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2017-05-08 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. May 8, 2017 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. 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 LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Lalo Perez, Molly Stump, and Rumi Portillo) Employee Organizations: Service Employees International Union- Hourly, (SEIU) Local 521; Palo Alto Police Managers’ Association (PAPMA) Authority: Government Code Section 54957.6(a) Special Orders of the Day 6:00-6:10 PM 2.Appointment of two Candidates to the Human Relations Commission, Four Candidates to the Public Art Commission, and two Candidates to the Utilities Advisory Commission for Terms Ending May 31, 2020, and Appointment of one Candidate to the Human Relations Commission for the Unexpired Term Ending May 31, 2019 REVISED MEMO 2 May 8, 2017 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Study Session 6:10-7:10 PM 3.Joint Study Session of the City Council and Planning and Transportation Commission Agenda Changes, Additions and Deletions City Manager Comments 7:10-7:20 PM Oral Communications 7:20-7:35 PM Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Consent Calendar 7:35-7:40 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 4.Adoption of a Resolution Adding a 15-year Contract Term Option to the Palo Alto CLEAN Program, Continuing the Existing Program Rate Structure of 16.5 ¢/kWh for Local Solar Resources Until Reaching 3 MW of Program Capacity and for all Local Solar Resources Installed in Excess of 3 MW and all Non-solar Eligible Renewable Energy Resources at Avoided Cost, and Amending Associated Program Rules and Agreement 5.Approval of a Contract With O'Grady Paving, Inc. in the Amount of$2,283,754 for the Fiscal Year 2017 Asphalt Paving, Capital Improvements Program Project PE-86070 6.SECOND READING: Adoption of an Ordinance Amending Chapter 18 (Zoning) to Implement a new State Law Related to Accessory Dwelling Units and Junior Dwelling Units and to Reorganize and Update the City’s Existing Regulations. The Ordinance is Exempt From the California Environmental Quality Act (CEQA) per Public Resource Code Section 21080.17 and CEQA Guideline Sections 15061(b), 15301, 15303 and 15305 (FIRST READING: April 17, 2017 PASSED: 7-2 Holman, Kou no) 7.Approval of a Professional Services Agreement With UtiliWorks Consultants, LLC in an Amount Not-to-Exceed $174,735 Over two Years for Phase I of the Utility Smart Grid Assessment and Development of a Utility Technology Roadmap and Implementation Plan 8.Approval and Authorization for the City Manager to Execute a Cooperative Agreement With the Federal Transit Administration (FTA) for the Management of and Participation in a Grant Award to Enhance 3 May 8, 2017 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. and Evaluate a Comprehensive Technology/Policy Solution Called Fair Value Commuting (FVC), Designed to Reduce Traffic Congestion Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:40-9:00 PM 9.PUBLIC HEARING/QUASI-JUDICIAL 689-693 Arastradero [16PLN-00228]: Consideration of Applicant’s Request for Approval of a Preliminary Parcel Map, With Exceptions, to Merge two Existing Parcels Into one Parcel. The Exception Would Allow the Merged Parcel to Exceed the Maximum lot Area for the Purpose of Constructing a new Private School Campus for Bowman School. The Planning and Transportation Commission Reviewed and Recommended Approval of the Project. Environmental Assessment: A Draft Initial Study and Mitigated Negative Declaration was Circulated on January 19, 2017 for Public Review. A Final Initial Study/Mitigated Negative Declaration is Available. Zoning District: R-1(10,000) 9:00-9:45 PM 10.Adoption of Formal Positions Supporting Four State Bills 9:45-10:15 PM 11.Discussion and Approval to Defer to a Future Date the Consideration of the Formation of a Stakeholder Committee to Address Potential Local Business Tax for Transportation 10:15-10:45 PM 12.Colleagues' Memo From Council Members Fine, Holman, Kou, and Wolbach Regarding a Matching Funding Opportunity and Proposal to Increase Programming for Youth Through Youth Community Services Inter-Governmental Legislative Affairs Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 4 May 8, 2017 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. Finance Committee Meeting May 9, 2017 Policy and Services Committee Meeting Cancellation May 9, 2017 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Palo Alto Downtown Monitoring Report 2015-2016 City of Palo Alto Utilities Update for the Second Quarter of Fiscal Year 2017 Informational Report on the City of Palo Alto Utilities Demand Side Management Annual Report for Fiscal Year 2016 Public Letters to Council Set 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK May 8, 2017 The Honorable City Council Palo Alto, California Appointment of two Candidates to the Human Relations Commission, Four Candidates to the Public Art Commission, and two Candidates to the Utilities Advisory Commission for Terms Ending May 31, 2020 On Monday, May 8, 2017, the Council is scheduled to appoint: two (2) candidates to the Human Relations Commission; four (4) candidates to the Public Art Commission; and two (2) candidates to the Utilities Advisory Commission for terms ending May 31, 2020. Voting will be by paper ballot. Background On April 26, 2017, the Council interviewed 5 applicants for the Human Relations Commission, 10 applicants for the Public Art Commission, and 5 applicants for the Utilities Advisory Commission. Interviews for the Library Advisory Commission have been continued to a date uncertain. Human Relations Commission Vote to appoint two (2) three-year terms on the Human Relations Commission (HRC) expiring on May 31, 2020. The first two candidates to receive at least five votes (required) will be appointed. The 5 HRC Candidates are as follows: 1. Alhassani, Mehdi (Incumbent) 2. Brahmbhatt, Deepali 3. Eisenberg, Rebecca 4. Lee, Steven 5. Podulka, Kristen Public Art Commission Vote to appoint four (4) three-year terms on the Public Art Commission (PAC) expiring on May 31, 2020. The first four candidates to receive at least five votes (required) will be appointed. The 10 PAC Candidates are as follows: 1. Erickson, Britta 2. Fenney, Linda 3. Kiernan, Bette (resume provided on April 27 – see Attachment A) 4. Migdal, Jim (Incumbent) Page 2 5. Pettit, Donna 6. Ross, Amanda (Incumbent) 7. Scharf, Mary Ann 8. Shen, Hisnya 9. Smith, Jeny 10. Taylor, Nia (Incumbent) On April 24, 2017, Diana Maxwell withdrew her application for the Public Art Commission. Utilities Advisory Commission Vote to appoint two (2) three-year terms on the Utilities Advisory Commission (UAC) expiring on May 31, 2020. The first two candidates to receive at least five votes (required) will be appointed. The 5 UAC Candidates are as follows: 1. Ezran, Claude 2. Forssell, Lisa (Incumbent) 3. Segal, Lauren 4. Smolar, Curtis 5. Weber, Jay ATTACHMENTS: Attachment A: PAC - Kiernan, Bette Resume (PDF) Department Head: Beth Minor, City Clerk Page 3 BETTE U. KIERNAN, MFT CA License MFT 18408 845 Oak Grove Avenue Suite 110+* +Menlo Park, CA 94025 Telephone: (650) 324-3639; E Mail: betteuk@aol.com WWW.betteconsulting.com/ SUMMARY OF EXPERIENCE 2015 Kiernan, B.U. Presented From at Neuroscience toward a More Peaceable World. Compassion Conference. San Francisco State University, June 2015 2014-present Journalist, Splash Magazines Worldwide 2009 Kiernan, B.U. Examining Sacred Texts. Massachusetts Institute of Technology. International Media Conference. Presented April 2009 and published on line through MIT Kiernan, B.U. The Group Dynamics of International Relationships. 17th International Congress of Group Psychotherapy and Group Dynamics. Presented August 2009, Rome Italy 1987-2012 Led training groups at Northern California Group Psychotherapy Society Annual Training. Asilomar, CA 2006 Military and Family Life Consultant. Provided brief therapy to soldiers and their families related to deployment in Iraq. Contract with United States Department of Defense. Hanau, Germany. 2005 Kiernan, B.U. Fairy Tales and Psychotherapy. Presented April 2005. Massachusetts Institute of Technology International Media Conference, and published online through MIT. Developed and led a group for cancer patients at Stanford University School of Medicine using Fairy Tales as Guides to Healing. Stanford, CA 1994 Psychotherapist. Contract with Palo Alto Medical Foundation, Palo Alto, CA. Co-directed Psychological, Social and Spiritual Roots of Violence, a symposium on violence. Rollo May Center for Study of the Humanities, San Francisco, CA. Founded Arbor Psychological Health Services, Palo Alto, CA 1991 Co-directed Responsive Witness, a symposium on psychological meanings of political art. City of Palo Alto Cultural Center 1989 Developed, directed and produced a performance of Creation Mythology: In Story, Music and Dance. City of Palo Alto, Division of Arts and Culture. Designed, developed and taught Fairy Tale and Mythology classes for University of California, Santa Cruz, Extension services. 1987 to Present Provided Trainings and Critical Incident Stress Debriefings to Silicon Valley corporations, law firms, and cites including Stanford University Medical School, DLA Piper Global Law Firm, AOL, Oracle, Apple, Go Pro, Pacific Gas and Electricity, Sun Microsystems, Wilson Sonsini Goodrich and Rosati Law, Pillsbury Winthrop Law, Morrison and Forester Law, DLA Piper, Gray Carey Law, Intel, Intuit, United Defense, JDS Uniphase, Southwall Technology, Yahoo, Tyco, Bank of America, Greater Bay Bank, Hewlett Packard, Mircrosoft, Jamba Juice, City of Palo Alto, City of City of Menlo Park Fire Department, Alameda County Water District, Oracle, Co-America Bank, City of San Jose, Microsoft, City of Palo Alto, Sun Power, Southwest Airlines, Bank of the West, Alameda County Water District, Valley Transit Authority, City of Palo Alto, Stanislaus County and others 1986-1988 Designed, developed and provided group leadership for two Career Advancement Strategy groups under the auspices of Federal Women’s Program, and Veteran’s Administration Medical Centers, Palo Alto/Menlo Park. Developed a Fairy Tale course with City of Palo Alto Division of Arts and Sciences. 1983 to Present Private Psychotherapy Practice. Palo Alto, Menlo Park CA. 1983 to 1987 Designed, implemented and led single parent support system at Palo Alto Unified School District, Palo Alto, CA.1983 Led groups in divorcing families’ project at Stanford University, Stanford,CA 1978 to 1985 Designed, directed, and evaluated The Child Development and Parenting Project, a child abuse prevention program, Crittenton Friends, Palo Alto, CA. PUBLICATIONS/ARTICLES Thesis: The Development, Direction, and Evaluation of the Child Development and Parenting Program. San Jose State University, 1979. Kiernan, B.U. (1987) A Systems Perspective on Soviet-American Relations. Political Psychology Vol.8, no. 2, 1987. Kiernan, B.U., Wilson, D., Suter, N., Naqvi, A., Molten, J. and Silver, G. Comparison of the Geriatric Depression Scale and Beck Depression Inventory in a Nursing Home Setting. Clinical Gerontologist vol.6 (1) Fall, 1986. Kiernan, B.U. Systems Processes: Archetypal Pattern that Connects. Paper read at Association for Transpersonal Psychology Meetings, Asilomar, 1988. Kiernan, B.U. Fertilizing the Seeds of Compassion in Ancient Texts. Journal of Compassion Research. June 2009 Kiernan, B.U. Group Dynamics of International Relations. Northern California Group Psychotherapy Newsletter, fall 2010. Kiernan, B.U. The Uses of Fairy Tales in Psychotherapy. Santa Clara Valley Marriage Family Child Therapist newsletter, summer 2010. PRESENTATIONS/TRAININGS Listening Better. Communication Training. Presented at DiTech. Mountain View, CA. 2009, DeVry University, Fremont, CA. 2010 The Uses of Fairy Tales for Group Psychotherapy. Northern California Association of Group Psychotherapy. Asilomar, CA. 2010, 2008. Stress Management Techniques. Presented at DLA Piper, Palo Alto, CA. 2008. Stress Management Techniques. Presented at Wilson, Sonsini, Goodrich and Rosati Law Firm. Palto Alto, CA. 2006 Management Training for Referring Employees CPI. Palo Alto, CA. 2007. Coping with 9/11. Presented at Pillsbury Winthrop Law Firm. Palo Alto, CA.2001 Myths and Transformation. How Cultural Beliefs Contribute to Global Violence and Terrorism. Presented at Kozmetsky Global Collaboratory. Stanford University. Stanford, CA. 2004 The Uses of Fairy Tales in Psychotherapy. Presented at The Work of Stories Conference. Massachusetts Institute of Technology. Cambridge, MA. 2005 Managed Care and the Socially Responsible Psychologist. Presented at Ortho Psychiatry Meeting, San Francisco, CA. 1993. An Object Relations Perspective on Divorce. Presented at California Association for Marriage, Family, Child Therapists Divorce Conference, Stanford, CA. 1990. A Systems Perspective on International Relations. Presented at Association for Humanistic Psychology Conference, Stanford, CA. 1989. Fairy Tale Groups; Presented at Northern California Group Psychotherapy Association, Conference, Asilomar, 1987, 1988,1989,1990, 2008. Career Advancement Strategies; Presented to Department of the Navy, Western Division Engineering Facility, San Bruno, CA 1987, and presented at Veterans Administration Medical Centers, Palo Alto, CA, 1986. Coping Strategies for Working Mothers; Presented to City of Palo Alto Employees, 1985. Introduction to Research Methodology; presented at Veterans Administration Medical Center, Menlo Park, CA, 1986. Single Parent Groups; Presented at Northern California Group Psychotherapy Association, Asilomar 1986. The Shadow of Nuclear Weapons; Presented to Psychologists for Social Responsibility, Stanford, CA, 1985. The Need for Supportive Services for Single Parent Families in Public Schools; Presented at California State PTA, San Jose, 1985. A Preventive Child Abuse Program: Presented American Psychological Association. Meetings, Montreal, Canada. 1983. Small is Beautiful: A Community Based Approach to Social Action Programs; presented at 1981 Western Psychological Association meetings, Los Angeles EDUCATION M.A. Psychology. San Jose State University, 1979 M.A. Psychology. Western Graduate School, 1981 B.A. Psychology. Ohio State University, 1965 A.A. Lasell College. Auburndale, MA. 1963 RESEARCH Veterans Administration Hospital, Menlo Park California. Performed all aspects of major NIH research grant. 1984-1987 TEACHING Institute for Transpersonal Psychology. Lifespan Development. 2007. University of Santa Clara. Depth Psychology, 1991 to 2006. University California, Santa Cruz Extension, Berkeley Extension, Psychological Theories as Reflected Myths and Fairy Tales. Spring 1989 2001. John F. Kennedy University, Campbell, CA. Courses: Group Psychotherapy, Family Systems Theories. 1999-2003. John F. Kennedy University, Berkeley, CA. Course: Uses of Fairy Tales in Psychotherapy. March 2017. AWARD Superior Performance Award, presented by Veterans Administration Medical Center, 1987 OFFICES Board Member, Northern California Psychologists for Social Responsibility,1986 - 1994. President, Northern California Psychologists for Social Responsibility, 1991 – 1992 Betteconsulting.com/ TO: FROM: DATE: CITY OF PALO ALTO HONORABLE CITY COUNCIL BETH MINOR, CITY CLERK MAY 8, 2018 2 SUBJECT: AGENDA ITEM NUMBER 2-Appointment of two Candidates to the Human Relations Commission, Four Candidates to the Public Art Commission, and two Candidates to the Utilities Advisory Commission for Terms Ending May 31, 2020 Staff recommends the City Council consider making an appointment to the Human Relations Commission for the unscheduled vacant term ending May 31, 2019 from among the applications received as part of the Spring Recruitment. On April 30, 2017, the City Clerk's Office was notified Greer Stone resigned from the Human Relations Commission (see Attachment A). This resignation created a vacant term on the Human Relations Commission ending May 31, 2019. On April 28, 2017, the City Clerk's Office received a revised resume from Public Art Commission applicant, Bette Kiernan (see Attachment B). ~~ Beth Minor City Clerk 1of1 Greer B. Stone April 30, 2017 Palo Alto City Council 250 Hamilton Ave. Palo Alto, CA 94301 RE: Resignation Letter To the honorable members of the Palo Alto City Council, ATTACHMENT A 751 Layne Ct. Apt. 15, Palo Alto CA 94306 Cell: 6505750405 -gstone22@gmail.com For the past four years I have had the distinct honor of serving at the pleasure of this Council on the Human Relations Commission. It has been one of the greatest honors of my life serving the people of Palo Alto, and bringing attention to some of the greatest problems our most underserved residents face. When I first joined the Commission, issues of human rights and tolerance were not on the radar of many Palo Al tans. Four years later, the election of Donald Trump has brought fear and uncertainty to many in our community. Immigrants fear deportation, nonprofits fret over loss of federal funding, and deplorable symbols of hate have shaken our peace-of-mind. Today, we are reminded the shadow of intolerance and hate can exist in all corners of the world, even one as bright as ours. This must be a constant reminder for us all to stay vigilant, and to fight against hate and intolerance in all its forms. This Council has taken a positive first step in reaffirming our commitment to being a "diverse, supportive, inclusive and protective" community. I urge you to implement these guiding principles in everything we do, and take additional methods to safeguard our community from those who wish to do us harm. When I first sought appointment to this Commission, I said to you I believe what defines us as Palo Al tans is not the number of zeros in our bank account, but rather the set of values we hold as a community. I believe that more than ever today, and I have seen over the past four years the need for us to continue to support those who are serving the most vulnerable in our community. The nonprofit organizations serving those people need our help. They need additional funding, but our City has failed to provide sufficient increases to our Human Services Resource Allocation Process (HS RAP). These magnanimous organizations help keep people off the streets, nourish our elderly, care for our mentally ill, provide counseling and aid to young people, and they do it at an incredible value for our City. The least we can do is provide them with the funding they need. Thank you for allowing me the opportunity to serve Palo Alto on the Human Relations Commission. I will never forget the people I met, the stories I heard, and the service we have all shared together. It is with sadness that I tender my resignation to you, effective immediately. I have been appointed by Supervisor Joe Simitian to represent Northern Santa Clara County on the County Human Relations Commission. I look forward to continue representing the people of Palo Alto in my new position with the County of Santa Clara. Thank you for the honor, Greer B. Stone Palo Alto Human Relations Commission, Chair BETTE U. KIERNAN, MFT CA License MFT 18408 845 Oak Grove Avenue, Suite 101 Menlo Park, CA 94025 Telephone: (650) 324-3639; E Mail: betteuk@aol.com WWW.betteconsulting.coml SUMMARY OF EXPERIENCE 2015 ATTACHMENT B Kiernan, B.U. Presented From Neuroscience toward a More Peaceable World. Compassion Conference. San Francisco State University, June 2015 2014-present Journalist, Splash Magazines Worldwide 2009 Kiernan, B.U. Examining Sacred Texts. Massachusetts Institute of Technology. International Media Conference. Presented April 2009 and published on line through MIT Kiernan, B.U. The Group Dynamics of International Relationships. 17th International Congress of Group Psychotherapy and Group Dynamics. Presented August 2009, Rome Italy 1987-2012 Led training groups for group psychotherapists at Northern California Group Psychotherapy Society Annual Training. Asilomar, CA 2006 Military and Family Life Consultant. Provided brief therapy to soldiers and their families related to deployment in Iraq. Contract with United States Department of Defense. Hanau, Germany. 2005 Kiernan, B.U. Fairy Tales and Psychotherapy. Presented April 2005. Massachusetts Institute of Technology International Media Conference, and published online through MIT. BETTE KIERNAN 1994 Psychotherapist. Contract with Palo Alto Medical Foundation, Palo Alto, CA. Co-directed Psychological, Social and Spiritual Roots of Violence, a symposium on violence. Rollo May Center for Study of the Humanities, San Francisco, CA. Founded Arbor Psychological Health Services, Palo Alto, CA 1991 Co-directed Responsive Witness, a symposium on psychological meanings of political art. City of Palo Alto Cultural Center 1989 Developed, directed and produced a performance of Creation Mythology: In Story, Music and Dance. City of Palo Alto, Division of Arts and Culture. Designed, developed and taught Fairy Tale and Mythology classes for University of California, Santa Cruz, Extension services. 1987 to Present Provided Trainings and Critical Incident Stress Debriefings to Silicon Valley corporations, law firms, and cites including Stanford University Medical School, SAP, DLA Piper Global Law Firm, Nutanix, AOL, Oracle, Apple, Go Pro, Pacific Gas and Electricity, Communications and Power Industries, Sun Microsystems, Wilson Sonsini Goodrich and Rosati Law, Pillsbury Winthrop Law, Morrison and Forester Law, DLA Piper Law, Gray Carey Law, Intel, Intuit, United Defense, JDS Uniphase, Southwall Technology, Yahoo, Tyco, Bank of America, Greater Bay Bank, Hewlett Packard, Mircrosoft, Jamba Juice, City of Palo Alto, City of City of Menlo Park Fire Department, Alameda County Water District, Oracle, Blood Systems, Altera, Co-America Bank, City of San Jose, Microsoft, Sun Power, Southwest Airlines, Bank of the West, Alameda County Water District, Valley Transit Authority, City, Stanislaus County and others 1986-1988 Designed, developed and provided group leadership for two Career Advancement Strategy groups under the auspices of Federal Women's Program, and Veteran's Administration Medical Centers, Palo Alto/Menlo Park. Developed a Fairy Tale course with City of Palo Alto Division of Arts and Sciences. 1983 to Present Private Psychotherapy Practice. Palo Alto, Menlo Park CA. 1983 to 1987 Designed, implemented and led single parent support system at Palo Alto Unified School District, Palo Alto, CA.1983 2 BETTE KIERNAN Led groups in divorcing families' project at Stanford University, Stanford, CA 1978 to 1985 Designed, directed, and evaluated The Child Development and Parenting Project, a child abuse prevention program, Crittenton Friends, Palo Alto, CA. PUBLICATIONS/ARTICLES Thesis: The Development, Direction, and Evaluation of the Child Development and Parenting Program. San Jose State University, 1979. Kiernan, B.U. (1987) A Systems Perspective on Soviet-American Relations. Political Psychology Vol.8, no. 2, 1987. Kiernan, B.U., Wilson, D., Suter, N., Naqvi, A., Molten, J. and Silver, G. Comparison of the Geriatric Depression Scale and Beck Depression Inventory in a Nursing Home Setting. Clinical Gerontologist vol.6 (1) Fall, 1986. Kiernan, B. U. Systems Processes: Archetypal Pattern that Connects. Paper read at Association for Transpersonal Psychology Meetings, Asilomar, 1988. Kiernan, B.U. Fertilizing the Seeds of Compassion in Ancient Texts. Journal of Compassion Research. June 2009 Kiernan, B.U. Group Dynamics of International Relations. Northern California Group Psychotherapy Newsletter, fall 2010. Kiernan, B.U. The Uses of Fairy Tales in Psychotherapy. Santa Clara Valley Marriage Family Child Therapist newsletter, summer 2010. PRESENTATIONS/TRAININGS Listening Better. Communication Training. Presented at DiTech. Mountain View, CA. 2009, DeVry University, Fremont, CA. 2010 The Uses of Fairy Tales for Group Psychotherapy. Northern California Association of Group Psychotherapy. Asilomar, CA. 2010, 2008. Stress Management Techniques. Presented at DLA Piper, Palo Alto, CA. 2008. Stress Management Techniques. Presented at Wilson, Sonsini, Goodrich and Rosati Law Firm. Palto Alto, CA. 2006 Management Training for Referring Employees CPI. Palo Alto, CA. 2007. Coping with 9/11. Presented at Pillsbury Winthrop Law Firm. Palo Alto, CA.2001 Myths and Transformation. How Cultural Beliefs Contribute to Global Violence and Terrorism. Presented at Kozmetsky Global Collaboratory. Stanford University. Stanford, CA. 2004 The Uses of Fairy Tales in Psychotherapy. Presented at The Work of Stories Conference. Massachusetts Institute of Technology. Cambridge, MA. 2005 Managed Care and the Socially Responsible Psychologist. Presented at Ortho Psychiatry Meeting, San Francisco, CA. 1993. 3 BETTE KIERNAN An Object Relations Perspective on Divorce. Presented at California Association for Marriage, Family, Child Therapists Divorce Conference, Stanford, CA. 1990. A Systems Perspective on International Relations. Presented at Association for Humanistic Psychology Conference, Stanford, CA. 1989. Fairy Tale Groups; Presented at Northern California Group Psychotherapy Association, Conference, Asilomar, 1987, 1988,1989,1990, 2008. Career Advancement Strategies; Presented to Department of the Navy, Western Division Engineering Facility, San Bruno, CA 1987, and presented at Veterans Administration Medical Centers, Palo Alto, CA, 1986. Coping Strategies for Working Mothers; Presented to City of Palo Alto Employees, 1985. Introduction to Research Methodology; presented at Veterans Administration Medical Center, Menlo Park, CA, 1986. Single Parent Groups; Presented at Northern California Group Psychotherapy Association, Asilomar 1986. The Shadow of Nuclear Weapons; Presented to Psychologists for Social Responsibility, Stanford, CA, 1985. The Need for Supportive Services for Single Parent Families in Public Schools; Presented at California State PTA, San Jose, 1985. A Preventive Child Abuse Program: Presented American Psychological Association. Meetings, Montreal, Canada. 1983. Small is Beautiful: A Community Based Approach to Social Action Programs; presented at 1981 Western Psychological Association meetings, Los Angeles EDUCATION · M.A. Psychology. San Jose State University, 1979 M.A. Psychology. Western Graduate School, 1981 B.A. Psychology. Ohio State University, 1965 A.A. Lasell College. Auburndale, MA. 1963 RESEARCH Veterans Administration Hospital, Menlo Park California. Performed all aspects of major NIH research grant. 1984-1987 TEACmNG 4 BETTE KIERNAN Institute for Transpersonal Psychology. Lifespan Development. 2007. University of Santa Clara. Depth Psychology, 1991 to 2006. University California, Santa Cruz Extension, Berkeley Extension, Psychological Theories as Reflected Myths and Fairy Tales. Spring 1989-2001. John F. Kennedy University, Campbell, CA. Courses: Group Psychotherapy, Family Systems Theories. 1999-2003. John F. Kennedy University, Berkeley, CA. Course: Uses of Fairy Tales in Psychotherapy. March 2017. AWARD Superior Performance Award, presented by Veterans Administration Medical Center, 1987 OFFICES Board Member, Northern California Psychologists for Social Responsibility, 1986 -1994. President, Northern California Psychologists for Social Responsibility, 1991 -199~ www. betteconsulting.com/ 5 City of Palo Alto (ID # 8023) City Council Staff Report Report Type: Study Session Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: City Council and Planning and Transportation Commission Study Session Title: Joint Study Session of the City Council and Planning and Transportation Commission From: City Manager Lead Department: Planning and Community Environment Recommendation: Staff recommends that the City Council hold a joint study session with the Planning and Transportation Commission. No action is required as this is a study session. Discussion: The City Council and the Planning & Transportation Commission periodically meet in joint session to discuss issues of interest within the purview of the Commission. In advance of tonight’s joint session, the Mayor and Vice Mayor meet with the Chair and Vice Chair of the Planning and Transportation Commission to identify the following topics for discussion and estimated discussion timeframe: A. Introduction (Mayor Scharff – 5 minutes) B. PTC Priorities and Focus in 2017 (Council led discussion – 25 minutes) C. PTC Process Improvement Opportunities (Council led discussion – 25 minutes) D. Summary and Conclusion (Mayor Scharff – 5 minutes) Environmental Review: This discussion is exempt from the California Environmental Quality Act. City of Palo Alto (ID # 7943) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/8/2017 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Palo Alto CLEAN Contract Term Update Title: Adoption of a Resolution Adding a 15-year Contract Term Option to the Palo Alto CLEAN Program, Continuing the Existing Program Rate Structure of 16.5 ¢/kWh for Local Solar Resources until Reaching 3 MW of Program Capacity and for All Local Solar Resources Installed in Excess of 3 MW and All Non-Solar Eligible Renewable Energy Resources of Avoided Cost, and Amending Associated Program Rules and Agreement From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council: 1. Adopt a resolution (Attachment A) to make the following changes and amend the Clean Local Energy Accessible Now (CLEAN) Program Eligibility Rules and Regulations (CLEAN Program) (Attachment A-1) accordingly: a. Add a 15-year Contract Term Option in Addition to the CLEAN Program’s Existing 20-Year and 25-Year Contract Term Options; b. Continue the CLEAN Program current rate structure for local solar energy resources at 16.5 cents per kilowatt-hour (¢/kWh) until the solar energy resource program reaches 3 MW of capacity, after which the rate reduces to the City’s estimated avoided cost of energy generated by these resources, currently 8.8 ¢/kWh for a 15-Year Contract Term, 8.9 ¢/kWh for a 20-Year Contract Term, and 9.1 ¢/kWh for a 25-Year Contract Term; and c. Continue the CLEAN Program current rate structure for local non-solar eligible renewable resources without any cap at a contract price equal to the City’s estimated avoided cost of energy generated by these resources, currently 8.4 City of Palo Alto Page 2 ¢/kWh for a 15-Year Contract Term, 8.4 ¢/kWh for a 20-Year Contract Term, and 8.5 ¢/kWh for a 25-Year Contract Term. 2. Approve the attached amended Palo Alto CLEAN Program Eligible Renewable Energy Resource Power Purchase Agreement (PPA) (Attachment A-2) to implement the recommended changes to the CLEAN Program. 3. Delegate authority to the City Manager or his designee to sign contracts for the output of one or more solar, or other non-solar eligible renewable energy resource meeting the CLEAN Program described in Section 1; to make additional changes to the PPA and related CLEAN Program documents that are approved by the City Attorney’s office as may be otherwise necessary to implement the recommendations that are approved by Council; and to execute any documents necessary to administer executed PPAs and related CLEAN Program documents that are consistent with the Palo Alto Municipal Code and City Council approved policies. Executive Summary In March 2012 the Council adopted the Palo Alto CLEAN Program (also commonly referred to as a feed-in tariff, or FIT, program). The program was designed to address the Long-term Electric Acquisition Plan (LEAP) objective to enhance supply reliability through the pursuit of local generation opportunities, and to complement the City of Palo Alto Utilities’ (CPAU’s) existing PV Partners solar rebate program. Palo Alto CLEAN created an additional alternative for property owners by enabling them to build a new solar system on their property and sell the energy to CPAU under a long-term, fixed-rate, standardized contract rather than use the energy on site. Though solar developers expressed interest in Palo Alto CLEAN in 2012, the initial contract price (14 ¢/kWh for a 20-year contract term) proved insufficient to facilitate the most common business model used by project developers, which involves a third-party investor leasing roof space from a property owner. Council increased the Palo Alto CLEAN contract price to 16.5 ¢/kWh in December 2012, and has maintained it at that level ever since (last reaffirming it in February 2017), for local solar energy resources capped at 3 MW of solar program capacity. In May 2015, Council added a 25-year contract term option, and expanded the program to include non-solar eligible renewable energy resources, setting their contract prices and any solar energy resources in excess of the 3 MW cap at the avoided cost level. After receiving no applications in its first four years, at the beginning of 2016 the CLEAN Program executed contracts for five solar projects that would account for about 1.6 MW of capacity. The City has received requests from solar developers for a contract term that is shorter than the current 20-Year and 25-Year contract terms. These developers have explained that a 15-Year contract term will better align with land or rooftop lease terms available to them from City customers. Although the request to add a 15-Year Contract Term originated with developers of solar resources, this same contract term option is being provided for local non- solar eligible renewable resources as well. In addition, in the course of modifying the CLEAN PPA to include this new contract term, staff also identified some minor, clarifying changes City of Palo Alto Page 3 which further reinforce the City’s ability to retain a customer’s reservation deposit in certain situations. The proposed CLEAN Program modifications only add a 15-year contract term option and establish the corresponding avoided cost rate for such term. These modifications do not modify the existing contract rate structure. The rate for local solar energy resources remains 16.5 ¢/kWh until the program reaches 3 MW of capacity, after which the contract rate reduces to the City’s estimated avoided cost of energy generated by these resources, currently 8.8 ¢/kWh for a 15-Year Contract Term, 8.9 ¢/kWh for a 20-Year Contract Term, and 9.1 ¢/kWh for a 25-Year Contract Term. (As indicated in the CLEAN Program rules, solar energy resources that straddle multiple pricing tiers shall receive a weighted-average purchase price based on the amount of capacity that is contained in each tier.) For local non-solar eligible renewable resources, the contract rate is equal to the City’s estimated avoided cost of energy generated by these resources, currently 8.4 ¢/kWh for a 15-Year Contract Term, 8.4 ¢/kWh for a 20-Year Contract Term, and 8.5 ¢/kWh for a 25-Year Contract Term. Making this contract term modification to the CLEAN PPA – while maintaining the same contract rate structure and program capacity available at this rate – will have virtually no financial impact on the City. And it would support the Local Solar Plan goal of increasing the installation of local solar facilities to provide 4 percent of the City’s total energy needs by 2023. As such, staff supports the request by developers to add an additional 15-Year Contract Term option. Resource Impact The following table summarizes staff’s estimates of the current cost of buying energy from solar resources outside of Palo Alto (including transmission and capacity) over a 15-year, 20-year, or 25-year term, as well as the annual excess costs of purchasing the output from 3 MW of local solar projects at a contract price of 16.5 ¢/kWh over those terms. Contract Term Contract Rate Avoided Cost Annual Excess Cost 15 years 16.5 ¢/kWh 8.8 ¢/kWh $385,000 20 years 8.9 ¢/kWh $380,000 25 years 9.1 ¢/kWh $370,000 The difference in the annual excess costs of the 15-year contract term option versus the 20- year contract term option ($5,000) is equivalent to less than 0.005% of the electric utility’s costs, which is negligible. Policy Implications The recommendation to add a 15-year contract term option to the Palo Alto CLEAN Program supports the City’s carbon neutral electric supply portfolio policy, the Local Solar Plan, and the LEAP Objective to enhance supply reliability through the pursuit of local generation opportunities. City of Palo Alto Page 4 Environmental Review Adoption of the attached resolution and the associated amendment of the CLEAN Program Eligibility Rules and Requirements and PPA is not subject to California Environmental Quality Act (CEQA) review as an administrative government activity that will not result in any direct or indirect physical change to the environment as a result (CEQA Guidelines section 15378(b)(5)). Future CEQA review will occur, if necessary, based on the relevant lead agency’s analysis of any impacts from the underlying solar, or other non-solar eligible renewable energy resource projects that may be developed pursuant to the CLEAN Program. Attachments: Attachment A: Resolution Adding a 15-year Contract Term Option to the Palo Alto CLEAN Program (**NEEDS Exhibit A-1 Revised Program Rules to be attached**) Attachment B: Updated Palo Alto CLEAN Power Purchase Agreement *NOT YET APPROVED* 170412 999-Larson Resolution No. _____ Resolution of the Council of the City of Palo Alto Adding a 15-Year Contract Term Option to the Palo Alto Clean Local Energy Accessible Now Program, Continuing the Existing Program Rate Structure of 16.5 ¢/kWh for Local Solar Resources until Reaching 3 MW of Program Capacity and for All Local Solar Resources Installed in Excess of 3 MW and All Non-solar Renewable Energy Resources of Avoided Cost, and Amending Associated Program Rules and Agreement R E C I T A L S A. On March 5, 2012, the City approved the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program Eligibility Rules and Regulations (Clean Program or feed-in-tariff). Under the Palo Alto CLEAN Program, participants who build a new solar generating system in Palo Alto may obtain a long-term, fixed-price contract with the City to sell the energy from the system to the City’s electric utility. B. Council extended the program beyond its original termination date of December 31, 2012 and has periodically reviewed the contract price and program cap. C. On February 6, 2017, Council approved Resolution 9665, which continued Palo Alto CLEAN at the contract price of 16.5 cents per kilowatt-hour (¢/kWh) for local solar resources up to 3 MW of program capacity, reduced the contract prices for installed local solar capacity in excess of the 3 MW limit to the avoided cost value of 8.9 ¢/kWh for a 20-year term and 9.1 ¢/kWh for a 25-year term, and increased the contract prices for local non-solar renewable energy resources to 8.4 ¢/kWh for a 20-year term or 8.5 ¢/kWh for a 25-year term. The contract rates for non-solar resources were set to be equal to the then current estimated avoided cost of the energy generated by these resources. The resolution further eliminated the program caps of 3 megawatts (MW) of generating capacity for both the solar and non-solar resources. D. In the past year, the City has received five CLEAN Program project applications for local solar facilities, which together will total 1.65 MW of capacity, or 55% of the 3 MW of capacity available at the 16.5 ¢/kWh contract price. E. The City wants to continue to encourage the development of distributed renewable energy resources within its territory; to do so it wants to add a 15-year contract term option and corresponding 15-year avoided cost contract rate to the current 20-year and 25-year options, as well as make minor, clarifying changes to the CLEAN Program Eligible Renewable Energy Resource Power Purchase Agreement (PPA) which reinforces the City’s ability to keep a reservation deposit under certain circumstances. F. For all contract term options, the City wants to maintain the current contract price structure: offering local solar resources a contract price of 16.5 ¢/kWh up to 3 MW of program capacity, with all local solar capacity installed beyond the 3 MW limit and all local non- solar eligible renewable resources receiving contract prices equal to the avoided cost of energy ATTACHMENT A *NOT YET APPROVED* 170412 999-Larson of these resources. For local solar resources, the avoided cost of energy is 8.8 ¢/kWh for a 15- year term, 8.9 ¢/kWh for a 20-year term, and 9.1 ¢/kWh for a 25-year term. For local non-solar renewable resources, the avoided cost of energy is 8.3 ¢/kWh for a 15-year term, 8.4 ¢/kWh for a 20-year term, and 8.5 ¢/kWh for a 25-year term. The Council of the City of Palo Alto (“City”) RESOLVES AS FOLLOWS: SECTION 1. To modify the CLEAN Program to: a. Add a 15-Year Contract Term Option in Addition to the CLEAN Program’s Existing 20- Year and 25-Year Contract Term Options; b. Continue the CLEAN Program current rate structure for local solar energy resources at 16.5 ¢/kWh until 3 MW of solar resource program capacity after which the rate reduces to the City’s estimated avoided cost of energy generated by these resources, currently 8.8 ¢/kWh for a 15-Year Contract Term, 8.9 ¢/kWh for a 20-Year Contract Term, and 9.1 ¢/kWh for a 25-Year Contract Term; and c. Continue the CLEAN Program current rate structure for local non-solar eligible renewable resources without any cap at a contract price equal to the City’s estimated avoided cost of energy generated by these resources, currently 8.3 ¢/kWh for a 15-Year Contract Term, 8.4 ¢/kWh for a 20-Year Contract Term, and 8.5 ¢/kWh for a 25-Year Contract Term. SECTION 2. To implement such changes, the Council adopts the revised Palo Alto CLEAN Program Eligibility Rules and Requirements, set forth in Exhibit A-1 attached to this Resolution, and approves a revised Palo Alto CLEAN Program Eligible Renewable Energy Resource Power Purchase Agreement (PPA), set forth in Exhibit A-2 attached to this Resolution. SECTION 3. The Council authorizes the City Manager or his designee to sign contracts for the output of one or more solar, or other non-solar eligible renewable energy resource meeting the CLEAN Program described in Section 2; to make additional changes to the PPA and related CLEAN Program documents that are approved by the City Attorney’s office as may be otherwise necessary to implement the recommendations that are approved by Council; and to execute any documents necessary to administer executed PPAs and related CLEAN Program documents that are consistent with the Palo Alto Municipal Code and City Council approved policies. SECTION 4. The Council finds that the adoption of this resolution and the associated amendment of CLEAN Program and PPA is not subject to California Environmental Quality Act (CEQA) review as an administrative government activity that will not result in any direct or indirect physical change to the environment as a result (CEQA Guidelines section 15378(b)(5)). Future CEQA review will occur, if necessary, based on the relevant lead agency’s analysis of any *NOT YET APPROVED* 170412 999-Larson impacts from the underlying solar, or other non-solar eligible renewable, energy resource projects that may be developed pursuant to the CLEAN Program. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _______________________ Senior Deputy City Attorney City Manager ___________________________ Utilities General Manager ___________________________ Director of Administrative Services 040914 jrm 0180042 1 POWER PURCHASE AGREEMENT ELIGIBLE RENEWABLE ENERGY RESOURCE (Palo Alto Clean Local Energy Accessible Now Program) This Power Purchase Agreement - Eligible Renewable Energy Resource, dated, for convenience, , 20 (the “Effective Date”), is entered into by and between the CITY OF PALO ALTO, a California chartered municipal corporation, and , a corporation (individually, a “Party” and, collectively, the “Parties”). RECITALS 1.The Buyer has adopted and implemented its CLEAN Program, which allows an owner of a qualifying electric generation system to sell to the Buyer the power output of a small-scale distributed generation Eligible Renewable Energy Resource, subject to the CLEAN Program’s rules and requirements. 2.The Seller owns or operates and desires to interconnect its Facility in parallel with Buyer’s Distribution System and sell the Energy produced by its Facility, net of Station Service Load, directly to the Buyer in furtherance of the CLEAN Program. 3.The Parties do not intend this Agreement to constitute an agreement by the Buyer to provide retail electrical service to the Seller. 4.The Parties wish to enter into a power purchase agreement for the sale and purchase of the Output of the Facility. The Parties will enter into a separate “Interconnection Agreement” in connection with this Agreement. NOW THEREFORE, in consideration of the foregoing recitals and the following covenants, terms and conditions, the Parties agree, as follows: AGREEMENT 1.1 DEFINITIONS The initially capitalized terms, whenever used in this Agreement, have the meanings set forth below, unless they are otherwise herein defined. The terms “include,” “includes,” and “including,” when used in this Agreement, shall mean, respectively, “include, without limitation,“ “includes, without limitation” and “including, without limitation.” “Agreement” means this Power Purchase Agreement – Eligible Renewable Energy Resource between the Buyer and the Seller. “Business Day” means any day except a Saturday, Sunday, or a day that the City observes as a regular holiday under Palo Alto Municipal Code section 2.08.100(a). “Buyer” refers to the City of Palo Alto, California, with a principal place of business at 250 Hamilton Avenue, Palo Alto, California 94301. “Buyer’s Distribution System” means the wires, transformers, and related equipment used by the Buyer to deliver electric power to the Buyer’s retail customers, typically at sub-transmission level voltages or lower. “CAISO” means the California Independent System Operator Corporation, or successor entity. “CAISO Tariff” means the CAISO FERC Electric Tariff, as amended. “Capacity” means the ability of a generator at any given time to produce Energy at a specified rate, as measured in megawatts (“MW”) or kilowatts (“kW”), and any reporting rights associated with it. “Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ATTACHMENT B 040914 jrm 0180042 2 ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Facility, intended to value any aspect of the Contract Capacity of the Facility to produce Energy or ancillary services, including contributions towards Resource Adequacy (including those requirements defined in Section 40 of the CAISO Tariff) or reserve requirements (if any), and any other reliability or power attributes. “CEC” means the California Energy Resources Conservation and Development Commission, or successor agency. “Certificate of RPS Eligibility” means a certificate issued by the CEC as evidence of RPS Certification of the Facility. “City” means the government of the City of Palo Alto, California. “CLEAN Program” refers to the Palo Alto Clean Local Energy Accessible Now Program, a renewable energy program established by the City by adoption of resolution number , dated , of the Palo Alto City Council, whereby the Buyer will purchase from the Seller the Output of Eligible Renewable Energy Resources that meet specified criteria set forth in the City’s applicable ordinances and resolutions. “Commercial Operation” means the period of operation of the Facility, once the Commercial Operation Date has occurred. “Commercial Operation Date” means the date specified in the Commercial Operation Date Confirmation Letter, which the Parties execute and exchange in accordance with this Agreement. “Contract Capacity” means the installed electrical Capacity available upon the Commercial Operation Date of the Facility in an amount, as specified in Exhibit “PPA-A.” “Contract Capacity” is measured at the Buyer’s revenue meter at the Delivery Point and is net of any Station Service Loads, any applicable Facility step-up transformer losses, and distribution losses on Buyer’s Distribution System up to the Delivery Point. “Contract Price” means the price paid by the Buyer to the Seller for the Output generated at the Facility and received by the Buyer, as set forth in Exhibit “PPA-A.” “CPUC” means the California Public Utilities Commission, or successor agency. “Delivery Point” means the point of interconnection to Buyer’s Distribution System, where the Buyer accepts title to the Output. “Delivery Term” has the meaning set forth in Section 14.2 hereof. “Eligible Renewable Energy Resource” means an electric generating facility that is defined and qualified as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended. “Energy” means electrical energy generated from the Facility and delivered to Buyer’s Distribution System with the voltage and quality required by the Buyer, and measured in megawatt-hours (“MWh”) or kilowatt- hours (“kWh”), as metered at the Delivery Point. “Facility” means the qualifying renewable energy generation equipment and associated power conditioning and interconnection equipment that deliver the Output to the Buyer at the Delivery Point. “FERC” means the Federal Energy Regulatory Commission, or successor agency. 040914 jrm 0180042 3 “Forced Outage” means an unplanned outage of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity. “Force Majeure” means an event or circumstance, which prevents a Party from performing its obligations under this Agreement, and which is not in the reasonable control of, or the result of negligence of, the Party claiming Force Majeure, and which by the exercise of due diligence is unable to overcome or cause to be avoided. “Force Majeure” shall include: (a) An act of nature, riot, insurrection, war, explosion, labor dispute, fire, flood, earthquake, storm, lightning, tidal wave, backwater caused by flood, act of the public enemy, terrorism, or epidemic; (b) Interruption of transmission or generation services as a result of a physical emergency condition (and not congestion-related or economic curtailment) not caused by the fault or negligence of the Party claiming Force Majeure and reasonably relied upon and without a reasonable source of substitution to make or receive deliveries hereunder, civil disturbances, strike, labor disturbances, labor or material shortage, national emergency, restraint by court order or other public authority or governmental agency, actions taken to limit the extent of disturbances on the electrical grid; or (c) Other similar causes beyond the control of the Party affected, which causes such Party could not have avoided by the exercise of due diligence and reasonable care. A Party's financial incapacity, the Seller’s ability to sell the Output at a more favorable price or under more favorable conditions, or the Buyer’s ability to acquire the Output at a more favorable price or under more favorable conditions or other economic reasons shall not constitute an event of Force Majeure. “Force Majeure” does not include a Forced Outage to the extent such event is not caused or exacerbated by an event of Force Majeure, as described above, and does not include the Seller’s inability to obtain financing, permits, or other equipment and instruments necessary to plan for, construct, or operate the Facility. “Good Utility Practice” means those practices, methods and acts that would be implemented and followed by prudent operators of electric energy generating facilities in the western United States, similar to the Facility, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time the decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability, and safety. The Seller acknowledges that its use of Good Utility Practice does not exempt it from performing any of its obligations arising under this Agreement. “Good Utility Practice” includes, at a minimum, those professionally responsible practices, methods and acts described in the preceding paragraph that comply with manufacturers’ warranties, restrictions in this Agreement, the interconnection requirements of Buyer, the requirements of governmental authorities, and WECC and NERC standards. “Good Utility Practice” also includes the taking of reasonable steps to ensure that: (a) Equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the Facility’s needs; (b) Sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Facility properly and efficiently, and are capable of responding to reasonably foreseeable emergency conditions at the Facility and emergencies whether caused by events on or off the Facility’s site; (c) Preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation of the Facility, and are performed by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; (d) Appropriate monitoring and testing are performed to ensure equipment is functioning as designed; and (e) Equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or the connecting utility’s electric system or contrary to environmental laws, permits or regulations or without regard to defined limitations such as, flood conditions, safety inspection requirements, operating voltage, current, volt ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and control system limits; and equipment and components are designed and manufactured to meet or exceed the standard of durability that is generally used for electric energy generating facilities operating in the western United States and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Facility site and under both normal and emergency conditions. 040914 jrm 0180042 4 “Green Attributes” refers to the definition set forth in the Standard Terms and Conditions, Appendix A-2, as amended, Decision D.07-02-011, as modified by D.07-05-057, of the CPUC, which incorporates the definition of “Environmental Attributes” set forth in the Standard Terms and Conditions, Appendix A-1, as amended, D. 04-06-014. “Green Attributes” includes any and all credits, benefits, emissions reductions, environmental air quality credits, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility, and its displacement of conventional energy generation, whether existing now or arising in the future. “Green Attributes” includes RECs, as well as (1) any avoided emissions of pollutants to the air, soil or water, such as sulfur oxides (“SOx”), nitrogen oxides (“NOx”), carbon monoxide (“CO”) and other pollutants; (2) any avoided emissions of carbon dioxide (“CO2”), methane (“CH4”), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and other greenhouse gases (“GHGs”) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights and RECs. “Green Tag Reporting Rights” are the right of a Green Tag Purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include those Green Tag Reporting Rights accruing under Section 1605(b) of the Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on a kWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. “Green Attributes” do not include (i) any Energy, Capacity, reliability, or other power attributes of the Facility, (ii) production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered, used or created by the Facility for compliance with or sale under local, state, or federal operating and/or air quality permits or programs. If the Facility is a biomass or landfill facility and the Seller receives any tradable Green Attributes based on the Facility’s greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, the Seller shall provide the Buyer with sufficient Green Attributes to ensure that there are zero net emissions associated with the production of electricity from the Facility. “Green Attributes” includes any other environmental credits or benefits recognized in the future and attributable to Energy generated by the Facility during the Term that may not be represented by Green Tag Reporting Rights or RECs, unless otherwise excluded herein. Any Green Attributes provided under this Agreement shall be documented by RECs, or any other representation of the environmental benefits of the Output, the monthly cumulative total of which shall be provided to the Buyer, as specified herein. “Interconnection Agreement” refers to the agreement between the Buyer and the Seller, specific to the interconnection of the Facility to Buyer’s Distribution System. “NERC” means the North American Electric Reliability Corporation, or successor organization. “NCPA” means Northern California Power Agency, a California joint action agency, or successor agency. “Output” means all Capacity associated with Contract Capacity and associated Energy made available from the Facility, as well as any Capacity Attributes, Green Attributes, or other attributes existing now or in the future associated with Contract Capacity and/or associated Energy. “Output” does not include production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation. “Planned Outage” means an outage, scheduled in advance, of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity. 040914 jrm 0180042 5 “Pre-Certification Price” means the contract price to be paid for all Energy delivered to the Buyer prior to the RPS Certification Date, as specified in Exhibit “PPA-A”. “Renewable Energy Credit” or “REC” has the meaning set forth in Section 399.12(h)(1) and (2) of the California Public Utilities Code, and includes a certificate of proof that one unit of electricity was generated by an Eligible Renewable Energy Resource. Currently, RECs are used to convey all Green Attributes associated with electricity production by a renewable energy resource. RECs are accumulated on a kWh basis and one REC represents the Green Attributes associated with the generation of 1 MWh (1,000 kWhs) from the Facility. For purposes of this Agreement, the term REC shall be synonymous with the term Green Tag, green ticket, bundled or unbundled renewable energy credit, tradable renewable energy certificates, or any other term used to describe the documentation that evidences the renewable and Green Attributes associated with electricity production by an Eligible Renewable Energy Resource. “Renewables Portfolio Standard” or “RPS” means the standard adopted by the State of California pursuant to Senate Bill 2 1st Extraordinary Session (SBX1 2, Chapter 1, Statutes 2011-12), and California Public Utilities Code Sections 399.11through 399.31, inclusive, as may be amended, setting minimum renewable energy targets for local publicly owned electric utilities. “Reservation Deposit” means the monetary deposit submitted by the Seller (or the Facility sponsor on behalf of the Seller) to secure a reservation of the CLEAN Program’s prices. The Reservation Deposit is set forth in Exhibit “PPA-A.” “Resource Adequacy” means a requirement by a governmental authority or in accordance with its FERC- approved tariff, or a policy approved by a local regulatory authority, that is binding upon either Party and that requires that Party to procure a certain amount of electric generating capacity. “RPS Certification” means certification by the CEC that the Facility qualifies as an Eligible Renewable Energy Resource for RPS purposes, and that all Energy produced by the Facility qualifies as generation from an Eligible Renewable Energy Resource, as evidenced by a Certificate of RPS Eligibility. “RPS Certification Date” means the date on which the RPS Certification begins, as specified in the Certificate of RPS Eligibility. “Seller” means with a principal place of business at , , . “Station Service Load” means the electrical loads associated with the operation and maintenance of the Facility, which may at times be supplied from the Facility’s Energy. “Term” has the meaning set forth in Section 14.1 hereof. “WECC” means the Western Electricity Coordinating Council, the regional entity responsible for coordinating and promoting regional bulk electric system reliability in the Western Canada and the United States, or any successor organization. 2.0 SELLER’S GENERATING FACILITY, PURCHASE PRICE AND PAYMENT 2.1 Facility. This Agreement governs the Buyer’s purchase of the Output from the Facility, as described in Exhibit “PPA-A.” The Seller shall not modify the Facility to increase or decrease the Contract Capacity after the Commercial Operation Date. 2.2 Products Purchased. During the Delivery Term, the Seller shall sell and deliver, or cause to be delivered, and the Buyer shall purchase and receive, or cause to be received, the Output from the Facility. The Seller shall not have the right to procure the Output from sources other than the Facility for sale or delivery to the Buyer under this Agreement or to substitute the Output. 040914 jrm 0180042 6 2.3 Delivery Term. The Delivery Term shall commence on the Commercial Operation Date under this Agreement, and shall continue for an uninterrupted period of [fifteen (15), twenty (20), or twenty-five (25) years]. This period will commence on the first day of the calendar month immediately following the Commercial Operation Date. As evidence of the Commercial Operation Date, the Parties shall execute and exchange the “Commercial Operation Date Confirmation Letter,” attached hereto as Exhibit “PPA- B.” The Commercial Operation Date shall be the date on which the Parties acknowledge, in writing, that the Facility starts operating and is otherwise in compliance with applicable interconnection and system protection requirements, including the final approvals by the City’s building department official. 2.4 Payment for Products Purchased. 2.4.1 Deliveries Prior to RPS Certification Date. Once the Facility has achieved Commercial Operation, if the CEC has not issued a Certificate of RPS Eligibility for the Facility or the Facility has not been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller for the Output by multiplying the Pre-Certification Price by the quantity of Energy. 2.4.2 Deliveries After RPS Certification Date. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer shall pay the Seller for all Output on or after the RPS Certification Date by multiplying the Contract Price by the quantity of Energy. 2.4.3 True-up Upon Issuance of Certificate of RPS Eligibility. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller an amount equal to the difference between the Contract Price and the Pre-Certification Price for the Output (a) that was delivered on or after the RPS Certification Date and (b) for which the Seller has already received payment at the Pre- Certification Energy Price. 2.4.4 Energy in Excess of Contract Capacity. The Seller shall not receive payment for any Energy or Green Attributes delivered in any hour to the Buyer in excess of the following amount of energy (in kilowatt-hours): 110% of the Contract Capacity (in kilowatts) multiplied by one hour. Any payment in excess of this amount shall be refunded to the Buyer, on demand. 2.5 Billing. The Buyer shall pay the Seller by check or electronic funds transfer, on a monthly basis, within thirty (30) days of the meter reading date. 2.6 Title and Risk of Loss. Title to and risk of loss related to the Output shall be transferred from the Seller to the Buyer at the Delivery Point. The Seller warrants that it will deliver to the Buyer the Output free and clear of all liens, security interests, claims, encumbrances or any interest therein or thereto by any person, arising prior to the Delivery Point. 2.7 No Additional Incentives. The Seller warrants that it has not received any other incentives funded by the Buyer’s ratepayers and it further agrees that, during the Term, it shall not seek additional compensation or other benefits from the Buyer pursuant to the following programs of the Buyer: (a) Photovoltaic (PV) Partners Program; (b) Power from Local Ultra-Clean Generation Incentive (PLUG- In) Program; or (c) other similar programs that are or may be funded by the Buyer’s ratepayers. 040914 jrm 0180042 7 3.0 RPS CERTIFICATION; GREEN ATTRIBUTES 3.1 CEC Certification. The Seller, at its own cost and expense, shall obtain the RPS Certification within six (6) months of the Commercial Operation Date. The Seller shall maintain the RPS Certification at all times during the Delivery Term. The foregoing provision notwithstanding, the Seller shall not be in breach of this Agreement and the Buyer shall not have the right to terminate this Agreement, if the Seller’s failure to obtain or maintain the RPS Certification is due to a change in California law, occurring after the Commercial Operation Date, so long as the Seller has used commercially reasonable efforts to obtain and maintain the RPS Certification and the Seller’s actions or omissions did not contribute to its inability to obtain and maintain the RPS Certification. 3.2 Obligation to Deliver Green Attributes. The Seller shall sell and deliver to the Buyer, and the Buyer shall buy and receive from the Seller, all right, title, and interest in and to Green Attributes associated with Energy, produced by the Facility and delivered to the Buyer at the Delivery Point, whether now existing or that hereafter come into existence during the Term, except as otherwise excluded herein; provided, the Buyer shall not be obligated to purchase and pay the Seller for any Green Attributes associated with any amount of the Output, that is generated by any fuel which is not renewable and which cannot be counted for the purpose of the production of Green Attributes. The Seller agrees to sell and make all such Green Attributes available to the Buyer to the fullest extent allowed by applicable law, in accordance with the terms and conditions of this Agreement. The Seller warrants that the Green Attributes provided under this Agreement to the Buyer shall be free and clear of all liens, security interests, claims and encumbrances. 3.3 Conveyance of Green Attributes. The Seller shall provide Green Attributes associated with the Facility, which shall be documented and conveyed to the Buyer in accordance with the procedure described in Exhibit “PPA-D.” 3.4 Additional Evidence of Green Attributes Conveyance. At the Buyer’s request, the Seller shall provide additional reasonable evidence to the Buyer or to third parties of the Buyer’s right, title, and interest in the Green Attributes and any other information with respect to Green Attributes, as may be requested by the Buyer. 3.5 Modification of Green Attributes Conveyance Procedure. The Buyer may unilaterally modify Exhibit “PPA-D” in order to reflect changes necessary in the Green Attributes conveyance procedures, so that the Buyer may be able to receive and report the Green Attributes, purchased under this Agreement, as belonging to the Buyer. 3.6 Reporting of Ownership of Green Attributes. The Seller shall not report to any person or entity that the Green Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any applicable program that Green Attributes purchased by the Buyer hereunder belong to it. 3.7 Greenhouse Gas Emissions. The Seller shall comply with any laws and/or regulations regarding the need to offset emissions of GHGs by delivering to the Buyer the Energy from the Facility with a net zero GHG impact. 4.0 CONVEYANCE OF CAPACITY ATTRIBUTES 4.1 Conveyance of Resource Adequacy Capacity. The Seller shall not report to any person or entity that the Resource Adequacy Capacity, as defined in the CAISO Tariff) associated with the Facility, if any, belongs to a person other than the Buyer, which may report that Resource Adequacy Capacity purchased hereunder belongs to it to fulfill the Resource Adequacy requirements, as defined in Section 40 of the CAISO Tariff, as amended, or any successor program. The Seller shall take those actions described in Section 6.0 hereof, as applicable, to secure recognition of Resource Adequacy Capacity by the CAISO. 4.2 Conveyance of Other Capacity Attributes. In addition to the obligations imposed on the 040914 jrm 0180042 8 Seller under Section 4.1, the Seller will undertake any and all actions reasonably needed to enable the Buyer to effect the recognition and transfer of any Capacity Attributes in addition Resource Adequacy, to the extent that such Capacity Attributes exist now or will exist in the future; provided, if such actions require any actions beyond the giving of notice by the Seller, then the Buyer shall reimburse all out-of- pocket costs and charges of such actions. 4.3 Reporting of Ownership of Capacity Attributes. The Seller shall not report to any person or entity that the Capacity Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any such program that such Capacity Attributes purchased hereunder belong to it. 5.0 METERING AND OPERATIONS 5.1 Timing of Outages. The Seller may not schedule or take any Planned Outage from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. 5.2 Outage Reporting. 5.2.1 Buyer Request. The Seller is not required to report any Planned Outage or Forced Outage, unless the Buyer first submits a written request to the Seller to commence Outage reporting. Upon receipt of such a request, the Seller shall report all subsequent Planned Outages and the Forced Outages according to the procedures described in subsections 5.2.2 and 5.2.3, and shall continue such reporting until (a) the termination of this Agreement for any reason, or (b) the Buyer subsequently provides written notice to the Seller that the Seller may cease such reporting in the future. 5.2.2 Planned Outage Notifications. The Seller shall notify the Buyer at least 72 hours in advance of any Planned Outage that would result in a reduction in the effective Output of the Facility during the period over which the Planned Outage is scheduled. Notification shall be provided by e-mail to the e-mail address (or addresses) set forth in Exhibit “PPA-F.” 5.2.3 Forced Outage Notifications. Within 24 hours of the occurrence of a Forced Outage of the Facility that impacts the ability of the Facility to produce Energy, the Seller shall notify the Buyer of the Forced Outage, including the Capacity of the Facility that is impacted, and the expected duration of the Forced Outage. Within 24 hours of the return of the Facility to service following the Forced Outage, the Seller shall notify the Buyer of the return-to-service details. Notification shall be made by e-mail to the address (or addresses) set forth in Exhibit “PPA-F.” 5.3 Metering. The Buyer shall furnish and install one or more standard watt-hour meters to read Energy generated by the Facility, and it will charge a meter fee to the Seller to cover the costs associated with the meter’s purchase and installation. As requested, the Seller shall provide and install a meter socket in accordance with the Buyer’s metering standards. The Buyer reserves the right to install additional metering equipment at its sole cost and expense. 6.0 PARTICIPATING GENERATORS 6.1 Applicability. This Section 6.0 shall apply if the Facility meets the definition of a “Participating Generator,” as may be defined by the CAISO Tariff. This Section 6.0 shall not apply if the definition applies to the Facility only upon the election by the Seller. For the purposes of this Section 6.0, all special terms not otherwise defined in Section 1.0 are defined in the CAISO Tariff. 6.2 Participating Generator Agreement. The Buyer will notify the CAISO of the Seller’s interconnection to Buyer’s Distribution System. If the CAISO requires it, the Seller, at its own expense, shall negotiate and enter in to two contracts, a “Participating Generator Agreement” and a “Meter Services Agreement for CAISO Metered Entities,” with the CAISO. 040914 jrm 0180042 9 6.3 Scheduling Coordination. If the CAISO requires the Seller to enter in to a Participating Generator Agreement, then the Seller shall designate NCPA as the Buyer’s scheduling coordinator. The Buyer, acting in its sole discretion, may replace NCPA as the scheduling coordinator for the Facility. If NCPA ceases to be the scheduling coordinator for the Facility and the Buyer has not, upon fourteen (14) days’ prior written notice of inquiry from the Seller, appointed a replacement scheduling coordinator, then the Seller shall have the right to appoint a replacement scheduling coordinator on the Buyer’s behalf. Thereafter, the Buyer shall enter into all reasonable and appropriate agreements with such replacement scheduling coordinator at its own costs. 6.4 Scheduling Procedure. The Buyer may require the Seller to provide the Buyer with Energy forecasts on a periodic basis, as may be necessary for the Buyer to account for expected Facility generation in its daily power scheduling process. The requirements are set forth in Exhibit “PPA-C.” 6.5 Modification of Scheduling and Outage Notification Procedure. The Buyer may unilaterally modify Exhibit “PPA-C” to reflect changes necessary in the scheduling and Outage notification procedures. The Buyer shall give the Seller reasonable notice of any such changes. 6.6 Provision of Other Equipment. If the Seller is required to enter into a Participating Generator Agreement with the CAISO, then the Seller, at its own cost and expense, shall provide and maintain data transmission-grade phone line and telecommunications equipment at the meter location that complies with applicable requirements of the CAISO, the Buyer, and NCPA. Any meter installed by the Seller shall comply at all times with the CAISO’s metering requirements. If the Seller fails to provide or maintain any such required equipment or data connection, then the Buyer shall acquire, install and maintain the same at the Seller’s sole cost and expense. 6.7 Designation as Resource Adequacy Resource. The Buyer may submit a written request to the Seller to obtain the CAISO’s designation of the Facility as a Resource Adequacy Resource. Upon receipt of such request, the Seller shall provide such information and undertake such steps as may be required by the CAISO in order to complete such an assessment. If the Buyer makes such a request, then the Buyer shall be responsible for the following: (1) any costs charged to the Seller by the CAISO as a condition of applying for or receiving designation as a Resource Adequacy Resource, including any deposits required during the study process or the cost of any related studies or deliverability assessments performed by the CAISO; (2) the capital, installation, and maintenance costs of any additional equipment required by the CAISO as a condition of receiving designation as a Resource Adequacy Resource; (3) the costs of any Network Upgrades, as defined in the CAISO Tariff, as may be required by the CAISO, provided, the Buyer shall receive any subsequent repayments from the CAISO or the Participating Transmission Owner related to such upgrades; and (4) any charges or penalties assessed by the CAISO as a consequence of the Facility’s designation as a Resource Adequacy Resource. 6.8 CAISO Charges. The Buyer shall be solely responsible for paying all costs and charges associated with the receipt of Energy under this Agreement, at the Delivery Point, and for the transmission and delivery of Energy from the Delivery Point to any other point downstream of the Delivery Point, including transmission costs and charges, competition transition charges, applicable control area service charges, transmission congestion charges, inadvertent energy flows, any other CAISO charges related to the transmission of such Energy by the CAISO and any charge assessed or collected in the future pursuant to any utility tariff or rate schedule, however defined, for transmission or transmission-related service rendered by or for any transmission-owning or operating entity. The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and minimize any potential liability, under the CAISO tariff. If and to the extent that the Seller fails to comply with the notice provision in Exhibit “PPA-C,” concerning Outages, or with its obligations as outlined in the previous sentence, the Seller shall be wholly responsible for all imbalances, deviations, or any other CAISO charges or penalties associated with such Outage or other CAISO Tariff obligation. 6.9 Inclusion in Metered Subsystem. At the option of the Buyer, the Facility may be included within NCPA’s metered sub-system in connection with the scheduling of power over the CAISO grid and related functions; provided, however, that such inclusion shall have no adverse effect on the Facility’s operations or the Seller (or any such effect shall be fully mitigated by the Buyer). The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and 040914 jrm 0180042 10 minimize any potential liability, under the CAISO Tariff; provided, that if such actions require any actions beyond the giving of notice to be provided by the Buyer, then the Buyer shall reimburse the Seller for all out-of-pocket costs and charges of such actions. 7.0 COMMERCIAL OPERATION DATE; REFUND OF RESERVATION DEPOSIT 7.1 Commercial Operation Date. The Facility shall achieve Commercial Operation by the Commercial Operation Date deadline (the “Deadline”), which is one (1) year from the Effective Date. 7.2 Reservation Deposit. The Buyer acknowledges that, as of the Effective Date or other date established by the Buyer, the Seller has provided the Reservation Deposit to the Buyer. 7.2.1 If the Commercial Operation Date occurs on or prior to the Deadline, the Buyer shall refund to the Seller the Reservation Deposit without interest. 7.2.2 If the Commercial Operation Date commences within seventy (70) days of the Deadline, the Seller, as liquidated damages and not as a penalty, shall relinquish its claim to a ten percent (10%) portion of the amount of the Reservation Deposit for every full week transpiring between the Deadline and the Commercial Operation Date, but the total amount to be relinquished to the Buyer shall not exceed 100% of the Reservation Deposit. 7.2.3 If the Facility has not achieved Commercial Operation within seventy (70) days of the Deadline, then the Buyer may terminate this Agreement without liability of either Party to the other (other than as set forth in Section 7.2.2) by giving written notice of termination to the Seller. 7.2.4 If the Seller gives notice of termination to terminate the Agreement before Commercial Operation occurs, then the Buyer shall refund a percentage of the Reservation Deposit equal to the following: the percentage to be refunded will equal A/B, where A equals the number of days between the date of the Seller’s notice of termination, received by the Buyer, and the Deadline, and B equals the number of days between the Effective Date and the Deadline. 7.3 Return of Reservation Deposit. The Buyer shall return to the Seller the Reservation Deposit, without interest, in the event that (a) the Buyer furnishes written notice of the costs of interconnection (defined in the Interconnection Agreement to include the costs related to the Interconnection Facilities and Distribution Upgrades) to the Seller and (b) within thirty (30) days of receipt of the notice regarding costs of interconnection, the Seller provides the Buyer with written notice that the Seller does not intend to sign the Interconnection Agreement and does intend to proceed with the project. 8.0 REPRESENTATION AND WARRANTIES; COVENANTS 8.1 Representations and Warranties. On the Effective Date, each Party represents and warrants to the other Party that: 040914 jrm 0180042 11 8.1.1 It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.1.2 The execution, delivery and performance of this Agreement is within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; 8.1.3 This Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; 8.1.4 It is not bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt; 8.1.5 There is not pending or, to its knowledge, threatened against it or any of its affiliates, if any, any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement; and 8.1.6 It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of, and understands and accepts, the terms, conditions and risks of this Agreement. 8.2 General Covenants. Each Party covenants that, during the Term: 8.2.1 It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.2.2. It shall maintain (or obtain from time to time as required, including through renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and 8.2.3 It shall perform its obligations under this Agreement in a manner that does not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it. 8.3 Covenant by Seller. The Seller covenants that, during the Term: 8.3.1 If the Eligible Renewal Energy Resource or the Facility is considered an ‘eligible qualifying facility’ under applicable law and has a net power production capacity of greater than one (1) megawatt, then the Seller covenants and agrees that, within thirty (30) days of the Effective Date or longer period allowed by law, it will complete and file Form No. 556 or other similar form with FERC as the same may be required by law.” 9.0 GENERAL CONDITIONS 9.1 Facility Care and Interconnection. During the Delivery Term, the Seller shall execute and maintain an “Interconnection Agreement” with the Buyer, whereby the Seller shall pay and be responsible for designing, installing, operating, and maintaining the Facility in accordance with all applicable laws and regulations and shall comply with all applicable Buyer, WECC, FERC, and NERC requirements, including applicable interconnection and metering requirements. The Seller shall also comply with any modifications, amendments or additions to the applicable tariff and protocols. The Seller also shall arrange and pay independently for any and all necessary costs under the Interconnection Agreement with the Buyer. 040914 jrm 0180042 12 9.2 Standard of Care. The Seller shall: (a) operate and maintain the Facility in a safe manner in accordance with its existing applicable interconnection agreements, manufacturer’s guidelines, warranty requirements, Good Utility Practice, industry norms (including standards of the National Electrical Code, Institute of Electrical and Electronic Engineers, American National Standards Institute, and the Underwriters Laboratories, and in accordance with the requirements of all applicable federal, state and local laws and the National Electric Safety Code, as such laws and code norms may be amended from time to time; (b) obtain any governmental authorizations and permits required for the construction and operation thereof. The Seller shall make any necessary and commercially reasonable repairs with the intent of optimizing the availability of electricity to the Buyer. The Seller shall reimburse the Buyer for any and all losses, damages, claims, penalties, or liability that the Buyer incurs as a result of the Seller’s failure to obtain or maintain any governmental authorizations and permits required for the construction and operation of the Facility throughout the Term. 9.3 Access Rights. The Buyer, its authorized agents, employees and inspectors shall have the right to inspect the Facility on reasonable advance notice during normal business hours and for any purposes reasonably connected with this Agreement or the exercise of any and all rights secured to the Buyer by law, including, without limitation, its ordinances, resolutions, tariffs, utility rate schedules or utilities rules and regulations. The Buyer shall make reasonable efforts to coordinate its emergency activities with the safety and security departments, if any, of the Facility’s operator. The Seller shall keep the Buyer advised of current procedures for communicating with the Facility operator’s safety and security departments. 9.4 Protection of Property. Each Party shall be responsible for protecting its own facilities from possible damage resulting from electrical disturbances or faults caused by the operation, faulty operation, or non-operation of the other Party’s facilities and such other Party shall not be liable for any such damages so caused. 9.5 Insurance. During the Term, the Seller shall obtain and maintain and otherwise comply with the insurance requirements, as set forth in Exhibit “PPA-E.” 9.6 Buyer’s Performance Excuse; Seller Curtailment. 9.6.1 Buyer Performance Excuse. The Buyer shall not be obligated to accept or pay for the Output during Force Majeure that affects the Buyer’s ability to accept Energy. 9.6.2 Seller Curtailment. The Buyer may require the Seller to interrupt or reduce deliveries of Energy: (a) whenever necessary to construct, install, maintain, repair, replace, remove, or investigate any of its equipment or part of the Buyer’s Distribution System or facilities; or (b) if the Buyer determines that curtailment, interruption, or reduction is necessary due to a System Emergency, as defined in the CAISO Tariff, an unplanned outage on Buyer’s Distribution System, Force Majeure, or compliance with Good Utility Practice. 9.7 Notices of Outages. Whenever possible, the Buyer shall give the Seller reasonable notice of the possibility that interruption or reduction of deliveries may be required. 9.8 No Additional Loads. The Seller shall not connect any loads not associated with Station Service Loads at the location of the Facility in a manner that would reduce Energy provided from the Facility to the Buyer hereunder. The Seller shall obtain separate retail electric service under the Buyer’s rate schedules for the service of such additional loads. 10.0 FORCE MAJEURE 10.1 Effect of Force Majeure. A Party shall be excused from its performance under this Agreement to the extent, but only to the extent, that its performance hereunder is prevented by Force Majeure. A Party claiming Force Majeure shall exercise due diligence to overcome or mitigate the effects of Force Majeure; provided, that nothing in this Agreement shall be deemed to obligate the Party affected by Force Majeure (a) to forestall or settle any strike, lock-out or other labor dispute against its will; or (b) for Force Majeure affecting the Seller only, to purchase electric power to cure Force Majeure. 040914 jrm 0180042 13 10.2 Remedial Action. A Party shall not be liable to the other Party if the Party is prevented from performing its obligations hereunder due to Force Majeure. The Party rendered unable to fulfill an obligation by reason of Force Majeure shall take all action necessary to remove such inability with all due speed and diligence. The nonperforming Party shall be prompt and diligent in attempting to remove the cause of its failure to perform, and nothing herein shall be construed as permitting that Party to continue to fail to perform after that cause has been removed. Notwithstanding the foregoing, the existence of Force Majeure shall not excuse any Party from its obligations to make payment of amounts due hereunder. 10.3 Notice of Force Majeure. In the event of any delay or nonperformance resulting from Force Majeure, the Party directly impacted by Force Majeure shall, as soon as practicable under the circumstances, notify the other Party, in writing, of the nature, cause, date of commencement thereof and the anticipated extent of any delay or interruption in performance. 10.4 Termination Due to Force Majeure. If a Party will be prevented from performing its material obligations under this Agreement for an estimated period of twelve (12) consecutive months or longer due to Force Majeure, then the unaffected Party may terminate this Agreement, without liability of either Party to the other (other than any liability set forth in Section 7.2.2 arising prior to such extended Force Majeure), upon thirty (30) Days’ prior written notice at any time during Force Majeure. 11.0 INDEMNITY 11.1 Indemnity by the Seller. The Seller shall indemnify, defend, and hold harmless the Buyer, its elected and appointed officials, directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees, resulting from, or arising out of or in any way connected with claims by third parties associated with (A) (i) Energy delivered at the Delivery Point; (ii) the Seller’s operation and/or maintenance of the Facility; or (iii) the Seller’s actions or inactions with respect to this Agreement, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Buyer or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Buyer, its agents, employees, directors or officers. 11.2 Indemnity by the Buyer. The Buyer shall indemnify, defend, and hold harmless the Seller, its directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees resulting from, or arising out of or in any way connected with claims by third parties associated with acts of the Buyer, its officers, employees, agents, and representatives, relating to: (A) Energy delivered by the Seller under this Agreement after the Delivery Point, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Seller or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Seller, its agents, employees, directors or officers. 12.0 LIMITATION OF DAMAGES EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED UNLESS EXPRESSLY HEREIN PROVIDED. NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR 040914 jrm 0180042 14 CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF SECTION 11 (INDEMNITY), IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. 13.0 NOTICES Notices shall, unless otherwise specified herein, be given, in writing, and may be delivered by hand delivery, United States mail, overnight courier service, facsimile or electronic messaging (e-mail) to the addresses set forth in Exhibit “PPA-F.”. Whenever this Agreement requires or permits delivery of a “notice” (or requires a Party to “notify”), the Party with such right or obligation shall provide a written communication in the manner specified below. A notice sent by facsimile transmission or electronic mail will be recognized and shall be deemed received on the Business Day on which such notice was transmitted if received before 5 p.m. Pacific Time (and if received after 5 p.m., on the next Business Day) and a notice by overnight mail or courier shall be deemed to have been received two (2) Business Days after it was sent or such earlier time as is confirmed by the receiving Party unless it confirms a prior oral communication, in which case any such notice shall be deemed received on the day sent. A Party may change its addresses by providing notice of same in accordance with this provision. A Party may request a change to Exhibit “PPA- F” as necessary to keep the information current. 14.0 TERM, TERMINATION EVENT AND TERMINATION 14.1 Term. The Term shall commence upon the execution by the duly authorized representatives of each of the Parties, and shall remain in effect until the conclusion of the Delivery Term, unless terminated sooner pursuant to the terms and conditions of this Agreement. All indemnity rights shall survive the termination of this Agreement for twelve (12) months. 14.2 Delivery Term. The Delivery Term of the Agreement is _______ years and is defined as the period of time from the Commercial Operation Date through the expiration or early termination of this Agreement. 14.3 Termination Event. 14.3.1 The Buyer shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Facility has not achieved Commercial Operation within seventy (70) days following the Deadline; (b) After the Commercial Operation Date, the Seller has not sold or delivered Energy from the Facility to the Buyer for a period of twelve (12) consecutive months; (c) If the Facility does not obtain RPS Certification within six (6) months of the Commercial Operation Date and maintain RPS Certification as required by Section 3.2; or (d) The Seller breaches any other material obligation of this Agreement. 14.3.2 The Seller shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Buyer fails to make a payment due and payable under this Agreement within thirty (30) days after written notice that such payment is due; or (b) The Buyer breaches any other material obligation of this Agreement. The preceding sentence notwithstanding, the Seller may terminate this Agreement without cause at any time prior to the Commercial Operation Date, subject to the provisions of Section 7 of this Agreement. 14.4 Time to Cure. None of the events described in Section 14.3.1 and 14.3.2 shall constitute a Termination Event if the Buyer or the Seller cures the event, failure, or circumstance within thirty (30) days after receipt of written notification sent by the other Party, seeking termination, or such longer period as may be necessary to cure so long as the Party subject to the Terminating Event is exercising diligent efforts to cure. 040914 jrm 0180042 15 14.5 Termination. 14.5.1 Declaration of a Termination Event. If a Termination Event has occurred and is continuing, the Party with the right to terminate shall have the right to: (a) send notice, designating a day, no earlier than thirty (30) days after such notice is deemed to be received (as provided in Section 13), as an early termination date of this Agreement (the “Early Termination Date”), unless the Seller has timely communicated with the Buyer and the Parties have agreed to resolve the circumstances giving rise to the Termination Event; (b) accelerate all amounts owing between the Parties; and (c) terminate this Agreement and end the Delivery Term effective as of the Early Termination Date. 14.5.2 Release of Liability for Termination Event. Upon termination of this Agreement pursuant to this section neither Party shall be under any further obligation or subject to liability hereunder, except with respect to the indemnity provision in Section 11 hereof, which shall remain in effect for a period of 12 months following the Early Termination Date. 14.6 No Limitation on Damages. Nothing in this Agreement shall be deemed or construed to limit a Party’s right to recover damages from the other Party, except as otherwise provided in this Agreement. 15.0 RELEASE OF DATA Except as may be exempt from disclosure under applicable law, the Seller authorizes the Buyer to release to any regulatory authority having jurisdiction over the Facility or a Party, or to any request made pursuant to the California Constitution or the California Public Records Act, information regarding the Facility, including the Seller’s name and location, operational characteristics, the Term of this Agreement, the Facility resource type, the scheduled Commercial Operation Date, the actual Commercial Operation Date, the Contract Capacity, payments made to the Seller and Energy production information. The Seller acknowledges that this information may be made publicly available. 16.0 ASSIGNMENT Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld. 16.1 Upon the written request of the Seller, the Buyer will execute a “Lender Consent and Agreement” between the Seller and the Seller’s lender(s), if any, in the form acceptable to the Parties; provided, for illustration purposes only, an exemplar is attached hereto as Exhibit “PPA-G.” 16.2 Notwithstanding the foregoing, no Consent and Agreement shall be required for: 16.2.1 Any assignment or transfer of this Agreement by the Seller to an affiliate of the Seller, provided that such affiliate’s creditworthiness is equal to or better than that of Seller, as reasonably determined by the non-assigning or non-transferring Party; or 16.2.2 Any assignment or transfer of this Agreement by the Seller or the Buyer to a person succeeding to all or substantially all of the assets of such Party, provided that such person’s creditworthiness is equal to or greater than that of such Party, as reasonably determined by the non-assigning or non-transferring Party. 16.2.3 Notification of any assignment or transfer of this Agreement under Section 16.2.1 or 16.2.2 shall be given to the non-assigning or non-transferring Party in accordance with Exhibit “PPA-F.” 17.0 APPLICABLE LAW, VENUE, ATTORNEYS’ FEES, AND INTERPRETATION This Agreement will be governed by and construed in accordance with the laws of the State of California. The Parties will comply with applicable laws pertaining to their obligations arising under this 040914 jrm 0180042 16 Agreement. 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 or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. 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. If a court of competent jurisdiction finds or rules that any provision of this Agreement, the Exhibits, or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement, the Exhibits, or any amendment thereto will remain in full force and effect. The Parties agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any Exhibit or any amendment thereof. 18.0 SEVERABILITY If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement and the Parties shall use their best efforts to modify this Agreement to give effect to the original intention of the Parties. 19.0 COUNTERPARTS; INTERPRETATION OF CONFLICTING PROVISIONS This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile or portable document format (“PDF”) transmission will be deemed as effective as delivery of an originally executed counterpart. Each Party delivering an executed counterpart of this Agreement by facsimile or PDF transmission will also deliver an originally executed counterpart, but the failure of any Party to deliver an originally executed counterpart of this Agreement will not affect the validity or effectiveness of this Agreement. In the event of a conflict between the Agreement and any, some or all of the Exhibits, the document imposing the more specific duty or obligation will prevail. 20.0 GENERAL No amendment to or modification of this Agreement shall be enforceable unless reduced to writing and executed by both Parties. This Agreement shall not impart any rights enforceable by any third party other than a permitted successor or assignee bound to this Agreement. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. The headings used herein are for convenience and reference purposes only. // // // // // // 040914 jrm 0180042 17 21. EXHIBITS The following exhibits shall be deemed incorporated in and made a part of this Agreement. Exhibit “PPA-A” - Facility Description, Prices, and Reservation Deposit Exhibit “PPA-B” - Commercial Operation Date Confirmation Letter Exhibit “PPA-C” - Scheduling and Outage Notification Procedure Exhibit “PPA-D” - Green Attributes Reporting and Conveyance Procedures Exhibit “PPA-E” - Insurance Requirements Exhibit “PPA-F” - Notices Exhibit “PPA-G” - Form of Lender Consent and Agreement IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives as of the Effective Date. CITY OF PALO ALTO SELLER APPROVED AS TO FORM Senior Deputy City Attorney APPROVED City Manager Director of Utilities 040914 jrm 0180042 18 EXHIBIT “PPA-A” Facility Description, Rates, and Reservation Deposit Program Rates Contract Term: [Fifteen (15), twenty (20), or twenty-five (25) years] Contract rate: $0.165 per kWh for solar resources, 15- or 20- or 25-year contract term (up to 3 MW solar energy resources program capacity) $0.088 per kWh for solar resources, 15-year contract term (beyond 3 MW) $0.089 per kWh for solar resources, 20-year contract term (beyond 3 MW) $0.091 per kWh for solar resources, 25-year contract term (beyond 3 MW) $0.083 per kWh for non-solar resources, 15-year contract term $0.084 per kWh for non-solar resources, 20-year contract term $0.085 per kWh for non-solar resources, 25-year contract term Pre-certification rate: $0.08 per kWh Reservation Deposit Reservation Deposit ($20/kW of Contract Capacity): $ Service address: Facility Description: Contract Capacity: kW (CEC-AC), based on solar array rating (Panel rated output at PV USA test conditions x inverter efficiency) or inverter rating Facility primary fuel/technology: 040914 jrm 0180042 19 EXHIBIT “PPA-B” Commercial Operation Date Confirmation Letter In accordance with the terms of the Power Purchase Agreement (Palo Alto CLEAN), dated (the “Agreement”) by and between the City of Palo Alto, as the Buyer, and , as the Seller, this Confirmation Letter serves to document the Parties’ agreement that (i) the conditions precedent to the occurrence of the Commercial Operation Date have been satisfied, and (ii) the Buyer has received Energy, as specified in the Agreement, as of , . The actual installed Contract Capacity is kW. This Confirmation Letter shall confirm the Commercial Operation Date, as defined in the Agreement, as of the date referenced in the preceding sentence. IN WITNESS WHEREOF, each Party has caused this letter to be duly executed by its authorized representative as of the date of last signature provided below: Buyer Seller By: By: Name: Name: Title: Director of Utilities Title: Date: Date: In recognition of the Commercial Operation Date relative to the Effective Date of the Agreement by and between the Buyer and the Seller, the Seller hereby calculates the amount to return, if any, of the Seller’s deposit, as follows: Original Reservation Deposit Amount: $ Commercial Operation Date Deadline: □ Commercial Operation Date is prior to Deadline □ Commercial Operation Date occurred weeks following the Deadline, meaning that % of the Reservation Deposit is relinquished by Seller per Section 7.2.2 of the Power Purchase Agreement. Amount (if any) of Reservation Deposit to return to the Seller is: $ 040914 jrm 0180042 20 EXHIBIT “PPA-C” Scheduling and Outage Notification Procedure C.1 Applicability. This Exhibit” PPA-C” shall apply if the Facility is subject to Section 6.0 of this Agreement. C.2 Annual Operations Forecast C.2.1 By the tenth (10th) day September of each calendar year, the Seller will provide NCPA with an annual operations forecast detailing hourly expected generation and all proposed planned Outages for the next calendar year. The annual operations forecast for the calendar year shall be provided by not later than ninety (90) days prior to the scheduled Commercial Operation Date of the Generating Facility. C.2.2 NCPA may request modifications to the annual operations forecast at any time, and the Seller shall use good faith efforts to accommodate the requested modifications. C.2.3 The Seller shall not conduct Planned Outages at times other than as set forth in its annual operations forecast, unless approved in advance by NCPA, which approval shall not be withheld or delayed unreasonably. C.2.4 The Seller shall not schedule or conduct Planned Outages from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. C.3. Short Term Operations Forecasts C.3.1. Quarterly Operations Forecast C.3.1.1 By the fifth (5th) day of January, April and July of each Contract Year, the Seller shall provide a calendar quarter-operations forecast by hour of expected generation and all proposed Planned Outages for the next full calendar quarter and the twelve (12) months following that calendar quarter. As an example, by January 5, 2014, the Seller would provide a calendar quarter-operations forecast by hour of expected generation for the period, April 1, 2014 through June 30, 2014, and identify all proposed Planned Outages for the period, April 1, 2014 through June 30, 2015. C.3.1.2 NCPA will approve or require modifications to the proposed calendar quarter-operations forecast within ten (10) days of receipt of the forecast. C.3.1.3 If required by NCPA, the Seller will provide a modified calendar quarter-operations forecast within seven (7) days after receipt of required modifications from NCPA. C.3.2 Weekly Update C.3.2.1 By 14:00 of each Wednesday, the Seller shall provide an electronic update, in a format specified by NCPA, to the calendar quarter-operations forecast for the following seven (7) days (Thursday through the next Wednesday). C.3.2.2 The weekly update shall include hourly expected generation and all proposed planned Outages for the relevant seven (7) day period. C.4 Outage Detail for Annual and Short Term Operations Forecasts. Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, capacity out of service (kW), the equipment that is or will be out of service, and the reason for the Outage. 040914 jrm 0180042 21 C.5 General Scheduling Protocols C.5.1 Daily Modifications to Forecasts. Unless otherwise mutually agreed, the Seller may make changes to the weekly update to the calendar quarter-operations forecast by providing such changes to NCPA prior to 08:00 of the day that is two (2) Business Days before the active scheduling day as determined by the WECC prescheduling calendar. Example: For power that is scheduled for generation or delivery on Friday, March 29, 2014, changes must be submitted to NCPA by 08:00 on Wednesday, March 27, 2014. C.5.2 Hourly Modifications to Active Schedules. Unless otherwise mutually agreed, the Seller may request changes to active schedules by providing such changes to NCPA with a minimum of four (4) hours’ notice prior to the applicable CAISO market deadline (e.g. Hour Ahead Scheduling Process (“HASP”) Scheduling deadline, as defined in the CAISO Tariff). Active day Schedule changes are not binding. Changes to active Schedules are limited to two (2) changes per day, excluding forced Outages, unless otherwise agreed to between the Parties. One request for a Schedule change, of one-hour or multiple-hours duration, constitutes one Schedule change. Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:01 to 15:00), changes must be submitted to NCPA by 10:00. C.5.3. Unforeseen Circumstances. At the Seller’s request, NCPA may, but is not required to, modify the Schedules for the Generation Facility Output due to unforeseen circumstances in accordance with the above scheduling timeline constraints described in this Exhibit PPA-C. C.5.4. Absence of Forecasts. In the absence of forecasts and schedules as required by this Agreement or this Exhibit, NCPA shall utilize the most current information the Seller provides in the development and submission of Schedules. C.6 Outage Reporting Protocols C.6.1. Notification. The Seller shall notify NCPA of all planned or forced Outages of the Generating Facility to ensure compliance with the CAISO Outage Coordination and Enforcement Protocols. C.6.1.1 Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, Capacity out of service (kW), equipment out of service, and the reason for the Outage. C. 6.1.2 Seller shall provide the Planned Outages not included in the annual operations forecast, the calendar quarter-operations forecast, or the weekly update, to NCPA at least four (4) Business Days prior to the start of the requested outage. C. 6.1.3 At any time prior to the start of a Planned Outage, the CAISO may deny the Outage due to a System Emergency (as defined in the CAISO Tariff) or as otherwise permitted under the CAISO Tariff. If NCPA receives notice that the CAISO has denied an Outage in accordance with the CAISO Tariff, NCPA will notify the Seller as soon as possible and the Seller shall modify the planned Outage as required by the CAISO. C.6.2 Commencement of an Outage. The Seller shall not begin any Planned Outage without the prior approval of NCPA and the CAISO. C.6.3 Forced Outages C.6.3.1 The Seller shall report the Forced Outages to NCPA within twenty (20) 040914 jrm 0180042 22 minutes of such Outages. C.6.3.2 The Seller’s notice of a Forced Outage sent to NCPA shall include the reason for the Outage (if known), expected duration of the Outage, and the Capacity reduction. C.6.3.3 By the end of the next Business Day following the day on which a Forced Outage has occurred, the Seller shall provide to NCPA a detailed written report, specifying the reason for the Outage, expected duration of such Outage, capacity reduction, and actions taken to mitigate such Outage. C.6.4 Return to Service. The Seller shall notify NCPA as soon as possible, but in any case before the Generating Facility is returned to service. C.7 Notices. All Scheduling notices and Schedules shall be submitted to NCPA by phone, fax or email, or other means as may be mutually agreed by the Parties, to the persons designated in Exhibit “PPA-F.” C.8 Changes in Scheduling and Outage Procedure. The Buyer shall revise Exhibit “PPA-C,” or, as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-C,” which shall then become part of the Agreement to reflect changes in the scheduling and outage notification procedure. 040914 jrm 0180042 23 EXHIBIT “PPA-D” Green Attributes Reporting and Conveyance Procedures D.1 Additional Definitions for the Conveyance of Green Attributes D.1.1 “Certificate Transfers” means the process, as described in the WREGIS Operating Rules, whereby a WREGIS account holder may request that WREGIS Certificates from a specific generating unit shall be directly deposited to another WREGIS account. D.1.2 “WREGIS Certificates” means a certificate created within the WREGIS system that represents all Renewable and Green Attributes from one MWh of electricity generation from an Eligible Renewable Energy Resource that is registered with WREGIS. D.1.3 “WREGIS Operating Rules” means the document published by WREGIS that governs the operation of the WREGIS system for registering, tracking, and conveying, among others, RECs produced from Eligible Renewable Energy Resources that shall be registered with WREGIS. D.1.4 “WREGIS” means Western Renewable Energy Generation Information System. D.2 RECs. Green Attributes shall be conveyed by the Seller to the Buyer through RECs, which shall be registered tracked and conveyed to the Buyer, using WREGIS. D.3 WREGIS Registration. Prior to the Commercial Operation Date, the Buyer will register the Facility in the Buyer’s WREGIS account on behalf of the Seller. The Buyer shall charge back to the Seller any costs of registering and maintaining the registration of the Facility with WREGIS. The Seller shall provide to the Buyer any documents required by WREGIS and assign the Seller’s rights to register the Facility in WREGIS, using agreements provided by WREGIS. D.4 B u yer ’s W REGI S Acco unt . The Buyer shall, at its sole expense, establish and maintain the Buyer’s WREGIS account sufficient to accommodate the WREGIS Certificates produced by the output of the Facility. The Buyer shall be responsible for all expenses associated with (A) establishing and maintaining the Buyer’s WREGIS Account, and (B) subsequently transferring or retiring WREGIS Certificates. D.5 Qualified Reporting Entity. The Buyer shall be the Qualified Reporting Entity (as such term is defined by WREGIS) for the Facility, and shall be responsible for providing the metered Output data to WREGIS. D.6 Reporting of Environmental Attributes. In lieu of the Seller’s transfer of the WREGIS Certificates using Certificate Transfers from the Seller’s WREGIS account to the Buyer’s WREGIS account, the Buyer shall report the Facility as being held directly in its WREGIS account, which will preclude the Seller from reporting the Facility in its own WREGIS account. D.6.1 By avoiding the use of Certificate Transfers, there will be no transaction costs to the Seller or the Buyer for the Certificate Transfers that would otherwise be used. D.6.2 WREGIS Certificates for the Facility will be created on a calendar month basis in accordance with the certification procedure established by the WREGIS Operating Rules in an amount equal to the Energy generated by the Project and delivered to the Buyer in the same calendar month. D.6.3 WREGIS Certificates will only be created for whole MWh amounts of energy generated. Any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate and all such accumulated 040914 jrm 0180042 24 MWh of Environmental Attributes will then be available to Buyer. D.6.4 If a WREGIS Certificate Modification (as such term is defined by WREGIS) will be required to reflect any errors or omissions regarding the Green Attributes from the Facility, then the Buyer will manage the submission of the WREGIS Certificate Modification. D.6.5 Due to the expected delay in the creation of WREGIS Certificates relative to the timing of invoice payments under Section 2, the Buyer will normally be making an invoice payment for the Output for a given month in accordance with Section 2 before the WREGIS Certificates for such month may be created in the Buyer’s WREGIS account. Notwithstanding this delay, the Buyer shall have all right and title to all such WREGIS Certificates upon payment to the Seller in accordance with Section 2. D.7 Changes in Green Attributes Reporting and Conveyance Procedures. The Buyer shall revise this Exhibit “PPA-D,” as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-D,” which shall then become part of this Agreement in the event that: D.7.1 WREGIS changes the WREGIS Operating Rules (as defined by WREGIS) after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Exhibit “PPA-D” after the Effective Date; or, D.7.2 WREGIS is replaced as the primary method that the Buyer uses for conveyance of Green Attributes, or additional methods to convey all Green Attributes, are required. 040914 jrm 0180042 25 EXHIBIT “PPA-E” Insurance Requirements CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, WILL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH A 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 AUTOMOBILE LIABILITY STATUTORY STATUTORY YES COMMERCIAL 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 $2,000,000 $2,000,000 $2,000,000 YES COMPREHENSIVE AUTOMOBILE LIABILITY, INCLUDING, 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 NO 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: PROPOSER, 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 PROPOSER AND ITS SUBCONSULTANS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY 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 – SEE, SAMPLE AGREEMENT FOR SERVICES. II. SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH V, BELOW. A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER): B. NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER: 040914 jrm 0180042 26 C. POLICY NUMBER(S): D. DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL): III. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND PROPOSER’S SUBMITTAL OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN. IV. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSURES” 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 INSURES. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES 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 ISSUING COMPANY 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 ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. V. PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE REQUIREMENTS: THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME SIGNATURE(S) AS APPEAR(S) ON SECTION II, ATTACHMENT A, PROPOSER’S INFORMATION FORM. Firm: Signature: Name: (Print or type name) Signature: Name: (Print or type name) 040914 jrm 0180042 27 NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303. 040914 jrm 0180042 28 EXHIBIT “PPA-F” Notices Contract Administration BUYER: SELLER: City of Palo Alto Utilities Resource Management 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org Billing and Settlements BUYER: SELLER: City of Palo Alto Utilities Resource Management 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org Forecasting and Outage Reporting under Section 6 of this Agreement Planned Outages: BUYER: SELLER: Northern California Power Agency Real- Time Dispatch 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-3518 Forced Outages BUYER: SELLER: Northern California Power Agency Real- Time Dispatch 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-3518 Forecasting and Scheduling BUYER: SELLER: Northern California Power Agency Operations and Pre-Scheduling 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-0123 040914 jrm 0180042 29 EXHIBIT “PPA-G” Form of Lender Consent and Agreement This CONSENT AND AGREEMENT (this “Consent”), dated as of , 20 , is entered into by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”), , a corporation (the “Lender),” by its agent, (the “Administrative Agent”), and , a corporation (the “Borrower”) (collectively, the “Parties”). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined). RECITALS A. Borrower intends to develop, construct, install, test, own, operate and use an approximately MW electric generating facility located in the city of Palo Alto in the State of California, known as the Project (the “Project”). B. In order to partially finance the development, construction, installation, testing, operation and use of the Project, Borrower has entered into that certain financing agreement dated as of (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), among Borrower, the financial institutions from time to time parties thereto (collectively, the “Lenders”) , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower. C. The City and Borrower have entered into that certain Power Purchase Agreement, dated as of (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Power Purchase Agreement”). D. The City and Borrower have entered into that certain Interconnection Agreement, dated as of _ (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Interconnection Agreement”). E. Pursuant to a security agreement executed by Borrower and Administrative Agent for the Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Financing Agreement and related documents (collectively, the “Financing Documents”), all of its right, title and interest in, to and under the Power Purchase Agreement and Interconnection Agreement to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under the Financing Documents. F. It is a requirement under the Financing Agreement that the Parties hereto execute this Consent. AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties agree, as follows: 1. CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E above, consents to an assignment of the Power Purchase Agreement and Interconnection Agreement pursuant thereto, and agrees with Administrative Agent, as follows: (a) Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any 040914 jrm 0180042 30 defaults of Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, subject to applicable notice and cure periods provided in the Power Purchase Agreement and Interconnection Agreement. Upon receipt of notice from Administrative Agent, the City agrees to accept such exercise and cure by Administrative Agent if timely made by Administrative Agent under the Power Purchase Agreement or Interconnection Agreement, as the case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to make directly to such account as Administrative Agent may direct the City, in writing, from time to time, all payments to be made by the City to Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, from and after the City’s receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Power Purchase Agreement, Interconnection Agreement, or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a). (b) The City will not, without the prior written consent of Administrative Agent (such consent not to be unreasonably withheld), (i) cancel or terminate the Power Purchase Agreement or Interconnection Agreement, or consent to or accept any cancellation, termination or suspension thereof by Borrower, except as provided in the Power Purchase Agreement or Interconnection Agreement and in accordance with subparagraph 1(c) hereof, (ii) sell, assign or otherwise dispose (by operation of law or otherwise) of any part of its interest in the Power Purchase Agreement or Interconnection Agreement, except as provided in the Power Purchase Agreement or Interconnection Agreement, or (iii) amend or modify the Power Purchase Agreement or Interconnection Agreement in any manner materially adverse to the interest of the Lenders in the Power Purchase Agreement and Interconnection Agreement as collateral security under the Security Agreement. (c) The City agrees to deliver duplicates or copies of all notices of default delivered by the City under or pursuant to the Power Purchase Agreement or Interconnection Agreement to Administrative Agent in accordance with the notice provisions of this Consent. The City shall deliver any such notices concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement. To the extent that a cure period is provided under the Power Purchase Agreement or Interconnection Agreement, Administrative Agent shall have the same period of time to cure the breach or default that Borrower is entitled to under the Power Purchase Agreement or Interconnection Agreement, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement, then as to Administrative Agent, the applicable cure period under the Power Purchase Agreement or Interconnection Agreement shall begin on the date on which the notice is given to Administrative Agent. If possession of the Project is necessary to cure such breach or default, and Administrative Agent or its designee(s) or assignee(s) declare Borrower in default and commence foreclosure proceedings, Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to complete such proceedings so long as Administrative Agent or its designee(s) continue to perform any monetary obligations under the Power Purchase Agreement or Interconnection Agreement, as the case may be. The City consents to the transfer of Borrower's interest under the Power Purchase Agreement and Interconnection Agreement to the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or grantee as the applicable party under the Power Purchase Agreement and Interconnection Agreement (provided that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee assume the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement, including, without limitation, satisfaction and compliance with all credit provisions of the Power Purchase Agreement and Interconnection Agreement, if any, and provided further that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than 040914 jrm 0180042 31 Borrower, as reasonably determined by City). (d) In the event that either the Power Purchase Agreement or Interconnection Agreement, or both is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City will execute and deliver to Administrative Agent a new power purchase agreement or interconnection agreement, as the case may be, which power purchase agreement or interconnection agreement shall be on the same terms and conditions as the original Power Purchase Agreement or Interconnection Agreement for the remaining term of the original Power Purchase Agreement or Interconnection Agreement before giving effect to such rejection, and which shall require Administrative Agent to cure any defaults then existing under the original Power Purchase Agreement or Interconnection Agreement. Notwithstanding the foregoing, any new renewable power purchase agreement or interconnection agreement will be subject to all regulatory approvals required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals. (e) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to perform Borrower's obligations under the Power Purchase Agreement and Interconnection Agreement, succeed to Borrower’s interest under the Power Purchase Agreement and Interconnection Agreement, or enter into a new power purchase agreement or interconnection agreement as provided in subparagraph 1(d) above, the recourse of the City against Administrative Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties’ interests in the Project, and the credit support required under the Power Purchase Agreement and Interconnection Agreement, if any. (f) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to Borrower's interest under the Power Purchase Agreement and Interconnection Agreement, Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Power Purchase Agreement or Interconnection Agreement, except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s) shall have the right to assign all or a pro rata interest in the Power Purchase Agreement and Interconnection Agreement to a person or entity to whom Borrower’s interest in the Project is transferred, provided such transferee assumes the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement and has a creditworthiness equal to or better than Borrower, as reasonably determined by the City. Upon such assignment, Administrative Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees) shall be released from any further liability thereunder accruing from and after the date of such assignment, to the extent of the interest assigned. 2. REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as of the date of this Consent: (a) It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Power Purchase Agreement and Interconnection Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby; (b) the execution, delivery and performance of this Consent, the Power Purchase Agreement and the Interconnection Agreement have been duly authorized by all necessary action on its part and do not require any approvals, material filings with, or consents of any entity or person which have not previously been obtained or made; (c) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement is in full force and effect; 040914 jrm 0180042 32 (d) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement has been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law); (e) there is no litigation, arbitration, investigation or other proceeding pending for which the City has received service of process or, to the City’s actual knowledge, threatened against the City relating solely to this Consent, the Power Purchase Agreement, or the Interconnection Agreement and the transactions contemplated hereby and thereby; (f) the execution, delivery and performance by it of this Consent, the Power Purchase Agreement, and the Interconnection Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material contract or material agreement to which it is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach or default of which could have a material adverse effect on its ability to perform its obligations under this Consent; (g) neither the City nor, to the City’s actual knowledge, any other party to the Power Purchase Agreement or Interconnection Agreement, is in default of any of its obligations thereunder; and (h) to the City’s actual knowledge, (i) no Force Majeure Event exists under, and as defined in, the Power Purchase Agreement or Interconnection Agreement and (ii) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the Power Purchase Agreement or the Interconnection Agreement. Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby. 3. NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private courier or delivery service with charges prepaid, and addressed as specified below: If to the City: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] If to Administrative Agent: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] 040914 jrm 0180042 33 If to Borrower: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] Any party shall have the right to change its address for notice hereunder to any other location within the United States by giving thirty (30) days written notice to the other parties in the manner set forth above. 4. ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and benefit the successors and assigns of the Parties hereto and their respective successors, transferees and assigns (including without limitation, any entity that refinances all or any portion of the obligations under the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with respect to its interest in the Power Purchase Agreement or Interconnection Agreement to assume, in writing and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the Power Purchase Agreement or Interconnection Agreement not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder. 5. GOVERNING LAW. This Consent shall be governed by the laws of the State of California applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent. 6. COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement. 7. SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby. 8. ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges and agrees that neither the execution of this Consent, the performance by the City of any of the obligations of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City of performance of the Power Purchase Agreement by any party other than Borrower shall (1) release Borrower from any obligation of Borrower under the Power Purchase Agreement or Interconnection Agreement, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any of the other Financing Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Power Purchase Agreement or Interconnection Agreement. Borrower and Administrative Agent acknowledge hereby for the benefit of City that none of the Financing Agreement, the Security 040914 jrm 0180042 34 Agreement, the Financing Documents or any other documents executed in connection therewith alter, amend, modify or impair (or purport to alter, amend, modify or impair) any provisions of the Power Purchase Agreement. CITY OF PALO ALTO ADMINISTRATIVE AGENT APPROVED AS TO FORM Senior Deputy City Attorney BORROWER APPROVED City Manager Director of Utilities City of Palo Alto (ID # 7953) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Contract for FY 2017 Asphalt Paving Project Title: Approval of Contract with O'Grady Paving, Inc. in the Amount of $2,283,754 for the FY 2017 Asphalt Paving, Capital Improvements Program Project PE-86070 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with O’Grady Paving, Inc. (Attachment A) in an amount not to exceed $2,283,754 for Palo Alto FY 2017 Asphalt Paving Project (Capital Improvement Program projects PE-86070, PO-89003, PF-14004, and PL-04010), 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with O’Grady Paving, Inc. for related additional but unforeseen work that may develop during the project, the total value of which shall not exceed $228,376. 3. Amend the Fiscal Year 2017 Budget Appropriation for the Capital Improvement Fund by: a. Increasing the California Avenue Parking District Parking Improvements project PF-14004 appropriation by $189,503; and, b. Decreasing the Infrastructure Reserve by $189,503. Background Public Works Engineering Services Division manages construction contracts for concrete repair, preventive maintenance, resurfacing, and reconstruction of various City streets annually. In more recent years, additional Capital Improvement Program (CIP) projects are being built through the annualized City of Palo Alto Page 2 resurfacing contracts due to the complexity of construction and benefit of being included in a larger project. All City of Palo Alto streets are surveyed biennially by Public Works Engineering staff and rated by a computerized pavement maintenance management system (PMMS) and Metropolitan Transportation Commission’s (MTC) pavement analysis program Street Saver. All streets have been coordinated with the City’s Utilities Department and Planning and Community Environment Department’s Transportation Division to eliminate the cutting of newly resurfaced streets. Extensive public outreach will be conducted before and during the construction phase to keep the community informed throughout the process, including sending flyers to adjacent residences and businesses and posting notices on Nextdoor and the City’s website. Discussion Project Description The $2,283,754 expenditure for this contract will be used to repave 3.8 lane miles (over 297,000 square feet) of streets with Pavement Condition Index (PCI) scores less than 60. In addition to poor surfaces, many street segments have areas of significant ponding or lifted curbs and sidewalks. The scope of work includes the replacement of approximately 5,000 lineal feet (0.95 miles) of curbs and gutters, nearly 7,600 square feet of driveways, and about 8,600 square feet of sidewalks. The sidewalk and driveway repair work in this contract is funded through CIP PO- 89003, Sidewalk Repairs. Additionally, 33 curb ramps will be replaced with Americans with Disabilities Act (ADA) compliant ramps. The streets and other work sites in this contract are listed in Attachment B. Additional maps of the FY 2017 Street Maintenance Program and current 5-year plan for street repaving are available on the Street Maintenance Program homepage located at www.cityofpaloalto.org/streets. The California Avenue Parking District will receive significant improvements as part of this project with the resurfacing of parking lots 4, and 9. This improvement work is funded through CIP PF-14004, California Avenue Parking District Parking Improvements. In conjunction with this work, sections of Sedro and New Mayfield Lanes will be milled and paved with new asphalt, including minor concrete curb City of Palo Alto Page 3 improvements as needed. The contract provisions state only one parking lot may be closed at a time. Staff will coordinate with the California Avenue merchants group prior to scheduling the parking lot work. Bid Process On March 14, 2017, a notice inviting formal bids (IFB) for the Palo Alto FY 2017 Asphalt Paving Project was posted at City Hall and sent to nine builder’s exchanges and 239 contractors. The bidding period was 21 days. Bids were received from two contractors on April 04, 2017 as listed on the Bid Summary (Attachment C). Summary of Bid Process Bid Name/Number Palo Alto FY 2017 Asphalt Paving Project Proposed Length of Project 160 calendar days Number of Bid Packages Sent to Builder’s Exchanges 9 Number of Bid Packages Sent to Contractors 239 Total Days to Respond to Bid 21 Pre-Bid Meeting? No Number of Bids Received: 2 Bid Price Range $2,283,754 to $2,610,308 The apparent low bidder was selected based upon the total of the base bid plus add alternates 1 and 2. Bids ranged from $2,283,754 to $2,610,308, and from 6% to 23% above the engineer’s estimate of $2,153,840. Staff has reviewed all bids submitted and recommends the base bid and alternatives number one and two, totaling $2,283,754, submitted by O’Grady Paving, Inc. be accepted, and O’Grady Paving, Inc. be declared the lowest responsible bidder. The contingency amount of $228,376, representing ten percent of the total contract amount, is requested City of Palo Alto Page 4 for related, additional, but unforeseen work, which may develop during the project. Staff reviewed other similar projects performed by the lowest responsible bidder, O’Grady Paving, Inc., including projects performed for the City and did not find any significant complaints with their previous work. Staff also checked with the Contractor's State License Board and confirmed the contractor has an active license on file. Resource Impact Funding for the FY 2017 Asphalt Paving Project is available in Capital Improvement Program projects PE-86070 Street Resurfacing Program; PO-89003 Sidewalk Repairs; and PL-04010 Bicycle and Pedestrian Plan Implementation. The funding allocation is as follows: Funding Source Contract Contingency Total Encumbrance PE-86070 $1,771,304 $177,130 $1,948,434 PO-89003 $300,375 $30,038 $330,413 PF-14004 $172,275 $17,228 $189,503 PL-04010 $39,800 $3,980 $43,780 Total $2,283,754 $228,376 $2,512,130 Insufficient funding remains in the California Avenue Parking District Parking Improvements project (PF-14004), therefore, an increase of $189,503 is recommended to provide funding for repaving Lots 4 and 9. A transfer from the California Avenue Parking Permit Fund is included in the FY 2018 Proposed Budget to repay the Capital Improvement Fund for this increase in costs. Policy Implications This project is in conformance with the City of Palo Alto’s Comprehensive Plan and does not represent any changes to existing City policies. Environmental Review Street resurfacing projects are categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301(c) of the CEQA Guidelines, City of Palo Alto Page 5 as repair, maintenance and/or minor alteration of existing facilities, and no further environmental review is necessary. Attachments: Attachment A: Contract Attachment B: Street List Attachment C: Bid Summary Invitation for Bid (IFB) Package 1 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT Contract No. C17167781 City of Palo Alto FY 2017 Asphalt Paving 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 May 8, 2017 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and O’GRADY PAVING, INC. ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a General Contractor duly organized and in good standing in the State of California, Contractor’s License Number 201696 and Department of Industrial Relations Registration Number 1000003381. 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 March 14, 2017, City issued an Invitation for Bids (IFB) to contractors for the FY17 Asphalt Paving 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 FY17 Asphalt Paving Project, located at Various Streets, Palo Alto, CA. 94301 ("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 160 calendar days () after the commencement date specified in City’s Notice to Proceed. By executing this Construction Contract, Contractor expressly waives any claim for delayed early completion. 6.4 Liquidated Damages. Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time, including any approved extensions thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion, based on the amount of five hundred dollars ($500) per day, or as otherwise specified in the Special Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor, 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 Two Million Two Hundred Eighty Three Thousand Seven Hundred Fifty Four Dollars ($2,283,754). [This amount includes the Base Bid and Additive Alternates 1 and 2.] 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: Holly Boyd AND [Include Construction Manager, If Applicable.] Invitation for Bid (IFB) Package 12 Rev. March 17, 2017 CONSTRUCTION CONTRACT City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be sent by registered mail or certified mail with return receipt requested. All notices, demands, requests or approvals from City to Contractor shall be addressed to: O'grady Paving, Inc. Attn: Craig Young 2513 Wyandotte Street Mountain View, Ca 94043 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: ____________________________ Public Works Director CONTRACTOR Officer 1 By:___________________________ Name:________________________ Title:__________________________ Date: _________________________ Officer 2 By:____________________________ Name:_________________________ Title:___________________________ Date:____________________________ ATTACHMENT B FY 2017 Asphalt Paving Project Street List STREET FROM TO 1 Leghorn Street San Antonio Avenue City Limit 2 Ash Street Stanford Avenue Oxford Avenue 3 Ash Street Sherman Avenue Page Mill Road 4 Byron Street Lincoln Avenue Melville Avenue 5 Forest Avenue Lincoln Avenue Center Drive 6 Melville Avenue Alma Street Emerson Street 7 Tennyson Avenue Webster Street Middlefield Road 8 Emerson Street North California Avenue Oregon Expressway 9 Fulton Street Addison Avenue Kingsley Avenue 10 Coleridge Avenue Bryant Street Cowper Street 11 Cowper Street Embarcadero Road Lowell Avenue 12 Lane 11 West Emerson Street Ramona Street 13 Lane 12 West Hamilton Avenue Ramona Street 14 Sedro Lane College Avenue Cambridge Avenue 15 Sedro Lane Cambridge Avenue New Mayfield Lane 16 New Mayfield Lane Mimosa Lane Birch Street 17 18 1 2 Median Improvements Cal Ave Lot 4 (400 Block of Cambridge) Cal Ave Lot 9 (Cambridge/Birch) FY 2017 ASPHALT PAVING BASE BID FY 2017 ASPHALT PAVING ADD ALT #1 & 2 Overcrossing/Undercrossing Miscellaneous Improvments ATTACHMENT C FY 2017 Asphalt Paving Project Bid Summary BID ITEM BASE BID APPROX. QTY.UNIT UNIT COST COST UNIT COST COST UNIT COST COST 1 Ashpalt Overlay 15% RAP 3,258 TON $110.00 $358,380.00 $112.00 $364,896.00 $220.00 $716,760.00 2 PCC Base Repair, also includes AC patching to grade 7,372 SF $18.00 $132,696.00 $18.00 $132,696.00 $16.50 $121,638.00 3 PCC Base Repair 27,163 SF $17.00 $461,771.00 $15.00 $407,445.00 $14.50 $393,863.50 412‐inch AC Plug 601 SF $7.00 $4,207.00 $22.00 $13,222.00 $30.00 $18,030.00 5AC Milling 224,010 SF $0.38 $85,123.80 $0.70 $156,807.00 $0.50 $112,005.00 6 Interlayer Membrane 9,000 LF $3.00 $27,000.00 $4.00 $36,000.00 $3.70 $33,300.00 7 Crack Sealing 27,000 LF $0.50 $13,500.00 $0.50 $13,500.00 $0.60 $16,200.00 8 Reset Utility Box 67 EA $600.00 $40,200.00 $600.00 $40,200.00 $947.00 $63,449.00 9 Reset Manhole 16 EA $650.00 $10,400.00 $850.00 $13,600.00 $1,600.00 $25,600.00 10 Reset Catch Basin 5 EA $1,800.00 $9,000.00 $2,200.00 $11,000.00 $2,050.00 $10,250.00 11 Remove and Replace Type A Curb & Gutter, 1' Buried Pan 1,100 LF $75.00 $82,500.00 $79.00 $86,900.00 $75.00 $82,500.00 12 Remove and Replace Type A Curb & Guter, 1' Exposed Pan 3,282 LF $75.00 $246,150.00 $79.00 $259,278.00 $75.00 $246,150.00 13 Remove and Replace Type A Curb & Gutter, 2' Exposed Pan 103 LF $85.00 $8,755.00 $90.00 $9,270.00 $84.00 $8,652.00 14 Remove and Replace Type A Curb & Gutter, 2.5' Exposed Pan 177 LF $85.00 $15,045.00 $92.00 $16,284.00 $87.00 $15,399.00 15 Remove and Replace Type A Curb & Gutter, 3' Exposed Pan 309 LF $90.00 $27,810.00 $95.00 $29,355.00 $89.00 $27,501.00 16 Remove and Replace Concrete Driveway 7,578 SF $16.00 $121,248.00 $17.00 $128,826.00 $16.00 $121,248.00 17 Remove and Replace Concrete Sidewalk 8,585 SF $14.00 $120,190.00 $15.00 $128,775.00 $14.00 $120,190.00 18 Demo Concrete/Asphalt 75 SF $4.00 $300.00 $10.00 $750.00 $8.20 $615.00 19 Curb Ramp 33 EA $4,000.00 $132,000.00 $5,200.00 $171,600.00 $4,876.00 $160,908.00 20 Traffic Loops 1 EA $1,000.00 $1,000.00 $3,000.00 $3,000.00 $2,500.00 $2,500.00 21 Recycling of Inert Solid Materials 3,258 TON $3.00 $9,774.00 $5.00 $16,290.00 $18.00 $58,644.00 22 Remove and Replace Blue Pavement Markers 15 EA $26.00 $390.00 $30.00 $450.00 $32.50 $487.50 23 Curb Paint 590 LF $4.00 $2,360.00 $2.50 $1,475.00 $3.25 $1,917.50 24 Thermoplastic Striping, Caltrans Detail 1 1,320 LF $2.00 $2,640.00 $2.00 $2,640.00 $0.80 $1,056.00 25 Thermoplastic Striping, Caltrans Detail 22 105 LF $2.00 $210.00 $4.00 $420.00 $4.30 $451.50 26 Thermoplastic Striping, Caltrains Detail 39/39A 1,120 LF $2.00 $2,240.00 $2.50 $2,800.00 $6.50 $7,280.00 27 Thermoplastic Striping, White, 4" Wide/Parking Stalls 5,660 LF $1.50 $8,490.00 $2.00 $11,320.00 $1.90 $10,754.00 28 Thermoplastic Striping, Yellow, 12" Wide 740 LF $4.00 $2,960.00 $5.00 $3,700.00 $1.90 $1,406.00 29 Thermoplastic Striping, White, 12" Wide 595 LF $4.00 $2,380.00 $5.00 $2,975.00 $6.50 $3,867.50 30 Thermoplastic Paving Legends 128 EA $65.00 $8,320.00 $35.00 $4,480.00 $81.00 $10,368.00 31 Traffic Control 1 LF $90,000.00 $90,000.00 $80,000.00 $80,000.00 $72,000.00 $72,000.00 32 Tree Trimming 50 CREW HOURS $270.00 $13,500.00 $250.00 $12,500.00 $365.00 $18,250.00 33 Project Notification 1 LS $19,500.00 $19,500.00 $50,000.00 $50,000.00 $47,000.00 $47,000.00 34 Utility Tie‐out Submittal 1 LS $5,000.00 $5,000.00 $3,000.00 $3,000.00 $8,693.00 $8,693.00 35 Miscellaneous Transportation Improvements 1 LS $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00 36 Offhaul and disposal of Inert Solid Materials Containing Petromat 3,500 TONS $6.00 $21,000.00 $1.00 $3,500.00 $13.25 $46,375.00 BASE BID TOTAL $2,111,039.80 $2,243,954.00 $2,610,308.50 BID ITEM ADD ALTERNATE # 1 APPROX. QTY.UNIT UNIT COST COST UNIT COST COST UNIT COST COST 1 Overcrossing/Undercrossing Project 1 LS $30,000.00 $30,000.00 $25,000.00 $25,000.00 $22,000.00 $22,000.00 TOTAL $30,000.00 $25,000.00 $22,000.00 BID ITEM ADD ALTERNATE # 2 APPROX. QTY.UNIT UNIT COST COST UNIT COST COST UNIT COST COST 1 Install 4' wide concrete median including asphalt plug 400 SF $30.00 $12,000.00 $35.00 $14,000.00 $32.00 $12,800.00 2 Remove and Replace Caltrans Standard Detail 9 200 LF $2.00 $400.00 $2.00 $400.00 $5.40 $1,080.00 3 Remove and Replace 4" Yellow Striping 200 LF $2.00 $400.00 $2.00 $400.00 $5.40 $1,080.00 TOTAL $12,800.00 $14,800.00 $14,960.00 GRAND TOTAL $2,153,839.80 $2,283,754.00 $2,647,268.50 OVER 6%23% ENGINEERS ESTIMATE O'GRADY PAVING, INC.GRANITE CONSTRUCTION CO. APPARENT LOW BIDDER ENGINEERS ESTIMATE O'GRADY PAVING, INC.GRANITE CONSTRUCTION CO. ENGINEERS ESTIMATE O'GRADY PAVING, INC.GRANITE CONSTRUCTION CO. City of Palo Alto (ID # 8048) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Accessory Dwelling Unit Ordinance Update Title: SECOND READING: Adoption of an Ordinance Amending Chapter 18 (Zoning) to Implement a new State Law Related to Accessory Dwelling Units and Junior Dwelling Units and to Reorganize and Update the City’s Existing Regulations. The Ordinance is Exempt From the California Environmental Quality Act (CEQA) per Public Resource Code Section 21080.17 and CEQA Guideline Sections 15061(b), 15301, 15303 and 15305 (FIRST READING: April 17, 2017 PASSED: 7-2 Holman, Kou no) From: City Manager Lead Department: Planning and Community Environment Recommendation: Staff recommends that the Council conduct a second reading and adopt the attached Accessory Dwelling Unit Ordinance (Attachment A). Background: On April 17, 2017, the Council held a public hearing and approved the draft Accessory Dwelling Unit Ordinance on first reading asking staff to return with modifications to the draft ordinance. The City Council reviewed draft ordinance and staff report from April 17th meeting; the accompanying report is available online: http://www.cityofpaloalto.org/civicax/filebank/documents/56870 Discussion: Consistent with the Council’s motion at the April 17th hearing, staff made the following changes to the ordinance, as shown in strikeout /underline in Attachment A, with one notable exception described below: City of Palo Alto Page 2 Adopt the Accessory Dwelling Unit Ordinance amending Palo Alto Municipal Code provisions regarding Accessory Dwelling Units (ADUs) including the following changes: i. Limit ADU’s to lot sizes of 5,000 square feet or more; ADU conversions and Junior Accessory Dwelling Units (JADUs) would be exempt from this requirement; ii. Allow two story ADUs in the Residential Estate (RE) district using existing setbacks; (no changes were made to the ordinance presented for a first reading on April 17th, see RE District & ADU Setbacks heading below) iii. Clarify that the additional Floor Area Ratio (FAR) should be used within the ADU, not the primary dwelling unit; iv. Restore Ordinance language pertaining to doorway orientation; v. Remove Lot Coverage requirements for new ADUs on properties that are no smaller than 10 percent smaller than standard lot sizes including those which are standard or larger. In addition to the ordinance modifications, the Council directed staff to: explore options to limit parking permits in Residential Preferential Parking (RPP) districts by lot; return with potential Eichler design guidelines relating to ADUs, including lower height limits; report back to the City Council on a quarterly basis; and, Direct the Planning and Transportation Commission to conduct a Study Session within six months of the implementation of the Accessory Dwelling Unit Ordinance to analyze the results of this Ordinance. RE District & ADU Setbacks No changes were made to the ordinance with respect to item (ii) above because the proposed ordinance provides that ADUs shall comply with the underlying zoning district’s setbacks unless express exceptions implementing state law requirements apply. Therefore, in the RE district, two-story or second story (Attached) ADUs would be subject to the underlying zoning district’s setback requirements, except for new ADU construction over a garage – this is the only limited circumstance under which the 5-foot setback from the side and rear lot lines is required under state law. (A “setback of no more than five feet from the side and rear lot lines shall be required for an accessory dwelling unit that is constructed above a garage.” Government Code section a(1)(D)(vii)).) A detached two story ADU is not allowed in the RE district or any other district that permits ADUs, except for the Detached Housing on Small Lots (DHS) zone in the South of Forest Avenue, Phase I, Coordinated Area Plan (SOFA I CAP). The existing SOFA I CAP complies with state law with regard to ADUs and no changes are required or proposed for this area. City of Palo Alto Page 3 Clarifications to Comply with State Law In two places in the ordinance, language that was shown as deleted between the March 7th and April 17th hearings was restored in order to comply with state law requirements. The first is subsection (a)(3)(ii) of Section 18.42.040 regarding setbacks for an existing garage that is converted to an ADU. State law states that “no setback shall be required for an existing garage that is converted to an accessory dwelling unit”. (Government Code section 65852.2(a)(1)(D)(vii).) The other excerpt that was restored is in subsection (a)(7)(iii) of Section 18.42.040 regarding the maximum increase in the living area by an attached ADU. State law states that the “total floor area of an attached accessory dwelling unit shall not exceed 50 percent of the existing living area”. (Government Code section 65852.2(a)(1)(D)(iv).) Clarifications for Consistency with the Municipal Code Lot Coverage/Floor Area Exception (Section 20 18.42.040(a)(4)(ii)(b)) Language stating that basement area shall not count towards floor area maximum if the finished level of the first floor is no more than three feet above grade will be carried forward with this section from the original location in the existing Municipal Code. This confirms when basements count towards floor area or not and will bring this proposed code section into consistency with the rest of the Municipal Code. This language was inadvertently left off in the previous draft. Parking in Front Setback (Section 20 18.42.040(a)(10)(ii)) Language was added to clarify that structures are not permitted within the front setback, consistent with the Municipal Code. Only uncovered parking would be allowed within the front setback. Timeline: If adopted on second reading, the ordinance will be effective on June 8th (the 31st day following council action). City of Palo Alto Page 4 Attachments: Attachment A: Ordinance Accessory Dwelling Unit_Revised (PDF) Attachment B: 04-17-17 DRAFT Action Minutes (DOCX) Attachment C: Public Letters to Council (PDF) Not Yet Approved 2017-04-19_Palo Alto ADU 1 Ordinance No. Ordinance of the Council of the City of Palo Alto Amending Chapter 18 (Zoning) of the Palo Alto Municipal Code to Implement New State Law Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units and to Reorganize and Update City’s Existing Regulations The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. Housing in California is becoming increasingly unaffordable. The average California home currently costs about 2.5 times the national average home price and the monthly rent is 50% higher than the rest of the nation. Rent in San Francisco, San Jose, Oakland, and Los Angeles are among the top 10 most unaffordable in the nation. With rising population growth, California must not only provide housing but also ensure affordability. B. Despite a high median income in Palo Alto, nearly 30 percent of all households overpaid for their housing (more than 30 percent of their income) in 2010; C. It is estimated that 63 percent of extremely low income renter households and 75 percent of extremely low income owner households overpaid for housing in 2010. Of the estimated 1,520 low income households, 75 percent of renter households and 44 percent of homeowner households paid more than 30 percent of their income for housing. D. The Palo Alto City Council, recognizing the severity of the regional housing crisis, requested that the Planning and Transportation Commission review constraints affecting the production of second (accessory) dwelling units and recommend modifications to the City’s development standards. E. While existing law enables accessory dwellings as a source of housing, recent studies show that local standards like Palo Alto’s, perhaps unintentionally, prevent homeowners from building ADUs with standards like lot coverage, large set-backs, off-street parking, or costly construction requirements. F. In September 2016, Governor Brown signed into law Senate Bill 1069, Assembly Bill 2299 and Assembly Bill 2406 relating to the creation of accessory dwelling units (ADUs) and junior accessory dwelling units. G. These new bills were intended to address the housing crisis by easing regulatory barriers for homeowners who choose to build affordable housing in their own backyards. H. This ordinance is adopted to comply with these new State mandates regarding ADUs and junior accessory dwelling units, and to reduce regulatory constraints affecting their production. SECTION 2. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) is amended to read as follows: Not Yet Approved 2017-04-19_Palo Alto ADU 2 18.04.030 Definitions . . . (4) “Accessory dwelling unit” means an attached or a detached residential dwelling unit which provides complete independent living facilities for one or more persons. It shall include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-family dwelling is situated. An accessory dwelling unit also includes the following: a. An efficiency unit, as defined in Section 17958.1 of the Health and Safety Code. b. A manufactured home, as defined in Section 18007 of the Health and Safety Code. In some instances this Code uses the term second dwelling unit interchangeably with accessory dwelling unit. (46.5) “Dwelling unit, second” means a separate and complete dwelling unit, other than and subordinate to the main dwelling unit, whether a part of the same structure or detached, on the same residential lot. (74.5) “Junior accessory dwelling unit” means a unit that is no more than 500 square feet in size and contained entirely within an existing single-family structure. A junior accessory dwelling unit may include separate sanitation facilities, or may share sanitation facilities with the existing structure. (132) “Single-family use” means the use of a site for only one dwelling unit and, where permitted, an accessory second dwelling unit or a junior accessory dwelling unit. . . . SECTION 3. In Section 18.10.010 (a) substitute the term “accessory dwelling unit(s)” for “second dwelling unit(s)”. SECTION 4. Section 18.10.030 Table 1 and Footnote (2) are amended as follows: TABLE 1 PERMITTED AND CONDITIONALLY PERMITTED LOW-DENSITY RESIDENTIAL USES [P = Permitted Use -- CUP = Conditional Use Permit Required] R-E R-2 RMD Subject to Regulations in: ACCESSORY AND SUPPORT USES Accessory facilities and uses customarily incidental to permitted uses (no limit on number of plumbing fixtures) P P P 18.10.080 Home Occupations, when accessory to permitted residential uses. P P P 18.42.060 Horticulture, gardening, and growing of food products for consumption by occupants of the site. P P P Sale of agricultural products produced on the premises (1) P 18.10.110 Not Yet Approved 2017-04-19_Palo Alto ADU 3 Second Accessory Dwelling Units P P(2) P(2) 18.4210.0470 Junior Accessory Dwelling Units P P(2) P(2) 18.42.040 AGRICULTURE AND OPEN SPACE USES Agriculture P 18.10.110 EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Private Educational Facilities CUP CUP CUP Religious Congregations and Institutions CUP CUP CUP PUBLIC/QUASI-PUBLIC USES Community Centers CUP CUP CUP Utility Facilities essential to provision of utility services to the neighborhood, but excluding business offices, construction or storage yards, maintenance facilities, or corporation yards. CUP CUP CUP RECREATION USES Neighborhood Recreational Centers CUP Outdoor Recreation Services CUP CUP RESIDENTIAL USES Single-Family P P P Two-Family use, under one ownership P P Mobile Homes P P P 18.42.100 Residential Care Homes P P P RETAIL USES Cemeteries CUP Commercial Plant Nurseries CUP SERVICE USES Convalescent Facilities CUP Day Care Centers CUP CUP CUP Small Adult Day Care Homes P P P Large Adult Day Care Homes CUP CUP CUP Small Family Day Care Homes P P P Large Family Day Care Homes P P P Bed & Breakfast Inns P(3) P = Permitted Use CUP = Conditional Use Permit Not Yet Approved 2017-04-19_Palo Alto ADU 4 Required . . . (2) Second Accessory Dwelling Units in R-2 and RMD Zones: An accessory second dwelling unit or a Junior Accessory Dwelling Unit associated with a single-family residence on a lot in the R- 2 or RMD zones is permitted, subject to the provisions of Section 18.10.07018.42.040, and such that no more than two units result on the lot. . . . SECTION 5. Section 18.10.040 (Development Standards) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) is amended to read as follows: 18.10.040 Development Standards (a) Site Specifications, Building Size, Height and Bulk, and Residential Density . . . 18.10.040(a) Table 2, Footnote . . . (5) Maximum House Size: The gross floor area of attached garages and attached second accessory dwelling units and junior accessory dwelling units are included in the calculation of maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. This provision applies only to single-family residences, not to duplexes allowed in the R-2 and RMD districts. . . . (B) Flag Lot Development Standards (i) Individual Review The Individual Review provisions of Section 18.12.110 of the Zoning Ordinance shall be applied to any single-family or two-family residence in the R-2 or RMD districts to those sides of a site that share an interior side lot line with the interior side or rear lot line of a property zoned for or used for single- family or two-family dwellings. , except where architectural review board review is required for an accessory second dwelling on an RMD-zoned site. The individual review criteria shall be applied only to the project's effects on adjacent single-family and two-family uses. SECTION 6. Section 18.10.060 Table 3 is amended as follows: Not Yet Approved 2017-04-19_Palo Alto ADU 5 TABLE 3 PARKING REQUIREMENTS FOR R-E, R-2 AND RMD USES Use Minimum Off-Street Parking Requirement Single-family residential use (excluding second accessory dwelling units) 2 spaces per unit, of which one must be covered Two family (R2 & RMD districts) 3 spaces total, of which at least two must be covered Second Accessory dwelling unit, attached or detached: >450 sf in size ч450 sf in size 2 spaces per unit, of which one must be covered 1 space per unit, which may be covered or uncovered No parking required Junior accessory dwelling unit No parking required Other Uses See Chapter 18.40 . . . SECTION 7. Section 18.10.070 (Second Dwelling Units) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) is repealed in its entirety and a new 18.10.070 is added to read as follows: 18.10.070 Accessory and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Section 18.42.040. SECTION 8. Section 18.10.120 (Architectural Review) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) is amended to read as follows: 18.10.120 Architectural Review Architectural review, as required in Section 18.76.020, is required in the R-E, R-2, and RMD districts whenever three or more adjacent residential units are intended to be developed concurrently, whether through subdivision or individual applications. Architectural review is also required for second dwelling units of more than 900 square feet, when located in the Neighborhood Preservation Combining District (NP). SECTION 9. Section 18.10.140 (Neighborhood Preservation Combining District (NP) Not Yet Approved 2017-04-19_Palo Alto ADU 6 Standards) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) is amended to read as follows: 18.10.140 Neighborhood Preservation Combining District (NP) Standards . . . (b)(2) Design Review Required For properties on which two or more residential units are developed or modified, design review and approval shall be required by the architectural review board in compliance with procedures established in Section 18.76.020 for any new development or modification to any structure on the property and for site amenities. No design review is required for construction of or modifications to single-family structures that constitute the only principal structure on a parcel of land or for accessory dwelling units or junior accessory units. No design review is required for construction of second dwelling units on a parcel except when the second unit exceeds 900 square feet in size. . . . SECTION 10. Section 18.10.150(e) (Existing Second Dwelling Units on Substandard Size Lots) is deleted in its entirety and reserved for future use. . . . SECTION 11. Section 18.12.010(a) is amended as follows: (a) Single Family Residential District [R-1] The R-1 single family residential district is intended to create, preserve, and enhance areas suitable for detached dwellings with a strong presence of nature and with open area affording maximum privacy and opportunities for outdoor living and children's play. Minimum site area requirements are established to create and preserve variety among neighborhoods, to provide adequate open area, and to encourage quality design. Second Accessory dwelling units, junior accessory dwelling units and accessory structures or buildings are appropriate. where consistent with the site and neighborhood character. Community uses and facilities, such as churches and schools, should be limited unless no net loss of housing would result. . . . SECTION 12. Section 18.12.030 Table 1, is amended as follows: Not Yet Approved 2017-04-19_Palo Alto ADU 7 Table 1 PERMITTED AND CONDITIONAL R-1 RESIDENTIAL USES R-1 and all R-1 Subdistricts Subject to Regulations for: ACCESSORY AND SUPPORT USES Accessory facilities and uses customarily incidental to permitted uses with no more than two plumbing fixtures and no kitchen facility, or of a size less than or equal to 200 square feet P 18.04.030(a)(3) 18.12.080 Accessory facilities and uses customarily incidental to permitted uses with more than two plumbing fixtures (but with no kitchen), and in excess of 200 square feet in size, but excluding second accessory dwelling units CUP 18.12.080 Home occupations, when accessory to permitted residential P 18.42.060 Horticulture, gardening, and growing of food products for consumption by occupants of the site P Second Accessory Dwelling Units P(1) 18.42.04012.070 Junior Accessory Dwelling Unit P(1) 18.42.040 EDUCATIONAL, RELIGIOUS AND ASSEMBLY USES Private Educational Facilities CUP Churches and Religious Institutions CUP PUBLIC/QUASI PUBLIC USES Community Centers CUP Utility Facilities essential to provision of utility services to the neighborhood, but excluding business offices, construction or storage yards, maintenance facilities, or corporation yards CUP RECREATION USES Outdoor Recreation Services CUP RESIDENTIAL USES Single-Family P Mobile Homes P 18.42.100 Residential Care Homes P SERVICE USES Day Care Centers CUP Small Adult Day Care Homes P Not Yet Approved 2017-04-19_Palo Alto ADU 8 Large Adult Day Care Homes CUP Small Family Day Care Homes P Large Family Day Care Homes P P = Permitted Use CUP = Conditional Use Permit Required (1) An Accessory Dwelling Unit or a Junior Accessory Dwelling Unit associated with a single- family residence on a lot is permitted, subject to the provisions of Section 18.42.040, and such that no more than two total units result on the lot. SECTION 13. Section 18.12.040 Table 2, footnote (8) is amended as follows: (8) Maximum House Size: The gross floor area of attached garages and attached accessory second dwelling units and junior accessory dwelling units are included in the calculation of maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. SECTION 14. Section 18.12.060 Table 4 is amended as follows: Table 4 shows the minimum off-street automobile parking requirements for specific uses in the R-1 district. Table 4 Parking Requirements for Specific R-1 Uses Use Minimum Off-Street Parking Requirement Single-family residential use (excluding second accessory dwelling units) 2 spaces per unit, of which one must be covered. Second Accessory dwelling unit , attached or detached 2 spaces per unit, of which one must be covered No parking required Junior Accessory Dwelling Unit No parking required Other Uses See Chs. 18.52 and 18.54 . . . Not Yet Approved 2017-04-19_Palo Alto ADU 9 SECTION 15. Section 18.12.070 (Second Dwelling Units) of Chapter 18.12 (R-1 Single- Family Residential District) of Title 18 (Zoning) is repealed in its entirety and a new 18.12.070 is added to read as follows: 18.12.070 Accessory and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Section 18.42.040. SECTION 16. Section 18.12.090(b)(2) is amended to read as follows: . . . (2) basement area is deemed to be habitable space but the finished level of the first floor is no more than three feet above the grade around the perimeter of the building foundation. Basement space used as a second dwelling unit or portion thereof shall be counted as floor area for the purpose of calculating the maximum size of the unit (but may be excluded from calculations of floor area for the total site). This provision is intended to assure that second units are subordinate in size to the main dwelling and to preclude the development of duplex zoning on the site. . . . SECTION 17. Section 18.12.150(d) (Existing Second Dwelling Units on Substandard Size Lots) is deleted in its entirety and reserved for future use. . . . SECTION 18. Section 18.28.040, Table 1, is amended as follows: Table 1 Land Uses PF OS AC Subject to Regulations in Chapter: ACCESSORY AND SUPPORT USES Accessory facilities and accessory uses P Chs. 18.40 and 18.42 Eating and drinking services in conjunction with a permitted use (1) CUP Retail services as an accessory use to the administrative offices of a non-profit organization, provided that such retail services do not exceed 25% of the gross floor area of the combined administrative office services and retail service uses (1) CUP Retail services in conjunction with a permitted use (1) CUP Not Yet Approved 2017-04-19_Palo Alto ADU 10 Sale of agricultural products produced on the premises; provided, that no permanent commercial structure for the sale or processing of agricultural products shall be permitted. P Second Accessory dwelling units, subject to regulations in Section 18.28.07042.040 P(2) 18.28.070 18.42.040 Junior Accessory Dwelling Unit P(2) 18.42.040 AGRICULTURAL AND OPEN SPACE USES Agricultural Uses, including animal husbandry, crops, dairying, horticulture, nurseries, livestock farming, tree farming, viticulture, and similar uses not inconsistent with the intent and purpose of this chapter P P Botanical conservatories, outdoor nature laboratories, and similar facilities P Native wildlife sanctuaries P Park uses and uses incidental to park operation P EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Business or trade schools (1) CUP Churches and religious institutions (1) CUP Educational, charitable, research, and philanthropic institutions CUP Private educational facilities (1) CUP Public or private colleges and universities and facilities appurtenant thereto CUP Special education classes (1) CUP OFFICE USES Administrative office services for non-profit organizations (1) CUP OTHER USES Other uses which, in the opinion of the director, are similar to those listed as permitted or conditionally permitted uses CUP (1) PUBLIC/QUASI-PUBLIC FACILITY USES All facilities owned or leased, and operated or used, by the City of Palo Alto, the County of Santa Clara, the State of California, the government of the United States, the Palo Alto Unified School District, or any other governmental agency P Communication Facilities CUP Community Centers CUP (1) Utility Facilities CUP CUP CUP RECREATIONAL USES Neighborhood recreation centers CUP (1) Not Yet Approved 2017-04-19_Palo Alto ADU 11 Outdoor recreation services CUP (1) CUP Recreational uses including riding academies, clubs, stables, country clubs, and golf courses CUP Youth clubs CUP (1) RESIDENTIAL USES Single-family dwellings P Manufactured housing (including mobile homes on permanent foundations) P 18.40. Guest ranches CUP Residential care facilities, when utilizing existing structures on the site CUP (1) Residential Care Homes P Residential use, and accessory buildings and uses customarily incidental to permitted dwellings; provided, however, that such permitted dwellings shall be for the exclusive use of the owner or owners, or lessee or lessor of land upon which the permitted agricultural use is conducted, and the residence of other members of the same family and bona fide employees of the aforementioned P SERVICE USES Animal care, including boarding and kennels CUP CUP Cemeteries CUP Cemeteries, not including mausolea, crematoria, or columbaria CUP Small day care homes P Large day care homes CUP Day care centers CUP (1) Art, dance, gymnastic, exercise or music studios or CUP (1) Medical Services: Hospitals CUP Outpatient medical facilities with associated medical research CUP TEMPORARY USES Temporary parking facilities, provided that such facilities CUP (1) TRANSPORTATION USES Airports and airport-related uses CUP (1) . . . (2) An accessory dwelling unit or a Junior Accessory Dwelling Unit associated with a single- family residence on a lot in the OS District is permitted, subject to the provisions of Section 18.42.040, and such that no more than two total units result on the lot. SECTION 19. Section 18.28.070(a) (Second Dwelling Units) is amended as follows: 18.28.070 Additional OS District Regulations The following additional regulations shall apply in the OS district: Not Yet Approved 2017-04-19_Palo Alto ADU 12 (a) Second Accessory Dwelling Units and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Section 18.42.040. Not more than one attached or detached second dwelling units shall be allowed on a lot in the OS district, and shall be subject to the following regulations: (1) Second dwelling shall only be permitted on sites with a minimum site area of 10 acres; (2) Attached second dwelling units shall comply with the OS district height limitation of 25 feet; and (3) Second dwelling units shall follow the standards set forth in the Residential Estate (R- E) District for second dwelling units (18.10.070(b)), with the exceptions outlined in subsections 1 and 2 above. . . . SECTION 20. Section 18.42.040 (Accessory and Junior Dwelling Units) is added as follows: 18.42.040 Accessory and Junior Dwelling Units The following regulations apply to zoning districts where accessory dwelling units and junior accessory dwelling units are permitted. (a) Accessory Dwelling Units 1. Purpose The intent of this section is to provide regulations to accommodate accessory dwelling units, in order to provide for variety to the city's housing stock and additional affordable housing opportunities. Accessory Dwelling Units shall be separate, self-contained living units, with separate entrances from the main residence, whether attached or detached. The standards below are provided to minimize the impacts of accessory dwelling units on nearby residents and throughout the city, and to assure that the size and location of such dwellings is compatible with the existing residence on the site and with other structures in the area. 2. Minimum Lot Sizes (i) In the R-1 district and all R-1 subdistricts, RE district, R-2 district, and RMD district, the minimum lot size for the development of an accessory dwelling unit is 5,000 square feet. (ii) In the OS District, the minimum lot size for the development of an accessory dwelling unit is 10 acres. 3. Setbacks and Daylight Plane (i) Except as otherwise provided in this section, accessory dwelling units shall comply with the underlying zoning district’s setbacks, including daylight plane requirements. Not Yet Approved 2017-04-19_Palo Alto ADU 13 (ii) Notwithstanding section (i) above, no setback shall be required for an existing garage that is converted to an accessory dwelling unit, except as provided in subsection (a)(5) below. (iii) In districts permitting second story accessory dwelling units, a setback of no more than five feet from the side and rear lot lines shall be required for an accessory dwelling unit constructed above a garage. 4. Lot Coverage/FAR (i) An accessory dwelling unit shall be included in the lot coverage and FAR requirements applicable to the parcel. (ii) Exceptions: a.Lot Coverage. When the development of an accessory dwelling unit on a parcel with an existing single family residence would result in the parcel exceeding the lot coverage requirement, the accessory dwelling unit shall not be included in the calculation of lot coverage applicable to the property, so long as the parcel meets the underlying zoning district’s minimum lot size requirement or is substandard by no more than ten percent (10%) of the underlying zoning district’s minimum lot size requirement. b.Basement FAR. In the R-1 district and all R-1 subdistricts, basement space used as an accessory dwelling unit, or portion thereof, shall not be included in the calculation of floor area for the entire site, providing the measurement from first finished floor to grade around the perimeter of the building is no more than three (3) feet c.FAR. When the development of a new one-story accessory dwelling unit on a parcel with an existing single family residence would result in the parcel exceeding the maximum floor area, an additional 175 square feet of floor area above the maximum amount of floor area otherwise permitted by the underlying zoning district shall be allowed. This additional area shall be permitted only to accommodate the development of the accessory dwelling unit. 5.Conversion of Space in Existing Single Family Residence or Existing Accessory Structure Notwithstanding the provisions of subsections (a)(2), (a)(3), (a)(4), (a)(7) and (a)(8), in the R-1 district and all R-1 subdistricts and RE district only, an Accessory Dwelling Unit shall be permitted if the unit is contained within the existing space of a single-family residence or an existing accessory structure, has independent exterior access from the existing residence, and the side and rear setbacks are sufficient for fire safety, and if the accessory dwelling unit conforms with the following: a.For the purposes of this section, the portion of the single-family residence or accessory structure subject to the conversion shall be legally permitted and existing as of January 1, 2017. Not Yet Approved 2017-04-19_Palo Alto ADU 14 b. Notwithstanding the allowance in this section, only one accessory dwelling unit or junior accessory dwelling unit may be located on any lot subject to this section. c. No new or separate utility connection shall be required between the accessory dwelling unit and utility service, such as water, sewer, and power. d. The accessory dwelling unit shall comply with the provisions of subsections (a)(6), (a)(9), and (a)(10). 6. Privacy Any window, door or deck of a second story accessory dwelling unit shall utilize techniques to lessen views onto adjacent properties to preserve the privacy of residents. These techniques may include placement of doors, windows and decks to minimize overview of neighboring dwelling units, use of obscured glazing, window placement above eye level, and screening between the properties. 7. Additional Development Standards for Attached Accessory Dwelling Units (i) Attached accessory dwelling units are those attached to the main dwelling. All attached accessory dwelling units shall be subject to the additional development requirements specified below. (ii) Attached unit size counts toward the calculation of maximum house size. (iii) Unit Size: The maximum size of an attached accessory dwelling unit living area shall not exceed 600 square feet and shall not exceed 50% of the existing living area of the primary existing dwelling unit. The accessory dwelling unit and any covered parking provided for the accessory dwelling unit shall be included in the total floor area for the site, but the covered parking area is not included in the maximum 600 square feet for attached unit. Any basement space used as an accessory dwelling unit or portion thereof shall be counted as floor area for the purpose of calculating the maximum size of the accessory unit. (iv) Maximum height (including property in a special flood hazard zone): One story and 17 feet. However, in the RE District attached Accessory Dwelling Units may be two stories and 30 feet. In the OS zone, attached Accessory Dwelling Units may be two stories and 25 feet. (v) Separate Entry Required for Attached Units: A separate exterior entry shall be provided to serve an accessory dwelling unit. (vi) Except on corner lots, the accessory dwelling unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the second entranceway is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property. (vii) If covered parking for an accessory dwelling unit is provided in the RE zone, the maximum size of the covered parking area for the accessory dwelling unit is 200 square feet. 8. Additional Development Standards for Detached Accessory Dwelling Units Not Yet Approved 2017-04-19_Palo Alto ADU 15 (i) Detached accessory dwelling units are those detached from the main dwelling. All detached accessory dwelling units shall be subject to the additional development standards specified below. (ii) The maximum size of the detached accessory dwelling unit living area shall be 900 square feet. a. The accessory dwelling unit and any covered parking shall be included in the total floor area for the site, but the covered parking area is not included within the maximum 900 square feet for detached unit. b. Any basement space used as an accessory dwelling unit or portion thereof shall be counted as floor area for the purpose of calculating the maximum size of the accessory unit. (iii) Maximum height (including property in a special flood hazard zone): one story and 17 feet. (iv) Setbacks: notwithstanding section (a)(3)(i), a detached accessory dwelling unit may be located in a rear yard, but must maintain a minimum setback of six feet (6’) from the interior side and rear property lines and sixteen feet (16’) from a street side yard. No portion of a building may encroach into a daylight plane beginning at a height of eight feet (8’) at the property line and increasing at a slope of one foot (1’) for every one foot (1’) of distance from the property line. (v) If covered parking is provided for an accessory dwelling unit in the RE District, the maximum size of covered parking area for the detached accessory dwelling unit is 200 square feet. (vi) There shall be no windows, doors, mechanical equipment, or venting or exhaust systems located within six feet of a property line. 9. Additional Requirements for All Accessory Dwelling Units (i) Sale of Units: The Accessory dwelling unit shall not be sold separately from the primary residence. (ii) Short term rentals. The accessory dwelling unit shall not be rented for periods of less than 30 days. (iii) Number of Units Allowed: Only one accessory dwelling unit or junior accessory dwelling unit may be located on any residentially zoned lot. (iv) Existing Development: A single-family dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of the accessory dwelling unit. (v) Occupancy: The owner of a parcel proposed for accessory dwelling use shall occupy as a principal residence either the primary dwelling or the accessory dwelling, unless both the primary dwelling and the accessory dwelling are rented to the same tenant and such tenant is prohibited from sub-leasing the primary dwelling or the accessory dwelling. Not Yet Approved 2017-04-19_Palo Alto ADU 16 (vi) Prior to issuance of a building permit for the accessory dwelling unit, the owner shall record a deed restriction in a form approved by the city that: includes a prohibition on the sale of the accessory dwelling unit separate from the sale of the single-family residence; requires owner- occupancy consistent with subsection (a)(9)(v) above; does not permit short-term rentals; and restricts the size and attributes of the accessory dwelling unit to those that conform with this section. (vii) Accessory dwelling units shall not be required to provide fire sprinklers if they are not required for the primary residence. (viii) Street Address Required: Street addresses shall be assigned to all accessory dwellings to assist in emergency response. (ix) Street Access: When parking is provided, the accessory dwelling unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access is permitted by the director upon a determination that separate access will result in fewer environmental impacts such as excessive paving, unnecessary grading or unnecessary tree removal, and that such separate access will not create the appearance, from the street, of a lot division or two-family use. (x) For properties listed in the Palo Alto Historic Inventory, the California Register of Historical Resources, the National Register of Historic Places, or considered a historic resource after completion of a historic resource evaluation, compliance with the appropriate Secretary of Interior’s Standards for the Treatment of Historic Properties shall be required, as determined by the Planning Director. (xi) No protected tree shall be removed for the purpose of establishing an accessory dwelling unit unless the tree is dead, dangerous or constitutes a nuisance under Section 8.04.050. Any protected tree removed pursuant to this subsection shall be replaced in accordance with the standards it the Tree Technical Manual. (xii) Except as modified by this Section 18.42.040, the accessory dwelling unit shall conform to all requirements of the underlying zoning district, any applicable combining district, and all other applicable provisions of this Title 18. 10. Parking (i) No additional parking shall be required for accessory dwelling units. (ii) If an accessory dwelling unit replaces existing required covered parking, replacement spaces shall be provided. When a garage, carport, or covered parking structure is demolished in conjunction with the construction of an accessory dwelling unit, any required replacement spaces may be located in any configuration on the same lot as the accessory dwelling unit, including, but not limited to, within the front setback if on an existing driveway, as covered spaces, uncovered spaces, or tandem spaces, or by the use of mechanical automobile parking lifts. All new parking structures shall comply with development standards of the underlying zoning. Not Yet Approved 2017-04-19_Palo Alto ADU 17 (b) Junior Accessory Dwelling Units 1. Purposes: This Section provides standards for the establishment of junior accessory dwelling units, an alternative to the standard accessory dwelling unit. Junior accessory dwelling units will typically be smaller than an accessory dwelling unit, will be constructed within the walls of an existing single family structure and requires owner occupancy in the single family residence where the unit is located. 2. Development Standards. Junior accessory dwelling units shall comply with the following standards: (i) Number of Units Allowed: Either one accessory dwelling unit or one junior accessory dwelling unit, may be located on any residentially zoned lot that permits a single-family dwelling except as otherwise regulated or restricted by an adopted Coordinated Area Plan or Specific Plan. A junior accessory dwelling unit shall only be located on a lot which already contains one legal single-family dwelling. (ii) Size: A junior accessory dwelling unit shall not exceed 500 square feet in size. (iii) Lot Coverage/FAR: a. A junior accessory dwelling unit shall be included in the calculation of lot coverage and FAR applicable to the property. b. A lot with a junior accessory dwelling unit shall be permitted to develop an additional 50 square feet of floor area above the maximum amount of floor area otherwise permitted by the underlying zoning district. This additional area shall be permitted to accommodate the junior accessory dwelling unit. (iv) Owner Occupancy: The owner of a parcel proposed for a junior accessory dwelling unit shall occupy as a principal residence either the primary dwelling or the junior accessory dwelling. Owner-occupancy is not required if the owner is a governmental agency, land trust, or housing organization. (v) Sale Prohibited: A junior accessory dwelling unit shall not be sold independently of the primary dwelling on the parcel. (vi) Short term rentals: The junior accessory dwelling unit shall not be rented for periods of less than 30 days. (vii) Location of Junior Accessory Dwelling Unit: A junior accessory dwelling unit shall be created within the existing walls of an existing primary dwelling, and shall include conversion of an existing bedroom. Not Yet Approved 2017-04-19_Palo Alto ADU 18 (viii) Separate Entry Required: A separate exterior entry shall be provided to serve a junior accessory dwelling unit, with an interior entry to the main living area. A junior accessory dwelling may include a second interior doorway for sound attenuation. (ix) Kitchen Requirements: The junior accessory dwelling unit shall include an efficiency kitchen, requiring and limited to the following components: a. A sink with a maximum waste line diameter of one-and-a-half (1.5) inches, b. A cooking facility or appliance which does not require electrical service greater than one hundred and twenty (120) volts, or natural or propane gas, and c. A food preparation counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit. (x) Parking. No additional parking is required beyond that required at the time the existing primary dwelling was constructed. (xi) Fire Protection; Utility Service. For the purposes of any fire or life protection ordinance or regulation or for the purposes of providing service for water, sewer, or power, a junior accessory dwelling unit shall not be considered a separate or new unit. (xii) Deed Restriction. Prior to the issuance of a building permit for a junior accessory dwelling unit, the owner shall record a deed restriction in a form approved by the city that includes a prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, requires owner-occupancy consistent with subsection (b)(2)(iv) above, does not permit short-term rentals, and restricts the size and attributes of the junior dwelling unit to those that conform with this section. SECTION 21. Section 18.52.040 (6)(c) Table 1, is amended as follows: Table 1 Minimum Off-Street Parking Requirements Use Vehicle Parking Requirement (# of spaces) Bicycle Parking Requirement Spaces Class1 Long Term (LT) and Short Term (ST) RESIDENTIAL USES Single -Family Residential (Primary Unit) Tandem Parking Allowed (a) In the OS district 4 spaces, of which at least one space must be covered None (b) In all other districts 2 spaces, of which at least one space must be covered Not Yet Approved 2017-04-19_Palo Alto ADU 19 (c) Underground parking for single family uses is prohibited, except pursuant to a variance granted in accordance with the provisions of Chapter 18.76 (Permits and Approvals) of this title, in which case the area of the underground garage shall be counted toward the gross floor area. Second Accessory Dwelling Unit (In addition to main dwelling unit requirements) >450 sf in size <450 sf in size 2 spaces, of which at least one must be covered 1 space, covered or uncovered No parking required None Junior Accessory Dwelling Units No parking required None Two-Family Residential (R-2 & RMD Districts) 1.5 spaces per unit, of which at least one space per unit must be covered Tandem Parking Allowed, with one tandem space per unit, associated directly with another parking space for the same unit 1 space per Unit 100% – LT Multiple -Family Residential 1.25 per studio unit 1.5 per 1-bedroom unit 2 per 2-bedroom or larger unit At least one space per unit must be covered Tandem parking allowed for any unit requiring two spaces (one tandem space per unit, associated directly with another parking space for the same unit, up to a maximum of 25% of total required spaces for any project with more than four (4) units) 1 per unit 100% – LT Not Yet Approved 2017-04-19_Palo Alto ADU 20 (a) Guest Parking For projects exceeding 3 units; 1 space plus 10% of total number of units, provided that if more than one space per unit is assigned or secured parking, then guest spaces equal to 33% of all units is required. 1 space for each 10 units 100% – ST . . . SECTION 22. In Section 18.76.020 (D), substitute the term “accessory dwelling unit(s)” for “second dwelling unit(s)”. SECTION 23. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 24. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 25. The Council finds that the adoption of this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to Public Resources Code section 21080.17 (Application of Division to Ordinances Implementing Law Relating to Construction of Dwelling Units and Second Units) and CEQA Guideline sections 15061(b) and 15301, 15303 and 15305 because it simply provides a comprehensive permitting scheme for accessory dwelling units whose construction is exempt from CEQA. SECTION 26. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: Not Yet Approved 2017-04-19_Palo Alto ADU 21 NOT PARTICIPATING: ATTEST: __________________________________ __________________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________________ __________________________________ Senior Asst. City Attorney City Manager __________________________________ Director of Planning & Community Environment CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 5 Special Meeting April 17, 2017 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:00 P.M. Present: DuBois, Filseth arrived at 5:05 P.M., Fine, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Action Items 8A. (Former Agenda Item Number 4) FIRST READING: Adoption of an Ordinance Amending Chapter 18 (Zoning) to Implement a new State Law Related to Accessory Dwelling Units and Junior Dwelling Units and to Reorganize and Update the City’s Existing Regulations. The Ordinance is Exempt From the California Environmental Quality Act (CEQA) per Public Resource Code Section 21080.17 and CEQA Guideline Sections 15061(b), 15301, 15303 and 15305 and was Recommended for Approval by the Planning and Transportation Commission on November 30, 2016. (FIRST READING: March 7, 2017 PASSED: 6-2-1 DuBois, Holman no, Kou abstain). Council took a break from 9:54 P.M. to 10:06 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Holman to: A. Adopt an Ordinance amending Palo Alto Municipal Code provisions regarding Accessory Dwelling Units as recommended by Staff on March 7, 2017; and B. Refer Council directed amendments to the Planning and Transportation Commission and Staff for analysis and return to Council as soon as possible; and C. Find the Ordinance exempt from review under the California Environmental Quality Act. DRAFT ACTION MINUTES Page 2 of 5 City Council Meeting Draft Action Minutes: 4/17/17 SUBSTITUTE MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to: A. Adopt an Ordinance amending Palo Alto Municipal Code provisions regarding Accessory Dwelling Units (ADUs); and B. Find the Ordinance exempt from review under the California Environmental Quality Act. INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Substitute Motion, “direct Staff to report back to Council on a quarterly basis.” (New Part B) AMENDMENT TO THE SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Council Member Kou to add to the Motion, “limit ADUs to lot sizes of 6,000 square feet or more.” AMENDMENT TO THE SUBSTITUTE MOTION RESTATED AND INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Substitute Motion, “limit ADUs to lot sizes of 5,000 square feet or more.” (New Part A.i.) AMENDMENT TO THE SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Council Member Holman to add to the Motion, “restore Ordinance language pertaining to doorway orientation.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “limit parking permits in Residential Preferential Parking (RPP) districts by lot.” (New Part A.ii.) INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “allow two story ADUs in the Residential Estate (R-E) District using existing.” (New Part A.iii.) AMENDMENT2 TO THE SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Vice Mayor Kniss to add to the Motion, “direct Staff to return with potential Eichler design guidelines relating to ADUs.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Substitute DRAFT ACTION MINUTES Page 3 of 5 City Council Meeting Draft Action Minutes: 4/17/17 Motion, “clarify that the additional Floor Area Ratio (FAR) should be used within the ADU, not the primary dwelling unit.” (New Part A.iv.) INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part A.ii., “direct Staff to explore options to” before “limit parking permits.” AMENDMENT TO THE SUBSTITUTE MOTION RESTATED: Council Member DuBois moved, seconded by Council Member Holman to add to the Motion, “restore Ordinance language pertaining to doorway orientation.” (New Part A.v.) AMENDMENT TO THE SUBSTITUTE MOTION PASSED: 6-3 Fine, Tanaka, Wolbach no INCORPORATED INTO AMENDMENT2 TO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to Amendment2 to the Substitute Motion, “including lower height limits” after “relating to ADUs.” AMENDMENT2 TO THE SUBSTITUTE MOTION AS AMENDED RESTATED: Council Member DuBois moved, seconded by Vice Mayor Kniss to add to the Motion, “direct Staff to return with potential Eichler design guidelines relating to ADUs, including lower height limits.” (New Part A.vi.) AMENDMENT2 TO THE SUBSTITUTE MOTION AS AMENDED PASSED: 9-0 AMENDMENT TO THE SUBSTITUTE MOTION: Council Member Kou moved, seconded by Council Member Filseth to add to the Motion, “restore parking restrictions to the March 7, 2017 Staff recommendation.” AMENDMENT TO THE SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou yes INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Substitute Motion, “remove Lot Coverage requirements for new ADUs on properties that are no smaller than 10 percent smaller than standard lot sizes including those which are standard or larger.” (New Part A.vii.) INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the end of Motion Part A.i., “ADU conversions and Junior Accessory Dwelling Units (JADUs) would be exempt from this requirement.” DRAFT ACTION MINUTES Page 4 of 5 City Council Meeting Draft Action Minutes: 4/17/17 AMENDMENT TO THE SUBSTITUTE MOTION: Council Member Filseth moved, seconded by Council Member Holman to add to the Substitute Motion, “add to Municipal Code Section 18.42.040(a)8.(iv), ‘Design: The detached accessory dwelling unit shall be similar to the main residence with respect to style, roof pitch, color and materials.” AMENDMENT TO THE SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou yes AMENDMENT TO THE SUBSTITUTE MOTION: Council Member Fine moved, seconded by Council Member XX to add to the Substitute Motion, “replace in Municipal Code Section 18.42.040(a)8.(iv), ‘daylight planes beginning at a height of eight feet (8’)’ with ‘daylight planes beginning at a height of ten feet (10’).’” AMENDMENT TO THE SUBSTITUTE MOTION FAILED DUE TO THE LACK OF A SECOND AMENDMENT TO THE SUBSTITUTE MOTION: Council Member Fine moved, seconded by Council Member XX to add to the Substitute Motion, “update Municipal Code Section 18.42.040(a)8.(vi) to allow windows within six feet of a property line that do not face a side property.” AMENDMENT TO THE SUBSTITUTE MOTION FAILED DUE TO THE LACK OF A SECOND AMENDMENT: Council Member Fine moved, seconded by Council Member XX to add to the Motion, “update Municipal Code Section 18.42.040(a)7.iv. to allow 2-story ADUs if attached.” AMENDMENT TO THE SUBSTITUTE MOTION FAILED DUE TO THE LACK OF A SECOND INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Substitute Motion, “direct the Planning and Transportation Commission to conduct a Study Session within six months of the implementation of this Ordinance to analyze the results of this Ordinance.” (New Part C) SUBSTITUTE MOTION AS AMENDED RESTATED: Mayor Scharff moved, seconded by Vice Mayor Kniss to: A. Adopt an Ordinance amending Palo Alto Municipal Code provisions regarding Accessory Dwelling Units (ADUs) including the following changes; and DRAFT ACTION MINUTES Page 5 of 5 City Council Meeting Draft Action Minutes: 4/17/17 i. Limit ADUs to lot sizes of 5,000 square feet or more; ADU conversions and Junior Accessory Dwelling Units (JADUs) would be exempt from this requirement; and ii. Direct Staff to explore options to limit parking permits in Residential Preferential Parking (RPP) districts by lot; and iii. Allow two story ADUs in the Residential Estate (R-E) District using existing setbacks; and iv. Clarify that the additional Floor Area Ratio (FAR) should be used within the ADU, not the primary dwelling unit; and v. Restore Ordinance language pertaining to doorway orientation; and vi. Direct Staff to return with potential Eichler design guidelines relating to ADUs, including lower height limits; and vii. Remove Lot Coverage requirements for new ADUs on properties that are no smaller than 10 percent smaller than standard lot sizes including those which are standard or larger; and B. Direct Staff to report back to Council on a quarterly basis; and C. Direct the Planning and Transportation Commission to conduct a Study Session within six months of the implementation of this Ordinance to analyze the results of this Ordinance; and D. Find the Ordinance exempt from review under the California Environmental Quality Act. SUBSTITUTE MOTION AS AMENDED PASSED: 7-2 Holman, Kou no Adjournment: The meeting was adjourned at 12:59 A.M. City of Palo Alto | City Clerk's Office | 4/24/2017 7:33 AM 1 Carnahan, David From:Margaret Allen <margaret.e.allen@gmail.com> Sent:Sunday, April 23, 2017 4:29 PM To:Council, City Subject:Accessory Dwelling Units Dear Palo Alto City Council Members, I would be very grateful if you would reconsider the 5000 sf minimum lot size for accessory dwelling units, and instead require what was agreed upon March 7th. I can’t help but wonder how the size limit was arrived at. Could you reassure me that this isn’t simply an arbitrary figure? Do you think it is possible that this discriminates against those of us who have smaller lots? Palo Alto used to have an emphasis on enabling older residents to be able to “age in place”. This is a worthy philosophy, but it now seems that people like myself, with smaller lots, may be denied the privilege of having an ADU for either themselves or their care givers at some time in the future. In addition to helping residents with the ever-rising cost of living in our homes, Increasing the housing possibilities in Palo Alto would reduce commuter traffic, relieve the stress of driving long distances to work in this area, and ensure a vibrant diverse mix of people living here. Please reconsider this decision. I look forward to hearing back from you. With best wishes, Margaret Allen City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 1 Carnahan, David From:Jeffrey Lipkin <repjal@att.net> Sent:Friday, April 21, 2017 12:09 PM To:Lydia Kou; Council, City Subject:Housing and Accessory Dwelling Units (ADUs) The Council has once again failed to deal with the housing situation in a way that protects the average citizen and makes a real positive difference in solving the housing problem. As I indicated in my earlier emails, there are two logical places for development of more than token housing - 1. the airport or golf course, and 2. along El Camino (look at what Mountain View has accomplished in this regard). First, solicit development proposals for the lands that are now a city airport and a city golf course, both underutilized, economically marginal, and playthings. Do this solicitation without any obligation to make an award and without preconditions in order to see what constructive thinking lies outside the council’s walls. Second, rezone all the land along El Camino and back for 100 yards in order to encourage multi-story, multi-family housing with retail inserts. Jeff Lipkin Begin forwarded message: From: Jeffrey Lipkin <repjal@att.net> Subject: Housing Date: November 28, 2016 at 10:55:28 AM PST To: city.council@cityofpaloalto.org, Lydia Kou <lydiakou@lydiakou.emailnb.com> Maybe with the recent change in council membership you can reconsider why the city needs a city golf course and a city airport when there are serious unmet housing needs. Why not get a competent developer to see if he or she can make use of this land. Jeff Lipkin Begin forwarded message: City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 2 From: repjal@att.net Subject: Re: Housing Date: August 28, 2016 at 1:10:39 PM PDT To: Eric Filseth <efilseth@gmail.com> It's not so hard - include flood control like the Dutch in the former RFQ. In the latter require proof of status. Simple and easy Sent from my iPhone On Aug 28, 2016, at 1:06 PM, Eric Filseth <efilseth@gmail.com> wrote: Not sure about the golf course and airport, which may be under water in a few decades. But El Camino seems generally right; good access to jobs in the Research Park and elsewhere. One challenge is how do you make sure it actually goes to those groups, vs getting bid out of range by professionals (such as the Facebook expansion in MP which will add over 6,000 tech jobs, with housing for only a fraction). But solve that one and there's potentially a real policy. Eric PS - firefighters a special case: because of work rules (few days on, few days off) most of them prefer to live out of town where they can buy a big spread, and just come in once a week. But that's unique to them. -----Original Message----- From: Jeffrey Lipkin [mailto:repjal@att.net] Sent: Sunday, August 28, 2016 12:30 PM To: city.council@cityofpaloalto.org Subject: Housing If this city is serious about encouraging low rent housing for elderly, civil servants, police, firemen, teachers, and poor, it should consider two modest proposals: First, solicit development proposals for the lands that are now a city airport and a city golf course, both underutilized, economically marginal, and playthings. Do this solicitation without any obligation to make an award and without preconditions in order to see what constructive thinking lies outside the council’s walls. Second, rezone all the land along El Camino and back for 100 City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 3 yards in order to encourage multi-story, multi-family housing with retail inserts. On Apr 21, 2017, at 2:23 AM, Lydia Kou <lydiakou@lydiakou.emailnb.com> wrote: Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of thi s pi ctu re from the In ternet.Vote for Lydia Kou If you have trouble reading this email, click here to read it in your browser Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.lydia_kou_1s.jpg Dear Residents, While State law again has made a blanket law allowing ADUs in municipalities without review or study as to the within a neighborhood, parking space availability in neighborhoods, short term rentals, use of the owner for their I do want to point out that the majority on Council went beyond what State law mandated without any considerat sanctity of neighborhoods. Parking is a tremendous issue, with our narrow neighborhood streets, the Safe Route of Palo Alto’s complete and Safe Routes to School streets. Many concerned citizens mentioned that these new policies promoting growth will be a cause for neighbor with n noise, or loss of privacy, etc., yet Mayor Scharff, Vice-Mayor Kniss, Council Members Wolbach, Fine and Tana March 7threcommendation. The Mayor’s message and the news media mentions that there was a “compromise. T 5,000 sf and re-orienting the ADU door to the side. Of particular concern are the already heavily impacted areas in which newly built ADUs and JADUs are allowed parking regulations within 0.5 or 0.75 miles from public transportation as show in the diagrams. However, the Co Red circle shows area within 0.75 miles of a Caltrain. Green circle shows area within 0.50 miles of public transit City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 4 Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.ADU-1.jpg Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.ADU-2.jpg The following chart shows: 1. Current ordinance, 2. State Law, 3. Staff proposed changes in the Staff Report on March 7th, 4. Expanded version passed by the Council on March 7th and 5. Ordinance passed on April 17th. Development Standards Current Ordinance (R-1 Standards)* State Law Restrictions January 1, 2017 City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 5 Setbacks Side: 6-ft Back: 20-ft 12 feet separation buffer between existing single family home and detached ADU. Not stated, Local government may establish for detached ADUs No setbacks required for existing garage converted to an ADU but only apply if existing garage is not needed as required parking for principal dwelling. Permits construction of an above garage ADU with a maximum side and rear property setback of 5ft. No Chaordinan Parking 2 parking spaces, /1 covered Cannot be in front setback Not to exceed 1 per unit or per bedroom May be located in setbacks or tandem, unless special findings No parking required: o if ADU is within half mile from public transit o Is within an architecturally and historically significant historic district o Is part of an existing primary residence or an existing accessory structure. o Is in an area where on-street parking permits are required, but not offered to the occupant of the ADU. o Is located within one block of a car share area. Same a City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 6 Minimum lot size / Lot Coverage 35% greater than minimum lot size for R-1 lots Local government may establish minimum and maximum unit sizes No Chaordinan ADU Height R-1 zones have height restriction of 17th for both attached and detached ADUS and 1-story. Not stated, local government may establish Smoke Detectors / Carbon Monoxide Detectors Federal and State Law apply. No fire sprinklers shall not be required if they are not required in the primary residence. Federaand Ca Fees All impact fees, including water, sewer, park and traffic fees must be charged in accordance with the Fee Mitigation Act, City of Palo Alto | City Clerk's Office | 4/21/2017 1:04 PM 7 Other Give-Aways Ministerial approval of ADUs if unit complies with certain parking requirements, the maximum allowable size of attached ADU and setback requirements. The single-family residence in which the JADU is created or JADU must be occupied by the owner of the residence The owner must record a deed restriction stating that the JADU cannot be sold separately from the single family residence and restricting the JADU to the size limitations and other requirements of the JADU ordinance. For ADUs that require an addition or a new accessory structure, development standards such as parking, height, lot coverage, lot size and maximum unit size can be established with certain limitations. For more information, check out Doug Moran’s blog http://www.paloaltoonline.com/blogs/p/2017/03/04/rp Lydia Kou http://www.lydiakou.com/ Vote for Lydia Kou · 708 Matadero Ave, Palo Alto, CA 94306, United States This email was sent to repjal@att.net. To stop receiving emails, click here. You can also keep up with Lydia Kou on Twitter or Facebook. Created with NationBuilder, softw City of Palo Alto | City Clerk's Office | 4/20/2017 2:05 PM 1 Carnahan, David From:Emer Martin <alyekrvwehduakz@ujoin.co> Sent:Thursday, April 20, 2017 1:25 PM To:Council, City Subject:Support Mar 6 Direction for ADUs! From: martin_emer@hotmail.com <Emer Martin> Message: Dear Mayor Scharff, Vice-Mayor Kniss and City Council Members, I would like to write in support of the ADU Ordinance motion as voted on and approved on Mar 6, 2017. Please do not pull this from the consent calendar on Monday April 17, 2017. Housing is a basic need. Finding ways to expand housing options (like ADUs and JADUs) for our community members is an economic, environmental, social justice and humanitarian issue. ADU's/granny units/secondary dwellings are something that can help our entire community. Through this ordinance, we can help homeowners, our aging community, young millenials starting out, and even families who rent, to find a feasible and timely housing solution that can make a meaningful difference in our community, all with one small policy/ordinance change. Above all, it enables us to continue nurturing the vibrant and diverse community already here in the city we call home, Palo Alto. In particular, I support the following motions made on March 6, 2017: a. Require no more than 6-ft side and rear setback for ADUs; b. Allow ADUs on all residential lot sizes; c. Allow an additional 175 sq-ft of FAR for an ADU, but not for a two-story ADU; d. Allow an additional 50 sq-ft of FAR for a JADU; e. Increase the maximum size of attached ADUs to 600 sq-ft; f. Remove Lot Coverage requirements for ADUs on properties that are no smaller than 10% smaller than standard lot sizes; g. Limit ADUs to 17-ft high and single-story in Single Story Overlay (SSO) neighborhoods, even if the main house is a grandfathered 2-story house; h. Remove design review and requirements; i. Remove door orientation requirements for ADUs; j. ADUs to have the same parking requirements as JADUs; and k. Remove requirements for covered parking on properties with an ADU or JADU; and l. Allow required replacement parking on an existing driveway within the front setback Sincerley Emer Martin palo alto California City of Palo Alto | City Clerk's Office | 4/24/2017 7:34 AM 1 Carnahan, David From:Steven Baker <iiogtobuesnxybj@ujoin.co> Sent:Saturday, April 22, 2017 11:53 AM To:Council, City Subject:Support Mar 6 Direction for ADUs! From: steven.baker@gmail.com <Steven Baker> Message: I am personally planning on building an ADU and using it to rent to college students but also let my mother retire in place or stay in the ADU. Dear Mayor Scharff, Vice-Mayor Kniss and City Council Members, I would like to write in support of the ADU Ordinance motion as voted on and approved on Mar 6, 2017. Please do not pull this from the consent calendar on Monday April 17, 2017. Housing is a basic need. Finding ways to expand housing options (like ADUs and JADUs) for our community members is an economic, environmental, social justice and humanitarian issue. ADU's/granny units/secondary dwellings are something that can help our entire community. Through this ordinance, we can help homeowners, our aging community, young millenials starting out, and even families who rent, to find a feasible and timely housing solution that can make a meaningful difference in our community, all with one small policy/ordinance change. Above all, it enables us to continue nurturing the vibrant and diverse community already here in the city we call home, Palo Alto. In particular, I support the following motions made on March 6, 2017: a. Require no more than 6-ft side and rear setback for ADUs; b. Allow ADUs on all residential lot sizes; c. Allow an additional 175 sq-ft of FAR for an ADU, but not for a two-story ADU; d. Allow an additional 50 sq-ft of FAR for a JADU; e. Increase the maximum size of attached ADUs to 600 sq-ft; f. Remove Lot Coverage requirements for ADUs on properties that are no smaller than 10% smaller than standard lot sizes; g. Limit ADUs to 17-ft high and single-story in Single Story Overlay (SSO) neighborhoods, even if the main house is a grandfathered 2-story house; h. Remove design review and requirements; i. Remove door orientation requirements for ADUs; j. ADUs to have the same parking requirements as JADUs; and k. Remove requirements for covered parking on properties with an ADU or JADU; and l. Allow required replacement parking on an existing driveway within the front setback Sincerley Steven Baker PALO ALTO California City of Palo Alto | City Clerk's Office | 4/25/2017 7:49 AM 1 Carnahan, David From:Linnea Wickstrom <ljwickstrom@comcast.net> Sent:Monday, April 24, 2017 6:34 PM To:Council, City Subject:Thank you Honorable Mayor Scharff, Vice Mayor Kniss, and members of the City Council, This is just a delayed thank you for hearing out all 67! of us at the April 17th Council meeting on ADUs. I admire the effort, time, and thought you put into working for the community. With appreciation, Linnea Wickstrom Monroe Park Palo Alto City of Palo Alto (ID # 7836) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Approval of Consulting Contract with Utiliworks LLC for Smart Grid/Technology Workplan Title: Approval of a Professional Services Agreement with UtiliWorks Consultants LLC in an Amount Not to Exceed $174,735 over Two Years for Phase I of the Utility Smart Grid Assessment and Development of a Utility Technology Roadmap and Implementation Plan From: City Manager Lead Department: Utilities Recommendation Staff recommends that City Council approve and authorize the City Manager or his designee to execute a Professional Services Agreement (Contract C17165774, Attachment A) with UtiliWorks Consultants LLC (UWC) in a total not-to-exceed amount of $174,735 over a two (2) year term for Phase I of development of utility smart grid assessment and utility strategic technology workplan; which includes $15,885 for unforeseen, Additional Work. Executive Summary In 2012, the City of Palo Alto Utilities (CPAU) conducted a smart grid assessment (the “2012 Assessment”) and found that the benefits of such applications in Palo Alto did not justify the estimated $15 million to $20 million capital investment to pursue at that time. The 2012 Assessment recommended that CPAU undertake pilot scale smart grid projects and defer major investments due to uncertainties in the technology market and high costs. For the past several years, staff has initiated a number of small scale pilot projects to evaluate the merits of various smart grid technology applications, seek customer feedback, and gain operational experience that could be utilized by staff when the technology is eventually implemented. The Professional Services Agreement with UWC recommended by staff would evaluate CPAU’s smart grid pilot projects implemented to-date and look beyond to larger questions around smart grid deployment, including updating the cost-benefit assessment for automated metering infrastructure (AMI) based smart grid investments. The results of proposed UWC analysis would inform the City’s decision about whether to recommend to Council to proceed with subsequent phases of Smart Grid investments. Separately, UWC will also develop a recommendation to chart a long term technology roadmap and implementation plan for CPAU. This assignment will City of Palo Alto Page 2 be coordinated with the broader CPAU Strategic Plan expected to be undertaken in 2017 and conform to City’s overall Technology Vision. To retain technology consultants, CPAU issued a Request for Proposals (RFP) in November 2016. Proposals from nineteen vendors were received. Four of the most qualified vendors were interviewed by the review panel and UWC was selected as the most qualified based on the evaluation criteria. Upon execution of the contract, the Phase I assignment is expected to last 18-months. Staff is targeting providing the results and recommendations to the Utility Advisory Commission and Council by the winter of 2018. Background The 2012 Assessment found that the large scale investment required for AMI based smart grid systems in Palo Alto was not cost-justifiable at that time (Staff Report #3330). Based on the findings, the consultant that performed the 2012 Assessment recommended the following: Rather than investing $15 million to $20 million in a full-scale smart grid system, CPAU should implement small-scale pilot projects over the next several years; and Implement smaller pilot scale projects that will allow CPAU to gauge customer interests and to develop a better understanding of the value proposition for implementing such systems in Palo Alto at a future date as costs decline and the technologies become more mature. Based on this recommendation, staff undertook a number of pilot scale projects. Outlined below are a list of pilot projects and a brief description of the scope of those projects to test various “use-cases”. 1. The Customer Connect Pilot provided 300 residential customers with advanced electric, natural gas and water meters, which provided the customers with more granular utility consumption information. Through this pilot program, customers were able to view their utility consumption on an hourly basis in a web-based portal to better understand the drivers for their consumption, and to detect-fix water leakages if and when they arise. 2. The CustomerConnect pilot also implemented pilot time-of-use (TOU) electric rates that provide lower rates for residential customers who were able to shift their energy consumption during off-peak hours. About 50 Electric Vehicle (EV) owners are currently participating in the TOU pilot. The program was closed to new applicants in 2014. Since then, a few hundred customers have expressed interest in joining the program and have been added to a waitlist. 3. Evaluated ways to optimally operate the electric distribution system based on voltage information gathered from advanced customer meters. Leveraging a fully implemented AMI system could lower total electricity use in Palo Alto by 0.5% to 1.0%. City of Palo Alto Page 3 4. Enabled customers to view their consumption information in real-time with in-home- display units that the customers can purchase and connect to their utility electric meter. This allowed customers to remotely monitor usage information in real-time. 5. Enabled customers to optimally operate their distributed energy resources that benefit both the customer and the utility. Examples of such pilot programs include customer demand response and leveraging smart invertors in solar photovoltaic systems to inject capacitive energy into the distribution system when needed. These pilot programs have enabled CPAU staff to test the value of many smart grid “use-cases” and learn as the technology landscape evolved in the past four-years. In addition to smart grid pilot projects, CPAU also undertook a Utility Technology Systems Review and Future’s Needs Assessment in 2014, and identified 40 projects that could enhance customer service and improve operational efficiencies in the coming years1. Discussion Based on results of the pilot projects, customer feedback, and technological advancements, staff believes it is time to re-engage specialists to re-evaluate the merits of smart grid investments. UWC in this consulting agreement will evaluate past work done, evaluate lessons learned from the pilot projects, and conduct and Assessment and recommend a Technology Workplan and Implementation Plan for CPAU over the next 5-10 years (Phase I). The evaluation will help CPAU prioritize these projects, estimate resources needed for implementation and recommend implementation timelines. Depending on the outcome of Phase I results, UWC may be called upon to assist staff with its pursuit and evaluation of Phase II and Phase III of the project2. Council authorization will be sought for these subsequent consulting phases at a later time, based on Phase I findings and availability of funds and resources. In doing so, Staff will take care to ensure that any engagement of UWC for subsequent phases does not run afoul of Government Code section 1090 requirements or other conflicts of interest rules. In addition, UWC will revisit the 2014 Utility Technology Systems Review and Future’s Needs Assessment. While a number of these projects are either completed or underway, other projects need to be prioritized and implemented in a methodical manner in the coming years. Consultant Selection Process 1 These projects were catalogued under the following eight categories: People/Process, Customer Facing, Distribution System, Utility Business Systems, Employee tools, Security, ERP/Reporting, and AMI enabled systems. 2 Scope of work for Phase II and III were provided in the RFP document. However, the City reserves the right to solicit proposals from other vendors for Phase II and III work. City of Palo Alto Page 4 In November 2016 Request for Proposal (RFP) 165774 was issued titled “Consulting Assistance for Smart Grid/IT Strategic Plan and Implementation Services for Over 5 Years.” Staff developed a RFP proposal evaluation criterion with the following scoring weights. Completeness of Proposal (5%) Qualifications of the firm and assigned staff (25%) Past experience in each of the task areas (25%) Proposed approach to implement each of the tasks (25%) Compensation and payment structure (10%) Exceptions to the City’s contract template (10%) Nineteen vendors submitted proposals. A shortlist of four vendors was interviewed by the evaluation panel and UWC was selected. UWC is well-qualified to undertake Phase I of the work, and if need arises, they are also well qualified to undertake Phase II and Phase III assignments. Phases II and III are contingent on the results of Phase I and will require subsequent Council approval for each additional phase. Resource Impact Funds of $174,735 for Phase I of this contract are included in the FY 2017 Capital Improvement Program (CIP) budget under project Smart Grid Technology Installation EL-11014. Staffing resources to manage the consultant and to finalize the work product have also been identified within existing staff. Phases II and III of the contract are subject to the findings and recommendations of Phase I. Funding for phases II and III are subject to Council approval in subsequent years. Policy Impacts This recommendation sets no new Council policy and is consistent with the Council-approved Utilities Strategic Plan. Environmental Review Approval of the UWC Contract does not require review under the California Environmental Quality Act (“CEQA”) because feasibility and planning studies are exempt under CEQA Guidelines Section 15262. Attachments: Attachment A: Contract with Utiliworks Consulting, LLC ATTACHMENT A CITY OF PALO ALTO CONTRACT NO. C17165774 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND UTILIWORKS CONSUL TING, LLC. FOR PROFESSIONAL SERVICES This Agreement ("Agreement") is entered into on this __ day of May, 2017 ("Effective Date"), by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and UTILIWORKS CONSULTING LLC., a limited liability company, located at 2351 Energy Drive, Suite 1010, Baton Rouge, LA 70808 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to evaluate the feasibility of an Advanced Metering Infrastructure (AMI) system and associated smart grid technologies and programs ("Project") and desires to engage a consultant to assist in developing a Strategic Technology Roadmap and Implementation Plan smart grid/ AMI business case 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 Effective Date through completion of the services or May 8, 2019, whichever is sooner, 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 Professional Services Rev. April 27, 2016 a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULT ANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULT ANT. CITY's agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay ifthe 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 One Hundred Fifty Eight Thousand Eight Hundred Fifty Dollars ($158,850.00). 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 One Hundred Seventy Four Thousand Seven Hundred Thirty Five Dollars ($174,735.00). The applicable rates and schedule of payment are set out at Exhibit "C-1 '', entitled "HOURLY RA TE SCHEDULE," which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit "A". SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT's billing rates (set forth in Exhibit "C- l"). 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. CONSULT ANT 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. 2 Professional Services Rev. April 27, 2016 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 CONSULT ANT' 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. CONSULT ANT 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. CONSULT ANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Dale Pennington as the Project Supervisor to have supervisory responsibility for the performance, progress, and execution of the Services to represent CONSULTANT during the day-to-day work on the Project. 3 Professional Services Rev. April 27, 2016 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 Shiva Swaminathan, Utilities Department, Resource Division, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone:650-329-2465. The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT's records pertaining to matters covered by this Agreement. CONS ULT ANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements ("Claims") resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULT ANT 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 ofCONSULTANT's services and duties by CITY shall not 4 Professional Services Rev. April 27, 2016 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 CONSULT ANT 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 entireterm 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 5 Professional Services Rev. April 27, 2016 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 CONSULT ANT 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: ATTN: Dale Pennington 2351 Energy Drive, Suite 1010 Baton Rouge, LA 70808 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. 6 Professional Services Rev. April 27, 2016 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULT ANT 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 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. CONSULT ANT 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 ofCITY'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, CONSULT ANT 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 CONSULT ANT 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 7 Professional Services Rev. April 27, 2016 (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.l 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 D 26.1 CONSULT ANT 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 1 773 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. 8 Professional Services Rev. April 27, 2016 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 CONSULT ANT' 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.S(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 Infonnation. 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. 9 Professional Services Rev. April 27, 2016 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement 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 UTILIWORKS CONSUL TING, LLC. City Manager or designee APPROVED AS TO FORM: City Attorney or designee Attachments: EXHIBIT "A": EXHIBIT "B": EXHIBIT "C": EXHIBIT "C-1 ": EXHIBIT "D": Officer.2 , Q.t'~ By:/(/~ Name: ()J LO I( eir-1 rf--/1 ) Title: 0 pf,· e_ -r r / (Yl ct 11 5c J-c ( \ ; SCOPE OF SERVICES SCHEDULE OF PERFORMANCE COMPENSATION SCHEDULE OF RATES INSURANCE REQUIREMENTS 10 Professional Services Rev. April 27, 2016 EXHIBIT "A" SCOPE OF SERVICES Phase I: Smart Grid Assessment & Strategic Technology Roadmap and Implementation Plan Purpose This Statement of Work (SOW) specifies in detail services UtiliWorks Consulting, LLC. ("Consultant" or "UtiliWorks") will provide the City of Palo Alto Utilities ("City" or "Palo Alto") related to Assessing the Merits of Smart Grid Investments and Developing a Strategic Technology Roadmap and Implementation Plan (Phase I Assessment). The services described in this Exhibit "A" are considered "Basic Services" under the Agreement. In conducting its work on Phase I, Consultant will demonstrate an understanding of the City's organization, processes, personnel and IT systems is essential when embarking on evaluating the merits of Smart Grid investments. Consultant will review the Prior City Assessments listed below, including the City's 2014 IT Systems Review and Future Needs Assessment (2014 Technology Assessment) in particular, which outlines various Information Technology (IT) and Operating Technology (OT) projects in process or contemplated as City priorities. Prior City Assessments Include: • Smart Grid Applications In Palo Alto: Findings and Recommendations -2012 • Palo Alto Utilities IT System Review & Findings -2014 • Palo Alto ERP and Utility Billing System Evaluation Findings and Recommendations-2015 • Developing System Specifications for ERP/CIS systems and Systems Selection-in progress • City's Overall IT Strategic Plan and Vision from the CIO's Office • Palo Alto GIS System Assessment Findings -2017 (Draft) • Procurement My Utilities Account Customer Engagement Tool & Mobile Platform - Status Update Relying both on the Prior City Assessments and Consultant's expertise and industry knowledge, to perform an updated assessment, the UtiliWorks team will determine which technologies are best suited for the City's unique environment and identify the associated business process changes that must occur to maximize the benefits of such technologies, including Advanced Metering Infrastructure (AMI) and Meter Data Management (MDM). Described below are additional details related to the specific tasks Consultant must undertake as part of Phase I. Phase I will inform the City on the decision to proceed (or not) with a Smart Grid implementation, and help chart the course for implementing other IT and OT projects in the next 5 to 10 years. 11 Professional Services Rev. April 27, 2016 FINAL PROJECT DELIVERABLES -Consultant will prepare for City: (1) Final Report -includes (a) Assessment Report; (b) Strategic Technology Roadmap; and (c) Implementation Plan; (2) AMI/MOM Business Case Model; and (3) Presentation of Final Report and AMI/MOM Business Case Information to Utilities Advisory Commission and Council with associated materials, as requested by City Consultant also agrees to up to three (3) on-site workshops (which may be combined in City discretion) for Phase I, and to conduct all necessary interviews and discussions to facilitate the development of Final Project Deliverables. Two (2) Executive Briefings with associated presentations for City Staff and Two (2) Interim Written Memoranda are also anticipated at the project progresses. The interim written memoranda will be incorporated into the Final Report. Specific Tasks related to the Final Deliverables associated with Phase I are outlined in more detail below: Task 1.0 -Initial Preparation Task 1.1 -State of the Industry& Technology Maturity of Palo Alto Remote Kickoff-2 hours Onsite workshop for Current State and State of the Industry -3 days (combined at City discretion with workshop for Task 1.2) Executive briefing on project status following workshop #1 Detailed Project Schedule Materials for Workshop, Post-workshop summaries Internal City presentation and associated materials City project team, Consultant Consultant project team City project team, Consultant Consultant project team City project team, Consultant Consultant project team Consultant will demonstrate a comprehensive understanding of both the engineering and economic aspects of AMI and other operating technologies identified in the City's 2014 Technology Assessment. Consultant's team will detail key concepts underlying the current state of the AM I and other OT industry and important design considerations when embarking on a new technology project. Consultant experts will also lead a discussion that will be informed by projects already undertaken or in the process of being implemented by the City. To establish a future vision for the strategic roadmap, UtiliWorks will consider external and internal drivers and utility industry trends. External drivers are the policies and regulations intended to protect the environment, including water and energy conservation, efficient use of resources, and reduction of the greenhouse gas emissions. Internal drivers include ensuring the reliability and security of our utility systems, maintaining low costs, managing aging infrastructure and increasing operational efficiency. Industry trends include advanced distribution automation, proliferation of distributed energy resources (photovoltaics, electric vehicles, energy storage, controllable customer appliances, etc.), need to provide time-of-use based customer retail rates, and increased informational and online service needs of utility 12 Professional Services Rev. April 27, 2016 customers. Consultant will align and facilitate workshop(s) that explore alignment of the City's IT /OT systems and current state operations. Note, this task (including the workshop) may be performed in conjunction with the Discovery work in Task 1.2 at City's discretion. Consultant will develop a readiness score in each technology area that is used to determine the educational content depth to be provided during the State of the Industry Executive Briefing. Consultant will also delve into the success stories of other utilities and outline how the City can avoid the pitfalls to methodically deploy a range of utility operating technologies. Consultant will provide the City with a comprehensive vendor overview along with explanations of how their products and system characteristics could impact the City's operations and customer base. Additional Notes RE: Deliverables & Task 1.1: • State of the Industry and Technology Maturity of Palo Alto Executive Briefing (including presentation (onsite) and supporting materials) should cover all technologies identified in in the 2014 assessment and new technologies. Discovery -business case and Response to Consultant current state data request City City project team from Consultant questions Discovery -review CPAU Written Memorandum -Consultant project Task 1.2 -documents, reports and data to be incorporated into Consultant Discovery Phase request input Final Report team Onsite workshop for discovery Materials for Workshop, Consultant exec. - 3 days (combined, at City Post-workshop Consultant team, City exec. discretion with workshop for Task 1.1) summaries team Consultant will complete a comprehensive discovery phase. This discovery phase will reveal the critical success factors and identify the gaps and shortcomings for the City and Consultant to address. The Consultant team will perform a deep dive into the details of the City's organization to develop the foundation for change and identify the underlying business reasons that are driving the effort. Consultant will review existing documentation and through a series of pre-set questions, interviews, and workshops using the following approach: • Goals and Objectives -The Consultant team will conduct workshops with executives, stakeholders and key personnel in order to establish a common understanding of the City's project goals, drivers, success factors, and risks. The Consultant will stimulate discussion around City goals and objectives that otherwise may have not been considered. Consultant will also work to identify potential project risks early on in the process so that these risks can be addresses and mitigated. • Data Collection/Current State-Consultant will provide the City with a comprehensive list of data and information requests that will feed into the cost/benefit analysis underlying the business case 13 Professional Services Rev. April 27, 2016 to be completed in Task 1.3. The Consultant team will examine the City's current business and operations processes, practices, and personnel to identify gaps and establish a baseline for assessing AMI readiness. The Consultant team will be equipped with a customized set of questions Consultant can use to collect this information through a series of onsite workshops with the City's respective subject matter experts. • IT System Gap Analysis and Planning-Consultant will assess the "as-is" systems/applications inventory across the City with a focus on those systems and applications that may/will be impacted by potential Smart Grid projects. In looking to the future, UtiliWorks will identify a number of technology drivers that are relevant to the City and their strategic roadmap. Consultant's evaluation will consider aspects of the utility that will be impacted by these drivers, including: Enterprise Service Bus, Data Communications (for metering and secured systems, such as SCADA), Application platforms, and Social Media. As part of this effort, UtiliWorks will review and assess the following aspects of each piece of technology set forth below: • Hardware/Software • Backup and Disaster Recovery • Security • Data Network Physical Diagram • Application and network monitoring capabilities • IT Support (skills/capabilities) • System interdependencies • Cost (one-time and recurring) As part of analyzing the technology being used at the City and looking to develop a 10-year roadmap, Consultant will perform the following tasks: • Complete a thorough assessment of the City's current IT systems, Smart Grid pilot projects and the input from the 2014 Utilities IT strategic initiatives report • Identify potential future requirements and needs • Identify technology recommendations based on market maturity and technology trends • Identify business process, staffing and skill needs to meet the City's objectives • Develop a high level roadmap for technology implementation, including prioritization of recommended technology projects and timeline As noted above, the City may in its discretion, work with Consultant to combine elements of Task 1.1 and Task 1.2. Additional Notes RE: Deliverables & Task 1.2: • Discovery workshops (onsite) 14 Professional Services Rev. April 27, 2016 • Consultant's written memorandum should identify key goals and objectives, and document Technology priorities that will go into Technology Strategic Roadmap and Implementation Plan (.pdf format) Task 1.3-Build AMl/MDM Business Case Model -minimum of 3 AMl/MDM model scenarios with sensitivity Consultant Consultant project Business Case (iterative with next step) analysis for each (Excel, team MS Project, etc.) Review AMl/MDM Business City project team, Case results City Comments City Consultant project team Incorporate feedback from Final version of Model Consultant Consultant Project City into Business Case Model Team Consultant will develop a business case for AMl/MDM. The cornerstone of the business case is the cost/benefit analysis of implementing AMI technology/system(s). Consultant's methodology will include detailed financial consideration, determination of the Net Present Value (NPV) of the project, payback period and operational impacts. Consultant's team will work with the City to identify the estimated costs and potential benefits of an AMl/MDM implementation, including impact of uncertainties in input assumption of results/recommendations. Consultant's analysis will leverage information provided by the City, as well as information and data gathered via UtiliWorks industry experience. In order to develop a reliable cost estimate for an AMl/MDM implementation, Consultant will leverage its comprehensive vendor technology pricing database and tailor the information for the City's potential deployment in the 2019-2020 time line. • Costs: Consultant will assess costs including: capital costs (e.g. system infrastructure including equipment, hardware, software, communications; installation; professional services, etc.) and ongoing operation & maintenance cost (e.g. system operator cost, licensing, internal staffing, public awareness campaign, etc.). The assessment will be undertaken from a societal and utility perspective, and based on an incremental cost/benefit basis. • Benefits: Consultant's benefits analysis will identify and quantify the value propositions that can be realized with the successful deployment of an AMI system. Consultant's evaluation will consider hard, quantitative benefits, including areas of potential operational savings, revenue enhancement, and recovery of product losses. Consultant's Model will put a numerical value to a given decision, but the Consultant analytics team will remain concerned with more than just the financial outcome in development of the model. Consultant will also examine how the financial projections and outcomes of the business case affect the day-to-day operations of the City and the impact on rates, fees, and charges. The Consultant team will analyze the interaction of people, processes, and procedures with finances and data to help the City maximize overall benefits. Consultant will work with the City to utilize systems and strategies previously identified in Tasks 1.1 and 1.2 in order to fully leverage AMI technology in the business case. Consultant's assessment will also identify additional technology investments the City may need to 15 Professional Services Rev. Apiil 27, 2016 leverage the base AMI infrastructure. Consultant will utilize its System Matter Experts (SMEs) to further develop various deployment scenarios. The results of the business case should help inform City and Consultant recommendations on whether the City should proceed with the deployment of AMI and other related OT identified in the assessment. Additional Notes RE: Deliverables & Task 1.3: • Palo Alto AMI/MOM Model should include assumptions and results of up to 3 scenarios for comparison, including sensitivity analysis to identify uncertainties and timeline for each scenario ilr•T° --~ -_,. .,,..-..... • •• 11:.1-I;#-····-~ . - Task 1.4-Operational Impacts and Materials for Workshop, City project team, - Operational Implementation Strategy Impacts Onsite workshop -2-3 days Post-workshop Consultant Consultant project onsite summaries team Executive briefing on project Internal City Consultant exec. status following workshop #2 Presentation and Consultant team, City exec. & Business Case associated Materials team Through the information gleaned from interviews and workshops in Task 1.1, 1.2 and development of the business case in 1.3, Consultant will work with the City to identify and analyze the key operational areas/functions that may be impacted by Smart Grid projects to minimize risks and eliminate any surprises in later stages of projects identified. These areas include, without limitation: • Human Resources -What staffing changes, if any, are necessary to support your project and ongoing operations? What are the skills and training needs? • Organizational Structure -Is the organization optimally structured to implement and then operationalize the technology for optimal use? • Policies -What, if any, policy changes are necessary to accommodate AMI implementation? • Business Process Re-Design -Which business processes will require change? • Information Processing -What new data or reports will require your attention? • Information Security-Will the new technology introduce new security risks or threats? Additional Notes RE: Deliverables & Task 1.4: • Operational impacts workshop with key stakeholders • A written memorandum identifying operational impact findings from stakeholder workshops 16 Professional Services Rev. April 27, 2016 17 Professional Services Rev. April 27, 2016 ,r ' I - ~~ Ir _,_ .-;,_ ---·am,,-~ -ffi.:1 --'· l •T•nrrii'j , ·. ... ··-·'1B' ·• •r: ltl..._"t. - Task 1.5 -Final Draft Initial Version of Final Report Report -to include (1} Assessment Report, (2) Consultant project Strategic Technology Draft Final Report Consultant Roadmap, and (3) team Implementation Plan (iterative with next step) Review Draft Initial Assessment Report and Smart Grid and Strategic Technology City Comments City City project team Roadmap & Implementation Plan and provide feedback and input Incorporate input from City Final Report Consultant Consultant Project and complete Final Report Team Presentation of Final Report to Presentation and City Team UAC, City project & team, Consultant the UAC Associated Materials Consultant exec. team Provide input after UAC City Comments City City PM presentation Incorporate any feedback, as necessary from UAC, Finalize Updated Final Report Consultant Consultant project recommendation and update team final report for Council City to review and provide Comments re: Updated Final sign-off on Updated Final City City PM Report Final Report Presentation and Council, UAC, City Associated Materials City Team project team, Presentation of Updated Final & Consultant exec. Report to Council Consultant team In accordance with the Schedule from Task 1.0, Consultant will compile output from Task 1.1-1.4 into a Final Report for City. The Final Report, in addition to the specific details identified later in this section will include the following: (a) Assessment Report; (b) Strategic Technology Roadmap (big picture timelines and estimated budgets); and (c) Implementation Plan (additional details related to the Strategic Technology Roadmap); Consultant will collaborate with the City to develop the recommended Final Report as noted in this Exhibit "A". Key implementation planning for the Strategic Technology Roadmap will involve developing a high-level schedule, budget and sequencing. Overall, Consultant's technology implementation methodology should include stage gates that divide the project work into specific phases, with measurable outcomes that build from the previous phase . 18 Professional Services Rev. April 27, 2016 As part of this task, Consultant will develop the proposed project schedule based on the results/conclusions of the resulting business cases and affiliated recommendations. This schedule will outline the major milestones underlying the procurement and implementation phases. Consultant will also advise on how best to structure the City's project team to support the procurement and implementation phases along with ongoing support once the projects are completed, including AMI/smart grid projects. Additional Notes RE: Deliverables and Task 1.5: • The Final Report should incorporate outputs form Tasks 1.1 -1.4 (.pdf format). The Final Report would include the following sections at a minimum: o Executive Summary o Technology Overview o Organizational Goals and Objectives o Assessment Report o Strategic Technology Roadmap (higher level discussion of timelines and estimated budgets) o Additional details related to Sequencing, Timelines, Resources needed as part of the Implementation Plan o Organizational capacity and structure required to operationalize implementation plans o Summary/Recommendations o Note: the document form/outline will be subject to review and comments by the City. • A final version of the AMI/MOM Business Case Models, Including Assumptions for business case and Implementation Timelines is a Final Deliverable in addition to the Final Report (MS Excel, MS Project, etc.) • City also contemplates Consultant delivering Presentations on Final Report and Business Case to UAC and Council as part of this Task (on site, PowerPoint) ---------·~ !.~ ...... •r._illii;-l ... •J II ·~,.,. ~-. I i'lr:J Task 1.6-Project Project Budget and Management Schedule Tracking as Consultant Consultant PM, Project Management Requested by City; PM City PM Meeting Facilitation and Notes Consultant will provide structured project management to ensure that all project components are executed in a timely, organized fashion and completed to the project definition and expectations. As communication is a critical success factor, the Consultant Project Manager will work to make sure that all designated team members are aware of project status and issues. During Phase I, project management activities will include: • Develop and maintain the overall project schedule • Work with all project participants to monitor progress and adjust the work plan as needed to stay on schedule • Facilitate regular project progress and other meetings • Track project budgets 19 Professional Services Rev. April 27, 2016 20 Professional Services Rev. April 27, 2016 FINAL PROJECT DELIVERABLES -Consultant will prepare for City: (1) Final Report -includes (a) Assessment Report; (b) Strategic Technology Roadmap; and (c) Implementation Plan; {2) AMl/MDM Business Case Model; and {3) Presentation of Final Report and AMl/MDM Business Case Information to Utilities Advisory Commission and Council with associated materials, as requested by City Consultant also agrees to up to three (3) on-site workshops {which may be combined in City discretion) for Phase I, and to conduct all necessary interviews and discussions to facilitate the development of Final Project Deliverables. Two (2) Executive Briefings wit h associated presentations fo r City Staff and Two (2) Interim Written Memoranda are also anticipated at the project progresses. The i1nterim written memoranda will be incorporated into the Final Report. Initial Preparation Remote Kickoff-2 hours Detailed Project Schedule lffimi'I --.-111 l• ic_1n_•.t~ I Ir.. I Task 1.1-State of the Onsite workshop for Current State Industry& Technology and State of the Industry - 3 days Materials for Workshop, Post- Maturity of Palo Alto (combined at City discretion with workshop summaries workshop for Task 1.2} Executive briefing on project status Internal City presentation and following workshop #1 associated materials ~ ~ -"" Task 1.2 -Discovery Discovery-business case and current Response to Consultant Phase state data request from Consultant questions Discovery-review CPAU documents, Written Memorandum -to be reports and data request input incorporated into Final Report Onsite workshop for discovery - 3 Materials for Workshop, Post-days (combined, at City discretion wlth workshop for Task 1.1) workshop summaries ~ ... , ~~ Model -minimum of 3 Task 1.3 -AMl/MDM Bu ild AMI/MOM Business Case model scenarios with sensitivity Business Case (iterative with next step) analysis for each (Excel, MS Project, etc.) Review AMl/MDM Business Case results City Comments Incorporate feedback from City into Final version of Model Business Case Model 21 Consultant [anJ Consultant Consultant ~ City Consultant Consultant ~ Consultant City Consultant City project team, Consultant project team ~~:~'.lilll~t City project team, Consultant project team City project team, Consultant project team [· --1•1• tr::1Hl:t City project team Consultant project team Consultant exec. team, City exec. team B.1;;;-., •. Consultant project team City project team, Consultant project team Consultant Project Team Professional Services Rev. April 27, 2016 Task 1.4 -Operational Impacts Task 1.5 -Final Report Task 1.6 -Project Management Operational Impacts and Implementation Strategy Onsite workshop -2-3 days onsite Executive briefing on project status following workshop #2 & Business Case ~ Draft lnltial Version of Flna l Report- to include (1) Assessment Report, (2) St rategic Technology Roadmap, and (3) Implementation Pla n (iterative with next step) Review Draft Initial Assessment Report and Smart Grid and Strategic Technology Roadmap & Implementation Plan and provide feedback and input Incorporate input from City and complete Final Report Presentation of Final Report to the UAC Provide input after UAC presentation Incorporate any feedback, as necessary from UAC, Finalize recommendation and update final report for Council City to review and provide Final sign- off on Updated Final Report Presentation of Updated Final Report to Council Project Management 11 Materials for Workshop, Post- workshop summaries Internal City Presentation and associated Materials -llJ:.l11•J: .. .1o1•, •lf!ll Draft Final Report City Comments Final Report Presentation and Associated Materials City Comments Updated Final Report Comments re: Updated Final Report Presentation and Associated Materials Project Budget and Schedule Tracking as Requested by City; Meeting Facilitation and Notes 22 I Consultant Consultant ll'!F.f.J Consultant City Consultant City team & Consultant City Consultant City City team & Consultant Consultant PM City project team, Consultant project team Consultant exec. team, City exec. team t::r.1ur~1•r. ·~· Consultant project team City project team Consu ltant Project Team UAC, City project team, Consultant exec. team City PM Consultant project team City PM Council, UAC, City project team, Consultant exec. team Consultant PM, City PM Professional Services Rev. April 27, 2016 23 Professional Services Rev. April 27, 2016 EXHIBIT "B" SCHEDULE OF PERFORMANCE CONSULT ANT 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. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Phase I -Timeline -In Calendar Days after Palo Alto Issues Notice to Proceed NTP -Mid May (T) Initial Preparation Remote Kickoff-2 hours Task 1.1 -State of the Industry& Technology Maturity of Palo Alto Task 1.2 - Discovery Phase I-; ---- ·-.• # Onsite workshop for Current State and State of the Industry I -3 days {combined at City I discretion with workshop for Task 1.2) Executive briefing on project status following workshop #1 J:'d:~ rl'a'Tl I Discovery-business case and current state data request I from Consultant 1 Discovery-review CPAU documents, reports and data request input Onsite workshop for discovery - 3 days (combined, at City discretion with workshop for Task 1.1) Build AMI/MOM Business Case model 24 iit1'l-f11T'1°r.f. {f;l Materials for Workshop, Post-workshop summaries Internal City presentation and associated materials (i].~ . .::ir:.:1 Response to Consultant questions Written Memorandum - to be incorporated into Final Report Materials for Workshop, Post-workshop summaries Model -minimum of 3 scenarios with sensitivity C"':i~"El:-m-ra T+75 T+75 ~~;~,!..l;..f'r::. T+60 T+75 T+75 T+lOO Professional Services Rev. April 27, 2016 I (iterative with next step) Task 1.3-I AMl/MDM Review AMl/MDM Business Case results Business Case Incorporate 'feedback from City into Business Case Model Operational Impacts and Implementation Strategy Task 1.4-Onsite workshop -2-3 days Operational on site Impacts Executive briefing on project status following workshop #2 & Business Case n~ ... Task 1.5 -Final l Draft Initial Version of Final Report Report -to include (1) Assessment Report, (2) Strategic Technology Roadmap, and (3) Implementation Plan (iterative with next step) Review Draft Initial Assessment Report and Smart Grid and Strategic Technology Roadmap & Implementation Plan and provide feedback and input Incorporate input from City and complete Final Report Presentation of Final Report to the UAC Provide input after UAC presentation Incorporate any feedback, as necessary from UAC, Finalize recommendation and update final report for Council City to review and provide Final sign-off on Updated Final Report 1 Presentation of Updated Final I Report to Council 25 analysis for each (Excel, MS Project, etc.) City Comments Final version of Model Materials for Workshop, Post-workshop summaries Internal City Presentation and associated Materials -::..or:•ll~ It . Draft Final Report City Comments Final Report Presentation and Associated Materials City Comments Updated Final Report Comments re: Updated Final Report Presentation and Associated Materials T+130 T+lSO T+180 T+180 ~.ma I T+200 T+230 I (initial) ' I T+260 T+280 T+300 T+310 I I T+320 I T+330 T+350 Professional Services Rev. Aptil27,2016 Task 1.6 -Project Management Project Management 26 Project Budget and Schedule Tracking as Requested by City; Meeting Facilitation and Notes Ongoing Professional Services Rev. Apdl 27, 2016 EXHIBIT "C" COMPENSATION The CITY agrees to compensate the CONSULT ANT 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 the amounts for each task set forth below. CONSULT ANT 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. Schedule of Cost and Payments CONSULTANT will invoice the City monthly for the services in this SOW based on percent complete of the deliverables assigned to each task, in no less 25% increments. Such invoices should also identify any eligible Reimbursable Expenses, at cost. BUDGET SCHEDULE Task 1.2 -Discover Phase Task 1.3 -AMI/MDM Business Case Task 1.4 -0 erational Im acts Task 1.5 -Draft of Final R ort Task 1.5 -Present Final Re ort to UAC Task 1.5 -U date Final Re ort Followin UAC Task 1.5 -Present U dated Final R ort to Council Task 1.6 -Pro·ect Mana ement Travel Phase 1 NTE Phase I Total NTE 27 NOT TO EXCEED AMOUNT of Palo Alto $15,152 $23,602 $22,635 $6,984 $23,984 $7,576 $7,576 $7,576 $17,765 $26,000 $158 850 Professional Services Rev. April 27, 2016 Sub-total Basic Services $158,850.00 Total Basic Services and Reimbursable expenses $158,850.00 Additional Services (Not to Exceed) $15,885.00 Maximum Total Compensation $174,735.00 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 $100.00 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 28 Professional Services Rev. April 27, 2016 Title Managing Director Principal Project Manager Associate Analyst Administrative EXHIBIT "C-1" HOURLY RATE SCHEDULE Hourly Billing Rates by Position with Escalation CY 2017 $285 $250 $215 $185 $155 $110 29 CY 2018 $292 $256 $220 $190 $159 $113 Professional Services Rev. April 27, 2016 The ACORD name and logo are registered marks of ACORD CERTIFICATE HOLDER © 1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25 (2014/01) AUTHORIZED REPRESENTATIVE CANCELLATION DATE (MM/DD/YYYY)CERTIFICATE OF LIABILITY INSURANCE LOCJECTPRO-POLICY GEN'L AGGREGATE LIMIT APPLIES PER: OCCURCLAIMS-MADE COMMERCIAL GENERAL LIABILITY PREMISES (Ea occurrence) $DAMAGE TO RENTED EACH OCCURRENCE $ MED EXP (Any one person) $ PERSONAL & ADV INJURY $ GENERAL AGGREGATE $ PRODUCTS - COMP/OP AGG $ $RETENTIONDED CLAIMS-MADE OCCUR $ AGGREGATE $ EACH OCCURRENCE $ UMBRELLA LIAB EXCESS LIAB DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) INSRLTR TYPE OF INSURANCE POLICY NUMBER POLICY EFF(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)LIMITS PERSTATUTE OTH-ER E.L. EACH ACCIDENT E.L. DISEASE - EA EMPLOYEE E.L. DISEASE - POLICY LIMIT $ $ $ ANY PROPRIETOR/PARTNER/EXECUTIVE If yes, describe underDESCRIPTION OF OPERATIONS below (Mandatory in NH) OFFICER/MEMBER EXCLUDED? WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N AUTOMOBILE LIABILITY ANY AUTO ALL OWNED SCHEDULED HIRED AUTOS NON-OWNEDAUTOSAUTOS AUTOS COMBINED SINGLE LIMIT BODILY INJURY (Per person) BODILY INJURY (Per accident) PROPERTY DAMAGE $ $ $ $ THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSD ADDL WVD SUBR N / A $ $ (Ea accident) (Per accident) OTHER: THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: INSURED PHONE(A/C, No, Ext): PRODUCER ADDRESS:E-MAIL FAX(A/C, No): CONTACTNAME: NAIC # INSURER A : INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : INSURER(S) AFFORDING COVERAGE SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INS025 (201401) 2/28/2017 The Juban Insurance Group LLC 4319 Bluebonnet Blvd Baton Rouge LA 70809 Brenda Caruso (225)291-0405 (225)291-0420 bcaruso@jubaninsurance.com Utiliworks Consulting, LLC; Utiliworks, LLC 2351 Energy Drive Ste. 1010 Baton Rouge LA 70808 Certain Und @ Lloyds of London Travelers Indemity Co of CT 25682 16-17/2 A X X X PSF03202477 8/6/2016 8/6/2017 2,000,000 250,000 5,000 2,000,000 4,000,000 2,000,000 Employee Benefits 2,000,000 A X X PSF03202477 8/6/2016 8/6/2017 1,000,000 B N XOUB4147T90-5-16 10/1/2016 10/1/2017 X 1,000,000 1,000,000 1,000,000 A Professional Liability PSF03202477 8/6/2016 8/6/2017 Each & Every Claim 1,000,000 Errors & Ommissions (Includes cost & expense)Aggregate 2,000,000 Cyber/Technology Liability $2,000,000 Each Claim $2,000,000 Aggregate. Applicable to Certificate Holder: Blanket Additional Insured, Primary Non-Contributory basis, 30 days notice of cancellation (10 days for non-payment) and Wavier of Subrogation included in the General Liability General Condition wording, if required by written contract. Blanket Waiver of Subrogation in favor of certificate holder when required by written agreement with respects to Workers Compensation. Dave Peek/BRENDA EXHIBIT D - PROOF OF INSURANCE The ACORD name and logo are registered marks of ACORD CERTIFICATE HOLDER © 1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25 (2014/01) AUTHORIZED REPRESENTATIVE CANCELLATION DATE (MM/DD/YYYY)CERTIFICATE OF LIABILITY INSURANCE LOCJECTPRO-POLICY GEN'L AGGREGATE LIMIT APPLIES PER: OCCURCLAIMS-MADE COMMERCIAL GENERAL LIABILITY PREMISES (Ea occurrence) $DAMAGE TO RENTED EACH OCCURRENCE $ MED EXP (Any one person) $ PERSONAL & ADV INJURY $ GENERAL AGGREGATE $ PRODUCTS - COMP/OP AGG $ $RETENTIONDED CLAIMS-MADE OCCUR $ AGGREGATE $ EACH OCCURRENCE $ UMBRELLA LIAB EXCESS LIAB DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) INSRLTR TYPE OF INSURANCE POLICY NUMBER POLICY EFF(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)LIMITS PERSTATUTE OTH-ER E.L. EACH ACCIDENT E.L. DISEASE - EA EMPLOYEE E.L. DISEASE - POLICY LIMIT $ $ $ ANY PROPRIETOR/PARTNER/EXECUTIVE If yes, describe underDESCRIPTION OF OPERATIONS below (Mandatory in NH) OFFICER/MEMBER EXCLUDED? WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N AUTOMOBILE LIABILITY ANY AUTO ALL OWNED SCHEDULED HIRED AUTOS NON-OWNEDAUTOSAUTOS AUTOS COMBINED SINGLE LIMIT BODILY INJURY (Per person) BODILY INJURY (Per accident) PROPERTY DAMAGE $ $ $ $ THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSD ADDL WVD SUBR N / A $ $ (Ea accident) (Per accident) OTHER: THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: INSURED PHONE(A/C, No, Ext): PRODUCER ADDRESS:E-MAIL FAX(A/C, No): CONTACTNAME: NAIC # INSURER A : INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : INSURER(S) AFFORDING COVERAGE SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INS025 (201401) 4/12/2016 The Juban Insurance Group LLC 4319 Bluebonnet Blvd Baton Rouge LA 70809 Brenda Caruso (225)291-0405 (225)291-0420 bcaruso@jubaninsurance.com Utiliworks Consulting, LLC; Utiliworks, LLC 2351 Energy Drive, Suite 1010 Baton Rouge LA 70808 Certain Und @ Lloyds of London AA112200 Travelers Indemity Co of CT 25682 15-16 MASTER WC A X X X PSE02140995 8/6/2015 8/6/2016 2,000,000 250,000 5,000 2,000,000 2,000,000 Employee Benefits 1,000,000 A X X PSE02140995 8/6/2015 8/6/2016 1,000,000 B N XEUB4147T90-5-15 10/1/2015 10/1/2016 X 1,000,000 1,000,000 1,000,000 A Professional Liability PSE02140995 8/6/2015 8/6/2016 Occurence 1,000,000 Errors & Ommissions Agrregate 2,000,000 Applicable to Certificate Holder: Blanket Additional insured, primary non-contriburtory basis, 30 days notice of cancellation (10 days for non payment) and Waiver of Subrogation is included in the General Liability General Condition wording, if required by written contract. Blanket Waiver of Subrogation in favor of certificate holers when required by written agreement with respects to workers compensation. Dave Peek/BRENDA City of Palo Alto, It's Council Members Officers, Agents & Employees 250 Hamilton Avenue Palo Alto, CA 94301 maintained uninterrupted insurance of the same type with ussince the expiry of that earlier Policy, then, notwithstanding EXCLUSION 12, we will permit the matter to be reported under this Policy and will indemnify you, provided that: a) the indemnity will be subject to the applicable aggregate limit of liability or limit of liability of the earlier Policy under which the matter should have been reported or the aggregate limit of liability or limit of liability of the current Policy, whichever is the lower; b)we may reduce the indemnity entitlement by the monetary equivalent of any prejudice which has been suffered as a result of the delayed notification; c) the indemnity will be subject in addition, to all of the terms, CONDITIONS, DEFINITIONS and EXCLUSIONS, other than the aggregate limit of liability or limit of liability, contained in this current Policy. 3.Fraudulent claims If you notify us of any claim knowing that claim to be false or fraudulent in any way, we shall have no responsibility to pay that claim or any other claims under this insurance and the Policy will be treated as if it had not been effected. 4.Agreement to pay claims We have the right and duty to take control of and conduct in your name the investigation settlement or defence of any claim. We shall also pay on your behalf costs and expenses incurred with our prior written consent (subject to the Limits of Liability and applicable Deductible shown in the Declarations) provided that we shall not a) pay for the costs and expenses of any part of a claim that is not covered by this Policy. b) incur any costs and expenses in the defence of any claim unless there is a reasonable prospect of success, taking into account the commercial considerations of the costs of defence. We shall always endeavour to settle any claim through negotiation, mediation or some other form of alternative dispute resolution and shall pay on your behalf the amount so agreed by us and the claimant. If we cannot settle by such means, we shall pay the amount which you are found liable to pay either in court or through arbitration proceedings, subject always to the Limit of Liability shown in the Declarations. If you refuse to consent to a settlement that we recommend and that the claimant will accept, you must then defend, investigate or settle the claim at your own expense. As a consequence of your refusal, our liability for any claim shall not be more than the amount that we could have settled the claim for had you consented, plus any costs and expenses incurred prior to the date of such refusal. 5.Innocent non-disclosure We will not seek to avoid the Policy or reject any claim on the grounds of non-disclosure or misrepresentation except where the non-disclosure or misrepresentation was reckless or fraudulent or you failed to conduct a full inquiry prior to providing the information that forms the basis of this insurance. In the event that we seek to avoid the Policy or reject any claim on this basis the burden of proving otherwise rests solely with you. 6.Your duty to advise us of changes If you become aware that any of the information that you have given us in the Application Form or elsewhere in connection with your application for this insurance has materially changed then you must advise us as soon as is practicable. In this event, we reserve the right to amend the terms, conditions or premium of the Policy. 7.Risk management conditions If we attach any additional conditions to your Policy regarding any risk survey or risk management timetable or any other similar conditions then it is your responsibility to ensure that these conditions are complied with by the deadlines shown in the conditions. 8.Our rights of recovery If any payment is made under this Policy in respect of a claim, loss or damage and there is available to us any of your rights of recovery against any other party then we maintain all such rights of recovery. We shall not exercise these rights against any past, present or future employee, director, officer or partner of the company named as the Insured in the Declarations or any subsidiary, unless such payment is in respect of any wilful, malicious or dishonest acts or omissions. You must do nothing to impair any rights of recovery. At our request you will bring proceedings or transfer those rights to us and help us to enforce them. Any recoveries shall be applied as follows: a) first, to us up to the amount of our payment on your behalf including costs and expenses; b) then to you as recovery of your Deductible or other amounts paid as compensation or costs and expenses. 9.Waiver of subrogation Notwithstanding CONDITION 8above we agree to waive our rights of subrogation against a responsible third party client of yours but only if you and your client have entered into a contract that contains a provision requiring us to do this. 10.Cancellation This Policy may be cancelled: a) by you at any time on request; or b) by us if we give you 30 days written notice, or c) by usif we give you 15 days written notice, should any amount in default not be paid within 15 days of the due date shown in the Debit Note that accompanies this Policy. If you give us notice of cancellation in accordance with a) above, the earned Premium shall be computed at pro rata to the number of days that the Policy is in effect subject to a minimum amount of 30% of the Premium. If we give you notice of cancellation in accordance with b) or c) above, the Premium shall be computed at pro rata to the number of days that the Policy is in effect. The Policy Administration Fee shall be deemed fully earned upon inception of the Policy. 11.Additional insureds We shall indemnify any third party as an additional Insured under this Policy, but only in respect of sums which they become legally obliged to pay (including liability for claimants’ costs and expenses) as a result of a claim arising solely out of a wrongful act committed by you or arising solely out of accidental injury or damage caused by you, provided that: a)youcontracted in writing to indemnify the third partyfor such a claim prior to it rst being made against them; and b) had the claim been made against you, then you would be entitled to indemnity under this Policy. Where we indemnify a third party as an additional insured under this Policy, this Policy shall be primary and non-contributory to the third party’s own insurance, but only if you and the third party have entered into a contract that contains a provision requiring this. 11 CFC Underwriting Ltd are Authorised and Regulated by the Financial $POEVDU Authority ©1999-2014 CFC Underwriting Ltd, All Rights Reserved CFC PRO US V2.5 PRO City of Palo Alto (ID # 8059) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Authorize City Manager to execute Cooperative Agreement for $1.085M FTA Mobility Grant Title: Approval and Authorization for the City Manager to Execute a Cooperative Agreement with the Federal Transit Administration (FTA) for the Management of and Participation in a Grant Award to Enhance and Evaluate a Comprehensive Technology/Policy Solution Called Fair Value Commuting (FVC), Designed to Reduce Traffic Congestion From: City Manager Lead Department: City Manager Recommendation Staff recommends that the City Council approve and authorize the City Manager to execute a Cooperative Agreement with the Federal Transit Administration (FTA) for the management of, and participation in a grant award named Fair Value Commuting (FVC) which aims to enhance and evaluate a comprehensive technology/policy solution designed to reduce traffic congestion and greenhouse gas emissions. Background Palo Alto is known as a climate leader with a strong environmentally active resident base. But Silicon Valley loves cars; the regional single occupancy vehicle (SOV) rate is 76%.1 As a result, Bay Area traffic congestion is the second worst in the US (after LA).2 Additionally, approximately 65% of Palo Alto’s total greenhouse gas (GHG) emissions are generated from road transportation.3 Managing and participating in the FVC program aligns with the City’s Sustainability and Climate Action Plan (S/CAP) by helping it work towards rethinking mobility and transforming regional transportation infrastructure. This funding will enable the City to take proactive steps, in collaboration with regional partners, to advance traffic mitigation and GHG reduction strategies. 1 WP Chapter 2. www.cities21.org/wp.pdf 2 https://mobility.tamu.edu/ums/media-information/press-release/ 3 City of Palo Alto S/CAP page 6 City of Palo Alto Page 2 Discussion In conjunction with Joint Venture Silicon Valley (JVSV) and a number of consortium supporters, the City of Palo Alto has been awarded a $1,085,000 grant on behalf of the group to administer, manage and participate in the FVC Program. FVC is a public/private sector partnership program that has the potential to generate strategies that could, if effectively scaled up over time, reduce single occupancy vehicle (SOV) commute share from 75% to 50%. Scaled Bay Area wide, this program has the potential to reduce 1 million car trips per day and 3.4 billion vehicle miles traveled (VMT) per year. The project will: a) collaborate directly with vendors that contribute to FVC by enhancing their software/hardware features and interoperability, b) pilot FVC at 11 employers with more than 27,000 employees, and c) collaboratively analyze commute patterns and develop/pilot gap- filling strategies such as peer-to-peer ridesharing and e-bike/scooter loan-to-own. The initiative is summarized in Attachment A. FTA provided notice in October 2016 that Palo Alto and its partners were one of eleven recipients nationwide approved for this grant program. Approval of the cooperative agreement with FTA represents the next step in this grant process. On January 28, 2017 City Council directed staff to file the formal application with the FTA, and to return to City Council for formal approval of the Cooperative Agreement. FTA in response issued its formal statement of award February 15. The completed Cooperative Agreement is presented in Attachment B. The FTA considers the Mobility on Demand Sandbox projects as Research & Development projects, not a traditional infrastructure or capital improvement project grant. As such the Cooperative Agreement provides substantial flexibility by enabling FTA and the City to jointly modify project expectations in response to results and learning during the course of the project. Staff will return to City Council with contracts with partnering organizations, after receipt of the executed Cooperative Agreement from FTA. As lead recipient of the grant, the City is responsible for establishing these third party contracts with each partner. Resource Impact Staff will return to City Council with a detailed resource impact analysis along with the aforementioned contracts. The City’s costs will be reimbursed by the grant and or will be realized as in kind contributions towards the grant. The FTA funding will provide Palo Alto with approximately $250,000 in support of mobility projects such as the Commuter Wallet and $40,000 in support of low income commuter programs. Policy Implications This initiative is in alignment with the Sustainability and Climate Action Plan (S/CAP) approved City of Palo Alto Page 3 by City Council on November 28 2016. Environmental Review The project is categorically exempt from the California Environmental Quality Act (CEQA), per Section 15306 (basic data collection, research, experimental management and resource evaluation activities which do not result in a serious or major disturbance to an environmental resource). The project may lead to recommendations for subsequent projects or programs, which will be separately reviewed under CEQA prior to approval, adoption or funding. With regard to NEPA, staff anticipates that FTA will determine the project to be categorically excluded under Section 5312 (research projects with limited scope). Attachments: Attachment A: Palo Alto_MOD Sandbox Summary Attachment B: Palo Alto Sandbox Agreement CA-2017-020-00 Mobility on Demand (MOD) Sandbox Summary Page 1 of 2 MOBILITY ON DEMAND (MOD) SANDBOX City of Palo Alto Bay Area Fair Value Commuting Demonstration TEAM, BUDGET, AND WAIVERS Key Partners: Joint Venture Silicon Valley Network, Redwood City, City of Fremont, City of Mountain View, San Mateo County, City of Cupertino, RideAmigos, Luum, Moovel, Lyft, GenZe, EcoReco, Microsoft, Google, Commute.org, C/CAG, samTrans, VTA, Bay Area Council, Transportation for America, Palo Alto Transportation Management Association (TMA), SPUR Project Supporters: State Assembly District 22, Bay Area Air Quality Management District, Governor’s Office of Planning and Research, Metropolitan Transportation Commission, Silicon Valley Leadership Group, Transform, Sierra Club, and Association for Commuter Transportation – NorCal Chapter Budget Summary: The budget from the applicant is summarized below: MOD Sandbox Demonstration Federal Amount ($) MOD Sandbox Cost Share ($) Total Cost $1,085,000 $271,250 $1,356,250 INNOVATION: PROJECT APPROACH The proposed solutions seek to reduce Bay Area single occupancy vehicle (SOV) commute share from 75% to 50% through a Fair Value Commuting (FVC) solution. Stanford University’s commute program provides the conceptual FVC starting point. Stanford reduced SOV from 75% to 50% (with transit share increasing from 8.0% to 31.1%), eliminating the need for $107M in new parking structures. FVC consists of five components: Component #1: Enterprise Commute Trip Reduction (ECTR) software automates employer commute programs. ECTR will integrate with public transit by filling up transit fare cards (Bay Area’s Clipper) and allowing pre-tax commuter benefits purchase of transit passes. Project partner vendors are Luum and RideAmigos Component #2: Mobility Aggregation (MobAg) app is a mobile multimodal trip planning app with a seamless combination of public/private transit, bikeshare, rideshare, carshare, and electric scooter/bike “loan-to-own,” with e-payment. MobAg integrates MOD products such as Lyft line, UberPOOL, Waze Carpool, Scoop, ZipCar, and Car2Go. MobAg apps include Moovel, Urban Engines, Whim, Moovit, Transit App, TripGo, Swiftly, Ventra, Siemens, and GoLA. The project integrates MobAg with ECTR. MobAg integrates with public transit by providing multimodal trip planning featuring transit via the GTFS open standard interface. Component #3: A “revenue-neutral workplace parking feebate” charges a fee for SOV commutes and rebates that revenue to non-SOV commutes, structured so that there is no cost to employers. ECTR vendors take their fee out of SOV revenue. Component #4: “Gap Filling” describes analytics to identify commutes with poor alternatives and subsequent attempts to improve them. Lyft/Uber services integrate with public transit by providing first/last mile - 20% of Lyft trips are first/last mile to transit. E-scooter loan-to-own integrates with transit by providing first/last mile. Bike network improvements integrate with transit by providing first/last mile. Public microtransit such as VTA Flex is already public transit and also provides first/last mile to transit. Mobility on Demand (MOD) Sandbox Summary Page 2 of 2 Component #5: Alleviating systemic obstacles such as: a) enable better public transit routes that cross county borders (the region has 24 transit agencies), b) better integrate transit fares within multi-agency trips, c) modernize transit e-payment, and d) develop a healthy, interoperable mobility software ecosystem, following open standards. The project will: a) collaborate directly with the top vendors that contribute to FVC by enhancing software/hardware feature sets and interoperability, b) pilot FVC at 11 employers with more than 27,000 employees, and c) collaboratively analyze commute patterns and develop/pilot new gap-fillers such as low-income subsidy and loan-to-own. CHALLENGES PROJECT IS DESIGNED TO ADDRESS Scale Challenge: In car-loving portions of the Bay Area, transit commute mode share is an anemic 3.3% and Lyft/Uber serves less than 1 out of every 1,000 trips. For a zip code with 31,550 residents, of which 500 are downtown Palo Alto workers, there are fewer than 8 people to match in each 20-minute peak hour commute interval. SOLUTION: At regional scale FVC creates 465,000 new customers for non-SOV mobility. Gap Challenge: There is a need for “Gap Filling” to identify commute vectors with poor alternatives and subsequently improve options. SOLUTION: FVC fills gaps with: low-income transit subsidies, e-scooter first/last mile, Uber first/last mile, bike network analysis/improvements to reduce stress, e-bikes for 8-mile commutes, on- demand P2P rideshare (Lyft Carpool), microtransit (VTA Flex, Bridj), and telecommuting. Integration Challenge: A handful of suburban employers have reduced commuting from 75% to 50% SOV, but no suburb or suburban county has adopted city-wide or county-wide technologies/policies that have reduced SOV commuting by even 5%. SOLUTION: FVC addresses demand and supply side challenges. FVC’s integrated five- component solution combines technologies and policies, providing a “credible success narrative” that mode shift from 75 to 50% may be achieved. Mobility for All Solution: FVC provides equitable pathways to jobs as follows: 1) The Palo Alto TMA low-income commute gap-filling work task. 2) The FVC “feebate” serves as a progressive wealth transfer from high-income to low income. Compared to other congestion reduction policies, FVC scores high for social equity. 3) 25% mode shift away from SOV in suburbia will result in multimodal expansion to the great benefit of the disability community. Systemic Challenge: The Bay Area has a series of systemic obstacles that need addressing, including: a) enable better transit routes that cross county borders, b) provide better transit fares for multi-agency trips, c) e-payment, d) interoperable software ecosystem. SOLUTION: One of FVC’s five components reduces systemic obstacles. ANTICIPATED OUTCOMES, BENEFITS, IMPACTS Capstone deliverables: 1) a real-time commute mode dashboard aggregated from 11 employers using two different ECTR apps and 2) a consortium-wide conclusion about far along FVC has progressed from 40% ready towards 100% ready to become a regional-scale solution. Potential Bay Area-wide Benefits / Impacts include: Creating $670M/year new transit, biking, carpool, and mobility service funding out of thin air Benefits lower income workers more than higher income workers Reducing 1M car trips/day, 1.3M tons/GHG/year, 3.4B VMT/year at a “negative cost” of -$558/ton GHG reduction Creating a large new pro-transit voting constituency. DOT FTA U.S. Department of Transportation Federal Transit Administration Award Federal Award Identification Number (FAIN) CA-2017-020-00 Temporary Application Number 2303-2017-1 Award Name Bay Area Fair Value Commuting (FVC) Demonstration Project Award Status Obligated / Ready for Execution Award Budget Number 0 Part 1: Recipient Information Name: PALO ALTO, CITY OF Recipient ID Recipient OST Type Recipient Alias Recipient DUNS 2303 City CITY OF PALO ALTO 050520782 Location Type Address City State Zip Headquarters 250 HAMILTON AVE PALO ALTO CA 94301 Physical Address 250 HAMILTON AVE PALO ALTO CA 94301 Mailing Address P. O. BOX 10250 PALO ALTO CA 94303 Union Information There are no union contacts for this application Part 2: Award Information Title: Bay Area Fair Value Commuting (FVC) Demonstration Project FAIN Award Status Award Type Date Created Last Updated Date From TEAM? CA-2017- 020-00 Obligated / Ready for Execution Cooperative Agreement 1/17/2017 1/17/2017 No Award Executive Summary The Bay area Fair Value Commuting (FVC) Demonstration Project is a Mobility on Demand (MOD) research and demonstration project. In pursuit of Bay Area congestion relief and air quality improvement, state/regional/local objectives have converged on 15% per-capita VMT reduction and 2x transit/biking use. In pursuit of regional objectives, this MOD Sandbox demonstration project has the potential to gradually reduce Bay Area single occupancy vehicle (SOV) commute share from 75% to 50%. The demonstration project's technology/policy solution is called Fair Value Commuting and consists of five components. • Enterprise Commute Trip Reduction (ECTR) software. • Mobility Aggregation (MobAg) app, a mobile multimodal trip planning application. • A revenue-neutral workplace parking feebate. • Gap Filling analytics; and • Reduction of systemic obstacles to transit use. The total eligible project cost is $1,356,250. The federal funding will include $329,842 in FY14, and $755,158 in FY 16 Section 5312 funding for a total federal participation of $1,085,000. These funds will be matched with $271,250 in local cost share. Attachments to this application include the project’s Statement of Work (SOW). This application includes funds for Research and/or Development activities. Federal Role: The FTA will actively participate in the project activities by directing activities, attending review meetings, commenting on technical reports, and maintaining frequent contact with the local project manager. FTA reserves the right to re-direct project activities and funding for the project supported under this Award and their related activities. Recipient Role: The City of Palo Alto, along with its project partners, will manage the project as outlined in the attached statement of work including, preparing technical, status, and financial reports; and submitting deliverables. Special Conditions: The recipient will ensure the project team cooperates and provides support to the independent evaluator, as designated by FTA, in their efforts to evaluate the MOD Sandbox projects and the overall MOD Sandbox program, including input to the evaluation plan, as appropriate, and ensuring their MOD sandbox project team provides the independent evaluator qualitative and/or quantitative data as specified in the evaluation plan. The recipient will develop a plan for how the project will address accessible and equitable mobility service for all travelers and will address in particular how the project will provide equivalent service for all travelers as required by U.S. DOT ADA regulations. The recipient will coordinate with FTA any significant media relations and community outreach directly related to the MOD Sandbox program. The local share of this award may be deferred as necessary, consistent with the project milestone schedule. The recipient will be reimbursed for actual costs, as detailed in the project milestone schedule and project budget. The Recipient agrees that it will maintain adequate cost records to support any payment request, and that the payment requested will not exceed the Federal share of the costs actually incurred for the milestone. The Recipient shall comply with the requirements of FTA Circular 6100.1E, “Research, Technical Assistance and Training Program: Application Instructions and Program Management Guidelines.” The Recipient is responsible for awarding or managing any third party contracts or partnering arrangements associated with this project in accordance with the requirements of FTA Circular 4220.1F, “Third Party Contracting Requirements.” Delinquent Federal Debt No, my organization does not have delinquent federal debt. Requires E.O. 12372 Review No, this application does not require E.O. 12372 Review. Subject to Pre-Award Authority Yes, this application is subject to Pre-Award Authority. Will this Grant be using Lapsing Funds? No, this Grant does not use Lapsing Funds. Frequency of Milestone Progress Reports (MPR) Quarterly Frequency of Federal Financial Reports (FFR) Quarterly Award Point of Contact Information First Name Last Name Title E-mail Address Phone Christina Gikakis Christina.Gikakis@dot.gov (202) 366-2637 Gil Friend Chife Sustainability Officer gil.friend@cityofpaloalto.org 650-329-2447 Award Budget Control Totals Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $329,842 49 USC 5312 - (FAST) Public Transportation Innovation 5312-1 20514 $755,158 Local $0 Local/In-Kind $271,251 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $1,356,251 Award Budget Project Number Budget Item FTA Amount Non-FTA Amount Total Eligible Amount Quantity CA- 2017- 020-01- 00 550- 00 (550- A1) Research Projects $1,085,000.00 $271,251.00 $1,356,251.00 0 CA- 2017- 020-01- 00 55.14.00 MANAGERIAL,TECHNICAL & PROFESSIONAL $32,000.00 $8,000.00 $40,000.00 0 CA- 2017- 020-01- 00 55.54.00 OTHER $48,000.00 $12,000.00 $60,000.00 0 CA- 2017- 020-01- 00 55.74.00 OTHER PROJECT COSTS $755,158.00 $188,790.00 $943,948.00 0 CA- 2017- 020-01- 00 55.74.00 OTHER PROJECT COSTS $249,842.00 $62,461.00 $312,303.00 0 Earmark and Discretionary Allocations Earmark ID Earmark Name Amount Applied D2017-MODD-004 Bay Area Fair Value Commuting Demonstration (Palo Alto) $755,158 D2017-MODD-003 Bay Area Fair Value Commuting Demonstration (Palo Alto) $329,842 Sources of Federal Financial Assistance PO Number Project Number Scope Name Scope Number Scope Suffix UZA Code Area Name Account Class Code FPC Description Amendment Amount Cumulative Amount CA-26- 1013 CA- 2017- 020-01- 00 Research Projects 550-00 (550) A1 060000 California 2014.23.26.TD.1 01 Tech demonstration &deployment $329,842 $329,842 CA-26- 1013 CA- 2017- 020-01- 00 Research Projects 550-00 (550) A2 060000 California 2016.25.26.TD.2 01 Research, Development, Demonstration, and Deployment $755,158 $755,158 Part 3: Project Information Project Title: Bay Area Fair Value Commuting (FVC) Demonstration Project Project Number Temporary Project Number Date Created Start Date End Date CA-2017-020-01-00 2303-2017-1-P1 1/17/2017 10/13/2016 7/1/2019 Project Description The FVC demo project will demonstrate how technology can aid in reducing traffic congestion. The project will take place in Silicon Valley, which has one of the highest congestion levels in the nation; and will span approximately two years. The demo project will be lead by the City of Palo Alto in conjunction with Joint Venture Silicon Valley. Project Benefits Key FVC benefits on a Regional scale are: • Creates $670M/year of new transit, biking, carpool, and mobility service funding out of thin air (equivalent to a half-cent sales tax). • Benefits lower income workers more than higher income workers. • Reduces 1M car trip/day, 1.3M tons/GHG/year, 3.4B VMT/year at a “negative cost” of $558/ton GHG reduced. • Creates a large new pro-transit voting constituency Additional Information The FVC demonstration project's Statement of Work (SOW) is attached to this grant application. Location Description The demonstration project will take place in the San Francisco, California, Bay Area, specifically Silicon Valley. Project Location (Urbanized Areas) UZA Code Area Name 060000 California Congressional District Information State District Representative California 18 Anna Eshoo California 17 Ro Khanna Project Control Totals Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $329,842 49 USC 5312 - (FAST) Public Transportation Innovation 5312-1 20514 $755,158 Local $0 Local/In-Kind $271,251 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $1,356,251 Project Budget Project Number Budget Item FTA Amount Non-FTA Amount Total Eligible Amount Quantity CA- 2017- 020-01- 00 550- 00 (550- A1) Research Projects $1,085,000.00 $271,251.00 $1,356,251.00 0 CA- 2017- 020-01- 00 55.14.00 MANAGERIAL,TECHNICAL & PROFESSIONAL $32,000.00 $8,000.00 $40,000.00 0 CA- 2017- 020-01- 00 55.54.00 OTHER $48,000.00 $12,000.00 $60,000.00 0 CA- 2017- 020-01- 00 55.74.00 OTHER PROJECT COSTS $755,158.00 $188,790.00 $943,948.00 0 CA- 2017- 020-01- 00 55.74.00 OTHER PROJECT COSTS $249,842.00 $62,461.00 $312,303.00 0 Project Budget Activity Line Items Budget Activity Line Item: 55.14.00 - MANAGERIAL,TECHNICAL & PROFESSIONAL Scope Name / Code Line Item # Custom Item Name Activity Quantity Research Projects (550-00) 55.14.00 MANAGERIAL,TECHNICAL & PROFESSIONAL PERSONNEL 0 Extended Budget Description This line item is for City of Palo Alto staff and internal resources to support grant project. Will 3rd Party contractors be used to fulfill this activity line item? No, 3rd Party Contractors will not be used for this line item. Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $32,000 Local $0 Local/In-Kind $8,000 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $40,000 Milestone Name Est. Completion Date Description Start Date 10/13/2016 Start date is date of Letter of No Prejudice issued for the project, and beginning of initial project activities. Estimated completion date is estimated date project activities will be completed. End Date 7/1/2017 End date is end of project activities. Budget Activity Line Item: 55.54.00 - OTHER Scope Name / Code Line Item # Custom Item Name Activity Quantity Research Projects (550-00) 55.54.00 OTHER CONTRACTUAL 0 Extended Budget Description This line item covers 3rd party support products and services such as travel, equipment, supplies, and project support consulting services. Will 3rd Party contractors be used to fulfill this activity line item? Yes, 3rd Party Contractors will be used for this line item. Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $48,000 Local $0 Local/In-Kind $12,000 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $60,000 Milestone Name Est. Completion Date Description Completion Date 7/1/2019 This milestone covers project support provided through 3rd party vendors, project travel, supplies, and equipment. Start Date 10/13/2016 The start date of this milestone is the date of the Letter of No Prejudice issued for the project on 10/13/2016. Budget Activity Line Item: 55.74.00 - OTHER PROJECT COSTS Scope Name / Code Line Item # Custom Item Name Activity Quantity Research Projects (550-00) 55.74.00 OTHER PROJECT COSTS OTHER 0 Extended Budget Description This activity line item covers work performed by project "Key Partners" as listed in the City's Project Proposal responding to Federal Register / Vol. 81, No. 85 / Tuesday, May 3, 2016 "Public Transportation Innovation Funding Opportunity; Mobility on Demand (MOD) Sandbox Demonstration Program". Specifically paragraph "C. Eligibility Information" of this Federal Register Notice indicates among other things: "A key partner is essential to the project as approved by FTA and is therefore eligible for a noncompetitive award by the applicant to provide goods or services described in the application." Will 3rd Party contractors be used to fulfill this activity line item? Yes, 3rd Party Contractors will be used for this line item. Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $249,842 Local $0 Local/In-Kind $62,461 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $312,303 Milestone Name Est. Completion Date Description Start Date 10/13/2016 Start date is date of Project Letter of No Prejudice 10/13/2016. End Date 7/1/2019 End date is completion of project activities. Budget Activity Line Item: 55.74.00 - OTHER PROJECT COSTS Scope Name / Code Line Item # Custom Item Name Activity Quantity Research Projects (550-00) 55.74.00 OTHER PROJECT COSTS OTHER 0 Extended Budget Description This activity line item covers work performed by project "Key Partners" as listed in the City's Project Proposal responding to Federal Register / Vol. 81, No. 85 / Tuesday, May 3, 2016 "Public Transportation Innovation Funding Opportunity; Mobility on Demand (MOD) Sandbox Demonstration Program". Specifically paragraph "C. Eligibility Information" of this Federal Register Notice indicates among other things: "A key partner is essential to the project as approved by FTA and is therefore eligible for a noncompetitive award by the applicant to provide goods or services described in the application." Will 3rd Party contractors be used to fulfill this activity line item? Yes, 3rd Party Contractors will be used for this line item. Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - (FAST) Public Transportation Innovation 5312-1 20514 $755,158 Local $0 Local/In-Kind $188,790 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $943,948 Milestone Name Est. Completion Date Description Start Date 10/13/2016 Start Date is the date of the Project's Letter of No Prejudice. End Date 7/1/2019 End Date is date of completion of project activities. Project Environmental Findings Finding: Class II(c) - Categorical Exclusions (C-List) Class Level Description Class II(c) consists of projects called categorical exclusions (CEs) which are known not to have, either individually or cumulatively, a significant environmental impact on the human or natural environment and are therefore categorically excluded from the requirement to prepare an environmental assessment or an environmental impact statement. Class II(c) does not require documentation. Categorical Exclusion Description Type 04: Planning and administrative activities which do not involve or lead directly to construction, such as: training, technical assistance and research; promulgation of rules, regulations, directives, or program guidance; approval of project concepts; engineering; and operating assistance to transit authorities to continue existing service or increase service to meet routine demand. Date Description Date Class IIc CE Approved 1/9/2017 Part 4: Fleet Details No fleet data exists for this application. Part 5: FTA Review Comments FTA Review Internal Comments Comment By Christina Gikakis Comment Type Environmental Concurrence Date 1/18/2017 Comment This project has a categorical exclusion. Comment By Christina Gikakis Comment Type Technical Concurrence Date 1/18/2017 Comment The Project Manager has reviewed and approved this application and submits it for approval. Comment By Gwo-Wei Torng Comment Type Operations Concurrence Date 2/9/2017 Comment Comment By Jamie Pfister Comment Type Planning Concurrence Date 2/9/2017 Comment Selected as part of 2016 MOD Sandbox; ready for award of these funds previously announced in Oct 2016. Comment By Stephen Pereira Comment Type Legal Concurrence Date 2/10/2017 Comment Comment By Vincent Valdes Comment Type RA Concurrence Date 2/10/2017 Comment Part 6: Agreement UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION FEDERAL TRANSIT ADMINISTRATION COOPERATIVE AGREEMENT (FTA C-23, October 1, 2016) On the date the authorized U.S. Department of Transportation, Federal Transit Administration (FTA) official sign this Cooperative Agreement, FTA has obligated and awarded federal assistance as provided below. Upon execution of this Cooperative Agreement by the Recipient named below, the Recipient affirms this FTA Award, enters into this Cooperative Agreement with FTA, and binds its compliance with the terms of this Cooperative Agreement. The following documents are incorporated by reference and made part of this Cooperative Agreement: (1) "Federal Transit Administration Master Agreement," FTA MA(23), October 1, 2016, http://www.fta.dot.gov, (2) The Certifications and Assurances applicable to the FTA Award that the Recipient has selected and provided to FTA, and (3) Any Award notification containing special conditions or requirements, if issued. WHEN THE TERM “FTA AWARD” OR “AWARD” IS USED, EITHER IN THIS COOPERATIVE AGREEMENT OR THE APPLICABLE MASTER AGREEMENT, “AWARD” ALSO INCLUDES ALL TERMS AND CONDITIONS SET FORTH IN THIS COOPERATIVE AGREEMENT. FTA OR THE FEDERAL GOVERNMENT MAY WITHDRAW ITS OBLIGATION TO PROVIDE FEDERAL ASSISTANCE IF THE RECIPIENT DOES NOT EXECUTE THIS COOPERATIVE AGREEMENT WITHIN 90 DAYS FOLLOWING FTA's AWARD DATE SET FORTH HEREIN. FTA AWARD Federal Transit Administration (FTA) hereby awards a Federal grant as follows: Recipient Information Recipient Name: PALO ALTO, CITY OF Recipient ID: 2303 DUNS No: 050520782 Award Information Federal Award Identification Number: CA-2017-020-00 Award Name: Bay Area Fair Value Commuting (FVC) Demonstration Project Award Executive Summary: The Bay area Fair Value Commuting (FVC) Demonstration Project is a Mobility on Demand (MOD) research and demonstration project. In pursuit of Bay Area congestion relief and air quality improvement, state/regional/local objectives have converged on 15% per-capita VMT reduction and 2x transit/biking use. In pursuit of regional objectives, this MOD Sandbox demonstration project has the potential to gradually reduce Bay Area single occupancy vehicle (SOV) commute share from 75% to 50%. The demonstration project's technology/policy solution is called Fair Value Commuting and consists of five components. • Enterprise Commute Trip Reduction (ECTR) software. • Mobility Aggregation (MobAg) app, a mobile multimodal trip planning application. • A revenue-neutral workplace parking feebate. • Gap Filling analytics; and • Reduction of systemic obstacles to transit use. The total eligible project cost is $1,356,250. The federal funding will include $329,842 in FY14, and $755,158 in FY 16 Section 5312 funding for a total federal participation of $1,085,000. These funds will be matched with $271,250 in local cost share. Attachments to this application include the project’s Statement of Work (SOW). This application includes funds for Research and/or Development activities. Federal Role: The FTA will actively participate in the project activities by directing activities, attending review meetings, commenting on technical reports, and maintaining frequent contact with the local project manager. FTA reserves the right to re-direct project activities and funding for the project supported under this Award and their related activities. Recipient Role: The City of Palo Alto, along with its project partners, will manage the project as outlined in the attached statement of work including, preparing technical, status, and financial reports; and submitting deliverables. Special Conditions: The recipient will ensure the project team cooperates and provides support to the independent evaluator, as designated by FTA, in their efforts to evaluate the MOD Sandbox projects and the overall MOD Sandbox program, including input to the evaluation plan, as appropriate, and ensuring their MOD sandbox project team provides the independent evaluator qualitative and/or quantitative data as specified in the evaluation plan. The recipient will develop a plan for how the project will address accessible and equitable mobility service for all travelers and will address in particular how the project will provide equivalent service for all travelers as required by U.S. DOT ADA regulations. The recipient will coordinate with FTA any significant media relations and community outreach directly related to the MOD Sandbox program. The local share of this award may be deferred as necessary, consistent with the project milestone schedule. The recipient will be reimbursed for actual costs, as detailed in the project milestone schedule and project budget. The Recipient agrees that it will maintain adequate cost records to support any payment request, and that the payment requested will not exceed the Federal share of the costs actually incurred for the milestone. The Recipient shall comply with the requirements of FTA Circular 6100.1E, “Research, Technical Assistance and Training Program: Application Instructions and Program Management Guidelines.” The Recipient is responsible for awarding or managing any third party contracts or partnering arrangements associated with this project in accordance with the requirements of FTA Circular 4220.1F, “Third Party Contracting Requirements.” Total Award Budget: $1,356,251.00 Amount of Federal Assistance Obligated for This FTA Action (in U.S. Dollars): $1,085,000.00 Amount of Non-Federal Funds Committed to This FTA Action (in U.S. Dollars): $271,251.00 Total FTA Amount Awarded and Obligated (in U.S. Dollars): $1,085,000.00 Total Non-Federal Funds Committed to the Overall Award (in U.S. Dollars): $271,251.00 Award Budget Control Totals (The Budget includes the individual Project Budgets (Scopes and Activity Line Items) or as attached) Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $329,842 49 USC 5312 - (FAST) Public Transportation Innovation 5312-1 20514 $755,158 Local $0 Local/In-Kind $271,251 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $1,356,251 (The Transportation Development Credits are not added to the amount of the Total Award Budget.) Project Information Project Number Project Title Project Description CA-2017- 020-01-00 Bay Area Fair Value Commuting (FVC) The FVC demo project will demonstrate how technology can aid in reducing traffic congestion. The project will take place in Silicon Demonstration Project Valley, which has one of the highest congestion levels in the nation; and will span approximately two years. The demo project will be lead by the City of Palo Alto in conjunction with Joint Venture Silicon Valley. Project Funding Summary Funding Source Section of Statute CFDA Number Amount 49 USC 5312 - Research, Development, Demonstration, Deployment 5312 20514 $329,842 49 USC 5312 - (FAST) Public Transportation Innovation 5312-1 20514 $755,158 Local $0 Local/In-Kind $271,251 State $0 State/In-Kind $0 Other Federal $0 Transportation Development Credit $0 Total Eligible Cost $1,356,251 U.S. Department of Labor Certification of Public Transportation Employee Protective Arrangements: Original Certification Date: TERMS AND CONDITIONS Special Conditions There are no special conditions. Awarded By: Jamie Pfister Supervisor FEDERAL TRANSIT ADMINISTRATION U.S. DEPARTMENT OF TRANSPORTATION Contact Info: Award Date: 2/15/2017 1:40 PM GMT+00:00 EXECUTION OF THE COOPERATIVE AGREEMENT There are several identical counterparts of this Cooperative Agreement in typewritten hard copy. Each counterpart is: (1) Fully signed in writing by the duly authorized officials of FTA or the Federal Government and the Recipient, and (2) Deemed to be an original having identical legal effect. Upon full execution of this Cooperative Agreement by the Recipient, the Effective Date will be the date FTA or the Federal Government awarded Federal assistance for this Cooperative Agreement. By executing this Cooperative Agreement, the Recipient intends to enter into a legally binding agreement in which the Recipient: (1) Affirms this FTA Award, (2) Adopts and ratifies all of the following information it has submitted to FTA: (a) Statements, (b) Representations, (c) Warranties, (d) Covenants, and (e) Materials, (3) Consents to comply with the requirements of this FTA Award, and (4) Agrees to all terms and conditions set forth in this Cooperative Agreement. Executed By: PALO ALTO, CITY OF City of Palo Alto (ID # 7714) City Council Staff Report Report Type: Action Items Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: 689-693 Arastradero Preliminary Parcel Map with Exceptions for Bowman School Title: PUBLIC HEARING/QUASI-JUDICIAL. 689-693 Arastradero [16PLN-00228]: Consideration of Applicant's request for Approval of a Preliminary Parcel Map, With Exceptions, to Merge Two Existing Parcels into One Parcel. The Exception Would Allow the Merged Parcel to Exceed the Maximum Lot Area for the purpose of Constructing a New Private School Campus for Bowman School. The Planning and Transportation Commission Reviewed and Recommended Approval of the Project. Environmental Assessment: A Draft Initial Study and Mitigated Negative Declaration was Circulated on January 19, 2017 for Public Review. A Final Initial Study/Mitigated Negative Declaration is Available. Zoning District: R-1(10,000). From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council take the following actions: 1.Adopt the final Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program in Attachment F; and 2.Approve the Record of Land Use Action for the Preliminary Parcel Map application, with exceptions, based on findings and subject to conditions of approval set forth in Attachment A. Executive Summary The applicant requests approval of a preliminary parcel map, with exceptions, to merge a 24,688 square foot (sf) parcel located at 693 Arastradero Road with a 30,206 sf parcel located at 689 Arastradero Road. The resulting 54,894 sf parcel would exceed the maximum allowable lot size of 19,999 sf in the R-1(10,000) Zoning District. The proposed preliminary parcel map is City of Palo Alto Page 2 included in Attachment G. The merged parcels would support an expansion to the Bowman International School located at 4000 Terman Drive, approximately 500 feet north of the subject parcel. Through separate approvals, the applicant proposes to construct a new school facility, which would include a gymnasium, an administration and classroom building, a lab space for art and wood shop and an outdoor learning circle amphitheater. The proposed art and wood shop areas would be below grade, leading to the lower portion of the amphitheater. There are two notable policy considerations highlighted for Council consideration that relate to the size of the parcel and the loss of residential housing units. On balance, however, staff finds the proposal in compliance with the comprehensive plan and recommends approval of the parcel map with exceptions. A Draft Initial Study/Mitigated Negative Declaration was prepared and circulated for public review on January 19, 2017. A Final Initial Study/Mitigated Negative Declaration considers public comments on the Draft as well as revisions to the Focused Traffic Impact Assessment based on additional staff requested revisions to the proposed improvements. This document, along with the accompanying mitigation monitoring and reporting program must be adopted to approve the project. Background The Planning and Transportation Commission considered the proposed project in a public hearing held on February 8, 2017 and recommended that Council approve the preliminary parcel map application, with exceptions. A copy of the staff report, without attachments, is included in Attachment D and a copy of the minutes is included in Attachment E. The Commission was generally supportive of the project, voting 5-0 to recommend approval. Commissioners highlighted two concerns related to traffic. One commissioner requested that the Conditional Use Permit include a restriction on the number of special events that may occur at the site. Although the Conditional Use Permit is not subject to PTC or Council purview, unless a hearing is requested, staff concurs and will include a condition related to special events on the Conditional Use Permit to limit the timing and number of events. The other concern was related to the anticipated delay at Arastradero Road and Georgia Avenue, which incorrectly noted a delay of approximately 6 seconds during the PM peak hour at that intersection despite the low number of anticipated trips in the PM peak hour. The Transportation Impact Assessment has since been further reviewed and revised to reflect an actual anticipated delay of .6 seconds. Another commissioner also considered whether the Comprehensive Plan policy encouraging City of Palo Alto Page 3 schools and residential uses to be in close proximity extended to private schools the same way it might to public schools. Private schools tend to draw students from a larger geographic area whereas public schools generally support the population living nearest the school. However, the Comprehensive Plan does not differentiate between private and public schools and the proposed school does provide an additional option for parents and guardians to send their children to preschool. Some commissioners expressed what might be best described as a missed opportunity to rezone the site and provide a multi-family housing development; citing the adjacent multi- family housing project next to the subject property and other nearby land uses. Though, clearly it is not the applicant’s interest or intent to entitle a housing project. At least one other commissioner expressed concern that the one large parcel could result in a substantially large home. However, the R-1 zoning includes a provision that limits the size of homes to 6,000 square feet of floor area, which would likely mitigate this issue. The size of the new proposed parcel did lead the Commission toward adding a condition that requires all discretionary entitlements be obtained prior to approval of a final map, which is reviewed separately by the City Council. This condition has been included in the attached record of land use action. There was also discussion about how the parcel lines could be adjusted to provide for more residential lots, and, based on current zoning and lot area, at least three lots could be established, possibly four, but the development feasibility of the fourth lot, if it could be created, would be limited due to what would be a resultant triangularly shaped lot. Requested Entitlements, Findings, and Purview Preliminary Parcel Map With Exceptions: The process for evaluating this type of application is set forth in Title 21 of the Palo Alto Municipal Code (PAMC) and California Government Code 66474. Palo Alto Municipal Code section 21.12.100 requires that mergers be processed in the same fashion as a subdivision. The process for approval of a preliminary parcel map for a subdivision is outlined in PAMC Section 21.12.090. Although preliminary parcel maps may be reviewed and approved at a staff level, PAMC Section 21.32.020 requires Council approval of preliminary parcels maps for which an exception is requested. The Council reviews whether the amended subdivision (or in this case, merger) complies and is consistent with the Subdivision Map Act (in particular, Government Code 66474), Title 21 of the Palo Alto Municipal Code, the Palo Alto Comprehensive Plan, and other applicable provisions of the Palo Alto Municipal Code and state law. The findings to approve a preliminary parcel map are provided in Attachment A. In accordance with PAMC 21.32, exceptions may be granted by City Council after a recommendation by the PTC. Application for such an exception shall be made by petition of the applicant, stating fully the grounds of the application and the facts relied upon by the petitioner. Such petition shall be submitted with the preliminary parcel map for which the exception is requested and shall be reviewed and processed City of Palo Alto Page 4 concurrent with said map. The PTC reviewed and recommended approval of the project on February 8, 2017. The petitioners request is included in Attachment C. In addition to the Preliminary Parcel Map with exceptions, staff is concurrently reviewing a separate application for the following entitlements, for which Council review is not required unless a hearing is requested or on appeal: an application for a Major Architectural Review for the proposed on site improvements; a Conditional Use Permit for the proposed use of the site as a private school in the R-1 Zone District; and a requested Variance to allow for the below grade Learning Circle, which exceeds the maximum allowable area for excavated features in the R-1 Zone District. Discussion Key issues and policy implications are discussed in detail in the staff report prepared for the Planning and Transportation Commission provided in Attachment D. A brief summary of staff’s conclusions outlined in that report is provided herein. Zoning Compliance The two existing properties exceed the maximum lot area for the subject R-1 (10,000) Zoning District; the maximum lot size is 19,999 square feet. The applicant proposes to merge the two parcels into one larger parcel to accommodate the proposed development. The resultant lot area would contain 54,894 square feet. There are instances in the code where lot mergers in excess of the maximum standard are permitted; however, it requires no net loss of housing units, or other criteria, which are not met by the proposed development. Accordingly, the applicant has filed for a parcel map exception to allow the parcel to exceed the maximum lot area. Except for the size of the parcel, the proposed parcel map would otherwise meet other applicable site development standards, such as lot depth and width. The purpose of restricting lot size in the R-1 Zone District is to limit the potential for lot combinations to result in a net loss of housing stock and to ensure the resultant homes are not out of scale with the surrounding neighborhood. In this instance, the proposed project would remove three homes, albeit one is nonconforming, and replace these structures with a new private school. Staff’s analysis of the project findings for a parcel map exception are included in Attachment A. Staff’s conclusion summarizes that, due to the irregular (triangular) shape of the lot at 693 Arastradero, the height and floor area ratio (FAR) of development would be restricted by setback and daylight plane requirements to the rear of the lot. The lot merger allows for better site planning; specifically the location of the single taller building to be placed toward the rear of the property rather than at the front of the lot, where it would be more visible to adjacent single-family residential uses and less in character with the neighborhood. Without this City of Palo Alto Page 5 exception, Bowman School would be limited in the types of facilities that could be provided due to the irregular shape of the lot. The granting of this exception would not be detrimental to the public welfare because many of the surrounding lots are much larger than the requested lot size and the majority of the immediately adjacent lots exceed 20,000 sf. In addition, the total number of students that may be enrolled between the two campuses would be consistent with the total number that is already approved to be enrolled at the existing Bowman school campus at 4000 Terman Drive. Consistency with the Comprehensive Plan, Area Plan and Guidelines The site has a Comprehensive Plan land use designation of single-family residential and is not subject to any area plans or specific guidelines. Allowed uses in the single-family residential zoning district include one dwelling unit on each lot as well as conditional uses such as churches and schools. With approval of a CUP, the proposed use for a private school would be consistent with the Comprehensive Plan. One key policy consideration for Council to evaluate is the loss of three housing units to allow for the expansion of an existing private school. The proposed expansion is not for increased enrollment, but to provide additional breakout space for students at the existing Bowman School campus at 4000 Terman Drive and space for younger children. Students ages 3-5 would primarily be located at the new campus, while older students would walk between the existing and proposed campus in order to utilize these breakout spaces. Policy H1.1 of the 2015-2023 Housing Element states “Promote the rahabilitation of deteriorating or substandard residential properties using sustainable and energy conserving approaches.” Although removal of these housing units is not aligned with this policy, a policy consideration must be made in balancing the loss of housing units and the project’s consistency with other goals in the Comprehensive Plan, as outlined in the findings included in Attachment A. In staff’s assessment of the proposal, the loss of residential housing warrants Council discussion. The City, specifically, and the region, generally, has a significant housing shortage and the loss of even a few units requires review. In this particular instance, one of the three residences is nonconforming and would not be allowed under current zoning. The City’s zoning code seeks to have nonconforming uses abated and there is nothing in the City’s local regulations that would require the nonconforming home to remain. The loss of two or three single family housing units is noteworthy, but arguably de minimis in terms of overall housing production and for housing affordability. If the merger were denied, redevelopment of the site would likely include two new large single family homes that would be sold at prices not generally accessible to most home buyers. Additionally, the subject property is located at the edge of a residential neighborhood surrounded by Alta Mesa Memorial Park; a multi-family housing development; a church; and, across the street, other single family residences under similar zoning. City of Palo Alto Page 6 Based on the location of the property and surrounding uses, staff concludes that the proposed lot merger, to accommodate a new school, would not be detrimental to the public welfare, or more specifically, impact the residential neighborhood. The loss of housing units is unfortunate but it does not, from staff’s perspective, outweigh the benefit of the proposed school expansion. Moreover, the current Comprehensive Plan does not contain any current policies that preclude the loss of housing units. The City Council, in its review of the updated plan, may consider policies to address this concern when they review that policy document later this year. Environmental Review The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. A Draft Initial study/Mitigated Negative Declaration (IS/MND) was circulated for public review and comment on January 19, 2017. It was open through February 21, 2017. One comment letter was received during the public comment period. These comments have been considered in the preparation of the Final IS/MND. A link to the Final IS/MND and Mitigation Monitoring and Reporting Program are provided in Attachment F. The Focused Traffic Impact Analysis, as revised, is included as Appendix G to the Final IS/MND. Public Comments As of the writing of this report, three public comments have been received related to the proposed improvements on site as well as the use of the site. These comments are being considered by the ARB and the Director of Planning as part of the application for these requests. No comments have been received related to the proposed preliminary parcel map with exceptions. Alternative Actions In addition to the recommended action, the City Council may: 1. Approve the project with modified findings or conditions 2. Continue the project to a date (un)certain; or 3. Recommend project denial based on revised findings. Attachments: Attachment A: Draft RLUA, Findings and Conditions (DOCX) Attachment B: Location Map (PDF) Attachment C: Applicant's Request Letter (PDF) Attachment D: February 8, 2017 PTC Staff Report without attachments (PDF) Attachment E: Planning and Transportation Commission Hearing Minutes (PDF) Attachment F: Environmental Analysis and Mitigation Monitoring and Reporting Program (DOCX) Attachment G: Project Plans (DOCX) 689-693 Arastradero Drive APPROVAL NO. 2017-6 RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 689-693 ARASTRADERO DRIVE: PRELIMINARY PARCEL MAP APPLICATION [16PLN-00228] On ______, 2017, the City Council of the City of Palo Alto considered and approved the Preliminary Parcel Map for the development of a two lot merger with exceptions, making the following findings, determinations and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On June 23, 2016, Mary Ricks of Bowman School, on behalf of Bowman International School and the Pierce Family Trust, applied for a Preliminary Parcel Map with exceptions for the development of a 54,894 square foot (sf) parcel (“The Project”). B. The project site is comprised of two lots (APN 167-04-012 and APN 167-04- 011) that are 24,688 and 30,206 sf, respectively. The site contains three residential structures, an accessory structure, and two detached garages. Single-family residential land uses are located adjacent to the lot to the north, south, east and west. C. Following staff review, the Planning and Transportation Commission reviewed the project and recommended approval on February 8, 2017 subject to conditions of approval. SECTION 2. Environmental Review. The City as the lead agency for the Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA). The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, a Draft Initial Study/Mitigated Negative Declaration was circulated for public review on January 19, 2017. The public comment period ended on February 21, 2017. A Final Initial Study/ Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan was made available in April 2017 and the City Council adopted the Final IS/MND and MMRP on _______, 2017. SECTION 3. Preliminary Parcel Map Findings. A legislative body of a city shall deny approval of a Parcel Map, if it makes any of the following findings (California Government Code Section 66474): 1. That the proposed map is not consistent with applicable general and specific plans as specified in Section 65451: California Government Code Section 65451 outlines required information for a specific plan. The site does not lie within a specific plan area as specified in Section 65451. It is consistent, on the whole, with the provisions of the Comprehensive Plan, which 689-693 Arastradero Drive encourages schools to be sited near homes and identifies schools as a conditionally permitted land use. The proposed merger would allow better site planning that is more in context with the neighborhood, consistent with the plan goals. 2. That the design or improvement of the proposed subdivision is not consistent with applicable general and specific plans: The map is consistent with the following Comprehensive Plan policies and goal: a. Policy L-12: Preserve the character residential neighborhoods by encouraging new or remodeled structures to be compatible with the neighborhood and adjacent structures. b. Policy L-48: Promote high quality, creative design and site planning that is compatible with surrounding development and public spaces. c. Goal H2: Support the construction of housing near schools, transit, parks, shopping, employment and cultural institutions. Surrounding uses at the site include a memorial park to the south, multi-family residential uses to the east, the existing Bowman School and a church to the north, and single-family residential uses to the west across a major arterial road. The proposed structures would be single-story buildings along the Arastradero Road frontage, where the site is located closest to single-family residences and the tallest building, which is still similar in height to existing two-story residences, would be set further back, closer to taller, mixed-use residential uses. These proposed structures are consistent with the mass and scale of the neighborhood and adjacent structures. The location of this satellite school allows for students to walk between the existing Bowman campus and the new buildings, providing additional hands-on indoor and outdoor learning spaces for students at the existing Bowman campus in addition to providing a space for younger, preschool age students. Given the site’s proximity to the existing Bowman campus as well as a park and existing residential uses, the proposed design and improvements at this site are, on balance, consistent with the goals and policies outlined in the Comprehensive Plan. 3. That the site is not physically suitable for the type of development: The site, with approval of the exception to the maximum lot size, is well suited for the proposed school. The proposed school would replace three existing single-family homes, an accessory structure and two detached garages. Three of the houses are currently vacant and two are abandoned. Schools are a conditionally permitted use in the R-1 zoning district and the comprehensive plan encourages the siting of housing and schools in close proximity. 4. That the site is not physically suitable for the proposed density of development: 689-693 Arastradero Drive While the project needs an exception to the maximum lot area, it would be in conformance with all other zoning regulations including the maximum floor area ratio. 5. That the design of the subdivision or the proposed improvements are likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat: The project site is located in an urbanized area of Palo Alto, and has been developed with residential buildings and landscaping consisting primarily of non-native grasses and shrubs and a mix of native and non-native ornamental trees. The project site does not contain substantial areas of native vegetation or biological resources suitable to provide habitat for sensitive or special status species, such as riparian habitat or other sensitive natural communities. The nearest water features are Adobe Creek, located over 1,000 feet east of the project site and Barron Creek located over 1,500 feet west of the project site. Removal of up to six trees could impact avian species. However, the Mitigated Negative Declaration for the project requires Mitigation Measure BIO-1 to avoid disturbance of nesting and special-status birds. With implementation of this Mitigation Measure, the project would not cause environmental damage or injure fish, wildlife, or their habitat. 6. That the design of the subdivision or type of improvements is likely to cause serious public health problems: The merging of two parcels to create one combined parcel for a school will not cause serious public health problems because the site is designated for such conditionally permitted uses. The use of the site for a school would not generate public health problems in the area because this use would not emit hazardous emissions or involve the handling of hazardous or acutely hazardous materials, substances, or waste. There are no known recognized environmental conditions at the site. The main source of noise at the site would continue to be traffic noise along Arastradero Road. The noise level is not anticipated to increase, as discussed in the Mitigated Negative Declaration. 7. That the design of the subdivision or the type of improvements will conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. In this connection, the governing body may approve a map if it finds that alternate easements, for access or for use, will be provided, and that these will be substantially equivalent to ones previously acquired by the public. This subsection shall apply only to easements of record or to easements established by judgment of a court of competent jurisdiction and no authority is hereby granted to a legislative body to determine that the public at large has acquired easements for access through or use of property within the proposed subdivision. There is one known Pacific Gas and Electric easement on the property, which is located in the southwestern corner of the site. There are no known plans for use of this easement. The easement would be vacated, quitclaimed, or equivalent prior to issuance of the building permit, as required in accordance with the conditions of approval and as noted on 689-693 Arastradero Drive the preliminary parcel map. The merging of these two parcels would not affect any other public easements on or adjacent to the project site. Access to the site would continue to be provided from Arastradero Road. Therefore, the proposed preliminary parcel map will not conflict with any easements acquired by the public at large, for access through or use of property within the subdivision. SECTION 4. Exception Findings The project proposes the following exception to the zoning standards as depicted on Preliminary Parcel Map: Exceeds Maximum Lot Size of 19,999 square feet. 1. There are special circumstances or conditions affecting the property. Due to the irregular (triangular) shape of the lot at 693 Arastradero, the height and FAR of development would be unusually restricted by setback and daylight plane requirements. The lot merger allows for better site planning of a school facility; specifically, this merger would allow the single taller building to be placed toward the rear of the property, rather than at the front of the lot where it would be more visible to the adjacent single-family residential uses and less in character with the neighborhood. Therefore, without this exception, Bowman School would be limited in the types of facilities that could be provided due to the irregular shape of the lot. 2. The exception is necessary for the preservation and enjoyment of a substantial property right of the petitioner. Schools are allowed in the R-1 districts with approval of a Conditional Use Permit. In order to build a school with the proposed amenities, sufficient space is required to meet FAR requirements and to maintain appropriate indoor and outdoor space for the children to learn and play. The proposed merger would reduce restrictions on the academic interests that the school wishes to pursue on behalf of its students. If an exception is not granted to allow for a larger lot size, Bowman School would be limited in the ability to provide the requested facilities for classroom learning as well as other breakout space that would be shared with the existing Bowman School limiting their preservation and enjoyment of the right to use of the site for a school, subject to obtaining a Conditional Use Permit. 3. The granting of the exception will not be detrimental to the public welfare or injurious to other property in the territory in which the property is situated. The purpose of the maximum lot size in the R-1 District is to prevent lot combinations that would allow homes that would be out of scale with other homes in the surrounding neighborhood. This exception would allow for an expansion of Bowman’s existing school just down the street. There are several schools within this area; therefore, this school use is similar to other school uses within the site vicinity. In addition, this site is located close to single-family residences but not 689-693 Arastradero Drive immediately adjacent, which reduces potential for noise impacts on single-family residences. The existing Conditional Use Permit for the Bowman School on 4000 Terman Drive allows for up to 300 students and was determined to not be detrimental to the public welfare or injurious to other property in the territory in which the property is situated. With the addition of the new school annex, the total number of students enrolled at the Bowman School site at 4000 Terman (200 feet from the subject property) and the new school would remain at 300 students total. Therefore the granting of the exception will not be detrimental to the public welfare or injurious to other property in the territory in which the property is situated. 4. The granting of the exception will not violate the requirements, goals, policies, or spirit of the law. Pursuant to Municipal Code Section 18.12.010, the purposes of the single family zoning district are to create, preserve, and enhance areas suitable for detached dwellings with a strong presence of nature and with open area affording maximum privacy and opportunities for outdoor living and children’s play. The granting of the exception will permit the construction of the school, which could not otherwise be built and which does not result in a home that is out of scale with the surrounding neighborhood. The school, although not an attached dwelling unit, provides for a strong presence of nature with open space affording opportunities for children to play and learn. The proposed development includes outdoor learning areas, including a learning circle, Science garden, play and exploration yards, patios and walkways. The above, coupled with the residential style and design of the proposed development, do not detract from the purposes for this residential district and would not violate the requirements, goals, policies, or spirit of the law. SECTION 5. Preliminary Parcel Map Approval Granted. Preliminary Parcel Map approval is granted by the City Council under PAMC Sections 21.12 and 21.20 and the California Government Code Section 66474, subject to the conditions of approval in Section 7 of this Record. Approval of the Preliminary Parcel Map prepared by McLeod and Associates, “Preliminary Parcel Map with Exceptions For Lot Merger Purposes 689 & 693 Arastradero Road”, consisting of two lots, dated December 15, 2016, is strictly limited to those features required to be included on a preliminary parcel map under PAMC Section 21.12.040. Notwithstanding the title of the Preliminary Parcel Map, no development rights shall vest under PAMC Chapter 21.13 or the Subdivision Map Act as a result of this approval. SECTION 6. Parcel Map Conformance. The Parcel Map submitted for review and approval by the City Council shall be in substantial conformance with the Preliminary Parcel Map prepared by McLeod and Associates, “Vesting Preliminary Parcel Map with Exceptions For Lot Merger Purposes 689 & 693 Arastradero Road”, consisting of two lots, dated December 15, 2016, except as modified to incorporate the conditions of approval in Section 7. A copy of this plan is on file in the Department of Planning and Community Environment, Current Planning Division. Within two years of the approval date of the Preliminary Parcel Map, the subdivider shall cause the subdivision or any part thereof to be surveyed, and a Parcel Map, as specified in Chapter 21.08, to be prepared in conformance with the Preliminary Parcel Map as conditionally approved, and in compliance with the provisions of the Subdivision Map Act and PAMC Section 21.16 and submitted to the City Engineer (PAMC Section 21.16.010[a]). 689-693 Arastradero Drive SECTION 7. Conditions of Approval. Planning Division 1. Prior to approval of the parcel map, the applicant will obtain all required entitlements for construction and use of the school, and shall make any modifications to proposed site improvements shown on the Preliminary Parcel Map required as a condition of such entitlements. 2. The applicant shall confirm the location all existing features of the site, including protected and non-protected trees, wells, structures, utilities, and easements to the satisfaction of Public Works, the Planning Division, and any other agency that would have an interest in those features. 3. The owner or designee, prior to issuance of any building permit, shall pay the applicable Development Impact fees. 4. The owner or designee prior to building permit issuance shall submit for review and approval a construction traffic plan and construction phasing plan for development to the City. 5. The existing private utility easement along the northwest lot line as well as the existing Pacific Gas and Electric easement in the southwest corner of the site will be quitclaimed, vacated, or equivalent prior to issuance of a building permit. 6. California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. If these requirements constitute fees, taxes, assessments, dedications, reservations, or other exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide notification that, as of the date of this notice, the 90-day period has begun in which you may protest these requirements. 7. The applicant is hereby notified, as required by Government Code § 66020, that the approved plans, these conditions of approval, and the adopted City fee schedule set forth in Program H3.1.2 of the City of Palo Alto Comprehensive Plan constitute written notice of the description of the dedications, reservations, amount of fees and other exactions related to the project. As of the date of project approval, the 90 day period has begun in which the 689-693 Arastradero Drive applicant may protest any dedications, reservations, fees or other exactions imposed by the City. Failure to file a protest in compliance with all of the requirements of Government Code § 66020 will result in a legal bar to challenging the dedications, reservations, fees or other exactions. 8. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion and at Applicant’s expense, elect to defend any such action with attorneys of its own choice. Public Works Engineering Department PRIOR TO PARCEL MAP SUBMITTAL 9. A digital copy of all the documents must be submitted for the reviewing of the Parcel Map, see comment C-1. 10. The Parcel Map shall include CITY ENGINEER STATEMENT, CITY SURVEYOR STATEMENT and DIRECTOR OF PLANNING AND COMMUNITY ENVIRONMENT STATEMENT. PRIOR TO PARCEL MAP RECORDATION. 11. The City of Palo Alto does not currently have a City Surveyor we have retained the services of Siegfried Engineering to review and provide approval on behalf of the City. Siegfried will be reviewing, signing and stamping the Parcel Map associated with your project. In effort to employ the services of Siegfried Engineering, and as part of the City’s cost recovery measures, the applicant is required to provide payment to cover the cost of Siegfried Engineering’s review. Our intent is to forward your Parcel Map to Siegfried for an initial preliminary review of the documents. Siegfried will then provide a review cost amount based on the complexity of the project and the information shown on the document. We will share this information with you once we receive it and ask that you return a copy acknowledging the amount. You may then provide a check for this amount as payment for the review cost. The City must receive payment prior to beginning the final review process. 12. Submit wet signed and stamped mylar copy of the Parcel Map to the Public Works for signature. Map shall be signed by Owner, Notary and Surveyor prior to formal submittal. PRIOR TO BUILDING PERMIT ISSUANCE 13. Parcel Map shall be recorded with County Recorder. 689-693 Arastradero Drive Utilities Water Gas Wastewater Department The following comments are required to be addressed prior to any future related permit application such as a Building Permit, Excavation and Grading Permit, Certificate of Compliance, Street Work Permit, Encroachment Permit, etc. Any water service, gas service, or wastewater lateral not in use must be disconnected and abandoned. 14. Each unit shall have its own water and gas meter. Each parcel shall have its own water service, gas service, and wastewater lateral connection. 15. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. 16. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services. 17. The contractor shall not disconnect any part of the existing water, gas, or wastewater mains except by expressed permission of the WGW utilities inspector and shall submit a schedule of the estimated shutdown time to obtain said permission. 18. Only City forces can work on the City gas distribution system. 19. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line. RPPA’s for domestic service shall be lead free. Show the location of the RPPA on the plans. SECTION 8. Term of Approval. 1. Preliminary Parcel Map. All conditions of approval of the Preliminary Parcel Map shall be fulfilled prior to map recordation (PAMC Section 21.16.010[c]). Unless a Parcel Map is filed, and all conditions of approval are fulfilled within a two- year period from the date of Preliminary Parcel Map approval, or such extension as may be granted, the Preliminary Parcel Map shall expire and all proceedings shall terminate. PASSED: AYES: 689-693 Arastradero Drive NOES: ABSENT: ABSTENTIONS: 10 ATTEST: APPROVED: City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: Those plans prepared by McLeod and Associates titled “Preliminary Parcel Map with Exceptions For Lot Merger Purposes 689 & 693 Arastradero Road”, consisting of one page, dated April 24, 2017. Ter m a n Par k Parki n g L o t Term a n Alta Mesa Memorial Park Gu n n H i g h S c h o o l Gunn High School Hetc h H e t c h y R i g h t o f W a y Rec o r d O v e r l a p Re s e a r c h e d 2 - 1 0 - 1 9 7 6 Hetch Hetchy Right of Way Alta Mesa Memorial Park Alta MesaMemorial Park Ter m a n M i d d l e S c h o o l Bow m a n I n t . Scho o l 24 24 24 24 60 3 0 24 24 24 24 24 24 30 Mausoleum #2 Mausoleum #1 Adobe CreekMausoleum Terman Middle School Aras t r a d e r o West Apar t m e n t s Student Activities Center QUAD Math & Sc i e n c e Office (MS - 6 ) World Language s &English- Social St u d i e s Offices LOCKER S Bowm a n I n t e r n a t i o n a l S c h o o l Science Arastrad e r o S t a t i o n 9 . 3 '1 0 . 9 '1 1 5 . 0 '7 0 . 0 ' 1 1 5 . 0 '7 0 . 0 ' 2 0 . 6 '2 1 . 4 '1 4 . 2 '1 1 0 . 2 ' 1 2 4 . 9 '1 1 6 . 8 ' 1 1 5 . 4 ' 6 5 . 0 ' 1 1 6 . 1 ' 1 0 . 2 ' 6 1 . 8 ' 1 1 6 . 0 ' 3 1 . 3 ' 2 9 . 5 ' 1 1 0 . 4 ' 6 2 . 0 ' 2 1 . 0 ' 1 1 6 . 1 ' 6 4 . 0 ' 1 3 1 . 0 ' 3 7 . 5 ' 3 9 . 8 ' 1 3 1 . 0 ' 5 0 . 0 ' 1 3 0 . 5 ' 8 1 . 4 ' 1 3 0 . 5 ' 5 0 . 5 ' 1 3 1 . 0 ' 8 2 . 3 ' 6 5 . 3 ' 1 4 2 . 3 ' 1 0 3 . 4 ' 1 3 8 . 6 ' 6 1 . 0 ' 1 3 8 . 6 ' 1 0 0 . 0 ' 1 1 9 . 2 ' 1 3 1 . 0 ' 6 4 . 0 ' 1 2 0 . 3 ' 4 9 . 5 ' 2 2 . 1 ' 1 1 0 . 4 ' 6 1 . 4 ' 1 1 5 . 1 ' 8 3 . 0 ' 4 7 . 7 ' 1 3 3 . 7 ' 6 8 . 9 ' 3 3 . 5 ' 1 5 6 . 4 ' 4 2 . 0 ' 1 5 6 . 4 ' 1 4 . 7 ' 9 4 . 9 ' 1 2 6 . 3 ' 5 8 . 0 ' 1 2 6 . 3 ' 7 8 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 3 0 . 5 ' 4 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 2 0 . 3 ' 8 3 . 4 ' 1 2 3 . 6 ' 6 8 . 2 ' 1 1 8 . 8 ' 9 2 . 0 ' 1 1 8 . 8 ' 7 7 . 0 ' 1 1 6 . 0 ' 9 2 . 0 ' 1 1 6 . 0 ' 7 7 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 6 8 . 0 ' 1 1 5 . 0 ' 7 6 . 0 ' 1 1 5 . 3 ' 6 7 . 7 ' 1 1 5 . 3 ' 8 0 . 0 ' 1 2 2 . 5 ' 6 9 . 8 ' 1 2 2 . 5 ' 8 0 . 0 ' 1 4 2 . 3 ' 3 3 . 0 ' 1 4 5 . 0 ' 4 3 . 1 ' 3 2 . 1 ' 6 3 . 8 ' 1 0 5 . 8 ' 2 0 . 0 ' 1 1 . 0 ' 3 4 . 6 ' 2 0 . 0 ' 1 0 5 . 8 ' 9 5 . 0 ' 1 1 4 . 2 ' 6 0 . 0 ' 1 1 4 . 2 ' 7 0 . 0 ' 1 1 6 . 7 ' 1 0 8 . 0 ' 8 3 . 0 ' 4 . 2 ' 8 7 . 0 ' 3 4 . 6 ' 2 2 . 6 ' 1 4 . 5 ' 3 2 . 9 ' 1 1 6 . 7 ' 7 0 . 0 ' 1 2 0 . 0 ' 6 0 . 0 ' 1 7 0 1 . 1 ' 1 6 9 3 . 7 ' 9 9 . 9 ' 9 2 6 . 7 ' 2 3 3 . 7 ' 1 1 7 7 . 1 ' 5 2 3 . 1 ' 2 2 5 . 4 ' 1 3 . 7 ' 9 3 8 . 8 ' 1 0 . 0 ' 6 0 . 0 ' 1 7 1 . 3 ' 1 6 4 . 8 ' 5 6 7 . 8 ' 2 6 7 . 4 ' 3 1 . 1 ' 4 1 8 . 5 ' 1 1 5 . 0 ' 1 2 . 4 ' 5 7 . 8 ' 1 1 9 . 2 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 '7 0 . 0 ' 1 1 5 . 0 '7 0 . 0 ' 1 1 5 . 4 ' 7 0 . 0 ' 1 1 5 . 4 ' 7 0 . 0 ' 1 6 . 2 ' 1 3 . 5 '9 7 . 1 ' 7 0 . 0 ' 1 1 5 . 4 ' 5 1 . 6 ' 6 2 . 0 ' 1 0 9 . 1 ' 6 5 . 1 ' 8 5 . 9 ' 3 8 . 7 ' 5 0 . 0 ' 1 1 5 . 0 ' 8 4 . 0 ' 1 3 3 . 7 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 . 5 ' 1 1 4 . 2 ' 7 1 . 3 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 3 7 . 0 ' 2 4 . 3 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 0 . 3 ' 9 . 0 '5 5 . 0 ' 1 1 0 . 3 ' 7 0 . 0 ' 2 5 . 0 ' 1 1 6 . 9 ' 5 4 . 4 ' 1 1 6 . 9 ' 7 2 . 7 ' 4 2 . 0 ' 1 1 9 . 2 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 2 7 . 8 ' 2 3 . 6 ' 9 . 4 ' 1 1 0 . 0 ' 1 0 2 . 2 ' 1 2 6 . 1 ' 5 2 . 0 ' 1 1 0 . 0 ' 7 7 . 0 ' 1 1 2 . 8 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 6 4 . 4 ' 1 2 6 . 1 ' 9 1 . 6 ' 3 4 . 0 ' 1 2 8 . 3 ' 4 7 . 3 ' 1 3 4 . 3 ' 7 2 . 0 ' 1 3 2 . 5 ' 6 5 . 7 ' 1 4 0 . 0 ' 1 9 . 5 ' 6 5 . 4 ' 1 3 4 . 3 ' 4 5 . 0 ' 1 4 3 . 9 ' 5 9 . 3 ' 5 3 . 4 ' 1 4 0 . 0 ' 4 6 . 6 ' 1 1 2 . 8 ' 6 1 . 5 ' 1 8 . 0 ' 1 8 . 6 ' 1 4 3 . 9 ' 5 9 . 7 ' 1 2 8 . 3 ' 1 0 8 . 0 ' 1 1 2 . 1 ' 8 0 . 0 ' 1 0 8 . 8 ' 6 5 . 0 ' 1 0 9 . 1 ' 7 0 . 0 ' 1 0 9 . 5 ' 7 0 . 0 ' 1 0 8 . 8 ' 7 0 . 0 ' 1 1 0 . 2 ' 7 0 . 0 ' 1 0 9 . 5 ' 7 0 . 0 ' 1 1 0 . 9 ' 7 0 . 0 ' 1 1 0 . 2 ' 7 0 . 0 ' 1 1 1 . 7 ' 7 0 . 0 ' 1 1 0 . 9 ' 7 0 . 0 ' 1 1 2 . 4 ' 7 0 . 0 ' 1 1 1 . 7 ' 7 0 . 0 ' 1 1 3 . 1 ' 7 0 . 0 ' 1 1 2 . 4 ' 6 1 . 5 ' 9 . 6 ' 9 . 1 ' 1 1 3 . 3 ' 7 0 . 2 ' 1 1 3 . 1 ' 6 8 . 6 ' 1 6 . 4 ' 1 5 . 1 ' 7 7 . 6 ' 6 1 . 3 ' 1 1 3 . 3 ' 4 5 . 5 ' 5 8 . 0 ' 6 3 . 0 ' 3 3 . 7 ' 2 0 . 3 ' 8 . 4 ' 9 . 1 ' 5 . 0 ' 2 0 . 0 ' 7 7 . 0 ' 6 6 . 0 ' 6 0 . 0 ' 5 8 . 0 ' 4 5 . 5 ' 5 . 0 ' 2 4 . 9 ' 3 6 . 8 ' 1 3 . 8 ' 1 4 . 5 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 1 5 . 8 ' 7 . 0 ' 7 7 . 0 ' 2 0 . 0 ' 4 3 . 5 ' 7 . 4 ' 1 1 5 . 8 ' 9 2 . 6 ' 9 7 . 1 ' 1 0 0 . 0 ' 3 0 . 5 ' 4 7 . 8 ' 8 0 . 2 ' 6 2 . 0 ' 1 0 0 . 0 ' 6 2 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 1 2 2 . 2 ' 6 1 . 5 ' 1 0 2 . 4 ' 1 4 . 6 ' 1 4 . 5 ' 3 3 . 4 ' 4 9 . 4 ' 1 0 2 . 4 ' 7 3 . 3 ' 1 3 . 7 ' 7 8 . 5 ' 2 5 . 0 ' 3 6 . 5 ' 2 5 . 0 ' 7 8 . 5 ' 8 0 . 0 ' 1 5 . 0 ' 1 2 8 . 3 ' 1 6 . 6 ' 1 5 . 3 ' 1 2 8 . 3 ' 6 5 . 0 ' 9 9 . 5 ' 3 2 . 7 ' 9 9 . 5 ' 1 2 0 . 0 ' 1 1 9 . 1 ' 3 8 . 9 ' 1 1 9 . 1 ' 5 9 . 0 ' 8 4 . 0 ' 1 1 4 . 6 ' 1 6 . 9 ' 1 4 . 5 ' 2 8 . 9 ' 1 1 4 . 6 ' 7 4 . 7 ' 1 2 0 . 4 ' 3 6 . 7 ' 1 2 0 . 4 ' 6 1 . 0 ' 9 9 . 6 ' 3 6 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 6 1 . 0 ' 1 0 0 . 0 ' 2 5 . 9 ' 3 3 . 7 ' 1 0 0 . 0 ' 7 0 . 0 ' 1 0 2 . 8 ' 1 4 . 1 ' 2 6 . 0 ' 1 0 2 . 8 ' 9 0 . 0 ' 1 0 8 . 0 ' 3 1 . 4 ' 1 2 . 3 ' 3 7 . 0 ' 7 0 . 7 ' 1 1 9 . 2 ' 5 8 . 0 ' 1 0 8 . 0 ' 1 1 5 . 0 ' 1 1 5 . 1 ' 7 . 2 ' 6 2 . 2 ' 1 1 5 . 0 ' 7 2 . 0 ' 4 6 . 4 ' 3 1 . 1 ' 9 9 . 9 ' 2 2 . 1 ' 4 8 . 5 ' 1 0 . 0 ' 1 2 . 6 ' 7 . 8 ' 2 3 . 2 ' 1 1 . 6 ' 1 4 7 . 3 ' 7 . 8 ' 7 . 0 ' 1 1 2 . 7 ' 1 1 8 . 8 ' 1 3 4 . 0 ' 6 7 . 0 ' 1 2 1 . 7 ' 1 5 . 6 ' 1 4 . 5 ' 5 . 8 ' 3 1 . 5 ' 1 9 . 7 ' 9 9 . 9 ' 5 8 . 8 ' 9 8 . 4 ' 1 5 . 3 ' 2 0 . 8 ' 3 5 . 8 ' 3 4 . 2 ' 9 7 . 5 ' 1 1 1 . 1 ' 8 9 . 9 ' 8 0 . 8 ' 1 0 6 . 9 ' 1 5 0 . 6 ' 7 0 . 0 ' 1 0 7 . 6 ' 6 2 . 4 ' 7 . 6 ' 1 0 6 . 9 ' 7 0 . 0 ' 1 0 8 . 1 ' 7 0 . 0 ' 1 0 7 . 6 ' 5 7 . 0 ' 1 3 2 . 5 ' 7 7 . 0 ' 1 3 3 . 0 ' 1 3 7 . 1 ' 5 6 . 0 ' 1 3 3 . 0 ' 3 9 . 0 ' 3 2 . 2 ' 1 2 1 . 7 ' 6 1 . 9 ' 1 3 7 . 1 ' 7 0 . 4 ' 5 8 . 5 ' 1 1 2 . 1 ' 2 8 . 0 ' 7 6 . 0 ' 1 2 0 . 4 ' 1 2 0 . 7 ' 3 0 . 2 ' 2 8 . 2 ' 1 1 6 . 0 ' 8 0 . 0 ' 9 3 . 6 ' 1 7 . 1 ' 1 6 . 0 ' 4 8 . 2 ' 1 1 5 . 4 ' 7 0 . 0 ' 8 . 2 ' 7 0 . 0 ' 2 8 . 2 ' 4 1 . 8 ' 1 1 5 . 5 ' 1 2 . 2 ' 5 7 . 8 ' 1 1 5 . 0 ' 7 0 . 0 '1 1 5 . 0 ' 7 0 . 0 '1 1 5 . 0 ' 7 0 . 0 '1 1 5 . 0 ' 7 0 . 0 '1 1 5 . 0 ' 7 0 . 0 ' 9 9 . 2 ' 1 5 . 5 ' 1 4 . 3 ' 5 1 . 6 ' 1 1 7 . 6 ' 6 6 . 7 ' 5 . 2 ' 4 . 8 ' 1 1 8 . 8 ' 6 4 . 0 ' 1 1 7 . 6 ' 1 1 5 . 4 ' 7 0 . 0 ' 1 1 5 . 5 ' 7 0 . 0 ' 6 5 . 0 ' 1 3 . 0 ' 1 2 0 . 6 ' 3 1 . 6 ' 3 0 . 0 ' 1 1 5 . 5 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 8 7 . 0 ' 1 1 2 . 2 ' 6 5 . 0 ' 1 1 0 . 0 ' 8 2 . 8 ' 1 2 3 . 9 ' 6 2 . 0 ' 1 1 2 . 2 ' 7 0 . 0 ' 9 9 . 9 ' 3 1 . 4 ' 5 0 . 2 ' 1 2 3 . 9 ' 2 4 . 0 ' 2 6 . 3 ' 3 1 . 4 ' 9 8 . 9 ' 7 0 . 0 ' 1 1 3 . 9 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 7 0 . 0 ' 1 1 0 . 0 ' 4 9 . 0 ' 4 0 . 5 ' 1 1 3 . 9 ' 4 9 . 6 ' 1 1 0 . 0 ' 7 8 . 9 ' 1 1 0 . 6 ' 6 6 . 0 ' 1 0 9 . 3 ' 7 0 . 0 ' 1 0 9 . 3 ' 7 0 . 0 ' 1 0 8 . 9 ' 9 2 . 0 ' 1 2 4 . 2 ' 6 2 . 0 ' 1 1 0 . 6 ' 7 4 . 9 ' 1 2 6 . 8 ' 3 1 . 4 ' 5 0 . 2 ' 1 2 4 . 2 ' 7 5 . 0 ' 1 2 2 . 5 ' 5 4 . 5 ' 1 1 5 . 0 ' 3 4 . 2 ' 4 0 . 5 ' 1 3 1 . 0 ' 5 0 . 0 ' 1 2 2 . 5 ' 5 0 . 3 ' 3 1 . 4 ' 9 8 . 0 ' 7 2 . 3 ' 1 3 1 . 0 ' 7 2 . 3 ' 1 1 1 . 4 ' 3 1 . 4 ' 5 0 . 2 ' 1 1 7 . 5 ' 9 3 . 0 ' 1 1 7 . 5 ' 6 2 . 0 ' 1 1 4 . 2 ' 9 6 . 9 ' 1 0 5 . 0 ' 8 6 . 9 ' 1 5 . 7 ' 9 5 . 0 ' 3 2 . 4 ' 2 4 . 9 ' 4 0 . 7 ' 9 2 . 2 ' 1 3 0 . 0 ' 9 6 . 9 ' 7 0 . 0 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 2 8 . 2 '4 1 . 8 ' 1 1 5 . 0 ' 7 0 . 0 ' 1 1 5 . 0 ' 1 3 0 . 0 ' 7 0 . 0 ' 1 0 8 . 5 ' 7 0 . 0 ' 1 0 8 . 1 ' 7 0 . 0 ' 1 0 8 . 9 ' 7 0 . 0 ' 1 0 8 . 5 ' 1 0 9 . 6 ' 1 7 . 0 ' 5 0 . 5 ' 1 0 2 . 3 ' 6 9 . 5 ' 5 1 . 3 ' 1 0 8 . 9 ' 1 0 3 . 0 ' 1 5 5 . 2 ' 4 0 . 0 ' 1 5 5 . 2 ' 4 0 . 0 ' 1 0 7 . 2 ' 1 1 7 . 0 ' 3 4 . 1 ' 2 6 . 9 ' 1 1 7 . 0 ' 8 7 . 0 ' 1 0 8 . 0 ' 8 0 . 2 ' 5 2 . 2 ' 1 0 8 . 0 ' 8 5 . 0 ' 1 5 . 7 ' 8 6 . 9 ' 1 4 7 . 9 ' 3 0 . 7 ' 8 7 . 3 ' 9 7 . 5 ' 2 8 . 6 ' 4 9 . 9 ' 5 0 . 0 ' 1 3 9 . 2 ' 2 7 . 4 ' 2 6 . 8 ' 1 4 3 . 0 ' 1 2 0 . 4 ' 2 5 . 7 ' 2 9 . 4 ' 6 . 0 ' 1 1 2 . 7 ' 6 7 . 0 ' 4 1 . 9 ' 1 0 8 . 9 ' 8 0 . 0 ' 1 0 9 . 6 ' 2 2 . 1 ' 2 6 . 2 ' 1 1 . 1 ' 1 0 7 . 5 ' 9 9 . 8 ' 1 2 . 2 ' 2 0 . 8 ' 1 3 7 . 8 ' 3 3 . 0 ' 1 3 7 . 8 ' 1 4 3 . 3 ' 6 5 . 7 ' 7 4 . 0 ' 1 2 1 . 9 ' 8 5 . 0 ' 4 7 . 0 ' 9 2 . 2 ' 4 7 . 0 ' 8 5 . 0 ' 1 2 1 . 9 ' 7 4 . 0 ' 9 2 . 2 ' 1 2 8 . 5 ' 1 2 5 . 5 ' 2 4 4 . 7 ' 1 0 4 . 2 ' 7 1 . 6 ' 1 0 8 . 8 ' 3 6 . 6 ' 5 4 . 0 ' 2 1 . 0 ' 2 1 . 0 ' 1 7 7 . 7 ' 2 6 3 . 5 ' 2 6 . 0 ' 7 7 . 0 ' 2 3 9 . 2 ' 1 5 7 . 7 ' 2 5 6 . 9 ' 1 2 5 . 5 ' 1 5 4 . 5 ' 2 6 3 . 5 ' 2 5 . 0 ' 7 7 4 . 4 ' 2 4 7 . 9 ' 8 3 . 8 ' 5 8 . 7 ' 7 1 . 1 ' 1 3 3 . 8 ' 7 0 . 3 ' 6 1 . 4 ' 7 5 . 0 ' 1 2 5 . 3 ' 7 5 . 0 ' 1 2 5 . 2 ' 7 5 . 0 ' 1 2 5 . 3 ' 7 5 . 0 ' 1 2 5 . 3 ' 7 5 . 0 ' 1 2 5 . 4 ' 7 5 . 0 ' 1 2 5 . 3 ' 7 5 . 0 ' 1 2 5 . 5 ' 7 5 . 0 ' 1 2 5 . 4 ' 7 5 . 0 ' 1 2 5 . 2 ' 7 5 . 0 ' 1 2 5 . 1 ' 7 5 . 0 ' 1 2 5 . 6 ' 7 5 . 0 ' 1 2 5 . 5 ' 7 5 . 0 ' 1 2 5 . 7 ' 7 5 . 0 ' 1 2 5 . 6 ' 7 5 . 0 ' 1 2 5 . 7 ' 7 5 . 0 ' 1 2 5 . 7 ' 7 5 . 0 ' 1 2 5 . 8 ' 7 5 . 0 ' 1 2 5 . 7 ' 2 9 . 2 ' 4 5 . 9 ' 1 2 7 . 3 ' 7 5 . 0 ' 1 2 5 . 8 ' 6 0 . 6 ' 1 4 . 9 ' 1 3 5 . 8 ' 7 5 . 0 ' 1 2 7 . 3 ' 1 4 2 . 5 ' 8 9 . 9 ' 4 6 . 5 ' 9 7 . 3 ' 6 5 . 0 ' 9 2 . 1 ' 2 8 . 5 ' 6 6 . 5 ' 9 . 6 ' 1 4 2 . 5 ' 7 0 . 8 ' 7 6 . 1 ' 1 2 5 . 0 ' 5 6 . 1 ' 3 1 . 4 ' 1 0 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 7 5 . 0 ' 1 2 5 . 0 ' 3 9 . 6 ' 1 2 5 . 0 ' 1 4 5 . 0 ' 7 0 . 0 ' 1 3 3 . 3 ' 5 1 . 1 ' 1 3 4 . 4 ' 5 4 . 3 ' 1 1 3 . 1 ' 1 2 5 . 0 ' 4 0 . 6 ' 1 4 . 5 ' 2 2 . 6 ' 1 4 7 . 2 ' 1 0 9 . 0 ' 1 3 4 . 4 ' 3 2 . 0 ' 5 4 . 9 ' 1 1 8 . 7 ' 7 3 . 0 ' 1 6 3 . 3 ' 3 8 . 4 ' 8 2 . 3 ' 7 5 . 2 ' 9 3 . 0 ' 1 1 8 . 7 ' 7 6 . 0 ' 1 0 5 . 0 ' 3 1 . 4 ' 5 6 . 0 ' 1 2 5 . 1 ' 1 0 2 . 3 ' 1 9 . 7 ' 4 0 . 8 ' 3 1 . 4 ' 5 2 . 9 ' 8 6 . 0 ' 5 7 . 5 ' 1 2 0 . 0 ' 3 0 . 0 ' 3 1 . 4 ' 4 0 . 0 ' 6 0 . 6 ' 1 4 0 . 4 ' 1 3 5 . 5 ' 3 2 . 9 ' 6 5 . 7 ' 9 8 . 6 ' 3 2 . 9 ' 1 3 5 . 5 ' 1 0 7 . 5 ' 8 0 . 0 ' 5 7 . 5 ' 2 8 . 1 ' 3 3 . 0 ' 3 1 . 4 ' 6 9 . 0 ' 9 2 . 5 ' 1 5 . 0 ' 1 1 0 . 0 '8 6 . 2 ' 3 1 . 4 ' 9 0 . 0 '1 0 6 . 2 ' 6 7 . 4 ' 1 1 6 . 2 ' 6 7 . 4 ' 1 1 6 . 2 ' 6 7 . 4 ' 1 1 6 . 2 ' 6 7 . 4 ' 1 1 6 . 2 ' 6 7 . 4 ' 1 1 6 . 2 ' 6 7 . 4 ' 1 1 6 . 2 ' 5 4 . 5 ' 3 1 . 4 ' 9 6 . 3 ' 7 4 . 7 ' 1 1 6 . 2 ' 1 3 4 . 0 ' 9 6 . 0 ' 1 3 4 . 0 ' 9 6 . 0 ' 1 3 4 . 0 ' 7 6 . 0 ' 1 3 4 . 0 ' 7 6 . 0 ' 1 3 5 . 0 ' 7 6 . 0 ' 1 3 5 . 0 ' 7 6 . 0 ' 1 3 5 . 0 ' 7 6 . 0 ' 1 3 5 . 0 ' 9 0 . 0 ' 1 0 5 . 0 ' 3 1 . 4 ' 7 0 . 0 ' 1 2 5 . 0 ' 8 9 . 0 ' 1 2 5 . 0 ' 8 9 . 0 ' 1 2 5 . 0 ' 9 0 . 0 ' 1 2 5 . 0 ' 7 0 . 0 ' 3 1 . 4 ' 1 0 5 . 0 ' 1 3 5 . 0 '7 0 . 2 ' 1 3 5 . 0 '7 0 . 0 ' 1 3 4 . 0 ' 7 0 . 4 ' 1 3 4 . 0 ' 7 0 . 2 ' 1 1 6 . 2 ' 6 7 . 4 '1 1 8 . 3 ' 1 2 . 9 '5 4 . 8 ' 6 0 . 0 ' 1 3 5 . 0 ' 4 2 . 7 ' 6 5 . 3 ' 2 7 . 0 ' 3 1 . 4 ' 3 1 . 4 ' 7 0 . 0 ' 1 3 5 . 0 ' 7 0 . 0 ' 1 3 5 . 0 ' 1 1 9 . 2 ' 8 . 7 ' 5 2 . 1 ' 1 3 3 . 3 ' 1 2 9 . 0 ' 1 2 0 . 0 ' 8 6 . 0 ' 1 2 0 . 0 ' 8 6 . 0 ' 1 2 0 . 0 ' 8 6 . 0 ' 1 2 0 . 0 ' 8 6 . 0 ' 1 2 0 . 0 ' 8 6 . 0 ' 1 2 0 . 0 ' 8 6 . 0 ' 1 3 6 . 1 ' 5 4 . 6 ' 1 2 0 . 0 ' 1 1 8 . 8 ' 6 7 . 0 ' 6 7 . 0 ' 1 4 0 . 0 ' 6 7 . 0 ' 1 4 0 . 0 ' 6 9 . 3 '1 4 0 . 0 ' 3 4 . 9 ' 8 3 . 9 ' 4 5 . 3 ' 3 4 . 8 '7 4 . 0 '1 2 7 . 0 ' 7 4 . 0 '1 2 7 . 0 ' 1 0 8 . 4 '4 1 . 0 '8 4 . 2 ' 1 3 4 . 0 '1 2 1 . 1 ' 7 4 . 0 '1 2 7 . 0 ' 7 4 . 0 '1 2 7 . 0 ' 1 2 4 . 8 ' 4 1 . 6 ' 6 2 . 7 ' 7 0 . 6 ' 5 8 . 8 ' 1 1 7 . 5 ' 8 2 . 5 ' 1 1 0 . 9 ' 6 8 . 0 ' 8 2 . 5 ' 6 6 . 0 ' 7 6 . 6 ' 9 8 . 3 ' 8 3 . 2 ' 7 4 . 6 ' 9 6 . 4 ' 7 8 . 5 ' 7 0 . 6 ' 4 9 . 5 ' 8 7 . 8 ' 2 6 . 4 ' 7 9 . 2 ' 3 5 . 6 ' 6 2 . 0 ' 4 0 . 3 ' 1 0 7 . 6 ' 8 5 . 8 ' 7 9 . 2 ' 1 6 6 . 3 ' 5 4 . 8 ' 8 4 . 5 ' 7 5 . 2 ' 1 6 1 . 0 ' 4 6 . 2 ' 1 0 2 . 3 ' 7 0 . 6 ' 3 3 . 0 ' 7 7 . 9 ' 8 5 . 1 ' 6 3 . 4 ' 1 7 8 . 2 ' 1 0 4 . 9 ' 3 7 . 0 ' 1 3 4 . 6 ' 1 4 7 . 2 ' 6 7 . 3 ' 1 5 5 7 . 2 ' 6 6 . 7 ' 1 4 5 1 . 0 ' 1 3 3 . 3 ' 3 0 0 . 0 ' 1 2 4 . 8 ' 4 1 . 6 ' 6 2 . 7 ' 7 0 . 6 ' 5 8 . 8 ' 1 1 7 . 5 ' 8 2 . 5 ' 1 1 0 . 9 ' 6 8 . 0 ' 8 2 . 5 ' 6 6 . 0 ' 7 6 . 6 ' 9 8 . 3 ' 8 3 . 2 ' 7 4 . 6 ' 9 6 . 4 ' 7 8 . 5 ' 7 0 . 6 ' 4 9 . 5 ' 8 7 . 8 ' 2 6 . 4 ' 7 9 . 2 ' 3 5 . 6 ' 6 2 . 0 ' 4 0 . 3 ' 1 0 7 . 6 ' 8 5 . 8 ' 7 9 . 2 ' 1 6 6 . 3 ' 5 4 . 8 ' 8 4 . 5 ' 7 5 . 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PC-2 6 6 6 RE RM-40 RM-30 R-1(10000) R-1 PF This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Park School Zone Districts abc Zone District Labels 689 - 693 Arastradero Road (Project Site) 0'337' 689 - 693 Arastradero Road16PLN-00228 Location Map CITY O F PALO A L TO IN C O R P O R AT E D C ALIFOR NI A P a l o A l t oT h e C i t y o f A P RIL 16 1 894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto vhernan2, 2016-09-08 11:54:07Location Map 693 Arastradero (\\cc-maps\gis$\gis\admin\Personal\vhernan2.mdb) Planning & Transportation Commission Staff Report (ID # 7619) Report Type: Action Items Meeting Date: 2/8/2017 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: 689-693 Arastradero: Preliminary Map with Exceptions Title: PUBLIC HEARING / QUASI-JUDICIAL. 689-693 Arastradero [16PLN-00228]: Recommendation to City Council for Approval of a Preliminary Parcel Map, With Exceptions, to Merge Two Existing Parcels into One Parcel. The Exception Would Allow the Merged Parcel to Exceed the Maximum Lot Area. Environmental Assessment: A Draft Initial Study and Mitigated Negative Declaration was Circulated on January 19, 2017 for Public Review. Zoning District: R-1 (10,000) Zoning District. For More Information, Contact Claire Hodgkins at: claire.hodgkins@cityofpaloalto.org. From: Hillary Gitelman Recommendation Staff recommends the Planning and Transportation Commission (PTC) take the following action(s): 1. Recommend approval of the proposed preliminary parcel map application, with exceptions, to the City Council based on findings and subject to conditions of approval set forth in Attachment C. Report Summary The applicant requests approval of a preliminary parcel map, with exceptions, to merge a 24,688 square foot (sf) parcel located at 693 Arastradero Road with a 30,206 sf parcel located at 689 Arastradero Road. The resulting 54,894 sf parcel would exceed the maximum allowable lot size of 19,999 sf in the R-1 (10,000) Zoning District. The merged parcels would support an expansion to the Bowman International School located at 4000 Terman Drive, approximately 500 feet north of the subject parcel. Through separate approvals, the applicant proposes to construct a new school facility, which would include a gymnasium, an administration and classroom building, a lab space for art and wood shop and City of Palo Alto Planning & Community Environment Department Page 2 an outdoor learning circle amphitheater. The proposed art and wood shop areas would be below grade, leading to the lower portion of the amphitheater. There are two notable policy considerations the commission will want to consider that relate to the size of the parcel and the loss of residential housing units; both topics are expanded up on this report. However, on balance, staff finds the proposal in compliance with the comprehensive plan and recommends approval of the parcel map with exceptions. A Draft Initial Study/Mitigated Negative Declaration was prepared and circulated for public review on January 19, 2017. Background Project Information Owner: Bowman School International (693 Arastradero); Pierce Family Trust (689 Arastradero) Architect: Pacific Peninsula Architecture, Inc. Representative: Colleen Reilly Legal Counsel: None Property Information Address: 689-693 Arastradero Road Neighborhood: Green Acres adjacent Lot Dimensions & Area: 693 Arastradero; 24,688 sf 689 Arastradero; 30,206 sf Housing Inventory Site: No Located w/in a Plume: No Protected/Heritage Trees: Yes, three protected oaks to remain Historic Resource(s): An Historic Resources Evaluation has been prepared; the existing structures are not eligible for the California Registry of Historical Resources Existing Improvement(s): Three single-story single-family homes: 689 Arastradero –house, detached garage, and accessory structure built circa 1948; 691 Arastradero – house built circa 1958, 693 Arastradero – house and detached garage built circa 1960 Existing Land Use(s): Single-family residential Adjacent Land Uses & Zoning: North: R-1 (10000) Single-Family Residential zoning (Church) West: R-1 Single-Family Residential zoning (Single-family Residential) East: RM-30 Multi-family Residential Zoning (Multi-family Residential) South: Public Facility Zoning/Open Space (Palo Alto-Los Altos Bike Path) City of Palo Alto Planning & Community Environment Department Page 3 Special Setbacks: Arastradero Road (24 ft. setback) Aerial Image: Source: Google Maps Land Use Designation & Applicable Plans/Guidelines Zoning Designation: R-1 (10000) Comp. Plan Designation: Single-family Context-Based Design: Not Applicable Downtown Urban Design: Not Applicable SOFA II CAP: Not Applicable Baylands Master Plan: Not Applicable ECR Guidelines ('76 / '02): Not Applicable Proximity to Residential Uses or Districts (150'): Yes, in a residential neighborhood Located w/in AIA (Airport Influence Area): Not Applicable Prior City Reviews & Action City Council: None PTC: None City of Palo Alto Planning & Community Environment Department Page 4 HRB: None ARB: 15PLN-00254 Preliminary Architectural Review 10/15/2015 https://www.cityofpaloalto.org/civicax/filebank/documents/49416; 16PLN-00089 First formal as a study session 11/17/2016 http://www.cityofpaloalto.org/civicax/filebank/documents/54708 Project Description The applicant requests approval of a Preliminary Parcel Map, with exceptions, to merge two single-family residential parcels into one parcel that would subsequently be developed as a private school (Bowman School). A Location Map is included in Attachment A. The lots are 24,688 sf and 30,206 sf (respectively, APNs 167-04-011 and 167-04-012) and would result in a combined lot size of 54,894 sf. The maximum lot size in the R-1 (10000) Zoning District is 19,999 sf. The applicant is requesting an exception to exceed the maximum allowable lot size. The lots would continue to be accessed via Arastradero Road. The project request letter, also referred to below as the applicant’s petition, is included in Attachment B and the proposed Preliminary Parcel Map is included in Attachment G. Requested Entitlements, Findings and Purview: The following discretionary applications are being requested and subject to PTC purview: Preliminary Parcel Map: The process for evaluating this type of application is set forth in Title 21 of the Palo Alto Municipal Code (PAMC) and California Government Code 66474. Palo Alto Municipal Code Section 21.12.100 requires that mergers be processed in the same fashion as a subdivision. The process for approval of a preliminary parcel map for a subdivision is outlined in PAMC Section 21.12.090. Although preliminary parcel maps may be reviewed and approved at a staff level, PAMC Section 21.32.020 requires the Commission to review preliminary parcels maps for which an exception is requested. The Commission reviews whether the amended subdivision (or in this case, merger) complies and is consistent with the Subdivision Map Act (in particular Government Code 66474), Title 21 of the Palo Alto Municipal Code, the Palo Alto Comprehensive Plan, and other applicable provisions of the Palo Alto Municipal Code and State Law. The Commission’s recommendation is forwarded to the City Council for final approval. The findings to approve a Preliminary Parcel Map are provided in Attachment C. In accordance with PAMC 21.32, exceptions may be granted only by the City Council after recommendation by the PTC. Application for such an exception shall be made by petition of the applicant, stating fully the grounds of the application and the facts relied upon by the petitioner. Such petition shall be submitted with the tentative or preliminary parcel map for which the exception is requested and shall be reviewed and processed concurrent with said map. Additionally, the project as a whole will require approval for the following, which are not subject to PTC review: City of Palo Alto Planning & Community Environment Department Page 5 Major Architectural Review: Major Architectural Review (AR) is required, as set forth in PAMC 18.77.070. AR applications are reviewed by the ARB and recommendations are forwarded to the Planning & Community Development Director for action within five business days of the Board’s recommendation. Action by the Director is appealable to the City Council if filed within 14 days of the decision. AR projects are evaluated against specific findings. All findings must be made in the affirmative to approve the project. Failure to make any one finding requires project redesign or denial. Conditional Use Permit (CUP): A CUP is required for a private educational facility in the Single-family Residential Zone District. The process for evaluating this type of application is set forth in PAMC 18.77.060. CUP applications are reviewed by the Planning and Community Environment Director. Action by the Director is appealable to the Planning and Transportation Commission and City Council if filed within 14 days of the decision. CUPs are evaluated against specific findings set forth in PAMC 18.76.010. All findings must be made in the affirmative to approve the project. Failure to make any one finding requires project redesign or denial. Variance: A variance is required for the below grade amphitheater, which exceeds the maximum allowable area for excavated features in the Single-family Zone District; the code limits sunken areas adjacent to a basement to 200 sf and the project proposes 3,140 sf. The process for evaluating this type of application is set forth in PAMC 18.76.070. Variance applications are reviewed by the Planning and Community Environment Director. Action by the Director is appealable to the Planning and Transportation Commission and City Council if filed within 14 days of the decision. CUPs are evaluated against specific findings set forth in PAMC 18.76.030. All findings must be made in the affirmative to approve the project. Failure to make any one finding required project redesign or denial. Analysis1 Neighborhood Setting and Character The project site is located in a predominately residential neighborhood, containing a variety of uses. Properties to the northeast along Arastradero Road are zoned Single-family Residential (R- 1 [10,0000]) and include the Palo Alto Christian Reformed Church, single family homes on Ynigo Way and the existing Bowman School Terman site. Properties to the south and southeast of the site, zoned PF and R-E, include the Hetch Hetchy right-of-way/Pedestrian Trail and Alta Mesa Memorial Park. To the north of the site, across Arastradero, properties are zoned R-1 and are single-family residences. To the southwest there is multi-family housing, zoned RM-40, and Gunn High School. To the east of the site (rear) is the Terman Apartments, a multi-family 1 The information provided in this section is based on analysis prepared by the report author prior to the public hearing. Planning and Transportation Commission in its review of the administrative record and based on public testimony may reach a different conclusion from that presented in this report and may choose to take an alternative action from the recommended action. City of Palo Alto Planning & Community Environment Department Page 6 apartment complex in the RM-30 Zone District. Adjacent lot sizes range from approximately 122,000 sf (Terman Apartments to the east) and 189,000 sf (Hetch Hetchy right of way to the south) to approximately 43,000 sf (church to the north). Aside from the existing single-family residential uses west and further north of the site, all of the lots in this area exceed the allowable 20,000 sf. A variety of architectural styles are present in the neighborhood, including mid-century and more contemporary styles. The site would be constructed with smaller, single- story residential style buildings at the front of the property and the taller 26 foot gymnasium building would be located towards the rear of the site where it is less visible from the street. Parking would be located at the front of the property along Arastradero, consistent with the parking lot locations of the adjacent Palo Alto Christian Reformed Church and the existing Bowman School Terman site. Zoning Compliance2 The two existing properties exceed the maximum lot area for the subject R-1 (10,000) zoning district; the maximum lot size is 19,999 square feet. Additionally, one of the parcels includes two housing units, exceeding the permitted density for this district. The applicant proposes to merge the two parcels into one larger parcel to accommodate the proposed development. The resultant lot area would contain 54,894 square feet. There are instances in the code where lot mergers in excess of the maximum standard are permitted; however, it requires no net loss in housing units, or other criteria, which are not met by the proposed development. Accordingly, the applicant has filed for a parcel map exception to allow the parcel to exceed the maximum lot area. Except for the size of the parcel, the proposed parcel map would otherwise meet other applicable site development standards, such as lot depth and width. Attachment D provides a summary of the project’s compliance with the zoning standards. The purpose for restricting lot size in the R-1 district is to limit the potential for lot combinations to result in a net loss in the city’s housing stock and to ensure the resultant homes are not out of scale with the surrounding neighborhood. In this instance, the proposed project would remove three homes, albeit one of those is nonconforming, and replace these structures with a new private school. The design of the school buildings and site layout are being reviewed by the ARB. Preliminary Parcel Map The necessary findings for approval of the Preliminary Parcel Map are contained in State law and incorporated into Title 21 of the Municipal Code. Under the Subdivision Map Act, the PTC and Council must make a series of “reverse” findings to justify approval. In particular, the PTC must recommend denying a Preliminary Parcel Map if it makes any of the findings provided in Government Code Section 66474 (see Attachment C). Parcel Map Exception PAMC Chapter 21 includes standards for reviewing parcel maps. Because the project includes deviations from the zoning standards for lot size, the applicant requests an exception to the 2 The Palo Alto Zoning Code is available online: http://www.amlegal.com/codes/client/palo-alto_ca City of Palo Alto Planning & Community Environment Department Page 7 maximum lot size standard pursuant to PAMC 21.32. The maximum lot size of 19,999 sf in the R-1 (10,000) Zone District is established by PAMC 18.12.040. The project proposes one combined lot that is 54,894 sf. The standards applicable to a parcel map exemption are provided in PAMC 21.32.020, which is restated below, with the specific findings required to grant the exception listed in subsection (b): (a) Exceptions shall be granted only upon a finding that the approval will secure substantially the objectives of the regulations or requirements to which the exceptions are requested, shall protect the public health, safety, convenience, and the general welfare and shall be consistent with and implement the policies and objectives of the comprehensive plan. Any approval of exceptions may be made upon such conditions as are deemed necessary to secure such compliance. (b) Exceptions shall be granted only upon making the following findings: (1) There are special circumstances or conditions affecting the property. (2) The exception is necessary for the preservation and enjoyment of a substantial property right of the petitioner. (3) The granting of the exception will not be detrimental to the public welfare or injurious to other property in the territory in which the property is situated. (4) The granting of the exception will not violate the requirements, goals, policies, or spirit of the law. (c) In the event an exception is granted, any conditions necessary to achieve the objectives of this title, the comprehensive plan, or any provision of law shall be imposed. Included in Attachment C is staff’s analysis of the project to these findings. Staff’s conclusion in Attachment C summarizes that, due to the irregular (triangular) shape of the lot at 693 Arastradero, the height and FAR of development would be restricted by setback and daylight plane requirements toward the rear of the lot. The lot merger allows for better site planning; specifically, the location of the single taller building to be placed toward the rear of the property rather than at the front of the lot, where it would be more visible to adjacent single- family residential uses and less in character with the neighborhood. Without this exception Bowman School would be limited in the types of facilities that could be provided due to irregular shape of the lot. The granting of this exception would not be detrimental to the public welfare because many of the surrounding lots are much larger than the requested lot size and the majority of the immediately adjacent lots exceed 20,000 sf. In addition, the total number of students that may be enrolled between the two campuses would be consistent with the total number that is already approved to be enrolled at the existing campus. Consistency with the Comprehensive Plan, Area Plans and Guidelines3 The site has a Comprehensive Plan land use designation of Single-family Residential and is not subject to any area plans or specific guidelines. Allowed uses in the Single-family Residential Zoning District include one dwelling unit on each lot as well as conditional uses such as 3 The Palo Alto Comprehensive Plan is available online: http://www.cityofpaloalto.org/gov/topics/projects/landuse/compplan.asp City of Palo Alto Planning & Community Environment Department Page 8 churches and schools. With approval of a CUP, the proposed use for a private school would be consistent with the Comprehensive Plan. 2015-2023 Housing Element There are three existing housing units currently on the project site. One of the houses was previously rented and is currently vacant. Two of the houses were previously abandoned and remain vacant. The proposed project would remove the three housing units to allow for construction of the new school. One key policy consideration for the PTC to evaluate is the loss of three housing units to allow for the expansion of an existing private school. The proposed expansion is not for increased enrollment, but to provide additional breakout space for students at the Terman site. Students ages 3-5 would primarily be located at the new campus while older students would walk between the existing and proposed campus in order to utilize these breakout spaces. Policy H1.1 of the 2015-2023 Housing Element states “promote the rehabilitation of deteriorating or substandard residential properties using sustainable and energy conserving approaches.” Although removal of these housing units is not aligned with this policy, a policy consideration must be made in balancing the loss of these housing units and the project’s consistency with other goals of the Comprehensive Plan. For example, Goal H2 of the Housing Element focuses on encouraging the siting of housing and schools in close proximity. It states “support the construction of housing near schools, transit, parks, shopping, employment and cultural institutions.” In addition, the Land Use and Design element of the Comprehensive Plan includes L-12, which states “preserve the character of residential neighborhoods by encouraging new or remodeled structures to be compatible with the neighborhood and adjacent structures. In addition, Policy L-48 states “promote high quality creative design and site planning that is compatible with surrounding development and public spaces.” In staff’s assessment of the proposal, the loss of residential housing warrants Commission discussion. The City specifically, and the region generally, has a significant housing shortage and the loss of even a few units requires review. In this particular instance, one of the three residences is nonconforming and would not be allowed under current zoning. The City’s zoning code seeks to have nonconforming uses abated and there is nothing in the City’s local regulations that would require the nonconforming home to remain. The loss of two or three single family housing units is noteworthy, but it is also de minimis in terms of overall housing production and for housing affordability. If the merger were denied, redevelopment of the site would likely include two new large single family homes that would likely be sold at prices not generally accessible to most home buyers. Additionally, the subject property is located at the edge of a residential neighborhood surrounded by Alta Mesa Memorial Park; a multi-family housing development; a church; and, across the street other single family residences under similar zoning. The City’s Comprehensive Plan also encourages locating schools and housing in close proximity. While there is an argument that this private school may not be as accessible as public schools to City of Palo Alto Planning & Community Environment Department Page 9 neighborhood children, the importance of setting in establishing a school is also important and, given the close proximity to the school’s primary campus, the subject location seems like a beneficial location for families attending the school and the school’s academic pursuits. In addition, the proposed design seems compatible with the adjacent neighborhood and adjacent structures, focusing massing away from adjacent single-family residences, consistent with Policy L-12. The tallest building would be 26 feet, which is similar to the height of most two- story residences. Most buildings would be single-story. Based on the location of this property and the surrounding land uses, staff concludes that the proposed lot merger, to accommodate a new school, would not be detrimental to the public welfare, or more specifically, impact the residential neighborhood. The loss of housing units is unfortunate, but it does not, from staff’s perspective, outweigh the benefit of the proposed school expansion. Moreover, the current comprehensive plan does not contain any current policies that preclude the loss of housing units. The City Council in its review of the updated plan may consider policies to address this concern when they review that policy document later this year. Circulation With the proposed merger, access to and from the site would continue to be provided from Arastradero Road. As part of the applicant’s ARB application, a new one-way driveway and parking layout is proposed to be accessed by a right-turn only in driveway at the southwestern corner of the property and a right-turn only out driveway at the northeastern corner of the property. The right-turn only approach to the circulation pattern is necessitated by the City proposed median improvements for the portion of Arastradero Road fronting the property. The applicant reports that the proposed median improvements will prevent a left-turn in or out of the applicant’s property with the exception of bicycles utilizing the left turn bike lane. City staff is continuing its analysis of the on-site circulation plan to ensure it is efficiently designed and takes into consideration a variety of factors. The ARB will make a recommendation to the Director on the proposed circulation layout, which is provided to the PTC for informational purposes only. Bowman has stated that current enrollment at their Terman site is 237 students, where they have approvals for 300 students. With this application, Bowman is proposing that total enrollment at both sites would not exceed this currently permitted 300 students. Approval of the new and revised CUPs is not subject to PTC purview. Environmental Review The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. A Draft Initial Study/Mitigated Negative Declaration (IS/MND) was circulated for public review and comment on January 19, 2017. The public comment period is open through February 21, 2017 and a link to the IS/MND is provided in City of Palo Alto Planning & Community Environment Department Page 10 Attachment E. A focused Traffic Impact Analysis was prepared and a link to this analysis is provided in Attachment F. Public Notification, Outreach & Comments The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and mailed to owners and occupants of property within 600 feet of the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Palo Alto Weekly on January 27, 2016, which is 12 days in advance of the meeting. Postcard mailing occurred on January 25, 2016, which is 14 days in advance of the meeting. As of the writing of this report, one written public comment in opposition of the proposed project was received. This comment was provided in response to the applicant’s request for a Conditional Use Permit and Architectural Review. The commenter noted that changing zoning to convert a single family home at 693 Arastradero Road to a 60 student school structure would not be acceptable. They expressed concerns about the fact that there are several other schools nearby and that the portion of Arastradero between El Camino and Foothill is already impacted by congestion. This comment is being considered by the ARB as part of the application for these requests. Alternative Actions In addition to the recommended action, the Planning and Transportation Commission may: 1. Approve the project with modified findings or conditions; 2. Continue the project to a date (un)certain; or 3. Recommend project denial based on revised findings. Report Author & Contact Information PTC4 Liaison & Contact Information Claire Hodgkins, Project Planner Jonathan Lait, AICP, Assistant Director (650) 329-2116 (650) 329-2679 claire.hodgkins@cityofpaloalto.org jonathan.lait@cityofpaloalto.org Attachments: Attachment A: Location Map (PDF) Attachment B: Applicant Request Letter (PDF) Attachment C: Draft RLUA, Findings and Conditions (DOCX) Attachment D: Zoning Compliance Table (DOCX) Attachment E: Initial Study / Mitigated Negative Declaration (DOCX) Attachment F: Traffic Impact Analysis (DOCX) Attachment G: Project Plans (DOCX) 4 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Planning & Transportation Commission 1 Action Agenda: February 8, 2017 2 Council Chambers 3 250 Hamilton Avenue 4 6:00 PM 5 6 Call to Order / Roll Call 6:07pm 7 8 Chair Alcheck: (Unintelligible) can you take roll call, please? 9 10 Yolanda Cervantes, Administrative Assistant: Chair Alcheck, Commission Gardias, Commissioner 11 Lauing, Commissioner Rosenblum, Commissioner Summa, Vice Chair Waldfogel. He’s absent so 12 five Commissioners present, one absent. 13 14 Oral Communications 15 The public may speak to any item not on the agenda. Three (3) minutes per speaker.1,2 16 17 Chair Alcheck: At this time, I want to invite anybody who’d like to speak up for oral 18 communications. The public can speak about any item they wish if they present a card. I don’t 19 see any cards. Ok, so seeing no cards. 20 21 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Agenda Changes, Additions, and Deletions 1 The Chair or Commission majority may modify the agenda order to improve meeting management. 2 3 Chair Alcheck: Let’s just move to… I don’t… we do have a… do we want to deal with the 4 continuance now? 5 6 Mr. Jonathan Lait, Assistant Director: Yeah, under agenda changes? 7 8 Chair Alcheck: Yeah. 9 10 Mr. Lait: Yeah, that sounds like a great idea. 11 12 Chair Alcheck: Ok. Do we need a motion to do that? 13 14 Mr. Lait: Yes. We would look for a motion to continue it to… what was the date that we said? 15 March 8th. 16 17 MOTION 18 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok, so for various reason among others, we’re continuing the item related to the 1 Castilleja agenized item tonight to March 8th. And in are… in an effort to allow individuals in the 2 community and this Commission to attend this Mayor’s state of the City address if they wish. 3 So, I’m going to make a motion to continue that items to March 8th. Can I get a second? 4 5 Commissioner ?: I second. 6 7 VOTE 8 9 Chair Alcheck: Great. All those in favor? Raise your hand or say aye. Great. That’s unanimous. 10 We’re continuing the item. 11 12 MOTION PASSED (5-0 unanimous) 13 14 Commission Action 15 16 Motion made to continue Item 4 to March 8, 2017 PTC Meeting. Motion made by Chair Alcheck, seconded by 17 Commissioner Rosenblum, MOTION PASSES 5-0 18 City Official Reports 19 1. Assistant Directors Report, Meeting Schedule and Assignments 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok, let’s begin with the assistant director's report then or meeting schedule and 1 any other items. 2 Jonathan Lait: Thank you. So, just a couple of items to report. One, I wanted to remind the 3 Commissioners, we’ve gotten a couple of responses already for the Planning Commissioners 4 Academy. I understand Commissioner Summa and Lauing are on a wait list to participate in that 5 effort and I think you’re really close to the top of that list so we’ll keep you posted when we 6 learn more about that. It’s a great opportunity to… for all Commissioners… new Commissioners 7 but also people who have been… Commissioners who have been around for a while to network 8 and get a chance to see what’s going on in other jurisdictions. We certainly encourage everyone 9 to participate in that as your time permits. We would cover the cost for your training and travel 10 and so forth. So, if you are interested in that and you haven’t told us already, then please let 11 Yolanda know and we can help get you set up for that. It is on March 1st -3rd and it’s in Los 12 Angeles. 13 A couple other quick notes. The City will be taking up the Retail Preservation Ordinance on 14 February 13th. According to your schedule, we have Commissioner Rosenblum who is the PTC 15 representative for that month so we look forward to seeing you at that meeting. And then in 16 March, we have the ADU is going to Council and… on March 6th and I believe Commissioner… 17 Vice Chair Waldfogel is the representative but I think he might be out of town that week and, so 18 I would look to the Chair to assign a backup if Asher [Note-Waldfogel] is unable to attend. 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. And then finally, there’s a question about the February 22 meeting and whether or not we’re 1 going to have a speaker or if we may cancel that meeting. And if you have more information on 2 that otherwise we will send a notice out later. 3 Chair Alcheck: Yeah, I’ll probably know more about that in a couple days. 4 Mr. Lait: OK. 5 Chair Alcheck: When is the (unintelligible) moment that we would definitely want to have notify 6 people? 7 Mr. Lait: Well, for… we to notice 72- hours in advance so we would… 8 Chair Alcheck: Ok. So, if we find out in say… 9 Mr. Lait: We have time. 10 Chair Alcheck: 3 or 4 days we’re ok? 11 Mr. Lait: Yes. 12 Chair Alcheck: Ok. Then I just wanted to sort of add a comment about the Commissioners 13 Academy I attended when the… one of the years… I can’t actually remember how many years 14 ago, it was. And it was… I literally thought it was incredible. So, if you guys are on the… it 15 sounds like you're already motivated to go but it was very, very interesting. You know, I hear a 16 lot on this Commission from other Commissioners, you know, asking about what another City’s 17 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. do. Sometimes to deal with our… Sometimes we ask, what are other Cities doing to address 1 Item A or B that we’re dealing with and attending the Academy is a really interesting way to 2 learn about other Cities. And you make connections with other Commissioners all over the 3 State. And that can be valuable. You can reach out to them and I want… mention… we had a 4 discussion yesterday during our pre-Commission meeting about the idea of asking any people… 5 any who attended to… we can create an agenda item to discuss, maybe your topic of most 6 interest at the Academy. To come back and just present short, you know, what did you enjoy 7 learning about the most or sharing some thoughts with us. So, I… number 1, how you make it 8 off the waiting list. 9 Male: Yeah, that’s the key. 10 Yeah, that’s the key. 11 Chair Alcheck: There’s got to be a way our Planning Staff can twist some arms. 12 Commissioner Summa: I’m two so he’s either one or three. 13 Chair Alcheck: There’s… I mean, Palo Alto is… you know, they got to make room for Palo Alto. 14 So, hopefully, you get there and I’m really looking forward to hearing more about it when you 15 get back, hopefully. Ok. 16 Study Session 17 Public Comment is Permitted. Five (5) minutes per speaker.1,3 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 2. Update on the City's Effort to Update the Comprehensive Plan 1 Chair Alcheck: With that, I’d like to…Well, do we want to get a quick update on the City’s effort 2 to update the Comprehensive Plan? 3 Ms. Hillary Gitelman, Planning Director: Yes, thank you Mr. Chair and Commissioners. Hillary 4 Gitelman the Planning director. Thank you for having me tonight to do a short update on the 5 Comprehensive Plan. I know we don’t have a lot of time for discussion today but we will 6 schedule an item for… actually a public hearing item of… for the Commission towards the end 7 of March. And we’ll make time at that… on that agenda for a lot of discussions if you’d like. So, 8 just to update you where we are. First, at the end of this week, on Friday. We’re publishing a 9 supplement to the Draft EIR on the Comp. Plan update that was circulated early last year. For 10 those who have been following this long process, the Draft EIR analyzed four different planning 11 scenarios as a proxy for… or as a way to bracket the potential impacts of the plan that we 12 ultimately develop. And when the Council reviewed the Draft EIR, they asked us to analyze two 13 more scenarios so we’re producing a supplement to the Draft EIR that analyzes those two 14 scenarios and it will be available starting on Friday. So, we’ll push out notices to those who 15 commented on it and were interested in the first go around. And we will be providing hard 16 copies to the Commission as soon as we can logistically get them to you. So, it will probably be 17 next week or in your next packet. I don’t know exactly how we’ll get them to you but we will 18 get you a hard copy in addition to providing, of course, a link to the website where it will be 19 housed. The Commission will hold the hearing… a public hearing on the supplement to the 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Draft EIR and we’ve tentatively scheduled that for you for your last meeting in March. And 1 that’s the point at which I think we’ll have not only that hearing, where you’ll take testimony 2 and offer your own comments on the environmental document but we’ll schedule a discussion 3 with you about how the Commission will conduct its review of the Comp. Plan elements when 4 they come back to you from the City Council. There is a provision in the municipal code that 5 was actually adopted by the voters that sets forth the Commission’s responsibility in reviewing 6 and updating the General Plan; which is called the Comp. Plan. And the Commission had begun 7 work on the Comprehensive Plan back in 2008 and really took 6-years to deliver a draft to the 8 Council and what’s been happing in the last couple years is the Council and the CAC have been 9 working with that as a base document. And what’s going to come back from the Council, 10 probably in June, to the Commission is something pretty different than what the Commission 11 forwarded to the Council. So, we’re anticipating the Commission will really want to dig in and 12 do an in-depth review of all of the chapters or elements and provide recommendations to the 13 Council on all of those different pieces. So, what we’re proposing to bring to you at the end of 14 March, in addition to the environmental document, is a discussion about different ways you 15 might approach your review. Some of the Commissioners have suggested subcommittees. 16 Some have other ideas about how we can organize your discussions but it’s clear that however, 17 we do it, it’s going to take a concerted effort on the part of the Commission, individually and 18 collectively, do the review of what has grown into a large and complex document over the 19 course of the summer, we hope. So, more on that later. 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. I also just wanted to touch briefly on the last chapter in our saga about the Comprehensive 1 Plan update which was a newsworthy and covered in the press. It was January 30{th} 2 conversation with the City Council about… involving their review of the draft Land Use and 3 Transportation Elements from the CAC. The CAC, rather than developing a set of 4 recommendations that had minority and majority opinions and votes around them, gave the 5 Council a whole series of different options… policy options. And so, the meeting on January 30th 6 was set up for the Council to choose amongst those options and there were many, many, many 7 of them. So, it was a long meeting and we did get guidance and direction from the Council on a 8 wide variety of issues. Way at the end of the evening, I’m saying like 11 o’clock at night or 9 something, the Commission suggested pulling out the implementation programs from the 10 elements and putting them in separate sections and that has generated a degree of controversy 11 that some of us… were just a little surprised at the controversy about it. Partly because I’m an 12 optimist and I’ve don’t a lot of these General Plans and I think there’s a way to accomplish the 13 Council’s goals and preserve all the good, hard work that put into the programs. And will some 14 further discussion with the Council and with the CAC and the Commission, I think we’re going to 15 build a document with all of those pieces in it that expresses our values in a way that we can all 16 get behind. And that really won't constitute a major change from the current Comprehensive 17 Plan. So, we… I’d be happy to talk about that further as well but tonight it probably not the 18 night for that but if any of you have questions offline, I’d be happy to answer them or we can 19 discuss this further when you meet on the subject again on March 29th. 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Thank you. I just want to quickly add. This is going to be the most, if not the most 1 important thing that we will work on as Commissioners. And one of the things… Staff has 2 agreed to come up with a strategy of how we approach this and that is what Director Gitelman 3 is referring to; that they will present. But… between now and that presentation, if you begin to 4 formalize some ideas of your own about strategies on how we approach this, don’t hesitate to 5 reach out to Director Gitelman. Send her an email if you have some ideas of how we could 6 tackle this responsibility in a more effective way because I want us to first come up with a 7 strategy and then implement it. So, (unintelligible) any other questions about this? Go ahead. 8 Commissioner Gardias: Thank you. So, in this matter what I’d like to propose that our liaison to 9 the CAC group, Commissioner Summa if she agrees… if she could agree just to give us periodic 10 updates at the meeting of this Commission. We have these excellent updates from Director 11 Gitelman or her Staff about structural progress but what’s missing is the update of the 12 substantial changes within the Comprehensive Plan. I think that if we were to get some periodic 13 updates just about the main topics that were captured in the Comprehensive Plan or changed 14 from Commissioner Summa. We would be better prepared for the future discussions. 15 Chair Alcheck: Ok. I think that’s a good… any other suggestions, let’s make them offline. That’s a 16 great suggestion. Maybe we can reiterate it also in an email. I want to sort of… I’d love for you 17 to be able to collect any and then when we have that March 8th meeting, develop that strategy. 18 Ok. 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Action Items 1 Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. 2 All others: Five (5) minutes per speaker.1,3 3 3. PUBLIC HEARING / QUASI-JUDICIAL. 689-693 Arastradero [16PLN-00228]: 4 Recommendation to City Council for Approval of a Preliminary Parcel Map, With 5 Exceptions, to Merge Two Existing Parcels into One Parcel. The Exception Would 6 Allow the Merged Parcel to Exceed the Maximum Lot Area. Environmental 7 Assessment: A Draft Initial Study and Mitigated Negative Declaration was Circulated 8 on January 19, 2017 for Public Review. Zoning District: R-1 (10,000) Zoning District. 9 For More Information, Contact Claire Hodgkins at: 10 claire.hodgkins@cityofpaloalto.org. 11 Chair Alcheck: Let’s move on to our first item… action item, item #3. Staff, will you begin your 12 presentation? 13 Mr. Lait: Yes. 14 Chair Alcheck: Let me just. I see there are people in the audience but I don’t have any speaker 15 cards. If any of you are interested in speaking, please get a card, fill it out and hand it up here so 16 that we have it. 17 Ms. Claire Hodgkins, Project Planner: Good evening Commissioners. I’m Claire Hodgkins and I’m 18 the Project Planner for this project. The proposed project before you today is a proposed 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. preliminary parcel map with exceptions to allow for the merger of two lots located at 689 and 1 693 Arastradero. And an exception is requested to allow for a larger lot size than the maximum 2 allowable in the R-1 (10,000) zoning district. The applicant has applied for separate permits 3 which are not part of the Commission’s purview for construction and use of a new private 4 school for up to 60 students ages 3-5. The new school would also provide breakout space for 5 students at the existing Bowman School. Total enrollment of those sites will not exceed the 6 currently permitted 300 students at the existing Bowman School. So, the resulting parcel would 7 be 54,894-square feet and the allowable lot size in this zoning district is 19,999-square feet. 8 Here we have a quick overview of the existing lots. So, this is a location map that shows you the 9 proposed project outlined in Yellow, with the two lots and it also shows you the location of the 10 existing Bowman School just north… west… sorry… northeast of the project site. The site shows 11 surrounding uses. It should be noted that the several adjacent properties have large lot sizes 12 that exceed the zoning code requirements as well. For example, the lot for the Terman 13 Apartments to the east, that multi-family residential area is approximately 122,000-square feet. 14 And the lot for the church immediately to the north is 43,000-square feet. 15 So, there are two larger policy considerations to be made. One is related to the lot size 16 exception. This requires that the findings be made for an exception and Staff has outlined those 17 Draft Findings in Attachment C of the Staff report. The second is related to loss of housing. Staff 18 has summarized its analysis of this consideration in the Staff report as well. And Staff’s 19 conclusion is that the project on a whole is consistent with the Comprehensive Plan. 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. So, it’s recommended that the PTC recommend that City Council adopts the Mitigated Negative 1 Declaration for the proposed project and approve the Recreative Land Use Action approving 2 the merger of 689 and 693 Arastradero Road, based on the findings and subject to conditions of 3 approval that were outlined in Attachment C of your Staff report. And that’s all. 4 Chair Alcheck: Ok. Alright, I’m going to open… oh, ok. Would the applicant care to present 5 their… 6 Mrs. Colleen Reilly, Project Manager: Good evening. 7 Chair Alcheck: Just before you start, how much time do I a lot to the applicant? Remind me. 8 Mr. Lait: 15-minutes. 9 Ms. Reilly: I would just say that we are not going to add to the presentation. We support what 10 Staff has presented. We’re here to answer any questions. I am the Project Manager for the 11 Bowman School project and we have the Civil Engineer and the Architect and the legal counsel 12 for any of the issues about housing. So, any question we would be happy to take them but we 13 support what’s been presented. 14 Chair Alcheck: Ok. Thank you. Ok. Then at this time, I open… I don’t have any speaker cards so 15 I’ll leave it open for the time being. And would anybody like to… I see, hold on. I have… that Ed 16 or…Oh, we have a speaker card. Ok, great. Why don’t… Is it Ron Schrotenboer, is, that, right? 17 Hard to read this handwriting. Ok, would you please approach and you have 5-minutes. 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Ron Schrotenboer: My name is Ron Schrotenboer. I am a member of the Church which is 1 right next to this proposed lot and per say, I don’t think the Church has any difficulty with 2 combining these two lots or necessarily have the school there. We have a comment that we’ve 3 made in the past with respect to the preschool and that is relating to the proposed gym that’s 4 fairly close to the lot line. We have a nursery school or preschool that operates 5-days a week in 5 the church building and in the… well, back from the road side, which is… when you look at the 6 map that you had your picture up there, when you looking to the north, it’s to the east side on 7 the lot. It’s next to the lot line which would be next to the school and the concern of the school 8 is, with respect to the shade or the blocking of the sun basically, from the size of the gym that’s 9 being proposed there. I think that that’s not part of what you guys are approving tonight so… 10 but I want to make that comment that we have that concern. We hope that that’s addressed at 11 the appropriate place in the appropriate permit process but wanted to make sure that that was 12 stated. And if it’s not part of this issue which appears it’s not to me, then it’s just the… for 13 information piece of item. 14 Chair Alcheck: Thank you. Maybe, Staff, you could just take a minute to outline this process. For 15 example, tonight we’re not really reviewing any layout of how this lot would end up looking but 16 maybe you could sort of identify for the public how that timeline would work if this process 17 moves forward. 18 Ms. Hodgkins: Yeah, of course. So, we have an application for this process, the Preliminary 19 Parcel Map with exceptions which will be reviewed by the Planning and Transportation 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commission. And then forwarded onto Council assuming a recommendation of approval. And 1 there are separate applications that have been applied for architectural review and this 2 commenter's concern I think would be addressed as part of the architectural review process as 3 well. And then there is also a Conditional Use Permit that’s been applied for, for the use of the 4 sit. So, tonight we’re only looking at the Preliminary Parcel Map with the exception for a larger 5 lot size however, the shading studies will be part of the purview of Architectural Review Board. 6 And right now, the timeline… the ARB hearing is to be determined but we would be looking to 7 go to ARB next to hear from ARB and then finalizing with City Council the lot merger. 8 Chair Alcheck: Let me ask… let me ask two questions. One, would you mind putting up on the 9 screen the criteria for the findings we need to make today. Yeah. 10 Ms. Hodgkins: Yes, of course. So, I actually put them into four different slides but the findings… 11 Exception 1 findings is there are special circumstances or conditions affecting the property. 12 Chair Alcheck: Actually, you know, why don’t we do it like this? What page does that start on? 13 12, ok. 14 Ms. Hodgkins: It’s on Attachment C. 15 Chair Alcheck: No, I just want everyone to have it sort of handy. So, if you’re following along 16 with the slides, it starts on page 12 and we can leave that one up there. We have it in our 17 Attachment C as well. And then my second… Just a quick clarifying question because this just 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. popped into my head. This… these are findings we have to make because it’s currently zoned 1 R1? 2 Ms. Hodgkins: Yes. 3 Chair Alcheck: Identified on the map that multi-family site with 100,000-square feet that’s 4 adjacent to it? These apartments. 5 Ms. Hodgkins: Yes. 6 Chair Alcheck: What are those zoned? 7 Ms. Hodgkins: They are zoned RN-30. 8 Chair Alcheck: So, I’m just curious, if this site as merged was zoned RN-30, would we need to 9 make any findings? I mean, if these two parcels would have to already be zoned R-30 but if… 10 I’m just curious to know if you have to go to this length to determine these exceptions if the 11 site was zoned… I guess more appropriately for its size. 12 Ms. Jodie Gerhardt, Manager of Current Planning: So, the exception… Jodie Gerhardt, Manager 13 of Current Planning. So, the exception is to the lot size. This is an R-1 (10,000) zoned property, 14 has a maximum lot size of 19,999. 15 Chair Alcheck: Which both lots already exceed. 16 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Ms. Gerhardt: Correct. And, so if we were looking at the RN-30, I was just trying to look up the 1 maximum size for that and I don’t know that… yeah, I don’t know that there is… there is a 2 minimum size and so you’re right, that it would be… there wouldn’t be this type process if it 3 was zoned differently. 4 Chair Alcheck: I’m just curious, is that within the scope of this? Like if we… it’s not? 5 Mr. Lait: No, that would be a rezone application. That’s not what the applicant is (interrupted) 6 Chair Alcheck: It’s separate? 7 Mr. Lait: Yeah (Unintelligible) 8 Chair Alcheck: Alright, then it’s not worth even thinking about. Ok, in that case, I have a light 9 from Commissioner Gardias. Is that…did one you turn your light on? I don’t have a light. Ok, it’s 10 just this thing doesn’t always line up right. Ok, so why don’t we start with Commissioner 11 Rosenblum and we’ll just go down. Ok? 12 Commissioner Rosenblum: Yeah, thanks for the report. I found the finding section in 13 Attachment C pretty easy to follow and I am also in agreement with Staff’s findings. The piece 14 that I struggle with though is the traffic analysis. And in particular, there was an odd thing that 15 I’m wondering if someone here could speak to. And let me just pull it up from my notes. Give 16 me one moment. So, there was an evening delay at Arastradero Road and Georgia Avenue 17 intersection that would go from 21 to 28 seconds approximately. And so, I know we’ve had 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. discussions around using level of service as a metric and warnings about that but dropping a 1 grade from C to D and yet, the traffic count in the evening peak hour was estimated to only be a 2 net generation of 17 cars. So, that was lower than the morning count and so I found this a little 3 bit strange that actually, there was a fairly large delay caused of predicted to be caused in the 4 evening. And I’m wondering if I’m reading this correctly on the traffic report and I’ll go to the 5 table that I’m referring; one second. 6 Chair Alcheck: (Unintelligible – off microphone) 7 Commissioner Rosenblum: I’m looking at the difference between table 4, which is Bowman trip 8 generation for Arastradero campus which is on page 7, where at peak hour, 17 out, 13 in, net 9 new trips. And then on Table 6 intersection LOS and delay existing… and existing plus project 10 conditions, which is page 10. That the PM peak hour at Arastradero Road and Georgia Avenue 11 had the largest impact from this project. So, all other intersections had an impact of below 4 12 seconds. Only this intersection had an impact about 7 seconds which in and of itself is not 13 massive although, I’m just curious because that was also the lowest number of cars that was 14 predicted was outbound evening. And so, I don’t know how that was calculated. I looked at the 15 appendix and I’m not an expert reading the calculations so I’m not sure how that happened? 16 And I would say, by the way, Arastradero in the evening is difficult and so this relatively small 17 addition if it does add that level of delay would be concerning. 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: I don’t think the applicant brought their traffic consultant and we actually don’t have 1 our traffic consultant here as well. 2 Commissioner Rosenblum: Ok. 3 Mr. Lait: What I would suggest is we take that comment and follow-up after the meeting with 4 our consultants to make sure there was not an error in that. I will say that the Architectural 5 Review Board is still in its review of the application and we can vet that out there. Also, the 6 maps going to go to the Council. And between now and the Council, we can identify if there is 7 any discrepancy in that issue. 8 Commissioner Rosenblum: Ok, that was my only question. My comment is I think that a lot of 9 our purview and I appreciated what findings we need to find but I think that one of the major 10 concerns that we would have is just traffic generation and I think that’s what the neighbors 11 would be concerned about. So, really digging into the traffic report and making sure that we 12 understand the assumption and we feel good about the assumptions would be important to 13 me. That’s it for me. 14 Commissioner Summa: I appreciate that because I noticed that too and I’m probably less well 15 equipped at reading those charts underneath. I was concerned about the traffic because I’ve 16 heard a lot of residential concern about traffic on Arastradero. And I just wanted… I was 17 surprised we didn’t get more communications from the public and I just wanted to double 18 check that there was only that one communication. Which surprises me and I checked with 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. people who live nearby and they seemed to feel the outreach was more than adequate and 1 that the school is a welcome part of the neighborhood so that was good for me to hear. But I 2 think it would be good to make sure that there’s not an error or something in the traffic report. 3 One of my concerns about the merger, not that anyone would intend, at the school, would 4 intend for this to happen but sometimes projects just don’t happen the way they are 5 anticipated and I don’t know if we can condition the merger to be specific only for this project. 6 Like if the merger happened and there’s another lot and they don’t do the project. So, I don’t 7 know if that’s a possibility? 8 Mr. Lait: So, we actually had that same thought as well and we had conversations internally and 9 we don’t believe that there is that opportunity to impose a condition like that but beyond that, 10 we started thinking about, ok, well even though we… even if we can’t impose that kind of 11 condition. What’s the… what are we trying to solve for? What is the problem we are trying to 12 solve for if the project falls through? And at the end of the day, if the lots do get merged and for 13 whatever reason, the school decides not to proceed with the project. It’s still a residentially 14 zoned parcel and there are residential developmental standards that would still limit the size of 15 a home. So, a home… there’s not going to be an advantage for a feature owner of the property 16 or for Bowman School or a feature developer to keep the lot size necessarily large because our 17 code still caps the size of a home to… you know, a maximum square footage. There would, I 18 would think, an incentive still to restore the lots to their original subdivision lines so that you 19 could sell two homes and make that available on the market. So, as we thought that through, 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. we weren’t coming up with the thing that we were trying to protect against and maybe you 1 have an idea of what it is that we haven’t thought about and we would be happy to understand 2 what that is. 3 Commissioner Summa: I was more concerned… it seems like a logical place for denser housing 4 actually, with the apartments behind it. So, I didn’t want to lose the upper… I mean, somebody 5 could put a house on it and have a gigantic, you know, yard basically. But I mean, I guess that 6 would be up to the owners but I think it’s a good potential site as long as the people in the area 7 didn’t object for a denser zoning designation. 8 Mr. Lait: Right and that was another thought that we had to was what if… because there is that 9 large multi-family property nearby. That would be a legislative change that somebody would 10 have to seek and this it would come to this Commission to go from R-1 to RN whatever and that 11 would also have to go to the Council. So, there would be opportunities for public engagement 12 through that process as well. 13 Commissioner Summa: Ok. And the only other and I know this isn’t in our purview but just an 14 observation that it might be nice in the CUP to limit the number of events. I think they current 15 have four events where they have to have parking in the neighborhood because they are larger 16 events. And I think it might be nice to address that in the CUP so it wasn’t open ended. Actually, 17 that’s it for now. 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Lauing: Yes, first I had a couple questions. One is if we know the current 1 ownership of that land? I got some preliminary information from Jonathan but if we could just 2 know who owns it and what the status is? 3 Ms. Reilly: So, 693 is owned by Bowman School currently and Steve Pierce Family Trust, I 4 believe is 689. 5 Commissioner Lauing: I didn’t get the second part. 6 Ms. Reilly: Steve Pierce Family Trust is 689. 7 Commissioner Lauing: So, there is an agreement in place to purchase that for owning? 8 Ms. Reilly: That’s correct. That’s correct, yes. 9 Commissioner Lauing: And if this fell through, that owner would do something else with the 10 land? 11 Ms. Reilly: That’s not my understanding that they were going through with that purchase. 12 That… 13 Commissioner Lauing: Ok. My second question is in a couple of places here it talks about the 14 property right of the petitioner and that was on page 14 in the packet B2. The exception is 15 necessary for preservation and jointment of a substantial property right of the petitioner. And 16 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. then just another case where on page 26 Item 2, it talks about Bowman’s right to build a school 1 so I would like to understand legally what that means? 2 Mr. Lait: If you can… so, on packet page 14, you’re referring to the findings that need to be 3 granted, is, that, right? 4 Commissioner Lauing: Under the exceptions of B… 5 Mr. Lait: Yes. 6 Commissioner Lait: …Item #2. 7 Mr. Lait: Ok. Ok and then you were also referencing another section as well? 8 Commissioner Lauing: Page 26, Item 2. 9 Mr. Lait: Ok, so on both of these instances we’re talking about the Parcel Map exception 10 findings. 11 Commissioner Lauing: Right. The second one says it’s necessary to preserve Bowman’s right to 12 build a school on the site. So legally, I would just like clarification on how that right is granted? 13 What’s the City’s stake in that? Etc. 14 Mr. Lait: Ok. So, I’ll start this and then Albert may amplify. If the… what we’re doing here is 15 we’re trying to demonstrate that the need for the variant or the need for the exception and we 16 acknowledge that with this finding and this particular sentence that there… that schools are 17 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. conditionally permitted uses on the property. Subject to a review process and that review 1 process is the Conditional Use Permit. And so, the interest here or the concern that’s been 2 expressed is that to achieve the… that goal of building a school on the R-1 zone is difficult 3 without the exception because it would limit the school uses or that the project objective to put 4 a gymnasium and some of these other school facilities on the property. And so, that’s the effort 5 that we’re trying to get at. Is they have a… 6 Commissioner Lauing: The second thing you said was what they would not be able to do? That’s 7 different than they have a right to build a school. So, that’s exactly what I’m trying to clarify. 8 Mr. Albert Yang, Senior Deputy City Attorney: Yeah so… Albert Yang, Senior Deputy City 9 Attorney. I think that this wouldn’t a… we’re not referring here to what we might consider a 10 vested right to develop a property into a school because obviously, school uses are only 11 conditionally permitted. It just a…I think we were just recognizing that it is a use that is 12 conditionally permitted. It’s not something that is, you know, entirely forbidden in the zone. 13 And that in our analysis for that conditionally permitted use to be successful… most success, a 14 merger is necessary. 15 Commissioner Lauing: Right so it’s not inalienable, so to speak, and the school is already on the 16 property that’s there. We’re talking about just another expansion. Excuse me. 17 Mr. Lait: Yes, so the school is not on the subject property but it’s within 500-feet of the subject 18 property. There’s an intervening lot and I think, some houses between… 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Lauing: Right. So, what you’re saying is… if I just summarize both of you, I think I 1 heard that if it were to receive a conditional use, then they would have a right to do… to do X, 2 Y, and Z. Right? 3 Mr. Lait: I guess if they received the necessary City approvals inclusive of this Parcel Map and 4 the Architectural Review Board application and the Conditional Use Permit. If all those get 5 approved, then they’ve got this right to build. 6 Commissioner Lauing: Right. So, currently right now relative to the no pun intended, to the 7 expansion area. There’s no right that we have to recognize from a legal standpoint. 8 Mr. Lait: That’s correct. It is an application before this Commission, subject to these findings. 9 That’s what…with respect to the specific Parcel Map merger, it’s based on not only these 10 expectations findings but also the Subdivision Map findings. And if the Commission is able to 11 make those findings, the project goes forward onto Council. If the Commission is unable to 12 make those findings… well, it still goes onto Council but it goes on with a recommendation for 13 denial. 14 Commissioner Lait: Yeah. Ok. So, and then in various places, it talks about that there would be 15 restrictions on the academic interest that the school wants to pursue and phrases like that. So, 16 not to be unfriendly about that but is that… that’s not an obligation that the City of Palo Alto 17 has. It’s just what they want to achieve there right? 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: That is their project objectives and if one were to attempt to align those project 1 objectives to the exception finding criteria, that’s the story we’re trying to tell there. But you’re 2 correct, the City is not in a position where like you know, others may argue differently but there 3 is… there are alternatives that the applicant could explore. If the Commission weren’t able to 4 make that finding. 5 Commissioner Lauing: Right. Including completely different locations or… 6 Mr. Lait: That’s right. 7 Commissioner Lauing: …and x’s or whatever. So, I just want to clarify that just to make sure that 8 I knew and we knew because there’s so much discussion of rights and restrictions in their 9 expansion that I just wanted to know if there was any obligation from the City, which I did 10 presume that there was. 11 So, one of the things that is of concern is sort of just land use priorities. Just a principle we 12 always talk about, you know, we need more land for everything because we’re landlocked. And 13 looking at this particular parcel for potential other opportunities, you know, could make some 14 sense. I don’t know where we are in the timing of all this but there just isn’t any more land. And 15 we need land for housing and we… in the Master Plan for parks which is in front of Council, we 16 need a lot of new parks in certain areas. That… which is something I’m quite familiar with. You 17 know, it could be an interesting area for a small park. So, in the analysis here, we don’t seem to 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. be considering any other alternatives for that land. All be it, it’s not owned by the City so the 1 seller can do whatever he wants. 2 The other thing is that we are taking away homes. I agree that perhaps there’s a way to replace 3 those three somewhat substandard homes from the report, maybe with 6. So, instead of, you 4 know, eliminating 3 homes, we might be illuminating 6 possible really nice homes or even more 5 dense if we wanted to go for a zoning change. 6 And there are other phrases in here about how we believe that the Comp. Plan talks about 7 getting schools close to housing and can’t get back in the framers head when it was being 8 written. I don’t know if that applies equally to private schools and public schools. You know, the 9 latter of which are obviously, more the responsibility of the City so that would be a concern. 10 Just to point out that the verbiage in the report suggest that there aren’t going to be any more 11 total number of kids there. Which is true because the cap is at 300 but the current is 237. So, 12 we’re going to get 63 more kids and maybe 62 more cars bringing kids there. So, the traffic that 13 Eric brought up is real and that might be without the increase of the 63. Ok. 14 Ms. Reilly: Can I just clarify that it’s actually just an additional 40 students. The 20 are already 15 on the existing (unintelligible) site. Just for clarification. 16 Commissioner Lauing: Ok, thanks. So, in summary there, we’re some housing that’s there, 17 maybe more. The Staff report says that it’s de minimis. This sort of creep issue is of concern. In 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. (unintelligible) we have feature creep and you try to add more creeps. In parks, sometimes they 1 try to take a little bit of park because they say well, you know, it’s only a little bit and there are 2 plenty of parks; which there isn’t. And now we’re doing it with houses so that’s of concern. 3 There’s the traffic concern and then the use that may be private schools are different. There’s 4 already a school there. It’s not like we’re saying it’d be great to have another private school so 5 the alternative use of that space is a question. Thank you. 6 Chair Alcheck: Ok. Thank you. We will spend as much time as we need to on this item. I just 7 want to make sure we’re aware of the time. It’s 10 to 7. Ok, Commissioner Gardias, do you 8 want to comment? 9 Commissioner Gardias: Sure. Thank you. Thank you very much for your review and the 10 applicant or project manager and others related, thank you for coming and presenting this to 11 us. If you could tell me more about the houses that are currently on the lot. So, I can just 12 imagine that they are being led by the Pierce family that owns the land, right? And those 13 families, they pretty much would move out at the time when the merger is approved, is this 14 correct? 15 Ms. Reilly: Sure. The houses have gone through a historical review and had no historical 16 significant to the National or State of California. There was… they were built, one in the 30s and 17 I think two in the 50s. They have been abandoned for a while. One’s a garage and a house on 18 689. Pardon me, 693. The 689-lot had a house that was somewhat inhabited for a renter. Again, 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. no significance historically. Not… the first two on 693 are in great disrepair and unhabitable. 1 The other is below standard housing but not historical significant or architectural significant 2 either. 3 Commissioner Gardias: But we’re losing two buildings in Palo Alto. 4 Ms. Reilly: No, I appreciate that. Yeah, I was just… 5 Commissioner Gardias: Two living spaces. 6 Ms. Reilly: No, I appreciate that. 7 Commissioner Gardias: So, another question… I was just getting to the core question. So, with 8 the new building that you’re going to erect on the site with a gymnasium and a children’s 9 house. There will be a need for more Staff, presumably? 10 Ms. Reilly: Actually, it’s just an addition… a single Staff person for that site which would be a 11 receptionist. The other Staff people are within the Terman site currently. 12 Commissioner Gardias: So, ok, so there will be just one… 13 Ms. Reilly: One additional. 14 Commissioner Gardias: …one extra. One additional headcount. 15 Ms. Reilly: Exactly, that will be added to the payroll. 16 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Gardias: I was getting with the questions pretty much doesn’t your Staff need 1 housing in Palo Alto. So, you’re losing two houses. I’m not interested in just preserving some 2 buildings. That was not my intention. I was just interested in just opening your mind to pretty 3 much build housing for your Staff. That I don’t know if your Staff lives on… in Palo Alto or 4 maybe not but we are trying to with different efforts to also to open below market rate housing 5 for the teachers to lure better teachers to Palo Alto. I don’t know if this school has such a need 6 but that’s an opportunity. 7 Ms. Reilly: Currently everybody on the Staff has housing and lives within the area. Some in Palo 8 Alto and some in the surrounding. 9 Commissioner Gardias: Ok, so my second question is about the shading that [the] gentleman 10 raised here. If you could just show us the map… show us the map and then point at the area of 11 concern that he was expressing… that he was alluding too. 12 Chair Alcheck: I actually don’t want to get into that. I don’t want us to explore the layout of the 13 plan because the plans are not submitted and I don’t want to treat the plans as currently drawn 14 as even remotely final. So, I actually would prefer if we didn’t explore that. 15 Commissioner Gardias: I understand but I still would like to carry my question because you 16 know, I don’t know what’s… I’d like to understand it as opposed to just setting it aside. So 17 (unintelligible) (interrupted) 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: (unintelligible) I’m not suggesting that we’re going to set it aside. I’m suggesting 1 that this isn’t the forum and I’m… I don’t want to allow it. I don’t want us to explore a topic that 2 is not relevant to the criteria of which we’re reviewing this subject tonight. And I know in the 3 past we’ve done that but I really want us to stick to the criteria and the topic of review. You will 4 have an opportunity if this moves forward to look at items like that under the (unintelligible) 5 and the Architectural Review Board really is the place for us to that. And one of my goals this 6 year is to make us efficient and the only way I can do that is if we stick to the topics for which 7 we are responsible. 8 Commissioner Gardias: I can… I will go along with your ask. I understand what it is but just to 9 argue for the purpose, I will remind the review from the Park Avenue where pretty much that 10 the shade that was… that was caused with the umbrella that was placed on top of the 255 Park 11 Avenue was not… went through architectural review but under CEQA and loss of access to light. 12 It was under our purview but I will go along with your proposal. So, I’d like to… so that I believe 13 answers my question but I’d like to make a suggestion here because there is, on page number 14 13, there is a comment about… it just talks that the site will be constructed with smaller single 15 story residential style buildings at the front. Which I understand that this is a jester toward 16 neighborhood to somehow blend with the neighborhood. That may also be beyond the purview 17 of this Commission but we have some not very successful stories of that and I can just as an 18 example give you two project. One is the development of the housing on the Stanford property 19 where pretty much it was requested that there would be a mix of the buildings and it doesn’t 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. really look up to the Palo Alto standards that we have now are policies. And then also we had 1 another review that was also on the Stanford grounds, where pretty much there was a request 2 to… the housing would be resembling a mix of styles if I remember correctly, which was pretty 3 much in both cases. That request was pushing the development Agency of Stanford University 4 to build houses that would pretty much not be built under normal conditions. And we can see 5 that it doesn’t look today because it’s just sort of artificial and so when I see a statement like 6 this, I understand that you’re trying just to be nice for the neighborhood but I’m not really sure 7 if… you know I’d rather see the building looks like the school because then pretty much it just 8 reflects the truth of the architecture. So, thank you. 9 Ms. Reilly: I was just going to say, I’m happy to respond or the architect could for the 10 suggestion. Actually, (unintelligible) (interrupted) 11 Mr. Lait: Actually Chair, if I may (interrupted) 12 Chair Alcheck: This is not the right time for that conversation. Ok. So, let me begin with my 13 comments. Let me start with the easy one. I thought that this report was very well written so 14 for all the Staff members involved. This is one of the absolutely, best-written reports. It was 15 very clear. It was very specific and direct and I think that it added our understanding of the 16 topic tremendously. I hope all reports will use this as a template. 17 I think we’re here tonight because this property…these properties are improperly zoned. I 18 don’t think we would be here tonight if they were zoned correctly. They…and so while we’re 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. talking about the topic with land use, I think it’s important and Staff please sort of add anything 1 to this statement. But it’s my impression that all schools in Palo Alto are CUP. We don’t have a 2 school zone so every school that operates in this City, operates under a Conditional Use Permit. 3 Mr. Lait: Not every. There are areas like (sofa?) for instance, where schools are permitted by 4 right. 5 Chair Alcheck: Ok. Alright. Would it be safe to say 90% of them? 6 Mr. Lait: I don’t have a percentage. 7 Chair Alcheck: Ok. 8 Mr. Lait: Elsewhere I believe that a CUP is required. 9 Chair Alcheck: Yeah, so everywhere outside of (sofa?). In order to operate a school; preschool, 10 high school, middle school, public school, private school, their operating under a CUP. And I 11 think that’s important because the way our City provides for that use is by allowing it in 12 residential neighborhoods and by doing it with a Conditionally Use Permit. So, again, that 13 Conditional Use Permit is actually isn’t up in front of us tonight and so the dialog that we’re 14 having about merging these parcels, we could theoretically discuss this in… with any use of the 15 land. We could talk about would this… would we support this parcel merger for any use? The 16 findings though are and I agree with Staff’s sort of conclusion here. The findings are satisfied 17 though because of the use that’s proposed. And one item that came up in our pre-Commission 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. meeting was if we were concerned about an alternative use in that space, we could condition 1 our approval tonight of this preliminary map. We could condition it upon the submittal of… help 2 me out here. 3 Mr. Lait: I think the idea was that the Parcel Map approval would be valid only to the extent 4 that the applicant was able to obtain other discretionary entitlement such as the variants, the 5 CUP and the ARB. 6 Chair Alcheck: That is a method for essentially elevating concern amongst the Commission of 7 well, what if this doesn’t work out for them and then we have one big parcel and somebody 8 going to build a big mansion on it. I will just say this. That would be… it I could… if this for some 9 reason doesn’t work out and I hope it really does for you, then I would be supportive of 10 rezoning this site as RN, whatever, 30 or whatnot because again, I think these parcels are… 11 there not zoned appropriately for where they are; either separate or combined. And had we 12 rezoned this, in conjunction with a parcel merger, then maybe we wouldn’t have to make these 13 findings. But I’ll just add a few more comments. I feel comfortable that the findings have been 14 satisfied. I won’t go through each of them because I think they're very well out in our Staff 15 report but I am persuaded by the logic… the same logic that Staff was persuaded with. 16 And I want to add that I don’t think that it’s relevant to our decision tonight how many students 17 at this school are residents of Palo Alto. I don’t think that’s a relevant… I’m not going to ask that 18 question. I won’t stop you from asking but I don’t think it’s relevant to whether this parcel 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. should be merged for the purposes identified in the Staff report. And I would suggest that while 1 there are many potential uses for a site like this. We are reviewing the project that being 2 brought by the owner or future owner of the two sites. And I think it’s always important to 3 appreciate that notion. That the individual bringing the application has their own vision for the 4 property they own. And when we talk about the housing element and we zone sites for the 5 housing and you know, you often hear Cities sort of hides behind this political comment well, 6 we don’t have to build them, we just have to zone for them. Which is an often used… my point 7 is that we don’t get to decide where our housing is built. The property owners and the City get 8 to make that decision based their sort of aspirations but we have to create those opportunities. 9 This particular lot, the notion that a single home or two homes could come how, I think, add to 10 the or… they could add to the fight against the housing crisis. I just think is not necessarily 11 persuasive. I think that there was a sentence in here where they called it a de minimise lost and 12 I agree with that. I think we have to again, appreciate that our school system in general, is 13 largely supportive by a CUP process. And it sounds to me like you have a very crowded 14 institution and what you’re doing is expanding space so that the largely current number of 15 students can enjoy what looks to be a much better asset. And I think that’s why I didn’t find the 16 traffic concerns to be dramatic. 17 I want to make one other point which I will make for the benefit of all future comers. I heard 18 through the grapevine that you guys had a tremendous outreach process and that the 19 neighbors were largely in support and that fantastic. Sometimes the neighbors are not in 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. support. That doesn’t necessarily mean a project isn’t appropriate but I will say this, I believe 1 that our… often times our review bodies can be very skeptical and having neighbors present to 2 reiterate their support is always helpful. So, moving forward I would encourage you to do that 3 because their voices are often very hard to ignore. I am prepared to make a motion in support 4 of this lot merger and based on the findings. And I would add a condition, like I suggested 5 earlier, which would be that it be conditioned on the… is there any way we can put that 6 language up maybe? 7 Mr. Lait: Yeah, we can read it into the records. 8 Ms. Hodgkins: (unintelligible – mic not on) Oh, sorry. Prior to approval of the Parcel Map, the 9 applicant will obtain all required entitlements for construction in use of the school. 10 MOTION 11 Chair Alcheck: Ok, so I move that we recommend approval of the proposed Preliminary Parcel 12 Map Application with that condition in an effort to elevate concerns of what could if for 13 example, this project did continue. Which would essentially result in the exact same situation 14 we have now. Are there any seconds? 15 SECOND 16 Commissioner Rosenblum: I second that. 17 Chair Alcheck: Great. I don’t need to speak to it more. Would you like to speak to the motion? 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Rosenblum: I concur that Staff in making our purview clear in Attachment C, 1 each of the findings for both the variance required and the PTC oversite requirements… that 2 they are very well laid out and I can’t find any one of them that I would take issue with. With 3 regards to the discussion of whether or not this is the best use for that piece of land given the 4 priorities of Palo Alto. I agree that this is a little bit of a slippery slope. I am always advocating 5 for more housing, more housing. A denser housing project was the subject of a referendum in 6 Palo Alto not far from there. So, it’s unclear to me that that neighborhood even wants a denser 7 housing project and I personally also, just don’t think it’s the right place to add density. It’s not 8 a major transit hub. It’s already quite congested. It’s not the place where I’d be advocating to 9 add more density and so expanding an existing school facility that’s next door to Terman, across 10 from Gun, near other uses. And I would finally agree that one of the core matters is that if you 11 look at the other land uses, a large cemetery, a high school, a middle school and others, it does 12 seem odd that you have this one patch of R-1 that is right there. So, I’m not… I do feel that we 13 just have an unusual designation for that parcel and so my second in this is that I feel that Staff 14 did a good job of outlining both our purview and the basis for the exceptions. And therefore, I 15 think we should move to except Staff recommendation. 16 Chair Alcheck: Ok. Thank you. At this time, I want to take a vote. I’ll allow any dissensions to 17 speak to their dissent. So… 18 Commissioner Lauing: I just want to ask a question of the motion maker. 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok. 1 Commissioner Lauing: In the scheme of things, how do you feel that this a benefit to Palo Alto 2 residents and students regardless of what the mix is of students in terms of where they live? 3 Chair Alcheck: Yeah, so I think you know…. I think the criteria I’m using is essentially the 4 framework of our Comprehensive Plan. And so, I… you know we have policies in our… goals in 5 our Comprehensive Plan about locating schools close to housing and the way that I see this is I 6 see that we have a very successful school in Palo Alto that wants to be more successful. And 7 this effort is essentially an upgrade. And I mean, the notion that they only have to hire… I mean, 8 we heard it tonight, right, but the notion that they only have to hire one individual suggests to 9 me that they intend to spread out. And if there is even one student at that school who's a 10 resident of Palo Alto, right? What we’re essentially doing and correct me if I’m wrong but this is 11 also a preschool? Right. So, we don’t really provide preschool education in Palo Alto. Right, it’s 12 not a… there is no public… correct me if I’m wrong, there’s not public preschool in Palo Alto. I 13 don’t think there’s a public preschool in the State but I may be wrong. And so, these institutions 14 are providing education to the youngest in our community. It will be delightful if all your kids 15 were from Palo Alto but there are lots of Palo Alto preschool to choose from but the notion 16 that this one can continue to thrive suggests to me that it would benefit Palo Alto. And so, if for 17 example, this institution has more space and more resources to succeed, maybe it will be even 18 more appealing to the residents of Palo Alto to send their kids to school there. 19 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Benefits a tricky word but I guess the more important, sort of, conclusion I’m making is that 1 each of the exceptions is sort of satisfied. Each of the conditions are satisfied and that’s why I 2 made my motion. Ok. Alright. At this time, I want to take a vote. 3 Commissioner Summa: Can I? I had my light on. 4 Chair Alcheck: Would you like to make a comment? Ok, go ahead. 5 Commissioner Summa: So, I’m really close. The only finding I have a problem with is 3, the 6 granting of this exceptional will not be detrimental to the public well fair. That’s been 7 somewhat alleviated by knowing that even the traffic report was based on 60 and I understand 8 really, the reality is 40 new students and one Staff member. So, it would even be less but I just 9 hope going forward in the review process, a better understanding of the impacts on 10 Arastradero can kind of considered because it is a really… a street that really impacted. So, 11 that’s the only finding and I really appreciate Commissioner Lauing’s contemplation about loss 12 of housing but I do also agree that the owners of the property want… this is a conditionally 13 allowed use and the owners of the property want to build a bigger school so I think I’m able 14 unless anybody else has comments to dissuade me, to support the motion. 15 VOTE 16 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: I won't take any more comments to dissuade you. No, I’m just kidding. Ok, at this 1 time I would like to take a vote. All those in favor of the motion on the floor, please raise your 2 hand and say aye. Ok, that unanimous support. 3 MOTION PASSED 5-0 4 Chair Alcheck: At this time, I would like to close… I guess I have to close the public hearing and 5 also end that item on the agenda. The public hearing is closed on this item. 6 Commission Action 7 Motion: Recommend Approval of the Preliminary Parcel Map with Exceptions to the 8 City Council Based on Findings and Conditions Provided in the Staff Report and the 9 following added condition: “Prior to approval of the parcel map, the applicant will 10 obtain all required entitlements for construction and use of the school.” Motion 11 made by Chair Alcheck, seconded by Commissioner Rosenblum; motions PASSES 5-0. 12 13 4. 1310 Bryant Street [16PLN-00258]: The Planning and Transportation Commission Will 14 Hold a Public Scoping Meeting on the Notice of Preparation for an Environmental 15 Impact Report for the Castilleja School Expansion Project. Public Input is Encouraged. 16 For More Information, Please Visit the Webpage or Contact Amy French at 17 amy.french@cityofpaloalto.org. ITEM CONTINUED TO MARCH 8, 2017 18 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Item number 4 has been continued. 1 Approval of Minutes 2 Public Comment is Permitted. Five (5) minutes per speaker.1,3 3 5. January 11, 2017 Draft Planning & Transportation Commission Meeting Minutes 4 5 Chair Alcheck: So, I’d like to quickly… is there a motion to approve the minutes from January 6 11th? 7 8 MOTION 9 10 Commissioner Lauing: So, move. 11 12 Chair Alcheck: Second? 13 14 SECOND 15 16 Commissioner Summa: Second. 17 18 VOTE 19 20 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Thank you. All those in favor of approving the minutes from January 11th, please 1 say aye. Raise your hand. Thank you. That unanimous. 2 3 MOTION PASSES 5-0 4 Commission Action 5 Motion: Approve the Minutes of January 11, 2017. Motion made by Commissioner 6 Lauing, seconded by Commissioner Summa; motions PASSES 5-0. 7 8 Committee Items 9 Commissioner Questions, Comments or Announcements 10 11 Chair Alcheck: Ok, I’m going to continue. Any discussion on Committee, Commissioner 12 questions, and comments or announcements. Until our next meeting in an effort to allow 13 everybody here to attend the State of the City if they so choose. Ok? That’s the conclusion of 14 our meeting. Thank you. Time is 7:14. 15 Adjournment 7:14PM 16 _______________________ 1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Palo Alto Planning & Transportation Commission 1 Commissioner Biographies, Present and Archived Agendas and Reports are available online: 2 http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The PTC Commission members are: 3 4 Chair Michael Alcheck 5 Vice Chair Asher Waldfogel 6 Commissioner Przemek Gardias 7 Commissioner Ed Lauing 8 Commissioner Eric Rosenblum 9 Commissioner Doria Summa 10 11 Get Informed and Be Engaged! 12 View online: http://midpenmedia.org/category/government/city-of-palo-alto or on Channel 26. 13 14 Show up and speak. Public comment is encouraged. Please complete a speaker request card 15 located on the table at the entrance to the Council Chambers and deliver it to the Commission 16 Secretary prior to discussion of the item. 17 18 Write to us. Email the PTC at: Planning.Commission@CityofPaloAlto.org. Letters can be 19 delivered to the Planning & Community Environment Department, 5th floor, City Hall, 250 20 Hamilton Avenue, Palo Alto, CA 94301. Comments received by 2:00 PM two Tuesdays preceding 21 the meeting date will be included in the agenda packet. Comments received afterward through 22 2:00 PM the day of the meeting will be presented to the Commission at the dais. 23 24 Material related to an item on this agenda submitted to the PTC after distribution of the 25 agenda packet is available for public inspection at the address above. 26 Americans with Disability Act (ADA) 27 It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a 28 manner that is readily accessible to all. Persons with disabilities who require materials in an 29 appropriate alternative format or who require auxiliary aids to access City meetings, programs, 30 or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing 31 ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 32 24 hours in advance of the meeting, program, or service. 33 Attachment F Environmental Documents Hardcopies of the Initial Study/Mitigated Negative Declaration are provided to Council Members. These documents are available to the public by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Directions to review Environmental Documents online: 1. Go to: https://paloalto.buildingeye.com/planning 2. Search for “693 Arastradero” and open record by clicking on the green dot (ensure that you are reviewing the record for 16PLN-00228) 3. Review the record details and open the “more details” option 4. Use the “Records Info” drop down menu and select “Attachments” 5. Open the attachment named “2017-04 Final IS-MND” for the Final Initial Study/Mitigated Negative Declaration and “2017-04 Mitigation Monitoring and Reporting Plan” for the Mitigation Monitoring and Reporting Plan. Attachment G Hardcopies of Project plans were provided to Councilmembers. These plans are available to the public online and by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Directions to review Project plans online: 1. Go to: https://paloalto.buildingeye.com/planning 2. Search for “693 Arastradero” and open the record by clicking on the green dot (Check that the Application Selected is 16PLN-00228) 3. Review the record details and open the “more details” option 4. Use the “Records Info” drop down menu and select “Attachments” 5. Open the attachment named “2017-0424 Preliminary Parcel Map with Exceptions”. City of Palo Alto (ID # 8058) City Council Staff Report Report Type: Action Items Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Action for position on state legislation Title: Adoption of Formal Positions Supporting Four State Bills From: City Manager Lead Department: City Manager Recommendation Staff recommends that Council formally support SB 22 (Hill), ACA 4 (Aguiar-Curry), SB 5 (De Leon), and AB 18 (Eduardo Garcia). Staff further recommends that Council direct staff and the City’s lobbyists to advocate for these bills, including submitting letters to legislators, participating in stakeholder meetings, meeting with legislative staff, and testifying before committees. Background The City’s Legislative Program Manual (Manual), last revised and adopted on January 9, 2017, states that the City Council is the official voice of the City and the final authority for determining legislative positions. While the Manual gives the City Manager the ability to advocate on most items without going to Council, staff may bring to the Policy and Services Committee and/or the Council items of controversy or particular importance. If timeliness is an issue, the Manual allows staff the ability to recommend action to the full Council without first appearing before the Policy and Services Committee. In this case, the bills mentioned here are moving swiftly through the legislative process, creating a timeliness issue. In addition to the recommended support positions, staff brings forward SB 649 (Huseo) as an informational item. Discussion I. Bills suggested for a support position SB 22 (Hill). Firearms: law enforcement agencies: agency firearm accounting. This bill requires law enforcement agencies to adopt a written procedure accounting for City of Palo Alto Page 2 firearms owned by the agency or an employee if carried in the course of official duties. Any firearms that are lost or stolen must be entered into the State’s Automated Firearms System. Senator Hill introduced this bill after learning of three news reports which found that hundreds, if not thousands, of guns owned by California law enforcement agencies and their officers have been stolen or lost and were largely unaccounted. As of March 21, the California Chapters of the Brady Campaign to Prevent Gun Violence and the Firearms Policy Coalition support the bill; there is no registered opposition. ACA 4 (Aguiar-Curry). Local government financing: affordable housing and public infrastructure: voter approval. To fund affordable housing and infrastructure projects, this potential constitutional amendment reduces the local vote threshold from two-thirds to 55 percent for bond and special tax measures. The League supports this bill. SB 5 (De Leon). California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018. This bill would place on the June 2018 ballot a measure for a $3 billion General Obligation bond to fund parks, rivers, lakes, and streams; coast and ocean protection; climate preparedness, and water and flood protection and repair. As of March 16, supporters include the American Heart Association, Sierra Club California, and a large number of other environmental groups. There is no registered opposition. AB 18 (Eduardo Garcia). California Clean Water, Climate, Coastal Protection and Outdoor Access For All Act of 2018. Similar to but competing with SB 5, this bill also places on the June 2018 ballot a measure to spend $3 billion in General Obligation bonds to finance parks, water, climate adaptation, coastal protection, and outdoor access programs. Many environmental groups and the League support this bill. While there is no public opposition, staff understands there are groups opposed who raise concerns with the number of bonds that should be authorized for future state ballots given the state's debt service ratio, and the investment period of local parks. As noted, AB 18 and SB 5 are currently competing with each other for space on the June 2018 ballot. As written now, SB 5 focuses more on climate change while AB 18 focuses on open spaces. Our lobbyist foresees these bills eventually merging into one bill, with elements of each found in a single bill. So as to ensure the City is supportive of the eventual single bill and to encourage elements of each bill, staff recommends supporting both. Alternatively, Council could direct staff to wait, continue monitoring each bill, and take a support position on the merged bill, if and when it appears. City of Palo Alto Page 3 II. Information item SB 649 (Hueso). Small cell fixtures on poles. Supported by large telecommunications companies such as Verizon and Sprint, this bill attempts to ease and standardize local government permitting requirements for “small cell” wireless equipment. Small cells are infrastructure attached to poles to strengthen the signal of mobile networks. (See examples pictured below). Prior to May 1, SB 649 would have eliminated localities’ ability to regulate the placement of these wireless devices on its “vertical infrastructure,” as long as the small cells met certain requirements. Vertical infrastructure means all poles owned or controlled by a city that are in the public right-of-way or public utility easements and meant or used for communications service, electric service, lighting, traffic control, or similar functions. In effect, almost all poles in city limits. This bill was substantially amended on May 1. As modified, cities have more flexibility in permitting this infrastructure and can rescind a permit under certain circumstances. The amended bill also allows cities to impose certain permitting conditions. However, while portions of this bill were amended favorably, language remains regarding the mandatory placement of small cells onto “property” owned by localities that are not in the public right-of-way. Staff is currently reviewing the latest amendments and working with our affected departments and associations to develop a thorough impact analysis. We will continue to closely monitor this bill and work through our Sacramento representative to communicate with the author any concerns. Examples of small cells and associated equipment, such as a power amplifier box City of Palo Alto Page 4 Timeline These bills are moving through the legislative process now, and must pass out of their houses of orgin by June 2 if they are to pass this year. City of Palo Alto (ID # 8025) City Council Staff Report Report Type: Action Items Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Transportation Tax Stakeholder Process Title: Discussion and Approval to Defer to a Future Date the Consideration of the Formation of a Stakeholder Committee to Address Potential Local Business Tax for Transportation From: City Manager Lead Department: City Manager Recommendation: Staff recommends the City Council defer the formation of a transportation tax stakeholder advisory committee and reconsider the need, purpose and specific tasks associated with such a committee at a future date. Discussion: At its October 24, 2016 meeting, the City Council considered the formation of a stakeholder committee to advise the Council on a potential local tax to raise funds for transportation programs and projects. At that meeting, the specific direction from the Council was as follows: “The Transportation Funding Stakeholder Advisory Committee will be working to advise the City Council regarding a potential future ballot measure seeking voter approval for a general tax on businesses, as well as other potential funding sources that the City could use to fund transportation programs and projects. The Stakeholder Committee will be asked to explore transportation needs, identify funding requirements and assist staff with development of a timeline for a potential future ballot measure. It is expected this Committee will complete its work by November 2017.” The original committee application submission process was conducted similarly to those for boards and commissions with a submission deadline at the end of January 2017. The Council had also identified specific organizations that would be asked to provide a representative on the advisory group. Given the small initial response, the deadline was extended for several weeks with a total of 39 applications submitted by the final deadline for 12 open committee slots and four organization specific representatives. The outreach process had some challenges, and there were a number of questions from potential applicants regarding the City of Palo Alto Page 2 scope, purpose and portfolio of responsibilities of the committee. Since that time, no further action has been taken on the formation of a committee due to a number of circumstances, and there has also been several key transportation developments that factor in the recommendation. Staff did advise applicants of the recommendation contained in this report and advised applicants of the date this would be on the Council agenda. One of several reasons for exploring this potential tax initially was to develop a funding source for the downtown TMA and other future TDM implementation strategies. However, other important revenue raising possibilities have surfaced since then, including in the Downtown Parking Management Study, that could provide needed funding towards those programs with a clear geographic nexus. The staff report on the Downtown Parking Management Study anticipated the potential to loan the program funds in the near term to accelerate TMA funding support, which will be a topic discussed in more detail with the Finance Committee during the budget process. Also, the directive from Council was expansive in its scope, reaching beyond a business tax to fund TDM to explore “other potential funding sources” and to “explore transportation needs, identify funding requirements”. . . etc. Most importantly, however, is the available bandwidth of staff to support a meaningful process to form and support the stakeholder process. The City already has numerous transportation initiatives underway including: Finalizing RPP district planning and implementation Numerous bike and pedestrian plan improvements Downtown and Cal Ave parking garage design and policies Rail Committee support, Caltrain electrification and grade separation public process High Speed Rail regional engagement and advocacy Downtown Parking Management Study – wayfinding, access control, new parkingfees/paid parking recommendations and design Palo Alto Shuttle recommendations and action related to VTA bus system changes Manager’s Mobility Partnership: regional bikeways and bike share Comp Plan support Strategy and engagement with VTA on Measure B funding Mobility recommendations in the S/CAP implementation plans Various TDM related research and testing/deployment Most of these projects have demanding technical requirements and usually even more demanding community engagement requirements. The same transportation staff who would be most involved in any transportation stakeholder group process are already heavily involved in these projects, and couldn’t realistically support this transportation tax process City of Palo Alto Page 3 without seriously compromising these other important initiatives. In particular, staff will be severely stretched to support an emerging and demanding engagement process regarding Caltrain, grade separations, and Measure B funding using the Context Sensitive Solution (CSS) approach. The listed initiatives, among others, are already included on the Council’s work plan and support the priorities agreed upon for 2017. Council may wish to revisit the need for a potential tax in 2018 or subsequent years, when staff can effectively support a demanding public engagement process. There should also be more specificity about funding needs, potential uses of revenues and identification of gaps in the City’s overall transportation strategy by the beginning of next year that could inform the Council’s decision and bring more initial clarity to any tax stakeholder process. In addition, there could be other funding matters that could need voter approval in coming years that should be factored into the City’s strategic thinking. These include potential additional funding for grade separations, implementation of the Cubberley master plan process recommendations, and other potential issues. Resource Impact: The staff recommendation reduces the resource impact. City of Palo Alto COLLEAGUES MEMO May 08, 2017 Page 1 of 2 (ID # 8061) DATE: May 8, 2017 TO: City Council Members FROM: Council Member Fine, Holman, Kou, and Wolbach, SUBJECT: Colleagues' Memo From Council Members Fine, Holman, Kou, and Wolbach Regarding Matching Funding Opportunity and Proposal to Increase Programming for Youth Through Youth Community Services Goals: Among the goals achievable though the success of this proposal are: •Increase efforts that serve the youth in the community including teaching critical life skills; • Leverage potential Santa Clara County matching funds with support from Supervisor Simitian; • Regain small portion of funding for Palo Alto’s social services organizations lost in the prior economic downturn without taking away from other current Palo Alto HSRAP non- profit organizations; • Expand programs included in Council’s Healthy City, Healthy Community Resolution. Background and Discussion: The City of Palo Alto through its General Fund helps support organizations through the Human Services Resource Allocation Process (HSRAP). Each year the Council and the Human Relations Commission (HRC) struggle to allocate limited dollars among the many non-profits that provide critical services to a broad range of members of our community. Competition for funding is always intense and a matter of thoughtful and extensive deliberation, especially at the HRC. Unfortunately, with such limited funding, it is common for allocations to fall short of the support sought by valued organizations to provide critical services. Additional organizations delivering direct safety net services to Palo Alto residents are sadly deterred from applying altogether. In the throes of the last economic downturn, funding for social services organizations was cut from a level that has yet to be restored. Palo Alto’s current HSRAP funding remains at 2010 levels while the demand for services of these organizations has steadily grown. Palo Alto has an opportunity to take advantage of a three-year fifty thousand dollar ($50,000) a year County matching program for longtime HSRAP grantee Youth Community Services (YCS). The current May 08, 2017 Page 2 of 2 (ID # 8061) HSRAP program is already in process with the HRC and will soon reach Council and will continue through the budget process independent from this consideration, which relies on approval by both the City and the County. The result will possibly not be known until late in both parties’ budget deliberations. Santa Clara County counts among the non-profits it supports, several of the HSRAP organizations that the City also supports, some through direct financial assistance and some by providing office space. With this grant opportunity YCS, which has been providing critical services to Palo Alto’s youth since 1990, could be added to that list of organizations supported by both City and County. No effort is more central to the health of our residents than service to our youth especially in the realm of growing leadership and life skills. This opportunity to realize $50,000 per year in matched dollars for a three-year period comes at a time when other funds for YCS are in jeopardy due to other jurisdictional cutbacks while the needs of our youth have not diminished. Leif Erickson, Executive Director of YCS, has prepared a proposal (attached) for how this matching grant can help continue providing critical services, expand their efforts in our community thus better serving our youth, and position the organization to continue at a higher range of programming as a result of this opportunity. Recommendation: We recommend that Council refer this proposal to the Finance Committee for discussion of potential inclusion in the FY 2018 budget with advisory to that effect to Supervisor Simitian. Staff Impact: It is not anticipated this recommendation will have significant impact on staff resources. 1 Youth Community Service Santa Clara County - City of Palo Alto Three-Year Matching Grant 2017-2020 Proposal Outline Building Protective Factors in Youth through Evidence-Based Connectedness Strategies Youth Community Service Executive Director: Leif Erickson 705 Alester Ave. Room 4 Palo Alto, CA, 94303 650-858-8061 leif@youthcommunityservice.org www.youthcommunityservice.org Founded: 1990 IRS 501(c)3: 20-8099150 Annual organizational budget: $650,000 Board chair: Barbara Spreng Board members: 12 Current School-Year Employees: 12 Summary of Organization History: Youth Community Service was founded by the Cities of Palo Alto and East Palo Alto and their two school districts, to bring diverse communities closer together through youth service. Since then, YCS has engaged over 19,000 young people in service activities to learn more about themselves and their communities. Youth have provided over 115,000 hours of service through more than 40 local community groups. In 1994, the California Department of Education CalServe Initiative designated YCS as the Service Learning Lead for educators in our five-county region. In 1998, YCS initiated the Summer of Service day camp program, based in Palo Alto, for youth ages 11 to 14 from diverse communities to engage together in well-designed service-based learning activities across the Bay Area – environmental, intergenerational, educational and economic safety net projects. A research report appeared in a peer-reviewed journal documenting gains in self- efficacy scores for YCS program participants. In 2000, YCS was honored with the Award of Excellence by the California Park and Recreation Society. 2 In 2008, after eighteen years as a collaborative of the City of Palo Alto and East Palo Alto and their school districts, YCS incorporated as a non-profit corporation with our own board of directors. The organization continues to enjoy in-kind partner support through ongoing agreements with the cities and school districts. In 2009, YCS partnered with the 180-Degrees Organization to adopt evidence- based social-emotional learning curriculum that YCS staff members have been trained to bring to classrooms with at-risk students from East Palo Alto to Redwood City. Embraced by principals and administrators because of positive academic and behavioral student outcomes, the work has been deepened through additional curriculum development by YCS staff members. Since 2009, over 1,500 at-risk high school students and over 1,000 middle school students have completed semester-long YCS social-emotional learning classes. With our focus on Palo Alto today, YCS leads service-learning clubs and attendance & behavior academies with youth ages 11 – 18, school-wide service- learning days, and community-based service events – in partnership with the City of Palo Alto – including MLK Day in January and Make a Difference Day in October. Our students in Palo Alto schools include Voluntary Transfer Program students who reside in East Palo Alto. YCS has also initiated a coding program with youth that includes an afterschool partnership at Mountain View High School, with support from Google and Yahoo employees. Mission Statement and Vision: Youth Community Service engages young people from diverse Silicon Valley communities in meaningful service-based learning. YCS youth build leadership and life skills, empathy for the needs of others, and a sense of connectedness, purpose and efficacy, while making a positive difference in the lives of those around them. At Youth Community Service, we believe that every young person with a heart full of service has a future of meaning and purpose. Executive Summary: A three-year grant will make a meaningful investment in the YCS model that combines life skills, service-learning, social-emotional learning, and develop- mental relationships in a focused series of activities and reflection that build protective factors with young people ages 11 – 18. This proposal addresses critical unmet needs in the Palo Alto community identified by the recent CDC Epi-Aid Suicide Prevention Report, California Healthy Kids Survey, Developmental Assets Survey, and Project Safety Net Community Survey. Evaluation over the three-year period will build a strong case for the efficacy of this evidence-based connectedness model that can be shared with other communities and districts in our County and throughout Silicon Valley and the Bay Area where surveys continue to identify risk factors in young people. 3 The grant will make possible a Youth Connectedness Initiative led by YCS staff members to recruit and train youth peer leaders to engage other youth in a series of service-based activities and reflections, and to engage parents and other adults in raising awareness of options that will encourage the development of protective factors in young people in Palo Alto schools and community. The work will be guided and evaluated using the recommendations of the CDC Epi-Aid Report on Suicide Prevention, CDC evidence-based strategies for building school connectedness, developmental assets strategies from Project Cornerstone, and developmental relationship strategies from the Search Institute. Top Three Outcomes of Proposed Project: 1. Youth will be trained as peer leaders to promote engagement by other youth in service and learning activities in their schools and community that are intentionally designed to build connectedness and protective factors. 2. Youth who participate in service and learning experiences will demonstrate gains in individual, interpersonal and community protective factors as demonstrated by participant surveys. 3. Secondary school parents and other adults (including Mandarin and Spanish- speaking) will increase awareness of strategies and options to build youth connectedness and developmental relationships. Definitions Protective Factors – As defined by Centers for Disease Control and Prevention (CDC), protective factors are individual or environmental characteristics, conditions or behaviors that reduce the effects of stressful life events; increase an individual’s ability to avoid risks or hazards; and promote social and emotional competence to thrive in all aspects of life now and in the future. Connectedness – As defined by the CDC’s Division of Adolescent and School Health in the Wingspread Declaration on School Connections, school connectedness is the belief by students that adults in the school care about their learning as well as about them as individuals. Because studies indicate that individual students’ feelings of being connected to school are influenced by their peers as well as by adults, that definition now includes peer influence. Developmental Relationships – As defined by the Search Institute, relationships are developmental when they help young people: 1) discover who they are 2) develop abilities to shape their own lives 3) learn how to engage with and contribute to the world around them. The Search Institute has identified five elements, which are expressed through 20 actions. (For example one action to express the element of Expand Possibilities is “to Inspire me to see possibilities for my future.”) 4 Background Research Summary Youth Community Service strategies are informed by the recently released CDC Epi-Aid Report for Santa Clara County: Undetermined Risk Factors for Suicide among Youth Ages 10-24, which was initiated in response to a request for Epidemiologic Assistance from the Santa Clara Public Health Department. The report synthesized current County trends, programs and practices, as well as data from surveys that included Developmental Assets Survey from PAUSD, California Healthy Kids Survey, and the Project Safety Net Community Survey. The Epi-Aid report recommends multiple prevention approaches to address multiple risk factors for suicide and suicide-related hospitalizations. Prevention approaches for youth highlighted by the report at the individual, interpersonal and community levels include: Positive perception of self Positive outlook on one’s future Problem-solving Emotional self-awareness Self-efficacy for help-seeking Engagement in outside activities Close and positive relationships with adults outside of school/family Caring relationships with fellow youth Caring relationships with teachers and adults at school Positive relationships with neighborhood and community In addition, the YCS Connectedness Initiative will draw on well-proven strategies provided by CASEL (Collaborative for Academic, Social and Emotional Learning), Project Cornerstone (strategies for building Developmental Assets) and Search Institute (strategies for building Developmental Relationships). The Centers for Disease Control and Prevention has published evidence-based strategies for School Connectedness that will also be a resource. Many years of research by the Search Institute have identified twenty-one internal and external protective factors, generated through meaningful “service to others” experiences – that enable young people to overcome mental health challenges and build resilience to thrive as connected community members on a path to becoming future community leaders. Project Budget: Annual project budget for each of three years: $100,000 ($50,000 from Santa Clara County; $50,000 from City of Palo Alto) Opportunity for YCS Connectedness Initiative Despite a long track record of effective school and community-based programming with youth ages 11 to 18, the capacity of Youth Community Service to address unmet community needs to build protective factors in youth has been restricted by limited financial investment by local public agencies. 5 The YCS skill-set and evidence-based curricula that we offer occupy the critical social-emotional territory that lies between the supports offered by the school district’s academic resources and those by the district’s clinical partners. It is in this social-emotional territory where the potential is greatest for young people to develop protective factors that include self-efficacy, positive relationships, connectedness and community engagement. In recent years, YCS staff members have worked to leverage our modest financial resources through active participation in partnerships such as the Project Safety Net collaborative, the Palo Alto school district’s Continuum of Care Committee and Social-Emotional Learning Curriculum Committee, as well as the City of Palo Alto’s Healthy Cities, Healthy Communities priority initiative. In addition, current budget challenges facing the Palo Alto Unified School District may result in reduced investments in the coming school years in the social- emotional connectedness territory that YCS addresses. This grant proposal represents an opportunity to build a strong case for the efficacy of our intentional model that combines life skills, service-learning, social- emotional learning, and developmental relationships in a focused series of activities and reflection that build protective factors in young people through connectedness strategies. Problem Statement: Palo Alto youth in the 11 - 18 age groups as a whole are characterized by high academic achievement. But multiple recent surveys identify significant room for improvement in the areas of connectedness and protective factors. For example, up to 25 percent of 9th and 11th grade girls report feeling chronic sad or hopeless feelings. Youth Community Service staff in collaboration with school and community partners will apply our experience and curriculum materials to engage youth in service and learning activities that will build the developmental relationships all young people need to thrive. Who Will the Project Serve? The project will serve a cross-section of youth in the 11 - 18 age group (sixth grade through high school seniors) that reflects the range of cultural diversity, gender, academic achievement and interests, with a goal of demonstrating the efficacy of connectedness strategies across all youth sectors. Evaluation: Judy Dauberman, PhD, YCS director of service-learning and social-emotional learning, will manage the evaluation process to assess the impact and lessons learned with youth and adults through surveys and interviews to demonstrate gains in protective factors, connectedness strategies, and developmental relationships across diverse school and community sectors. 6 Collaboration: Youth Community Service has a long track record of collaboration with partners in the City, school district and community. For this project, YCS would assemble an advisory council that would meet quarterly to provide feedback and insight. Advisory Council members would draw on local partners such as: Judy Argumedo, Voluntary Transfer Program coordinator Becky Beacom, Palo Alto Medical Foundation Kathleen Blanchard, parent active in suicide-prevention efforts and YCS board member Josh Bloom, Paly High teacher on special assignment, social-emotional learning Debra Cen, Palo Alto Chinese Parents Club, founder Rob DeGeus, City of Palo Alto Community Services Department, director Paul Dunlap, Gunn High, adviser to ROCK student peer mentors (Reach Out. Care. Know) Sources of Strength Mary Gloner, Executive Director, Project Safety Net Vicky Harrison, Community Partnerships Manager, Stanford Center for Youth Mental Health and Well-Being Linda Lenoir, retired PAUSD district nurse and YCS board member Kala Mehta, DSc, MPH, Public Health Professor, UCSF and YCS board member Vic Ojakian, Santa Clara County Co-Chair, Suicide Prevention Oversight Committee Lee Pfab, Executive Director, Ross Road Family YMCA Gail Price, Santa Clara County Behavioral Health Board Valerie Stinger, Palo Alto Human Relations Commission Greer Stone, Santa Clara County Human Relations Commission Plus Liaison to Palo Alto Palo Alto Police Departmernt Liaison to Palo Alto PTA Council Liaison to Palo Alto Human Relations Commission Youth liaison to ROCK organization (Reach Out. Care. Know) Youth liaisons to campus media organizations Youth liaisons to student service clubs Youth liaison to Youth Advisory Council Timeline: Year One 2017-2018 Planning in July and early August for 2017-18 school year Collaborate with school site and youth partners to identify youth peer leaders with whom YCS staff can work to engage other youth in service and learning activities and reflection activities. Staff will provide ongoing training with youth leaders in strategies designed to build protective factors and developmental relationships. Parent education events during the school year in partnership with secondary school PTA’s and parent grade level cohorts, as well as community organizations such as neighborhood associations and congregations, to share 7 strategies for strengthening developmental relationships with their children Scheduling for presentations in school living skills and advisory periods Leverage existing YCS service day activities and community partnerships to extend and deepen connectedness strategies that more intentionally build protective factors and developmental relationships Coordination with City-School Liaison Committee Evaluation surveys with youth and parent participants Year Two 2018-2019 Continue the above with the addition of: Youth-planned forums to share positive experiences Parent-planned forum to share positive experiences and survey results Evaluation surveys with youth and parent participants Year Three 2019-2020 Continue the above with the addition of: Day-long event with speakers and workshops for youth and adults Publication of materials illustrating elements of the model with interviews and outcomes Sustainability: Youth Community Service will highlight this funded project over three years to leverage other public agency grants, contracts and partnerships to establish a focused model for building protective factors through evidence-based connectedness strategies. The demonstrated effectiveness of this emerging model will be shared with parents, foundations, and youth-focused foundations to achieve sustainable funding beyond the life of the three-year grant. Contributing parent donors will be a particular funding focus as they become aware of the value of these activities for building protective factors in their children. To continue to invite financial support, YCS hosts events such as this year’s April 27 fund-raising luncheon with NFL legend Steve Young, whose book, QB: My Life Behind the Spiral, candidly describes his struggle with anxiety disorder that began in his youth. Annual Project Budget – each of three years: $50,000 Staff expense, youth connectedness coordinator $30,000 Program expense, service and learning activities $10,000 Communication materials and media $5,000 Program development $5,000 Evaluation $100,000 Annual Budget City of Palo Alto (ID # 7652) City Council Staff Report Report Type: Informational Report Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Downtown Monitoring Report 2015-2016 Title: Palo Alto Downtown Monitoring Report 2015-2016 From: City Manager Lead Department: Planning and Community Environment Recommendation This is an informational report and no Council action is required. Executive Summary The annual Commercial Downtown (CD) Monitoring Report tracks total non-residential growth, office and retail vacancy rates and parking deficits in Downtown Palo Alto in accordance with the Comprehensive Plan and Palo Alto Municipal Code. The non-residential square feet development includes all commercial projects approved in CD zone. The overall CD zone vacancy was 4.1% and 3.3% in the CD-Community, Ground Floor (GF) and Pedestrian (P) Combining District subdistrict in the 2015-2016 development cycle. Approximately 4,570 of commercial square footage was added in the CD zone in this reporting cycle. The current parking deficit is now at 795 parking spaces downtown, due to the number of public parking garage stalls, parking exceptions granted to entitled projects and constructed parking spaces. Background The 1986 Downtown Study implemented a Development Cap to limit future non-residential development activity in the CD zoning district. A growth limit of 350,000 square feet beyond what existed or was approved in May 1986 was put in place. The study also required a re- evaluation of CD zoning regulations when net new development reached a threshold of 235,000 square feet. This development cap is reflected in Comprehensive Plan Program L-8 and Palo Alto Municipal Code (PAMC) Chapter 18.18.040. Comprehensive Plan Program L-8 requires that the growth limit cap be re-evaluated once the City approves 235,000 square feet of new development. This milestone was reached in 2013 and a study is currently in process in conjunction with the Comprehensive Plan Update. City of Palo Alto Page 2 Discussion Palo Alto Municipal Code (PAMC) Section 18.18.040 and Comprehensive Plan Program L-8 require City staff to monitor and submit an annual report to the City Council regarding the development activity Downtown, consistent with the 1986 Downtown Study. This report (Attachment A) is prepared annually to meet this requirement. The annual Commercial Downtown Monitoring Report tracks total non-residential growth, office and retail vacancy rates and parking deficits in Downtown Palo Alto. As part of the Comprehensive Plan Update, the City Council adopted a motion at the January 30, 2017 hearing on the draft Land Use and Community Design Element to eliminate the Downtown cap found in the existing Program L-8 and focus instead on monitoring development and parking demand. The review of the draft Land Use and Community Design Element has been scheduled to be discussed by the City Council again on May 1, 2017. The entire Comprehensive Plan Update is anticipated to be reviewed by the City Council for a decision at the end of 2017. Planning Department staff compiles this annual report using a variety of sources. The sources include: Planning Department’s non-residential development data of projects with Entitlements approved, Office and retail vacancy data collected from local real estate leasing agents, internet websites and field work, and Office and retail rental rates from local real estate leasing agents. This report contains data for th e “2015-2016 Development Cycle” with data valid through 2016 on non-residential development, vacancy rates and parking requirement for each project. Entitled Square Footage The Downtown Monitoring Report 2015-2016 (tracks non-residential square feet added in the downtown CD zone during this timeframe. In this reporting cycle only two projects received planning entitlements and added a total of 4,570 square feet. A detailed table (Table 5) with all contributing projects adding net new non-residential square feet since 1986 is provided in Attachment A. Table 1 below summarizes the total non-residential development added in the CD zone since the last reporting cycle (2014-2015). It shows a total of 38,280 square feet is left to reach the growth cap of 350,000 square feet. Table 1. Summary of Non-Residential Development in the CD Zone as of August 31, 2016 City of Palo Alto Page 3 Gross sq. ft. Commercial Downtown Zoning Districts Growth CAP 350,000 sq. ft. Net non-residential SQFT added through August 31, 2016 281,770 sq. ft. Total SQFT development proposal in the pipeline 29,950 sq. ft.* Total SQFT development remaining to reach the CAP 38,280 sq. ft. Source: Palo Alto Planning & Community Environment, 2016 *Pipeline data includes 429 University project (10,660 sf of net new nonresidential space) in this reporting cycle since the project was approved after August 31, 2016. Vacancy Rates The Downtown Monitoring Report also provides information on commercial vacancy rates of the entire CD zone, including the sub districts of CD-C, CD-S, and CD-N and CD-C (GF)(P) zone. The CD zone includes the entire downtown business area, accommodating a wide range of commercial activities serving regional, city-wide, neighborhood as well as local needs. In this reporting cycle the total commercial vacancy rate for the entire CD zone is 4.1 percent. The Ground Floor Pedestrian CD-C (GF) (P) zone includes all parcels fronting University Avenue between Alma and Tasso Street and Hamilton Avenue between Alma and Bryant Street. This district aims at preserving and promoting ground-floor retail activities like personal services, restaurants, hotels and other retail uses that encourage foot traffic and enhance pedestrian activities. The current CD-C (GF)(P) vacancy rate is 3.3 percent. Parking Deficit The Downtown Monitoring Report also keeps track of the parking deficit of downtown commercial developments. A detailed table (Table 6) in Attachment A lists all non-residential projects with their parking requirements and net added spaces. It includes information on projects that qualified for parking exemptions and were not required to provide all of the required parking because of parking exceptions, such as ability to pay an in-lieu fee, and have added to the current parking deficit in the CD district. The parking numbers has been derived from planning entitlement records and building permit data maintained by the City. In this reporting cycle the two non-residential projects with planning entitlement added a parking deficit of 18 spaces. The cumulative parking deficit is 795 spaces. The Table 2 below summarizes the parking deficit from 1986 to August of 2016. Table 2. Summary of Parking Deficit in Downtown CD Zone from 1986 to August 2016 Parking Spaces 1986 Deficit 1601 1986-1990 Spaces Required/Added 162/354 1990 Cumulative Deficit 1409 City of Palo Alto Page 4 1991-2000 Spaces Required/Added 334/318 2000 Cumulative Deficit 1425 2001-2010 Spaces Required/Added 190/931 2010 Cumulative Deficit 684 2011-August 2015 Spaces Required/Added 466/355 2016 Cumulative Deficit 795 Source: Palo Alto Planning & Community Environment, 2016 Policy Implications This report on the Commercial Downtown (CD) zoning area is mandated by Comprehensive Plan Programs L-8 and L-9 and by the Downtown Study approved by the City Council on July 14, 1986. Resource Impact This report has no impact on resources. Environmental Review This informational report does not constitute a project under the California Environmental Quality Act (CEQA) and therefore CEQA does not apply to this agenda item. Attachments: Attachment A: Downtown Monitoring Report (DOCX) Attachment A PALO ALTO DOWNTOWN MONITORING REPORT The Downtown Monitoring Report is an annual monitoring report prepared to meet the requirements of Comprehensive Plan Land use Element Program L-8 and Palo Alto Municipal Code Section 18.18.040. The annual commercial downtown monitoring report tracks total non-residential growth, office and retail vacancy rates and parking deficits in Downtown Palo Alto in the CD zone area. The non-residential square feet development includes all commercial projects with approved planning entitlement in the CD zone. Downtown Palo Alto is the dynamic retail and commercial business hub of the City. It serves not only the City, but also the wider Silicon Valley region. Despite substantial development pressure, the Palo Alto Downtown has retained its unique pedestrian-scale ambiance and charm, with its many landmark historic buildings as well as new mixed use office buildings. Downtown Palo Alto also includes outdoor cafes, coffee shops, bookstores, mom-and- pop specialty stores, art galleries, two movie theaters and numerous restaurants attract shoppers, eaters and entertainment-seekers of all ages. Downtown Palo Alto is served by a transportation network that includes the regional Caltrain system which operates frequent trains up and down the Peninsula between San Francisco and San Jose, the free Stanford Marguerite shuttle bus service, Santa Clara Valley Transportation Authority buses, San Mateo County Transit District buses, Dumbarton Bridge Bus Service, local taxis and an extensive network of pedestrian and bike paths. Downtown Palo Alto has several large public garages, but parking along University Avenue can be difficult during the peak hours. Table: 1 STATUS OF DOWNTOWN NON RESIDENTIAL GROWTH CAP Commercial Downtown Zoning Districts Growth CAP 350,000 sq. ft. Total SQFT development proposal in the pipeline 29,950 sq. ft.* Source: City of Palo Alto, Planning Department. Data through August 31, 2016. *Pipeline data includes 429 University project (10,660 sf nonresidential space) in this reporting cycle since the project was approved after August 31, 2016. Net non-residential SQFT added through August 31, 2016 281,770 sq. ft. Total SQFT development remaining to reach the CAP 38,280 sq. ft. Table: 2 NON – RESIDENTAIL SQFT ADDED IN CD ZONE, 1986 - 2016 Total Downtown Non-Residential SQFT Source: City of Palo Alto, Planning Department. *Data through August 31, 2016. % of Increase Prior 1986 3,313,200 1986-1990 3,347,890 1% 1991-1995 3,360,390 1% 1996-2000 3,412,897 3% 2001-2005 3,409,909 3% 2006-2010 3,455,996 4% 2011- 2016* 3,594,970 4% Non-Residential Development Activity The 1986 Downtown Study incorporated a growth limit of 350,000 square feet beyond what existed or was approved in 1986. This restricted future non-residential development to a total of 350,000 square feet in the CD area (Palo Alto Municipal Code Section 18.18.040 and Comprehensive Plan Program L-8). The 1986 study required City staff to monitor and submit an annual report to the City Council monitoring the development activity. The study also required a re-evaluation of CD regulations when net new development reaches a threshold of 235,000 square feet. This threshold was reached in 2013 and a study was initiated in 2014. Since 1986, a total of 281,770 square feet of non-residential use has been added in the Downtown CD zoned area. In this reporting cycle two projects 355 University Avenue and 300 Homer Avenue received planning entitlement in the CD-C and SOFA I zones respectively and added a total of 4,570 sf nonresidential square footage in the Downtown. Another Downtown project 429 University Avenue (10,660 sf) approved in early 2017 is still included as pipeline project since this reporting cycle ends on August 31, 2016. Because of inclusion of 429 University Avenue in the pipeline, as of August 31st 2016, a remainder of 38,280 square feet of non-residential space is left to reach the 350,000 square feet cap in Comprehensive Plan Program L-8 and Palo Alto Municipal Code Section 18.18.040. Downtown Studies A Downtown Development Cap Study (Phase 1) evaluating existing conditions, developmental trends, parking and traffic needs was completed in 2014. The Study included two detailed reports, a Background Report describing research and analysis of existing land use and development trends, parking, and economic conditions of the Downtown area, and a Downtown Development Cap Evaluation Report assessing current and future non-residential development capacity. Residential uses were not included in the original Downtown Development Cap Phase 1 study. This study is essential to understand the potential of the Downtown area to accommodate more residential development. Staff is currently working on this analysis and expects it to be ready for the City Council review by mid-2017. Council is also reviewing potential revisions to the Land Use & Community Design Element of the Comprehensive Plan and may choose to eliminate the Downtown Cap and focus instead on a citywide cap and monitoring effort as well as an annual limit on office/R&D development. Retail Preservation Ordinance for Downtown In May of 2015 City Council adopted an Urgency Retail Ordinance to establish a moratorium on the conversion of ground-floor and basement retail spaces and “retail like” uses to office or other uses across the city. This ordinance was scheduled to sunset on April 30, 2017 and a permanent replacement ordinance was adopted on March 20, 2017. The ordinance protects retail and retail-like uses from conversion to non-retail uses on a citywide basis, expands the Ground Floor (GF) district boundaries to reincorporate downtown parcels that were previously removed from the district to create a continuous ground-floor retail environment; and adds design standards to the Downtown Commercial – Community (CD-C) (GF) district that support active retail uses and pedestrian-oriented ground-floor design. The ordinance also adjusts the definition of “personal services” to include small exercise studios and similar uses. Projects Demonstrating Special Public Benefits The 1986 Downtown Study reserved 100,000 square feet of the 350,000 square foot growth limit to be used for projects demonstrating special public benefits. Since 1986, eleven projects in the Downtown area have been developed under the Planned Community zoning that requires a public benefit in exchange for providing flexibility that would not be otherwise allowed in the existing zoning designation. Five of the projects exceeded the non-residential floor area that would otherwise be allowed under zoning by a total of 44,078 square feet. The total changes in square footage of these projects are shown in the fourth column of Table 5. The remaining five projects were mixed- use projects that did not exceed allowable non-residential floor areas. No projects in this current cycle were approved using public benefit findings. Projects Qualifying for Seismic, Historic or Minor Expansion Exemptions The Downtown Study designated 75,000 square feet of the 350,000 square foot cap for projects that qualify for seismic, historic or minor expansion exemptions in order to encourage these upgrades. Since 1986, 135,394 square feet have been added in this category. Two projects (300 Homer Avenue and 355 University Avenue) have added approximately 4,053 square feet of seismic and historic rehabilitation in this reporting cycle. These projects are shown in the fifth column of Table 5. Total Commercial Vacancy Rates Staff surveyed downtown CD and CD-C (GF) (P) zoned areas to assess commercial vacancies in February of 2017. This data includes all properties available in the market for office or retail use. Staff consulted several local real-estate agents and website databases to compile a list of properties in CD-C (GF) (P) area, which met the requirements for vacancy. In February of 2017, total commercial Downtown CD vacancy was 136,070 square feet including 20,075 square feet in CD-C (GF) (P) zone. The overall CD vacancy was 4.1 percent, double from previous year. The CD-C (GF)(P) vacancy rose from 2.8 percent to 3.3 percent. Figure: 1 COMMERCIAL VACANCY RATE SINCE 2006 Source: City of Palo Alto Planning Department. Data collected in February of 2017. Table: 3 TOTAL COMMERCIALVACANCY IN CD &CD-C (GF) (P) ZONES Reporting Cycle Total CD Vacant SQFT Total CD-C (GF1) (P) Vacant SQFT 2013-2014 45,760 (1.4%) 11,200 (1.9%) 2014-2015 69,500 (2.1%) 16,850 (2.8%) 2015-2016 136,070 (4.1%) 20,075 (3.3%) Source: City of Palo Alto Planning Department. Data collected in February of 2017. 1 The data presented include CD-C (GF) zoned parcels prior to adoption of Retail Preservation Ordinance of March 2017. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 % Overall CD Vacancy % of CD-C(GF)(P) Vacancy DO W N T O W N V A C A N C Y Commercial Vacancy Rate for Ground Floor (GF) Combining District The Ground Floor Combining District (GF) was created to encourage active pedestrian uses in the Downtown area such as retail, eating and drinking and personal services. Rezoning efforts were made in 2009 and 2013, to adjust the GF boundaries. Continuous increase in office rental rates and low office vacancies in Downtown for the past few years has created financial incentives to replace retail use with office use. To prevent such conversion, the recently adopted (March 2017) Retail Preservation Ordinance extended the GF boundary to Alma Street and Hamilton Avenue, adding the following parcels: 125, 124, 116, and 102 University Ave., 525, 529, 542 and 550 High St., 539 and 535 Alma St., 115, 150, 156, 158, and 164 Hamilton Ave to the GF combining district. Map 1 shows the existing commercial zoning district and the Ground Floor combining district. There were approximately eight vacant retail properties noted in the CD-C (GF)(P) and RT-35 (SOFA I) zones during the field survey done in February 2017, with little over 20,000 square feet of vacant space. This includes 999 Alma Street (Anthropology Store) accounting for 10,800 sf of large ground floor retail property. Additionally another 7,770 sf of ground floor retail space in CD-N(P) zone at 217 Alma (North Face Store) has been vacant since last year. So far the City has not received any formal redevelopment proposals for these two sites. Commercial Vacancy Rate for Remainder of CD Zone The entire CD area has approximately 3,850,000 gross square feet of floor area, including approximately 330,000 square feet within the SOFA CAP Phase 2 area. About 525,000 square feet is used for religious or residential purposes or is vacant and not available for occupancy. Thus, the square footage of available commercial space is approximately 3,325,000 square feet. In this monitoring cycle, there was a total vacancy of 115,995 square feet in rest of the CD zone. This includes total square feet of CD-C (GF) (P) second, third and fourth floor vacancies in addition to the CD zone. This vacancy equals a rate of 3.5 percent compared to 2 percent of 2014-2015 year’s number. This number is higher than last year due to multiple second and third floor office vacancies of over 5,000 square feet. Though the overall CD-C vacancy rate has reduced considerably from its peak in the 2008-2009 period from 6.6 percent to 4.1 percent this year, the downtown vacancy rate is gradually rising from 2014. More than 85 percent of the total vacant square foot is listed for office use. Retail Rental Rates Increases in the commercial retail rental rates have slowed down from previous year. Uncertainty in demand for retail space because of increasing trend of online shopping has led to slowing down of retail rental rates. February 2017 survey of Downtown retail rates ranges from $4.50 to $7.50. The lower end of this range is generally for spaces in older buildings and away from University Avenue. For some vacant properties outside the downtown core, rental rates have been listed as negotiable. Office Rental Rates Based on the information gathered from the commercial real estate agents listing properties for lease in Downtown, rents for Class A Downtown office space (i.e. newer and/or larger buildings on Hamilton Avenue, University Avenue and Lytton Avenue) has gone up, while rents for Class B and C office space (i.e. older and/or smaller buildings further from University Avenue) has stabilized since last year. At the time of the survey, office rents ranged from $7.50 to $11.00 per square foot. RE N TAL RA TES RE N TAL RA TES Parking Inventory The 1986 Downtown Study set performance measures that established that new commercial development in downtown should not increase the total parking deficit beyond that was existing or approved through May 1986. The term "parking deficit" was first created as part of the 1986 Downtown Study. Since 1986, Downtown commercial developments that have not provided the required parking because of parking exceptions have "added" to the deficit, while new parking garages, street parking and net reductions in existing floor area have reduced the deficit. The chart below summarizes the net deficit created since 1986. As of August 31, 2016 the cumulative deficit stands at 795 spaces. The 18 parking spaces required for the two non-residential projects adding 4,570 square feet in this cycle was accommodated through leasing parking space in the existing local garages and participating in the University Avenue Parking Assessment district plan by paying for a parking in-lieu fee. See Table 6 for project details. Table: 4 PARKING ADDED, AND PARKING DEFICIT CREATED 1986-PRESENT Parking Required for Non- Residential SQFT Added Net Added Parking Space for Non- Residential SQFT Parking Exemptions per 18.52.060 of PAMC Parking Required less Parking Added Total Cumulative Deficit Prior to 1986 -1601 1986-1990 162 354* 51 192 -1409 1991-1995 136 255** 73 119 -1290 1996-2000 198 63 88 -135 -1425 2001-2005 -22 784*** 43 806 -619 2006-2010 212 147 65 -65 -684 2011-2016 466 355 172 -111 -795 * Through Assessment District project provided additional 64 public parking spaces as part of public benefit and Addition of 2 levels of parking to Cowper/Webster garage ** Extensive restriping of on and off street parking ***Construction of 2 city parking garages. 528 High completed on Aug. 2003 and 445 Bryant completed on Nov. 2003 The July 1986 Downtown Study established performance measures that specified that new development in the Downtown should not increase the total parking deficit beyond that was existing or approved through May, 1986 (1600 spaces). The study calls for re-evaluation of the parking exemption regulations when the unmet parking demand, resulting from exemptions, reaches one half (225 parking spaces) of the minimum 450 parking spaces deemed necessary for construction of a new public parking structure. Source: City of Palo Alto 2016 (-) numbers mean project is adding to the parking deficit whereas (+) numbers mean project is decreasing the parking deficit. PA R KI N G INV EN TO RY MAP: 1 DOWNTOWN COMMERCIAL ZONING DISTRICT MAP SHOWING GROUND FLOOR OVERLAY DISTRICT (April, 2017) Page 1 Table: 5 CD ZONE NON-RESIDENTIAL SQUARE FOOT ADDED 09/01/86 TO 08/31/16 Project Address Zoning Planning Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non- Residential Floor Area Prior to 1986 520 Ramona Street A CDCGFP 11/20/1984 - 400 400 1986-1990 220 University Avenue CDCGFP 2/5/1987 - 65 65 151 Homer Avenue CDSP 3/17/1988 - - -9,750 314 Lytton Avenue CDCP 5/5/1988 - - -713 247-275 Alma Street CDNP 8/4/1988 - - 1,150 700 Emerson Street CDSP 9/15/1988 - - 4,000 431 Florence Street CDCP 9/15/1988 - 2,500 2,500 156 University Avenue CDCGFP 12/15/1988 - 4,958 4,958 401 Florence Street CDCP 3/2/1989 - 2,407 2,407 619 Cowper Street CDCP 5/6/1989 - - 2,208 250 University Avenue PC-3872 5/15/1989 11,000B 300 20,300 550 University Avenue CDCP 6/1/1989 - - -371 529 Bryant Street PC-3974 5/3/1990 2,491C 2,491 2,491 520 Webster PC-3499 0 305 Lytton Avenue CDCP 9/28/1990 200 200 550 Lytton AvenueDE CDCP 10/22/1990 - - 4,845 1991-1995 531 Cowper Street PC-4052 5/21/1991 9,000 475 9,475 540 Bryant Street CDCGFP 3/24/1992 - 404 404 530/534 Bryant Street CDCGFP 4/15/1993 - 432 432 555 Waverley Street/425 Hamilton AvenueE CDCP 9/21/1993 - - 2,064 201 University Avenue CDCGFP 11/18/1993 - 2,450 2,450 Page 2 Project Address Zoning Planning Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non- Residential Floor Area 518 Bryant Street CDCGFP 3/3/1994 - 180 180 245 Lytton Avenue CDCP 7/21/1994 - - -21,320 400 Emerson StreetEF PC-4238 9/19/1994 200 4,715 443 Emerson Street CDCGFP 1/5/1995 - 26 26 420 Emerson Street CDCP 3/16/1995 - 125 125 340 University Avenue CDCGFP 4/6/1995 -402 281 University Avenue CDCGFP 4/20/1995 -2,500 456 University Avenue CDCGFP 5/18/1995 - 7,486 7,486 536 Ramona Street CDCGFP 7/11/1995 - 134 134 725/753 Alma Street PC-4283 7/17/1995 - -1,038 552 Emerson Street CDCGFP 7/18/1995 - 177 177 483 University Avenue G PC-4296 10/2/1995 3,467C 2,789 7,289 424 University Avenue CDCGFP 9/21/1995 - 2,803 2,803 1996-2000 901/909 Alma Street EF PC-4389 8/1/1996 - - 4,425 171 University Avenue CD-C(GF)(P) 9/19/1996 - 1,853 1,853 401 High Street CD-C(P) 10/3/1996 - 350 350 430 Kipling Street DH CD-C(P) 10/22/1996 - 200 1,412 460-476 University Avenue CD-C(GF)(P) 3/20/1997 - 1,775 1,775 400 Emerson Street D PC-4238 3/21/1997 - - 2,227 275 Alma Street CD-N(P) 7/8/1997 - 200 3,207 390 Lytton Avenue PC-4436 7/14/1997 8,420C 689 17,815 411 High Street H CDCP 12/18/1997 - 2,771 2,771 530 Ramona CDCGFP 5/20/1999 - 2,852 2,852 705 Alma St CDSP 9/21/1999 - 2,814 2,814 200 Hamilton Ave CDCP 10/21/1999 - 10,913 10,913 550 Lytton Ave CDCP 8/11/2000 - - 93 2001-2005 528 HighG PF 0 Page 3 Project Address Zoning Planning Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non- Residential Floor Area 445 BryantG PF 0 437 Kipling St CDCGFP 2/1/2001 - - 945 701 Emerson St CDSP 5/29/2001 - - 434 723 Emerson St CDSP 5/29/2001 - - 400 880 - 884 Emerson St CDSP 5/29/2001 - - 312 539 Alma St CDCGFP 10/23/2001 - 2,500 2,500 270 University Ave CDCGFP 11/1/2001 - 2,642 2,642 800 High St. I PC-4779 2/3/2003 - - -15,700 164 Hamilton Ave CDCP 1/13/2005 - - -2,799 335 University Ave CDCGFP 8/10/2005 - 4,500J 5,249 657 Alma St. (101 Forest Ave) I RT-50; CD-C(P) 11/10/2005 3,029 2006-2010 820 Ramona CD-S (P) 3/21/2006 2,936 382 University Ave CDCGFP 7/27/2006 - 194 194 102 University Ave CDCGFP 10/10/2006 - - 8 325 Lytton Ave CDCP 5/1/2006 - - 17,515 310 University Ave CDCGFP 7/31/2008 - 7,481 7,481 317-323 University Ave CDCGFP 1/1/2008 - 2,500 3,290 564 University Ave CDCP 7/1/2008 - 2,500 4,475 278 University 801-849 Alma St. I CDCGFP RT-50 11/1/2008 11/9/2009 - - 137 -9,740 265 Lytton CDCP 7/1/2010 - 3,712 21,151 340 University CDCP 12/1/2010 - - -1,360 2011-2016 524 Hamilton CDCP 2/1/2011 - 5,200 9,345 630 Ramona CDCP 6/1/2011 - 437 437 668 Ramona CDCP 7/1/2011 - 4,940 4,940 661 Bryant CDCP 2/1/2011 - 1,906 0 180 Hamilton CDCP 7/23/2012 0 Page 4 Project Address Zoning Planning Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non- Residential Floor Area 335-355 Alma CDCP 6/1/2012 9,700 - 49,863 135 Hamilton CDCP 2/1/2013 9,939 19,960 537 Hamilton CDCP 5/1/2013 5,775 9,979 611 Cowper CDCP 8/1/2013 6,938 20,506 651 Emerson CDCGFP 10/8/2013 346 301 High CDNP 12/2/2013 200 636 Waverley CDCP 12/16/2013 3,394 240-248 Hamilton CDCGFP 12/31/2013 5,000 4,527 500 University CDCGFP 12/31/2013 9,592 10,907 261 Hamilton Ave CDCGFP 3/25/2015 0 355 University Avenue CDCGFP 6/21/2016 2595 3112 300 Homer Avenue PF (SOFA I) 3/5/2016 1458 1458 Totals 1986-2016 44,078 135,394 281,770 Source : City of Palo Alto Planning Department, August 2015 A: Project approved during the Downtown Moratorium (9/84 to 9/86), but was not included in the Downtown EIR’s “pipeline projects.” As a result, the project is counted among the CD District’s nonresidential development approvals since the enactment of the Downtown Study Policies in 1986 B: Through Assessment District project provided additional 64 public parking spaces as part of public benefit instead of required 44 private spaces C: Project exceeded square footage otherwise allowed by zoning D: Project converted residential space to non-residential space. Net non-residential space counts toward the 350,000 square foot limit E: Project included covered parking that counts as floor area but not counted 350,000 square foot limit F: Project was approved pursuant to PAMC Sections 18.83.120 or 18.83.130 which allow for a reduction in the number required parking spaces for shared parking facilities, joint use parking facilities, or substitution of 8 bike parking spaces for one vehicle space. G. In addition, project paid in-lieu fee for loss of 2 on-site parking spaces H: In addition, projects paid in-lieu fee for loss of 4 on-site spaces I: Part of the SOFA 2 CAP Notes: 08/13 Removed 12,063 non-res square feet previously approved 901 High St project. Project approved 12/2002 but not built. 08/13 Added Projects 657 Alma St. (101 Forest), 820 Ramona, and 801-849 Alma St. Page 1 Table: 6 CD ZONE PROJECT PARKING REQUIREMENT AND DEFICIT CREATED 9/1/86 to 8/31/2016 Project Address Zoning Net Change in Non- Residential Floor Area (SQFT) Parking Required for New Non- Residential SQFT Net Added Parking Space for New Non- Residential SQFT Parking Exemptions per 18.52.060 of PAMC Parking Required less Parking Added Total Cumulative Deficit Prior to 1986 Deficit -1601 520 RamonaA CDCGFP 400 2 0 0 -2 -1603 220 University CDCGFP 65 0 0 0 0 -1603 151 Homer CDSP -9,750 -39 11 0 50 -1553 314 Lytton CDCP -713 -3 0 0 3 -1550 247-275 Alma CDNP 1,150 5 5 0 0 -1550 700 Emerson CDSP 4,000 16 16 0 0 -1550 431 Florence CDCP 2,500 10 0 10 -10 -1560 156 University CDCGFP 4,958 20 0 20 -20 -1580 401 Florence CDCP 2,407 10 0 10 -10 -1590 619 Cowper CDCP 2,208 9 9 0 0 -1590 250 UniversityB PC-3872 20,300 103 131 0 28 -1562 550 University CDCP -371 -1 0 0 1 -1561 529 Bryant PC-3974 2,491 10 0 10 -10 -1571 520 WebsterC PC-3499 0 0 163 0 163 -1408 305 Lytton CDCP 200 1 0 1 -1 -1409 550 Lytton CDCP 4,845 19 19 0 0 -1409 1986-1990 162 354 51 192 -1409 Downtown Extensive restriping by Transportation Division of on and off/street parking 96 -1313 531 Cowper PC-4052 9,475 38 0 2 -38 -1351 540 Bryant CDCGFP 404 2 0 2 -2 -1353 530/534 Bryant CDCGFP 432 2 0 2 -2 -1355 555 Waverley /425 HamiltonD CDCP 2,064 8 0 0 -8 -1363 201 University CDCGFP 2,450 10 0 10 -10 -1373 518 Bryant CDCGFP 180 1 0 1 -1 -1374 245 Lytton CDCP -21,320 0 149 0 149 -1225 400 Emerson PC-4238 4,715 18 5 1 -13 -1238 443 Emerson CDCGFP 26 0 0 0 0 -1238 420 Emerson CDCP 125 1 0 1 -1 -1239 340 University CDCGFP -402 -2 0 0 2 -1237 Page 2 Project Address Zoning Net Change in Non- Residential Floor Area (SQFT) Parking Required for New Non- Residential SQFT Net Added Parking Space for New Non- Residential SQFT Parking Exemptions per 18.52.060 of PAMC Parking Required less Parking Added Total Cumulative Deficit 281 University CDCGFP -2,500 -10 0 0 10 -1227 456 University CDCGFP 7,486 30 0 30 -30 -1257 536 Ramona CDCGFP 134 1 0 1 -1 -1258 725-753 Alma PC-4283 -1,038 -4 7 0 11 -1247 552 Emerson CDCGFP 177 1 0 1 -1 -1248 483 UniversityE PC-4296 7,289 29 -2 11 -31 -1279 424 University CDCGFP 2,803 11 0 11 -11 -1290 1991-1995 136 255 73 119 -1290 901/909 AlmaD PC-4389 4,425 18 18 0 0 -1290 171 University CDCGFP 1,853 7 0 7 -7 -1297 401 High CDCP 350 1 0 1 -1 -1298 430 KiplingE CDCP 1,412 5 -4 1 -9 -1307 460/476 University CDCGFP 1,775 7 0 7 -7 -1314 400 Emerson PC-4238 2,227 9 0 0 -9 -1323 275 AlmaF CDNP 3,207 0 0 1 0 -1323 390 Lytton PC-4436 17,815 74 50 3 -24 -1347 411 HighE CDCP 2,771 11 -4 11 -15 -1362 530 Ramona CDCGFP 2,852 11 0 11 -11 -1373 705 Alma CDSP 2,814 11 0 11 -11 -1384 200 HamiltonE CDCP 10,913 44 3 35 -41 -1425 550 Lytton CDCP 93 0 0 0 0 -1425 1996-2000 198 63 88 -135 -1425 528 HighG PF 0 0 138 0 138 -1287 445 BryantG PF 0 0 575 0 575 -712 437 KiplingE CDCGFP 945 4 0 2 -4 -716 701 Emerson CDSP 434 2 1 1 -1 -717 723 Emerson CDSP 400 2 2 0 0 -717 880 / 884 Emerson CDSP 312 2 5 0 3 -714 539 Alma St CDCGFP 2,500 10 0 10 -10 -724 270 UniversityE CDCGFP 2,642 11 0 11 -11 -735 800 HighH PC-4779 -15,700 -63 63 0 126 -609 164 Hamilton CDCP -2,799 -11 0 0 11 -598 Page 3 Project Address Zoning Net Change in Non- Residential Floor Area (SQFT) Parking Required for New Non- Residential SQFT Net Added Parking Space for New Non- Residential SQFT Parking Exemptions per 18.52.060 of PAMC Parking Required less Parking Added Total Cumulative Deficit 335 UniversityI CDCGFP 5,249 21 0 18 -21 -619 382 University CDCGFP 194 0 0 1 0 -619 2001-2005 -22 784 43 806 -619 102 University CDCGFP 8 0 0 0 0 -619 310 University CDCGFP 7,481 30 0 30 -30 -649 317-323 University CDCGFP 3,290 13 0 10 -13 -662 564 University CDCP 4,475 18 -2 10 -20 -682 325 Lytton CDCP 17,515 70 118 0 48 -634 265 Lytton CDCP 21,151 85 31 14 -54 -688 278 University CDCGFP 137 1 0 1 -1 -689 340 University CDCP -1,360 -5 0 0 5 -684 2006-2010 212 147 65 -65 -684 524 Hamilton CDCP 9,345 37 8 21 -29 -713 630 Ramona CDCP 437 2 0 2 -2 -715 668 RamonaJ CDCP 4,940 20 0 20 -20 -735 661 Bryant CDCP 0 0 0 8 0 -735 Downtown Extensive restriping by Transportation Division of on and off Street parking 32 -703 180 Hamilton CDCP 0 0 -5 0 -5 -708 335-355 Alma/101 LyttonK CDCP 49,150 101 123 0 22 -686 135 Hamilton CDCP 19,960 80 23 20 -57 -743 537 Hamilton CDCP 9,997 40 19 21 -21 -764 611 Cowper CDCP 19,419 78 62 42 -16 -780 651 Emerson CDCGFP 346 0 0 0 0 -780 301 High CDCNP 200 0 0 0 0 -780 240-248 Hamilton CDCGFP 4,527 23 4 18 -19 -799 500 University CDCGFP 10,907 44 65 20 21 -778 636 Waverley CDCP 3,394 23 20 0 -3 -781 261 HamiltonLM CDCGFP 0 0 4 0 4 -777 355 University Ave 300 Homer Ave CDCGFP 3112 12 0 0 12 -789 300 Homer Ave PF (SOFAI) 1458 6 0 0 6 -795 2011-2016 466 355 172 -111 -795 Source: Palo Alto Planning and Community Environment Department, Data through August 31 2016 Page 4 Project Address Zoning Net Change in Non- Residential Floor Area (SQFT) Parking Required for New Non- Residential SQFT Net Added Parking Space for New Non- Residential SQFT Parking Exemptions per 18.52.060 of PAMC Parking Required less Parking Added Total Cumulative Deficit (-) numbers mean project is adding to the parking deficit whereas (+) numbers mean project is decreasing the parking deficit. Note:Total Cumulative Parking Deficit number changed from the 2012-2013 Downtown Monitoring cycle reporting based on extensive staff research. A: Project approved during the Downtown Moratorium (9/84 to 9/86, but was not included in the Downtown EIR’s “pipeline projects.”) As a result, the project is counted among the CD District’s nonresidential development approvals since the enactment of the Downtown Study Policies in 1986 B: Through Assessment District project provided additional 64 public parking spaces as part of public benefit C: Addition of 2 levels of parking to Cowper/Webster garage D: Project was approved pursuant to PAMC Sections 18.83.120 or 18.83.130 which allow for a reduction in the number required parking spaces for shared parking facilities, joint use parking facilities, or substitution of 8 bike parking spaces for one vehicle space. E. Projects removed existing on-site spaces or met required parking by paying in-lieu fee F: Site had existing parking sufficient to allow expansion G: Construction of 2 city parking lots. 528 High completed on Aug. 2003 and 445 Bryant completed on Nov. 2003 H: Part of the SOFA 2 CAP I: As per PAMC 18.87.055, the TDR area transferred to the site does not increase the number of automobile parking spaces required for the additional floor area. J: Project used Historic and Seismic Bonuses K: Total Commercial SQFT subject to parking requirement is 31,593 SQFT. Received exemptions from being near transit, TOD, TDM (PAMC 18:52) L: Determination was made that the building area shown on the 2001 downtown parking assessment rolls was not consistent (it was less) with what the current project FAR. The applicant was required to park the difference, and added 4 spaces within the below grade garage M: Shared Parking Facilities Reduction 13% with Residential use City of Palo Alto (ID # 7944) City Council Staff Report Report Type: Informational Report Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Utilities Q2 Quarterly Report Title: City of Palo Alto Utilities Update for the Second Quarter of Fiscal Year 2017 From: City Manager Lead Department: Utilities Recommendation This is an informational report and no Council action is required. Executive Summary This update (Attachment A) on water, gas, electric, wastewater collection and fiber utilities, efficiency programs, legislative/regulatory issues, utility-related capital improvement programs, operations reliability impact measures and a utility financial summary, is for the Council and Utilities Advisory Commission’s (UAC’s) information. This update has been prepared to keep the UAC and Council apprised of the major issues that are facing the water, gas, electric, wastewater collection and fiber utilities. Items of special interest this quarter include: Updates on some of the impacts of the winter’s precipitation on the Western and Calaveras Hydroelectric Resources (pg. 1) Two solar projects came online in December 2016 (pg. 1) The electric utility has saved nearly $5M in its supply portfolio through February 2017 due to a combination of higher hydroelectric output and lower sales. (pp. 5-6) Gas prices have been higher than expected, which has led to higher commodity prices (pp. 9, 11) Snowpack and precipitation at Hetch Hetchy have been at historically high levels. (pp 13-15) In 2016 Palo Altans reduced water consumption 24% compared to 2013, surpassing the SFPUC’s voluntary 10% request. (pp 15-16) Updates on the status of fiber system rebuilds, expansion plans, and other projects (pg. 18) Updates on efficiency program efforts, including a certification course for building operators begun in February 2017, the submittal of final reports for the Georgetown Energy Prize in February 2017, and a study with University of Oxford on drivers of household energy consumption. (pp. 19-20) City of Palo Alto Page 2 A report on progress toward the net energy metering cap (pg. 20) An overview of the Program for Emerging Technologies (pg. 21) Updates on electrification (pg. 22) Legislative and Regulatory updates (pp 22-24). Items of note include bills to increase the Renewable Portfolio Standard (SB 584), extend cap and trade past 2020 (AB 378), and SB 210 (requires school districts to restrict access to campus drinking water sources below EPA lead standards). The State Water Resources Control Board (SWRCB) continues to advance regulations requiring water providers to assist schools with lead testing. In February the SWRCB extended its drought regulations through 2017, but will consider repeal in May 2017. The electric utility is currently forecasting a $22M deficit rather than the $15M deficit in the original FY 2017 budget forecast due to lower sales and higher transmission costs. This deficit will result in decreases in reserves. High winter precipitation is likely to improve the outlook in Q3 and Q4. Other utilities will see increases in reserves due to delays in the City’s main replacement program. (pp. 25-27) Attachments: Attachment A: Quarterly Utilities Update for the Second Quarter of FY 2017 Utilities Quarterly Update Second Quarter of Fiscal Year 2017 April 2017 ATTACHMENT A Quarterly Update for Second Quarter of FY 2017 April 2017 i Utilities Quarterly Update Table of Contents I. Electricity ................................................................................................................... 1 Electric Supplies ............................................................................................................................................ 1 Cap-and-Trade: Use of Allowance Revenue................................................... Error! Bookmark not defined. Electric Budget and Portfolio Performance Measures ................................................................................. 5 II. Natural Gas................................................................................................................. 9 Gas Supply Retail Rates ................................................................................................................................. 9 Cap-and-Trade: Use of Allowance Revenue.................................................................................................. 9 Gas Budget and Portfolio Performance Measures ..................................................................................... 10 III. Water ....................................................................................................................... 13 Water Availability ........................................................................................................................................ 13 Water Use Compared to Targets ................................................................................................................ 15 Recycled Water Strategic Plan .................................................................................................................... 16 Water Budget Performance Measures ....................................................................................................... 16 IV. Fiber Optics .............................................................................................................. 17 Commercial Dark Fiber Service ................................................................................................................... 17 Citizen Advisory Committee ........................................................................................................................ 19 V. Public Benefit, Demand Side Management Programs and Communications ............... 19 Energy Efficiency Program Achievements .................................................................................................. 19 Local Renewable Energy Programs ............................................................................................................. 19 Communications Activities ............................................................................ Error! Bookmark not defined. VI. Research and Development and Innovation .............................................................. 21 Program for Emerging Technologies ........................................................................................................... 21 VII. Legislative and Regulatory Issues .............................................................................. 21 Summary ..................................................................................................................................................... 22 State Regulatory Proceedings ..................................................................................................................... 24 VIII. Utility Financial Summary ................................................. Error! Bookmark not defined. Residential Bill Comparisons (based on 30-day bills)..................................... Error! Bookmark not defined. Non-Residential Bill Comparisons (based on 30-day bills) ............................ Error! Bookmark not defined. Quarterly Update for Second Quarter of FY 2017 April 2017 ii List of Figures Figure 1: Electric Supply Resource Actual and Projection, 2015 to 2017 (as of Oct. 26, 2016) .................... 2 Figure 2: CY 2017 Monthly Electric Supply Resource Projection .................................................................. 3 Figure 3: Northern California Peak Electric Prices (as of October 25, 2016) ................................................ 4 Figure 4: FY 2016 Electric Load and Resource Balance ................................................................................. 7 Figure 5: FY 2016 Electric Market Purchase Costs and Market Prices .......................................................... 8 Figure 6: CPAU’s Gas Commodity Rates—July 2012 through November 2016 ............................................ 9 Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks ...................................................... 10 Figure 8: Natural Gas Consumption – Budget vs. Actual ............................................................................ 11 Figure 9: Natural Gas Supply Cost – Budget vs. Actual ............................................................................... 11 Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) – Expected vs. Actual .................................................. 13 Figure 11: Precipitation at Hetch Hetchy – Water Year 2017 ..................................................................... 14 Figure 12: % Median April 1 Snowpack Conditions .................................................................................... 14 Figure 13: Water Available to the SFPUC .................................................................................................... 15 Figure 14: Drought Conditions in California ................................................................................................ 15 Figure 15: Water Use Compared to Voluntary Target ................................................................................ 16 Figure 16: Water Consumption – Budget vs. Actual ................................................................................... 17 Figure 17: Water Cost – Budget vs. Actual.................................................................................................. 17 List of Tables Table 1: Use of Cap-and-Trade Allowance Auction Revenue and Expenditures .......... Error! Bookmark not defined. Table 2: FY 2016 Electric Utility Supply Cost Summary ................................................................................ 5 Table 3: FY 2016 Electric Load and Generation Compared to Budget Projections ....................................... 6 Table 4: Status to date of all applications to the Program for Emerging Technologies ............................. 21 Table 5: Residential Electric Bill Comparison ($/month) ............................... Error! Bookmark not defined. Table 6: Residential Natural Gas Bill Comparison ($/month) ........................ Error! Bookmark not defined. Table 7: Residential Water Bill Comparison ($/month) ................................. Error! Bookmark not defined. Table 8: Residential Wastewater Collection (Sewer) Bill Comparison ($/month) ........ Error! Bookmark not defined. Table 9: Median Residential Overall Bill Comparison ($/month) .................. Error! Bookmark not defined. Table 10: Non-Residential Electric Bill Comparison ($/month) ..................... Error! Bookmark not defined. Table 11: Non-Residential Natural Gas Bill Comparison ($/month) .............. Error! Bookmark not defined. Quarterly Update for Second Quarter of FY 2017 April 2017 1 I. Electricity Electric Supplies Western Area Power Administration (Western) Issues Drought conditions have lessened since the beginning of the new water year (Oct 1, 2016), raising projected Western Base Resource generation levels to near long-term average levels (399 gigawatt-hours, or GWh). For the second quarter of FY 2017, Western supply delivered 32 GWh (12 GWh below long-term average levels, but 6 GWh higher than in FY 2016). From July 2016 through January 2017, Western has supplied 200 GWh (only 5% below long-term average levels) and cost $6.9M (1% lower than the FY 2017 Adjusted Budget). As snowpack measures come in the the next few weeks, staff anticipates the forecast for Western supply to increase with corresponding decrease in supply costs. Calaveras Hydroelectric Project Issues Drought conditions are also lessening their impact on Calaveras Hydroelectric Project (“Project”), as the water shed has benefited from above average precipitation so far this winter and the main reservoir is projected to fill to capacity. For the second quarter of FY 2017 Palo Alto’s share of this project’s generation was 19.5 GWh (9% above the long-term average level, and 66% higher than in FY 2016). The extreme weather conditions experienced in December 2016 through mid February 2017, caused substaintial damage to portions of the Calaveras hydroelectric project. The high flow resulted in extensive sediment build up and forced outages at some of the Project’s generators. As a result, on February 23, 2017, the Northern California Power Agency (owner and operator of the Calaveras project) via resolution declared a State of Emergency at the Project. Renewable Energy Contract Summary On December 2, 2016 the Elevation Solar C and Western Antelope Blue Sky Ranch B projects officially achieved commercial operations and have been operating smoothly ever since. The two facilities have a combined capacity of 60 megawatts (MW), and are the fourth and fifth of the City’s five utility-scale solar photovoltaic (PV) projects to begin operating. The two projects are located on adjacent plots of land in Lancaster, CA, and are owned and operated by sPower – which is the developer that also owns and operates the Hayworth Solar Farm. Electric Load and Resource Balance The size of the committed and planned market purchases over the last and current calendar years (CYs) (shown in Figure 1 below) reflects an average level of hydroelectric output, as discussed above. For CYs 2016 and 2017 combined, net committed fixed-price forward market purchases currently account for approximately 204 GWh, which represents 11% of the City’s total load for the two-year period. For CY 2018, normal hydro output is projected along with a surge in solar resources. Long-term renewable resources (landfill gas, wind and solar) are projected to provide 56% of the City’s total CY 2018 load. Overall electric supply resources are Quarterly Update for Second Quarter of FY 2017 April 2017 2 expected to be surplus to load by about 25% for CY 2017 and 16% for CY 2018; however, some periods will see significant surplus positions while other periods will be deficit (see Figure 2 below). The forthcoming surplus positions will be sold as generic energy either ahead of the prompt month or in and settled in the spot market through the California Independent System Operator, thus allowing the City to retain full credit of the renewable attributes (RPS, etc.) of our renewable and hydro generation. Figure 1: Electric Supply Resource Actual and Projection, 2016 to 2018 (as of Feb. 28, 2017) Quarterly Update for Second Quarter of FY 2017 April 2017 3 Figure 2: CY 2017 Monthly Electric Supply Resource Projection Electric Market Price History and Projections As of February 21, 2017, the price for on-peak energy for March 2017 in Northern California was $33.66 per megawatt-hour (MWh)1, while the prices for December 2016 and January 2017 were $38.99/MWh and $39.62/MWh, respectively. These values are approximately $3.83/MWh lower than they were at the time of the last quarterly report.2 On-peak prices for calendar year strips are in the range of $35 to $37/MWh for 2016 through 2018. These prices are approximately $1.90/MWh lower than they were at the time of the last quarterly report. Figure 3 below illustrates historical monthly on-peak prices and projected monthly forward prices for Northern California from 2005 through 2023. 1 Note that $30 per megawatt-hour is equal to 3 cents per kilowatt-hour. 2 Market prices for the previous quarterly report were from October 25, 2016. Quarterly Update for Second Quarter of FY 2017 April 2017 4 Figure 3: Northern California Peak Electric Prices (as of February 21, 2017) Quarterly Update for Second Quarter of FY 2017 April 2017 5 Electric Budget and Portfolio Performance Measures Electric Supply Cost Summary Compared to Budget Estimates Table 1 below shows the City of Palo Alto Utilities’ (CPAU’s) supply cost by cost category through the second quarter of FY 2017. Supply costs were $5.1 million (9.8%) under budget primarily due to less than expected market purchases. Table 1: FY 2017 Electric Utility Supply Cost Summary Quarterly Update for Second Quarter of FY 2017 April 2017 6 Electric Usage and Generation Summary Compared to Budget Estimates Table 2 and Figure 4 below summarize the City’s electric supply sources through the second quarter of FY 2017. Load was 4.3% lower than budget. Solar generation was below budget (- 10.5%), but was balanced out by hydro generation from Calaveras and Western, which was significantly above budget (+37%). Some spot market purchases were expected; however, the City ended up selling power on the spot market (in January 2017) due to a combination of the above factors. As a result, total supply was below budget. Table 2: FY 2017 Electric Load and Generation Compared to Budget Projections Quarterly Update for Second Quarter of FY 2017 April 2017 7 Figure 4: FY 2017 Electric Load and Resource Balance Quarterly Update for Second Quarter of FY 2017 April 2017 8 Electric Market Prices and Costs Compared to Budget Estimates Figure 5 shows monthly market prices and the cost of purchasing energy from the market. Electric market prices saw fluctuations during the second quarter of FY 2017. The cost of market purchases through the second quarter of FY 2017 was higher than what it would have been if all energy had been purchased in the spot market3. The total cost of market purchases in the second quarter was lower than budget mainly due to lower than expected load and higher than expected production from hydro resources. Figure 5: FY 2016 Electric Market Purchase Costs and Market Prices 3 Note that some market purchases are made on a forward basis to lock in market prices. Quarterly Update for Second Quarter of FY 2017 April 2017 9 II. Natural Gas Gas Supply Retail Rates Since July 1, 2012, the commodity portion of CPAU’s retail gas rates for all customers varies every month depending on the market price of natural gas. Figure 6 below shows the actual commodity rates charged from July 2012 through March 2017. These rates can also be found on the web at: http://www.cityofpaloalto.org/civicax/filebank/documents/30399. Note that gas commodity rates have risen from the low rates in the spring of 2016. Figure 6: CPAU’s Gas Commodity Rates—July 2012 through January 20172016 Cap-and-Trade: Use of Allowance Revenue Calendar year 2015 was the first year the CPAU Gas utility had a compliance obligation in CARB’s cap-and-trade program. As of the end of CY 2015, CPAU received $501,000 in revenue from auctioning the emissions allowances allocated to its gas utility. The City Council adopted a resolution on January 26, 2015 (Staff Report 5397) that identified the following permissible uses for allowance revenue: 1) Investment in energy efficiency programs for the City’s natural gas portfolio and retail customers, 2) purchases or investment in cost effective renewable bio- gas resources for the City’s gas portfolio, 3) Investment in other carbon reduction activities for the City’s natural gas utility, including system maintenance or replacement to reduce fugitive gas emissions; and 4) Rebates to natural gas retail ratepayers provided on a non-volumetric basis. All available funds were carried over into CY 2016 and are planned to be expended this year. Quarterly Update for Second Quarter of FY 2017 April 2017 10 Gas Budget and Portfolio Performance Measures Value of CPAU’s Share of Redwood Pipeline Capacity Figure 7 below shows the cost of the Redwood gas transmission line compared to the value at month-ahead spot market prices as well as daily spot market prices. The Redwood pipeline allows the City to buy gas at the receipt point of Malin, Oregon and transport the gas to “PG&E Citygate”, which is normally a higher value receipt point. The City’s share of the Redwood pipeline was a net benefit to the Gas Utility of approximately $190,000 through the second quarter of FY 2017. This is the difference between the value of Redwood capacity of $553,000 (the difference of the monthly index prices at the ends of the Redwood pipeline in Malin, Oregon and PG&E Citygate) and the transportation cost of using the Redwood pipeline of $363,000. Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks Natural Gas Consumption and Costs: Budget vs. Actual Figure 8 and Figure 9 compare actual natural gas use and supply costs with the FY 2017 budget. Natural gas use through the second quarter of FY 2017 was 1.5% lower than the budget forecast, and costs were 13% higher than budgeted amounts. Quarterly Update for Second Quarter of FY 2017 April 2017 11 Figure 8: Natural Gas Consumption – Budget vs. Actual Figure 9: Natural Gas Supply Cost – Budget vs. Actual Quarterly Update for Second Quarter of FY 2017 April 2017 12 Quarterly Update for Second Quarter of FY 2017 April 2017 13 Figure 10 shows actual gas prices at PG&E Citygate (CG) versus gas prices that were projected at the time the FY 2017 budget was developed. During FY 2017, gas prices have been significantly higher than budget. Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) – Expected vs. Actual III. Water Water Availability Above normal precipitation and water available on Tuolumne River have resulted in Regional Water System storage capacity to be full. Figure 11 shows precipitation at Hetch Hetchy, Figure 12 shows the percentage of median April 1 snowpack conditions, and Figure 13 shows the water that has been made available to the SFPUC. Quarterly Update for Second Quarter of FY 2017 April 2017 14 Figure 11: Precipitation at Hetch Hetchy – Water Year 2017 Figure 12: % Median April 1 Snowpack Conditions Quarterly Update for Second Quarter of FY 2017 April 2017 15 Figure 13: Water Available to the SFPUC In addition, most of the state is out of drought condition as seen in Figure 14. Figure 14: Drought Conditions in California Water Use Compared to Targets The State Water Resources Control Board extended the Emergency Water Conservation Regulation; however, Palo Alto’s mandated water conservation target remains at zero. The City is conserving water at a rate far beyond the San Francisco Public Utilities Commission (SFPUC) request for 10% voluntary water use reduction. As of January 31, the City’s water use was 24.1% less than 2013 as shown in Figure 15 below. Quarterly Update for Second Quarter of FY 2017 April 2017 16 Figure 15: Water Use Compared to Voluntary Target Recycled Water Strategic Plan Work has begun on the Northwest County Recycled Water Strategic Plan (see Staff Report 6700). Ninety percent is being funded by the SCVWD (not to exceed $1.8 million) and the remaining ten percent is being paid by all the partners of the Regional Water Quality Control Plant. The first task underway is a feasibility study and risk assessment of expanding the existing recycled water distribution system to the Stanford Research Park. Water Budget Performance Measures Figure 16 and Figure 17 below compare actual water consumption and water supply cost to the FY 2017 budget projections. Actual water use through the second quarter of FY 2017 was 1.0% lower than budget estimates. Actual supply costs through the second quarter of FY 2017 were 0.9% below budget. Quarterly Update for Second Quarter of FY 2017 April 2017 17 Figure 16: Water Consumption – Budget vs. Actual Figure 17: Water Cost – Budget vs. Actual IV. Fiber Optics Commercial Dark Fiber Service The total number of commercial dark fiber customers remained at 108 in the second quarter of FY 2017. The total number of active dark fiber service connections serving commercial customers increased from 216 to 221 in the second quarter of FY 2017 (some customers have multiple connections). Commercial customers generate 81% of the dark fiber license revenues. Quarterly Update for Second Quarter of FY 2017 April 2017 18 Fiber Optic Network Rebuild Project The rebuild project will install new aerial duct or substructure (conduit and boxes), in addition to fiber backbone cable to increase capacity for sections of the dark fiber ring that are at or near capacity. This project will allow CPAU to meet customer requests for services. The project areas primarily cover the Stanford Research Park, Palo Alto Internet Exchange/Equinix at 529 Bryant, and Downtown areas. This project basically “overlays” new fiber over existing fiber routes in the network. Existing fiber will continue to serve City facilities and commercial dark fiber customers. 2017-2021 Capital Improvement Projects The budget for the rebuild project was reduced by the City Council during the Fiscal Year 2016 budget process. The Fiscal Year 2017 budget reflects this adjustment from $2.4 million to $1.3 million. The rebuild is a CIP charged to system improvements. Rebuild Work in Progress Route from PAIX at 529 Bryant to the Park Boulevard Substation. Substructure work, fiber pulling and cabinet installation are nearing completion. The new fiber installed for the backbone rebuild is 312-count single-mode fiber (2 x 144-count single-mode fiber, plus 24-count single- mode fiber). Upcoming work scheduled over the next 12 months: Route from Park Substation to Hansen Substation Route from Hansen Substation to Stanford Research Park Additional phases/routes to be determined. The estimated cost for the rebuild is between $500,000 and up to $1,000,000 for substructure work. Another $250,000 for the overhead portion of the work is allocated for the project. CPAU crews are performing the equipment installation, cable pulling and terminations. CPAU’s substructure contractor is installing the conduit and boxes. Fiber-to-the-Premises Master Plan and Wireless Network Plan Staff is currently working on the following tasks for the FTTP and Wireless Plans as directed by the Council on September 28, 2015: 1. Development of recommendations for fiber expansion opportunities for the UAC in April 2017 and the Council in May 2017. 2. “Dig Once” ordinance: Staff, including the City Attorney’s office and the City’s consultant CTC Technology & Energy (CTC), is working to evaluate existing dig once models, ordinances and strategies implemented by other municipalities and counties. Staff is meeting with AT&T and Comcast and other third parties that may be impacted by a dig once policy and ordinance. Staff anticipates bringing a recommendation to the Council at the end of the fiscal year. 3. Staff is working with CTC and the Office of Emergency Services to develop a Request for Proposal (RFP) for a Mobile Broadband Network for Public Safety (e.g. “in-vehicle” broadband access) and a Request for Qualification (RFQ) for a Point-to-Multipoint Network Quarterly Update for Second Quarter of FY 2017 April 2017 19 for Secure City Enterprise Access to improve command and control of critical City infrastructure for Public Safety and Utilities. The RFP and RFQ are expected to be released in April or May of 2017. 4. Staff will recommend expanding the City’s OverAir Wi-Fi Hotspots to specific unserved City facilities at portions of the Cubberley Community Center, Lucie Stern Community Center and the Golf Course. Citizen Advisory Committee Staff continues to meet on a regular basis with the committee regarding fiber and wireless initiatives. In 2016, five new members were appointed by the City Manager to the committee. The committee has provided significant input for the fiber/wireless expansion options and recommendations that will be submitted to the UAC and the Council in the next few months. V. Public Benefit, Demand Side Management Programs and Communications Energy Efficiency Program Achievements Building Operator Certification Courses for Key Account Facilities Managers The City is sponsoring a Building Operators Certification course for Key Account business utility customers. These are a series of classes designed to teach facilities management staff techniques to keep their buildings operating as efficiently as possible. The first class is being held on February 28, 2017. The course is divided up into eight one-day classes that are offered over a five month span. The class is funded partially by the student’s admission fee and partially from Utilities Public Benefits funds. Water Efficiency Rebates Residential clothes washer rebates, which were partially funded by the SCVWD and CPAU, have ended as of December 2016. Georgetown University Energy Prize Competition The Georgetown University Energy Prize (GUEP) competition is a national competition amongst small-to-medium-sized cities for a $5 million prize, sponsored by Georgetown University. The goal of the competition is to incentivize energy savings along with development of energy efficiency programs that are innovative, replicable, lasting, equitable, and connected to education. The competition measures energy usage in 2015 and 2016. Based on data from January through September 2015, Palo Alto ranked 15th (out of 50) in the competition. No updated rankings have been provided since September 2015, and communications from the GUEP team fell off significantly throughout 2016. According to the most recent communication from the GUEP team, they will be selecting finalists in late March or early April of 2017 based on their evaluation of 2016 Year-End Reports, which CPAU submitted in February 2017. Finalists Quarterly Update for Second Quarter of FY 2017 April 2017 20 will submit a Final Report in June, and a winning community will be selected based on these submissions. Oxford University Collaboration CPAU is currently supporting a project led by the University of Oxford to study the drivers of household energy consumption, including correlations between consumption and three factors: energy values, online portal use, and energy literacy. The researchers developed a survey that was sent to CPAU’s residential email list of 13,300 customers who have elected to receive information electronically, including newsletters, workshop and new program announcements, and other notifications. A pilot version of the survey was sent first to a subset of the customer list to test the effectiveness of incentives. Customers who were offered a free LED light bulb had the highest response rate and so this incentive was used for the remaining larger group of 12,700 customers. Overall, the response rate for the survey was 9.7%, which is high considering the length and content-depth of the survey. Results are being analyzed and will be available in late spring. Local Renewable Energy Programs Net Energy Metering Cap On August 22, 2016 Council approved the Net Energy Metering (NEM) Successor Program and revised the NEM cap to 10.8 MW. As of February 16, 2016 Palo Alto has 8 MW of local solar photovoltaic (PV) capacity, representing 74% of the NEM cap. Staff launched a NEM Reservation program (Nov. 2016) to allow customers who have signed PV purchase or lease contracts to apply for a reservation for the remaining NEM capacity. Once the remaining NEM capacity is fully reserved customers will be placed on the NEM Successor program. CPAU will maintain a NEM Reservation wait list in the event that a project with an approved NEM Reservation is cancelled. Communications Highlights This section summarizes communications highlights, updates on major campaigns and noteworthy events. Copies of all current and past ads and bill inserts are available online at cityofpaloalto.org/UTLbillinsert Education, Workshops and Community Outreach Activities The following activities were held since the last quarterly report attracting more than 500 customers: September 17: CPAU hosted a Residential Solar Workshop at Mitchell Park Community Center September 18: CPAU tabled at the Midtown Residents Association Ice Cream Social September 24, CPAU hosted a Landscape Design and Planting Workshop w/ BAWSCA October 2: CPAU tabled at the Bike ‘n Roll Event in front of City Hall October 15: CPAU hosted a Pruning, Propagation & Dead Heading Workshop w/BAWSCA November 5: CPAU hosted a workshop featuring the Home Efficiency Genie Program Quarterly Update for Second Quarter of FY 2017 April 2017 21 Power Content Label CPAU produces a Power Content Label each year and typically distributes it to customers via utility bill inserts, email newsletters, on the website and in social media during the month of September. This year, CPAU developed two Power Content Labels: one for residential customers and one for non-residential customers. Two different versions are necessary in order to accommodate information on the PaloAltoGreen program, as that program is no longer available for residential customers, but is still available to non-residential customers. View these at www.cityofpaloalto.org/PowerContentLabel VI. Research and Development and Innovation Program for Emerging Technologies CPAU’s Program for Emerging Technologies, or PET, (www.cityofpaloalto.org/UTLInnovation) provides the opportunity for local businesses and organizations to submit proposals for innovative and impactful products to CPAU for review as a prospective partner. The goal is to find and nurture creative products and services that will manage and better use electricity, gas, water and fiber optic services. From the program’s inception in June 2012 through the second quarter of FY 2017, the program has received a total of 61 applications. Table 3 below summarizes the status of all applications through the first quarter of FY 2017. Table 3: Status to date of all applications to the Program for Emerging Technologies Deadline Total Received Under Review Declined/Closed Active Completed FY 2013 13 0 11 0 2 FY 2014 15 0 11 1 3 FY 2015 15 0 11 2 2 FY 2016 14 0 9 0 5 FY 2017 4 0 2 1 1 TOTAL 61 0 44 4 13 PET Project Highlight from the second quarter of FY 2017: Do-It-Yourself Solar PV System for Residential and Small Commercial Applications – A team from the thin-film solar panel manufacturer MiaSolé approached CPAU to receive feedback on their proof-of-concept, off-the-shelf, do-it-yourself, pre-packaged solar PV system for residential and small commercial applications. CPAU staff coordinated meetings between the MiaSolé team and the appropriate staff from the CPAU Engineering division and the City’s Building department, who provided valuable feedback to MiaSolé on how to modify their product to make it code-compliant. The MiaSolé team is now working to deploy their product on two beta sites in Palo Alto, and CPAU staff are monitoring their progress. Quarterly Update for Second Quarter of FY 2017 April 2017 22 Electrification Activities Heat Pump Water Heater Pilot Program The City launched a Heat Pump Water Heater (HPWH) pilot program in late Spring 2016 to encourage residents replace their gas water heaters with efficient HPWHS. The pilot program website provides information such as rebate levels (up to $1,500), qualifying models that meets the minimum efficiency standard required by the California Energy Commission, installation considerations, etc. The City has developed a permit submittal check list for installing a HPWH. The City is planning to host a contractor training on HPWH installation in May 2017. EV Charger Rebate Program The City will begin offering rebates in March 2017 for Electric Vehicle Charging Stations installed at schools, apartment complexes, and non-profit buildings with common area charging accommodations. Rebates up to $30,000 will be available for Schools and Non-Profits and up to $16,000 will be available for use at Multi-Family and Mixed Use buildings. The Bay Area Air Quality Management District also just announced an incentive program for EV Chargers for public and private entities, which we will promote to those ineligible to participate in our rebate program. Additionally, we are putting the final touches on a new online PV and EV calculator. This calculator will help customers understand the costs associated with use of solar PV and electric vehicles in Palo Alto, using City of Palo Alto Utility rates and taking into account customers’ roof exposures for solar generation. VII. Legislative and Regulatory Issues While the City operates on the Fiscal Year (July through June), the State legislature and Congress operate on the Calendar Year, and federal agencies follow the Federal Fiscal Year (October to September). In order to provide accurate information in this report, staff notes here current issues, regardless of each entity’s operating year. Summary The State legislature began in earnest in January and promptly introduced hundreds of new bills. Those affecting CPAU are noted below. Congress began with new leaders and an uncertain road ahead with a new Administration. Thus far, there are no federal bills impacting CPAU; we note regulatory items below. State bills With the California Municipal Utilities Association (CMUA) and NCPA, CPAU staff is actively tracking each of the following bills ENERGY SB 584 (De Leon): Renewable Portfolio Standard (RPS). Changes RPS targets to 50% by 2025 and 100% by 2045. Quarterly Update for Second Quarter of FY 2017 April 2017 23 AB 35 (Quirk): Energy efficiency programs: low-income communities. A Spot bill that would require agencies with energy efficiency programs to establish metrics and collect data to increase the performance of energy efficiency programs in low income communities. AB 378 (Garcia, et all): California Global Warming Solutions Act of 2006: regulations. This bill would extend the greenhouse gas (GHG) emissions Cap & Trade program by allowing CARB to continue using a “market-based compliance mechanism” (aka Cap & Trade) from 2021 to 2030, to help achieve the state’s GHG reduction target of 40 percent by 2030 established by SB 32 (Pavely, 2016). AB 151 (Burke): California Global Warming Solutions Act of 2006: market-based compliance mechanisms. Currently only a placeholder bill, this is also an attempt to extend Cap & Trade. AB 33 (Quirk): Greenhouse gases from transportation: reduction: fees and rebates on new vehicle purchases. The intent of this bill is to enact legislation to reduce net GHG emissions from transportation by imposing fees and granting rebates on sales of new automobiles and light trucks. CPAU staff is tracking this bill because it is a placeholder bill and future language could impact the City. SB 71 (Wiener): Electricity: solar energy systems. This placeholder bill expresses the intent of the Legislature to enact legislation requiring the installation of solar PV or solar water heating systems in (as yet) undefined “solar zones.” AB 1405 (Mullin): RPS. Electricity: Clean Peak Energy Standard. This bill would require the CPUC to ensure an (unspecified) percentage of energy delivered to ratepayers during a peak load time period is derived from eligible renewables or energy storage. Specifically applies to POUs as well as IOUs. SB 338 (Skinner): RPS. Clean Peak Reliability Requirement. A Spot bill; would establish a program ensuring the state’s renewable generation actually results in an overall reduction of GHG emissions. WATER AB 18 (Eduardo Garcia): California Clean Water, Climate, and Coastal Protection and Outdoor Access For All Act of 2018. This bill would place on the June 2018 ballot a bond measure authorizing the issuance of $3,005,000,000 to finance a clean water, climate, and coastal protection and outdoor access for all program. AB 196 (Bigelow): Greenhouse Gas Reduction Fund: water supply repairs. This bill would allow money from the GHG reduction fund (Cap & Trade funds) to be used for water supply repairs if such repairs further the goal of GHG reduction. Quarterly Update for Second Quarter of FY 2017 April 2017 24 SB 5 (De Leon). California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018, aka the 2018 Climate Bond. A companion to the above bill, this bill places on the June 2018 ballot a bond measure, authorizing $3,000,000,000 to finance a drought, water, parks, climate, coastal protection, and outdoor access for all program. $1.5 billion is dedicated to replenishing state water programs. The focus of funding is disadvataged communitities. SB 210 (Leyva). Pupil health: drinking water. This bill prohibits drinking water that does not meet federal lead standards from being provided at schools. Requires a school district with drinking water below the EPA’s standards for lead or any other contaminant to close access to those drinking water sources, and to provide alternative drinking water sources. SB 427 (Leyva): Public water systems: lead user service lines. By July 2020, this bill would require all water systems with known lead services lines to provide to the state a timeline for replacement. If a water system has identified areas that may have lead lines, it must provide the State Board a timeline for their replacement. State Regulatory Proceedings California Air Resources Board CARB continues to work on cap-and-trade regulations for post 2020 implementation and updates to the climate scoping plan. California Energy Commission The CEC continues to work on implementing new regulations for the integrated resource plans (IRPs), the renewable portfolio standard (RPS), and the power source disclosure regulations (i.e. the Power Content Label). CPAU staff is motoring all proceedings and providing comments through NCPA. State Water Resources Control Board In February the Water Board extended the current emergency conservation regulations by 270 days, or until the Governor lifts the emergency declaration or the Board determines the regulations are no longer necessary. Specifically, at the board meeting in May 2017 the Board will consider repealing the regulation based on hydrologic and supply conditions at the end of the rainy season. In 2016 legislation was proposed that would have required water suppliers to test for lead in drinking water at private and public schools, health care centers, and other locations. While that legislation failed to pass, the Water Board utilized regulatory means to realize the intent of the bill regards to testing in schools. Consequently, if a public or private K-12 school requests testing of its drinking water, utilities must provide such testing. In CPAU, we are working closely with the Palo Alto Unified School District to organize such efforts. Quarterly Update for Second Quarter of FY 2017 April 2017 25 Federal Regulatory issues The Federal Energy Regulatory Commission is operating without a quorum, meaning their ability to perform certain duties is limited. While not currently directly impacting Palo Alto, NCPA’s business before the Commission is stymied, including a recent complaint alleging PG&E’s lack of transparency in increasing rates. CPAU staff will continue to monitor the situation and wait to hear about Mr. Trump’s appointees. VIII. Utility Financial Summary This section describes the unaudited actual financial results for FY 2017 for all Utilities funds. The Council-adopted long-term Financial Plans for the Electric, Gas, Wastewater Collection, and Water Funds will be updated for FY 2018 during the budget review process. Electric Utility Overview Sales through the second quarter of FY 2017 were 6.1% lower than expected. Sales revenues have consequently been lower by about $6 million from budget. Due to the ongoing drought, deliveries from Western and Calaveras hydroelectric resources have been lower than average. While this has necessitated additional electricity market purchases, market prices have been slightly lower than projected. Lower renewables costs have stemmed from a delayed start to the Elevation and Western Antelope solar projects. Transmission Access Charges (TAC) continue to be higher than originally budgeted. Current projections indicate lower net energy costs of $1.76 million for FY 2017. A planned $3 million customer funded project to rehabilitate a portion of the distribution system near the VA Hospital has been delayed, and the projected revenues will not be seen until FY 2018. This combination of lower costs and lower revenues results in a decrease in the level of the Electric Supply Operations Reserve to $9.4 million. Both the Electric Distribution and Electric Supply Operations Reserves may fall below the FY 2017 reserve minimum guideline levels based on preliminary reserve projections. In the FY17 Financial Plan, several proposed transfers from the Hydro Rate Stabilization and Rate Stabilization reserves were proposed, and staff may request an additional $8 to $10 million from the Electric Special Projects reserve as a short term loan. The Electric Rate Stabilization Reserve also has $3.6 million which could be used for this contingency. As shown in Table 6, the Electric Utility CIP Reappropriation and Commitment Reserves totaled $24.4 million at the end of Q2 FY 2017, of which $2.6 million was under contract. Gas Utility Overview Gas Utility sales through the second quarter of FY 2017 were lower than budget by 5.3%, but early results from January and February show that sales have picked up considerably. As drought conditions have eased and people start to use more household water, gas usage has also halted its downward trend. While the decreased consumption to date has resulted in Quarterly Update for Second Quarter of FY 2017 April 2017 26 $353,000 lower distribution sales revenue, it is too early in the winter heating season to determine whether this trend will continue. Gas supply revenues to date have also been lower than budget by $127,000, although cost impacts are reduced since as gas prices are passed through directly to customers through the market-based monthly-varying commodity rate. Of greater impact to the gas fund at this time is the pushing out of gas main replacement project 23 to FY 2019. This delay is the result of several factors: higher incoming bids resulting in the need to redesign projects, in gas as well as water and wastewater collection, and a shortage of qualified staff to perform the additional design work. This will reduce costs in FY 2017 by $3.55 million. The Gas Operations Reserve is projected to be between the minimum and maximum reserve guideline range for FY 2017. As shown in Table 7, preliminary levels for the Gas Utility CIP Reappropriation and Commitment Reserves totaled $10.1 million at the end of Q2 FY 2017, of which $375,000 was committed to projects under contract. Wastewater Collection Utility Overview Sales revenues are projected to be slightly lower than forecast, mainly due to lower winter water usage and thus lower commercial wastewater revenues. Similar to gas, Wastewater Rehabilitation Project 28 has been pushed out until FY 2019, the net effect being a $3.8 million reduction in expenses. The Wastewater Collection Operations Reserve is projected to be within the guideline levels for FY 2017. Should it be needed, the CIP reserve has an additional $2.6 million that could be utilized in case of emergency. As shown in Table 8, the Wastewater Collection Utility CIP Reappropriation and Commitment Reserves totaled $10.2 million at the end of Q2 FY 2017, of which $4.4 million was committed to projects under contract. Water Utility Overview With what appears to be a break in the State’s long running drought, water sales have started to increase, and sales through December are 4.4% above projections. Purchases are also commensurately higher. As with gas and wastewater collection, Water Main Replacement Project 27 has been delayed until FY 2019, with a savings of $6.22 million in FY 2017. The Water Operations Reserve is projected to be at or above the maximum guideline range, but should it be needed, the CIP Reserve has an additional $13.3 million that could be utilized. As shown in Table 9, the Water Utility CIP Reappropriation and Commitment Reserves totaled $22.7 million at the end of Q2 FY 2017, of which $3.9 million was for projects under contract. Quarterly Update for Second Quarter of FY 2017 April 2017 27 Fiber Optic Utility Overview Fiber sales and expenses through the second quarter of 2016 are $2.0 million and $1.1 million respectively, both are in alignment with the FY 2016 budget. Expenses are expected to increase by $1.6 million from FY 2015 to FY 2016, $2.4 million to $4.0 million respectively, primarily due to the Fiber Optic System Rebuild CIP project. The dark fiber network was constructed in the early 1990s. Several sections of the dark fiber system have either reached capacity or are in need of repair, thus limiting the City’s ability to add new customer connections. As shown in Table 5, the Fiber Optics Rate Stabilization Reserve is projected to be $22.2 million as of the end of FY 2016. Table 4: Financial Projections, FY 2017 Sales Volumes Revenue ($000) Expense ($000) Net Reserve Change ($000) Electric Utility Financial Plan 963,034,720 kWh 151,761 (166,953) (15,192) Current Forecast 909,752,142 kWh 142,960 (165,193) (22,233) Change from Financial Plan -53,282,578 kWh (8,801) 1,760 (7,041) -5.5% (5.8%) (1.1%) Gas Utility Financial Plan 28,652,783 therms 35,938 (40,418) (4,480) Current Forecast 28,295,300 therms 35,454 (37,363) (1,909) Change from Financial Plan -357,483 therms ( 484) 3,055 2,571 -1.2% (1.3%) (7.6%) Water Utility Financial Plan 3,859,444 ccf 41,522 (46,454) (4,932) Current Forecast 4,030,511 ccf 43,366 (40,578) 2,788 Change from Financial Plan 171,067 CCF 1,844 5,876 7,720 4.4% 4.4% 4.4% Wastewater Collection Utility Financial Plan 19,565 (20,968) (1,403) Current Forecast 19,265 (17,128) 2,137 Change from Financial Plan (300) 3,840 3,540 -1.5% (18.3%) Fiber Optic Utility Financial Plan 4,842 (3,785) 1,057 Current Forecast 4,842 (3,958) 884 Change from Financial Plan 0 0.0% (173) 4.6% (173) Quarterly Update for Second Quarter of FY 2017 April 2017 28 Table 5: FY 2017 Operations Reserves ($000) Electric Supply Electric Distribution Gas Water Wastewater Collection Fiber Optic * Beginning 15,642 6,208 9,952 12,415 3,211 21,361 Projected Change (13,209) (11,228) (1,909) 2,788 2,137 884 Transfers 9,911 14,500 - - - - FY 2017 Ending 12,344 9,480 8,043 15,203 5,348 22,245 Reserve Minimum 16,241 8,866 5,618 6,232 2,715 895 Reserve Maximum 32,242 13,170 11,235 12,558 6,767 2,238 * For Fiber Optics, the Reserve is the Rate Stabilization (not the Operations) Reserve CIP Reserves (Reappropriations and Commitments) Summary Table 6: Electric CIP Reappropriations and Commitments Table 7: Gas CIP Reappropriations and Commitments Table 8: Wastewater Collection Utility CIP Reappropriations and Commitments . Quarterly Update for Second Quarter of FY 2017 April 2017 29 Table 9: Water Utility CIP Reappropriations and Commitments *Includes unspent funds from previous years carried forward or reappropriated into the current fiscal year **Equal to Reserve for Reappropriations + Reserve for Commitments (CIP Reserves). Residential Bill Comparisons Table 10: Residential Electric Bill Comparison ($/month) As of March 1, 2017 Season Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville Winter (Nov -Apr) 300 33.09 59.94 35.18 55.67 453 (Median) 57.18 100.12 53.78 70.80 650 90.48 154.52 77.73 97.85 1200 183.43 306.38 144.59 179.96 Table 11: Residential Natural Gas Bill Comparison ($/month) As of March 1, 2017 Season Usage (therms) Palo Alto Menlo Park, Redwood City, Mountain View, Los Altos, and Santa Clara (PG&E Zone X) Roseville (PG&E Zone S) Winter (Nov-May) 30 34.88 41.57 41.57 54 (Median) 54.53 74.82 74.82 80 85.50 120.77 121.76 150 180.51 255.05 256.04 Quarterly Update for Second Quarter of FY 2017 April 2017 30 Table 12: Residential Water Bill Comparison ($/month) As of March 1, 2017 Usage CCF/month Palo Alto Menlo Park Redwood City Mountain View Santa Clara Hayward 4 43.69 44.46 33.37 46.47 19.80 34.63 (Winter median) 7 67.18 63.03 45.20 65.43 34.65 53.68 (Annual median) 9 87.24 75.43 53.09 78.07 44.55 66.38 (Summer median) 14 137.39 107.95 73.81 119.47 69.30 98.13 25 247.72 180.33 119.91 229.94 123.75 206.08 Based on the FY 2013 BAWSCA survey, the fraction of SFPUC as the source of potable water supply was 100% for Palo Alto, 95% for Menlo Park, 100% for Redwood City, 87% for Mountain View, 10% for Santa Clara and 100% for Hayward. Table 13: Residential Wastewater Collection (Sewer) Bill Comparison ($/month) As of March 1, 2017 Palo Alto Menlo Park Redwood City Mountain View Los Altos Santa Clara Hayward 34.83 85.91 75.11 34.30 33.93 41.65 29.80 Table 14: Median Residential Overall Bill Comparison ($/month) As of March 1, 2017 Utility and Usage Palo Alto Menlo Park Redwood City Mountain View Santa Clara Hayward Electricity (453 kWh/mo) $ 57.18 $ 100.12 $ 100.12 $ 100.12 $ 53.78 $ 100.12 Gas (54 th/mo) 54.53 72.82 72.82 72.82 72.82 72.82 Wastewater 34.83 85.91 75.11 34.30 41.65 29.80 Water (9 CCF/mo) 87.24 75.43 53.09 78.07 44.55 66.38 TOTAL $233.78 $334.28 $301.14 $285.31 $212.80 $269.12 CIP Project Detail Tables showing the details regarding the Capital Improvement Program projects are shown in: 1. Table 16 for the Electric Utility; 2. Table 17 for the Gas Utility; 3. Table 18 for the Wastewater Collection Utility; and 4. Table 19 for the Water Utility Quarterly Update for Second Quarter of FY 2017 April 2017 31 Table 15: FY 2017 Q2 Reserve Report from the City’s Financial System Quarterly Update for Second Quarter of FY 2017 April 2017 32 Table 16: Electric Utility CIP Project Detail (pg 1/2) Quarterly Update for Second Quarter of FY 2017 April 2017 33 Table 16: Electric Utility CIP Project Detail (pg 2/2) Quarterly Update for Second Quarter of FY 2017 April 2017 34 Table 17: Gas Utility CIP Project Detail (pg 1/2) Quarterly Update for Second Quarter of FY 2017 April 2017 35 Table 17: Gas Utility CIP Project Detail (pg 2/2) Quarterly Update for Second Quarter of FY 2017 April 2017 36 Table 18: Water Utility CIP Project Detail Quarterly Update for Second Quarter of FY 2017 April 2017 37 Table 19: Wastewater Collection Utility CIP Projects City of Palo Alto (ID # 7961) City Council Staff Report Report Type: Informational Report Meeting Date: 5/8/2017 City of Palo Alto Page 1 Summary Title: Annual Utilities Efficiency Programs Report for FY 2016 Title: Informational Report on the City of Palo Alto Utilities Demand Side Management Annual Report for Fiscal Year 2016 From: City Manager Lead Department: Utilities This memo and the attached report present the achievements of Demand Side Management (DSM) programs implemented by the City of Palo Alto Utilities (CPAU) during Fiscal Year (FY) 2016. This is for the Council’s information and no action is required. Executive Summary The FY 2016 DSM Annual Report provides updates on the achievements of CPAU’s electric, natural gas, and water efficiency programs, as well as locally-sited solar photovoltaic (PV), solar water heating program and sustainable energy programs. The DSM Report also provides updates on various customer outreach and research and development initiatives that are related to achieving savings in electric, gas and water. In January 2016, Utilities Marketing Services (UMS) was renamed Utilities Program Services (UPS) as UPS became a part of the Resource Management Division. The goal for this reorganization was to enhance integrated portfolio planning which includes purchasing electric, water and natural gas commodity and providing demand-side management services. This reorganization has allowed for more effective and efficient incorporation of energy efficiency, water conservation, and program management into CPAU’s resource portfolios. In FY 2016, CPAU exceeded its natural gas and water efficiency goals, but fell just short of meeting its electricity goal due to startup costs for new programs and reallocation of resources to focus on water efficiency during the California drought. On the other hand, total gas and water savings far exceeded their annual savings targets. Background As a municipal utility that delivers electric, gas and water services to customers in its service territory, CPAU complies with state laws that govern resource conservation, efficiency goals and related expenditures. Key legislation that affects CPAU includes: City of Palo Alto Page 2 Assembly Bill (AB) 1890 (1996) requires publicly owned electric utility (POUs) to establish a public benefit charge of 2.85% of revenue to fund any or all of the following “public benefit” programs: • Cost-effective, DSM services to promote energy-efficiency and energy conservation. • New investment in renewable energy resources and technologies consistent with existing statutes and regulations that promote those resources and technologies. • Research, development and demonstration programs in the public interest which advance science or a technology not being adequately provided for by competitive and regulated markets. • Services for low-income electricity customers such as targeted energy-efficiency installations. Senate Bill (SB) 1037 (2005) requires each POU, in procuring energy, to first acquire all available energy efficiency and demand reduction resources that are cost-effective, reliable and feasible. AB 2021 (2006), as amended by AB 2227 (2012), requires POUs to develop annual electric efficiency targets over ten years based on all potentially achievable cost-effective energy savings, update the goals every four years, and provide annual reports to their customers and the California Energy Commission. CPAU adopted its first ten-year electric and gas efficiency targets in 2007 and has since updated these goals twice with the last update completed in December 2012. SB 1 (2006) requires all POUs to adopt, implement and finance a solar initiative program to encourage the installation of residential and commercial solar energy systems. AB 1470 (2007) requires each POU providing gas service to retail end-use gas customers to adopt, implement and finance a solar water heating system incentive program. SBx7-7 (2009) requires water suppliers to reduce the state average per capita daily water consumption by 20% by December 31, 2020. This requirement is incorporated in the 2015 Urban Water Management Plan, adopted by California’s urban water suppliers including Palo Alto. Discussion CPAU offers incentives and education programs for customers to encourage energy and water efficiency, customer-owned renewable generation and enrollment in voluntary green energy programs. The table below summarizes the FY 2016 goals and achievements. As shown, the achievements for gas and water efficiency exceeded the goals set for FY 2016. Electricity savings was close to its target. The solar photovoltaic (PV) program is on track to meet its goal, but the solar water heating achievements are short of the goal due to low natural gas prices compared to the cost of solar water heating. City of Palo Alto Page 3 Goals versus Achievements Resource FY 2016 Savings Goals (% of load) FY 2016 Savings Achieved (% of load) FY 2016 Savings Achieved Electricity 0.60% 0.59% 5,548 MWh Gas 0.55% 1.08% 289,442 therms Water 0.91% 1.96% 74,603 CCF Customer side Renewable Program Goal FY 2016 Achievement Cumulative Achievement through FY 2016 Solar Electric (PV)* 6,500 kW, by 2017 1,098 kW 7,694 kW since 2008 Solar Water Heating 30 systems/year 1 system 59 systems since 2008 * Solar PV System goal is over a 10-year period (2008-2017) CPAU develops a range of marketing campaigns to promote gas, electric, and water efficiency programs, making a concerted effort to increase outreach efforts through public engagement. Promotional methods include community outreach events, print ads in local publications, utility bill inserts, messaging on bills and envelopes, website, email newsletters, videos for the web and local cable television channels, and the use of social media (Twitter/Facebook/NextDoor/Videos). CPAU has a number of pilot programs in place, including: the Heat Pump Water Heater Pilot Program designed at educating and promoting an option for residents interested in installing an electric heat pump water heater instead of a gas storage water heater; the linkAges Connect Program, partnering with the Palo Alto Medical Foundation Innovation Center, which uses electricity, gas, and water data from advanced meters allowing family caregivers to remain updated on the well-being of their senior family members; the Demand Response (DR) Pilot Program is designed to help participating large commercial customers reduce their electricity use on days when demand is high, helping to reduce Palo Alto’s annual peak electricity demand: a Commercial Benchmarking pilot program to assist 22 businesses with using the US EPA’s Portfolio Manager online energy management tool; and the Program for Emerging Technologies, which provides opportunities for local businesses to partner with CPAU or its customers to pilot test new technologies. The attached DSM Report provides details about CPAU’s FY 2016 DSM programs including costs and resource savings by program and by end use, description of customer outreach efforts, and research and development initiatives that are underway. Attachments: Attachment A: Demand Side Management Report for FY2016 Fiscal Year 2016 Demand Side Management Annual Report Resource Efficiency and Sustainable Energy Programs cityofpaloalto.org/utilities ATTACHMENT A The City of Palo Alto Utilities (CPAU) is the only city-owned utility in California that operates its own utilities including electric, fiber optic, natural gas, water and wastewater services. We have been providing quality services to the citizens and businesses of Palo Alto since 1896. MISSION: To provide safe, reliable, environmentally-sustainable and cost effective services. VISION: We deliver extraordinary value to our Customers. STRATEGIC DIRECTION: We will earn the high satisfaction of our customers with our cost-competitive provision of safe, reliable, and environmentally sustainable utility services. TABLE OF CONTENTS EXECUTIVE SUMMARY ..................................................................................................................... 4 1 ELECTRIC EFFICIENCY PROGRAMS ......................................................................................... 11 2 GAS EFFICIENCY PROGRAMS ................................................................................................. 14 3 WATER EFFICIENCY PROGRAMS ............................................................................................. 18 4 SUSTAINABLE ENERGY PROGRAMS ....................................................................................... 21 5 CUSTOMER OUTREACH & COMMUNICATIONS ....................................................................... 26 6 RESEARCH, DEVELOPMENT AND INNOVATION ....................................................................... 33 7 FUTURE PLANS ...................................................................................................................... 38 APPENDIX A: PROGRAM DESCRIPTION ........................................................................................... 42 APPENDIX B: FY 2016 ACHIEVEMENTS BY DSM PROGRAM ............................................................. 48 APPENDIX C: HISTORICAL DSM PROGRAM EXPENDITURES ............................................................. 49 APPENDIX D: FY 2016 SMART ENERGY RESIDENTIAL PROGRAM RESULTS ........................................ 50 APPENDIX E: FY 2016 LOW INCOME RESIDENTIAL ASSISTANCE PROGRAM (REAP) RESULTS ............. 51 APPENDIX F: SB 1037 ELECTRIC DSM REPORT TO CEC ..................................................................... 52 APPENDIX G: EXAMPLES OF CUSTOMER OUTREACH EVENTS .......................................................... 54 APPENDIX H: CITY POLICIES/PLANS AND STATE MANDATES IMPACTING DSM PROGRAM GOALS AND IMPLEMENTATION ........................................................................................................................ 57 4 of 59 FY 2016 Demand Side Management Annual Report EXECUTIVE SUMMARY The City of Palo Alto Utilities (CPAU) is pleased to issue the Demand Side Management (DSM) Report for Fiscal Year (FY) 2016. CPAU is committed to supporting environmental sustainability through efficient consumption of electric, gas and water resources, promoting distributed renewable generation, and modifying consumer demand through incentives and education. CPAU accomplishes these goals by delivering a wide range of customer programs and services described in this report. This annual report provides updates on: ♦ Electric and natural gas energy efficiency (EE) program achievements and expenditures ♦ Water conservation program achievements and expenditures ♦ Locally-sited solar photovoltaic and solar water heating program achievements and expenditures ♦ Voluntary green energy programs ♦ Customer outreach initiatives ♦ Research and development-related initiatives ♦ Future plans DSM GOALS and ACHIEVEMENTS CPAU offers incentives and education programs for customers to encourage energy and water efficiency, customer-owned renewable generation and enrollment in voluntary green energy programs. Table ES.1 summarizes the FY 2016 goals and achievements. As shown, the achievements for gas and water efficiency exceeded the goals set for FY 2016. Electricity savings was close to its target. The solar photovoltaic (PV) program is on track to meet its goal, but the solar water heating achievements are short of the goal due to low natural gas prices compared to the cost of solar water heating. Table ES.1: Goals versus Achievements Resource FY 2016 Savings Goals (% of load) FY 2016 Savings Achieved (% of load) FY 2016 Savings Achieved Electricity 0.60% 0.59% 5,548 MWh Gas 0.55% 1.08% 289,442 therms Water 0.91% 1.96% 74,603 CCF Customer side Renewable Program Goal FY 2016 Achievement Cumulative Achievement through FY 2016 Solar Electric (PV)* 6,500 kW, by 2017 1,098 kW 7,694 kW since 2008 Solar Water Heating 30 systems/year 1 system 59 systems since 2008 * Goal over a 10-year period 2008-2017 based the SB-1 California Solar Initiative. In FY 2018 reporting will transition to reflect CPAU’s Local Solar Plan goal. 5 of 59 FY 2016 Demand Side Management Annual Report DSM PROGRAM EXPENDITURES Table ES.2 summarizes the total DSM program expenditures over the last three years. Table ES.2: Electric, Gas, Water DSM Program Expenditures FY 2014 FY 2015 FY 2016 Electric DSM programs $3.2 million $2.4 million $2.4 million Gas DSM programs $0.7 million $0.59 million $0.69 million Water DSM programs $0.4 million $0.81 million $0.52 million PV Partners $1.3 million $1.1 million $1.1 million Solar Water Heating Program $67,000 $190,000 $23,000 TOTAL PROGRAM EXPENSES $5.7 million $5.1 million $ 4.8 million ENERGY AND WATER EFFICIENCY AS A RESOURCE CPAU is committed to identifying and achieving all cost-effective energy and water efficiency measures (i.e. those that are less expensive than supply-side resources). Since the adoption of the electric Carbon Neutral Plan starting in 2013, electric EE no longer contributes to the community’s greenhouse gas (GHG) emissions reduction based on the City’s climate reporting methodology.1 However, many electric EE measures still remain a cheaper resource than carbon-neutral electric supplies. Table ES.3 summarizes the cost of efficiency over the last three years compared to the projected cost of supply resources. The levelized cost of both electricity and gas were higher this year because 1) new programs were ramping up, 2) staff focused on water conservation to meet mandatory water restrictions, and 3) large portions of the savings were from retrocommissioning (RCx) savings, which had an expected useful lifetime of one year using former CPAU energy efficiency accounting protocols. CPAU is updating its protocols for these RCx savings to reflect that persistence of these measures is actually longer than one year. This will result in longer-lived, less expensive RCx savings in the future. CPAU is also evaluating if the customer and 3rd party vendor incentive payments need to be adjusted for RCx savings, since these savings are largely changes in how systems are operated, and both easier to implement and shorter lived than hardware upgrades. In addition, the Home Energy Genie program is mostly a customer service program that has great educational value to Palo Alto residents, but delivers almost no claimable energy efficiency savings and therefore drives up the average cost of all electricity and natural gas savings. For electricity, the levelized cost of electricity efficiency measures are still well below the future supply cost. The current future supply cost of gas is 25% lower than in 2014, reflecting the very low natural gas prices nationally. 1 This assumption is true for the climate reporting methodology used by the City, but there is still a real carbon savings value associated with electric EE. The City’s Carbon Neutral Portfolio objective is to have adequate renewable energy on an annual basis to serve load. That means that at some times of the year the City may have excess carbon free and renewable energy that offsets emissions from times of year when the City has insufficient carbon free and renewable energy and procures market energy, which typically comes from a gas generating plant. When electric EE results in load reduction during those times of day or year in which the City’s Carbon Neutral Portfolio has insufficient renewable energy, it can be argued there is a real long-term carbon savings from electric EE. 6 of 59 FY 2016 Demand Side Management Annual Report Table ES.3: Actual Levelized Efficiency Costs versus Projected Supply Costs FY 2014 Efficiency FY 2015 Efficiency FY 2016 Efficiency 3-yr average Efficiency Future Supply Water $/CCF $ 3.12 $4.61 $2.27 $3.33 $4.63 Gas $/therm $ 0.43 $0.72 $0.84 $0.66 $0.52 Electric $/kWh $0.043 $0.042 $0.067 $0.051 $0.077 HIGHLIGHTS OF FY2016 • Utilities Program Services - In January 2016, Utilities Marketing Services (UMS) was renamed Utilities Program Services (UPS). In spring of 2015, UMS, which had been a part of Utilities Customer Support Services, became a part of the Resource Management Division. The goal was to enhance integrated portfolio planning which includes purchasing electric, water and natural gas commodity and providing demand-side management services. This reorganization allows for more effective and efficient incorporation of energy efficiency, water conservation, and program management into CPAU’s resource portfolios. • Third-party EE programs account for a significant portion of CPAU’s reported energy savings. The following contracts were approved by Council on 5/18/2015 (Staff Report 5707) and the subsequent programs were launched in FY2016: 1. ClearResult Consulting, Inc. for the administration of the Home Efficiency Genie program which provides residential in-home energy assessment and phone-based energy efficiency advisory services; 2. Eagle Systems International, Inc. DBA Synergy Companies in a not-to-exceed amount of $540,000 for the administration of the Residential Energy Assistance Program, which provides no cost, direct installation EE services to prequalified residential customers that are eligible based on financial or medical needs; 3. Eagle Systems International, Inc. DBA Synergy Companies in a not-to-exceed amount of $450,000 for the administration of the MultiFamily Residence Plus+ Program, which provides no cost, direct installation of EE measures to multifamily complexes with 4 or more units; 4. Ecology Action of Santa Cruz, in a not-to-exceed amount of $1,950,000 for the administration of the SMB (Small & Medium Business) EMPower SMB Program, which provides turnkey direct installation of EE measures to commercial customers; 5. Ecology Action of Santa Cruz, Enovity, Inc. and BASE Energy, Inc. in a combined not-to- exceed amount of $2,775,000 across a total of three contracts, to provide building energy performance optimization services to large commercial and industrial customers; • Building Carbon Zero California Conference - On November 13, 2015 CPAU hosted the Building Carbon Zero California Conference at Lucie Stern Community Center. Palo Alto was selected as the site for Passive House California’s 5th Annual Conference, as Palo Alto is home to the largest California cluster of Passive Houses – considered to represent today’s highest energy standard, reducing a building’s energy consumption by up to 80%. Combined with renewable 7 of 59 FY 2016 Demand Side Management Annual Report energy systems such as solar, passive homes make zero net energy buildings one step closer to reality. Attendance: 330. • Georgetown University Energy Prize - In April 2014, the City announced its intent to compete for the Georgetown University Energy Prize, a national competition that aims to challenge communities across the U.S. to dramatically rethink their energy use. On January 14, 2015 CPAU was selected as one of the 50 communities in the U.S. to compete in the semi-final round. The competition stretched over a two year period between January 2015 and December 2016, with a $5 million prize to be awarded to the winner of the competition. • Georgetown University Energy Prize Conference - March 2016 CPAU hosted one of five conferences which were hosted nationwide. Palo Alto’s Mayor and Chief Sustainability Officer were keynote speakers. Georgetown participants from 9 cities throughout California were in attendance sharing best practices of EE programs and lessons learned. Attendance: 45. • Water Conservation Enforcement - During the drought, a water conservation enforcement program has allowed customers to report incidents of water waste to the utility through various tools. These tools included Palo Alto 311, Access Valley Water, and reporting from the State Water Resources Control Board. In addition to drought enforcement, the goal of this service was to inform customers of the current drought conditions. While some mandatory water use reductions have been eased, some other water use restrictions were added to the municipal code making them permanent. CPAU will continue to make water conservation a way of life and use this enforcement effort as a way to educate customers on water efficiency best practices. • The Home Efficiency Genie Program was launched in the summer of 2015. To improve marketing efforts, in January 2016 the Genie logo was redesigned to launch a cohesive co- marketing campaign with Palo Alto Green Gas. For this ‘Go Green in 2016’ campaign, bill inserts, email-blasts, envelope ads, online ads and detach cards were created to build brand recognition for both programs, resulting in marketing cost savings and increased participation in both programs. • Portal - In February 2016 CPAU launched a new residential online energy and water portal with Nexant Inc. replacing the Home Energy Report (Opower) and Home Water Report (WaterSmart) where customers can log in and view their gas, electric and water consumption, see how they are doing compared to similar homes and have access to all efficiency and savings programs, in one location. • Heat Pump Water Heater Pilot Program - In August 2015, City Council approved an Electrification Work Plan (Staff Report 5961), which is being incorporated into the Sustainability Implementation Plan going to Council in April 2017. The goal is reduction of GHG Emissions through switching from natural gas using appliances to electric appliances. Installation of Heat Pump Water Heaters (HPWH) has been selected as a good candidate for single family homes. A 8 of 59 FY 2016 Demand Side Management Annual Report pilot program designed to facilitate the installation of HPWHs was launched in the spring of 2016. • Demand Response Pilot Program - During summer 2016, seven large commercial customers participated in the Summer Peak Demand Response (DR) Pilot Program. Through this program, CPAU offers monetary incentives to key account customers to reduce their electric usage when called upon during high load periods in the summer. On the highest peak load day of the year, 237 kW of demand reduction was achieved by three of the seven participating customers. • CustomerConnect Program, Time of Use Rates and Water Leak Detection - From FY2014 through FY2016 the CustomerConnect Program installed advanced electric, gas and water meters at 280 residential homes. In addition, 120 advanced electric meters were installed to strengthen the mesh network to improve meter communication. Participating customers have access to a web-based online portal, which displays hourly interval consumption data. As part of this pilot, 96 customers have enrolled in the pilot Time-of-Use electricity rate. Enrolled customers are able to save money by shifting electric usage to off-peak hours. The pilot also offers water leak detection and alerts. Staff notifies customers of both small water leaks and burst pipes detected by the advanced meter system. Since November 2014, 222 individual water leak incidents have been detected. Staff contacted the homeowners to resolve the leaks on over a quarter of the incidents, saving thousands of gallons of water from being lost and saving customers money. The pilot is planned to be extended until the end of 2020. • Commercial Building Pilot Program - This pilot program with GreenTraks, Inc. was implemented to assist 22 businesses with using the US EPA’s Portfolio Manager online energy management tool. Each building is benchmarked against similar buildings based on its energy usage using an Energy Star rating of 1 to 100. The goal of the pilot is to help a mixture of small, medium and large commercial customers benchmark their buildings and determine the best ways to remove barriers and encourage more customers to use Portfolio Manager. • Palo Alto School District Grant - CPAU provides a grant to the Palo Alto Unified School District (PAUSD) of $50,000 each year for the implementation of energy and water efficiency educational programs from Public Benefits funds. During FY 2016, this CPAU grant supported various activities including: o The purchase of solar and wind renewable energy kits for students to build and learn about these forms of energy o Marine Science Institute Discovery Voyage on water conservation o Theatreworks visited an elementary school to teach students about “Playing with Science” o Home Energy Audit training on how to identify the most efficient lighting concepts o The purchase of energy efficiency building science kits for students to learn more about energy efficiency • Palo Alto Medical Foundation (PAMF) Connect Pilot Program - PAMF and CPAU partnered on a pilot program to install advanced electric meters and real time electricity monitoring devices in 25 resident’s homes. PAMF received a $750,000 grant to help seniors age in their homes 9 of 59 FY 2016 Demand Side Management Annual Report using technology in the energy field through the Robert Woods Johnson Foundation. The purpose of the pilot was to allow caregivers to remotely monitor the senior’s activity in a non- invasive platform. The real-time utility data is delivered to an online portal that learns the regular usage patterns, and can send alerts to caretakers if usage deviates from the regular pattern. All of the meters and real-time devices have been installed in Palo Alto and results from the pilot will be published during FY 2018. EXPECTED HIGHLIGHTS FOR FY 2017 • Energy Savings Contest - In February 2016 CPAU launched a residential online energy and water portal where customers can log in and view their gas, electric and water consumption, see how they are doing compared to similar homes and have access to all efficiency and savings programs, in one location. Staff is researching the idea of hosting a behavioral science energy savings contest among all residents. Each resident that reduces gas or electric use compared to the previous year will be eligible for free tickets based on their savings. At the end of the competition, a ticket will be randomly selected and the winner will receive a prize. Staff is currently working with the Natural Resources Defense Council and University of California at Irvine on this concept. • Santa Clara Valley Water District Grant Awards for Efficiency Programs - In October 2014, City Council approved and accepted a total of $75,000 in funds from SCVWD under the 2014 Safe, Clean Water Priority Grant Program (Staff Report 5025). The funds will used by CPAU to support its Business Water Report Pilot Program and Real Time Water Use Monitoring Pilot Program. Staff issued RFPs for the two pilot programs’ marketing, administration and implementation. In June 2015, WaterSmart was selected as the vendor for the Business Water Reports Pilot Program and National Meter & Automation, Inc. (NMAAI) was selected for the Real Time Water Use Monitoring Pilot Program. Both pilots are expected to launch in 2017. • Solar Bulk Buy Program - The Bay Area SunShares program was launched in August 2016. This group-buy program was administered by the non-profit Business Council on Climate Change and offered discounted PV installations and zero emission vehicles to Bay Area residents. 54 Palo Alto residents registered for solar proposals and 53 registered for zero emission vehicle proposals. Program results will be included in the FY17 DSM report. • Distributed Energy Resources (DER) Pilot Program - CPAU is working on ways to leverage distributed energy resources (DER) such as electric vehicles (EVs), EV chargers, thermostats, PV systems, and storage systems already at customer homes and businesses. A pilot program to enable grid connectivity of such DER systems is planned to commence in 2017. • New Design Partner - In November 2016 CPAU signed a three year contract with Essense Partners to support efforts in customer engagement, strategic planning and branding. Essense offers a unique combination of expertise in marketing, design and the energy industry. • EV Charger Rebate Program - In early 2017, CPAU will launch an EV Charger Rebate program 10 of 59 FY 2016 Demand Side Management Annual Report using funds from monetizing Low Carbon Fuel Standard (LCFS) credits. Rebates will be targeted to Multifamily and Mixed-use complexes, Schools and Non-Profits. There are also plans to offer a $300 rebate to single family homeowners who are willing to share EV Charger data as CPAU studies the impacts of EV charging on the grid. • Online EV/PV Calculator - CPAU will launch a new online calculator for residents to evaluate the costs and benefits of installing solar on their home. In addition, residents can evaluate different electric vehicles and view the bill impacts and environmental benefits of charging using Palo Alto’s carbon neutral electricity. The online calculator uses satellite imagery of Palo Alto homes to tailor the solar system design, as well as current utility rates tailored to Palo Alto. • Portal Update - CPAU will be selecting a vendor to provide a customer interface platform, building on knowledge gained and work completed with Nexant, Inc. to create a robust online customer portal. • Tier 2 Advanced Power Strip Pilot Program - CPAU is currently developing a joint residential Tier 2 Advanced Power Strip (T2APS) pilot program with other members of NCPA as the energy savings from this product has been increased from 24 kWh to 212kWh per year2. This program will be designed to quantify tangible energy savings from T2 APS installations. We are also looking into incorporating the T2 APS into the Home Efficiency Genie and Multifamily Residence Plus+ Programs. • Building Operators Certification (BOC) Course - CPAU will be hosting a Building Operators Certification Course taught by Northwest Energy Efficiency Commission (NEEC) from Seattle. BOC is an eight class certification course covering all aspects of building management and efficiency. Some topics to be covered are: HVAC, electrical systems, comfort control and lighting. Upon passing an end of class exam, graduates can become a Certified Building Operator (CBO). • Carbon Neutral Gas Plan - In December 2016, Council adopted Resolution 9649 approving the Carbon Neutral Gas Plan that will achieve carbon neutrality for the gas supply portfolio by FY 2018 using high-quality environmental offsets not to exceed a maximum rate impact of 10₵/therm. PaloAltoGreen Gas will be terminated concurrent with the implementation of the new plan. (Staff Report 7533) 2 As noted in the 2016 CMUA POU Technical Resource Manual 11 of 59 FY 2016 Demand Side Management Annual Report 1 ELECTRIC EFFICIENCY PROGRAMS 1.1 Electric Efficiency Savings versus Goals City Council approved CPAU’s first Ten-Year Energy Efficiency Portfolio Plan in April 2007, which included annual electric and gas efficiency targets between 2008 and 2017, with a 10- year cumulative savings target of 3.5% of the forecasted energy use. As mandated by California law, the electric efficiency targets were updated in 2010, with the ten-year cumulative savings goal doubling to 7.2% between 2011 and 2020. Since then, increasingly stringent statewide building codes and appliance standards have resulted in substantial energy savings (e.g. as of January 1, 2013, incandescent bulbs between 40W to 100W can no longer be sold). However, energy savings in these “codes and standards” improvements are excluded from meeting CPAU’s EE program goals. An updated set of Ten-Year Electric Efficiency Goals, adopted by City Council in December 2012, revised the ten-year cumulative electric efficiency savings to 4.8% between 2014 and 2023. CPAU’s electric efficiency savings goals and achievements as a percentage of the City’s energy usage are shown in Table 1 below. In FY 2016, CPAU achieved electric savings of 0.59% of load through its customer efficiency programs, which is slightly below the previous year due to the startup of new programs and reallocation of resources to focus on water efficiency during the California drought. Table 1: Electric Savings versus Goals Year Annual Savings Goal (% of load) Savings Achieved (% of load) Savings Achieved (MWh) FY 2008 0.25% 0.44% 4,399 FY 2009 0.28% 0.47% 4,668 FY 2010 0.31% 0.53% 5,270 FY 2011 0.60% 0.58% 5,497 FY 2012 0.65% 1.31% 12,302 FY 2013 0.70% 0.85% 8,074 FY 2014 0.60% 0.86% 8,218 FY 2015 0.60% 0.65% 6,063 FY 2016 0.60% 0.59% 5,548 1.2 FY2016 Electric Efficiency Savings by End Use and Customer Segment Non-residential customers account for 81% of CPAU’s electric sales, and non-residential efficiency program savings represent about 77% of CPAU’s total electric efficiency savings, as shown in Figure 1. Non-residential retrocommissioning, representing 35% of the electric savings, is the systematic process of identifying less-than-optimal performance in a facility’s equipment, lighting and control systems and making the necessary adjustments to optimize them. Although CPAU stopped delivering Home Energy Reports in FY 2015, CPAU can still claim an 80% persistence savings from the program. In FY 2016, the Home Energy Report program accounted for 19% of the total electric EE savings. 12 of 59 FY 2016 Demand Side Management Annual Report Figure 1: Composition of Net Electric Efficiency Savings in FY 2016 (Total saving of 5,548 MWh, 0.59% of annual load) 1.3 FY 2016 Electric Efficiency Program Expenditures The largest fraction of expenditures in the electric efficiency budget is for third-party administered contracts and rebates. Other expenses include in-house salaries, marketing, and customer education. Funding for electric efficiency programs came primarily from the mandated Public Benefit (PB) Charge, which is set at 2.85% of the customer retail rate. The majority of the PB funding is spent on efficiency programs; however, some also goes to renewable energy projects, research and development projects and low income efficiency programs. Table 2 shows the split of electric efficiency program expenditures by customer rebates, third-party contract administration, and other expenses, which include in-house staffing, marketing and communication expenses. State law requires evaluation, measurement and verification (EM&V) of the reported electric efficiency savings by an independent consultant. The EM&V contract cost is included in Table 2. Res. Home Energy Report 19% Res. Lighting 2% Res. Shell 1% Res. Refrigeration 1% Res. Others 0.5% Non-Res. Retrocommissioning 35% Non-Res. Lighting 28% Non-Res. Cooling 13% Non-Res. Others 1% 13 of 59 FY 2016 Demand Side Management Annual Report Table 2: FY 2016 Electric Efficiency Program Expenditures Customer Class Program Name Customer Rebates Contract Costs Other Expenses Annual Cost Programs delivered by CPAU staff Residential Smart Energy Rebates $15,600 - $80,000 $95,600 Non-Residential Com. (CAP) Rebates $41,800 - $110,000 $151,800 Non-Residential Schools Grant - $45,000 $2,000 $47,000 All EM&V, Marketing & Other - $134,000 $290,000 $424,000 Programs delivered by third-party administrators Residential Low Income (REAP)* $19,000 $19,000 $70,000 $108,000 Residential Home Efficiency Genie* $41,500 $41,500 $60,000 $143,000 Residential Home Energy Reports - - - $0 Non-Residential CIEEP: Enovity & EA $417,000 $514,000 $160,000 $1,091,000 Non-Residential Multifamily+ * $42,300 $42,300 $70,000 $154,600 Non-Residential Empower* $25,700 $25,700 $100,000 $151,400 Non-Residential New Construction $6,800 $13,500 $40,000 $60,300 TOTAL $609,700 $835,000 $982,000 $2,426,700 Source of Funds Public Benefit $2,426,700 Supply Funds $0 * These are “direct-install” programs, whereby the program administrator installs efficient equipment at the customer site at no cost to low income residents or with small co-pays from small business customers. Direct install programs typically target hard-to-reach customers. For direct install programs, payments to the third-party vendor are assumed to be 80% direct customer rebate and 20% contract administration. Figure 2 shows the historical annual electric efficiency savings and annual electric efficiency program expenditures. Figure 2: FY 2008 to FY 2016 Electric Efficiency Savings and Expenditures - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ Th o u s a n d s Ac h i e v e d E E s a v i n g s a s % o f l o a d EE program expenditures ($)Net EE savings achieved as % of load Completion of a significant EE project at a large commercial customer site 14 of 59 FY 2016 Demand Side Management Annual Report 2 GAS EFFICIENCY PROGRAMS 2.1 Gas Efficiency Savings versus Goals In parallel with the development of ten-year electric goals, the City Council adopted CPAU’s first set of gas efficiency targets in 2007 to reduce gas consumption by 3.5% between 2008 and 2017. In 2010, Council increased the gas efficiency targets to reduce use by 5.5% between 2011 and 2020. Similar to the electric side, the potential for gas efficiency savings has been reduced due to recent changes to California’s appliance standards and building codes. The ten-year gas efficiency goals were last updated in December 2012, with a cumulative gas efficiency target to reduce gas use by 2.85% between 2014 and 2023. CPAU’s gas efficiency savings goals and achievements as a percentage of sales are shown in Table 3. CPAU has continued to expand its gas efficiency program portfolio in the past several years, with the majority of gas savings delivered through third-party administered programs. Gas efficiency savings in FY 2016 nearly doubled the annual savings goal. Table 3: Gas Savings versus Goals Year Annual Savings Goal (% of load) Savings Achieved (% of load) Savings Achieved (therms) FY 2008 0.25% 0.11% 35,057 FY 2009 0.28% 0.29% 146,028 FY 2010 0.32% 0.35% 107,993 FY 2011 0.40% 0.55% 164,640 FY 2012 0.45% 0.74% 220,883 FY 2013 0.50% 1.13% 327,077 FY 2014 0.50% 1.20% 337,079 FY 2015 0.50% 0.92% 229,373 FY 2016 0.55% 1.08% 289,442 2.2 FY 2016 Gas Efficiency Savings by End Use and Customer Segment Non-residential customers account for 55% of the CPAU’s gas sales, and in FY 2016 gas efficiency savings in the non-residential segment represent about 47% of CPAU’s total gas savings. The Home Energy Reports, which stopped being delivered to customers in FY 2015, can still claim savings based on an 80% persistence of savings from the program. In FY 2016, the Home Energy Report program accounted for 40% of the total gas savings. Figure 3 shows the breakdown of gas savings in FY 2016 by end use. 15 of 59 FY 2016 Demand Side Management Annual Report Figure 3: Composition of Natural Gas Efficiency Savings in FY 2016 (Total saving of 289,2863 therms, 1.07% of annual load) 2.3 FY 2016 Gas Efficiency Program Expenditures The largest fraction of expenditures for gas EE in FY 2016 is for third-party administered contracts and rebates. Gas efficiency programs are primarily funded from the Gas Public Benefit charge, which is set at about 1% of the gas utility’s revenue. Additional funding is provided from supply funds if needed. As reflected in Table 4 below, gas efficiency programs in FY 2016 were funded only from PB charges. Table 4 also shows the split of gas efficiency program expenditures by customer rebates, third-party contract administration, and other expenses, which include in-house staffing, marketing and communication expense. Although not required by state law, CPAU conducts EM&V of its gas efficiency savings through an independent consultant. The EM&V contract cost is included in Table 4. 3 This number does not include gas savings from the Solar Water Heating Program. If the gas savings from the Solar Water Heating Program are included the total gas savings for FY 2016 are 289,442 therms. Home Energy Report 40% VFD Installations 7% Boiler Replacement 7% Economizer Optimization 8% Control & Temp Reset 10% Revise Operating Schedule 16% Res. Miscellaneous 11% Water Savings Measures 1% 16 of 59 FY 2016 Demand Side Management Annual Report Table 4: FY 2016 Gas Efficiency Program Expenditures Customer Class Program Name Customer Rebates Contract Costs Other Expenses Annual Cost Programs delivered by CPAU staff Residential Smart Energy Rebates $7,500 - $10,000 $17,500 Non-Residential Com. Rebates (CAP) $4,400 - $10,000 $14,400 All EM&V, Marketing & Other - $87,500 $40,000 $127,500 Programs delivered by third-party administrators Residential Low Income (REAP)* $28,500 $28,500 $35,000 $92,000 Residential Home Efficiency Genie* $62,300 $62,300 $20,000 $144,600 Residential Home Energy Report* - - - $0 Non-Residential CIEEP: Enovity & EA $132,000 $81,000 $30,000 $243,000 Residential Multifamily+* $25,000 $25,000 - $50,000 Non-Residential Empower* - - - $0 Non-Residential New Construction - - - $0 TOTAL $259,700 $284,300 $145,000 $689,000 Source of Funds Public Benefit $689,000 Supply funds $0 * These are “direct-install” programs, whereby the program administrator installs efficient equipment at the customer site at no cost or with a small co-pay from the customer. 17 of 59 FY 2016 Demand Side Management Annual Report Figure 4 compares the historical annual gas efficiency savings and annual gas DSM expenditures. Gas savings this year were nearly 30% greater than last year, with an increase in large commercial projects. Figure 4: FY 2008 to FY 2016 Gas Efficiency Savings and Expenditures - 300 600 900 1,200 1,500 0.0% 0.3% 0.6% 0.9% 1.2% 1.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ Th o u s a n d s Ac h i e v e d E E s a v i n g s a s % o f L o a d EE program expenditures ($)Actual EE savings as % of load 18 of 59 FY 2016 Demand Side Management Annual Report 3 WATER EFFICIENCY PROGRAMS 3.1 Water Efficiency Savings versus Goals In FY2016 CPAU updated the 2010 Urban Water Management Plan and addressed changes as required by the California Urban Water Management Planning Act and related legislation. The updated 2015 Urban Water Management Plan was approved by City Council in May 2016 and includes a per capita water use reduction goal of 20% by 2020 from a historical benchmark period (average use between years 1995 and 2004). CPAU’s water savings goals and achievements as a percentage of sales are shown in Table 5. Note that participation in water efficiency rebate programs during FY 2016 remained rigorous due to the California drought and the Governor’s Executive Order (B-36-15) mandating water conservation. Table 5: Water Savings versus Goals Year Annual Savings Goal (% of load) Savings Achieved (% of load) Savings Achieved (CCF) FY 2008 0.34% 0.72% 39,323 FY 2009 0.34% 0.98% 52,983 FY 2010 0.34% 1.35% 68,948 FY 2011 0.90% 0.47% 23,409 FY 2012 0.91% 1.09% 55,067 FY 2013 0.91% 0.53% 26,513 FY 2014 0.91% 0.64% 32,325 FY 2015 0.91% 1.54% 68,227 FY 2016 0.91% 1.96% 74,484 3.2 FY 2016 Water Efficiency Savings by End Use and Customer Segment During FY 2016, water efficiency savings were split nearly equally between residential and non-residential customers. Non-residential landscape conversions and irrigation hardware upgrades represent 47% of the total water savings. Home water reports were stopped in early FY 2016, but savings could still be claimed at an 80% persistence from FY 2015 and account for 40% of the total water savings. Note that savings from customers achieved due to behavioral changes or appliance upgrades prompted by CPAU’s drought awareness messaging but who did not seek a rebate are not accounted for in these achievements. 19 of 59 FY 2016 Demand Side Management Annual Report Figure 5: Composition of Water Efficiency Savings in FY 2016 (Total saving of 74,484 CCF, 1.96% of annual load) 3.3 FY 2016 Water Efficiency Program Expenditures CPAU partners with the SCVWD to provide residential and commercial water conservation programs which include free water audits to residential customers, landscape surveys, rebates for landscape conversions, irrigation hardware, clothes washers, high efficiency toilets and urinals. The payment to SCVWD includes customer rebates as well as various program expenditures. CPAU also offers an additional energy efficiency rebate to customers for high efficiency clothes washers. Table 6 shows program expenditures by customer rebates, third-party contract administration and other expenses, which includes in-house staffing, marketing and communication expenses. Non-Res. Landscapes 47% Home Water Report 40% Res. Landscapes 8% Res. Showerheads & Aerators 3% Res. Clothes Washers 1% Res. High Efficiency Toilets 1% 20 of 59 FY 2016 Demand Side Management Annual Report Table 6: FY 2016 Water Efficiency Program Expenditures Customer Class Program Name Customer Rebates Contract Costs Other Expenses Annual Cost Programs delivered by CPAU staff Residential Washing Machines1 $4,125 - $5,000 $9,125 All Marketing & Other - - $170,000 $170,000 Programs delivered by Santa Clara Valley Water District2 Residential High Efficiency Toilets - - $5,000 $5,000 Residential Landscape Rebates - $134,649 $25,000 $159,649 Residential Water Wise House Calls - - $10,000 $10,000 All Irrigation Hardware - - $10,000 $10,000 Non-Res High Efficiency Toilets3 - - $5,000 $5,000 Non-Res Washing Machines - - - - Non-Res Landscape Rebates - $57,165 $40,000 $97,165 Programs delivered by WaterSmart Residential Home Water Reports - $12,000 $25,700 $37,700 TOTAL $4,125 $209,814 $295,700 $503,639 1 For washing machine rebates, the customer receives $75 from water, $25 from gas, and $25 from electric budgets. The SCVWD reimburses CPAU 50% for the water portion of the residential washing machine rebates. The reported figure represents CPAU’s share of the water portion of the rebate. 2 During FY2016 although the cost sharing agreement with SCVWD was amended to only cover the increased rebate level for the landscape rebate program, CPAU customers are still able to participate in all rebates offered by the SCVWD with no financial participation from CPAU. 3 These are direct install programs, whereby the program administrator installs efficient equipment at the customer site at no cost to, or with a small co-pay from, the customer. Figure 6: FY 2008 to FY 2016 Water Efficiency Savings and Expenditures - 250 500 750 1,000 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ Th o u s a n d s Ac h i e v e d w a t e r s a v i n g s a s % o f L o a d Water efficiency program expenditures ($)Actual water savings as % of load 21 of 59 FY 2016 Demand Side Management Annual Report 4 SUSTAINABLE ENERGY PROGRAMS 4.1 Overview of Sustainable Energy Programs CPAU offers a variety of programs to encourage residents and non-residents to lessen the environmental impacts associated with their gas and electric consumption. Customer-side renewable generation programs are available to support the installation of both solar electric photovoltaic (PV) and solar water heating (SWH) systems. Voluntary green energy programs support investments in renewable electricity and carbon offsets that reduce greenhouse gas emissions. 4.2 PV System Installation Achievements versus Goals There have been a total of 910 PV installations (852 residential, 58 non-residential) since CPAU began supporting local solar PV installations in 1999. These customer-side generation systems are not included in CPAU’s Renewable Portfolio Standard (RPS) supply requirements. In 1999 CPAU offered incentives for PV system installations through the PV Partners Program. In FY2008 the PV rebate budget was increased as mandated by Senate Bill 1 and Palo Alto’s share of the state-wide goal established by SB1 was 6.5 MW by 2017. As of June 30, 2016, the total capacity of all Palo Alto PV systems was 7.7 MW, generating about 1.2% of the City’s annual energy needs. The PV rebate funds were fully reserved in August 2014 for residential projects, and April 2016 for commercial, however rebate payments are expected to continue through FY2023 due to the five year performance-based incentive schedule. Residents and commercial customers continue to install solar without a rebate largely due to the continued decrease in solar installation costs, net metering and the 30% Federal Tax Credit. Figure 7: Photovoltaic (PV) Installations by Fiscal Year FY00- 07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Res 176 112 43 52 44 49 49 103 93 131 Non-Res 9 5 9 2 2 4 3 10 9 5 0 20 40 60 80 100 120 140 160 180 200 In s t a l l a t i o n C o u n t 22 of 59 FY 2016 Demand Side Management Annual Report Figure 8: PV System Capacity (kW) added by Fiscal Year 4.3 Solar Water Heating System Installation Achievements versus Goals There have been a total of 59 SWH installations since CPAU began offering rebates to residential and commercial customers to install SWH systems in 2008. The SWH rebate program was mandated by AB 1470 (CY 2007) and is administered by the Center for Sustainable Energy (CSE), which also administers SWH rebate programs in the San Diego area. As shown in Figure 9, the number of SWH systems installed has been consistently below target, primarily due to low gas prices, which reduces the cost-effectiveness of SWH systems. Unlike PV systems, the cost for SWH systems has not decreased over time. This is partly because there are fewer SWH system installers than PV installers. The SWH equipment is most cost effective in multi-family buildings. Figure 9: Customer-Side Solar Water Heating Systems Program Achievements versus Goals FY00 -07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Res 542 328 152 205 187 195 214 543 474 633 Non-Res 123 227 1,037 15 295 249 49 1,383 378 465 Total 665 555 1,189 220 482 444 263 1,926 852 1,098 0 500 1000 1500 2000 2500 kW 0% 20% 40% 60% 80% 100% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 7 17 10 1 1 11 15 1 Installed by Fiscal Year Installation Goal 23 of 59 FY 2016 Demand Side Management Annual Report 4.4 FY 2016 Customer Renewable Program Expenditures The PV Partners program is administered by CPAU staff, whereas the SWH program is administered by the California Center for Sustainable Energy. CPAU contracts with third-party vendors to conduct PV system inspections. CPAU also contracts with a third-party vendor to maintain an online PV rebate application system. Table 9 lists the customer renewable program expenses by customer rebates, contract administration, and other expenses, which include in- house staffing, marketing and communication expenses. Table 7: FY 2016 Customer Renewable/Sustainable Energy Program Expenditures Program Name Customer Rebates Contract Costs Other Expenses Annual Cost PV Partners (Res) $30,000 $1,000 $50,000 $81,000 PV Partners (Bus) $1,000,000 $14,000 $50,000 $1,064,000 Solar Water Heating (Res) $2,500 $5,000 $5,000 $12,500 Solar Water Heating (Bus) $0 $5,000 $5,000 $10,000 PaloAltoGreen (Electric)* - $10,300 $10,000 $20,000 PaloAltoGreen Gas* - $128,876 $25,000 $153,876 Marketing & Other - - $200,000 $200,000 Total $1,032,500 $164,176 $345,000 $1,541,676 * PaloAltoGreen (Electric) and PaloAltoGreen Gas program expenses do not include the costs to purchase the electric Renewable Energy Credits (RECs) and gas offsets which are paid by the program participants. 24 of 59 FY 2016 Demand Side Management Annual Report 4.5 Palo Alto Green Gas In April 2014, City Council approved the establishment of the voluntary PaloAltoGreen Gas (PAGG) program. PAGG provides the opportunity for residential and commercial customers to reduce or eliminate the impact of GHG emissions associated with their gas usage, through the purchase of certified environmental offsets. PAGG, the first Green-e Climate certified gas offset program offered by a municipal utility and the first to be offered to individual community members, was launched in January 2015. Initially the program’s goal for 2020 was to achieve subscription of 20% of natural gas customers, representing approximately 10% of gas load and 16,000 metric tons of GHG emission reduction. Roughly 4% of the City’s residential natural gas customers have participated in PAGG accounting for approximately 3,200 tons of GHG emissions per year. City facilities began participating in PAG Gas in July 2015 and account for GHG emissions reductions of approximately 6,000 tons per year. However, PAGG will be terminated concurrent with the implementation of the new Carbon Neutral Gas Plan. In December 2016, Council adopted Resolution 9649 (Staff Report 7533) approving the Carbon Neutral Gas Plan that will achieve carbon neutrality for the gas supply portfolio by FY 2018 using high-quality environmental offsets not to exceed a maximum rate impact of 10 ₵/therm. Figure 10: PaloAltoGreen Gas Participation 25 of 59 FY 2016 Demand Side Management Annual Report 4.6 Palo Alto Green The PaloAltoGreen (PAG) program was launched on Earth Day 2003 to give customers the option to voluntarily reduce GHG emissions associated with their electricity use. Participants paid an additional charge per kWh to cover the purchase of Renewable Energy Certificates (RECs) so that their electric use would be supplied with 100% renewable energy. In June 2014, City Council terminated the PAG program for residential customers since the electric supply became 100% carbon neutral and customers no longer needed the program to eliminate the GHG emissions associated with their electricity use or to receive 100% renewable energy supplies. PAG is still available for commercial customers who wish to be recognized under the U.S. EPA Green Power Leadership program or to earn Leadership in Energy and Environmental Design (LEED) Green Power credits. Non-residential customers can choose to participate at 100% renewable energy for $0.002 kWh or purchase monthly increments of 1,000 kWh blocks for $2 per block. 26 of 59 FY 2016 Demand Side Management Annual Report 5 CUSTOMER OUTREACH & COMMUNICATIONS Utility Program Services (UPS) and Utilities Communications develop a range of marketing outreach pieces and implements campaigns to promote the gas, electric, and water efficiency programs and services offered to all CPAU customers. UPS is making a concerted effort to increase outreach efforts through public engagement to the Palo Alto community. Promotional methods include community outreach events, print ads in local publications, utility bill inserts, messaging on bills and envelopes, website, email blasts, videos for the web and local cable television channels, and the use of social media (Twitter/Facebook/NextDoor/Videos). In FY2016 we expanded outreach through cost effective use of social media and experimented with Facebook Ads and NextDoor posts. While print materials such as bill inserts, local magazine ads and webpages still feature prominently, CPAU is turning its outreach emphasis to social media, the Web, online videos and cable TV for more engaging and dynamic content. Regular email newsletters are delivered to residents and non-residents, as well as targeted emails and outreach to specific groups, such as neighborhood and youth organizations. Educational materials and brochures are regularly developed and updated for distribution at events in new customer welcome packets and for the general public at City facilities such as the Development Services Center, libraries and community centers. CPAU provides fun, yet practical promotional items such as hose nozzles, wildflower seed packets, LED light keychains, night lights, sponges, shower timers, pens, magnets and sunglasses to spread awareness about resource efficiency and renewable energy. Many City departments and utility workgroups participate in these efforts. Events are hosted at Mitchell Park, Lucie Stern and Rinconada Library for our workshops; Electric Operations and Maintenance Operations transports heavy equipment; Development Services generates data for reports and develops permit requirements for new programs; the Storm Drainage team in Public Works collaborates on Rain Barrel workshops; Library Services advertises the Home Efficiency Genie on their digital display boards; the Meter Shops work on projects involving installation of advanced meters; and the Print Shop consistently produces marketing materials and mailers for our customers. The spirit of City wide collaboration is overwhelmingly positive and appreciated. Marketing efforts in FY2016 continued to focus on California’s severe drought. In FY2015 CPAU was tasked with adopting water use restrictions in response to the State’s emergency drought regulations. To assist with customer education and enforcement of these water use restrictions, CPAU developed bill inserts, ads for local newspapers and magazines and specific materials for customer groups like hotels and restaurants. Staff also participated in over 30 events in FY2016. These included community tabling events as well as neighborhood, school, and business group meetings to talk with the public about drought regulations and opportunities for water use efficiency. Other events included hosting free water use efficiency workshops which focuses predominantly on sustainable landscaping and were tailored to addressing specific drought conditions. Additionally, CPAU hosted the Carbon Free California Conference and Home Efficiency Genie workshops, the Georgetown Energy Prize Conference, residential solar workshops, and Facility Manager’s meetings, which included speakers brought in to help CPAU’s Key Accounts improve efficiency. More than 500 people attended UPS- hosted workshops, 375 people attended the conferences, over 80 facility managers of Palo Alto’s 27 of 59 FY 2016 Demand Side Management Annual Report largest companies attended the Facility Manager’s Meetings, and staff spoke to over 2,000 people at various tabling events throughout FY2016. Table 8: FY 2016 Workshops, Events and Speaking Engagements # Event Date Location Audience Topic Actual Attendance 1 Lecture Series 7/9/15 Vi of Palo Alto Residents of the Vi Water 50 2 Water, Water, Everywhere and Not a Drop? 7/30/15 University Club Residents Water Conservation 30 3 Summer Concert Series 7/15 – 8/15 Various Locations Residents Home Efficiency Genie 100 4 Come Pick Up Your Free Drought Gear 8/5/15 Mitchell Park Library Residents Water Conservation 500 5 Public Drought Meeting 8/12/2015 Mitchell Park Community Center Residents Water 25 6 BAWSCA Water Conservation 101 8/13/15 Lucie Stern Community Center Residents Water Conservation 30 7 Rotary Club Meeting 8/24/15 Elks Lodge Palo Alto Rotary Club Members Water 50 8 SAP Lunch & Learn 8/25/15 SAP - Hillview SAP Employees Water 35 9 Green Fest Event 8/30/15 Mitchell Park Residents Environmental Issues - Zero Waste, Water, Energy Efficiency 150 10 Speaking Engagement - SJSU Energy Policy Class 9/8/15 San Jose State University Students Energy & Water Policies, Conservation 30 11 Midtown Residents Association Ice Cream Social 9/13/15 Hoover Park Midtown neighborhood residents, City Councilmembe rs, UAC General, efficiency, renewables, resource supply, safety, emergency preparedness 300 12 BAWSCA Maintaining Existing Landscape Design During a Drought 9/17/15 Lucie Stern CC Ball Room Residents Water Conservation 9 13 BAWSCA Rainwater Harvesting and Greywater Reuse 9/26/15 Rinconada Library Embarcadero Room Residents Water Conservation 50 14 BAWSCA Fundamentals of Waterwise Gardening 10/10/15 Lucie Stern CC Community Room Residents Water Conservation 40 15 Water-efficient Irrigation and Garden Re-landscaping @ City Hall - Hands On Class 10/17/15 City Hall King Plaza Residents Water Conservation 6 16 Emergency Preparedness and Safety Fair 10/18/15 Addison Elementary School Residents Emergency Prep & Safety 300 28 of 59 FY 2016 Demand Side Management Annual Report Table 8: Continued (FY 2016 Workshops, Events and Speaking Engagements) # Event Date Location Audience Topic Actual Attendance 17 CMUA/CUWA Water Forum 10/23/15 Sacramento CEOS, GMs of municipal utilities and water districts Water efficiency in new development - work with land use agencies. 30 18 Block Party @ 800 Colorado Avenue 10/25/15 800 Colorado Avenue Residents safety, Water conservation 21 19 Meet with 5 French Delegates on technology and CPAU Programs 11/12/15 City Hall 2 French government officials and 3 business reps What makes the City of Palo Alto Utilities unique? 5 20 Kiwani's Club 11/12/15 Genie, REAP, PAGG 30 21 Building Carbon Free California 11/13/16 - 11/14/16 Lucie Stern Community Center Homeowners, Designers, Architects, Builders, Policy Makers Green Building 330 22 Electric Operations Safety Demonstration 3/2/2016 Fairmeadow School Students Electric Safety 50 23 Georgetown University Energy Prize Conference 3/17/16 Mitchell Park Ballroom etc. Competitor Cities Energy 45 24 Silicon Valley Water Conservation Awards Ceremony 3/23/16 Google Water agencies, community members Conservation 150 25 Addison Elementary School Earth Day Event 4/21/16 Addison Elementary School Elementary school parents Earth Day 50 26 Nest Bring Your Kids to Work Day 4/28/16 Nest Nest Employees and their kids Earth Day 100 27 Great Race For Water/Run the Earth 5k - Climate Change 4/30/16 Baylands Residents Earth Day Climate Change/Water 200 28 Graywater to Green Garden (BAWSCA) 5/21/16 Mitchell Park CC Adobe Room Residents Water 50 32 Palo Alto Downtown Farmer's Market? 6/25/16 Palo Alto Downtown Farmer's Market Residents All UPS programs 60 33 Mitchell Park Library Tabling Monthly Mitchell Park CC Residents Home Efficiency Genie 100 TOTAL 2926 29 of 59 FY 2016 Demand Side Management Annual Report 5.1 Water Related Marketing Materials 30 of 59 FY 2016 Demand Side Management Annual Report 5.2 General Utilities Marketing Materials 31 of 59 FY 2016 Demand Side Management Annual Report 5.3 Evolution of Home Efficiency Genie Marketing Materials: 32 of 59 FY 2016 Demand Side Management Annual Report 5.4 Marketing Materials for the new customer Portal: 33 of 59 FY 2016 Demand Side Management Annual Report 6 RESEARCH, DEVELOPMENT AND INNOVATION 6.1 Demand Response Pilot Program The Demand Response (DR) Pilot Program is designed to help participating large commercial customers reduce their electricity use on days when demand is high, which helps reduce Palo Alto’s annual peak electricity demand. Through the program, CPAU offers monetary incentives to participating customers who are able to reduce their electrical usage when called upon by CPAU during high load periods in the summer months (between May 1st and October 15th.) The DR Pilot Program’s incentive payments share savings between CPAU and program participants. In 2016, program participants reduced aggregated demand by an average of 275 kW and an average energy reduction of 1,096 kWh during the two DR events. A total incentive payment of $991.96 was awarded to program participants for their load reduction performance. Though a relatively small program, over the past 4 years, this voluntary demand response program has become an integral part of the CPAU’s effort to lower purchase cost and relieve stress on the electrical grid. This program also helps participating customers meet their corporate sustainability goals. The program was approved by Council to run until the end of summer of 2016, but CPAU hopes to seek Council approval to continue to offer this program on a permanent basis. CPAU is also working on ways to leverage Distributed Energy Resources (DER) such as EVs, EV chargers, thermostats, PV systems and storage systems installed at customer homes and businesses. A pilot program to enable grid connectivity of such DER systems in planned to commence in 2017. 34 of 59 FY 2016 Demand Side Management Annual Report Figure 11: June 3, 2016 DR Event Load Reduction Performance (Aggregate Load of Participants) Figure 12: September 26, 2016 DR Event Load Reduction Performance (Aggregate Load of Participants) 35 of 59 FY 2016 Demand Side Management Annual Report 6.2 Program for Emerging Technologies The CPAU Program for Emerging Technologies (cityofpaloalto.org/UTLInnovation) provides the opportunity for local businesses to submit proposals to CPAU for review and potential pilot testing. The goal is to find and nurture creative products and services that will manage and better use electricity, gas, water, and fiber optic services. From its inception in June 2012 through July 2016, the Program for Emerging Technologies received 57 applications. Here are several PET pilot programs which began in FY 2016: • linkAges Connect: Using Utility Data to Help Seniors and their Caregivers Staff has been working with the Palo Alto Medical Foundation (PAMF) Innovation Center to evaluate the technical feasibility of deploying a research pilot called "linkAges Connect" on Palo Alto's utility distribution systems. "linkAges Connect” uses passive signals in the home, such as electricity, gas, and water data from advanced metering infrastructure, to allow family caregivers to remain updated on the well-being of their senior family members. Since changes in well-established daily routines of seniors are often an indication of shifts in health status, regular utility usage patterns can be an additional mode of communication that signals all is well with a senior family member who is living alone. Staff is currently working with two volunteer households to test the technical feasibility of the PAMF proposal, which, if successful, will lead to a pilot scale deployment. • Assessing the Environmental Value and Economic Performance of Residential Solar Water Heating A research team from the Center for Sustainable Energy submitted an application for CEC funding for a proposed research program to understand the role and interaction of various factors influencing the adoption of solar water heating systems in California. Through PET, CPAU submitted a letter of support for their application and this area of research, the outcomes of which would help the City improve its existing solar water heating rebate program as well as reduce natural gas usage and related emissions. • Advanced Distribution Management System Testbed Development A research team from the National Renewable Energy Laboratory submitted an application for funding to the Grid Modernization Laboratory Consortium for a project to establish a national testbed to accelerate industry development and adoption of Advanced Distribution Management System capabilities. Through PET, CPAU submitted a letter of support for their application and this area of research, the outcomes of which would help the City advance its smart meter pilot program and meet its aggressive Sustainability and Climate Action Plan goals. 36 of 59 FY 2016 Demand Side Management Annual Report • Integrated Energy Storage System Staff held a consultation meeting with the CEO and CTO of an early-stage company trying to enter the home energy storage/customer portal space, offering them the CPAU/industry perspective. If successful, this technology would allow will allow the city and its residents to better understand and manage their energy usage, while reducing the burden of distributed energy resources on the grid. 6.3 Pilot Project for Building Energy Management System in Small/Medium Commercial Buildings Staff has been coordinating with the Omaha Public Power District to implement an energy efficiency/demand response pilot program which has been funded by a grant through the American Public Power Association’s (APPA’s) Demonstration of Energy Efficiency Developments (DEED) Program. The purpose of the pilot program is to gain hands-on experience and validate the cost, ease of installation and usability while assessing the energy efficiency savings and demand response functionalities of a building energy management system for small to medium-sized commercial buildings. The building energy management system allows building owners to monitor and control building heating, ventilation and air conditioning (HVAC) equipment through a web-based application. Energy usage data has been logged for two downtown commercial buildings since summer 2014. Pilot results from multiple APPA member utilities participating in this DEED project will be compared to better estimate the energy savings potential from such building energy management systems. 6.4 CustomerConnect Advanced Meter and Time of Use (TOU) Rate Pilots The CustomerConnect Pilot Program is designed to evaluate the meter mesh network and energy and water consumption pattern of residential customers provided by advanced meters and equipment. Customers can also view their energy and water consumption through an online portal. The objectives of the pilot are to: • Gauge residential customer interest in and experience and satisfaction with using advanced meters and associated engagement tools; • Quantify the change in residential customer energy and water use through efficiency and conservation measures as a result of the customer engagement tools; • Evaluate the impact of the programs on utility costs and revenues; • Quantify residential customer bill impacts; and • Gain insight into the costs and benefits of implementing full-scale advanced meter- based residential customer services. The CustomerConnect pilot program will continue through 2017 at which time a full evaluation will be conducted. • Water Leak Detection The pilot advanced metering system has water leakage detection features that are able to detect and identify water leaks from the hourly interval data collected from the advanced water meter modules. Starting February 2015, CPAU began collecting water leak event data, such as leak rate, duration, date of occurrence, and leak location. From February 2015 to June 2016, more than 1,232 CCF (921,536 gallons) of water could be attributed to 37 of 59 FY 2016 Demand Side Management Annual Report leaks and were lost from the 288 pilot participants with advanced water meter modules. 30% of pilot participants had at least one water leak incidents per year (22% had one incident and 8% had two or more incidents). Given such a high percentage of water leak incidents and water lost per capita, the water leak detection in advanced metering system has potential to bring tremendous value to the utility and customers by identifying the leak, alerting the customer and preventing water lost by leaks that are hard to detect. • TOU Pilot Electricity Rate During FY 2016, CPAU successfully rolled out the TOU pilot electricity rate to 103 customers. The rate is designed to encourage residential customers, particularly those with electric vehicles (EVs), to shift electric usage to less expensive night hours. Shifting usage to off-peak periods reduces CPAU’s cost, minimizes the adverse impact on the environment and reduces the impact of EVs on residential distribution transformers and the electric distribution system. Figure 34: TOU Pilot Electricity Rate 38 of 59 FY 2016 Demand Side Management Annual Report 7 FUTURE PLANS In FY 2017, CPAU will engage in several new campaigns and programs and will continue to promote energy efficiency, water conservation and renewable energy generation through a variety of marketing and media channels. 7.1 Georgetown University Energy Prize (GUEP) In April 2014, the City announced its intent to compete for the Georgetown University Energy Prize. The Georgetown University Energy Prize is a two-year energy saving competition for a $5 million prize, in which communities reduce electric and natural gas consumption in the residential, municipal, and schools sectors. Palo Alto was selected as a semifinalist in December 2014. Final judging will be based on reductions in energy use, as well as the innovative, replicable, equitable, and educational qualities of the energy savings programs. Complementary to GUEP, in February 2016 CPAU launched a new residential online energy and water portal with Nexant. Using this portal, customers can log in and view their gas, electric and water consumption, see how they are doing compared to similar homes, and have access to all efficiency programs. Data from the portal is being used as a teaching tool in classrooms, meeting the GUEP criteria of innovation and connection to education. In addition to this new resource for customers, existing CPAU programs such as Multi-Family Plus (MF+, described in greater detail elsewhere in this report) contribute to Palo Alto’s efforts in the GUEP competition. The MF+ program showcases substantial energy savings that can be realized from installation of LED lighting in high-density housing locations, estimated at over 1 million kWh per year. More information about the Georgetown competition can be found at cityofpaloalto.org/Georgetown. 7.2 Multifamily Residence Plus+ Program The Multifamily Residence Plus+ Program was launched on May 1, 2015. The goal of this program is to offer direct-install EE measures to multifamily residences with 4 or more units including hospices, care centers, rehab facilities, and select small and medium commercial properties. This is a customer group which has been under-served and hard to reach for Utility EE programs. The majority of the work in FY2016 was been focused on adding insulation and installing lighting upgrades to many of the older apartment buildings in Palo Alto. As a result, the program installed over 100,000 square feet of attic insulation, approximately 1,000 LED lights and upgraded over 700 fluorescent tube lights. The program targeted lighting upgrades to locations where lights are on 24 hours per day such as parking garages, elevators and hallways. With the advancement of lighting technology, customers are very receptive to upgrading their lights from compact fluorescent bulbs to LEDs. In FY2017 CPAU will be able to offer this upgrade as the price of LED’s has decreased and the quality of the lights has greatly improved. As this was CPAU’s first program focused on multifamily residences staff’s initial forecasts for program activity have proven to be quite conservative. Also, with the increased interest in the program due to LED’s newly being offered as a cost effective measure, CPAU expects participation and energy savings to increase in FY2017. (Staff Report 7192) 39 of 59 FY 2016 Demand Side Management Annual Report 7.3 EV Charger Rebate Program The California Air Resources Board (CARB) developed the Low Carbon Fuel Standard (LCFS) program in compliance with AB 32 (the Global Warming Solutions Act of 2006) to reduce the carbon intensity of transportation fuels used in California by 10% by 2020. Electric utilities that provide electricity to charge electric vehicles (EVs) are eligible to receive LCFS credits. The City began participating in the program in April 2014 and CARB has been allocating LCFS credits to the City since then. The credits accumulated the past two years are currently valued at $600,000. The value of future credits is expected to be $500,000 to $1 million per year through 2020 as the number of EVs increase in Palo Alto. Using these LCFS funds, the plan is to launch a rebate program in FY 2017 for the installation of Electric Vehicle Supply Equipment (EVSE, or chargers). Staff determined that providing EVSE rebates for underserved segments of the market would be valuable which would include multi-family and mixed use buildings, schools and non-profits. The LCFS funds will also be used for EV education and outreach efforts. cityofpaloalto.org/civicax/filebank/documents/52568 Table 9: Residential EV Charging and Electricity Usage (kWh) Calendar Year Palo Alto Total Energy Usage Annual EVs Added Total EVs to Date Annual EV Energy Usage EV% of Total Energy Usage New Annual Energy Usage (w/o EV) 2010 949,786,659 4 4 11,782 0.001% 949,774,877 2011 949,516,612 99 103 318,104 0.034% 949,198,508 2012 935,020,602 123 226 699,622 0.075% 934,320,980 2013 953,234,933 394 620 1,922,002 0.202% 951,312,931 2014 953,385,112 495 1,114 3,456,596 0.363% 949,928,516 2015 932,922,151 510 1,624 5,039,644 0.540% 927,882,507 2016 914,774,023 417 2,041 6,333,360 0.692% 908,440,663 Note: Data calculated from California Air Resources Board Clean Vehicle Rebate Project Rebate Statistics, assuming 100% participation rate and 8.5kWh/vehicle/day. Data last updated 3/1/2017. https://cleanvehiclerebate.org/eng/rebate-statistics 7.4 Online EV/PV Calculator CPAU will launch a new online calculator for residents to evaluate the costs and benefits of installing solar on their home. In addition, residents can evaluate different electric vehicles and see the bill impacts and environmental benefits of charging using Palo Alto’s carbon neutral electricity. The online calculator uses satellite imagery of Palo Alto homes to tailor the solar system design, as well as current utility rates tailored to Palo Alto. 7.5 Water Grants and Water Pilot Programs CPAU received grant funding from the SCVWD to pursue two water conservation pilot programs targeting commercial customers. The programs have been selected through an RFP process with an expected program start date in FY 2017. • Real-Time Water Use Monitoring Pilot for Commercial Customers In 2012, the City implemented a Real-Time Water Use Monitoring pilot with select large commercial customers to actively engage them in water reduction and minimize water 40 of 59 FY 2016 Demand Side Management Annual Report loss. The pilot deploys a simple, relatively low cost technology that enables standard water meters to track consumption similar to a smart water meter. A wireless device attached to the water meter transmits real-time data to a cloud-based software platform. Customers securely log into a web portal to view water usage data on a minute interval basis and can find out about water leakage or other anomalies in water use and address these issues before they become maintenance and billing misfortunes. Over a two-year period, the total water use among pilot participants was reduced by approximately 8%. Through grant funding from SCVWD, the City will launch a larger Real-Time Water Use Monitoring pilot covering 100 city facility meters and 24 business customer sites. Pilot customers will be able to access real-time water consumption data through wireless sensors installed on the water meters. The pilot is expected to launch in FY2017. • Business Water Reports Pilot Program Through grant funding from SCVWD, the City will launch a Business Water Reports pilot to engage small to medium businesses in the hospitality and food service industries to actively manage water use. The key objectives of the Business Water Reports are to communicate water use and potential ways to reduce water consumption, and by doing so, give people the information they need to make wise water use decisions and inspire them to conserve. The pilot is expected to launch in FY2017. 7.6 Update to the Urban Water Management Plan CPAU is required to update its Urban Water Management Plan (UWMP) every five years under the California Urban Water Management Planning Act. The UWMP describes the City’s water system, supply sources, and demand-side (water efficiency) measures. The UMWP must include a plan for compliance with the Senate Bill x7-7 (2009) that mandates a statewide per capita water use reduction of 20% by the year 2020. The 2015 UWMP was approved by City Council in May 2016. The 2015 UWMP contains the following highlights: • Public involvement and coordination with other agencies; • Description of current and potential water sources, including the potential for expanded use of recycled water in the City; • The City's water demand projections; • Plans to implement water efficiency (conservation) programs; • Discussion of (non-drought) emergency plans; • The sufficiency of supplies from San Francisco, particularly in droughts; and • Drought response plans for droughts of varying severity. 7.7 Water Conservation Campaigns A great deal of outreach over the last few years has focused on water use efficiency, particularly in areas where customer water use tends to be the highest such as in landscape irrigation. Marketing materials promoting conservation will continue with a slight change in tone from “We’re All in This Together” to “A Way of Life”. 41 of 59 FY 2016 Demand Side Management Annual Report 7.8 Capturing Additional Energy Savings through the new Palo Alto Green Building Ordinance In April 2015, City Council approved revisions to the City’s Green Building Ordinance (GBO), which includes the Local Energy Efficiency Reach Code requiring new construction projects to exceed California’s building energy efficiency standards (“2013 Title 24 Standards”) by 15%, i.e. a building’s energy consumption must be 15% more efficient than current building code. The Energy Efficiency Reach Code took effect in September 2015. The new 2016 Title 24 Standards went into effect in January 2017 and the GBO mandates new buildings be 10% more efficient than the new stricter code. CPAU will coordinate with Development Services to report the energy savings attributed to the Green Building Ordinance. CPAU is currently investigating different ways to educate, assist and encourage residents and non-residents to adopt green building principles and energy efficient systems when planning remodeling or new construction projects. 7.9 Local Solar Plan In April 2014, Council approved the Local Solar Plan with a goal to increase the installation of local solar PV systems to provide 4 percent of the City’s total energy needs by 2023. The plan identifies a set of strategies and initiatives to promote solar in a cost-effective and sustainable manner by accelerating solar adoption in Palo Alto. Specifically, the plan includes the development of: (a) a Community Solar Share program that targets customers who do not have good solar access or cannot support solar at their own premise due to size or home/business ownership status, (b) a Community Solar Donation program that targets customers who want to contribute toward solar for the benefit of a community-based organization, such as local schools, and (c) a Solar Group Discount program designed to drive down the cost of local solar ownership by leveraging the purchasing power of the community. Staff is working to develop the new programs in the Local Solar Plan, but the timelines for implementation depend upon negotiations with vendors who will administer the programs. Supporting strategies include developing community education and demonstration projects, reducing internal system and institutional barriers to lower the “soft” costs associated with the adoption of PV systems, and supporting innovative solar technologies through CPAU’s Program for Emerging Technologies. 7.10 Smart Grid Pilots and Next Steps Smart grid related pilot programs will continue through FY 2017. Staff plans to develop recommendations on next steps on smart grid implementation by the end of 2016. One such smart grid pilot is Conservation Voltage Regulation (CVR). Based on the voltage sensing technology of the advanced electric meters in the 375 homes participating in the CustomerConnect pilot, staff is exploring the feasibility of how to optimally operate the distribution feeders by lowering service voltage to save energy. A system is being evaluated to monitor the voltages at the end of electrical feeder lines until the end of 2016, which will help develop implementation and operating strategies to harness the conservation potential of CVR. 42 of 59 FY 2016 Demand Side Management Annual Report APPENDIX A: PROGRAM DESCRIPTION The programs offered by CPAU are designed to assist all customer groups to achieve savings on electricity, natural gas and water in a cost-effective manner. Programs are designed to achieve results through a wide variety of both common and more innovative, harder to reach technologies. RESIDENTIAL CUSTOMERS • Home Efficiency Genie The Home Efficiency Genie has become our flagship residential program. Launched in June 2015, our residents can call the ‘Genie’ to get free utility bill reviews and phone consultations. For a fee, residents also have the option to receive an in-depth home assessment which includes air leakage testing, duct inspections, insulation analysis, energy modeling and a one on one review of assessment reports with an energy expert. This package is also followed up with guidance and support throughout home improvement projects. This program has a high educational component for Palo Alto residents. The Genie also tables at various events throughout the year. During FY 2016, the Home Efficiency Genie program recorded a net annual electric savings of 3,513 kWh and 2,484 therms. cityofpaloalto.org/efficiencygenie • Smart Energy Program Smart Energy is a comprehensive energy efficiency incentive program for residential customers. The City gives rebates to residents who install energy efficient measures and equipment in their homes. Among these are attic insulation, heat pump water heaters, clothes washers, pool pumps, smart power strips and whole house fans. Due to federal minimum manufacturing standards for appliance efficiency, the number of appliances meeting rebate qualifying standards dropped significantly during FY2016. Compared to FY 2015, CPAU paid out 50.5% less in rebates under the Smart Energy Program. CPAU projects that this downward trend will continue. In FY 2016, Smart Energy achieved net annual electric savings of 48,564 kWh and 4,046 therms. cityofpaloalto.org/SmartEnergy • Educational Programs and Workshops A variety of educational programs and workshops are held throughout the year. Typically, residential workshops on water and energy programs occur in the spring near Earth Day and in the “Summer Workshop Series.” Due to the drought, many of FY 2016’s workshops focused on water efficiency such as Maintaining Landscape in a Drought, Designing and Installing a Native Garden, and Greywater Systems. These workshops drew high attendance but after four years of drought, interest in water related topics began to wane. In response, CPAU also added workshops focusing on Solar and improving home comfort and efficiency. CPAU was also invited to table at various events throughout the year to educate residents about the various programs we offer. Customers also receive timely E-newsletters on a variety of efficiency matters. cityofpaloalto.org/workshops 43 of 59 FY 2016 Demand Side Management Annual Report • Home Energy Reports CPAU stopped providing residents with individualized reports comparing their home energy use with neighbors in similarly sized homes in FY 2016. However, studies have shown that savings persist after the program has ended, but decrease at a rate of 20% per year. In FY 2016, the Home Energy Report recorded first year persistence annual electric savings of 1,283,418 kWh and 116,925 therms. • Home Water Report Launched in the November 2013, Palo Alto stopped providing residents with individualized reports comparing their home water use with neighbors in similarly sized homes in FY 2016. However, studies have shown that savings persist after the program has ended, but decrease at a rate of 20% per year. In FY 2016, the Home Water Report recorded first year persistence annual water savings of 29,830 ccf. • Utility Portal A new portal was launched February 2016 where residents can have access to all water, gas and electric usage data, programs and reports in one location. The portal also offers tips and suggestions on reducing electric, natural gas and water usage. After an initial marketing campaign, efforts were pulled back due to numerous challenges in relation to CPAU’s data storage system. The Portal is being re-evaluated and will be relaunched along with the My Utilities Account MUA 2.0. • Refrigerator Recycling Program Palo Alto provided a $50 rebate to residents who recycled old, operational refrigerators with JACO Environmental which offered free pick-up and recycling services. In late November 2015, JACO Environmental went into receivership and shut down its operations. Utilities staff is looking for a new program vendor. • Residential Energy Assistance Program (REAP) REAP provides weatherization and equipment replacement services to low-income residents and those with certain medical conditions at no-cost. This program has an equal focus on comfort as well as efficiency. The program provides LED lighting, heating system upgrades as well as insulation for walls and roofs and weather-stripping for doors and windows. In FY 2016, REAP recorded net annual electric savings of 22,907 kWh and 4,451 therms. cityofpaloalto.org/LowIncome • Water Efficiency Programs Since 2002, the City has partnered with SCVWD to promote and cost-share in a wide range of water conservation programs to encourage residents and businesses to reduce water usage. These programs include free indoor and outdoor water audits, as well as rebates for a wide range of water conservation measures (including toilets, urinals, clothes washers, laundry to landscape graywater systems, landscape conversions, irrigation hardware upgrades, weather 44 of 59 FY 2016 Demand Side Management Annual Report based irrigation controllers and commercial ice machines.) CPAU also offers free workshops on water efficient landscaping and indoor water use efficiency throughout the year. In the spring and summer of 2016, free drought related workshops drew 185 participants. Staff frequently presented to schools, neighborhood and community groups about Palo Alto’s water resources and best practices for water efficiency. During FY2016 rebates for High Efficiency Toilets were terminated. cityofpaloalto.org/Water o Water Wise House Call Through SCVWD, the City has been offering this free water audit to residential customers in both single-family and multi-family dwellings. The survey includes a review of customer water use history, water meter check for leak detection assistance, and thorough evaluation of indoor and outdoor water use. A technician provides each customer with free low-flow showerheads, faucet aerators, toilet dye tablets, and/or toilet flappers when needed. The landscape survey includes an evaluation of the entire irrigation system, catch-can test for distribution uniformity, and site-specific recommendations including changes to the irrigation schedule. This program has gone through a makeover and SCVWD is now offering a two-part program including the Water Wise Outdoor Survey and the Do-it-Yourself Water Wise Indoor Survey. o Landscape Rebate Program (LRP) Provides rebates for various irrigation hardware upgrades, including rain sensors, high efficiency nozzles, dedicated landscape meters, and weather-based irrigation controller, as well as landscape conversion rebates that encourage residential and commercial customers to replace high water using landscape with low water using landscape. Residents were eligible to receive rebates of $3/square foot ($2.00 from SCVWD and $1.00 from CPAU) during FY 2016. A new agreement with the SCVWD will be signed in early 2017 which continues the City’s partnership in the LRP. Residents will be eligible to receive rebates of $2/square foot ($1.00 from SCVWD and $1.00 from CPAU). BUSINESS CUSTOMERS cityofpaloalto.org/CommercialPrograms • Commercial Advantage Program Business customers are offered rebates for investments in a catalog of energy efficiency products including lighting, motors, HVAC and custom projects that target peak demand and energy reductions. In FY 2016, CAP recorded a net annual electric savings of 334,645 kWh and 4,430 therms. cityofpaloalto.org/CommercialAdvantage • Commercial and Industrial Energy Efficiency Program (CIEEP) This is the first year that CPAU expanded this program to offer Key Accounts the option of picking one of three engineering consulting firms to assist in helping them evaluate and implement energy efficiency projects. Designed for the large commercial customer, CIEEP offered highly effective building commissioning services using third-party contractors Enovity, Ecology Action and BASE. This assistance included reviewing lighting and heating/cooling systems and their operating specifications. Customers then obtained rebates for replacing chillers, building control systems, linear fluorescent lighting, occupancy sensors, boilers and insulation. In FY 2016, CIEEP recorded net annual electric savings of 3,334,244 kWh and 132,172 therms. 45 of 59 FY 2016 Demand Side Management Annual Report • Empower This is an ongoing program focusing on energy efficiency savings from mostly lighting retrofits in the small/medium commercial sector. This program is provided by the third-party administrator Ecology Action which offers a turnkey solution for the implementation of energy efficient measures. Small/medium business customers are able to request onsite audits and efficiency rebates on a variety of measures including; interior and exterior lighting, lighting controls, vent hood controls, garage CO2 fan motor controls, and commercial kitchen refrigeration upgrades, as well as customized projects. In FY 2016, Empower recorded net annual electric savings of 372,598 kWh. • MultiFamily Residence Plus+ Program This first ever CPAU program focusing on Multifamily buildings provides free, direct installation of EE measures to multifamily residences with 4 or more units including hospices, care centers, rehab facilities, and select small and medium commercial properties. In its first year the program focused on energy efficient lighting and insulation upgrades. In summer 2016, the program was revamped to include more LED lighting upgrades as the price of LEDs has decreased and the quality of the lights has greatly improved. This drew excitement from many property managers and building owners who were initially not interested in participating in the program. As a result CPAU will continue to reevaluate the program to accommodate this underserved market. Staff expects energy savings to greatly increase for this program in FY2017, with a focus on upgrading below market rate apartment complexes. In FY 2016, the MultiFamily+ program recorded net annual electric savings of 105,514 kWh and 21,810 therms. • Business New Construction Program This program ended in FY2016 due to the new stricter Title 24 requirements and the Palo Alto Green Building Ordinance (10% more efficient than Title 24) which made it difficult to achieve deeper savings than the building code required. Although the program is closed, some customers have projects that await completion. During FY 2016, the program recorded a net annual electric savings of 24,273 kWh. • Commercial and Industrial Water Efficiency Program CPAU partners with the SCVWD to provide non-residential customers with free landscape irrigation audits, direct installation of high-efficiency toilets and urinals. Rebates are available for facility process improvements, landscape conversions, irrigation hardware upgrades and weather-based irrigation controllers. CPAU staff also provides free indoor water use surveys and efficiency opportunity evaluation. cityofpaloalto.org/water • Landscape Survey and Water Budget Program Through SCVWD, the City provides landscape irrigation surveys, water budgets and customized consumption reports for customers with large landscape sites. The service is provided by Waterfluence. The water budget for each landscape site is derived based on the amount of irrigated area, type of plants, type of irrigation system and real-time weather monitoring. 46 of 59 FY 2016 Demand Side Management Annual Report Monthly reports documenting a site’s irrigation performance are distributed to site managers, landscapers, HOA board members and other relevant parties, as approved by utility account holders. Through a web portal, customers can access site-specific recommendations, verify water budget assumptions and request a free landscape field survey from an irrigation expert. This program has been in place since 2012 and to date, there are 118 large landscape sites covered under this program. • PaloAltoGreen This highly successful program enabled residents and businesses that were willing to pay a small premium for 100% renewable energy. In June 2014, Council terminated PaloAltoGreen for residential customers since the City’s electric supplies are 100% carbon neutral. Commercial customers can still participate in this program by enrolling in the PaloAltoGreen 100% option or by purchasing blocks in 1,000 kWh increments. cityofpaloalto.org/pagbiz • Palo Alto Clean Local Energy Accessible Now (CLEAN) Program Through the CLEAN (Clean Local Energy Accessible Now) program CPAU offers a feed-in tariff, which is a program where developers of renewable energy generation projects in Palo Alto can receive a long-term purchase agreement at a fixed price for the output of their projects. All of the generated electricity is procured for use fulfilling Palo Alto’s Renewable Portfolio Standard (RPS) requirement. For fiscal year 2017, the prices are 16.5 ¢/kWh fixed for 20 or 25 years for solar renewable energy resources, up to a capacity limit of 3 MW (and 8.9 ¢/kWh for a 20-year contract term, or 9.1 ¢/kWh for a 25-year contract term beyond that limit), and 8.4 ¢/kWh for a 20-year contract term and 8.5 ¢/kWh for a 25-year contract term for non-solar eligible renewable energy resources. cityofpaloalto.org/PAClean ALL CUSTOMERS • PV Partners CPAU has offered incentives for local solar photovoltaic (PV) installations since 1999, and increased the PV rebate budget in 2007 as mandated by CA Senate Bill SB1. Residential rebates were fully reserved in August 2014, and funds for non-residential PV systems were reserved in April, 2016. This program is for systems interconnected behind the customer’s electric meter, and they receive net metering billing as required by SB1. cityofpaloalto.org/PVPartners • Solar Water Heating CPAU began to offer rebates to residential and commercial customers that install solar water heating (SWH) systems in 2008. The SWH rebate program was mandated by CA AB 1470 and is administered by the Center for Sustainable Energy, which also administers SWH rebate programs in the San Diego area. Incentives are limited to solar water heating for domestic use and solar water heating systems for pools, spas, or space heat are not eligible. cityofpaloalto.org/SWH • PaloAltoGreen Gas In April 2014, City Council approved the establishment of the voluntary PaloAltoGreen Gas (PAGG) program. PAGG provides the opportunity for residential and commercial customers to 47 of 59 FY 2016 Demand Side Management Annual Report reduce or eliminate the impact of GHG emissions associated with their gas usage, through the purchase of certified environmental offsets. PAGG, the first Green-e Climate certified gas offset program offered by a municipal utility and the first to be offered to individual community members, was launched in January 2015. However, PAGG will be terminated concurrent with the implementation of the new Carbon Neutral Gas Plan. (Staff Report 7533) Table A.1: FY 2016 -2017 UPS Programs At A Glance 48 of 59 FY 2016 Demand Side Management Annual Report APPENDIX B: FY 2016 ACHIEVEMENTS BY DSM PROGRAM Table B.1: FY 2016 Achievements by Efficiency Program No. of Electric savings (gross)* Gas savings Water savings Program Applications kWh/yr % Therms/yr % CCF/yr % RES- REAP (low income) 59 28,633 0.4% 4,451 1.5% - - RES-Smart Energy 212 81,540 1.2% 4,046 1.4% RES- SCVWD Water program 109 18,312 0.3% 2,603 0.9% 9,406 13% RES- Home Energy Report - 1,283,418 19.1% 116,925 40.4% - - RES- Home Water Report - - - - - 29,830 40% RES- Home Efficiency Genie 105 8,400 0.1% 2,484 0.9% - - COM- Business New 1 28,556 0.4% - - - - COM- Commercial Advantage 2 418,306 6.2% 4,430 1.5% - - COM- Ecology Action Large 6 2,198,872 32.7% 14,725 5.1% - - COM- Enovity Large Business 10 1,968,933 29.3% 117,447 40.6% - - COM- S&M Commercial 14 465,747 6.9% - - - - COM- MultiFamily+ 23 176,847 2.6% 21,810 7.5% - - COM- SCVWD Water program - - - 365 0.1% 35,367 47% GEN- T&D Upgrades 1 70,460 1.0% - - - Efficiency Total 6,748,0244 100% 289,2865 100% 74,603 100% * Gross saving are the total savings received from implementing a program or installing a measure. Net savings removes “free riders” from the savings total. Free riders are those who would have undertaken an activity, regardless of whether there was an energy efficiency program promoting that activity or not. Both gross and net savings are used when reporting program results. Table B.2: FY 2016 Achievements by CPAU’s Solar Programs Program Installations kW kWh/yr % Therms/yr % PV Installations- Residential 131 633 1,012,800 58% N/A N/A PV Installations - Commercial 5 465 744,000 42% N/A N/A Solar Water Heating - Single Family Residential 1 - - - 156 100% Solar Water Heating - Multi-Family Residential Low-Income - - - - - 0% Solar Water Heating - Commercial - - - - - 0% Solar Programs Total 137 1,098 1,756,800 100% 156 100% 4 This includes savings from Transmission & Distribution (T&D). 5 This is the total gross gas savings not including the savings from the Solar Water Heating Program. This number combined with the natural gas savings from the Solar Water Heating Program is equal to the 307,754 Therms reported as the total gross gas savings in FY 2016. 49 of 59 FY 2016 Demand Side Management Annual Report APPENDIX C: HISTORICAL PUBLIC BENEFIT PROGRAM EXPENDITURES The chart below shows expenditures by type of Public Benefit program (efficiency, low-income research, renewable, etc.) from FY 2009 through FY 2016. The PV Partners rebates ended in FY 2015, therefore there were no renewable energy rebates during this time period. Figure C.1 Public Benefit Expenditures for Electricity, Gas, and Water by Year and Function 0 1 2 3 4 5 6 7 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 R&D Efficiency Renewable Energy Low Income Admin $ Millions 50 of 59 FY 2016 Demand Side Management Annual Report APPENDIX D: FY 2016 SMART ENERGY RESIDENTIAL PROGRAM RESULTS Measures Number of Measure Total Rebate kWh/yr Saved (gross)* Therms/yr Saved Attic Insulation R-38 19 $4,356 9,526 3,059 Clothes Washer – Energy Star Most Efficient 110 $13,750 19,910 737 Electric Heat Pump Water Heater 1 $300 1,504 0 Freezer Recycling 2 $100 1,286 0 Gas Tankless Water Heater (0.90 EF or greater) 1 $200 0 60 Refrigerator 1 $50 195 0 Refrigerator Recycling 71 $3,308 43,736 0 Variable Speed Pool Pump 3 $600 5,133 0 Wall Insulation 1 $200 90 144 Water Heater-Gas Storage CEE Tier 1 2 $160 0 46 Whole House Fan 1 $50 161 0 Total 212 $23,075 81,540 4,046 * Gross saving are the total savings received from implementing a program or installing a measure. Net savings removes “free riders” from the savings total. Free riders are those who would have undertaken an activity, regardless of whether there was an energy efficiency program promoting that activity or not. Both gross and net savings are used when reporting program results. 51 of 59 FY 2016 Demand Side Management Annual Report APPENDIX E: FY 2016 LOW INCOME RESIDENTIAL ASSISTANCE PROGRAM (REAP) RESULTS Measures # of Measures Installed Dollars Spent kWh/yr Saved (gross)* Therms/yr Saved 7W LED replacing 60W incandescent1 174 $2,436 2,088 0 9W LED replacing 40W incandescent2 18 $297 324 0 Attic Access Weather-stripping 7 lin. ft. $120 14 7 Attic Insulation 14,260 sq. ft. $18,485 7,372 2,367 Caulking MFR Windows etc. 3 lin. ft. $159 6 3 Caulking SFR Windows etc. 17 lin. ft. $1,009 32 17 CO Detector 1 $39 0 0 Door Weather-stripping 67 201 268 Duct Test & Seal 31 $13,950 3,875 744 Education 47 $3,525 0 0 Faucet Aerator 128 $319 0 512 Furnace Filter 7 $77 7 0 Furnace Replacement 3 $16,990 0 132 Furnace Replacement Permits 2 $232 0 0 Hourly Rate Additional Work3 28 $1,892 0 0 LED Labor Only4 160 $720 4,480 0 LED R-305 314 $8,848 1,570 0 Low Flow Showerhead 36 $1,404 0 274 Natural Gas Appliance Testing6 27 0 0 Outlet Gaskets 279 $552 28 28 Power Strip 2 $74 0 0 Programmable Thermostat 1 $73 0 76 Refrigerator Replacement 51 $40,611 9,945 0 Removal of Asbestos 2 $2,060 0 0 Smoke Alarm 1 $39 0 0 T8 De-lamp Conversion7 2 $167 1,104 0 Water Heater Replacement 1 $1,440 0 23 New Ducts Installed 1 $1,700 73 20 Total N/A $125,558 31,119 4,471 * Gross saving are the total savings received from implementing a program or installing a measure. Net savings removes “free riders” from the savings total. Free riders are those who would have undertaken an activity, regardless of whether there was an energy efficiency program promoting that activity or not. Both gross and net savings are used when reporting program results. 1 7W LED replacing 40W Incandescent: Replace 40W incandescent bulb turned on 5-10 hours a day with a 7W LED producing 12 kwh annual savings/bulb 2 9W LED replacing 60W Incandescent: Replace 60W incandescent turned on 5-10 hours a day with a 9W LED producing 18 kwh annual savings/bulb 3 Hourly Rate Additional Work: Additional hourly fees of $65/hour (patching holes and walls). 4 LED Labor Only: Take out incandescent lightbulbs and replace with LED bulbs producing 28kwh in annual savings/bulb. 5 LED R-30: Take out incandescent R-30 flood light and replace with R-30 LED bulb producing 5kwh savings per light bulb. 6 Natural Gas Appliance (NGAT) Testing: Gas and Carbon Monoxide test with no associated savings. 7 T8 De-lamp Conversion: Remove T8 fixture with 4, 4 foot CFL lights and replace with a new fixture reducing the number of lights from 4 to 2 producing 552kwh annual savings/conversion 52 of 59 FY 2016 Demand Side Management Annual Report APPENDIX F: SB 1037 ELECTRIC DSM REPORT TO CEC The SB 1037 report, published annually in the California Municipal Utilities Association (CMUA) report to the California Energy Commission (CEC) is required by state law (SB 1037) and shows the results of CPAU’s efficiency programs in reducing electric consumption. This report does not include natural gas or water programs. Efficiency programs are the highest priority resource used by electric utilities. The programs are also deemed cost-effective if they achieve a Total Resource Cost (TRC)6 score of at least 1.0. Table F.1 shows an overall TRC of 0.78. Note that these savings do not capture the gas and water savings that the EE programs also produced. This is the first time that the TRC is below 1.0 since the start of the energy efficiency programs in 2008. This year’s TRC ratio is a result of several factors (1) the continued trend for easy target savings having been exhausted (so-called low hanging fruit) such as lighting retrofits from incandescents to CFL’s (2) the assumption of low persistence savings for retro- commissioning projects (only last for 1 year), and (3) FY2016 included some start-up costs for new efficiency programs such as the multi-vendor CIEEP, Home Efficiency Genie, Multifamily Plus, and Small and Medium Commercial programs. Staff is currently evaluating ways to increase the TRC of the City’s efficiency program portfolio. The full report can be found here: http://www.ncpa.com/policy/reports/energy-efficiency/ 6 The primary aim of cost-effective energy efficiency programs is to reduce utility cost and hence customer bills while improving the environment. Cost-effectiveness can be measured in many ways. The Total Resource Cost (TRC) reflects the financial perspective of the Palo Alto community as a whole. If the combination of the utility and all customers together save money, it is cost-effective from a “Total Resource Cost (TRC)” or societal viewpoint. 53 of 59 FY 2016 Demand Side Management Annual Report Table F.1: Electric Energy Efficiency Program Sector Results PAC Test: This refers to the Program Administrator Cost Test or the Utility Test. A measure that lowers the overall cost for the utility is cost-effective for the utility (also referred to as “Program Administrator”). For CPAU, this could also be considered the “all ratepayers test” or “average utility bill test,” as it reflects the change in the utility bill to the average customer. To be cost-effective from the utility perspective, the cost of the program (administrative and rebate costs) must be less than the savings from not purchasing the energy supply. Program Sector (Used in CEC Report)Category Units Installed Gross Coincident Peak Savings (kW) Gross Annual Energy Savings (kWh) Gross Lifecycle Energy Savings (kWh) Net Coincident Peak Savings (kW) Net Annual Energy Savings (kWh) Net Lifecycle Energy Savings (kWh) Net Lifecycle Gas Savings (MMBtu) Net Lifecycle GHG Reductions (Tons) Utility Incentives Cost ($) Utility Mktg, EM&V, and Admin Cost ($) Total Utility Cost ($) Utility ($/kWh) Appliances Res Clothes Washers 110 19,910 278,740 6,172 86,409 $10,035 $1,046 $11,082 $0.16 HVAC Res Cooling 1 161 3,220 45 902 $50 $25 $75 $0.12 Appliances Res Dishwashers Consumer Electronics Res Electronics HVAC Res Heating 40 5,584 55,777 3,685 36,801 $300 $7,805 $8,105 $0.26 Lighting Res Lighting 2,611 150 132,123 1,441,021 119 97,773 1,033,941 $127,771 $127,771 $0.15 Pool Pump Res Pool Pump 3 5,133 51,330 3,080 30,798 $600 $382 $982 $0.04 Refrigeration Res Refrigeration 125 55,162 276,279 44,110 220,750 $3,458 $11,494 $14,952 $0.08 HVAC Res Shell 14,485 77,749 1,552,585 25,735 512,840 $1,145 $81,664 $82,809 $0.23 Water Heating Res Water Heating Comprehensive Res Comprehensive 57,221 1,283,418 1,283,418 1,283,418 1,283,418 $18,260 $18,260 $0.01 Process Non-Res Cooking HVAC Non-Res Cooling 31 60 3,154,829 13,668,459 48 2,524,232 10,940,299 $310,870 $524,206 $835,076 $0.10 HVAC Non-Res Heating 33 18,348 220,176 14,678 176,141 $1,902 $4,406 $6,308 $0.04 Lighting Non-Res Lighting 27 443 1,852,256 26,279,808 354 1,482,864 21,039,732 $172,512 $506,513 $679,025 $0.04 Process Non-Res Motors 45 5 47,880 718,200 4 38,304 574,560 $10,019 $14,115 $24,134 $0.05 Process Non-Res Pumps Refrigeration Non-Res Refrigeration 3 7,100 85,200 5,680 68,160 $710 $2,785 $3,495 $0.06 HVAC Non-Res Shell Process Non-Res Process Comprehensive Non-Res Comprehensive Other Other SubTotal 74,735 658 6,659,654 45,914,213 526 5,529,777 36,004,750 $511,602 $1,300,472 $1,812,074 $0.06 T&D T&D 1 8 70,460 3,523,000 8 70,460 3,523,000 $46,708 $46,708 Total 74,736 666 6,730,114 49,437,213 534 5,600,237 39,527,750 $511,602 $1,347,180 $1,858,782 EE Program Portfolio TRC Test 0.78 PAC Test 1.34 Excluding T&D Resource Savings SummaryPalo Alto Cost Summary 54 of 59 FY 2016 Demand Side Management Annual Report APPENDIX G: PHOTOS FROM CUSTOMER OUTREACH EVENTS 55 of 59 FY 2016 Demand Side Management Annual Report 56 of 59 FY 2016 Demand Side Management Annual Report 57 of 59 FY 2016 Demand Side Management Annual Report APPENDIX H: CITY POLICIES/PLANS AND STATE MANDATES IMPACTING DSM PROGRAM GOALS AND IMPLEMENTATION CITY POLICIES/PLANS Title Description Resolution No. 9241 LEAP, the Long-term Electric Acquisition Plan (April 2012) Resolution No. 9322 Carbon Neutral Plan for Electric Supply (March 2013) Resolution No. 9402 Local Solar Plan (April 2014) Staff Report 3706 Program for Emerging Technology (April 2013) Staff Report 2552 GULP, the Gas Utility Long-term Plan (April 2012) Staff Report 6851 2015 Urban Water Management Plan (May 2016) Staff Report 7304 Sustainability and Climate Action Plan (November 2016) Staff Report 7718 Update of Ten-Year Energy Efficiency Goals for 2018 to 2027 (March 2017) FULL LIST OF STAFF REPORTS • CY 2015: cityofpaloalto.org/gov/agendas/city_managers_reports/2015.asp • CY 2016: cityofpaloalto.org/gov/agendas/city_managers_reports/2016.asp STATE MANDATES No bills establishing new DSM/Energy Efficiency mandates became law in FY2016. Existing mandates include: AB 802 (2015) Requires utilities to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12 month period and, upon the request and authorization of the owner (or owner's agent), provide aggregated energy usage data to the owner in the ENERGY STAR Portfolio Manager. AB 1164 (2015) Prohibits cities and counties from enacting or enforcing any ordinance or regulation prohibiting the installation of drought tolerant landscaping, synthetic grass, or artificial turf on residential property. AB 1236 (2015) Obliges cities and counties to adopt an ordinance, with certain specific elements, creating an expedited permitting process for electric vehicle charging stations. For a city the size of Palo Alto, the ordinance must be passed by September 30, 2017 SB 350 (2015) The Clean Energy and Pollution Reduction Act of 2015 sets targets for utilities of 50% renewable electricity retail sales and double the energy efficiency savings in electricity and natural gas, both by 2030. The law grants compliance flexibility for POUs that achieve 50% or more of retail sales from certain large hydroelectric power. 58 of 59 FY 2016 Demand Side Management Annual Report AB 2188 (2014) Requires a city and/or county to adopt an ordinance creating an expedited, streamlined permitting process for small residential rooftop solar energy systems. Executive Order Due to continued water shortages, on January 17, 2014, the Governor proclaimed a State of Emergency and directed state officials to take all necessary actions to make water immediately available. Part of the proclamation included a 20 percent water reduction goal. On April 1, 2015, the Governor issued an Executive Order (B- 36-15) mandating the State Water Resource Control Board impose restrictions leading to a 25 percent reduction in potable water use through February 28, 2016. SB 1420 (2014) Added a requirement to report on distribution system water loss to the UWMP. SB 73 (2013) The California Clean Energy Jobs Act, an initiative approved by the voters as Proposition 39 at the November 2012 statewide general election, establishes a Job Creation Fund with an annual budget of $550M to create clean energy jobs, including funding energy efficiency projects and renewable energy installations in public schools, universities, and other public facilities. The Job Creation Fund will be funded for four years, beginning in the 2013-2014 fiscal year. AB 2514 (2010) Mandates a local publicly owned electric utility to determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems and to adopt an energy storage system procurement target, if appropriate, to be achieved by the utility by December 31, 2016, and a second target to be achieved by December 31, 2021. SBx7-7 (2009) The Water Conservation Bill of 2009 requires water suppliers to reduce the statewide average per capita daily water consumption by 20% by December 31, 2020. To monitor the progress toward achieving the 20% by 2020 target, the bill also requires urban retail water providers to reduce per capita water consumption 10% by the year 2015. AB 1103 (2007) Requires electric and gas utilities maintain records of the energy consumption data of all nonresidential buildings to which they provide service and that by January 1, 2009, upon authorization of a nonresidential building owner or operator, an electric or gas utility shall upload all of the energy consumption data for the specified building to the EPA Energy Star Portfolio Manager in a manner that preserves the confidentiality of the customer. This statute further requires a nonresidential building owner or operator disclose Energy Star Portfolio Manager benchmarking data and ratings, for the most recent 12-month period, to a prospective buyer, lessee, or lender. Enforcement of the latter requirement began on January 1, 2014. 59 of 59 FY 2016 Demand Side Management Annual Report AB 1470 (2007) Solar Water Heating and Efficiency Act of 2007. Requires the governing body of each publicly owned utility providing gas service to retail end-use gas customers, to adopt, implement, and finance a solar water heating system incentive program. SB 1 (2006) The California State Legislature enacted SB 1 to encourage the installation of 3,000 megawatts (MW) of photovoltaic (PV) solar energy by the year 2017. SB 1 requires all publicly owned utilities to adopt, finance and implement a solar initiative program for the purpose of investing in and encourage the increased installation of residential and commercial solar energy systems. CPAU’s share of the state goal is 6.5 MW. In 2007, CPAU increased the PV Partners program funding to meet SB1 requirements. CPAU has fully reserved all rebate funds as of April, 2016. AB 2021 (2006) Requires the CEC on or before November 1, 2007, and every 3 years thereafter, in consultation with the commission and local publicly owned electric utilities, to develop a statewide estimate of all potentially achievable cost-effective electricity and natural gas efficiency savings and establish statewide annual targets for energy efficiency savings and demand reduction over 10 years. AB 1881 (2006) Requires cities and counties to implement a Water Efficient Landscape Ordinance which is “at least as effective as” the Department of Water Resources (DWR) Model Ordinance in reducing landscape water use. Requirements include enforcing water budgets, planting and irrigation system specifications to meet efficiency criteria. SB 1037 (2005) Requires each local publicly owned electric utility, in procuring energy, to first acquire all available energy efficiency and demand reduction resources that are cost-effective, reliable, and feasible. Also requires each local publicly owned electric utility to report annually to its customers and to the (CEC) its investment on energy efficiency and demand reduction programs. AB 1890 (1996) Requires electric utilities to fund low-income ratepayer assistance programs, public purpose programs for public goods research, development and demonstration, demand- side management and renewable electric generation technologies AB 797 (1983) The Urban Water Management Planning Act (AB 797) requires all California urban water retailers supplying more than 3,000 acre feet per year or providing water to more than 3,000 customers to develop an UWMP. The plan is required to be updated every five years and submitted to the Department of Water Resources before December 31 on years ending in 5 and 0.