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2017-08-28 City Council Agenda Packet
City Council 1 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Monday, August 28, 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 Study Session 5:00-6:00 PM 1.Joint Meeting of the City Council and the Historic Resources Board 6:00-7:00 PM 2.3709 El Camino Real [17PLN-00189]: Request by Palo Alto Housing for a Prescreening to Construct a Four-story Building With 61 Affordable Housing Units Including a Building Manager Unit; 2,412 Square Feet of Commercial Space; and Additional Amenity Space for use by the Tenants. The Proposal Would Require at Least one of the Following: Comprehensive Plan Amendment, Rezoning, and/or Zoning Text Amendment. Environmental Assessment: Prescreening is not a Project. The Formal Application Will be Subject to California Environmental Quality Act (CEQA) Review. Zoning District: CN (Neighborhood Commercial) REVISED 2 August 28, 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. Agenda Changes, Additions and Deletions City Manager Comments 7:00-7:10 PM Oral Communications 7:10-7:25 PM Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 7:25-7:30 PM 3.Approval of Action Minutes for the August 14, 2017 Council Meeting Consent Calendar 7:30-7:35 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 4.Adoption of a Resolution Authorizing the Submittal of a Financial Assistance Application to the United States Bureau of Reclamation for the WaterSMART: Title XVI Water Recycling Projects Under the WIIN Act and to Enter Into a Financing Agreement Under the Program 5.Approval of a Multi-year Contract With Abbe and Associates in the Amount of $499,016 for Technical Support for the Zero Waste Program That Includes; a Waste Characterization Study, an Update to the Zero Waste Operational Plan, and Refuse Management Contracting Assistance 6.Acceptance of the Hewlett Foundation Grant, National Endowment for the Arts Grant, and Code:ART Private Contributions; and Approve a Budget Amendment in the General Fund and Public Art Fund 7.Adoption of Three Resolutions Approving the Submission and Management of Three Grants to the California Natural Resources Agency for Junior Museum and Zoo Exhibits, Baylands Boardwalk and Trail Signage and Interpretation 8.Adoption of a Resolution Amending Utility Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service) to Reflect the Carbon Offset Charge, as Adopted by City Council in the Carbon Neutral Gas Plan, and Terminate PaloAltoGreen Gas Schedules G-1-G, G-2-G, G-3-G, and G-10-G 9.Approval of an Agreement With the County of Santa Clara Providing $3.2 Million in Transportation Impact Fees for the Design, Review, and Q and A Q and A 3 August 28, 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. Construction of Improvements at the Intersections of Page Mill Road/ Hanover Street and Page Mill Road/El Camino Real; and Approval of an Associated Budget Amendment in the Stanford Research Park/ El Camino CS Zone Traffic Impact Fund 10.Approval of Amendment Number 3 to Contract Number C15156501 With SP Plus in the Amount of $16,335 for Additional Services for Parking Permits and On-site Customer Service; Approval of Amendment Number 3 to Contract Number C15156763 With Serco, Inc. in the Amount of $115,140 for Enforcement of Southgate Residential Preferential Parking (RPP) District; and Approval of Amendment Number 5 to Contract Number C15157271 With McGuire Pacific Constructors in the Amount of $142,155 for Construction Services for Southgate Residential Preferential Parking District (RPP) 11.Approval of a Memorandum of Understanding With the Santa Clara Valley Water District to Assess the Feasibility of Developing Water Reuse Alternatives, and an Amendment to the Recycled Water Supply Agreement With the City of Mountain View 12.Approval of Contract Number C18167808C With DeSilva Gates Construction LP in the Amount of $9,243,797, Amendment Number 2 With Mead & Hunt, Inc. Contract Number C15155208B, and Amendment Number 4 With C&S Engineers, Inc. Contract Number C15155208A for the Airport Apron Reconstruction Capital Improvements Program Project AP-16000; Adoption of a Resolution Authorizing the City Manager to Execute Future Grant Agreements Offered by the California Department of Transportation for Airport Improvement Program Matching Grant Funds for Apron Reconstruction at the Palo Alto Airport, and Authorizing the City Manager to Execute Supporting Documents or Contracts Associated With the Application and Acceptance of Said Grant Funds; Approval of a Budget Amendment in the Airport Enterprise Fund; and Approval of Findings that the Proposed Project is Exempt From Environmental Review under California Environmental Quality Act (CEQA) Guidelines 15301 and15302 and Federal Aviation Administration (FAA) Order 1050.1F 13.Approval of a Contract With York Risk Services Group Inc. for up to Five Years in a Total Not-to-Exceed Amount of $1,206,015 for Workers’ Compensation Claims Administration Services 14.Vote to Endorse the Slate of Candidates for the Peninsula Division, League of California Cities Executive Committee for 2017-18 and Direct the City Clerk to Forward to Seth Miller, the Regional Public Affairs Manager for the Peninsula Division, League of California Cities the Completed Ballot for the City of Palo Alto Q and A 4 August 28, 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. 15.SECOND READING: Adoption of an Ordinance Authorizing an Amendment to the Contract Between the City of Palo Alto and the Board of Administration of the California Public Employees’ Retirement System (PERS) to add Cost-sharing Pursuant to Government Code Section 20516 (FIRST READING: August 14, 2017 PASSED: 9-0) Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:35-7:45 PM 16.PUBLIC HEARING: Adoption of a Finding That the Fire Station No. 3 Replacement Project (CIP PE-15003) is "Substantially Complex" Under Public Contract Code Section 7201 and Direction to Increase the Retention Schedule From 5 Percent to 10 Percent 7:45-9:15 PM 17.PUBLIC HEARING / QUASI-JUDICIAL: 3877 El Camino Real [14PLN-00464]: Adoption of a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan and Approval of a Site and Design Review for the Demolition of the Vacant 5,860 Square-foot Commercial Building and Construction of a new Mixed-use Project. The Project Includes a 4,027 Square-foot Commercial Building and 17 Dwelling Units (Flats and Townhouses). Parking for the Project is Provided in a Basement. The Applicant Also Requests Approval of a Design Enhancement Exception to Allow the Basement to Encroach Into the Required Rear Yard Setback Below Grade. Environmental Assessment: A Mitigated Negative Declaration was Circulated Between March 6, 2017 and April 7, 2017. Both the Planning & Transportation Commission (March 8, 2017) and Architectural Review Board (May 18, 2017) Have Recommended Approval of the Project. Zoning Districts: CS and RM-30. (Continued From August 21, 2017) 9:15-10:00 PM 18.Colleagues’ Memo From Council Members Dubois, Filseth, Holman, and Vice Mayor Kniss Regarding an Anti-idling Ordinance (AIO) Inter-Governmental Legislative Affairs 10:00-10:30 PM 19.Declaration of Support for SB 797 (Hill), a Bill Allowing Regional Entities and Residents of Santa Clara, San Francisco, and San Mateo Counties to Vote to Increase the Sales Tax by 1/8 Cent for Caltrain Operations and Capital Purposes Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) 5 August 28, 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. 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. 6 August 28, 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 Sp. City Council Meetings Sp. City Council Meeting August 29, 2017 Sp. City Council Meeting August 30, 2017 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Significant Gifts to the City, Fiscal Year 2016 Public Letters to Council Set 1 City of Palo Alto (ID # 8226) City Council Staff Report Report Type: Study Session Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Historic Resources Board and Council Joint Study Session Title: Study Session: Joint Meeting of HRB and Council From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council conduct a joint meeting with the Historic Resources Board (HRB). Below are the potential topics of discussion for the joint meeting with the Historic Resources Board. I. Overview/Update a. Introduction to the HRB by staff b. HRB presentation on recent accomplishments and proposed work program additions II. Council Questions and Comments/Discussion Background The last time Council met with the HRB was May 6, 2015. Council and HRB members provided comments and recommendations on matters related to Palo Alto’s historic preservation work program and activities. No actions were taken. A recording of that meeting can be found at http://midpenmedia.org/city-council-special-meeting-3/. HRB Responsibilities The HRB is tasked with responsibilities set forth in Palo Alto Municipal Code Chapter 16.49 to carry out the Historic Preservation program for Palo Alto, which is a Certified Local Government (CLG). Staff submits an annual report to the Office of Historic Preservation (OHP) each year, to summarize the activities, meeting attendance, and annual required training of HRB members, in accordance with CLG guidelines. 2016-2017 This year, staff provided training on how moving of homes on a property comports with City of Palo Alto Page 2 the Secretary of the Interior’s Standards for Rehabilitation. Staff also provided the HRB members with an update on state law regarding Accessory Dwelling Units (ADUs), and the City’s response. Also during the past year, the historic preservation team reviewed several notable development projects, including the Avenidas building expansion and Junior Museum and Zoo. In addition, the HRB reviewed Guidelines projects, such as the Professorville Guidelines (adopted by Council in October 2016). In the fall of 2016, the HRB reviewed a bulletin intended to aid staff and applicants by providing a summary of the City review process for modifications to historic resources and potential historic resources. Improvements to the Historic Preservation Program website are underway. The HRB has also formed subcommittees this year to explore specific topics. One subcommittee was regarding Governance, and explored the HRB’s role in relationship to the Architectural Review Board and PCE Director. Another subcommittee formed to consider potential features of a new Mills Act program for Palo Alto. Eichler Guidelines Project Historic preservation staff began work with the consultant, Page and Turnbull, in early 2017. After two successful workshops to gather input from Eichler owners in the spring 2017, staff has been working on a walking tour brochure for the two National Register District Eichler neighborhoods. Staff also orchestrated the recent Eichler Memory Event. The Draft Eichler Design Guidelines are tentatively scheduled for formal presentation to the HRB in September 2017. Staff anticipates bringing these Guidelines and potential code changes to Council for consideration in early 2018, following review by the HRB and Planning and Transportation Commission. Discussion There are two additional projects that members of the HRB are interested in adding to the Department’s work program: 1. Modern Age Context The HRB is interested in developing a Modern Age Context Statement for Palo Alto. A context statement can provide the foundation for preservation planning, to describe the broad patterns of historical development of a community represented by the physical development and character of the building environment. A context statement, typically developed during the early stages of survey planning, can be developed as a separate activity from a survey and can identify important property types and establish eligibility criteria and integrity thresholds. A context based survey can allow the city to evaluate resources for land use planning purposes without needing to research each individual property. The OHP offers guidance in developing these statements. Staff had prepared a draft Certified Local Government (CLG) grant proposal for development of a Modern Age Context Statement in 2016, but has not had resources to focus on this effort. If the Council is amenable, staff could submit the grant proposal to the Office of Historic Preservation in 2018 following completion of the Eichler Guidelines project. City of Palo Alto Page 3 2. Mills Act Program The Mills Act allows local jurisdictions to enter into contracts with property owners of historic properties much like the Williamson Act allows jurisdictions to enter into contracts with owners of agricultural properties. In both cases, the contract requires preservation of the resource in exchange for a property tax adjustment. The City of Palo Alto has one Mills Act contract, but has never crafted a Mills Act program to incentivize historic preservation. In the next month or so, the Council will see an amendment to an existing Mills Act contract for the Squire House on their consent agenda. From time to time, other property owners have expressed interest in entering into a Mills Act contract and the HRB held three sessions to discuss establishment of a program, beginning with April 27, 2017. The April 27th report recalled the May 6, 2015 HRB-Council meeting suggestion that the HRB discuss possible parameters for an updated Mills Act application, and how to strike a balance for the right amount of incentive for preservation without taking too much revenue away from the schools. Links to the three HRB reports on the Mills Act are here: April 27th report: http://www.cityofpaloalto.org/civicax/filebank/documents/57244 May 25th report: http://www.cityofpaloalto.org/civicax/filebank/documents/57907 June 8th report: https://www.cityofpaloalto.org/civicax/filebank/documents/58117. Minutes of the June 8th meeting are found at: https://www.cityofpaloalto.org/civicax/filebank/documents/58351. Councilmember input on these potential additions to staff’s work program would be appreciated. Given limited staffing for the historic preservation program, both projects would have to be completed as time permits. City of Palo Alto (ID # 8049) City Council Staff Report Report Type: Study Session Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: 3709 El Camino Real: Palo Alto Housing Prescreening Title: 3709 El Camino Real [17PLN-00189]: Request by Palo Alto Housing for a Prescreening to Construct a Four-story Building With 61 Affordable Housing Units Including a Building Manager Unit, 2,412 Square Feet of Commercial Space, and Additional Amenity Space for use by the Tenants. The Proposal Would Require at Least one of the Following: Comprehensive Plan Amendment, Rezoning, and/or Zoning Text Amendment. Environmental Assessment: Prescreening is not a Project. The Formal Application Will be Subject to California Environmental Quality Act (CEQA) Review. Zoning District: CN (Neighborhood Commercial) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends the City Council conduct a preliminary review (“prescreening”) and provide comments regarding the applicant’s proposal to develop the subject property at 3709 El Camino Real with affordable housing, as well as potential changes to local policy and regulations (Comprehensive Plan and Zoning) needed to implement the proposal. No formal Council action may be taken during a preliminary review, and comments provided in the course of a prescreening are not binding on the City or the applicant. Executive Summary The site consists of two adjoining parcels fronting on El Camino Real and contains two one-story buildings occupied by several retail establishments and surface parking lots. The applicant seeks to demolish the existing buildings and construct a new mixed use building containing 58 affordable studio housing units, 3 affordable one-bedroom units including a manager’s unit, 2,412 square feet of commercial space, and associated interior common and amenity space(s) for use by tenants. City of Palo Alto Page 2 As discussed in the Policy Implications and Options section below, the proposed use of the site would likely require amendments to at least one of the following: the Comprehensive Plan Land Use & Community Design Element, the Zoning District Map, and/or the text of the Zoning Ordinance. A prescreening provides an opportunity for the applicant to seek early input on a possible project and can help inform the design of the proposal and the form of any Comprehensive Plan/Zoning changes that will be proposed. A prescreening is required for legislative changes prior to the submittal of a formal application in accordance with Palo Alto Municipal Code (PAMC) Section 18.79.030(a). Prescreening(s) do not result in any formal action. Background The site is located at the northeast corner of El Camino Real and Wilton Avenue, and is zoned Neighborhood Commercial (CN). The site is currently used by several retail and personal service establishments, including a European grocery, a bridal shop, a coin and stamp store, and a barber shop. The existing site also includes a surface parking lot serving the businesses. The surrounding parcels located on the El Camino Real frontage are also located in the CN Zoning District, and include a mix of restaurants, shops, and personal service establishments. The alley at the rear of the site serves as the boundary of a RM-30 multiple-family zoning district. Surrounding uses to the rear include two-story apartments, with single family homes located further north along Wilton Avenue. The site is located along El Camino Real, which is a major bus transit corridor served by the Valley Transportation Authority’s 22 and 522 routes, as well as the Shopping Express branch of Stanford University’s Marguerite Shuttle. The frequency of bus service is greater than the Caltrain service to downtown. The site is approximately 1.2 miles from the California Avenue Cal Train station, which Google Maps estimates at a 23 minute walk or 5 minute bike ride. The project plans included in Attachment C provide a preliminary study of the program, interior layout, and building elevations of the proposed building and site. The proposal includes a four- story building forty-eight feet in height to the building’s parapet wall. The ground level program would include 2,412 square feet of commercial space, as well as functional spaces to serve the both the commercial and residential tenants such as a lobby, storage area, mail room, mechanical and trash rooms, and internal circulation space. The ground level also includes a building-integrated parking area, and a below grade parking level, both of which would be accessed by an unnamed alley off of Wilton Avenue at the site rear. The current plan shows 42 total parking spaces (23 parking spaces at grade, with an additional 19 spaces to be provided in a subterranean parking level). The second level includes 19 of the housing units, along with amenity space(s) including a community room and kitchen, laundry, and a fitness room. The second through fourth floors follow an L-shaped plan, with the majority City of Palo Alto Page 3 of the building mass stepped back from the alley incorporating a podium courtyard directly above the ground level parking structure. The upper floors would consist of the remaining 42 housing units. The fourth floor would also include a roof garden located at corner of Wilton Avenue and the alley. Discussion One purpose of a prescreening is for the applicant to assess whether there is sufficient Council interest to proceed with a formal application, and typically staff does not conduct a detailed review of prescreening applications for code compliance, knowing that the proposal is likely to evolve. Nonetheless, staff has identified a number of issues for Council’s consideration and comment: Affordable Housing The Comprehensive Plan Housing Element includes a number of policies that are relevant to the subject application. Policy H2.1 seeks to “identify and implement strategies to increase housing density and diversity, including mixed-use development and a range of unit styles, near community services. Emphasize and encourage the development of affordable and mixed- income housing to support the City’s fair share of the regional housing needs and to ensure that the City’s population remains economically diverse.” The current proposal includes 58 studio units 346-370 square feet in floor area each, and three one-bedroom units 656 square feet in floor area each. Both of the parcels constituting the subject site are listed as Housing Inventory Sites, and under current zoning, the Housing Element assumed a both a maximum and realistic capacity of 9 total units. The site is located along the El Camino Real corridor, which contains a wide range of neighborhood and regionally-based services, restaurants, and shops, as well as a number of mixed use projects. While the target income demographics of prospective residents has not been finalized at this time (30 units are currently proposed to be set-aside for adults with developmental disabilities), 61 affordable units would contribute significantly to the City’s fair share of the regional housing needs. Policy H2.1 includes several programs with which the proposed project would be consistent: Housing Program H2.1.1: To allow for higher density residential development, consider amending the zoning code to permit high-density residential in mixed use or single use projects in commercial area within one-half mile of fixed rail stations and to allow limited exceptions to the 50-foot height limit for Housing Element sites within one – quarter mile of fixed rail stations. [Note: The site is not located within ½ mile of a fixed rail station, but is located along a major bus thoroughfare on El Camino Real.] Housing Program H2.1.2: Allow increased residential densities and mixed use City of Palo Alto Page 4 development only where adequate urban services and amenities, including roadway capacity, are available. Housing Program H2.1.4: Amend the Zoning Code to create zoning incentives that encourage the development of smaller, more affordable units, including units for seniors, such as reduced parking requirements for units less than 900 square feet and other flexible development standards. Housing Program H2.1.6: Consider density bonuses and/or concessions including allowing greater concessions for 100% affordable housing developments. Housing Program H2.1.9: Amend the Zoning Code to create incentives that encourage the consolidation of smaller lots identified as Housing Inventory Sites and developed with 100% affordable housing projects. Incentives may include development review streamlining, reduction in required parking for smaller units, or graduated density when consolidated lots are over one-half acre. Adopt amendments as appropriate. Provide information regarding zoning incentives to developers. Policy H2.2 seeks to “Continue to support the redevelopment of suitable lands for mixed uses containing housing to encourage compact, infill development. Optimize the use of existing urban services, and support transit use.” The site is located along a major commercial thoroughfare with the full range of existing urban services, and the proposal is an infill project proposing a mix of housing and commercial uses. Housing Program H2.2.8: Assess the potential of removing maximum residential densities (i.e. dwelling units per acre) in mixed use zoning districts to encourage the creation of smaller housing units within the allowable Floor Area Ratio (FAR), and adopt standards as appropriate. Policy H3.1 seeks to “Encourage, foster, and preserve diverse housing opportunities for very low-, low-, and moderate income households.” As mentioned previously, target income demographics for future residents have not been finalized. However, it is readily forseeable that the housing units would be developed for income-restricted households and adults with disabilities, and would access funds from County Measure A (adopted by the voters in November 2016). Comprehensive Plan Land Use Element The Comprehensive Plan designation for the site is CN (Neighborhood Commercial), which is characterized in the Land Use Element as “Includ[ing] shopping centers with off-street parking or a cluster of streetfront stores that serve the immediate neighborhood. Examples include Alma Plaza, Charleston Center, Edgewood Center, and Midtown. Typical uses include City of Palo Alto Page 5 supermarkets, bakeries, drugstores, variety stores, barber shops, restaurants, self-service laundries, dry cleaners, and hardware stores. In some locations, residential and mixed use projects may also locate in this category. Non-residential floor area ratios will range up to 0.4.” The CN land use designation is categorized as primarily commercial in nature, and as a result does not set a residential population density. Instead, the CN designation sets a standard of land use intensity, expressed through the Floor Area Ratio. The subject application includes 61 residential units on a site area of 20,150 square feet (0.46 acres), yielding a residential density of 132 dwelling units per acre. While a density of this magnitude is not inconsistent with the CN land use designation due to the absence of a density standard, it would represent a density greater than that of the Transit-oriented Residential designation, which has the highest allowable density at 50 units per acre and thus a Comprehensive Plan amendment may be desirable. Zoning Ordinance While a full zoning analysis of the project cannot be performed given the initial stages of plan development, there are clearly a number of inconsistencies with current zoning standards that would have to be addressed through a zoning text amendment and possibly a zoning map amendment (rezoning). The necessary amendments are summarized briefly below: 1. PAMC 18.52: Required vehicle parking. The proposal provides 42 on-site parking spaces across two levels of garage parking. While parking adjustments are available for affordable housing in Palo Alto Municipal Code Section 18.52.050 and the State Density Bonus law (as implemented by Palo Alto Municipal Code Section 18.15.050), the number of spaces would likely be lower than required when including the commercial space. 2. PAMC 18.16.050: Restriction on conversion of ground floor retail. The proposal would replace approximately 6,700 square feet of existing retail establishments with 2,412 square feet of commercial space and other amenity uses, which is not in keeping with the intent of the Retail Preservation Ordinance. 3. PAMC 18.16.060 Table 4, Note 9: Maximum Residential Density. While the CN Comprehensive Land Use Designation does not provide a residential density standard, the corresponding CN Zoning District permits a maximum of 20 units per acre for housing inventory sites. The current proposal of 132 units per acre is in excess of the standard. 4. PAMC 18.16.060 Table 4: Maximum Mixed Use Intensity (FAR). CN-zoned sites proposing mixed-use projects on El Camino Real are limited to maximum residential and non- residential FAR limits of 0.5 and 0.5 respectively, for a 1.0 FAR total. The current proposal (estimated at 2.0 FAR) is in excess this standard. City of Palo Alto Page 6 5. PAMC 18.16.060 Table 4: Maximum Building Height. CN-zoned sites proposing mixed-use projects on El Camino Real are limited to a maximum building height of 40 feet. The current proposal has a maximum height of 48 feet, and is in excess of the standard. 6. PAMC 18.16.060 Table 4: Maximum Building Height Within 150 feet of a Residential Zone. CN-zoned sites proposing mixed-use projects are also limited to a maximum building height of 35 feet when a residential zoning district is within 150 feet of the site. The site is located immediately adjacent to a RM-30 zone and multi-family use across the rear alley. The adjacent apartment building is located 25 feet from the rear property line of the subject site. 7. PAMC 18.16.060 Table 4: Maximum Site Coverage. CN-zoned sites proposing mixed-use projects are limited to a maximum of 50% total site coverage and a minimum of 35% landscape/open space coverage. The current proposal includes approximately 82% site coverage, and approximately 7% landscaped coverage at the ground level. However, the proposal includes an additional 4,803 square feet (23% of the site area) of open space at the second floor podium courtyard and fourth floor roof deck. Traffic Impacts and Environmental Review The Transportation Planning Division estimates that a project of this size would likely generate between 30 and 50 net peak-hour vehicle trips, and as a result, a focused Transportation Impact Analysis will be required with the formal application submittal. This TIA will assess trip generation, access and circulation, and existing and proposed impacts to nearby traffic operations. Additionally, a Transportation Demand Management and Parking Management Plan would be required with the formal submittal in order to reduce single-occupancy vehicle trips associated with the site, and to encourage alternative modes of transportation. The TIA would inform a full analysis of environmental impacts under the California Environmental Quality Act (CEQA). Relationship to the El Camino Guidelines The 1979 El Camino Real Design Guidelines (ECR Guidelines) adopted by the City Council and the South El Camino Real Guidelines (South ECR Guidelines) recommended by ARB in 2002 are both applicable to this site. South ECR Guidelines The site is located in the Barron-Ventura pedestrian node sub-district, which extends along El Camino Real from Fernando Avenue to Los Robles Avenue and is characterized by moderately- dense development. The South ECR Guidelines establish a vision for the Barron-Ventura Area District of “reinforcing the area as a neighborhood-serving commercial node. Care should be taken to reinforce connections to the surrounding residential areas but also buffer the residential areas from the El Camino Real Development”. Regarding new buildings, the guidelines indicate new buildings “should front El Camino Real with a scale appropriate to a neighborhood commercial district. Street level facades should have numerous pedestrian City of Palo Alto Page 7 amenities. Street level facades should also be highly transparent from the sidewalk.” The Guidelines also provide direction on site planning for corner lots regarding setbacks, build-to lines, landscape and hardscape, and privacy of adjacent residential uses. ECR Guidelines The project is subject to the 1979 guidelines with respect to trees, signage, architecture and building colors. As this review is only a prescreening, limited information regarding trees and landscaping has been provided. Staff and the Architectural Review Board would assess the proposed project’s compatibility with the ECR Guidelines with respect to these features as part of architectural review if a development proposal is submitted. Policy Implications and Options As mentioned above, the proposal would require amendments to one or more of the following: the Comprehensive Plan Land Use & Community Design Element, the Zoning District Map, and/or the text of the Zoning Ordinance. The required changes to the Land Use Element are captured in the Draft Comprehensive Plan Update currently under review by the PTC. The nature and specifics of zoning code changes needed to allow the proposed development have not been fully determined, however, there are three clear options for consideration. The first option listed below is staff’s preference because of Housing Element programs about providing incentives for 100% affordable projects (Housing Program H2.1.6 for example) and streamlining the entitlement process for those projects (Housing Program H2.1.9 for example): Option #1: Develop a local alternative to the State Density Bonus Law that would allow an FAR of 2.0 with no maximum number of dwelling units for projects that propose 100% affordable housing with ground floor retail in transit-served areas. Use of a density bonus program would allow projects to access development concessions in Palo Alto Municipal Code Section 18.15. This option would require a text amendment to Section 18.15. Option #2: Develop an affordable housing combining district (overlay zoning district) that provides flexible development standards for projects that propose 100% affordable housing in transit served areas. This option would require rezoning of the site (i.e. a zoning map change) in addition to a text amendment to Section 18.30 to create a new Combining District. Future projects would require zoning map amendments to utilize the overlay zone. Option #3: Re-consider the current stay on Planning Community (PC) Zoning Districts, and re-zone the site to PC. Section 18.38 of the PAMC provides the process and standards for the consideration and establishment of PC districts. This option would City of Palo Alto Page 8 require a zoning amendment; however, the Council could consider an amendment to Section 18.38 to specifically limit application of the PC zone to specified uses, such as 100 percent affordable housing projects, concurrent with consideration of the project. Next Steps Following the prescreening review, the applicant will consider options and determine how they want to proceed. Formal applications and public hearings before the Architectural Review Board, Planning Commission and City Council would be required to advance the proposed conceptual project. Environmental Review This prescreening is a preliminary review process in which Councilmembers may provide comment, but no formal action will be taken. Therefore, no review under the California Environmental Quality Act (CEQA) is required at this time. A formal review under CEQA would be initiated with the formal filing of a development application. Following submittal of a formal application, a Traffic Impact Analysis, Noise Study, Phase I and other technical reports, as needed to complete the environmental review, would be prepared. Attachments: Attachment A: Location Map (PDF) Attachment B: Applicant's Project Description (PDF) Attachment C: Project Plans (DOCX) 132-40-062 132-41-019 132-35-025 132-35-028 132-35-030 132-35-029 37-08-032 137-11-051 137-11-052 137-11-053 137-08-041 137-08-038 137-08-037 132-40-047 70.0' 106.0'150.0' 90.0' 9.7'2.0'22.0' 126.2' 50.0' 95.8' 50.0' 95.8' 40 . 6' 79.6' 50.0' 79.6' 21.0' 46.2' 47.6' 107.9' 107.9' 55.0' 107.9' 107.9' 50.0' 107.9' 50.0' 107.9' 45.0' 107.9' 45.0' 107.9' 50.0' 107.9' 50.0' 10.0' 94.0' 107.9' 106.0' 87.9' 15.7'2.0' 55 75.0' 120.1' 104.3' 110.2' 15.7' 94.0' 31.4' 57.7' 24.9' 20.6' 85.1' 119.2' 165.0' 109.0' 13.7' 130.2'98.7' 130.2' 141.2' 120.3' 15.7' 131.3' 50.0' 100.0' 106.0' 50.0' 106.0' 50.0' 106.0' 50.0' 106.0' 50.0' 106.0' 50.0' 100.0' 15.7' 130.0' 27.6' 127.4' 49.9' 155.0' 49.9' 155.0' 59.1' 155.0' 59.1' 50.0' 143.0' 50.0' 143.0' 50.0' 143.0' 50.0' 44.5' 143.0' 44.5' 143.0' 44.5' 143.0' 44.5' 143.0' 44.5' 142.5' 44.5' 142.5' 44.5' 142.5' 44.5' 142.5' 108.0' 93.8' 15.7' 98.0' 103.6'103.6'167.5' 93.1' 177.5'50.0' 142.5' 50.0' 142.5' 50.0' 142.5' 50.0' 142.5' 62.5' 142.5' 62.5' 142.5' 20.6' 2 4.9' 57.7' 31.4' 30.1' 120.0' 35.1' 50.0' 120.0' 50.0' 119.9' 60.0' 120.0' 60.0' 120.0' 89.0'119.8' 89.0'120.0' 1 55.0' 109.0' 165.0' 55.0' 130 120.0' 50.0' 50.0' 119.9' 50.0' 119.9' 50.0' 119.9' 50.0' 119.9' 50.0' 119.9' 50.0' 119.8' 50.0' 119.8' 119.8' 53.0' 19.8' 62.5' 142.5' 66.0' 164. 7.5' 19.2' 50.0' 50.0' 110.0'110.0' 110.0'110.0' 100.0' 89.0' 92.4' 7.9'17.4' 5.0' 45.0' 3636 1 3725 3666 510 516 520 530 538 506 3825 505 3765 3745 3770 37903780 3804 3740 3727 3773- 3783 3691 3601 450 APT 1-4 471 4610 473 479483 489 446 444 452-458 482 488 440 430 425 431 437 443 451 380 37093707 384 388 3705 453-467 447 445 3 400 387 389 386 390 392 396 384 382 380 3737 486 475477 485 487 508 3731 3803 3801 484 480 500 3630 3700 381 378 BARRON AVENUE WILTON AVENUE UE EL CAMINO REAL MADELINE COURT LANE 66 R-2 RM-30 CN This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Historic Site Special Setback abc Known Structures Tree (TR) Zone Districts abc Zone District Notes Curb Edge abc Dimensions (AP) Sidewalk abc Easement abc Zone District Labels 3705-3709 El Camino Real 0' 93' 3705 - 3709 El Camino Real CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto gowen, 2017-08-03 14:27:06 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) Wilton Court Narrative Palo Alto Housing (PAH) proposes to redevelop two parcels (20,150 sf total) along El Camino Real into a mixed-use property. The project would include 61 units (studios and one-bedrooms) of badly needed affordable housing, including 30 units set-aside for residents with developmental disabilities. The project would take advantage of tax credit, Measure A, and City of Palo Alto financing. The development would be located at 3703-3705 and 3707-3709 El Camino Real, and would be bound by Wilton Avenue to the West, a 20’ wide alley to the North, interior lot lines to the South, and El Camino Real to the East. The proposed mixed use development would be a four-story wood frame (Type V-A) structure on a single story concrete (type I-A) podium. An approximately 2,400 sf commercial/retail space would activate the corner at the ground floor and shield the development from El Camino Real with a landscaping setback and prominent pedestrian entry feature. The remaining ground floor uses would be for the residential community above: management/leasing office, mailroom, bike storage and building – associated service spaces. One long term bike parking space is provided indoors for each apartment plus additional required for commercial/retail with short-term bike parking off sidewalks entering into the property. Vehicular parking would be provided in a split level garage. The above grade 24 spaces would house parking for retail, guests and staff. A subterranean garage would house 24 residential parking stalls, and building storage. The podium level would contain a community room, computer lab, gym and laundry facilities. The residential floors as proposed would be organized into an L-shape, following the corner of El Camino Real and Wilton Avenue. The podium level and subsequent building massing responds to the surrounding neighborhood by concentrating the bulk of the building towards El Camino Real. The building’s podium courtyard separate it from the two-story residential apartment complex at the rear. Additionally, four residential units have been removed from the fourth level, reducing the building’s height to three stories at the building’s northern corner adjacent to the alleyway shared by the neighboring apartment building. The alleyway would terminate at the garage ramp down for residential parking via a two way ramp. The remaining backyard would be landscaped and would provide for groundwater recharge of site storm water. This landscaped area houses most of the site’s existing mature trees, which would be preserved wherever feasible. The roof would be designed for the potential to include Solar Thermal and Photovoltaic panels for improved building energy performance. The project requests the following concessions: 1. Zone change 2. Reduction in required open space 3. Residential parking ratio decrease (max. 0.5 space per unit with 0.3 for adults with developmental disability) 4. Commercial/Retail loading space striped along El Camino Real Attachment C Project Plans Hardcopies of project plans are provided to Council Members. 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 “3709 El Camino Real” and open record by clicking on the green dot. 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 “City Council Study Session”. CITY OF PALO ALTO OFFICE OF THE CITY CLERK August 28, 2017 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the August 14, 2017 Council Meeting Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS: Attachment A: 08-14-17 DRAFT Action Minutes (DOCX) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 9 Special Meeting August 14, 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 arrived at 5:01 P.M., Kniss, Kou, Scharff, Tanaka arrived at 5:05 P.M., Wolbach Absent: Closed Session 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Ed Shikada, Rumi Portillo, Lalo Perez, Molly Stump) Employee Organization: Service Employees International Union (SEIU), Local 521 Authority: Government Code Section 54957.6(a). City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Ed Shikada, Rumi Portillo, Lalo Perez, Molly Stump) Employee Organization: Utilities Management and Professional Association of Palo Alto (UMPAPA) Authority: Government Code Section 54957.6(a). MOTION: Vice Mayor Kniss moved, seconded by Council Member Wolbach to go into Closed Session. MOTION PASSED: 6-0 Filseth, Holman, Tanaka absent Council went into Closed Session at 5:01 P.M. Council returned from Closed Session at 6:28 P.M. Mayor Scharff announced no reportable action. DRAFT ACTION MINUTES Page 2 of 9 City Council Meeting Draft Action Minutes: 8/14/17 Agenda Changes, Additions and Deletions None. Minutes Approval 2. Approval of Action Minutes for the June 19 and June 27, 2017 Council Meetings. MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to approve the Action Minutes for the June 19 and June 27, 2017 Council Meetings. MOTION PASSED: 9-0 Consent Calendar MOTION: Council Member Kou moved, seconded by Council Member DuBois, third by Council Member Holman to pull Agenda Item Number 13- 425 Portage Avenue: Approval of the Planning and Community Environment Director's Determination… to be heard on a date uncertain. MOTION: Vice Mayor Kniss moved, seconded by Council Member Filseth to approve Agenda Item Numbers 3-12, 14-19. 3. Selection of Applicants to Interview on August 24, 2017 for the Storm Water Management Oversight Committee. 4. Approval of Amendment Number 2 to the Agreement Between the City of Palo Alto and Acterra to Extend the Term to 2022 and Provide Funding for First Year of $75,720. 5. Approval and Authorization for the City Manager to Execute a Master License Agreement for use of City-controlled Space on Utility Poles and Streetlight Poles, and in Conduits With Mobilitie, LLC, a Nevada Limited Liability Corporation. 6. Approval of a Contract With Alaniz Construction, Inc. in the Amount of $568,880 for the City Facility Parking Lot Maintenance Project, Capital Improvement Program Project PE-09003, and Authorization for the City Manager to Negotiate and Execute Related Change Orders Not-to- Exceed $56,880 in Total Value. 7. Approval of Contract Amendment Number 3 to Contract Number C15154454 With Integrated Design 360 for Green Building Program Management Services and Landscape Plan Review and Consulting Services for a Term Extension of one Year and Increasing DRAFT ACTION MINUTES Page 3 of 9 City Council Meeting Draft Action Minutes: 8/14/17 Compensation for Ongoing and Approved Work With Development Services and Optional Tasks by $376,744 for a Total Not-to-Exceed Amount of $1,255,005. 8. Approval of Amendment Number 3 to Contract Number S15156222 With Golder Associates to Increase Compensation by $91,300, for a Total Not-to-Exceed Amount of $311,622, to Perform an Evaluation of Selenium Concentrations and Leachate Levels at the Palo Alto Landfill, and to Extend the Current Three-year Term by Four Months. 9. Authorize the City Manager to Execute an Amendment to Contract Number C12146667 Between the City and Van Scoyoc Associates Inc., for Federal Legislative Advocacy, to Reduce the Term by Seven Months and Reduce the Not-to-Exceed Amount by $56,000. 10. Approval of a Contract With Bauer Compressors in the Amount of $697,519 for the Purchase of Fire Fighting Self-contained Breathing Apparatus, Face Masks, Air Cylinders, Maintenance and Support Equipment, and Authorize the City Manager to Negotiate and Execute Related Change Orders Not-to-Exceed $102,481. 11. Approval of Amendment Number 3 to the Agreement With the Peninsula Corridor Joint Powers Board for Rail Shuttle Bus Administration to Extend the Term of the Agreement for one Year and to Provide an Additional $128,200 for Community Shuttle Service on the Existing Embarcadero Shuttle Route From July 2017 Until June 2018. 12. Resolution 9699 Entitled, “Resolution of the Council of the City of Palo Alto of Local Support for Grant Funding as Required by the Metropolitan Transportation Commission (MTC) for the One Bay Area Grant Program (OBAG) Cycle Two and Vehicle Emissions Reductions Based at Schools (VERBS) Funding Programs.” 13. 425 Portage Avenue: Approval of the Planning and Community Environment Director's Determination to Authorize a Waiver of the Retail Preservation Ordinance. Environmental Assessment: Exempt in Accordance With the California Environmental Quality Act (CEQA) Section 15061(b)(3) Guidelines. 14. Approval of a Side Letter of Agreement Between the City of Palo Alto and the Palo Alto Police Management Association (PMA). 15. Policy and Services Committee Recommendation to Accept the Continuous Monitoring Audit: Payments. DRAFT ACTION MINUTES Page 4 of 9 City Council Meeting Draft Action Minutes: 8/14/17 16. Policy and Services Committee Recommendation to Accept the Audit of Green Purchasing Practices. 17. Policy and Services Committee Recommendation to Accept the Utilities Department: Cross Bore Inspection Contract Audit. 18. Resolution 9700 Entitled, “Resolution of the Council of the City of Palo Alto Establishing Fiscal Year 2017-18 Secured and Unsecured Property Tax Levy for the City of Palo Alto’s General Obligation Bond Indebtedness (Measure N).” 19. Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of March 31, 2017. MOTION PASSED: 9-0 Action Items 20. Approval of the Draft Palo Alto Transit Vision Plan and Direction to Staff to Pursue Funding for Local Shuttle Service Enhancements. AT THIS TIME COUNCIL HEARD AGENDA ITEM NUMBERS 21-24. 21. PUBLIC HEARING/QUASI JUDICIAL 3972, 3980 and 3990 El Camino Real [17PLN-00197]: Request by the Housing Authority of Santa Clara County for a Tentative Map for a 6.19 Acre Site That Includes the Buena Vista Mobile Home Park Site (3980 El Camino Real) and two Adjacent Commercial Properties (3972 and 3990 El Camino Real), for lot Reconfiguration and lot Line Removals to Reduce Five Parcels to Three Parcels, and Provide Access and Utilities Easements. The Three new Parcels Will be: (1) Parcel 1, at 4.5 Acres, Zoned RM-15 for Multiple Family Residential Use (Buena Vista Mobile Home Park); (2) Parcel 2 at 1.0 Acre, Zoned CN for Neighborhood Commercial Use (Existing Retail Building); and (3) Parcel 3 at 0.7 Acres, Zoned CN (Existing Gas Station Site) and RM-15 (0.41 Acre Rear Portion Supporting More Than Eight Buena Vista Park Studios/Modular Units). The 0.41 Acre Residential Portion Would be Leased to the Housing Authority for up to Three Years, Allowing Tenants to Remain Until They can be Accommodated on Parcel 1. On July 12, 2017, the Planning & Transportation Commission Recommended Approval of the Tentative Map. Public Hearing opened at 8:21 P.M. Public Hearing closed at 8:24 P.M. DRAFT ACTION MINUTES Page 5 of 9 City Council Meeting Draft Action Minutes: 8/14/17 MOTION: Council Member Wolbach moved, seconded by Vice Mayor Kniss to approve the proposed Tentative Map based on findings and with conditions of approval as reflected in the Record of Land Use Action. AMENDMENT: Council Member DuBois moved, seconded by Council Member XX to add to the Motion, “direct Staff to explore re-zoning the area to Mobile Home Park and discuss this topic with the Santa Clara County Housing Authority.” AMENDMENT WITHDRAWN BY THE MAKER MOTION PASSED: 9-0 22. Approval of a Five-year General Services Agreement With SWA Services Group in the Amount of $10,652,615 for Janitorial Services and Approval of a Budget Amendment in the General Fund. MOTION: Mayor Scharff moved, seconded by Council Member Kou to: A. Approve and authorize the City Manager or his designee to execute a General Services Agreement in an amount not to exceed $10,652,615 with SWA Services Group for janitorial services for a term of five years effective September 1, 2017, ending August 31, 2022; including $10,145,347 for Basic Services and $507,268 for Additional Services; and B. Amend the Fiscal Year 2018 Budget Appropriation Ordinance for the General Fund by: i. Decreasing the FY 2018 Operations Reserve in Non-departmental by $500,000; and ii. Decreasing the General Fund Budget Stabilization Reserve by $753,463; and iii. Increasing the appropriation for the Public Works Department by $1,253,463. MOTION PASSED: 8-1 Tanaka no 23. Resolution 9701 Entitled “Resolution of the Council of the City of Palo Alto of Intent;” and adoption of an Ordinance to Amend the Contract Between the Board of Administration of the California Public Employees’ Retirement System (CalPERS) and the City of Palo Alto to Implement the Share of Employer Contribution in Accordance With Section 20516 of the California Government Code and the DRAFT ACTION MINUTES Page 6 of 9 City Council Meeting Draft Action Minutes: 8/14/17 Memorandum of Agreement Between the City of Palo Alto and Service Employees International Union (SEIU), Local 521; International Association of Fire Fighters (IAFF), Local 1319; Palo Alto Fire Chiefs’ Association (FCA); Palo Alto Peace Officers' Association (PAPOA); and Palo Alto Police Management Association (PAPMA). MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to adopt: A. A Resolution of Intention of the Council of the City of Palo Alto stating its intent to amend the contract between the California Public Employees’ Retirement System (CalPERS) and the City of Palo Alto in order to implement the pension cost share provision in accordance with California Government Code section 20516 and the Memoranda of Agreements between the City of Palo Alto and the following groups: i. Service Employees International Union (SEIU), Local 521; and ii. International Association of Fire Fighters (IAFF), Local 1319; and iii. Palo Alto Fire Chiefs’ Association (FCA); and iv. Palo Alto Peace Officers' Association (PAPOA); and v. Palo Alto Police Management Association (PAPMA); and B. An Ordinance amending the City’s contract with CalPERS. MOTION PASSED: 9-0 24. Designation of Voting Delegate and Alternate for the League of California Cities Annual 2017 Conference, to be Held September 13-15, 2017 in Sacramento, CA. MOTION: Vice Mayor Kniss moved, seconded by Mayor Scharff to designate Council Member Wolbach as the Voting Delegate and Mayor Scharff as the Alternate Voting Delegate for the 2017 League of California Cities Annual Conference. MOTION PASSED: 9-0 AT THIS TIME COUNCIL RETURNED TO AGENDA ITEM NUMBER 20. 20. Approval of the Draft Palo Alto Transit Vision Plan and Direction to Staff to Pursue Funding for Local Shuttle Service Enhancements. DRAFT ACTION MINUTES Page 7 of 9 City Council Meeting Draft Action Minutes: 8/14/17 MOTION: Council Member Wolbach moved, seconded by Mayor Scharff to: A. Approve the Palo Alto Transit Vision Plan including the following recommended enhancements (contingent on funding): i. Design of a new South Palo Alto Route; and ii. Expansion of the Crosstown and Embarcadero Routes; and iii. Rebranding and marketing strategy; and B. Direct Staff to seek Measure B and other available funding for the proposed service enhancements. Vice Mayor Kniss left the meeting at 10:50 P.M. AMENDMENT: Council Member DuBois moved, seconded by Council Member XX to replace in the Motion Parts A.i., A.ii., A.iii., and B with,” i. Propose funding of limited fixed shuttle service focused on school commute and select other high volume routes at particular times; and ii. Propose creation of a flex system aimed at seniors and employees; and iii. Return with funding needs and approach for revised hybrid fixed- flex proposal that includes a combination of public and private sources; and B. Seek Measure B and other available funding for a short-term South Palo Alto route to fill in Valley Transportation Authority (VTA) discontinued route until returning with fixed-flex hybrid.” AMENDMENT RESTATED: Council Member DuBois moved, seconded by Council Member XX to replace in the Motion Parts A.i., A.ii., A.iii., and B with,” i. Propose funding of limited fixed shuttle service focused on school commute and select other high volume routes at particular times; and ii. Propose creation of a flex system aimed at seniors and employees; and DRAFT ACTION MINUTES Page 8 of 9 City Council Meeting Draft Action Minutes: 8/14/17 iii. Return with funding needs and approach for revised hybrid fixed- flex proposal that includes a combination of public and private sources; and B. Seek Measure B and other available funding for a short-term South Palo Alto route to fill in Valley Transportation Authority (VTA) discontinued route when funding becomes available; and C. Revise the Vision Plan to incorporate dynamic service models and cutting edge transit models for possible implementation and funding in the future.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “incorporate fixed-flex models as appropriate to serve the areas recommended in the Vision Plan.” (New Part A.ii.) INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove Part A.iii., “expansion of the Crosstown and Embarcadero Routes” from the Motion. AMENDMENT FAILED DUE TO THE LACK OF A SECOND MOTION AS AMENDED RESTATED: Council Member Wolbach moved, seconded by Mayor Scharff to: A. Approve the Palo Alto Transit Vision Plan including the following recommended enhancements (contingent on funding): i. Design of a new South Palo Alto Route; and ii. Incorporate fixed-flex models as appropriate to serve the areas recommended in the Vision Plan; and iii. Rebranding and marketing strategy; and B. Direct Staff to seek Measure B and other available funding for the proposed service enhancements. MOTION AS AMENDED PASSED: 8-0 Kniss absent Council Member Holman left the meeting at 11:25 P.M. Inter-Governmental Legislative Affairs None. DRAFT ACTION MINUTES Page 9 of 9 City Council Meeting Draft Action Minutes: 8/14/17 Council Member Questions, Comments and Announcements Council Member Kou announced the Lytton Gardens Alzheimer’s Walk is taking place on September 15. Council Member Wolbach shared his appreciation for the City Manager’s commitment to working with tenants of faith institutions and understands the complex nature of Code Enforcement. He encouraged Staff to bring forward updates to the Municipal Code as appropriate to support faith institutions and their tenants. He shared his attendance at a rally in Mountain View in response to the protests and events in Charlottesville, NC over the weekend. The rally was well attended by residents, School Board Members, and Council Members from various cities and focused on rebutting white supremacy, misogyny, anti-Semitism, and Islamophobia. Mayor Scharff announced the Santa Clara County Cities Association formed a committee to work with Santa Cruz County to create a roundtable addressing airplane noise. Adjournment: The meeting was adjourned at 11:30 P.M. City of Palo Alto (ID # 8340) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Resolution to Apply for Federal Funds for Recycled Water Expansion Title: Adoption of a Resolution Authorizing the Submittal of a Financial Assistance Application to the United States Bureau of Reclamation for The WaterSMART: Title XVI Water Recycling Projects Under the WIIN Act and to Enter Into a Financing Agreement Under the Program From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council approve a resolution authorizing the submittal of a Financial Assistance Application to the United States Bureau of Reclamation for the WaterSMART: Title XVI Water Recycling Projects Under the WIIN Act and to Enter Into a Financing Agreement Under the Program. Background The City of Palo Alto (Palo Alto or City) operates the Regional Water Quality Control Plant (RWQCP) for six partner agencies and currently supplies tertiary treated recycled water to several City-owned parks and facilities, truck-fill standpipes, Caltrans, and the City of Mountain View’s North of Bayshore distribution system. The City is collaborating with the Santa Clara Valley Water District (Water District) to develop a Recycled Water Strategic Plan to update the 1992 Recycled Water Master Plan and include recommendations for expansion opportunities given projected demands, an evaluation of recycled water used for indirect potable reuse within Palo Alto, as well as a business plan and preliminary design for the Phase III Recycled Water Pipeline Expansion through South Palo Alto and Stanford Research Park (Project). The Water Infrastructure Improvements for the Nation (WIIN) Act was enacted in December 2016, to address water resources infrastructure that is critical to the nation's economic growth, health and competitiveness. The amendments in Section 4009 (c) of Subtitle J of WIIN allows new water recycling projects to be eligible for federal funding. The Bureau of Reclamation (Reclamation) provides funding through the Title XVI Water Reclamation and Reuse Program for projects that reclaim and reuse municipal, industrial, City of Palo Alto Page 2 domestic or agricultural wastewater and impaired ground or surface waters. The funding opportunity for the new WIIN Title XVI funding program is $10M available in CY17 Palo Alto’s Project is one of the thirty (30) projects nationwide that are eligible to receive this grant money. Discussion While there has been no determination of the economic feasibility of the Project, there is an immediate opportunity to apply for federal funds which, if secured, would significantly improve the business case. Submitting the attached resolution by thirty (30) days after the application deadline of August 17, 2017 is required to be eligible for this funding. The purpose of the resolution is to verify: 1. The identity of the official with legal authority to enter into an agreement; 2. The board of directors, governing body, or appropriate official who has reviewed and supports the application submitted; 3. The capability of the applicant to provide the amount of funding and/or in-kind contributions specified in the funding plan; and 4. That the applicant will work with Reclamation to meet established deadlines for entering into a grant or cooperative agreement. The application and the resolution do not commit Palo Alto to accepting funds. Such a commitment would be required if and when the City entered into a grant agreement, a decision that would return to Council for approval if the grant is secured. The business plan and preliminary design will be principally completed before Council would be asked to make a decision to accept funding. Timeline Staff intends to apply for the grant by the August 17, 2017 deadline and submit the adopted resoution within thirty (30) days of August 17, 2017 as required by the Program. Resource Impact Approving the resolution has no resource impact. Policy Implications Applying for funding does not carry any policy implications. Environmental Review Council’s approval of the Resolution is categorically exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines 15307 (Actions by Regulatory Agencies for Protection of Natural Resources). Attachments: Attachment A: Resolution Authorizing the WIIN Application for Recycled Water Funding NOT YET APPROVED 1 170725 jb JM/UTL/COUNCIL Resolution No. ______ Resolution of the Council of the City of Palo Alto Authorizing the City’s Submittal of a Financial Assistance Application to the United States Bureau of Reclamation for The WaterSMART: Title XVI Water Recycling Projects Under the WIIN Act and to enter into a Financing Agreement under the Program R E C I T A L S The Water Infrastructure Improvements for the Nation is referred to as the WIIN Act. A. The United Stated Bureau of Reclamation (“Reclamation”) has a funding program entitled “WaterSMART: Title XVI Water Recycling Projects Under the WIIN Act”, and pursuant to this program, Reclamation makes funds available for water recycling projects that have a Title XVI-compliant approved Feasibility Study. B. The City of Palo Alto (the “City”) has an approved Title XVI Feasibility Study for its project titled “Recycled Water Pipeline Project”. The Feasibility Study was approved by Reclamation on December 10, 2013. C. The City wishes to apply for WIIN funds to cover a portion of the cost of the Recycled Water Pipeline Project by the August 17, 2017 deadline. D. Reclamation has directed applicants to include in its application an official resolution adopted by the applicant’s board of directors or governing body verifying 1) the identity of the official with legal authority to enter into an agreement, 2) the board of directors, governing body, or appropriate official who has reviewed and supports the application submitted, 3) the capability of the applicant to provide the amount of funding and/or in-kind contributions specified in the funding plan, and 4) that the applicant will work with Reclamation to meet established deadlines for entering into a grant or cooperative agreement. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council hereby finds that it is in the City and the public’s interest in the health, safety and welfare of the community to file the WIIN Financial Assistance Application with Reclamation to seek funds made available under the WIIN Act of Title XVI. SECTION 2. The City Council has received and supports the application that will be submitted on the 17th day of August, 2017, and finds: (a) The City has legal authority to enter into an agreement with Reclamation to receive a grant, and (b) The City is able to provide the minimum 75% non-federal cost share specified in the funding plan for the application. ATTACHMENT A SECTION 3. The Council hereby authorizes and directs the City Manager or his designee, the General Manager of Utilities to: (a) File and sign, for and on behalf of the City of Palo Alto, a Financial Assistance Application for a financing agreement from Reclamation for the Recycled Water Pipeline Project. (b) Provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance agreement from the Board and any amendments or changes thereto. (c) Represent the City in carrying out the City’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the city and compliance with applicable state and federal laws. SECTION 4. The City will work with Reclamation to meet established deadlines required for entering into a cooperative agreement to obtain the aforementioned grant funding. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _____________________________ Deputy City Attorney City Manager City of Palo Alto (ID # 8321) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Zero Waste Technical Support Contract Title: Approval of a Multi-year Contract With Abbe and Associates in the Amount of $499,016 for Technical Support for the Zero Waste Program That Includes; a Waste Characterization Study, an Update to the Zero Waste Operational Plan, and Refuse Management Contracting Assistance From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council authorize the City Manager or his designee to execute the attached professional services contract with Abbe and Associates (Attachment A) in the amount not to exceed $499,016 for Zero Waste technical support, including completing a waste characterization study, updating the 2007 Zero Waste Operational Plan with new programs and policies to achieve 95 percent diversion by 2030 and providing assistance for modifying existing or procuring new contracts for refuse hauling, processing and disposal. Executive Summary Although the City of Palo Alto has one of the highest waste diversion rates in the state at over 81 percent (2016) and recently implemented compost collection programs that will most likely push the City’s diversion rate up to 83 percent in 2017, this is still short of the City’s goals of 90 percent diversion by 2021 and 95 percent diversion by 2030. It is critical to analyze, develop and select new programs and policies in the next two years because the City’s current three refuse management contracts (with annual costs of over $20 million) all expire in 2021, and a new Zero Waste Plan will be needed to provide guidance on new programs that will drive the new contracts. The consultant recommended for City of Palo Alto Page 2 selection, Abbe and Associates, will assist the City in characterizing current refuse streams (compost, recycling, and garbage), analyzing new reduction ideas, developing the new Zero Waste Plan, writing work plans and assisting with RFP processes, as needed, to select refuse management contractors well ahead of the 2021 expiration date. Background The City of Palo Alto has been a consistent leader in waste reduction, reuse, and recycling programs. The City has one of the highest waste diversion rates in the state at over 81 percent (2016). Beginning in the 1970s, the City was one of the first in the nation to offer municipal recycling and composting services and in 1991, due to shrinking landfill space, the City entered into an innovative 30-year partnership with the cities of Sunnyvale and Mountain View to send garbage to the Sunnyvale Material and Recovery Transfer (SMaRT) Station, a “dirty” Material Recovery Facility capable of recovering approximately 30 percent of waste as recyclable and compostable material. The SMaRT Station contract is directly linked to the City’s 30-year waste disposal contract at Kirby Canyon Landfill in south San Jose. In the early 2000s, after Council direction to create a Zero Waste framework for waste management, staff implemented “single stream” or one container recyclable collections, which increased program participation community-wide. While these efforts diverted 62 percent1 of the 70,000+ tons of waste generated from the landfill, the City needed more aggressive programs to achieve Zero Waste2 thereby adopting the Zero Waste Strategic Plan, which called for a 73 percent diversion rate by 2011 and approving the Zero Waste Operational Plan (ZWOP), which called for achieving Zero Waste by 2021. Via the ZWOP, a waste characterization study was conducted and resulted in a series of policies and programs to achieve Zero Waste being recommended. Many of these programs were implemented in the 2009 refuse hauling contract with GreenWaste of Palo Alto (GreenWaste), including enhanced technical support on waste management, increasing construction and demolition material recycling and collecting compostables (e.g., food scraps and soiled paper) from commercial 1 The diversion percentage is derived from CalRecycle per capita waste generation rates. 2 For program metrics, the definition of “zero waste” is achieving a 90 percent diversion rate. City of Palo Alto Page 3 customers. Although one of the highest in the state and well above regulatory requirements, the City’s diversion rate had plateaued around 80 percent by 2011 highlighting the need for further programs to reach the Zero Waste goal carbon emission reduction targets. Chart 1 Another waste characterization study in 2012, resulted in the residential curbside collection of food scraps and soiled paper in the green cart (CMR ID #5558), a 3- phase recycling and composting ordinance (CMR ID #6475) and an amendment to the GreenWaste contract shifting the contract incentives to encourage more compost collection and extending the contract term to 2021. These initiatives have resulted in diversion of over 4,000 tons of material, most likely pushing the City’s diversion rate up to 83 percent by 2017. In addition to accomplishing the City’s goals through vendor contracts, several Zero Waste programs promote waste reduction and reuse through community 2030 (95%) S/CAP Goal 2021 (90%) Zero Waste Goal City of Palo Alto Page 4 education and support, and partnering with organizations such as Repair Café Palo Alto, Transition Palo Alto Share Faires, and Palo Alto Unified School District. Discussion Although reaching an 83 percent diversion rate in 2017 would be a significant accomplishment and a testament to the dedication of City and GreenWaste staff and the community, accomplishing the Zero Waste Operational Plan and Sustainability/Climate Action Plan goals of 90 percent diversion by 2021 and 95 percent diversion by 2030, respectively, will require new and innovative ways to eliminate waste from being produced entirely. The scope of work for the proposed contract with Abbe Associates includes, but is not limited to the following tasks: 1. Complete a waste characterization survey: analyzing the composition of the City’s waste stream (garbage, recycling, and compost). 2. Analyze non-contract waste flows: quantifying self-hauled garbage going to landfills throughout the region. Currently the City exerts little control over this material; if found to be residual from construction and demolition within the City, more control over sorting and destination could be exercised. 3. Update the Zero Waste Operational Plan: utilizing results from Tasks 1 and 2, develop new programs and policies to help achieve 95 percent diversion by 2030. The update will include considerations for changes to collection and processing technologies, opportunities to move “upstream” by developing new extended producer responsibility policies and fostering greater deconstruction and salvage opportunities in the construction sector, as well as goals related to the City’s S/CAP Framework. 4. Contract support: analyzing current solid waste collections/hauling, processing, and disposal agreements, and assisting the City with contract extensions, modifications or new solicitations. The City currently has three main solid waste agreements budgeted at approximately $20 million annually: a. SMaRT Station: processing of garbage; agreement ends in 2021. b. Kirby Canyon Landfill: landfilling of garbage; contract ends in 2021. c. GreenWaste of Palo Alto: collection of all refuse and processing of recyclables and compost; contract ends 2021. City of Palo Alto Page 5 5. Optional contract negotiation and/or new solicitation assistance: if needed, assisting the City in renegotiating or extending existing agreements and/or developing requests for proposals for solid waste collection, processing and disposal. 6. Optional technical studies: if needed, determining life-cycle or analyzing greenhouse gas emissions for prospective programs and completion of California Environmental Quality Act (CEQA) documents. On May 4, 2017, a request for proposals for Zero Waste Technical Support Professional Services Contract was posted via the City’s eProcurement system. Proposals were received from two consultants on June 7. Staff reviewed the proposals and selected Abbe and Associates based on their experience and overall cost. After negotiations, the Abbe and Associates proposal fees are approximately 13% lower than the second consultant’s proposed fee amount. Abbe and Associates has significantly more experience with zero waste plan development than the second proposer. Abbe and Associates, led by Ruth Abbe, a solid waste expert with over 25 years of experience and one of the authors of the City’s Zero Waste Strategic Plan and Operational Plan, brings together solid waste experts who have authored approximately half of the nation’s Zero Waste plans, including individuals from Cascadia Consulting Group, Inc., HDR Engineering, Inc., R3 Consulting Group, Inc, and Gary Liss and Associates. As well, Abbe and Associates’ proposal provided more hours at a lower cost for the majority of the tasks. At approximately $20 million annually, the contracts with SMaRT Station, Kirby Canyon Landfill, and GreenWaste of Palo Alto, represent two-thirds of the City’s Refuse Fund budget. The deliverables provided in the proposed contract will help the City identify the most cost-effective and sustainable paths toward the City’s diversion goals, including cost-benefit analysis on the different diversion programs to ensure Council and ratepayers fully understand the implications of recommendations. Timeline This is a multi-year contract (through June 30, 2021) that will assist staff with a goal to select waste contractors, negotiate and gain Council approval of new waste agreements at least 12 months prior to the expiration of current City of Palo Alto Page 6 agreements. Staff will strive to finalize new agreements with enough time for waste management companies to purchase required trucks and/or upgrade facilities to manage the City’s wastes. The City can elect to not proceed with the optional tasks in the contract, if ultimately not needed, and the contract may be concluded earlier than the nearly 4 year term. The initial tasks – the waste characterization, non-contract flow analysis, new Zero Waste Plan, and contract options – are scheduled to be completed in early Fiscal Year 2019. Staff will present to Council the new Zero Waste Plan for approval and recommendations on how to proceed with the contracting options. Resource Impact Funding for this multi-year contract is in the Refuse Fund’s Fiscal Year 2018 adopted operating budget. Policy Implications This request is intended to identify programs and policies to achieve both City goals of 90 percent diversion by 2021 and 95 percent diversion by 2030 and is thereby consistent with the Zero Waste Operational Plan, Comprehensive Plan, and Sustainability/Climate Action Framework. This request does not represent any changes to existing City policies. Environmental Review This contract is exempt from CEQA as a Feasibility and Planning Study, Section 21083, Public Resources Code; Reference: Sections 21102 and 21150, Public Resources Code. Attachments: Attachment A: Contract C18167861 Abbe Associates Attachment A CITY OF PALO ALTO CONTRACT NO. C18167861 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ABBE & ASSOCIATES LLC FOR PROFESSIONAL SERVICES This Agreement is entered into on this 29th day of August, 2017, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and ABBE & ASSOCIATES LLC, a California Limited Liability Corporation, located at 1028 Fair Oaks Avenue, Alameda, CA 94501 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to develop new policies and programs to exceed its current Zero Waste goals (“Project”) and desires to engage a consultant to conduct various task as outlined in Exhibit A in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2021 unless terminated earlier pursuant to Section 19 of this Agreement. Professional Services Rev. April 27, 2016 2 SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Four Hundred Ninety-Nine Thousand Sixteen Dollars ($499,016.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the Professional Services Rev. April 27, 2016 3 professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. Option B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning Professional Services Rev. April 27, 2016 4 compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Ruth Abbe as the Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Ruth Abbe as the project manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Matthew Krupp, Public Works Department, Environmental Services Division, 3201 East Bayshore Road, Palo Alto, CA 94303, Telephone:650-496-5958. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts Professional Services Rev. April 27, 2016 5 fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the Professional Services Rev. April 27, 2016 6 approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. Professional Services Rev. April 27, 2016 7 SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person 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. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply Professional Services Rev. April 27, 2016 8 with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not Professional Services Rev. April 27, 2016 9 include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. OR 26.1 CONSULTANT is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. CONSULTANT shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. 26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any contract for public works construction, alteration, demolition, repair or maintenance. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 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. Professional Services Rev. April 27, 2016 10 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement Professional Services Rev. April 27, 2016 11 CONTRACT No. C18167861 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO City Manager (Contract over $85k) Purchasing Manager (Contract over $25k) Contracts Administrator (Contract under $25k) APPROVED AS TO FORM: City Attorney or designee (Contract over $25k) Contracts Administrator (Checklist Approval) ABBE & ASSOCIATES, LLC Officer 1 By: Name: Title: Officer 2 (Required for Corp. or LLC) By: Name: Title: Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS Professional Services Rev. April 27, 2016 12 EXHIBIT “A” SCOPE OF SERVICES Task 1 Project Coordination and Administration CONSULTANT shall provide management of all task activities under this Agreement, including project team assignments; meeting preparation and attendance; maintenance and monitoring of the budget and schedule; quality assurance and quality control of all deliverables; and coordination of any and all sub-consultants authorized under Section 12 of the Agreement. Task 2 Waste Characterization – targeted waste audits Task 2.1. Develop Study Design At the start of the waste characterization study, CONSULTANT will work with CITY staff and internal team members to solidify the methodology, protocols, and tools— including development of a detailed study design, sampling plan and schedule, and preparation of field forms and databases. Task 1 provides a foundation for all fieldwork, data entry, analysis, and reporting that is conducted as part of the study. Subtask 2.1.1 Conduct Project Kick-off Meeting CONSULTANT will begin the project with a kick-off meeting with CITY staff to clarify objectives, review the proposed methodology, and modify the approach to best meet the current needs of CITY. At the kickoff meeting CONSULTANT shall review, at a minimum, the following key considerations in designing any material characterization study: universe of material stream, number of samples, allocation of sample among material streams, and waste categories. The preliminary allocation is: Sector and Stream Sampling Method Characterization Method # of Samples Single-family, 3 carts Paired Carts Hand sort 30 Multifamily garbage Back of truck Hand sort 10 Commercial Front Load garbage Back of truck Hand sort 50 Commercial Compactor garbage Back of truck Hand sort 10 Loose Roll Off Back of truck Visual Characterization 20 Subtask 2.1.2 Develop Detailed Study Design The study design shall include protocols for a representative and unbiased approach to selecting routes, residences, businesses, etc. for sampling, the number size, and allocation of samples, and sample selection and characterization processes. The design shall also include field forms specific to each study that are designed to maximize data collection efficiency and minimize data collection errors. Within the study design, CONSULTANT shall design a sampling schedule for each task based on regular collection and operating schedules. CONSULTANT will also design the schedule to ensure an even distribution of samples across days of the week. This is Professional Services Rev. April 27, 2016 13 important because some communities or types of businesses may be more likely to have their waste, recycling and organics collected on certain days of the week. Subtask 2.2 Field Work CONSULTANT will perform 8 days of waste characterization field work. In this time, CONSULTANT will sort 15 samples per day for a total of 120 samples sorted. For the purposes of budgeting: a sample is a scoop of material from the back of a collection truck, the entire set out from a single-family residence, or a scoop of material from a bin at an individual business or multifamily property. Several 15 sample scenarios are illustrated below: Garbage samples from 4 regular route collection trucks + recycling samples from 4 regular route collection trucks + organics samples from 2 regular route collection trucks + the entire garbage, recycling, and organics carts from 2 single-family residences + the garbage, recycling, and organics from one restaurant = 15 samples Garbage samples from 4 regular route collection trucks + recycling samples from 3 regular route collection trucks + organics samples from 2 regular route collection trucks + the garbage, recycling, and organics from one multifamily property + the garbage, recycling, and organics from one restaurant = 15 samples CONSULTANT field crew will be receiving all samples at the SMaRT Station. All field work for one day will occur concurrently or consecutively without long breaks between field tasks. Subtask 2.2.1 Select Samples Task 2.2.1 involves implementing the specific sampling plan and schedule developed in Task 2.1. Depending on the target material stream, CONSULTANT’s method for selecting samples will include either (1) obtaining samples from randomly selected incoming vehicles at the SMaRT Station or (2) directing CITY or GreenWaste staff to randomly select single-family or multifamily dwellings for sampling at the generator site and deliver collected samples to a CONSULTANT field crew at the SMaRT Station. In this study, CONSULTANT shall use two types of sampling: back-of-vehicle sampling and “paired” cart sampling. Back-of-vehicle sampling is primarily used to sample the inbound streams at disposal sites and processing facilities, including landfills, transfer stations, MRFs, compost, and C&D facilities. “Paired” sampling refer to the simultaneous collection and sorting of multiple carts (usually garbage, recycling, and/or organics carts) from a single household, as part of the same set-out. This approach enables combining composition data from all three carts to produce more reliable estimates of achievable diversion for residential customers than back-of-vehicle studies. Subtask 2.2.2 Characterize Samples Professional Services Rev. April 27, 2016 14 In Task 2.2.2, CONSULTANT field crews shall characterize the samples collected in Task 2.2.1 using a hand sorting or visual characterization protocol as appropriate for the sample type, (the sorting protocol for each sample type will be defined in Task 2.1). CONSULTANT’s task manager will be on-site at the outset of all sorting activities to ensure that the crew follows approved protocols and maintains consistency across samples and sampling events. CONSULTANT’s field manager will be on-site every field day to brief personnel on any facility-specific health and safety requirements, personal protective equipment (PPE) requirements, contingency protocols, and ensure the quality and efficiency of field work. CONSULTANT will follow its standard process for hand-sorting all materials which includes the following steps: A member of the field crew will take photographs of the sample using a digital camera. The Sample Placard identifying the sample will be positioned to be visible in each photo. The field crew will sort the sample into the material categories and store separated materials in plastic laundry baskets. Individual members of the sorting crew typically specialize in groups of materials, such as papers or plastics. The field manager will monitor the homogeneity of material in the baskets as they accumulate, rejecting any materials that are improperly classified. The field manager will then visually inspect the purity of each material as it is weighed in its basket using a pre-calibrated scale, and will record each material weight on the Material Weight Tally Sheet. Task 2.3. Enter, Review, and Analyze Data In Task 2.3, CONSULTANT will analyze the data collected and documented during Task 2.2, using rigorous QA/QC protocols and the standard statistical procedures used for studies across the country, including in past Palo Alto characterization studies. CONSULTANT will enter data into its customized characterization database at the conclusion of each sampling event and will provide the CITY with a final accounting of all samples sorted. CONSULTANT will rely on CITY to provide annual and/or monthly tonnage estimates for commercial, single family, multifamily, and shared service area tonnages. CONSULTANT will perform one of two types of analyses: disposal site analysis (applicable for back-of truck samples) and generator analysis as appropriate. To perform these analyses, CONSULTANT will use the calculations approved by and used in the recent CalRecycle statewide study. Where alternative approaches are required or desired, CONSULTANT will work with CITY during study design in Task 2.1 to shape a defensible strategy that is suitable for obtaining consistent, representative, and reliable data. Task 2.4. Prepare a Draft and Final report In Task 2.4, CONSULTANT will assemble findings and recommendations into a clear, concise, and highly visual report that the CITY can use with confidence for short-and Professional Services Rev. April 27, 2016 15 long-term planning. To ensure that CONSULTANT fully meets project expectations, CONSULTANT’s project manager will develop and submit an outline of the final report for review by CITY staff. The outline will indicate all sections and analyses that are expected to be part of the final report. Upon approval of the outline, the project team will prepare a draft of the report, including executive summary, description of research protocols, and findings. CONSULTANT will submit the draft version of the report to CITY staff for review, and CONSULTANT will then incorporate comments, make necessary changes, and submit a completed final report. Task 2.5. Additional Sampling (if needed) In Task 2.5, CONSULTANT will perform additional sampling as requested by CITY and agreed to by CONSULTANT. Each additional day of field work is $6,500 ($6,100 in labor plus $400 in expenses) and the field crew can sort an additional 15 samples, subject to the same parameters details in Task 2.2. Task 3 Analysis of non-contract waste flows Task 3.1 Identify Areas of Research CONSULTANT will investigate three sources of information: Generator reports through the Green Halo system Diversion and disposal reports from the CITY’s approved C&D facilities Landfills receiving non-contract discarded materials Task 3.2 Document Diversion and Disposal through Green Halo and Approved C&D Facilities In the last 12 months, the Green Halo system has documented an overall diversion rate of 89 percent. CONSULTANT will meet with the CITY’s C&D coordinator to better understand the material flows and to obtain information about the disposition of the reported disposal tons (approximately 2,600 tons in the last 12 months). In addition to Zanker Materials Processing and Zanker Road Landfill, the CITY has approved 20 other C&D processing sites. These facilities are authorized to handle source- separated C&D materials, but likely also generate some processing residues. Should the CITY already receive diversion and disposal reports from these facilities, CONSULTANT will review these reports. Should the CITY not receive reports from these facilities, based on the Green Halo reports, CONSULTANT will identify the C&D processors handling the most materials and contact them for information about disposal tons attributed to Palo Alto generators. Task 3.3. Identify Landfills that Receive C&D and Self-haul Discarded Materials from Palo Alto Generators CONSULTANT will document the amounts of discarded materials from Palo Alto generators that were delivered to disposal facilities in 2016. CONSULTANT will work closely with the CITY to identify potential candidate landfills for further research and then contact key landfill personnel to document quantities and types of discarded Professional Services Rev. April 27, 2016 16 materials (including special waste) that these facilities received from Palo Alto generators. CONSULTANT will begin its data collection effort by meeting with CITY staff to review C&D flows and processes and to initially identify candidate landfills for follow-up surveys. CONSULTANT will review the Disposal Reporting System (DRS) to identify other landfills and disposal sites in the state that accept discarded originating in Palo Alto. CONSULTANT will provide a final list for the CITY’s review and approval prior to initiating any data collection contacts. Based on historical information, CONSULTANT anticipates contacting the following landfills for non-contract discarded materials flows: Altamont, Ox Mountain and Hay Road. CONSULTANT will work with CITY staff to obtain more information about: Processing residuals flows from GreenWaste to Monterey Regional and Potrero Hills landfills Self-haul tons delivered to the SMaRT Station (these are fairly well-understood and were sampled for the 2012 Waste Characterization Study) Self-haul tons from City operations Task 3.4. Plan and Schedule Data Collection Contacts To quantify the amounts of discarded materials from Palo Alto generators delivered to local landfills, CONSULTANT will contact landfill personnel who are familiar with their facility’s data management systems. To ensure the contacts are productive, CONSULTANT first will develop an electronic interview guide for recording answers to key questions, including, at a minimum, questions to comprehensively cover the following topics: Current types of materials accepted for disposal and/or diversion. Sectors (residential, commercial, industrial/institutional) from which the landfill receives material. The amounts and types of materials by sector received from Palo Alto. CONSULTANT is well-acquainted with landfill personnel at Altamont, Hay Road, Ox Mountain and Monterey Regional and do not anticipate needed a letter from the CITY in order to obtain the information requested. However, if needed, CONSULTANT will prepare a letter requesting participation and explaining the purpose of the study including the CITY’s specific data needs. The letter will be drafted in coordination with the CITY and ideally the CITY will send the letter, to ensure that landfills are responsive to the request. Task 3.5. Conduct Interviews CONSULTANT will contact the selected facilities using the interview guide developed in Task 3.4. To encourage candid discussion, CONSULTANT will assure participants that any sensitive or proprietary facility-specific information will not be shared beyond the consultant team and will be reported only as aggregated findings. Task 3.6. Summarize Findings Professional Services Rev. April 27, 2016 17 Using data collected during the research in Task 3.2 through 3.5 CONSULTANT will prepare a summary technical memo that includes the following information: An identification of the source and flows of discarded material generated in Palo Alto, with a particular emphasis on the C&D and self-haul loads. A complete list of all landfills that reported receiving discarded materials from Palo Alto. The types and quantities of materials received by each of the facilities. The type of customers/sectors delivering materials from Palo Alto. Task 4 Developing New Waste Reduction, Reuse, and Recycling/Composting Policy and Program Planning Task 4.1. Meet with City Staff to Discuss Findings An early task in planning for new policies and programs in waste reduction, reuse, and recycling and composting will be to meet and confer with CITY staff to discuss the preliminary findings and to discuss the full range of policies, programs and infrastructure that staff is interested in evaluating. For this task, CONSULTANT will develop a preliminary list of strategies and tactics for further research. Task 4.2. Analyze Data from Targeted Waste Audits and C&D and Self-Haul Flows CONSULTANT will carefully analyze the data obtained from the targeted waste audits and C&D and self-haul flows. CONSULTANT’s goal will be to identify service opportunities for enhancement of current programs and implementation of new programs. For this task, CONSULTANT will develop a list of service opportunities for further research. Task 4.3. Determine Palo Alto’s Capture Rate by Generator Sector Using available data from CITY and GreenWaste, CONSULTANT will prepare a capture rate analysis to determine the levels of diversion for each generator sector, single family, multifamily, commercial front load, commercial roll-off, and C&D. This analysis will help us to understand the success of the current programs. While the CITY’s overall diversion rate is 80 percent, it will be important to understand the CITY’s measured diversion rate. Task 4.4. Convene Stakeholder Groups CONSULTANT will work with CITY staff to identify the appropriate stakeholders for the planning process, which could include: Zero Waste block leaders, property managers, local builders, school site green team members, current or former members of the Community Environmental Action Partnership, local environmental groups (Sierra Club, Acterra), Chamber of Commerce or other business associations, faith organizations, hospitals, large commercial businesses and institutions (such as hospitals and educational institutions), service providers, reuse organizations, community and philanthropic organizations. Stakeholders could also include outside institutional or municipal partners, such as Stanford, SLAC, Sunnyvale, Mountain View and other nearby communities with high diversion or Zero Waste goals (San Jose, Santa Clara County, Menlo Park, San Carlos or San Mateo County). Professional Services Rev. April 27, 2016 18 Task 4.5. Convene Targeted Focus Groups to Pinpoint Barriers to Recycling and Composting Based on the results of the targeted waste audits and non-contract waste assessments, CONSULTANT will work with CITY staff to identify appropriate targets for these focus groups. Task 4.6. Identify Strategies and Tactics for Maximizing Participation in Existing Zero Waste Infrastructure For this task, CONSULTANT will work with CITY staff, using the results from our stakeholder meetings and focus groups, to identify the strategies and tactics for maximizing participation in the CITY’s existing Zero Waste infrastructure. Task 4.7. Identify Strategies and Tactics for Reducing Generation of Non-Recyclable, Non-Compostable Materials For this task, CONSULTANT will work with CITY staff to identify the strategies and tactics for reducing the generation of these materials. Task 4.8. Identify Strategies and Tactics for Maximizing Reduction in Overall Materials Generation For this task, CONSULTANT will work with CITY staff to identify the strategies and tactics for maximizing reduction in overall materials generation. Task 4.9. Review Technologies for Addressing Non-Recyclable, Non-Compostable Materials For this task, CONSULTANT will identify other new technologies or other innovations for addressing materials that are not currently targeted for recycling or composting. CONSULTANT will build on what has been learned from other jurisdictions and work with CITY staff to identify promising technologies or innovations that could be considered for future development. Task 4.10. Prepare Zero Waste Operational Plan For this task, CONSULTANT will compile the information developed in tasks 4.1 through 4.9 into a stand-alone Zero Waste Programs and Policies report. After review and comment by CITY staff, CONSULTANT recommends that this report be circulated to the CITY’s stakeholders for their review and comment. A revised version of the report will be incorporated into the Zero Waste Operational Plan. CONSULTANT will compile all of the information from tasks 2 through 4 into a new Zero Waste Operational Plan that will identify proposed policy and program costs, timing, materials diverted (tons), and environmental impacts. For this task, CONSULTANT will identify the planning level costs associated with each of the proposed policy, program and facility initiatives and identify an appropriate funding source for each initiative. CONSULTANT will estimate potential greenhouse gas reductions based on diverted tons using the U.S. EPA Waste Reduction Model and will estimate jobs creation potential using the methodology developed by the Institute for Local Self-Reliance. Professional Services Rev. April 27, 2016 19 CONSULTANT will also develop an implementation plan, identifying all of the action steps required to implement the Plan elements. The implementation plan will include an estimate of staff time necessary for implementation along with the opportunities for partnerships. The implementation plan will include a phasing schedule and diversion estimate by goal year and will serve as the “workbook” for CITY staff. Task 5 Refuse Contracting Options Task 5.1. Meet with Staff to Outline Preliminary Options For this task, CONSULTANT will meet with CITY staff to discuss each of the potential options available to the City for collection, processing, and disposal. The CITY may wish to explore scenarios that include the development of new collection and processing capacity. Based discussions with CITY staff, CONSULTANT will prepare an outline of the preliminary options for evaluation. CONSULTANT will also explore the criteria that the CITY would like to use to evaluate each of the scenarios. These could include: cost, diversion potential, environmental impacts, community impacts, greenhouse gas emissions reduction potential, ease of implementation, benefits to the local economy, and demonstrated ability to achieve desired results. Task 5.2. Identify a Minimum of Three Possible Scenarios For this task, CONSULTANT will analyze the impacts of implementing the new Zero Waste policies and programs described in the Zero Waste Operational Plan. Based on the results of task 5.1, CONSULTANT will develop a minimum of three contracting scenarios, these could include: Status quo – continuing with the SMaRT Station partnership and GreenWaste collection and processing contract Conducting a full RFP process for new collection, processing and disposal services Continuing some existing services while procuring additional new services CONSULTANT will document current regional plans and programs that could be made available to CITY. CONSULTANT will also describe and evaluation new collection and processing systems that CITY could procure. The results of this task will be documented in the draft Contracting Options report. Task 5.3 Prepare Draft Contracting Options Report The draft Contracting Options report will fully describe each of the scenarios identified in task 5.2 and will evaluate each scenario using the criteria identified by City staff in task 5.1. A focus of this effort will be to use best available information and economic and engineering expertise to fully evaluate each scenario. CONSULTANT anticipates conducting an economic analysis and greenhouse gas emissions reduction analysis for each scenario, identifying the pros and cons of each scenario, and ranking each scenario based on the evaluation criteria. CONSULTANT will prepare a draft report for review and comment by CITY staff. Task 5.4. Prepare Final Contracting Options Report Professional Services Rev. April 27, 2016 20 Based on comments received from CITY staff, CONSULTANT will prepare final Contract Options report. The final report will incorporate all comments and include specific conclusions and recommendations (if appropriate). Based on the information included in this report, CITY staff will be able to make a recommendation to the City Council for moving forward to the next stage of contract development. Task 6 Contract Development and Support (Optional) Task 6.1. Review and Analysis of Possible New Services and Contract Provisions for Inclusion in the RFP CONSULTANT will work with CITY staff to identify the possible new services and contract provisions to be included in the RFP. Task 6.2. Prepare RFP Documents CONSULTANT will prepare RFP documents with the assistance of CITY staff. The RFP documents will include a draft RFP and a draft agreement. CONSULTANT will use the CITY’s existing Franchise Agreement as the base for preparation of the revised agreement, revise and update provisions from community outreach meetings and analysis, as appropriate. CITY staff will review the draft RFP and agreement with the City Attorney, then City Council, before issuing the RFP. The RFP will include Communications and Process Integrity Guidelines to ensure that once the formal process starts, proposers will have clear guidance about how the City expects them to participate in the proposal process to ensure there are no questions about the integrity of the process. CONSULTANT will prepare written criteria and a methodology to evaluate proposals and recommend award of the contracts for discussion with and approval by City staff. CONSULTANT will draft the RFP incorporating recommended provisions for review and approval by City staff. CONSULTANT will work with City staff to convene a peer review panel of staff from other neighboring and comparable communities to review and comment on the draft RFP and service agreement. Task 6.3. Attend Council Meeting(s) for RFP Approval CONSULTANT will attend the Council meeting when the RFP is submitted for City Council approval. If the Council requests changes, CONSULTANT will make those revisions and attend subsequent Council meetings. CITY staff will issue the RFP after it has been approved by the City Council. Task 6.4. Assist with Conducting Mandatory Pre-Proposal Meeting(s) and Prepare RFP Addenda CONSULTANT will assist CITY staff in conducting the mandatory pre-proposal meeting with prospective proposers and preparing addenda to the RFP. The pre-proposal meeting will provide CITY staff with the opportunity to review the RFP with prospective proposers and respond to questions. CONSULTANT will prepare written responses to proposers’ questions before, during and after the pre-proposal meeting. Professional Services Rev. April 27, 2016 21 CONSULTANT will prepare answers to all questions from potential service providers. All responses to questions from potential service providers and addenda to the RFP that may be required will be prepared by our team and approved by CITY staff. Task 6.5. Evaluate Proposals CONSULTANT will provide CITY staff with the following assistance: A. Evaluate and Rank Proposals: Using the criteria described in Task 6.2 above, CONSULTANT will prepare documents evaluating each proposal for review by CITY staff, including reference check forms and evaluation forms, provide answers to specific questions or technical issues, and attend meeting(s) with CITY staff to discuss the proposals, if needed. B. Prepare Additional Information: CONSULTANT will coordinate with City staff, as necessary, to prepare any additional information to evaluate proposals received from service providers. C. Prepare for and Evaluate On-Site Evaluations: CONSULTANT will prepare questions for City staff to evaluate prior to conducting site evaluations at the proposers’ facilities for processing recyclables, organics and transfer for disposal to landfill. CONSULTANT will evaluate information provided during on-site evaluations. D. Prepare Technical Analyses: CONSULTANT will compile technical analyses to verify that the proposer can comply with the performance specifications and criteria during the contract term. E. Evaluate Proposers’ Experience and Performance CONSULTANT will evaluate: the qualifications and capabilities of project management team, relationships between the management team and corporate management, as well as internal controls; current and previous experience providing comparable services to communities of similar size and customer base; implementation and administration of complex solid waste collection systems, including equipment selection and route design; demonstrated experience providing services to other jurisdictions without unscheduled requests for rate changes (especially with recent contracts), effective operation of residential and commercial solid waste collection services; cost-effective processing and marketing of recyclable materials with demonstrated success in attaining the highest and best uses for materials collected; experience developing and maintaining a website to support the range of services provided by the franchisee; implementation of recycling services that achieve high participation levels and diversion rates, including incentives to increase diversion rates; demonstrated expertise in implementing and maintaining customer service programs that provide customers with easy access to information and the ability to make service level changes easily; demonstrated use of performance measures and achievement of specific goals; previous experience successfully designing and implementing services that transition to a new contract; demonstrated expertise in designing and maintaining data management systems to ensure accurate data collection, analyses and reporting; references; and history and scope of litigation. F. Analyze Financial Capability and Strength: CONSULTANT will evaluate proposer’s financial statements, including a review of financial ratios, and proposer’s ability to and plans for responding to fluctuations in recyclable material markets and for making needed start-up investments in equipment. CONSULTANT will also evaluate the likelihood that the proposer will be able to maintain the proposed service fees. Professional Services Rev. April 27, 2016 22 G. Evaluate Service Alternatives and Costs: CONSULTANT will confirm that the costs described in proposals are consistent with the activities and work plans. Task 6.6. Conduct Interviews with Proposers and Complete Reference Checks CONSULTANT will assist CITY with conducting interviews with qualified proposers. Such assistance will include preparing interview questions, conducting the interviews, summarizing the results of the interviews, and preparing any follow-up questions to the proposers invited to interviews. CONSULTANT will also obtain completed reference checks from those identified by proposers. Task 6.7. Complete Evaluation of Proposals CONSULTANT will assist CITY staff in completing evaluation of proposals by including any additional information requested by CITY, compiling scoring sheets and compiling the scoring results. CONSULTANT will prepare a summary of the proposal process, proposals received, the evaluation process, and the ranking of the proposals. Working with the City’s evaluation team and using the established criteria, CONSULTANT will review and prioritize the proposals and will seek clarification form the proposers as needed. If the criteria are weighted, CONSULTANT will prepare a preliminary ranking of the qualified proposals. During this task, CONSULTANT will prepare evaluation materials and analyze the cost proposals. CONSULTANT assumes one meeting during this task with the City’s evaluation team to compare evaluation notes and scorings. Task 6.8. Assist in Preparing Final Agreement CONSULTANT will provide City staff with the following assistance: A. Support During Negotiations: CONSULTANT will prepare a list of any outstanding services or costs issues that require negotiation with the top-ranked proposer to clarify proposals, complete the final agreement and ensure that the service fees are appropriate for the services that will be provided. B. Prepare Final Agreement: CONSULTANT will prepare the service agreement based on negotiations conducted, proposed service fees, final work plans and exhibits. CONSULTANT has budgeted up to a total of 40 hours for negotiations assistance and an additional 40 hours for finalizing the agreement and participating in the City Council selection meeting. CONSULTANT recognizes that if negotiations are more complex than anticipated and the City requires more technical assistance, this budget would need to be increased. C. Attend City Council Meeting(s): CONSULTANT will assist staff by preparing documents for presentation to the City Council summarizing the negotiations and the recommendation to execute service agreements with the service provider selected. If Council requests additional information before acting, CONSULTANT will assist staff in preparing that additional material and attending subsequent Council meeting(s). Task 7 Environmental Documentation Support (Optional) Task 7.1 Prepare Project Description Upon request of CITY, CONSULTANT will prepare the draft Project Description for review and comment by CITY staff. The project description will include discussions of Professional Services Rev. April 27, 2016 23 the following: 1) the project’s regional and local location; 2) project objectives and goals; 3) project characteristics, including new policies, programs and infrastructure; and 4) required discretionary actions. Upon receipt of the CITY’s comments on the administrative draft project description, CONSULTANT will revise the project description and resubmit for final approval before beginning the analysis. Task 7.2 Draft Initial Study and Negative Declaration Using the approved project description, CONSULTANT will prepare an Administrative Draft Initial Study (IS) and Negative Declaration (ND), Mitigated Negative Declaration (MND) or other CEQA document as determined by the City’s Department of Planning and Community Environment (Planning Department) for the Planning Department’s review. If through preparation of the IS, it is determined that there is a potential for a significant impact that cannot be mitigated, the IS determination will state that an EIR is required. If it is determined that there is no potential for a significant impact that cannot be mitigated, CONSULTANT will incorporate the City’s comments on the Administrative Draft of the CEQA document (i.e., IS/ND or IS/MND) and provide a Screencheck Draft for approval by City’s Planning Department. Following approval of the Screencheck Draft, CONSULTANT will prepare a final CEQA document for public review and publication. CONSULTANT will prepare the Notice of Completion (NOC) and Notice of Intent to Adopt the CEQA document (NOI) with the Draft CEQA document and will distribute the Draft CEQA document to interested parties and agencies including the State Clearinghouse and other applicable regional and local agencies. CONSULTANT will distribute the NOI to the Santa Clara County Clerk for posting. The IS and CEQA document (i.e., IS/ND or IS/MND) will address all CEQA Environmental Checklist topics, including Aesthetics, Agricultural Resources, Air Quality, Biological Resources, Cultural Resources, Geology and Soils, Greenhouse Gas Emissions, Hazards and Hazards Materials, Hydrology and Water Quality, Land Use and Planning, Mineral Resources, Population and Housing, Public Services, Recreation, Transportation/Traffic, and Utilities and Service Systems. Task 7.3 Public Hearings on Draft Initial Study and Negative Declaration CONSULTANT will present the findings of the Draft CEQA document at public hearings during the 30- day review period before the City of Palo Alto Planning Commission and City Council. This scope and budget includes one (1) hearing before the City of Palo Alto Planning Commission and one (1) hearing before City Council during the public review period. Task 7.4 Response to Comments and Final CEQA Document CONSULTANT will prepare responses to written and oral comments received on the Draft CEQA document and will prepare revisions to the Draft CEQA document resulting from comments. Task 7.5 Attend Public Hearings/Noticing Professional Services Rev. April 27, 2016 24 CONSULTANT will attend one (1) Planning Commission hearing and one (1) City Council hearing related to adoption of the CEQA document. Upon request of CITY, CONSULTANT will attend other meetings. CONSULTANT will prepare and file the Notice of Determination (NOD) with State Clearinghouse. It is assumed that all filing fees, including the California Department of Fish and Wildlife fee, will be paid to the Santa Clara County Clerk via a check provided by the City and is not included as part of the proposed budget. Task 8 Special Technical Studies (Optional) Task 8.1. Greenhouse Gas Emissions Analysis CONSULTANT will perform special studies to analyze specific environmental benefits/impacts of a program or policy. CONSULTANT will prepare a detailed analysis of greenhouse gas emissions associated with the Zero Waste Operational Plan or refuse collection options or procurement using the U.S. EPA Waste Assessment Model. Task 8.2. Refuse Rate Survey CONSULTANT will investigate and compare refuse rates and costs among cities. CONSULTANT will survey up to 10 comparable jurisdictions and document current rates for collection and processing. Professional Services Rev. April 27, 2016 25 Professional Services Rev. April 27, 2016 26 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within two (2) weeks of receipt of the notice to proceed (NTP). For Optional Tasks, CITY will issue a separate NTP; should CITY issue a NTP for such tasks, CONSULTANT shall provide a detailed schedule of work consistent within two (2) weeks of receipt of the NTP. Milestones No. of Days/Weeks Completion from NTP Task 1 Project Coordination and Administration 150 weeks Continuous through June 2021 Task 2 Waste Characterization 25 weeks Within 6 months from NTP Task 3 Analysis of Non-contract Waste Flows 12 weeks December 2017 Task 4 Developing New Policy and Program Planning 25 weeks June 2018 Task 5 Refuse Contracting Options 25 weeks June 2018 Task 6 Contract Development and Support (Optional) 75 weeks June 2021 Task 7 Environmental Documentation Support (Optional) 25 weeks June 2021 Task 8 Special Technical Studies (Optional) TBD As needed Professional Services Rev. April 27, 2016 27 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 Project Coordination and Administration $11,880 (annually) $35,640 (total) Task 2 Waste Characterization $110,700 (includes $3,900 in reimbursable expenses) Task 3 Analysis of Non-contract Waste Flows $19,000 Task 4 Developing New Policy and Program Planning $88,220 Task 5 Refuse Contracting Options $45,080 Professional Services Rev. April 27, 2016 28 Sub-total Basic Services $304,640 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $304,640 Additional Services (Not to Exceed) $0 Task 6 Contract Development and Support (Optional) $159,280 Task 7 Environmental Documentation Support (Optional) $23,128 Task 8 Special Technical Studies (Optional) $17,968 Maximum Total Compensation $499,016 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 $250.00 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 Professional Services Rev. April 27, 2016 29 EXHIBIT “C-1” SCHEDULE OF RATES Zero Waste Planning Support TEAM MEMBER ZERO WASTE PLANNING SUPPORT HOURLY RATES Ruth Abbe Project Manager $165 Richard Anthony Project Advisor, Zero Waste Policy & Program Analysis $125 Jessica Coe Task Leader, Materials Characterization & Flow Analysis $145 Dieter Eckels Project Analyst, Materials Characterization & Flow Analysis $183 Gary Liss Task Leader, Zero Waste Policy & Program Analysis $125 Kevin McCarthy Project Analyst, Financial Analysis $190 Tim Raibley Project Advisor, Facility Analysis $297 Charlie Scott Project Advisor, Materials Characterization & Flow Analysis $250 Portia Sinnott Project Analyst, Zero Waste Policy & Program Analysis/ Waste Characterization & Flow Analysis $125 Lisa Skumatz Project Advisor, Economic Analysis $135 Project Assistant Support to Materials Characterization & Flow Analysis $95 Field Crew Waste Sampling $6,100 per day Zero Waste Contracting Support TEAM MEMBER ZERO WASTE CONTRACTING SUPPORT HOURLY RATES Ruth Abbe Project Manager $165 Emily Ginsburg Project Analyst, Contract Options Analysis & Contract Development $145 Kevin McCarthy Task Leader, Contract Options Analysis $190 Garth Schultz Task Leader, Contract Development $205 Richard Tagore-Erwin Project Advisor, Contract Options Analysis & Contract Development $205 Tim Raibley Project Advisor, Processing Facility Procurement $297 Andrea Ramirez Project Engineer, Processing Facility Procurement $142 Environmental Documentation & Special Technical Studies TEAM MEMBER ENVIRONMENTAL DOCUMENTATION & SPECIAL TECHNICAL STUDIES HOURLY RATES Ruth Abbe Project Manager $165 Emily Ginsburg Task Leader, Refuse Rate Survey Development $145 Andrea Ramirez Task Leader, Environmental Documentation/Greenhouse Gas Emission Analysis $142 Michael Santulli Project Analyst, Refuse Rate Survey/Environmental Documentation $75 Lisa Skumatz Project Advisor, Community-based Social Marketing $135 Professional Services Rev. April 27, 2016 30 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. Professional Services Rev. April 27, 2016 31 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP City of Palo Alto (ID # 8358) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Acceptance of two CSD Grants and Budget Amendment of the General Fund & Public Art Fund Title: Acceptance of the Hewlett Foundation Grant, National Endowment for the Arts Grant, Code:ART Private Contributions, and Approve a Budget Amendment in the General Fund and Public Art Fund From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council: A. Accept grant funding to the General Fund as follows: 1. Approve the acceptance of grant funding from the William and Flora Hewlett Foundation in the amount of $28,000 for the Arts and Sciences Cultural Plan, and 2. Amend the Fiscal Year 2018 Budget Appropriation Ordinance for the General Fund budget by: a. Increasing the Community Services Department revenue estimate for grants by $28,000; and b. Increasing the Community Services Department appropriation by $28,000. B. Accept grant funding to the Capital Improvement Fund as follows: 3. Approve the acceptance of grant funding from the National Endowment for the Arts in the amount of $30,000 for the Public Art exhibition Code:ART, 4. Approve the acceptance of private contributions in the amount of $30,000 for the Public Art exhibition Code:ART, and 5. Amend the Fiscal Year 2018 Budget Appropriation Ordinance for the Capital Improvement Fund budget by: a. Increasing the Art in Public Places Capital Improvement Project (AC- 86017) revenue estimate in Fiscal Year 2018 by $60,000; and b. Increasing the Art in Public Places Capital Improvement Project (AC- 86017) appropriation by $60,000. Background City of Palo Alto Page 2 Arts and Sciences Cultural Plan The Arts and Sciences Division of the City of Palo Alto provides dynamic and engaging services to the community through civic cultural amenities and cultural programs. With six unique program areas, including two museums, three theatres, a public art program, an artist studio program and a maker studio, the Division engages with the community through exhibitions and performances; children’s and adults’ classes and summer camps; public art programming and teen-oriented cultural programs. While the cultural activity and creativity is exciting and the community engagement strong, the Division would benefit from a cultural plan that tied together and aligned the parts into a synergistic whole. A master cultural plan would ensure that each individual program’s plans tie together in an effective way and will allow the City to better utilize resources and collaboration across the department as well as improve data sharing across programs. In July 2017, the Arts and Science Division was awarded $28,000 for a William and Flora Hewlett Foundation Grant in support of the creation of this plan. The CSD budget now needs to be adjusted to accept the grant as revenue and adjust the Department’s expenditures in FY 2018. Code:ART Public Art Event With the support of an Art Works grant through the National Endowment for the Arts (NEA) and generous support from local corporate sponsors, the City of Palo Alto launched the Code:ART festival June 1-3, 2017. Code:ART temporarily reframed the City as a laboratory for urban interventions and creative placemaking while engaging commuters, residents, students and visitors in dialogue to shape the future of the downtown corridor. Code:ART was a unique opportunity to engage residents, Stanford affiliates and commuters to activate the downtown alleys and underutilized spaces in creative and engaging ways. The Public Art Program received $30,000 for a National Endowment for the Arts (NEA) grant in support of the Code:ART event (Attachment A). In addition, the Public Art Program received $30,000 in private contributions. The Public Art Program’s budget now needs to be adjusted to accept the final NEA reimbursement and private contributions as revenue and adjust the Department’s expenditures in FY 2018 to offset expenditures paid during the FY 2017 for this event. The $30,000 is accepted through a fiscal receiver arrangement between the City and Council for the Arts in Palo Alto and the Mid-Peninsula Area (CAPA). CAPA received donations for Code:ART from Houzz, Palantir and Verizon, which they passed on to the City. CAPA is a local non-profit that has advocated on behalf of the arts since 1971. Resource Impact These grant funds and contributions leverage and augment existing resources at no City of Palo Alto Page 3 cost to the City, and demonstrate increased efforts to support programs with non-City funds. Fiscal Year 2018 General Fund budget will need to be amended by: 1. Increasing the Community Services Department revenue estimates for grants by $28,000; and 2. Increasing the Community Services Department appropriation by $28,000. Fiscal Year 2018 Capital Improvement Fund budget will need to be amended by: 1. Increasing the Art in Public Places Capital Improvement Project (AC-86017) revenue estimate by $60,000; and 2. Increasing the Art in Public Places Capital Improvement Project (AC-86017) appropriation by $60,000. Attachments: Attachment A - NEA Code:ART Grant Award Letter National Endowment for the Arts CELEBRATING 50 YEARS arts.gov 2016 StP 13 AAJ Mr. Jim Keene Authorizing Official n II: DI c,ry M H£CE:il/t:o ANAGER'S OFFICE City of Palo Alto, California 250 Hamilton Avenue SEP .;.. 7 2016 Palo Alto, CA 94301-2531 Dear Mr. Keene: On behalf of the National Endowment for the Arts, it is a pleasure to inform you that your organization has been awarded a grant. Grantee: For: Grant#: Grant Amount: Period of Performance: CFDA#: Discipline/Program: Grant Project: City of Palo Alto, California Public Art Program 16-4100-7132 $30,000 June 1, 2016 to October 31, 2017 Grantee DUNS #: 050520782 Outcome: Livability 45.024, Promotion of the Arts -Grants to Organizations and Individuals Visual Arts To support Code: ART, media technology-based public art works focused on ·re-imagining the downtown corridors and underutilized spaces of the City of Palo Alto, as described in your application (A 15-966423) and the enclosed project budget. ~!& Refer to the enclosed Specific Terms that are applicable to this grant. Please review your award packet. A copy of the approved budget is included. If changes were made to the budget they are noted at the bottom of the budget page. Award materials are online at www.arts.gov/manageaward. The General Terms & Conditions, which adopts OMB's Uniform Guidance (2 CFR 200), provide detailed information concerning the NEA's regulations and procedures, the administrative requirements that apply to your grant, and your responsibilities as a grantee. Instructions for requesting grant funds and reporting on your project are also here. If you have any questions regarding the administrative requirements of this grant, our Grants & Contracts Office staff will be happy to assist you. They may be reached at grants@arts.gov or (202) 682-5403. Congratulations on your grant award! Sincerely, Jane Chu Chairman 400 7th Street, sw • Washington DC 20506 CELEBRATING50YEARS SPECIFIC TERM National Endowment for the Arts NCASpring Specific Terms and Conditions 8/29/16 The National Endowment for the Arts {NEA) reviews each grant project for its potential impact on historic properties/districts/sites and the environment to fulfill our responsibilities and obligations under the National Historic Preservation Act (NHPA) and the National Environmental Policy Act (NEPA), respectively. Under the terms of this grant award, no funds can be released, nor should you undertake any project activities, until the NEA conducts a complete review of your project in accordance with NH PA/NEPA The Office of the General Counsel or NEA Program Staff will be contacting, or may have already contacted, your organization regarding NHPA/NEPA compliance and what you need to do. Information that we request of you must be submitted to the Office of the General Counsel and/or to Program Staff by February 1, 2017. If you do not respond by this date, your grant will be terminated. All NHPA/NEPA related documentation must be emailed to NEAhistoricreview@arts.gov. To summarize, • Receipt of this award package in no way implies your NEA project is in compliance with NHPA and/or NEPA and until a determination is made by the NEA as to whether compliance standards have been met, your award is subject to review in accordance with NH PA/NEPA. • Be aware that you cannot begin any project activities until NEA completes its NHPA and/or NEPA review and notifies you that you may proceed. • Should you chose to proceed without having been notified that you are in compliance with NHPA/NEPA, you risk being unable to obtain any grant funds associated with your award and possible termination of your award. • Failure to adhere to this specific term of your award will jeopardize collecting any funds under your grant award. For more information on the National Historic Preservation Act and the National Environmental Policy Act see, • yvww .arts.gov /grants-organ izations/n epa-nhpa-review • www.arts.gov/grants/manage-your-award "Compliance with NEPA and NHPA." Page 1 of 1 NATIONAL ENDOWMENT FOR THE ARTS APPROVED PROJECT BUDGET Grantee: City of Palo Alto, California Grant#: 16-4100-7132 INCOME Match EXPENSES Cash: In-Kind: Direct Costs Salaries & Wages: Fringe: Travel: Other: IMPORTANT INFORMATION $ $ $ $ $ $ Application Update/Revised Budget: 04/19/2016 138,400 9,000 Total MATCH: $ 147,400 NEA GRANT*: $ 30,000. TOTAL PROJECT INCOME: $ 177,400 50,600 31,000 3,550 92,250 Total DIRECT Costs: $ 177,400 INDIRECT Costs: $ 0 TOTAL PROJECT EXPENSES: $ 177,400 You are responsible for reviewing the General Terms & Conditions for your award, which are available on our website at www.arts.gov/manageaward. Failure to comply with these Terms may result in the disallowance of project expenditures and/or the reduction or withdrawal of Arts Endowment support for your project. • This budget is derived from your application, revised budget, and/or other communication. All costs must be incurred within the period of performance listed on your award letter. It is understood that this budget reflects estimated expenditures and that actual, allowable expenditures will be reported on all financial reports. • This grant must be matched dollar for dollar (1 to 1) unless otherwise indicated in your grant award letter. Match must be nonfederal. • Certain unallowable costs may have been removed from your budget (see Budget Notes); these costs cannot be supported with Federal or matching funds and should not be included on future financial reports for this award. • Expenditures on your project should be in general agreement with the line item costs outlined in this budget. Some budget changes may require prior NEA approval (e.g., adding foreign travel or indirect costs). • This budget cannot include overlapping project costs with any other direct Federal grant including awards made directly by the NEA or another Federal Agency (e.g., NEH, HUD, etc.) per 2 CFR §200.306 and NEA Legislation. • NEA funds that are sub-granted to you through a state or regional arts agency, or a local arts organization, cannot be used as match on this award per 2 CFR §200.306 and NEA Legislation. • Proper documentation must be maintained for all costs in this budget, including all salaries charged, in whole or in part, to this award. • Proper documentation must be maintained for all in-kind contributions claimed per 2 CFR §200.96, .302, .333. • All activities supported with NEA or matching funds, including performance/touring activities as well as publications, websites, or other media projects, must be made accessible to people with disabilities in compliance with Section 504 and the ADA. • Payments to foreign nationals and/or non-compliant travel to or from countries sanctioned by the U.S. Treasury Department's Office of Foreign Asset Control are unallowable. *NEA Grant= total amount of federal funds d:>lgated, total amount of the federal award. BUDGET NOTES: "Volunteer hours" and "Provided exhibiting and storage space" removed from IN-KIND; not reflected as direct costs in the project budget. CASH increased to balance budget. ARTWORKS. '1;11~.g"v NATIONAL ENDOWMENT FOR THE ARTS REPORTING REQUIREMENTS for Grants to Organizations Grant Numbers that Begin 15-xxxx-xxxx and later Rev. November 2014 Materials regarding your award are online at www.arts.gov/manageaward/index. Basic information about your grant is available at www.arts.gov/mygrant (or My Grant at a Glance). The reporting requirements for your grant are described below. Follow these instructions carefully. PROGRESS REPORT Generally, only one progress report will be required during the grant period. It is submitted as part of the Payment Request form (Box 10). Limit your response to the space provided on the form. The Progress Report is due the first time the cumulative amount requested EXCEEDS two thirds (2/3) of the grant award amount. The Progress Report must include a description of grant supported activities that: • have been undertaken since the grant period start date, and • are scheduled for the remainder of the grant period. FINAL REPORTS Submit Final Reports to the Grants & Contracts Office (G&C) no later than 90 days after the grant period end date. You will be ineligible for any National Endowment for the Arts (NEA) awards if you fail to submit required and acceptable Final Reports for previous awards. Go to www.arts.gov/manageaward/index for Final Reports instructions and forms. The Final Descriptive Report (FDR) and Federal Financial Report (FFR) must be emailed to FinalReports@arts.gov. Identify your grant number and organization name in the subject line; e.g., FDR 15-3200-7xxx ABC Arts Organization, or FFR 15-3200-7xxx EFG Arts Organization. The Final Report includes: 1. Federal Financial Report (FFR). 2. Final Descriptive Report (FDR): • narrative describing the project activities; • data about specific activities and participants; and • geographic location(s) and venue(s) where grant activities took place (online module). 3. Final Product Requirement. If a final product is required for this grant, it is indicated below. Prominently label your product with your organization's name and grant number. If the product is available on line, include the Web address or link in your FDR. Other: Book(s) / Catalogue(s) / Journal(s) Publication(s) / Report(s) Recordings (CD, DVD, or other audio or video files) Libretto/ Score(s) (hard copy or PDF on disc) If no item is identified, a product is NOT required for your grant. We reserve the right to request subsequent information or work product(s) as necessary. All Federal awarding agencies retain a royalty-free right to use all or a portion of their grantees' final report material for Federal purposes (e.g., the use of final report work products to document the results of grant programs), including Page 1 of 2 publication on a Federal Web site. If the NEA is interested in using images for promotional and educational uses, we will contact you before any such use. For more information, see the General Terms & Conditions. If you cannot submit your product electronically contact finalreports@arts.gov for the NEA's address. NOTE: The first-class mail to the NEA is delayed due to security screening. Products put through this process suffer irreversible damage. If you are sending a product, or time-sensitive materials, use an alternative delivery service. ADDITIONAL REMINDERS 1. An active and valid www.sam.gov (formerly CCR) registration is required to receive Federal funds and must be maintained throughout the life of the award. 2. Grant activities must be carried out consistent with those approved for funding by the NEA. If changes in the project are believed necessary, send a request with a justification to the G&C before implementation. 3. NEA's support must be acknowledged in all materials and announcements regarding this grant. 4. See the requirements concerning record retention and the Federal government's rights of access to records and personnel in the General Terms & Conditions. 5. Documentation must be maintained for fill grant project costs claimed, including those covered by the required match. 6. Ensure your email will accept messages from the arts.gov domain name. REPORTING BURDEN: The public reporting burden for this collection of information is estimated to average eight hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. The NEA welcomes any suggestions that you might have on improving the reporting requirements and making them as easy to use as possible. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Deputy Chairman for Management & Budget; National Endowment for the Arts; Washington, DC 20506. NOTE: Grantees are not required to respond to the collection of information unless it displays an 0MB control number that is valid at the time of issue. Page 2 of 2 City of Palo Alto (ID # 8341) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: CA Resources Agency Grant Applications Title: Adoption of Three Resolutions Approving the Submission and Management of Three Grants to the California Natural Resources Agency for Junior Museum and Zoo Exhibits, Baylands Boardwalk and Trail Signage and Interpretation From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council authorize: 1) Staff to submit an application for an Outdoor Environmental Education Facility grant through the California Department of Parks and Recreation; and 2) Staff to submit an application for a Habitat Conservation Fund Program “Trails” grant through the California Department of Parks and Recreation’s Habitat Conservation Fund Program; and 3) Staff to submit an application for a California Museum Grant through the California Cultural and Historical Endowment; and 4) The City Manager or his designee from the Community Services Department to manage the grant, including submission of the grant, reports, and requests for reimbursement. 5) Approval of the attached resolutions to ensure that the applicant has reviewed the grant application and grant contract and agrees to all language within both documents. Executive Summary If approved, staff intends to submit two grants to the California Department of Parks and Recreation to fund interpretive signage, interactive exhibits, and public art to bring Palo Alto residents into the Baylands Nature Preserve and engage them in interpretive experiences on the reconstructed Baylands Boardwalk and nearby trails. Staff also intends to submit a California Museum grant to fund a “California Dinosaur Garden” exhibit at the Junior Museum and Zoo (JMZ). Background City of Palo Alto Page 2 Baylands Interpretive Grants An approval of this request would direct staff to submit grants requesting funds for the design, fabrication and installation of interpretive exhibits and public art on the boardwalk and adjacent trails. The signage and exhibits will improve visitor experience and engagment on the trail between Palo Alto’s Nature Center and East Palo Alto’s Cooley Landing Education Center. The Baylands Nature Center and Boardwalk are undergoing renovations and restoration. Improvements to the Lucy Evans Nature Interpretive Center (Nature Center) were completed in April 2017. In the winter of 2018, the adjoining 865-foot- long boardwalk, closed to the public in 2014, will be rebuilt to increase structural integrity and to improve access for people with disabilities. Two Capital Improvement Projects (CIPs), approved by Council for the Fiscal Year 2018 budgets, are addressing the structural and code compliance issues with the Nature Center and boardwalk, and another is providing interpretive signage for the Nature Center deck. Funds allocated to this project, however, are insufficient to provide interpretive signage exhibits on the boardwalk and nearby trails. California Museum Grant If awarded, funds from the California Museum Grant would support the design and construction of the California Dinosaur Garden Exhibit plannded for the Junior Museum and Zoo in 2020. The exhibit will feature cretaceous era plants, sculptures of California dinosaurs, and examples of local fossil evidence from the era. The JMZ is a treasured City-operated museum, zoo, and education center uniquely situated in Rinconada Park to serve Palo Alto families and children. With 184,000 annual visits, the JMZ engages a child’s curiosity for science and nature through hands-on inquiry-based exhibits and activities, and inspiring encounters with live animals. The current JMZ building (built in 1941) and zoo (built in the 1969) are not adequately sized or designed to accommodate the JMZ’s vibrant programs, current requirements to support living and non-living collections, expanding educational programs, and current accessibility and seismic code requirements. The Friends have successfully raised over $25 million to fund the rebuilding of the facility in partnership with the City. The California Dinasaur Gardern exhibt, and other planned new exhibits, will ensure that the re-built JMZ will better serve its current local visitors and schools while still maintaining its safe and intimate feel that is so popular with this community. Three Authorizing Resolutions are attached as Attachment A, B, and C. The Authorizing Resolution serves three purposes: 1) serves as the means by which the applicant’s Governing Body agrees to all the terms of the contract; 2) provides a descriptive project title and confirmation that the applicant has the funding to complete the proposed project if funds are awarded; and, 3) designates a position title to City of Palo Alto Page 3 represent the Governing Body on all matters regarding the application and project. The incumbent in this position is referred to as the Authorized Representative. Discussion Baylands Nature Center Signage Interpretive Plan In 2017, the Baylands Nature Center Exhibit CIP funded the consulting firm S2 Associates to develop a concept-level plan for interpretive signage on the Boardwalk and Adjacent trails and provided a cost estimate for the interpretive elements. The budget allocation sought for each Baylands Interpretive grant is approximately $500,000 and the applications describe nearly identical scopes. Only one grant is required to fund the project and if the City were to be awarded both grants, only one would be accepted. This planning effort dovetails with other preserve-wide interpretive planning underway as part of the Baylands Comprehensive Environmental Management Plan. Future signage located on the trails would follow the preserve’s standards and be mounted on posts as called out in the Design Guidelines for the Palo Alto Baylands Nature Preserve. Interpretation is insufficient along the San Francisquito Creek Trail and the portion of the Bay Trail north of the San Francisquito Creek Trail to Cooley Landing. These grants would fund appropriate levels of interpretation for the Boardwalk and adjacent trails, as called out on the Interpretive Plan. They would also support enhancements to the trails that link the Cooley Landing Education Center and the Baylands Nature Interpretive Center, as a means of improving access and relationships between the communities of East Palo Alto and Palo Alto. The plan envisions two public art interpretive pieces, one on the Boardwalk and one near Cooley Landing. Once funded, these installations will be designed to engage the public in site-specific phenomena similar to installations at the Emeryville Shore Line or Pier 15 in San Francisco. The Public Art Program, in collaboration with the Community Services Department, will manage the design and installation of the public art interpretive elements. Funds provided by this grant will provide the paths, boardwalk, and surrounding trails with interpretive signs, small scale sculptures, and interactive exhibits. Interpretive media is meaningful when placed outdoors in a nature preserve where the visitors can see, smell, hear, and feel the plants, animals and ecology to which the media refers. The goal of the interpretive media for this project is to connect what the visitor experiences in the marsh to the intangible meaning behind the experience so that the marsh becomes more personally relavent and valuable to them. The current constituency of the Interpretive Center includes a broad range of stakeholders. The Interpretive Center is a destination for elementary school classes who come to learn about the salt marsh through hands-on programimng operated by City of Palo Alto Page 4 the Junior Mueum & Zoo. The building is also used by community groups for meetings and special events. Individual families and birders are also frequent visitors to the preserve and InterpretiveCenter. The wider Baylands preserve is a popular destination for hikers, bicyclists and joggers who enjoy its 15 miles of trails. The preserve’s boat dock also serves water lovers by providing Bay access to small craft boaters, wind surfers, kayakers, canoers and paddle boarders. California Museum Grant The Friends of the Junior Museum & Zoo have allocated $1.5 million to exhibitry for the new museum, but this funding allocation does not include the California Dinosaur Garden. The budget allocation sought for the Junior Museum and Zoo’s California Dinosaur Garden is approximately $100,000. Resource Impact and Timeline Two of the grants, the “Trails” grant and the California Museum grant require one-to- one matching funds. The City’s Baylands Boardwalk CIP, PE-14018, funds would be used to meet the matching fund requirements for the Trails grant. This CIP has $1 million budgeted toward reconstruction of the Boardwalk and up to $500,000 would be used to match the grant. The City’s Rinconada Park Improvements CIP, PE-08001, would be used to meet the matching requirements of Museum Grant and this CIP has $300,000 budgeted toward park improvements and improvements to the parking lot that serves the JMZ and Rinconada Park. The applications are due August 14, September 1, and October 1, 2017 and the awards will be announced during the spring of 2018. The grant programs allow for submission of the resolution after the deadline. The City of Palo Alto would have up to seven years from the appropriation date to implement the complete the projects. The Baylands Interpretive Signage Project milestone schedule is as follows: Grant Announcement Spring 2018 Design Bid and Contract April – June 2018 Appropriation date July 1, 2018 Design July – September 2018 Boardwalk Construction October – February 2019 Bid and Fabrication October – January 2019 Installation February 2019 The completion of the Interpretive Plan will increase the number of signs that would need to be maintained by the City. Currently, signs in the Baylands Preserve are maintained by Community Service Department Rangers and Naturalists. The interpretive elements would be designed to be durable in the outdoor environment and City of Palo Alto Page 5 to resist tampering and vandalism. The Museum Grant and Dinosaur Garden Project milestone schedule is as follows: Grant Announcement Spring 2018 Design Bid and Contract April – June 2018 Appropriation date July 1, 2018 Design September 2018 – September 2019 JMZ Construction September 2018 – December 2020 Bid and Fabrication December 2019 – December 2020 Installation February 2020 Policy Implications Staff will fully comply with the rules and policies for grant submission as outlined in City Policy 1-12: Grant and Funding Request Applications. All improvements in the Baylands will conform with the 2004 Baylands Nature Preserve Site Assessment and Design Guildlines. All exhibits will comply with the Smithsonian Guidelines for Accessible Exhibition Design. Submission of grant applications for the the Baylands and the Junior Museum & Zoo are consistent with Policy C-19 of the Community Services Element of the City’s Comprehensive Plan: “Develop improvement plans for the maintenance, restoration and enhancement of community facilities, and keep these facilities viable community assets by investing the necessary resources.” Environmental Review Submission of a grant proposal is not considered a project under the California Environmental Quality Act. Attachments: Attachment A: Outdoor Education Grant Resolution Attachment B: HCF Trails Resolution 2015 Attachment C: CA Museum Grant Resolution Resolution No: _________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALO ALTO, SANTA CLARA COUNTY, DISTRICT 14 Approving the Application for OUTDOOR ENVIRONMENTAL EDUCATION FACILITIES GRANT FUNDS WHEREAS, the State Department of Parks and Recreation has been delegated the responsibility by the Legislature of the State of California for the administration of the Outdoor Environmental Education Facilities Grant Program, setting up necessary procedures governing the application; and WHEREAS, said procedures established by the State Department of Parks and Recreation require the Applicant to certify by resolution the approval of the application before submission of said application to the State; and WHEREAS, successful Applicants will enter into a contract with the State of California to complete the Grant Scope project; NOW, THEREFORE, BE IT RESOLVED that the City Council hereby: Approves the filing of an application for the California Dinosaur Garden); and 1. Certifies that said Applicant has or will have available, prior to commencement of any work on the project included in this application, the sufficient funds to complete the project; and 2. Certifies that if the project is awarded, the Applicant has or will have sufficient funds to operate and maintain the project, and 3. Certifies that the Applicant has reviewed, understands, and agrees to the General Provisions contained in the contract shown in the Grant Administration Guide; and 4. Delegates the authority to Community Services Director to conduct all negotiations, sign and submit all documents, including, but not limited to applications, agreements, amendments, and payment requests, which may be necessary for the completion of the Grant Scope; and 5. Agrees to comply with all applicable federal, state and local laws, ordinances, rules, regulations and guidelines. Approved and adopted the 14th day of August , 20 20 I, the undersigned, hereby certify that the foregoing Resolution Number _____ was duly adopted by the City Council following a roll call vote: Ayes: Noes: Absent: ________________ (Clerk) Resolution Form Resolution No: __________________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALO ALTO, SANTA CLARA COUNTY APPROVING THE APPLICATION FOR GRANT FUNDS FROM THE HABITAT CONSERVATION FUND PROGRAM WHEREAS, the people of the State of California have enacted the California Wildlife Protection Act of 1990, which provides funds to the State of California for grants to local agencies to acquire, enhance, restore or develop facilities for public recreation and fish and wildlife habitat protection purposes; and WHEREAS, the State Department of Parks and Recreation has been delegated the responsibility for the administration of the HCF Program, setting up necessary procedures governing project application under the HCF Program; and WHEREAS, said procedures established by the State Department of Parks and Recreation require the applicant to certify by resolution the approval of application(s) before submission of said application(s) to the State; and WHEREAS, the applicant will enter into a contract with the State of California to complete the project(s); NOW, THEREFORE, BE IT RESOLVED that the City Council of Palo Alto hereby: 1. Approves the filing of an application for the Habitat Conservation Fund Program; and 2. Certifies that said applicant has or will have available, prior to commencement of any work on the project included in this application, the required match and sufficient funds to complete the project; and 3. Certifies that the applicant has or will have sufficient funds to operate and maintain the project(s), and 4. Certifies that the applicant has reviewed, understands, and agrees to the provisions contained in the contract shown in the grant administration guide; and 5. Delegates the authority to Community Services Director to conduct all negotiations, execute and submit all documents, including, but not limited to applications, agreements, amendments, payment requests and so on, which may be necessary for the completion of the project. 6. Agrees to comply with all applicable federal, state and local laws, ordinances, rules, regulations and guidelines. Approved and Adopted the _____day of ______________, 20_______. I, the undersigned, hereby certify that the foregoing resolution number_____was duly adopted by the City Council following a roll call vote: Ayes: Noes: Absent: Clerk ______________________________________ Resolution No: _______________________ Resolution of the Palo Alto City Council Approving the Application for Grant Funds for The California Cultural and Historical Endowment’s Museum Grant Program under the California Clean Water, Clean Air, Safe Neighborhood Parks, And Coastal Protection Act Of 2002 (Proposition 40) WHEREAS, the Legislature and Governor of the State of California have provided funds for the program shown above; and WHEREAS, the California Cultural and Historical Endowment has been delegated the responsibility for the administration of this grant program, establishing necessary procedures; and WHEREAS, said procedures established by the California Cultural and Historical Endowment require a resolution certifying the approval of application(s) by the Applicants governing board before submission of said application(s) to the State; and WHEREAS, the applicant, if selected, will enter into an agreement with the State of California to carry out the Project NOW, THEREFORE, BE IT RESOLVED that the City Council 1. Approves the filing of an application for the (name of the project); and 2. Determines Applicant Is eligible to apply for a State grant due to status as a 501 (c) 3 non-profit organization, government entity, or Federally Registered tribe; and 3. Certifies that applicant understands the assurances and certification in the application herein, and 4. Certifies applicant organization has long-term control of the property and will provide satisfactory documentation of the long-term control as part of the grant agreement development process; and 5. Certifies that applicant or title holder will have sufficient funds to operate and maintain the project consistent with the land tenure requirements; or will secure the resources to do so; and 6. Certifies the proposed project/organization is free of any legal challenges that could undermine progress on the project; and 7. Gives State permission to publish any provided digital image to its website and to crop or resize the image; and 8. Agrees to acknowledge State’s support in any news media, brochures, articles, publications, seminars, exhibits, buildings, displays, products, or other promotion materials about the funded project; and 9. Certifies that it will comply with the provisions of Section 1771.5 of the State Labor Code regarding payment of prevailing wages on Projects awarded Proposition 40 Funds, and 10. Agrees that projects involving construction, renovation, repair, rehabilitation, or ground or visual disturbances must comply with all current laws and regulations which apply to the Project, including, but not limited to, labor codes related to prevailing wage, legal requirements for construction contracts, building codes, environmental laws, health and safety codes, disabled access and historic preservation laws and environmental laws. Grantee will be required to certify that, prior to commencement of construction, all applicable permits and licenses (e.g., state contractor’s license) will be obtained; and 11. Agrees to adhere to the Americans with Disabilities Act of 1990 (ADA) and the 2010 ADA Standards for Accessible Design. Title III of the ADA covers places of public accommodation (such as museums, libraries, and educational institutions) and includes a specific section regarding new construction and alterations in public accommodations; and 12. Agrees that projects involving construction, renovation, repair, rehabilitation, or ground or visual disturbances must comply with the National Historic Preservation Act and NAGPRA (Native American Graves Protection and Repatriation Act); and 13. Waives all rights to privacy and confidentiality of the material submitted to State, and 14. Agrees to execute a grant agreement prior to the encumbrance deadline of June 30, 2019, and will caused work on the project to be commenced within a reasonable time after encumbering the funds, so that the project will be complete and the final invoice submitted to the State by May 1 of the stated year; and 15. Agrees that for all property acquired or developed with Museum Grant funds, applicant will accept, sign, notarize and record a declaration of covenants, conditions and restrictions (deed restrictions) which attaches the conditions of the grant, as set forth in the grant agreement, on the use and enjoyment of the property until the end land tenure date specified in the grant agreement; and 16. Appoints the (designate position, not person occupying position) ______________________ , or designee, as agent to conduct all negotiations, execute and submit all documents including, but not limited to applications, agreements, payment requests and so on, which may be necessary for the completion of the aforementioned project(s). Approved and adopted the __________day of __________ 20____. I, the undersigned, hereby certify that the foregoing Resolution Number __________ was duly adopted by the City Council. Following Roll Call Vote: Ayes: _________ Nos: _________ Absent: _________ __________________________________________ Clerk/Secretary for the City Council City of Palo Alto (ID # 8343) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Miscellaneous Gas Rate Update - Carbon Offset Title: Adoption of a Resolution Amending Utility Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service) and G-10 (Compressed Natural Gas Service) to reflect the Carbon Offset Charge, as adopted by City Council in the Carbon Neutral Gas Plan, and Terminate PaloAltoGreen Gas Schedules G-1-G, G-2-G, G-3-G and G-10-G From: City Manager Lead Department: Utilities Recommendation Staff recommends that the Council adopt a Resolution (Attachment A) amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service) and G-10 (Compressed Natural Gas Service), and formally terminates PaloAltoGreen Gas schedules G-1-G, G-2-G, G-3-G, and G-10-G (Attachment B) to reflect the Carbon Offset Charge, as adopted by Council in the Carbon Neutral Gas Plan. Discussion The Carbon Neutral Gas Plan replaced the PaloAltoGreen Gas (PAG Gas) program, which launched in December 2014 as a voluntary program that allowed customers to negate the impact of greenhouse gas emissions associated with their natural gas usage. Engagement by community members interested in accelerating the reduction of the City’s natural gas carbon footprint let to the Carbon Neutral Gas Plan, which applies to all natural gas customers. At its December 5, 2016 meeting, the City Council unanimously adopted the Carbon Neutral Gas Plan, enabling the City to achieve a carbon-neutral gas supply portfolio starting in FY 2018 with a rate impact not to exceed 10¢/therm. The attached Resolution and Natural Gas Rate Schedules implement by Council’s approved directive and passes through to customers the cost of purchasing carbon offsets for the City’s natural gas portfolio. The cost to customers does not exceed $0.10 per therm. Each amended rate schedule includes a line item for the Carbon Offset Charge, with a price range of $0.00 to $0.10 per therm that will be adjusted administratively. The Carbon Offset Charge will show up as a separate line item on customer bills. Based on the City of Palo Alto Page 2 current cost of carbon offsets, the initial price to customers is anticipated to be $0.04/therm. The price is subject to change based upon the market price to buy carbon offsets in the future. As this item has been discussed at length by the UAC, Finance and City Council and merely implements already approved-in-concept rate schedule changes, this item is being presented to City Council on consent (Attachment C – Staff Report 7533). Resource Impact Based on quotes as of June 2017, the price for offsets is about $8/ton of carbon dioxide equivalent (CO2e), which is equivalent to $0.04/therm. At that price, the median residential customer’s bill will increase by about $17/year. If the cost of offsets were to rise to the $0.10/therm level, the impact would be around $43/year. While the program began July 1, 2018, the offset purchases are expected to occur several months later after the form contract has been approved by Council and several master agreements have been executed with qualified counterparties. Staff will establish a balancing account, and the customer charge will be adjusted as actual purchases are made and as offset prices change. Policy Implications The proposed gas rate adjustments to implement the carbon neutral gas plan are consistent with Gas Utility Long-term Plan (GULP) Objectives and the Sustainability and Climate Action Plan (S/CAP) Framework, Principles, and Guidelines. Environmental Review The Council’s adoption of this Resolution and rate schedule adjustments does not meet the definition of a project requiring California Environmental Quality Act (CEQA) review, under Public Resources Code Section 21065 and is exempt from CEQA review under Public Resources Code Section 21080(b)(8) as an adoption of rates to meet operating expenses, purchase supplies, meet reserve needs and obtain capital improvement funds). Offset and other potential project developers will be responsible for acquiring necessary environmental reviews and permits as those projects are developed. Attachments: Attachment A: Resolution Amending Gas Rates for FY 2018 Attachment B.1 G-1 effective 2017-9-1 Attachment B.2 G-2 effective 2017-9-1 Attachment B.3 G-3 effective 2017-9-1 Attachment B.4 G-10 effective 2017-9-1 Attachment C: Staff Report 7533 Attachment A Not Yet Approved 170725 jb 6053985 1 Resolution No. ____._ Resolution of the Council of the City of Palo Alto Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master- Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service Service) and repealing G-1-G (Residential Green Gas Service), G-2-G (Residential Master-Metered and Commercial Green Gas Service), G-3-G (Large Commercial Green Gas Service), G-10-G (Compressed Natural Green Gas Service) R E C I T A L S A. In December 2007, Council adopted the City’s Climate Protection Plan which set aggressive greenhouse gas (GHG) emission reduction goals to be achieved by the year 2020. B. In April 2016, this Council adopted a GHG reduction goal of 80% by the year 2030. GHG emissions associated with natural gas use were 135,000 metric tons of carbon dioxide equivalent, or 27% of the City’s GHG emissions, in 2015. C. On December 5, 2016, the City Council voted unanimously to approve a Carbon Neutral Natural Gas Plan, enabling the City to achieve a carbon-neutral gas supply portfolio with a rate impact not to exceed ten cents per therm ($0.10/therm), and terminate the PaloAltoGreen Gas program established by Resolution 9405, starting in fiscal year 2018. D. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-1, as amended, shall become effective September 1, 2017. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2 (Residential Master-Metered and Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-2, as amended, shall become effective September 1, 2017. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-3, as amended, shall become effective September 1, 2017. Attachment A Not Yet Approved 170725 jb 6053985 2 SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-10 (Compressed Natural Gas Service Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-10, as amended, shall become effective September 1, 2017. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedules G-1-G (Residential Green Gas Service), G-2-G (Residential Master-Metered and Commercial Green Gas Service), G-3-G (Large Commercial Green Gas Service), G-10-G (Compressed Natural Green Gas Service) are hereby repealed, effective July 1, 2017. SECTION 6. The Council finds that the revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 7. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 8. The Council finds that the adoption of this resolution changing gas rates to meet operating expenses and meet financial reserve needs is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor Attachment A Not Yet Approved 170725 jb 6053985 3 APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-1 Effective 119-1-20167 dated 711-1-2016 Sheet No G-1-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from City of Palo Alto Utilities: 1. Separately-metered single-family residential Customers. 2. Separately-metered multi-family residential Customers in multi-family residential facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ........................................................................................................$10.32 Tier 1 Rates: Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-$2.00 2. Cap and Trade Compliance Charge ..................................................$0.00-$0.25 3. Transportation Charge........................................................................$0.00-$0.15 4. Carbon Offset Charge ........................................................................$0.00-$0.10 Distribution Charge: ............................................................................................. $0.3933 Tier 2 Rates: (All usage over 100% of Tier 1) Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-2.00 2. Cap and Trade Compliance Charge ...................................................$0.00-$0.25 3. Transportation Charge........................................................................$0.00-$0.15 4. Carbon Offset Charge ........................................................................$0.00-$0.10 Distribution Charge: ............................................................................................. $0.9319 D. SPECIAL NOTES: 1. Calculation of Cost Components ATTACHMENT B.1 RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-2 Effective 119-1-20167 dated 711-1-2016 Sheet No G-1-2 The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases produced in the burning of natural gas. The Carbon Offset Charge will change in response to changing market conditions, changing sales volumes and the quantity of offsets purchased within the Council-approved per therm cap. The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto, accounting for delivery losses to the Customer’s Meter. The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Seasonal Rate Changes: The Summer period is effective April 1 to October 31 and the Winter period is effective from November 1 to March 31. When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates for each period. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Calculation of Usage Tiers Tier 1 natural gas usage shall be calculated and billed based upon a level of 0.667 therms per day during the Summer period and 2.0 therms per day during the Winter period, rounded to the nearest whole therm, based on meter reading days of service. As an example, for a 30 RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-3 Effective 119-1-20167 dated 711-1-2016 Sheet No G-1-3 day bill, the Tier 1 level would be 20 therms during the Summer period and 60 therms during the Winter period months. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. {End} RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-2-1 Effective 119-1-20167 dated 711-1-2016 Sheet No G-2-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities: 1. Commercial Customers who use less than 250,000 therms per year at one site. 2. Master-metered residential Customers in multi-family residential facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ........................................................................................................$78.23 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .................................... $0.10-$2.00 2. Cap and Trade Compliance Charges ................................................. $0.00-0.25 3. Transportation Charge........................................................................$0.00-$0.15 4. Carbon Offset Charge ........................................................................$0.00-$0.10 Distribution Charge: ........................................................................................................ $0.5767 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales ATTACHMENT B.2 RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-2-2 Effective 119-1-20167 dated 711-1-2016 Sheet No G-2-2 volumes and the quantity of allowances required. The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases produced in the burning of natural gas. The Carbon Offset Charge will change in response to changing market conditions, changing sales volumes and the quantity of offsets purchased within the Council-approved per therm cap. The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto, accounting for delivery losses to the Customer’s Meter. The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges will fall within the minimum/maximum ranges set forth in Section C. {End} LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-1 Effective 119-1-20167 dated 711-1-2016 Sheet No G-3-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities: 1. Commercial Customers who use at least 250,000 therms per year at one site. 2. Customers at City-owned generation facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: $377.43 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .................................................... $0.10-$2.00 2. Cap and Trade Compliance Charges ...................................................... $0.00-0.25 3. Transportation Charge .......................................................................... $0.00-$0.15 4. Carbon Offset Charge ........................................................................... $0.00-$0.10 Distribution Charge: .............................................................................................................$0.5687 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance ATTACHMENT B.3 LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-2 Effective 119-1-20167 dated 711-1-2016 Sheet No G-3-2 instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases produced in the burning of natural gas. The Carbon Offset Charge will change in response to changing market conditions, changing sales volumes and the quantity of offsets purchased within the Council-approved per therm cap. The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto, accounting for delivery losses to the Customer’s Meter. The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Request for Service A qualifying Customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site consists of one or more contiguous parcels of land with no intervening public right-of- ways (e.g. streets). 3. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable City of Palo Alto full-service rate schedule. {End} COMPRESSED NATURAL GAS SERVICE UTILITY RATE SCHEDULE G-10 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-10-1 Effective 119-1-20176 dated 711-1-2016 Sheet No.G-10-1 A. APPLICABILITY: This schedule applies to the sale of natural gas to the City-owned compressed natural gas (CNG) fueling station at the Municipal Service Center in Palo Alto B. TERRITORY: Applies to location at the Municipal Service Center in City of Palo Alto. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ........................................................................................................$52.93 Per Therm Supply Charges: Commodity (Monthly Market Based) ................................................................ $0.10-$2.00 Cap and Trade Compliance Charges .............................................................. $0.00 to $0.25 Transportation Charge........................................................................................ $0.00-$0.15 Carbon Offset Charge ........................................................................................ $0.00-$0.10 Distribution Charge ...............................................................................................................$0.0093 D. SPECIAL CONDITIONS 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of ATTACHMENT B.4 COMPRESSED NATURAL GAS SERVICE UTILITY RATE SCHEDULE G-10 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-10-2 Effective 119-1-20176 dated 711-1-2016 Sheet No.G-10-2 allowances required. The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases produced in the burning of natural gas. The Carbon Offset Charge will change in response to changing market conditions, changing sales volumes and the quantity of offsets purchased within the Council- approved per therm cap. The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto, accounting for delivery losses to the Customer’s Meter. The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges will fall within the minimum/maximum range set forth in Section C. {End} City of Palo Alto (ID # 7533) City Council Staff Report Report Type: Action Items Meeting Date: 12/5/2016 City of Palo Alto Page 1 Summary Title: Carbon Neutral Gas Portfolio Title: Finance Committee Recommends That the Council: (1) Adopts a Resolution Approving a Carbon Neutral Natural Gas Plan to Achieve a Carbon Neutral Gas Portfolio by Fiscal Year 2018 With no Greater Than 10¢/Therm Rate Impact; and Terminating the Palo Alto Green Gas Program; and (2) Provide Direction to Staff Concerning Aspects of Plan Implementation From: City Manager Lead Department: Utilities Recommendation Staff and the Finance Committee recommend that Council: 1.Adopt a Resolution that: a.Approves the Carbon Neutral Gas Plan, enabling the City to achieve a carbon- neutral gas supply portfolio starting in Fiscal Year (FY) 2018 with a rate impact not to exceed ten cents per therm (10 ¢/therm); and b.Terminates the PaloAltoGreen Gas program established by Resolution 9405; and 2.Direct Staff to: a.Develop an implementation plan for the Carbon Neutral Gas Plan; b.Provide an option for Council to consider prioritizing local offsets; and c.Prioritize maximizing carbon reduction within the 10 ¢/therm rate impact cap. Executive Summary The proposed Carbon Neutral Natural Gas Plan is designed to achieve carbon neutrality for the gas supply portfolio by FY 2018 using high-quality environmental offsets at a cost not to exceed a maximum rate impact of 10 ₵/therm. At current rates, this equates to about a 10% gas rate increase. The additional cost of a 10 ₵/therm gas rate increase will cost about $43 per year for the median residential customer usage. At current costs for environmental offsets and biogas, staff estimates that a 100% carbon neutral gas portfolio can be achieved for 4 ₵/therm if offsets are used to cover 100% of the gas use of Palo Alto customers. Alternately, a 100% carbon neutral gas portfolio can be achieved for 10 ₵/therm if offsets are used for 95% of the gas needs and biogas is purchased for 5% of the gas needs. ATTACHMENT C City of Palo Alto Page 2 In August 2016, the Utilities Advisory Commission (UAC) recommended that Council approve a plan to maximize the use of biogas while still achieving 100% carbon neutrality. In October, the Finance Committee recommended that Council maximize carbon reduction within the 10 ¢/therm rate impact cap, which argues for purchasing only environmental offsets, and no biogas, to achieve the maximum carbon reductions per dollar spent. Background The PaloAltoGreen Gas (PAG Gas) program was launched in December 2014. PAG Gas is a voluntary program providing customers with the option to negate the impact of greenhouse gas (GHG) emissions associated with their natural gas usage by purchasing environmental offsets. Engagement by some community members interested in accelerating the reduction of the City’s natural gas carbon footprint led to a proposal to make the gas portfolio carbon neutral. The plan presented to and recommended by the UAC included a portfolio of both physical biogas and environmental offsets. However, the Finance Committee preferred maximizing the carbon reduction for the money spent, or using only the less expensive offsets and no biogas as a mechanism for achieving carbon neutrality in the natural gas portfolio. Discussion Staff Report 7284 for the October 18 Finance Committee meeting provides detail on the proposed Carbon Neutral Gas Plan (Attachment B). To design and implement a carbon-neutral gas portfolio plan, several inter-related variables must be considered, including: 1. Rate impact. 2. Supply source (environmental offsets or biogas). 3. Timeframe over which carbon neutrality is achieved 4. Percentage of the portfolio to be made carbon-neutral. With respect to each of the variables above, the Finance Committee recommends: 1. Rate impact: No greater than 10¢/therm annually 2. Supply source: Environmental offsets. 3. Timeframe over which carbon neutrality is achieved: By FY 2018 4. Percentage of portfolio made carbon neutral: 100% or greater Rate Impact Staff recommends that Council make a clear determination of maximum acceptable rate impact for a carbon-neutral gas portfolio. A rate impact of 10 ₵/therm is equal to approximately a 10% rate increase based on current gas rates and assuming a commodity rate, which fluctuates monthly with market prices, of 30 ₵/therm. City of Palo Alto Page 3 Supply Source An environmental offset is a reduction in emissions of greenhouse gases (GHGs) made in order to compensate for or to offset an emission made elsewhere. For example, installation of manure management systems on dairy farms reduces methane emissions thus generating offsets. The California Air Resources Board protocols provide robust methods to quantify and report the GHG reductions. Biogas, on the other hand, is methane produced from the decay of organic matter. A dairy farm that generates offsets by preventing methane from entering the atmosphere can also sell the biogas as a renewable fuel. The price of biogas is currently driven by the federal renewable transportation fuel program and is at least 28 times more costly than offsets on a dollar per carbon dioxide equivalent ($/CO2e) basis. The current cost of offsets is about $8/ton of CO2e, which is equivalent to 4 ₵/therm. If environmental offsets were purchased today for 100% of the City’s gas usage, all customers would experience a rate increase of approximately 4%. A median residential customer’s winter bill would increase by about $2 per month (about $0.75 in the summer). Summary of Proposal The Finance Committee recommended a plan using high-quality environmental offsets to achieve a carbon-neutral gas portfolio by FY 2018. Rates are anticipated to increase by 4 ₵/therm and will increase by no more than 10 ₵/therm. Cost-effectiveness of a Carbon-neutral Gas Portfolio Compared to Electrification Staff completed a cost effectiveness study for abating GHG emissions by electrifying building appliances and passenger vehicles. The report was provided to Council in August 2015 (Staff Report 5971). Figure 1 shows the societal costs of carbon from that study compared to the carbon cost of environmental offsets and biogas. Environmental offsets currently cost $8/ton of CO2e compared to the cost of carbon of $226/ton of CO2e for biogas1. 1 Biogas is estimated to cost $1.50/therm, or $1.20/therm more than fossil fuel-based natural gas, resulting in an incremental cost of carbon of $226/ton of CO2e. City of Palo Alto Page 4 Figure 1: Incremental Societal Abatement Cost As shown in Figure 1, environmental offsets are a much less expensive way to achieve carbon reductions compared to most electrification options2. When the Finance Committee reviewed these data, its members questioned the use of biogas since it is so much more costly per ton of CO2e reduced. Proposed Offset Criteria for Carbon-neutral Gas Supply For the PAG Gas program, Council approved the use of high-quality environmental offsets from protocols approved by the California Air Resources Board (Staff Report 4596, Resolution 9405). The approved protocols currently include forestry, livestock, landfill, coal mine methane, urban forestry, ozone depleting substance and rice cultivation projects. Offsets used for PAG Gas do not need to be certified by CARB as it is an extra expense and only necessary if offsets are to be used for a regulatory compliance obligation. Staff proposes to apply the same standards to offsets used for the Carbon Neutral Gas Plan including a preference for California and local projects. One possible local offsets source may be an urban forestry project in Palo Alto. In addition to researching the use of local offsets, staff will also continue to review the extent to which fugitive methane emissions from natural gas production, transportation, and distribution can be attributable to provision of service to Palo Alto customers. There is currently no definitive answer on this point, but should the amounts attributable to individual customers become more concrete and clearly associated with the cost of providing service to Palo Alto customers, staff will consider whether such fugitive emissions would also fall under the auspices of the plan. 2 The study concluded that (after federal and state incentives) it is cheaper to own and operate a compact electric car (Nissan Leaf) than a similarly sized gasoline vehicle (Honda Civic) resulting in a negative incremental abatement cost. City of Palo Alto Page 5 Committee Review and Recommendation At its October 18, 2016 meeting, the Finance Committee reviewed the recommendation from staff and the UAC that Council approve a Carbon Neutral Gas Plan that would use a combination of physical biogas and high-quality environmental offsets to achieve a carbon- neutral gas supply portfolio starting in FY 2018 such that the amount of biogas included in the portfolio would be maximized with a rate impact not to exceed 10 ¢/therm. The Finance Committee, however, voted to maximize carbon reduction within the 10 ₵/therm rate impact cap, rather than include the more expensive biogas as part of the portfolio. Purchasing enough offsets to cover the volume of natural gas burned in the City (30 million therm or 159,000 tons CO2e per year) results in a rate increase of about 4 ₵/therm. The Finance Committee also discussed the proper venue for the discussion of the policy elements of the plan versus the financial impacts of the plan with the Chair of the Finance Committee opining that the Finance Committee’s charge is limited to review of the financial impacts. One Finance Committee member advocated for using local projects such as gasification projects that could convert local waste to biogas. After discussion of the differences between—and relative values of—biogas and offsets, the Finance Committee voted to support the staff recommendation, but to maximize the carbon reduction with the money spent. Staff interprets this, under current economics and until other options are available, as a preference for offsets over biogas. As the market changes, the plan provides flexibility for staff to change that prioritization as well, provided staff adheres to the goal of maximizing carbon reduction. In addition, the Finance Committee recommended that Council direct staff to provide Council with an option to “prioritize” local offsets. Staff noted that local offsets would need to go through the proper certification protocols so that the carbon neutral claims for the gas portfolio could be verified by an independent party. The Finance Committee’s vote was 2-1 with Chair Filseth and Wolbach voting yes, Vice Mayor Schmid voting no and Holman absent. The minutes for the October 18, 2016 Finance Committee meeting are provided as Attachment C. Resource Impact If only offsets are purchased to cover gas burned in the City, rates are expected to increase by about 4 ₵/therm or approximately 4%. With an additional cost of 4 ₵/therm, the median residential customer’s bill will increase about $17/year. At the maximum amount under the rate cap of 10₵/therm, implementation of a carbon-neutral gas portfolio will increase retail rates (and revenues) and the gas commodity budget. At the rate impact limit of 10 ₵/therm, commodity costs will increase by about $3 million, from $9 million to $12 million, per year. The retail rate revenue will likewise increase by about $3 City of Palo Alto Page 6 million. If the program is approved, the increased cost and revenues will be reflected in the FY 2018 budget request. For the median residential customer using 18 therms per month in the summer and 54 therms per month in the winter, the bill impact will be $1.80/month in the summer and $5.40/month in the winter, or about $43 per year with the additional 10 ₵/therm rate impact Policy Implications The Council-approved Utilities Strategic Plan includes an objective to offer programs to meet the needs of customers and the community. Strategy 4 in the Council-approved Gas Utility Long-term Plan (GULP) states: Reduce the carbon intensity of the gas portfolio in accordance with the Climate Protection Plan by: a. Designing and implementing a voluntary retail program using reasonably priced non‐fossil fuel gas resources; and b. Purchasing non‐fossil fuel gas for the portfolio as long as it can be done with no rate impact. Implementation of a carbon-neutral gas portfolio represents a departure from GULP Strategy 4 because the voluntary program will be eliminated and there will be a rate impact resulting from non-fossil fuel gas resources being purchased for the portfolio. GULP will need to be revised accordingly should Council approve a carbon-neutral gas portfolio. A carbon-neutral gas portfolio would, however, be an important part of meeting Council’s aggressive sustainability goal to reduce the City’s GHG emissions by 80% by 2030. Next Steps If Council approves the Carbon Neutral Gas Plan, staff will execute enabling agreements with qualified counterparties for purchasing environmental offsets. In addition, new rate schedules will be developed and brought to the UAC and Finance Committee for recommendations and to the Council for approval. Staff anticipates that this can be achieved such that the gas portfolio can be implemented in FY 2018. Because implementation of a carbon-neutral gas portfolio represents a departure from the Council-approved GULP strategies, GULP will need to be revised before the program is put into place. Cancelling PAG Gas will require communication with the customers, repeal of the rate schedule via resolution, and removal of the charge on participating customers’ bills by the carbon-neutral implementation date. City of Palo Alto Page 7 Environmental Review The Council’s adoption of this Resolution, which approves a Carbon Neutral Natural Gas Plan and terminates the PAG Gas program does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Offset, biogas and other potential project developers will be responsible for acquiring necessary environmental reviews and permits as those projects are developed. Attachments: Attachemnt A: Resolution Carbon Neutral Gas Portfolio (PDF) Attachment B: Finance Committee Staff Report Regarding the Carbon Neutral Natural Gas Portfolio Plan (PDF) Attachment C: Excerpted Draft Minutes of October 18, 2016 Finance Committee Meeting (PDF) 161102 jb JM/Staff Reports Attachment A NOT YET APPROVED Resolution No. _____ Resolution of the Council of the City of Palo Alto Approving a Carbon Neutral Natural Gas Plan to Achieve a Carbon Neutral Gas Supply Portfolio by Fiscal Year 2018 with No Greater than 10¢/Therm Rate Impact; and Related Termination of the Palo Alto Green Gas Program R E C I T A L S A. In December 2007, Council adopted the City’s Climate Protection Plan which set aggressive greenhouse gas (GHG) emission reduction goals to be achieved by the year 2020. B. In March 2013, this Council approved Resolution 9322 directing staff to achieve carbon neutrality for the electric supply portfolio by 2013 through the use of a combination of hydroelectric resources, long-term renewable resources and short-term renewable energy resources and/or renewable energy certificates (“RECs”). C. On September 9, 2013, this Council approved Resolution 9372 modifying and suspending portions of the PaloAltoGreen Program, and directing staff to develop a PaloAltoGreen Gas (PAG Gas Program) Program. D. On April 21, 2014, this Council approved Resolution 9405 establishing the voluntary PAG Gas Program to provide the opportunity for residential and commercial customers to economically reduce or eliminate the impact of GHG emissions associated with their gas usage through the purchase of certified environmental offsets. E. In April 2016, this Council adopted a GHG reduction goal of 80% by the year 2030. GHG emissions associated with natural gas use were 135,000 metric tons of carbon dioxide equivalent, or 27% of the City’s GHG emissions, in 2015. F. Staff initially proposed a Carbon Neutral Natural Gas Plan that would use a combination of physical biogas and high-quality environmental offsets to achieve a carbon- neutral gas portfolio by fiscal year 2018 by maximizing the amount of biogas in the portfolio while holding the rate impact at a maximum limit of ten cents per therm (10 ₵/therm). G. On August 31, 2016, the Utilities Advisory Commission voted 6-1 to recommend Council approve a Carbon Neutral Gas Plan using a combination of physical biogas and high- quality environmental offsets to achieve a carbon-neutral gas portfolio and terminate the PAG Gas Program. H. On October 18, 2016, the Finance Committee voted 2-1 to instead recommend that Council: (i) Adopt a resolution that (a) approves a Carbon Neutral Natural Gas Plan that would enable the City to achieve a carbon-neutral gas supply portfolio starting in Fiscal Year (FY) 2018 with a rate impact not to exceed ten cents per therm (10 ¢/therm); and (b) terminate the PAG Gas Program established by Resolution 9405; and 161102 jb JM/Staff Reports Attachment A NOT YET APPROVED (ii) Direct staff to: (a) develop an implementation plan for the Carbon Neutral Natural Gas Plan; (b) provide an option for Council to consider prioritizing local offsets; and (c) prioritize maximizing carbon reduction within the 10 ₵/therm rate impact cap. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council hereby adopts a resolution: 1. Approving a Carbon Neutral Natural Gas Plan, enabling the City to achieve a carbon-neutral gas supply portfolio starting in fiscal year 2018 with a rate impact not to exceed ten cents per therm (10 ₵/therm); and 2. Terminating the PAG Gas program established by Resolution 9405. SECTION 2. The Council’s adoption of this Resolution, which approves a Carbon Neutral Natural Gas Plan and terminates the PAG Gas program does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Offset, biogas and other potential project developers will be responsible for acquiring necessary environmental reviews and permits as those projects are developed. INTRODUCED AND PASSED: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Senior Deputy City Attorney City Manager Director of Utilities Director of Administrative Services City of Palo Alto (ID # 7284) Finance Committee Staff Report Report Type: Action Items Meeting Date: 10/18/2016 City of Palo Alto Page 1 Summary Title: Carbon Neutral Natural Gas Portfolio Plan Title: Utilities Advisory Commission Recommendation that Council Adopt a Resolution Approving a Carbon Neutral Natural Gas Portfolio Plan to Achieve Maximum Carbon Neutrality Using a Combination of Offsets and Biogas in the Gas Supply Portfolio by Fiscal Year 2018 with No Greater than 10¢/Therm Rate Impact; and Related Termination of the Palo Alto Green Gas Program From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee recommend Council: 1.Adopt a resolution (Attachment A) that: a.Approves the Carbon Neutral Gas Plan, enabling the City to achieve a carbon-neutral gas supply portfolio starting in fiscal year (FY) 2018 with a rate impact not to exceed ten cents per therm (10 ₵/therm); and b.Terminates the PaloAltoGreen Gas program established by Resolution 9405; and 2.Direct staff to develop an implementation plan for the Carbon Neutral Gas Plan. Executive Summary The proposed Carbon Neutral Gas Plan will achieve carbon neutrality for the gas supply portfolio by FY 2018 with a combination of high-quality environmental offsets and physical “biogas” or “biomethane”. The proposed cost cap to implement the plan is 10 ₵/therm. Based on current rates, this equates to about a 10% gas rate increase. For the median residential customer usage, the additional cost of a 10 ₵/therm gas rate increase is about $43 per year. The PaloAltoGreen Gas (PAG Gas) program was launched in December 2014. PAG Gas is a voluntary program providing customers with the option to negate the impact of greenhouse gas (GHG) emissions associated with their natural gas usage by purchasing environmental offsets. Implementation of a carbon-neutral gas portfolio renders the voluntary program redundant, therefore, termination of PAG Gas is recommended when implementing the Carbon Neutral Gas Plan. ATTACHMENT B City of Palo Alto Page 2 The UAC reviewed the proposed Carbon Neutral Gas Plan on August 31, 2016 and voted to recommend that Council approve the proposed plan. Background City’s GHG Emissions from Natural Gas Table 1 below, based on data from the 2016 Earth Day report (Staff Report 6754), shows the estimate for City and community GHG emissions for 1990, 2005, 2012, and 2015. Table 1 Palo Alto Community and City Greenhouse Gas Emissions (in 000’s of Metric Tons of CO2e) Emissions Category 1990 2005 2012 2015 Natural Gas Use 194 166 160 135 Electricity Use 186 160 75 0 Mobile Combustion * 332 372 320 330 Other ** 68 54 36 36 Total 780 752 591 501 * Consultant estimate based on population, employment, vehicle miles travelled and vehicular emission profiles ** Includes landfill, refuse and Regional Water Quality Control Plant emissions As shown in Table 1, GHG emissions from natural gas use in 2015 were reduced by 4,406 tons due to the PAG Gas program. The bulk of the reduction in emissions associated with natural gas use is associated with reduced natural gas use (from 37.2 million therms in 1990 to 30.1 million therms in 2012 to 25.5 million therms in 2015). Gas Utility Long-term Plan (GULP) and Early Evaluations of Alternative Gas Supplies In November 2009, the UAC reviewed an analysis of physical biogas as a resource for the gas supply portfolio.1 At that time, staff determined that physical biogas cost about 50 ₵/therm more than natural gas, or about $100 per ton of carbon dioxide equivalent (CO2e)2 and would increase a residential customer’s gas bill by 35%. GULP includes a strategy to evaluate a voluntary green gas program and evaluate purchasing non-fossil fuel gas for the gas portfolio. The City Council last approved updates to GULP in April 2012 (Staff Report 2522, Resolution 9244), including GULP Strategy 4: Reduce the carbon intensity of the gas portfolio in accordance with the Climate Protection Plan by: a. Designing and implementing a voluntary retail program using reasonably priced non‐fossil fuel gas resources; and b. Purchasing non‐fossil fuel gas for the portfolio as long as it can be done with no rate impact. 1 http://www.cityofpaloalto.org/civicax/filebank/documents/17514 2 1 ton/2204.16 lbs * 116 lbs CO2e/1 MMBtu CH4 *1 MMBtu/10 therms = .0053 tons/therm City of Palo Alto Page 3 In response to the GULP strategies, in April 2013, staff presented alternatives for a PAG Gas program to the UAC3 including the use of physical biogas for the program, but found that it would cost about $1 per therm more than natural gas based on responses to a request for proposal issued by the Northern California Power Agency. In addition, the long-term contracts required for biogas project developers to secure financing were, and are still, not conducive to the potentially volatile demand associated with a voluntary green gas program. PAG Gas The PAG Gas program was modeled after the highly successful, voluntary PaloAltoGreen (PAG) program, which allowed participants to receive 100% renewable energy and eliminate the GHG emissions associated with their electricity use. Participation rates in PAG were the highest among similar programs throughout the nation earning recognition for the City and creating a sense of community pride around sustainability efforts. In 2012, approximately 20% of CPAU’s customers participated in PAG, representing 8% of the City’s total electric usage. By 2013, the City’s aggressive Renewable Portfolio Standard (RPS) goal combined with its carbon-free hydroelectric resources rendered the electric supply portfolio largely carbon neutral. In March 2013, City Council approved the Carbon Neutral Plan committing CPAU to pursue only carbon neutral electric resources beginning in calendar year 2013 (Staff Report 3550, Resolution 9322). In September 2013, City Council suspended PAG and directed staff to develop a new voluntary PAG Gas program to afford participants the opportunity to eliminate the GHG emissions associated with their natural gas use (Staff Report 4041, Resolution 9372).4 In April 2014, City Council approved the establishment of a voluntary PAG Gas program (Staff Report 4596, Resolution 9405) using high quality offsets to back the program. All offsets purchased to date have been from a livestock methane capture project. The PAG Gas rate is 12₵/therm, which equates to an avoided GHG emissions cost of approximately $22 per ton of CO2e. The PAG Gas program goal is a 20% participation rate by 2020 with a corresponding GHG reduction of 16,000 tons of CO2e per year. The 2020 goal represents a 10% reduction in the City’s total GHG emissions associated with natural gas consumption. The reductions are achieved by purchasing high quality environmental offsets, with a preference for California projects, on behalf of participants in order to reduce or eliminate the impact of GHG emissions associated with each participating customer’s gas usage. All customers can sign up for PAG Gas 3 https://www.cityofpaloalto.org/civicax/filebank/documents/33744 4 In June 2014, since the PAG (electric) program is redundant with the Carbon Neutral Plan, Council eliminated the PAG program for residential customers (Staff Report 4718, Resolution 9422). At the same time, Council also reactivated the program for commercial customers since some customers (including City facilities) desire to participate in a voluntary green electric program to achieve environmental recognition and certifications in line with their own corporate sustainability goals including participation in the U.S. Green Building Council Leadership in Energy and Environmental Design (USGBC LEED) Program and the U.S. EPA Green Power Partnership Program. City of Palo Alto Page 4 for their entire gas usage; commercial customers also have the option of participating in the program for part of their natural gas usage. Since the program launch in December 2014, roughly 4% of the City’s residential natural gas customers have participated in PAG Gas 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. For a typical residential customer participating in PAG Gas, the cost is approximately $5 per month for an average use of 42 therms per month. After the June 1, 2016 UAC meeting, staff began to evaluate carbon neutral gas supply options and suspended active marketing of the program, resulting in decreased participation in the program. Figure 1 below shows the trajectory of PAG Gas participation for January 2015 through July 2016. Figure 1: PAG Gas Program Participation Figure 2 below shows the number of PAG Gas participants by customer type. Figure 3 shows the percentage of total gas usage by customer type. As shown, the vast majority of participants are residential customers—as was the case with the PAG (electric) program. The bulk of the City of Palo Alto Page 5 participation in terms of gas usage is for City facilities. Very few commercial customers have participated in the program to date. Approximately 4.1% of the City’s residential natural gas customers have signed up for PAG Gas as of the end of June 2016. In July 2015 all City facilities began participating in the program for 100% of their gas usage. Figure 2: Number of Customers Participating in PAG Gas City of Palo Alto Page 6 Figure 3: Percentage of the City’s Total Gas Load Participating in PAG Gas Utilities Advisory Commission Discussions At its October 7, 2015 meeting the UAC heard public comment on, and discussed the merits and drawbacks of, an opt-in versus an opt-out structure for the voluntary PAG Gas program. The minutes from that meeting are provided as Attachment B. At its June 1, 2016, meeting the UAC was presented with an overview and high-level analysis of several options for reducing the carbon impact of natural gas use in the City including converting the voluntary program to an opt-out model (meaning all customers would be automatically enrolled in the program, but could voluntarily leave the program at any time) and adopting a carbon neutral portfolio for all customers using either environmental offsets or physical biogas. The four main options discussed by the UAC at its June 1, 2016 meeting are summarized in Table 2 below. Table 2: Alternatives for Gas Portfolio GHG Reduction Pros Cons Opt-in Program Consistent with CPAU’s past practices of providing program and service options for those who want them. Allows participants to feel proud that they are doing more to help the environment Requires significant and continuing outreach effort to maximize participation—and minimize administrative costs—by capturing all customers who would participate in the program if they knew about and understood it City of Palo Alto Page 7 Pros Cons Opt-out Program Much greater reductions in GHG emissions associated with natural gas usage could be achieved sooner and at a lower cost After start up, easy and low cost to administer Risk of harming CPAU’s reputation as the program can be viewed by customers as “slamming” or even taking advantage of customers who are not paying attention even after being notified of right to opt- out Requires ongoing outreach to notify customers of their ability to opt-out at any time Requires development of detailed program rules and processes to allow for opting out/in, securing refunds and identifying potential sources of funds for such refunds. Gas Portfolio Backed by Offsets Maximum reductions in GHG emissions associated with natural gas usage Minimal administrative costs No need for complicated program terms and conditions Could be perceived as an overreaching mandate Small rate increase for all customers Cost varies with the cost of environmental offsets Gas Portfolio Backed by Green Gas Maximum reductions in GHG emissions associated with natural gas usage if for 100% of the gas portfolio Minimal administrative costs No need for complicated program terms and conditions Could be perceived as overreaching Large rate increase for all customers, especially if for 100% of the gas portfolio Cost varies with the cost of green gas Opt-In versus Opt-Out Alternative Staff provided further analysis for the June 1, 2016 UAC discussion comparing opt-in and opt- out designs including the cost comparison between the two approaches as shown in Table 3. City of Palo Alto Page 8 Table 3: Opt-in versus Opt-out Program Cost Estimates Opt-in Program Opt-out Program Units Current Post- 2020 First Year Subsequent Years Participation % of gas usage 6% 10% 90% 80% GHG emissions reduced tons1 9,000 15,000 135,000 120,000 Offset Cost $/ton2 9.25 9.25 9.25 9.25 ₵/therm 4.4 4.4 4.4 4.4 Administrative cost $/year $/ton $120,000 13.16 $85,000 5.66 $400,0003 2.96 $40,000 0.33 ₵/therm 7.0 3.0 1.6 0.5 Total Cost Retail Rate $/ton 22.46 14.91 12.21 9.58 ₵/therm 12 8 6 5 Residential Bill Impact4 $/month 4.32 2.88 2.16 1.80 Notes: 1. GHG emissions based on projected gas usage of 28.5 million therms per year (150K tons CO2e) 2. Offset costs will adjust with market conditions 3. Communication activities and billing system changes 4. Median residential customer gas use: 54 therms in winter month and 18 therms in summer A comparison of anticipated customer reactions to the two approaches was also presented and is shown in Table 4. Table 4: Anticipated Customer Reactions to Opt-in and Opt-out Programs Customer Opt-In Program Opt-Out Program Active Supporter Participates in PAG Gas Supports, would not opt out Passive Supporter Intend to opt in, but have not prioritized signing up Supports, would not opt out Unaware Supporter Would opt-in, but have not heard about it Would not opt out Ambivalent Don’t pay attention, or care either way Unlikely to opt out Unaware Opponent Would not opt in Prefers to opt out, but not paying attention to the City’s messaging or the resulting changes to their utility bills Passive Opponent Would not opt in Doesn’t support the program, but unlikely to prioritize opting out Aware Opponent Would not opt in Really don’t want to participate but feel guilty or embarrassed about opting out, especially if the program is characterized as being environmentally friendly Active Opponent Would not opt in Would opt-out of the program City of Palo Alto Page 9 UAC Action on June 1, 2016 On June 1, 2016, the UAC discussed the alternatives to continuing PAG Gas as a voluntary opt-in program and generally agreed that the current opt-in model was the least desired option. The UAC discussed the incremental cost of biogas and the availability of environmental offsets and said that, if the long-term goal was to have a carbon neutral gas portfolio, it would not be advisable to first convert the program to an opt-out program and then move to a carbon neutral portfolio since it would look like there was an opt-out option, but then that option would be taken away. One suggestion was to start with a portfolio that is not 100% carbon neutral and transition to 100% carbon neutral over time. Another suggestion was to start with offsets first and move to add more biogas over time. However, at the June 1, 2016 meeting, the UAC was not presented detailed costs for the different alternatives. One commissioner expressed support for converting to an opt-out program and advised against introducing a new program that costs more when gas rates are increasing as shown in the long- term Gas Financial Plan. At its June 1, 2016 meeting, the UAC voted 6-1 (with Chair Cook, Vice Chair Danaher, and Commissioners Ballantine, Forssell, Johnston and Trumbull voting yes and Commissioner Schwartz opposed) to recommend that Council adopt a carbon neutral gas portfolio and direct staff to develop an implementation plan. The minutes from the UAC’s June 2016 meeting are provided as Attachment C. Discussion To design and implement a carbon-neutral gas portfolio plan, several inter-related variables must be considered, including: 1. Rate impact. 2. Supply source (environmental offsets or biogas). 3. Timeframe over which carbon neutrality is achieved 4. Percentage of the portfolio to be made carbon-neutral. With respect to each of the variables above, staff makes the following recommendations: 1. Rate impact: No greater than 10¢/therm annually 2. Supply source: Combination of environmental offsets and biogas, with exact mix designed to maximize carbon neutrality within established rate impact limit. Staff estimates approximate ratio of offsets (95%) to biogas (5%) at the outset of the program. 3. Timeframe over which carbon neutrality is achieved: By FY 2018 4. Percentage of portfolio made carbon neutral: 100% City of Palo Alto Page 10 Rate Impact Staff recommends that Council make a clear determination of acceptable rate impact for a carbon-neutral gas portfolio. Council took such a step with respect to Carbon Neutral Plan for electricity where rate impacts, for a variety of reasons, were expected to be less significant than those potential impacts from a carbon free gas portfolio. The rate impact of achieving carbon neutrality for the electric portfolio is quite small (on the order of 1-2%) because the incremental cost to get to carbon-neutrality is diminished by the significant RPS requirement and the fact that carbon-free hydroelectric supplies provide about half of the City’s energy requirements in a normal year. The rate cap for the carbon neutral electric portfolio established by Council is 0.15 cents per kWh (Staff Report 3550, Resolution 9322). By contrast, the costs associated with a carbon neutral gas supply and associated rate impacts are not likely to be as low. The gas portfolio is currently supplied 100% by a fossil fuel source, whereas the electric supply portfolio includes a large fraction of carbon-free hydroelectric supplies and is subject to the State requirement for renewable supplies to meet a minimum of 33% (now 50% by 2030) of the City’s needs. A rate impact of 10 ₵/therm is equal to approximately a 10% rate increase based on current gas rates and assuming a commodity rate, which fluctuates monthly with market prices, of 30 ₵/therm. Supply Source Offsets as Supply Source Using environmental offsets to neutralize the GHG emissions of the gas portfolio is significantly less expensive than buying biogas. If environmental offsets were purchased today for 100% of the City’s gas usage, all customers would experience a rate increase of approximately 4%. A residential customer’s winter bill would increase by about $2 per month (about $0.75 in the summer). A range of potential offset costs were analyzed and are presented in Figure 4 below. The current cost of offsets is about $8 per ton of CO2e, which is equivalent to 4 ₵/therm. City of Palo Alto Page 11 Figure 4: Rate and Bill Impact of Using 100% Offsets to Achieve Carbon-Neutrality Biogas as a Supply Source Alternatively, the City’s gas needs could be met with renewable physical biogas, a much more expensive option. Biogas is a product of organic conversion (from cow manure at a dairy farm or from a landfill, for example). Most biogas produced in the United States is used as either a transportation fuel or to generate electricity. Biogas is most valuable as a transportation fuel due to the Federal Renewable Fuel Standard program and the state regulations like California’s Low Carbon Fuel Standard (LCFS) and Renewable Portfolio Standard (RPS). Biogas converted to electricity may be used to meet California’s RPS compliance obligations for electric utilities. State regulation and pipeline interconnection costs have largely kept biomethane projects out of California, but out- of-state supply sources are available. The short-term price for biogas is in the $2-$3 per therm range due to the transportation fuel- driven demand mentioned above. For a longer-term fixed-price commitment (5-7 years), prices are discounted to around $1.50 per therm. Two things eliminated the consideration of biogas for the City’s voluntary PAG Gas program: (1) the cost and the incompatibility between a voluntary program with uncertain demand; and (2) the biogas project developers’ need long- term commitments. While cost is still an issue, if it decided to pursue a carbon-neutral portfolio for the long term, the City would be in a position to make a long-term commitment for biogas. At a biogas price of $1.50/therm (or $1.20/therm over the projected $0.30/therm cost for natural gas), supplying 100% of the portfolio with biogas results in about a 120% rate increase City of Palo Alto Page 12 or about $65 more per month on an average residential customer’s monthly winter bill (or about $22 per month more in the summer when average residential use is 18 therms/month). Figure 5 shows both the rate and bill impacts at various biogas prices. Figure 5: Rate and Bill Impact of Using 100% Biogas to Achieve Carbon-Neutrality The two supply sources, environmental offsets and biogas, could be combined to achieve carbon-neutrality. However, even a ratio of 5% biogas and 95% environmental offsets results in a rate impact greater than 10%. Figure 6 shows the rate and bill impacts for different percentages of the two supply resources using biogas costing $1.50/therm and environmental offsets costing $8 per ton. City of Palo Alto Page 13 Figure 6: Rate and Bill Impact of Using a Combination of Biogas and Offsets to Achieve Carbon-Neutrality (Assumes $1.5/therm Biogas & $8/ton Offsets) Carbon Neutrality: Portfolio Percentage & Timeframe Two other variables may be adjusted when designing a carbon neutral plan. To reduce the cost impact of buying green gas for the gas portfolio and the GHG emissions reductions only a portion of the portfolio could be made carbon neutral. Alternately, or in addition, a green gas portfolio standard could increase over time (e.g. start at 10% in FY 2018 increasing to 100% by FY 2021). Figure 7 shows the rate and bill impacts of various biogas to offset ratios if less than 100% of the portfolio is carbon-neutral. Again, a $1.50/therm biogas price and an $8 per ton environmental offset price are assumed. City of Palo Alto Page 14 Figure 7: Rate and Bill Impact of Using a Combination of Biogas and Offsets to Achieve Partial Carbon-Neutrality (Assumes $1.5/therm Biogas & $8/ton Offsets) Summary of Proposal The proposed plan will use a combination of physical biogas and high-quality environmental offsets to achieve a carbon-neutral gas portfolio by FY 2018. The amount of biogas included in the portfolio will be maximized while causing rates to increase by no more than 10 ₵/therm. Given the 10 ₵/therm rate impact cap and current market prices, approximately 5% of the City’s portfolio can be met with biogas with the remaining 95% neutralized with environmental offsets. If the price of offsets increases, the portfolio may need to comprise up to 100% offsets, or the portfolio may be less than 100% carbon neutral. On the other hand, if the price of offsets decreases, the proportion of biogas will increase. Purchasing biogas for less than 5% of the total portfolio demand may be too small for a transaction. In that case, the portfolio will be comprised of 100% offsets, and the rate impact with be significantly less than 10 ₵/therm. Cost-effectiveness of a Carbon-neutral Gas Portfolio Compared to Electrification In May 2015, the UAC reviewed a cost effectiveness study for abating GHG emissions by electrifying building appliances and passenger vehicles. The report was provided to Council in August 2015 (Staff Report 5971). Figure 8 shows the societal costs of carbon from that study compared to the carbon cost of environmental offsets and biogas. The estimated cost of $1.50/therm for biogas, or an incremental cost of $1.20/therm relative to brown gas, results in an incremental cost of carbon of $226 per ton of CO2e. Environmental offsets are assumed to cost $8/ton of CO2e. City of Palo Alto Page 15 Figure 8: Incremental Societal Abatement Cost As shown in Figure 8, environmental offsets are a much less expensive way to achieve carbon reductions compared to most electrification options5. Biogas, however, results in higher abatement costs than converting from natural gas-fired water and space heaters to electric heat pump water and space heaters and converting from a gas stovetop to an electric stovetop. Proposed Biogas and Offset Criteria for Carbon-neutral Gas Supply Offset Criteria – Same as Approved for PAG Gas For the PAG Gas program, Council approved the use of high-quality environmental offsets from protocols approved by the California Air Resources Board. The approved protocols currently include forestry, livestock, landfill, coal mine methane, urban forestry, ozone depleting substance and rice cultivation projects. Offsets used for PAG Gas do not need to be certified by CARB as it is an extra expense and only necessary if offsets are to be used for a regulatory compliance obligation. Staff proposes to apply the same standards to offsets used for the Carbon Neutral Gas Plan including a preference for California and local projects (Staff Report 4596, Resolution 9405). Biogas Criteria – “Displacement” Concept Allowed Biogas is generated from an organic source such a waste from a dairy farm, other agricultural waste or from a landfill. Very little biogas is produced in California, but the Environmental Protection Agency’s (EPA) Renewable Fuel Standard Program is driving the development of projects in other states. The EPA recognizes two things: (1) molecules of biogas go into the pipeline and rarely end up being burned by the purchaser of that gas and (2) gas transportation 5 The study concluded that (after federal and state incentives) it is cheaper to own and operate a compact electric car (Nissan Leaf) than a similarly sized gasoline vehicle (Honda Civic) resulting in a negative incremental abatement cost. City of Palo Alto Page 16 can add significant costs if a biogas purchaser is forced to move gas long distances. The EPA, therefore, allows for “displacement” whereby biogas is purchased at a point near the project site and the environmental attributes of that gas are attached to brown gas delivered at a different location. California’s RPS program, on the other hand, requires entities to contract for gas transportation from the biogas source to the end use, adding significant cost to the gas. Because the City is seeking ways to reduce its GHG emissions and is not using offsets or biogas to meet a compliance obligation, the City has latitude to establish its own criteria for biogas use and eligibility under the City’s carbon-neutral gas supply program. Staff recommends utilization of the EPA’s approach, which allows for displacement of biogas in one location for brown gas in another location under the City’s carbon-neutral gas program. Alternatives There are many alternatives to the proposed program, which can be described by varying the key determinants. The following examples are ways in which the plan can be modified. 1. Rate impact: A rate impact higher than 10 ₵/therm would result in more biogas versus offsets being part of the portfolio. If the rate impact limit was reduced, the portfolio may not be able to be 100% carbon neutral. As another alternative, the rate impact could increase over time—for example, starting out at 5 ₵/therm and increasing to 10 ₵/therm in five years. 2. Supply: The proposed plan includes a combination of biogas and offsets such that the amount of biogas is maximized while limiting the rate impact to a set amount (10 ₵/therm). Instead of a rate impact measure, the program could be developed with a prescribed ratio of biogas to offsets. In this case, the rate impact would depend on the cost of the offsets and the biogas and could change year to year. 3. Carbon-neutral coverage of the portfolio: The proposed plan uses the full 10 ₵/therm to get up to 100% carbon neutrality with the expectation that most (95%) of the supply will be environmental offsets with the balance being biogas. However, the goal could be less than 100% carbon neutral supplies—for example, the goal could be to achieve 50% carbon neutral supplies while under the 10 ₵/therm rate impact, which would allow for purchases of biogas for about 8% of the gas needs and offsets for about 43% of the gas needs given current prices for offsets and biogas supplies. 4. Timing: The most aggressive implementation schedule, by FY 2018, is recommended. Carbon-neutrality could be staged over any number of years with changing rate impact or changing proportion of offsets to biogas. These program attributes could be combined in any number of ways to develop a program as shown in Table 5 below. City of Palo Alto Page 17 Table 5: Proposed Carbon Neutral Gas Plan and Alternatives Rate Impact Limit (₵/therm) Expected Supply 1,2 Carbon Neutral Portfolio Offsets Biogas Proposed Program 10 95% 5% 100% Lower Rate Impact 5 100% 0% 100% Higher Rate Impact 15 90% 10% 100% No Offsets 5 0% 4% 4% 10 0% 8% 8% 15 0% 13% 13% 25% Carbon Neutral Portfolio 5 21.5% 3.5% 25% 10 17.5% 7.5% 15 13% 12% 50% Carbon Neutral Portfolio 5 47.5% 2.5% 50% 10 43.25% 6.75% 15 39% 11% 75% Carbon Neutral Portfolio 5 73.5% 1.5% 75% 10 69% 6% 15 65% 10% Notes: 1 Assumes current prices for environmental offsets and biogas 2 Biogas volumes of less than 5% of the portfolio are likely too small to transact Commission Review and Recommendation Staff presented the proposed Carbon Neutral Gas Plan to the UAC at its August 31, 2016 meeting. Commissioners asked if the gas that would be neutralized by buying offsets or replaced with biogas accounts for all the gas the City uses in addition to whatever is leaked from source to transportation to the distribution system. Staff explained that the gas needs were determined by what the City buys at the Citygate and it includes any gas leaked in the City’s gas distribution system, but not any leaks in the gas transportation system or at the gas source. The greenhouse gas emission calculation is based on accounting for the gas at the Citygate as if it was 100% burned and not leaked as methane. Commissioners generally indicated they liked the flexibility of the proposed program since it provides for a higher amount of biogas as the cost comes down and it supports the development of a biogas marketplace. Commissioners also discussed whether carbon neutral gas would dampen the enthusiasm for electrification and asked if carbon neutral electricity has dampened the penetration of rooftop solar. After discussion and hearing public comment, the UAC voted to recommend Council approve the plan (6-1 with Chair Cook, Vice Chair Danaher, and Commissioners Ballantine, Forssell, Johnston, and voting yes and Commissioner Schwartz voting no). The minutes from the UAC’s August 31, 2016 meeting are provided as Attachment D. City of Palo Alto Page 18 Resource Impact Implementation of a carbon-neutral gas portfolio will increase retail rates (and revenues) and the gas commodity budget. The recommendation is to cap the rate impact at 10 ₵/therm. At that level, commodity costs will increase by about $3 million, from $9 million to $12 million, per year. The retail rate revenue will likewise increase by $3 million. If the program is approved, the increased cost and revenues will be reflected in the FY 2018 budget request. A rate increase of 10 ₵/therm will increase rates by approximately 10%. For the median residential customer using 18 therms per month in the summer and 54 therms per month in the winter, the bill impact will be $1.80/month in the summer and $5.40/month in the winter, or about $43 per year. Policy Implications The Council-approved Utilities Strategic Plan includes an objective to offer programs to meet the needs of customers and the community. Strategy 4 in the Council-approved GULP states: Reduce the carbon intensity of the gas portfolio in accordance with the Climate Protection Plan by: a. Designing and implementing a voluntary retail program using reasonably priced non‐fossil fuel gas resources; and b. Purchasing non‐fossil fuel gas for the portfolio as long as it can be done with no rate impact. Implementation of a carbon-neutral gas portfolio represents a departure from GULP Strategy 4 because the voluntary program will be eliminated and there will be a rate impact resulting from non-fossil fuel gas resources being purchased for the portfolio. GULP will need to be revised accordingly should Council approve a carbon-neutral gas portfolio. A carbon-neutral gas portfolio would, however, be an important part of meeting Council’s aggressive goal to reduce the City’s GHG emissions by 80% by 2030. Next Steps Several tasks must be completed before implementing the proposed Carbon Neutral Gas Plan. For example, existing gas purchasing agreements may be used to procure biogas with details about the biogas added to the transaction confirmations. Environmental offsets for the current PAG Gas program are included in the City’s agreement with the program administrator, so new contracts may need to be developed to purchase offsets for the carbon-neutral portfolio. If the Carbon Neutral Gas Plan is approved by Council, staff will execute enabling agreements with qualified counterparties for purchasing environmental offsets. City of Palo Alto Page 19 In addition, new rate schedules will be developed and brought to the UAC and Finance Committee for recommendations and to the Council for approval. Staff anticipates that this can be achieved such that the gas portfolio can be implemented in FY 2018. Because implementation of a carbon-neutral gas portfolio represents a departure from the Council-approved GULP strategies, GULP will need to be revised before the program is put into place. Cancelling PAG Gas will require communication with the customers, repeal of the rate schedule via resolution, and removal of the charge on participating customers’ bills by the carbon-neutral implementation date. Environmental Review The Council’s adoption of a resolution implementing a carbon-neutral gas portfolio and terminating the PaloAltoGreen Gas Program does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Offset and biogas project developers will be responsible for performing necessary environmental reviews and acquiring permits as offset and biogas projects are developed. Attachments: Attachment A: Resolution Approving Carbon Neutral Gas Portfolio (PDF) Attachment B: Excerpted Final Minutes of October 7, 2015 UAC Meeting (PDF) Attachment C: Excerpted Final Minutes of June 1, 2016 UAC Meeting (PDF) Attachment D: Excerpted Draft Minutes of August 31, 2016 UAC Special Meeting (PDF) NOT YET APPROVED 160921 jb JM/Staff Reports Resolution No. Resolution of the Council of the City of Palo Alto Approving a Carbon Neutral Natural Gas Portfolio Plan to Achieve Maximum Carbon Neutrality Using a Combination of Offsets and Biogas in the Gas Supply Portfolio by Fiscal Year 2018 with No Greater than 10¢/Therm Rate Impact; and Related Termination of the Palo Alto Green Gas Program R E C I T A L S A. In December 2007, Council adopted the City’s Climate Protection Plan which set aggressive greenhouse gas (GHG) emission reduction goals to be achieved by the year 2020. B. In March 2013, this Council approved Resolution 9322 directing staff to achieve carbon neutrality for the electric supply portfolio by 2013 through the use of a combination of hydroelectric resources, long-term renewable resources and short-term renewable energy resources and/or renewable energy certificates (“RECs”). C. On September 9, 2013, this Council approved Resolution 9372 modifying and suspending portions of the PaloAltoGreen Program, and directing staff to develop a PaloAltoGreen Gas (PAG Gas Program) Program. D. On April 21, 2014, this Council approved Resolution 9405 establishing the voluntary PAG Gas Program to provide the opportunity for residential and commercial customers to economically reduce or eliminate the impact of GHG emissions associated with their gas usage through the purchase of certified environmental offsets. E. In April 2016, this Council adopted a GHG reduction goal of 80% by the year 2030. GHG emissions associated with natural gas use were 135,000 metric tons of carbon dioxide equivalent, or 27% of the City’s GHG emissions, in 2015. F. The Carbon Neutral Gas Plan uses a combination of physical biogas and high-quality environmental offsets to achieve a carbon-neutral gas portfolio by fiscal year 2018 by maximizing the amount of biogas in the portfolio while holding the rate impact to ten cents per therm (10 ₵/therm). G. On August 31, 2016, the Utilities Advisory Commission voted 6-1 to recommend Council approve the proposed Carbon Neutral Gas Plan and terminate the PAG Gas Program. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council hereby adopts the resolution: Attachment A NOT YET APPROVED 160921 jb JM/Staff Reports 1.Approving a Carbon Neutral Gas Plan, enabling the City to achieve a carbon- neutral gas supply portfolio starting in fiscal year 2018 with a rate impact not to exceed ten cents per therm (10 ₵/therm); and 2.Terminating the PaloAltoGreen Gas program established by Resolution 9405. SECTION 2. The Council’s adoption of this Resolution, which implements a carbon neutral gas portfolio and terminates the Palo Alto Green Gas program does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Offset and biogas project developers will be responsible for acquiring necessary environmental reviews and permits as those projects are developed. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Senior Deputy City Attorney City Manager Director of Utilities Director of Administrative Services ATTACHMENT B EXCERPTED FINAL MINUTES OF THE OCTOBER 7, 2015 UTILITIES ADVISORY COMMISSION MEETING ITEM 2. DISCUSSION: Conversion of the PaloAltoGreen Gas Program From an Opt-In to an Opt-Out Program Chair Foster noted that this item is on the agenda due to support for the idea expressed from members of the community. Public Comment Sandra Slater commended the commission for keeping sustainability on the agenda. She said that it's time to move the needle now. She noted that research shows that participation will be much higher if the program was converted to an opt-out program. She said that the program could be changed to make the program supportable by all income levels. Converting the program to an opt-out program is something the City could do that would have an immediate, positive impact. Lisa Van Dusen said that the program is not perfect since it is backed by offsets, but we shouldn't let the perfect be the enemy of the good. We could pay even more by purchasing more aggressive offsets. There could be mechanisms to get out of the program during an "amnesty period" and low income customers on the Rate Assistance Program could be retained as opt-in customers. She said that there was so much staff effort for the PaloAltoGreen (electric) program just to achieve 24% participation and that there would be savings from lower marketing and administration costs in an opt-out program. Chair Foster said that the money paid by PaloAltoGreen Gas (PAGG) program participants fund offsets that pay to convert waste into methane that is burned to produce renewable electricity at a dairy farm in Wisconsin and that this wouldn't be done without the revenue from the offsets. Assistant Director Jane Ratchye indicated that this is correct. She said that the offsets that back this program are very high quality as they are selected only from those protocols that have been certified for use in the state’s cap-and-trade auction by the California Air Resources Board. One of the requirements of those protocols is that the offset be “additive”, or from a project that would not have been done without the monetary support from the sale of the offsets. Chair Foster said that he supports an opt-out program and that the additional cost is only $5 to $6 per month for the average resident. Commissioner Ballantine noted that there are ongoing costs to maintain an anaerobic digester. He said that people who opt-in are causing something real to happen. The greenhouse gas emissions reductions from those sources would not otherwise happen without programs like PAGG. Vice Chair Cook noted that the PaloAltoGreen (PAG) Electric program was effectively converted to cover everyone via the carbon neutral program and was a great way to transfer the new goal. He asked why PAGG was not made an opt-out program originally. Vice Chair Cook added that Community Choice Aggregation (CCA) programs were successful because they were opt- out programs. Ratchye replied that the carbon neutral electric supply is not the same as PAG and that it was not developed as a transition from PAG. She noted that PAG purchased Renewable Energy Certificates (RECs) for 100% of a residential customer’s load at a cost of 1.5 cents/kWh, or about 12% more than the normal electric rate. On the other hand, the carbon neutral electric supplies consist of about half carbon-free hydroelectric supplies, renewable supplies that are eligible under the state’s Renewable Portfolio Standard (RPS) and that RECs are purchased for the balance of the needs. It is expected that by the end of 2016, the City’s RPS will be 57% and with hydro supplies (given a normal hydro year), no RECs will be needed for carbon neutral electric supplies. She said that the state’s new goal for an RPS of 50% would result in carbon neutrality anyway at no additional cost in a normal hydro year. However, the increased cost of PAGG for participants is 12 cents per therm, or about 12% more than the normal gas rate of about $1 per therm. She said that the additional cost for PAGG was a consideration for making the program an opt-in program like PAG when the program was originally conceived. In addition, the program was just launched in January 2015 (and has yet to roll out a comprehensive marketing campaign for the program) and staff was hoping to determine the community’s appetite for the program. Ratchye agreed that CCAs are successful opt-out programs, but that they are generally no more costly than the alternative from the local utility so participants are not paying any extra to be “slammed” into a CCA. Vice Chair Cook said that our rates are allowed to go up with the carbon neutral electric supplies and asked what the threshold is for an opt-out versus an opt-in program. Chair Foster replied that the comparison of PAGG to the carbon neutral plan is different—like apples and oranges—since the carbon neutral electric supplies is not an opt-out, or opt-in, program, but is the electric supply for all customers. The percentage increase in cost to electric rate payers by going carbon neutral is small compared to the percentage increase to a customer by paying for participation in PAGG. He said that PAGG should be compared to the PAG electric program. Chair Foster asked if there is any legal reason that City Council could not adopt an opt-out program. Senior Deputy Assistant City Attorney Jessica Mullan said that a legal analysis would have to be completed and the answer may depend on the program design. Commissioner Schwartz asked if the point of the program was to reduce gas use or raise revenue. Chair Foster responded that neither of those options is the point, but that the objective is to reduce greenhouse gas (GHG) emissions associated with customers’ gas use. Commissioner Schwartz said that she agreed that more people will do an opt-out program, but that we need to make sure that participants truly want to participate. We need to provide a very easy way for people to opt-out and not be penalized for any of the months they were enrolled if they don’t want to be. A good outreach campaign could be a good way to increase awareness of the issue and it could have an impact of increasing customers’ awareness. She said that the program could be a bridge for people to become more conscious of using energy and would not just be a way to buy ourselves out of the problem. Commissioner Hall suggested that we not act too hastily, but develop a program like this over time, similar to the carbon neutral portfolio adoption. He said that he suspects that there would be a percentage of consumers that would find out later that they were enrolled in a “voluntary” program and feel cheated. A way forward could be to develop a carbon negative plan and start with a surcharge that would fund a solution to global warming. He said it could be a program that would be broadly advertised to ensure that everyone would be aware of the program. Commissioner Schwartz noted that she had seen an effective “cow power” video, which is an example of how the communication can be done in a playful way that would let people understand that we are in this together, which is a compelling message for many people. She added that it would be a good messaging experiment. Commissioner Eglash thanked the public commenters. He also complimented the UAC for placing the item on the agenda and allowing this discussion to take place. Commissioner Eglash said that when he weighs the advantages and disadvantages of opt-in versus opt-out, he would like to avoid disgruntled customers and any worry about customer satisfaction. The greatest danger of an opt-out plan is potential customer dissatisfaction. We devote a lot of time to customer satisfaction with the utility. He said it is more risky in this respect and as the price becomes significant, the danger becomes worse. He said that, with a full marketing campaign, is it still plausible that people would not be in the program that wouldn't want to be. He added that perhaps a very successful campaign would result in the same participation of an opt-out and an opt-in program. Commissioner Eglash indicated that he is leaning towards maintaining PAGG as an opt-in program. He added that there should be no action on the item at this time since there is no staff analysis, no fiscal analysis or legal analysis completed at this time. The discussion is conceptual at this point; there is no proposed design for an opt-out program. Chair Foster indicated that he disagrees that the participation rates for opt-in versus opt-out will converge with a great marketing campaign. He added that this is a discussion item on the agenda tonight so no action can be done. Commissioner Schwartz said that customer satisfaction depends on transparency. The fact that CPAU cares about being green will show that an opt-out program is consistent with the brand. She added that safeguards to allow folks to opt-out will be consistent with transparency. Commissioner Eglash said that many people in Palo Alto take pride in the City’s environmental efforts. He stated that safety, reliability, and low cost are primary considerations and to impose a greener solution that costs extra money is hazardous and must be done carefully. Commissioner Ballantine noted that offset resources are finite and that pressures from supply and demand will eventually bite us as the price for offsets will increase as demand increases. He added that an opt-out program would require sufficient offsets to be supplied. Commissioner Danaher said that the PAGG program has an environmental benefit, a psychological benefit, and a moral benefit. He said that the best idea is to make the program neither opt-in or opt-out, but our gas supply for everyone. He added that an opt-out program still allows people to opt-out easily since it could be very easy to go to the website and opt out. Commissioner Hall said that we could conduct a poll to see what the customers’ response would be to an opt-out program. He said that we should want to have this information before making a decision. Commissioner Schwartz advised against a poll as it would defeat the purpose of communicating the benefits of an opt-out program. Commissioner Danaher added that the poll would only be answered by the small number of people who read and respond to email. Commissioner Foster said that the program could be designed so that anyone who failed to opt-out early enough could still get their money back. He asked if the UAC could make a motion to recommend that the Council direct staff to develop an opt-out program. Director Fong stated that it can be added to the rolling calendar. Mullan added that the item is agendized as a discussion item and that the Commission can add it as a future item to be agendized under Item 4 on this meeting’s agenda. Vice Chair Cook thanked the public commenters. Commissioner Hall added his appreciation of the input from the public commenters, even if some commissioners disagree. ATTACHMENT C EXCERPTED FINAL MINUTES OF THE JUNE 1, 2016 UTILITIES ADVISORY COMMISSION MEETING ITEM 2. ACTION: Utilities Advisory Commission Discussion on Alternatives to the Existing Voluntary Opt-In PaloAltoGreen Gas Program Including an Opt-Out Mechanism and a Carbon- Neutral Natural Gas Portfolio Senior Resource Planner Karla Dailey summarized the written report. Commissioner Schwartz asked why is was so expensive just to convert from opt-in to opt-out since the rate is not being changed. Dailey explained that changes to the billing system made up the bulk of costs. Dailey pointed out that, after the initial investment, administrative costs drop significantly for the opt-out program. Commissioner Schwartz stated that the cost estimate seemed very high and questioned the advisability of making changes to the billing system, which is planned for replacement. Interim Director Shikada said the timing of an opt-out program should take into account the legacy billing system. Commissioner Trumbull asked about the bill impact. Dailey confirmed the bill impact is only for those customers in the voluntary program. Commissioner Ballantine asked about the customer breakdown. Dailey said 50% is residential, 30% is small commercial and 20% is large commercial. Commissioner Forssell asked about the variability for a typical residential customer. Dailey said some residential customers probably have much higher bills. Dailey described the types of customers with respect to an opt-out program structure: active supporters, passive supporters, unaware supporters, ambivalent customers, unaware opponents, passive opponents, aware opponents and active opponents. Dailey said staff is concerned about the customers who would be opposed to an opt-out structure, but do not opt- out right away for whatever reason leading to resentment and poor customer relations at a later date as well as issues around refunding the PAG Gas fee should a customer demand that. Commissioner Schwartz said that bill impact was so small that it shouldn’t cause harm to most customers and, if it was easy to opt-out, an opt-out program shouldn’t be a problem for anyone. If there were customers that found out later and were mad, the program could be designed to allow for refunding those customers. Dailey said that this is problematic. Commissioner Schwartz said that the risk to consumer attitude seems not to be a large issue. Continuing with the presentation, Dailey said that another option is to convert all, or a portion of, the natural gas portfolio to carbon neutral supplies. Commissioner Johnston asked if there would be any mechanical issues with running biogas through the pipeline. Dailey said that there would be no problem since biogas must meet the pipeline quality standards. Commissioner Ballantine added that the quality requirements depend on whether the gas is used for generation directly, or put in the pipeline—and the biogas can be mixed with natural gas to meet the pipeline quality standards. Chair Cook asked how the $1/therm incremental cost of biogas compared to the cost of natural gas. Dailey said that the current commodity cost of natural gas is about 20 cents per therm. Commissioner Johnston asked if there were limits to the number of offsets available. Dailey said that there would be sufficient offsets for our portfolio. Chair Cook asked staff to describe the offsets. Dailey said that the protocols for the offsets are all California Air Resources Board approved although the offsets themselves are not CARB certified. She explained the extra CARB certification would be needed for offsets used for compliance purposes rather than a voluntary program. Public Comments Sandra Slater stated that she and Lisa Van Dusen have prepared a letter with comments on the issue. She said that she supports the opt-out program, but her favorite is to have the gas portfolio carbon neutral. She said that climate change is a huge problem and time is getting short. She said that offset purchases can be a bridge in a plan to purchase biogas. She said that the success of the PaloAltoGreen program proves that there is large support for such a program. She also referenced the 80% GHG reduction goal by 2030 Council directive. She advised that we need to wean ourselves off of fossil fuels and move to electrification. She said there will be a few people, maybe as many as a hundred, who will be opposed, but a small number of people should not dictate the direction of the utility. She said that it would be nice to have local offsets, but supporting methane capture projects outside of Palo Alto is valuable since we have a global problem. Lisa Van Dusen said that the main point is that there is fundamental responsibility to take control of the impact caused. She advised that the City should take a bold action, noting that nothing is perfect. The goal is to maximize carbon reductions, minimize the potential for grumbling customers, minimize the impact to ratepayers, and allowing customers to have a choice. She said that higher gas prices also acts to encourage additional gas use efficiency. Commissioner Johnston said that the City should move away from the opt-in program design and advised that it should be easy for customers to opt out of the program. Commissioner Ballantine supported the option of moving to a carbon neutral gas portfolio, rather than transitioning to an opt-out program. He said that during the rate adjustment process, the larger users had a smaller percentage impact than the lower using customers, which is due to the fixed costs to operate the system. He said that it is not free to have a carbon neutral electric portfolio. He said that the move to electrification may be problematic if the electric portfolio is carbon free, but the gas portfolio isn’t. Commissioner Forssell asked if he program would only apply to residential customers only. She asked if we first go to an opt-out program and allow customers to opt out, then transition to a portfolio could be a problem since you first allow them out, then force them in. She said that we could start with carbon neutral portfolio that is not 100%, but could transition there over time. Commissioner Schwartz said that all points of view are represented in Palo Alto. She said that she is in favor of an opt-out program since this is an opportunity to practice how to do that. If there is no way to opt out, this could be a problem for some customers who will create a large issue in the community as it has been elsewhere with respect to having smart meters. Commissioner Trumbull said he did not opt-in to the current program. He was also concerned about opt-out as a transition to carbon-neutrality. Vice Chair Danaher said he stated at the prior UAC meeting on the subject that he was supportive of a carbon neutral gas portfolio and, after seeing the analysis, he is even more supportive of that option. Danaher asked if there was any negative feedback for the carbon neutral electric portfolio. Assistant Director Jane Ratchye said that there was no negative feedback that she knew of regarding the carbon neutral electric portfolio. Vice Chair Danaher said that there could be a cost for morality and that he supports moving to a carbon neutral portfolio rather than moving to an opt-out program. Chair Cook asked Chief Sustainability Officer Gil Friend whether the choices would support the City’s carbon goals. Friend noted that natural gas represents 25% of the City’s GHG emissions. Interim Utilities Director Ed Shikada noted that there was no staff recommendation for this item and views this discussion as one of values. He said that a survey of the community could be done to determine the community’s view on the issue. Chair Cook noted that staff did not provide a recommendation as it usually does and said he thought that this was appropriate in this case. He stated that we are talking about this at a time when gas rates are very low and also at a time when rates across the board are rising significantly this year. He said that he had not heard any protest regarding carbon neutrality for electric supplies, but says that a transition to carbon neutral gas can start and increase over time. It would be perhaps most advisable to start with offsets first and move to renewable biogas over time. He would recommend #3 and move to #4 by 2030. He would like to see the costs for these options. Commissioner Schwartz said that the issue with smart meter rollout happened when there were many missteps caused by a rate increase, very hot weather and the new meters were blamed. She said that rising rates are not a good time to introduce a new program that costs more. The downside is that the program could fail spectacularly if it becomes the rallying point for complaints. Commissioner Schwartz advised that a survey could be taken to determine the level of support. Chair Cook said he appreciated the additional options presented by staff. He pointed out that gas prices are currently very low and rates in the five utilities are increasing. Chair Cook said he was not prepared to adopt a carbon-neutral program supplied with only biogas. He said the rate impact would be less than the opt-in or opt-out options for a carbon-neutral portfolio. Dailey confirmed that administrative costs for the portfolio are near zero. He said he prefers starting with offsets and slowing adding biogas to the carbon-neutral portfolio. Chair Cook recognized that there will be some complaints but said the rate impact is low and the impact of a carbon-neutral portfolio is high. Commissioner Trumbull stated that he was supportive of having more detail available for a program before going to Council with a final recommendation. ACTION: Vice Chair Danaher made a motion that the UAC recommend that Council adopt a carbon neutral gas portfolio and direct staff to develop an implementation plan. Commissioner Trumbull seconded the motion. The motion passed (6-1) with Chair Cook, Vice Chair Danaher, and Commissioners Ballantine, Forssell, Johnston and Trumbull voting yes and Commissioner Schwartz opposed. Vice Chair Danaher left the meeting at the conclusion of the discussion of item #2. ATTACHMENT D EXCERPTED DRAFT MINUTES OF THE AUGUST 31, 2016 – SPECIAL MEETING UTILITIES ADVISORY COMMISSION MEETING ITEM 2. ACTION: Recommendation that Council Approve a Carbon Neutral Natural Gas Portfolio Plan to Achieve Maximum Carbon Neutrality Using a Combination Of Offsets and Biogas in the Gas Supply Portfolio by Fiscal Year 2018 with No Greater than 10¢/Therm Rate Impact; and Related Termination of the Palo Alto Green Gas Program Senior Resource Planner Karla Dailey provided a presentation summarizing the written report. Chief Sustainability Officer Gil Friend said that the Sustainability/Climate Action Plan (S/CAP) includes a plan to get to a carbon neutral utility and an aspirational goal of a carbon neutral city. He said that moving to an electrified city will be a long and complex process. He said the proposed program is a bridge to using less natural gas and that a comprehensive approach including offsets, biogas, efficiency and electrification will be necessary to achieve the city’s long-term goals. He pointed out that buying offsets provides capital for more projects in the U.S. and potentially locally. Public Comment Sandra Slater said that proposal is an interim strategy to get to carbon neutrality as soon as possible and offsets are a good tool to use for the time being. The price signal that the program cost provides will encourage gas efficiency and electrification of gas appliances. She suggested the money currently used to market the voluntary program could be redirected to efficiency and fuel switching programs. Offsets are not a “pass” for consumers as evidenced by the fact that Palo Altans continue to conserve electricity despite the carbon neutral electric supplies. Lisa van Dusen said that we must do everything and the beauty of this is that it can be done now and shows an intention to reduce carbon emissions in the long term. We have policies in place such as the 2009 proclamation to include environmental externalities and the S/CAP goal to reduce greenhouse gas (GHG) emissions by 80% by 2030. It may be faulted as not enough or too much, but it’s a good move in the right direction. Vice Chair Danaher said that the UAC received a comment from a member of the public who pointed out the proposed offset purchases do not cover fugitive methane losses from natural gas production and transportation. Vice Chair Danaher added that methane is as bad as coal due to the fugitive emissions. Commissioner Ballantine said that that position is not reflected in any DOE report that he searched for. Commissioner Schwartz agreed that the coal and natural gas are not considered to be equally bad by industry experts. Vice Chair Danaher said the proposed program is a good starting point and asked about the value of purchasing biogas. Dailey confirmed biogas is more expensive than offsets and it is Council’s prerogative to decide whether biogas is worth including. Commissioner Danaher asked where the methane comes from. Dailey explained the gas comes from landfills and agriculture, mainly dairy farms. Commissioner Ballantine said that if the source is dairy farms, then avoided methane emissions need to be considered. Dailey explained that offsets are generated by preventing methane from entering the atmosphere and the resulting biogas is a renewable fuel. A specific project can produce both offsets and renewable biogas. Commissioner Trumbull said that the request is fine, but he would like to get off gas as soon as possible. He suggested that rather than buying biogas, extra funds be used for electrification. Commissioner Johnston asked about the monthly bill impact of the 10 cent per therm rate increase. Dailey answered that an average residential customer’s winter bill would increase by a little more than $5 per month and pointed to a chart in the written report with the detail. Commissioner Forssell clarified the proposed amount of carbon to be covered by offsets is only that combusted in town and does not include methane leakage from the production fields or leaks in the transportation system. Assistant Director Jane Ratchye said leakage in the distribution system is covered. Commissioner Forssell asked about leakage data, and Ratchye said we know the difference between purchases and sales, but that some of the difference is due to mechanical meters operating slowly and not measuring all the gas flow so that the difference cannot all be attributed to leaks. Commissioner Schwartz pointed out that the strategic plan says customers should be offered choices for managing their environmental footprint, but this proposed program does not offer consumers choices and asked if the strategic objective needs to be changed. Ratchye said that the supply source is a Council decision similar to the decisions made regarding the composition of the electric supply portfolio. Commissioner Schwartz disagreed. She said where the electricity comes from is irrelevant, but if she is being told she can’t have an electric stove, that is a problem. Ratchye explained again that the proposal is about the gas supply portfolio and not about electrification. Commissioner Forssell observed there may be confusion between electrification efforts versus the proposed carbon neutral gas portfolio. Commissioner Schwartz asked if we need to change the strategic plan. Interim Director Ed Shikada said that the strategic plan will be updated. Commissioner Schwartz said biomethane is not very hard to come by. She said Apple can’t find biogas to serve its facilities. Dailey replied there is biogas available but very little in California. She explained that the plan is to get gas elsewhere and displace it in accordance with the federal renewable fuels rules. She said she has talked to all of the City’s regular gas suppliers and there is biogas available. She explained the some biogas producers are interested selling a portion of their production for at a longer term at a fixed price discounted to the spot price in order to diversifying their sales portfolios. Commissioner Schwartz said if we are pushing everyone to electrify, we should talk about that in the future. Commissioner Ballantine said he likes the flexibility of the proposal that allows more biogas to be included as it becomes available. Natural gas infrastructure is more resilient than electric infrastructure. He said that, if and electric outage occurs, it would be a dark day in Palo Alto if all is electric. He said the proposal is good because it includes biogas at a modest rate increase while we start to work on initiatives to improve the resilience of the electric grid. He added that this action helps to support a biogas marketplace and level the playing field for other ways to get heat, including solar thermal heating. He also noted that energy efficiency and the incentive to reduce local leaked gas is valued more. Vice Chair Danaher said he likes the flexibility of the proposal to maximize biogas. Chair Cook said he likes the staff proposal and appreciates the public comment. He pointed out Carbon Free Palo Alto’s caution that it will be a distraction from the real goal of electrification to reduce GHG emissions and might discourage fuel switching. He noted the differences between the carbon neutral electric portfolio and the proposed carbon neutral gas portfolio but suggested we test the hypothesis by determining whether the carbon free electricity dampened the penetration of rooftop solar. He said helping to build a biogas market may lead to lower prices as has happened with renewable electricity, and this program signals a move away from the GHG emissions associated with natural gas usage. Commissioner Schwartz asked if staff has done an analysis of where the electricity comes from with electric used for heating, positing that additional electric load may cause the use of more gas to power electric generation. Dailey answered that this proposal has nothing to do with electric generation or increased electric usage. Commissioner Ballantine asked if we electrify, would we increase our GHG footprint without realizing it. Ratchye said that a discussion about electrification will happen at a later date. ACTION: Vice Chair Danaher made a motion that the UAC recommend that Council approve a Carbon Neutral Gas Plan to achieve a carbon-neutral gas supply portfolio starting in Fiscal Year 2018 with a rate impact not to exceed ten cents per them; and terminate the PaloAltoGreen Gas Program established by Resolution 9405. Commissioner Forssell seconded the motion. The motion passed (6-1) with Chair Cook, Vice Chair Danaher and Commissioners Danaher, Forssell, Johnston, and Trumbull voting yes and Commissioner Schwartz voting no. FINANCE COMMITTEE EXCERPT MINUTES 1 Finance Committee Excerpt Minutes October 18, 2016 Special Meeting Tuesday, October 18, 2016 Chairperson Filseth called the meeting to order at 7:00 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth (Chair), Schmid, Wolbach Absent: Holman 2.Utilities Advisory Commission Recommendation That Council Adopt a Resolution Approving a Carbon Neutral Natural Gas Portfolio Plan to Achieve Maximum Carbon Neutrality Using a Combination of Offsets and Biogas in the Gas Supply Portfolio by Fiscal Year 2018 With No Greater Than 10¢/Therm Rate Impact; and Related Termination of the Palo Alto Green Gas Program. Chair Filseth: Welcome. So next item on the Agenda is the Utilities Advisory Commission (UAC) Recommendation for Carbon Neutral Gas Portfolio Plan and I guess there is a Staff presentation, at which point we’ll do public comment after that and then Committee questions and comments. Okay. Ed Shikada, General Manager for Utilities: Just a quick intro that Karla Dailey will report for Staff. We also have two of our UAC Commissioners here present if the Committee is interested for additional feedback. Chair Filseth: Super. Thanks for coming. Please proceed. Karla Dailey, Senior Resource Planner: Good evening. Thank you. My name is Karla Dailey. I’m a Senior Resource Planner in Utilities, and I do, as we said, have a short presentation for you. This is just a quick outline of what we’re going to talk about. So we’ve been doing a number of things over the past years to address the carbon footprint of our gas utility. I wanted to point out a couple of policies that are in place right now. The gas utility long- term plan, which was last revised and approved by Council in 2012 has a ATTACHMENT C EXCERPT MINUTES 2 Finance Committee Excerpt Minutes October 18, 2016 strategy, it happens to be Number 4, that says, Reduce the Carbon Intensity of the Gas Portfolio in accordance with the Climate and Protection Plan by: 1) designing and implementing a voluntary program; and secondly, purchasing non-fossil fuel gas as long as it can be done with no rate impact. So that’s what the current policy in place as far as the long-term plan looks like. So, because of that policy there was designed and implemented a Palo Alto Green Gas Program that was modeled very closely after the Palo Alto Green Program, which I know you are all very aware of. It was a very successful program, won lots of awards, 20 percent participation, kind of a model for similar programs around the country. The current participation in the gas program is about four percent of residents, 100 percent of City facilities and that results in about six percent of the City’s total gas demand. We supply that program with high quality environmental offsets with a preference for California projects, but we did go back earlier this year and take a really close look with our UAC Commissioners at the current program, looked at the possibility of converting it from an opt-in program to an opt- out program, but also presented the UAC with some other alternatives to that and the UAC supported, instead of converting that program to something like an opt-out program, moving to a completely carbon neutral gas portfolio. So that’s how we came to work on the program that is being proposed this evening. Natural gas use accounts for about 27 percent of Palo Alto’s greenhouse emissions, and you can see that while mobile combustion is by far and away the largest culprit, since the electric utility is carbon neutral, the largest, second largest remaining chunk is attributed to the gas portfolio. The recommended program achieves 100 percent carbon neutrality with these four sort of constraints. The rate impact being no greater than 10 cents/therm, proposing to use a combination of the same type of offsets that are used currently for the voluntary program, but trying to incorporate some biogas into that portfolio as well, as much biogas as possible without exceeding that 10 cent/therm rate impact. The time frame proposed is Fiscal Year (FY) 2018 and again, we are proposing that 100 percent of our portfolio be covered. Now, of course, for all four of those constraints, any one of them or any combination of them could be changed to come up with a slightly different program, really a continuum in all directions, but this table shows you some discrete options for different rate impacts, different combinations of offsets in biogas and different amounts of the portfolio that could be covered in a carbon neutral fashion. Of course, the time frame could be, achieving any of these benchmarks, could be done within any time frame as well. So, just to talk about the rate impact a little bit more, I think it’s important to think about the electric program, the electric carbon neutral program rather than the Palo Alto green program and compare that to what Staff is proposing on the gas side. The electric portfolio was quite different. We had a renewable portfolio standard requirement that was quite EXCERPT MINUTES 3 Finance Committee Excerpt Minutes October 18, 2016 significant prior to moving to a carbon neutral electric portfolio, and the combination of that RPS requirement and our large amount of hydro supplies really resulted in a largely carbon-free content of the electric portfolio already, and so in order to move from that to a 100 percent carbon neutrality there was a very small rate impact to do that, one to two percent for a few years, and then almost zero after that. The gas portfolio, on the other hand, is 100 percent fossil fuel with no renewable aspect to it. Ten cents/therm is about a 10 percent rate increase based on today’s rates and, again, part of why that 10 percent or 10-cent number was anchored on in the proposal is that we could include some biogas in the portfolio at that level. If you get much lower than a 10 cent/therm rate impact to biogases, it’s too expensive to include in it. So… Jane Ratchye, Assistant Director of Utilities: Can you go back one Slide, point out the Pacific Gas and Electric (PG&E) rate. Ms. Dailey: Oh yeah, down at the bottom of that Slide you can see the difference between Palo Alto’s rates and PG&E’s bundled rates. So for residential customers Palo Alto’s rate is significantly lower. Council Member Wolbach: Is that gas only, or is that gas plus electricity? Ms. Dailey: Just gas. Chair Filseth: And is commercial and large commercial the other way? Am I reading that right? Ms. Dailey: It’s very close for commercial and we are slightly higher for large commercial. So should the program be approved ultimately by Council, our next steps would be to execute enabling agreements for purchasing environmental offsets. Right now, even though we are purchasing some for the voluntary program, we are doing that through a turn-key contract with our marketing consultant, so we are not directly buying those. We would need to develop new rate schedules for Council approval, given the gas utility long-term plan that says we won’t do anything that has any rate impact whatsoever, we would have to go back and revise the gas utility long-term plan, and we would need to do some communication and outreach with the existing Palo Alto green gas participants and perform some fairly insignificant administrative tasks to terminate the program. The request before you this evening is from the UAC and Staff to adopt a resolution approving the Palo Alto, the proposed carbon neutral gas plan and terminating the Palo Alto green gas program established by Resolution EXCERPT MINUTES 4 Finance Committee Excerpt Minutes October 18, 2016 (Reso) 9405, and secondly, to direct Staff to develop an implementation plan for getting to carbon neutrality for the gas portfolio. And that’s all the official presentation I have. We can take questions or public comment. Chair Filseth: Okay. Thank you very much. I think the next step is we should do public comment, so the first speaker, there are six speakers, I think, so you will each have three minutes. The first speaker is Sandra Slater. (crosstalk) Chair Filseth: Ah, let’s see. Should we have the UAC. Actually, why don’t we do that. Is that okay, the Chair of the UAC speak. Sorry Sandra. James Cook, Chair, Utilities Advisory Commission: I was last to arrive and did not fill out a card, so sorry. James Cook. I’m currently the Chair of the Utilities Advisory Commission, and I live at 730 College Avenue. So I just wanted to briefly run down how we looked at this. We voted 6-1 in favor of the Staff recommendation, as we thought this was a great way to reduce greenhouse gas emissions for the City. You know, obviously, natural gas is, at least for the utilities, is the next big hurtle to overcome in terms of greenhouse gas emissions, the biggest greenhouse gas emitter for the gas utilities and a big part of what the City does. So we thought this was a great way to raise awareness and take some action on the issue, and also a great way to replace the Palo Alto green gas, and at the same time to replicate the success we’ve seen in the carbon neutral portfolio on the electrical side. They are not the same thing. The carbon neutral electricity is based on having actually, if the market system is a lot more open to inexpensive electricity that is green, so it’s not the same thing. Here you’re facing a market situation where there really isn’t a market for the biogas, or there is a very small one, but it gives, I think it gives a good market signal for that industry possibly to develop in a greater way. Also, the offset, using offsets versus Renewable Energy Certificates (RECS) are not the same thing. So it’s not considered, I would consider it not as high quality a way to offset your emissions, but it is what the green gas system uses right now is offsets. There is also a cool opportunity to use local, potentially local offsets because the system isn’t as clearly defined as RECS are. You know, there is a possibility you can fight climate change and reduce greenhouse gases here locally with those offsets, so I like that possibility. Also, I think we liked it as a good policy to improve what we’re doing, and it’s a policy that can be adjusted over time, so if, you know, we tried, like the carbon neutral electrical side we tried to cap it. I think that came from the Staff, but it was replicated, certainly a good part of the policy on the carbon neutral EXCERPT MINUTES 5 Finance Committee Excerpt Minutes October 18, 2016 electricity. But it also says, recognizes that biogas isn’t ready now, but it might be in the future, or there might be other ways to do it, so I like that it sort of establishes this framework, gets everyone involved in it right away as opposed to your four or five or six percent or whatever who are involved now in the green gas. And, so I think we like this as a great way to take action locally to do something different than we’ve been doing in a much greater way and reduce greenhouse gases. So I think there wasn’t that much debate at the UAC level. The question really was, are these quality, is this one-time or I think I’m on different sides from our friends at, Zero Carbon Palo Alto, what’s is it? Chair Filseth: Carbon Free Palo Alto. Mr. Cook: Carbon Free Palo Alto, thank you very much. You know, we talked about this and we don’t see it as a problem with, if the City were to try to push for a greater electrification, which would be a real great way to also reduce greenhouse gas emissions, it looks like, we don’t see that this is in conflict with that, and we also don’t see that would take any energy away from that, so we did discuss that. Obviously you guys can decide whether or not you feel that’s true or not, but that was the other thing we wanted to consider when we were looking at this policy. But I think as far as we were concerned, that we did spend a lot of time discussing this. This has been a long discussion. Obviously, it started back in 2013 really, and I think what Staff ended up with is really, we felt like this was the best option of the things we’ve seen over the last three years. Thanks very much. Council Member Schmid: Question. Chair Filseth: Let’s see, so how should we do this? I mean if we have questions for the UAC do we do that now? Council Member Wolbach: I’d say, since we are saving questions for Staff till later, let’s also save questions for the UAC till later and hear from the public. Chair Filseth: You’d like to ask them now. Mr. Cook: I’d be happy to stay, so… Council Member Wolbach: I have a million questions for Staff and UAC but I’d kind of like to… EXCERPT MINUTES 6 Finance Committee Excerpt Minutes October 18, 2016 Chair Filseth: I’ve got a few too. Let’s see. Council Member Schmid: It’s your decision. Chair Filseth: Yeah, um. If you’ve got a million questions for Staff and UAC, then we’ll probably have Steve up here for a long time. (crosstalk) Chair Filseth: So why don’t we, if Greg only has one, why don’t we let Greg ask his question, this will be a little bit of a hybrid here, let’s have Greg ask his question, then we’ll do public and you and I can ask all ours. Council Member Schmid: There was one dissenting vote on several meetings. Could you articulate what the… Mr. Cook: Yeah, sorry, I was going to bring that up too. So Commissioner Schwartz had a dissenting vote on this and on when we were discussing the, I think it was the Green Gas Program. I think her concerns centered around whether or not, I think she is not so concerned about gas, natural gas, and I also think she felt like, she did have one concern, remember Karla, one time she was bringing up to you like that she thought that there might be, if you, and I think this is, it gets, I think some of her thoughts were sort of led off into more on the electrification question, but she was concerned that if we encourage more electrification would that possibly somehow lead to higher use of gas, because you are using some gas in the grid that is being used in order to create electricity and that we have the carbon neutral portfolio. Lisa Forsell: If I may. Mr. Cook: Commissioner Forsell. Lisa Forsell: My recollection of her opposition was concern for rate payers. (crosstalk) Lisa Forsell: Lisa Forsell, also Utilities Advisory Commissioner. If I recall, Commissioner Schwartz was mainly concerned about the impact to rate payers and she favored the opt-out program because it gave customers choice and her dissenting vote wasn’t that she didn’t, you know, want the EXCERPT MINUTES 7 Finance Committee Excerpt Minutes October 18, 2016 carbon neutral gas portfolio is that she wanted to maintain choice for the rate payers. Mr. Cook: Yeah, that’s a more articulate and short (crosstalk). There were a couple of other things that she had brought up, but her probably number one concern was choice, whether or not you were forcing people to do something or not. And, again, one of the things we discussed was, of course, we did that we did that on the electrical side. Chair Filseth: Which is one of your options up here. Mr. Cook: That’s right. So it was more, and it was also when we were talking about opt in and opt out in previous meetings as well. Chair Filseth: Okay, why don’t we do the public comments now and then we’ll come back and if you guys, especially if you guys will still be able to be here, okay? So first public speaker is Sandra Slater. Sandra Slater: Thank you Council and Staff for all your hard work and for allowing me the opportunity to address you this evening. I got to expand on a letter that Lisa VanDusen and I wrote to the UAC back in August, which is on the record. You can take a look at that, and we’re very grateful for the support of both the UAC and Staff for the green gas program. Natural gas was originally considered as a way to wean the country off of coal and it was touted as sort of a cleaner bridge to a renewable energy future, and we were, frankly, I think, misinformed. Natural gas is an extremely potent greenhouse gas. In fact, according to the Union of Concerned Scientists, “the drilling and extraction of natural gas from wells and its transportation and pipelines results in the leakage of a methane that is 86 times stronger a greenhouse gas over 20 years.” In addition, the calculations we were initially given regarding natural gas versus coal does not take into account the fugitive emissions from extraction and you can think of the Porter Ranch leak that was so pernicious just last year, which produced 1,200 tons of methane every day, and in terms of greenhouse gas output per month it “compares to the equivalent effluvia of 200,000 cars a year”. So preliminary studies in field measurements show that these so-called fugitive emissions are just the tip of the iceberg. They occur not only in extraction, but in the transporting of gas right here in Palo Alto even, there are fugitive emissions in our gas pipelines. This is no clean energy bridge to a renewable future. It’s imperative that we wean ourselves from fossil fuels as quickly as possible, and in the meantime, purchasing a biogas in offsets is basically, as far as I can see, the least we can do. It’s not a panacea, but it’s a great step EXCERPT MINUTES 8 Finance Committee Excerpt Minutes October 18, 2016 in the right direction. Palo Alto has a set goal of reducing our Greenhouse Gases (GHGs) by 80 percent by 2030 and this green gas initiative supports that effort and will send a signal to Palo Altons that we are using all the tools in our toolbox to try to reach that goal. Green gas offers an interim strategy of carbon offsets that can be used as a bridge to get us weaned off of gas entirely, something that's going to take quite a few years, if not a decade or more. I’m a firm believer in an all of the above strategy to get us quickly to carbon neutrality as possible. We need quick and effective efficiency programs. We need a fuel switch to cleaner sources for our cars and our homes, and we need a real tax on carbon, but all these things take time. The program Staff outlined will begin to place a price signal to consumers that gas is something that should be used sparingly, if at all. It makes efficiency that much more attractive, because the more expensive the gas, the more attractive efficiency measures will be and electrification will become. So this is not an infrastructure investment or spend. We can dial the cost up or down and efficiency is certainly the low-hanging fruit. This is not giving a pass to Palo Altons to use as much gas as possible. The Electric Utility I see Palo Altons every day trying to reduce their electric usage and we have a carbon neutral electricity, so I think Palo Altons want to do the right thing if they can so this is a roadmap, interim tool, what we got. Thank you. Chair Filseth: Thank you. Next speaker Catherine Martineu. Catherine Martineu: Thank you. Good evening. I’m the Director of Canopy, which is an urban forestry organization based here in Palo Alto. I’m here actually to talk about another maybe more fun aspect of this project, which is the potential for local carbon offsets. There is a group of people, a climate action reserve, who are working right now on a new protocol for urban forestry carbon offsets that will, should allow a city like Palo Alto to use local tree planting programs, such as for example, tree plantings in South Palo Alto, which is something that we want to do to bring South Palo Alto tree cover at parity with North Palo Alto to use these type of programs and with this new protocol and obtain the offsets. So obviously, then you get the cake and you get the revenue as well, because we can get the offsets, all of the extra benefits of a healthy tree canopy and we get to keep the revenue to fund the program itself. So this is something that is being worked on right now. This replaces an older protocol that was basically not practical to use, it was very onerous to administer. This one uses new technology such as remote sensing, which makes it cost effective, so I’m very hopeful. And it looks like probably in the spring of 2017 we will see this protocol sent to the ERB and other agencies for validation and then vetting and so forth, and we might see potential program by the end of 2017. We are very lucky that EXCERPT MINUTES 9 Finance Committee Excerpt Minutes October 18, 2016 Walter Passmore, our urban forester, is one of the advisors on the carbon action reserve team. So there is absolutely no risk that either he or I would forget to let you know when the protocols are available, but I wanted to make sure, and I think actually, Commissioner James Cook mentioned that the program that Staff is recommending allows for local programs. But I just want to make sure that when the time comes, it is a possibility, that it is evaluated as part of the carbon offset portfolio. Chair Filseth: Thank you very much. The next speaker is Bruce Hodge. Bruce Hodge: Hello. I’m Bruce Hodge from Carbon Free Palo Alto. I’ll be speaking on what we view as problematic aspects of this plan, and my colleague, Bret Anderson, will explain our alternative proposal. Carbon Free Palo Alto does not support this plan. The use of offsets and biogas are nonscaleable solutions that don’t address the root cause of our natural gas emissions. The plan is a stand-alone effort that doesn’t serve as a bridge to more robust solutions. It is an underprised green washing approach that will most likely be hard to move away from when required additional investments and real solutions are proposed in the future. Many local community stakeholders, likely the majority, prefer directly addressing natural gas problem without using offsets. Other entities, such as the innovative Sacramento Municipal Utility District (SMUD) Utility are very interested in Palo Alto’s approach to reducing the use of natural gas and will not be impressed with an offset solution. Instead, Palo Alto should be advising innovative solutions that are scaleable and affordable. An offset solution was vigorously debated during lead up to the Sustainability and Climate Action Plan (S/CAP) and offsets were eventually dropped from the S- CAP 80 by 30 plan because of opposition to them. Solving the natural gas situation here at home is crucial. Offsets will result in approximately $3 million a year leaving the community, money that could be spent more wisely on investing in our own infrastructure. The use of offsets is essentially a green washing approach for several reasons. Number one, the market has failed to price carbon emissions realistically and hence offsets based on an unrealistically low cost of mitigation was not grounded in reality. And secondly, offsets only count the combusted emissions from gas and discount the real cost by as much as 50 percent by ignoring the impact of fugitive emissions of natural gas itself, as Sandra mentioned earlier. Just to be clear, the cumulative emissions from natural gas are estimated to be approximately double the reported figure. This means that in Palo Alto natural gas accounts for about half of our total emissions and that reduces the transportation percentage from two-thirds down to about half. We object to the use biogas as well. Biogas is not a scaleable solution, supplies are likely to remain limited because of lack of feed stocks and it just perpetuates EXCERPT MINUTES 10 Finance Committee Excerpt Minutes October 18, 2016 the use of a leaky gas infrastructure with fugitive emissions. Lastly, the plan is presented in isolation, with no linkage to other efforts that will be occurring in the same time frame. The proposed expenditure is somewhat arbitrary and there is no way to compare the potential costs (inaudible) to other approaches. We urge a more comprehensive approach. Chair Filseth: Thank you. The next speaker is, you already know that, Bret Anderson. Bret Anderson: So I’m also a member of Carbon Free Palo Alto. I’m going to explain a little bit about what we are proposing as an alternative. What we think of this alternative is that it’s really Plan A. This is what we should be doing to reduce gas use in Palo Alto and Plan B could be offsets, but we should only do that if we have a full comprehensive plan for what plan A really entails. We’re talking about efficiency measures, electrical equipment upgrades and upgrades to the electric panels in our homes and in our businesses and amid infrastructure upgrade to Palo Alto’s grid. So these are the things that we must do. We know we’re on the path to do them, but we have not yet, from our Utility Staff, a comprehensive plan that addresses how we’re going to get these adopted, these measures adopted. So we need to flush that out. That’s, goal number one would be to lay that plan out, look at how much it costs, how much it’s going to take from Staff to develop and run that program, how much would it take to fund that program. The key to all of this is the high up-front cost of these measures. We know these measures are tough and they’re going to be mostly done in a retrograde situation, so we have to come up with a way to finance this. The utility mode for financing using on-bill financing, tariff based financing is the best pass forward to get adoption rates high in a retrofit situation, which is really what we’re dealing with in an 80/30 scenario for reducing gas use in Palo Alto. So we really have to look at the way we’re going to get on-bill financing for single measures like a large meter or Heating, Ventilation and Air Conditioning (HVAC) or efficiency or a whole-house upgrade where we could finance $30,000 or $20,000 worth of upgrades for a home and have that billed over ten years or whatever it takes to make that flow for the customer. It should be a check-the-box decision for the customer as an opt in, but we need to do all the thinking beforehand and the financing beforehand using the Utility Financing Mode, which is low cost to capital and a very easy understood relationship with the end-user customer. We need to define that funding mechanism is a plan drawn up by Staff where we would love to work with Staff as Carbon Free Palo Alto to flush that plan out, but we also need to enumerate the (inaudible) benefits of this kind if a program, doing it ourselves to the rest of the community to sell the fee, maybe a use fee, that funds this effort, to sell it to our community, because we’re talking EXCERPT MINUTES 11 Finance Committee Excerpt Minutes October 18, 2016 about improving our infrastructure, our resiliency, benefits for the environment for not using fracked natural gas. We’ve got local jobs to create using these measures, or implementing these measures and I’d also add the home value that is improved by investing in the infrastructure, so you can improve the value of your home when you make this investment so offsets really represent a rent moving, exporting our problem outside of Palo Alto, whereas our own program, if we fund that through (inaudible) financing is an investment in our own community. Thank you. Chair Filseth: Thank you very much. The next speaker is Lisa VanDusen. Lisa VanDusen: Good evening. Thank you for considering this issue and I just want to say that Sandra Slater and I have been having these conversations with the UAC and with others for a while, yes, some years at this point, so it’s great to have come this far. I just want to comment a little bit on the remarks that these folks made, and I just want to say that all sounds great and it’s not entirely clear to me how that’s separate and not combinable with what we’re doing here. So I would hope that would be and I would contend that this does not slow us down or prevent us from moving in that direction at all. So great work, both of you. So first, also I want to say how much the Staff has done a really excellent job of flushing out the specifics of this, Karla and Jean, in particular. So I think the benefits you’ve heard, but I just want to reiterate that this program is really flexible. It can flex with the marketplace, with what’s available, with the tide of where we are with efforts like that or anything else. It really does, as James said, create a framework and allow us to really move around with availability, with rate payer concerns, with sustainability targets, with progress and cost. So the second thing is that, and I think you also said this, that it sends a signal. It sends various kinds of signals. It sends a price signal that, in fact, natural gas should not be less expensive than electricity. It is not the direction we want to go, so it sends the signal that way. It sends a market signal to tell the world and the marketplace that we want alternatives to natural gas. And it tells consumers, rate payers here and elsewhere that we are doing what we can to move in the right direction. And when I think, you know, maybe East Bay Municipal Utility District (MUD) is looking at us, but I think others the world over are looking at what we’re doing and I agree with the “all of the above” strategy that Sandra mentioned. So the fact that, I want to just speak to the concern that Commissioner Schwartz had, which was that the matter of choice and the importance of that and, in fact, we have competing things. We have consumer choice, but we also have a mandate and really a moral calling right now to do everything that we can, and the City has already adopted the 20 by 2020, 80 by 2030 goal and we have also the proclamation from 2009, the Council said we wanted to be considering EXCERPT MINUTES 12 Finance Committee Excerpt Minutes October 18, 2016 externalities in our decisions as we do business, so I hope that you will go forward with this and take this to the Council and we can all move forward quickly with this. Thank you. Chair Filseth: Thank you very much. And our final speaker tonight is Lisa Forsell. Lisa Forsell: Hi. Lisa Forsell, UAC Commissioner, although tonight I’m not representing the UAC but I just wanted to share my own thoughts as to why I support the proposal. A lot of things have been said tonight that I will try not to rehash at length. I see it as a transition strategy, not the permanent strategy, that we shouldn’t go like, “okay, we’re done now, our gas portfolio is carbon neutral, no more work to be done”. It’s a way to start having an impact now while we implement the long-term electrification strategy. I like the current proposal because it’s flexible, so Council, there was a good slide about it, can decide how much appetite you have for rate impact, and if you feel it is too high you can go with five cents/therm or, you know, another number, or if you have a great appetite for rate impact, more physical biogas could be added to the portfolio. I might also throw in there that, you know, Carbon Free Palo Alto has also raised a very legitimate concern about fugitive emissions and if I recall, Staff isn’t quite sure what’s the appropriate estimate for Palo Alto fugitive methane emissions, but one could attempt to purchase offsets against the fugitive emissions as well, if that was something that we wanted to pursue. And finally, just a couple of thoughts about the opt out, because when we started the conversation at the UAC meeting in June, we did spend a lot of time talking about opt out and one of the reasons that I was against an opt out program was because a lot of the rate impact actually went to administrative costs to operate the opt out program and all the sort of complicated corner cases about what if you only noticed it six months later and you wanted retroactive opt out and all these things, so it felt like, for the money rate payers were spending, I’d rather that money go to the offsets and the physical biogas than to a big administrative burden for staff. And I also felt that if we went with an opt out, that could not be a transition to a full portfolio because we then had, you know, let members, let rate payers who did not want to be part of the program identify that they didn’t want to be in and then it’s quite rude to pursue upon them later and I felt it was better for the community to just take a stand and go with the whole portfolio. Thank you very much. Chair Filseth: Thank you. I have a couple of procedural comments. Do you have a question? EXCERPT MINUTES 13 Finance Committee Excerpt Minutes October 18, 2016 Council Member Wolbach: Actually a procedural question for you. Chair Filseth: Okay. Council Member Wolbach: Do you want take five before we get into questions? I just want to go grab a cup of coffee before we get into the rest of this. If we’re going to lose quorum (crosstalk) Take a couple of minutes to absorb the comments. Chair Filseth: Yeah, let me make a couple of procedural comments and then maybe… Is two minutes enough? Council Member Wolbach: Sure. Chair Filseth: A maximum of five. Okay. So thank you very much everybody who came. My question for you guys. I guess what you guys are suggesting is that we should proceed straight to figuring out how to move to electrification, get rid of gas and what’s the financing strategy for that. Did I get that right? That’s, I’m going to guess, is beyond the scope of our agenda tonight, and it’s something that would be sort of a complex agendized process, so we’re probably not going to dive into that. Is that accurate? Terence Howzell, Principal Attorney: That is accurate. Council Member Wolbach: Can I ask (inaudible) to that one? Chair Filseth: Yes. Council Member Wolbach: To the degree that one program might be an opportunity, present an opportunity cost that deprives us of funds or Staff resources to pursue another program, we can talk about, you know, the fact that, we can talk about it in that context, correct? Mr. Howzell: In passing. Council Member Wolbach: In passing. Chair Filseth: Okay. So the second one is, and there may be some disagreement a little bit on this side, which is okay, right? But it seems to me that what we’re talking about here is sort of a long and complicated decision for the City, right. Are we going to move to sort of a different way EXCERPT MINUTES 14 Finance Committee Excerpt Minutes October 18, 2016 of doing gas? It seems to me that the heavy lifting on that decision should be borne by the UAC and by the full Council, right. So the question is, what is our role here in the Finance Committee, because obviously we could cover a lot of territory. It seems to me that our role in these kinds of things in the Finance Committee is not, for example, to go back and revisit policy, so I don’t think the Finance Committee should say, “no, we think it should be option number 3 instead of Option Number 4”, right. It seems to me that sort of the center of gravity, what we should be doing is looking at is, you know, is the City going to go broke trying to do this, right. I mean, it’s our money to do this. And to a lesser extent, maybe get into the issue of is the City getting its money’s worth from this kind of program, right. It seems to me that’s sort of the space that we ought to spend most of our time today. Do you guys agree generally with that or disagree? Council Member Schmid: Disagree a little bit. Chair Filseth: Okay. Council Member Schmid: I think the function of the committees are to look in detail at what the consequences of decisions might be. Primarily financial but I don’t think exclusively financial. Chair Filseth: Primarily financial would be my comfort zone for this Committee, because the Utilities Advisory Committee is another committee another Council Committee that looks at this, and this is their job, to set rate and things like that seems to me is the purview of the Utilities Advisory Committee and we can look at that, right, but it doesn’t seem to me that we, they ought to be going one way and we ought to be going the other and they ought to provide the guidance on this. Council Member Schmid: The difference between the UAC and a Council Committee is we also are elected and have to go in front of the voters, and so we should be taking into account the public more maybe than the UAC. Chair Filseth: Sorry. Maybe I haven’t been clear on that. I think as members of the full Council, I think we are going to be very, very interested in that. So, I mean, I sort of see myself as having two hats, one is Finance Committee and the other is, I’m very interested, I mean, I’m going to be interested in a lot more aspects of this when it comes to Council than on this Committee. That sort of has been my thought process. But I don’t want to constrain you from going outside that, to be too narrow. I want to go outside that somewhat, and I think have at it. But I think my guidance on this would EXCERPT MINUTES 15 Finance Committee Excerpt Minutes October 18, 2016 be the heavy lifting on policy issues ought to be borne by the UAC and the full Council when it comes to this. Okay. But as members of the full Council we’re going to see this thing again, so it’s not completely divorceable. With that, why don’t we take a couple of minutes break, two minutes. The Committee took a break from 8:04 P.M. to 8:08 P.M. Chair Filseth: Okay, with that let’s do Finance Committee comments and questions and why don’t we do both at once. Council Member Wolbach. Council Member Wolbach: So a few questions at the moment. I’ll probably have more later. I guess a good place to start for me would be if somebody from Staff or UAC perhaps provide just a quick reminder of the difference between offsets and RECS, first. Ms. Dailey: So a REC is only associated with Renewable Electric Energy, so when you generate electricity from a renewable resource, there is an attribute attached to that electron that is a renewable energy credit. So it doesn’t make sense to use, you can’t use that for gas. Those are particular to energy, not to natural gas. An offset is generated by an action to prevent greenhouse gases from going to the atmosphere by, for instance, planting trees to sequester carbon, if it’s an additive tree-planting operation. So trees that are just sort of hanging round town don’t generate offsets, but a program that is financed by being able to collect revenue for the offsets in order to achieve that carbon reduction generates offsets. Council Member Wolbach: So RECS are not an option for natural gas I heard you say. Ms. Dailey: Yes, that’s correct. Council Member Wolbach: So they’re off the table and that’s why it’s not part of this discussion. Ms. Dailey: That’s right. Council Member Wolbach: Thank you for clarifying that question. Okay, I can move on from there. Next question, there seems a clear emphasis on biogas over offsets aside from the concerns about costs, biogas being very EXCERPT MINUTES 16 Finance Committee Excerpt Minutes October 18, 2016 expensive. Just for our edification, maybe a real quick summary why there is the emphasis on biogas over offsets? Ms. Dailey: Well, I think because offsets are kind of a more esoteric product, there has been an emotional leaning toward liking biogas, but it is a very expensive resource and Staff felt like the rate impact of achieving carbon neutrality just with biogas would be unacceptable, and so tried to strike a middle ground. It’s a matter of personal preference, but… Council Member Wolbach: Any input from the UAC on that one? See if there are any further thoughts from the recommending body. Mr. Cook: No, I think that captures it pretty well. I think there is a sense of biogas as preferable to the existing stock of natural gas, but this is still seen as a bridge or some sort of transition to using less gas because it does have the methane emissions, most of the people who have talked from the public have said. So I think that, you know, we are seeing either that if there is more biogas you might have an increased percentage of biogas usage in the program or if there is some other way to transition away from… You know, I think ultimately may want to transition away from gas, but it’s just that they don’t have a better explanation. Karla is the real expert on gas, so maybe she… But I think there is much more to it. Council Member Wolbach: Okay, next question. On Slide 8 of tonight’s presentation, Palo Alto’s gas rates are compared to PG&E gas rates, and I just want to be clear. These are our current gas rates, correct? And I was hoping to see a quick side-by-side, if it’s available, of… Are we facing some expected increases in our gas rates anyway? Aren’t we planning to increase our gas rates already or and if so… Ms. Ratchye: Yeah, in the long-term plan, the Ffinancial Plan, we had an 8 percent expected increase for Fiscal Year, the next Fiscal Year. Chair Filseth: And that goes on for a few years, right? Ms. Ratchye: Yeah, I can’t remember the whole trajectory, but next year we did and I think there are a couple of years. Ms. Dailey: But these rates do include a big rate increase that we experienced as a result of a lot of the money that’s being spent on safety in EXCERPT MINUTES 17 Finance Committee Excerpt Minutes October 18, 2016 the PG&E system. It gets passed straight through to us from all the work they are doing. Council Member Wolbach: Okay, so we’re including some of that. Ms. Dailey: Oh yeah. Council Member Wolbach: But this does not include the potential 10 percent rate increase from this proposal? Ms. Ratchye: That’s correct. Council Member Wolbach: So we could… And you said there was also an 8 percent that we’re going to be increasing this coming year anyway, correct? Ms. Ratchye: That was the expectation that we had in the long-term Financial Plan, that next year for FY’18 so July 1 it would be 8 percent. Council Member Wolbach: That’s what I thought. And so I want to make sure I did my math right here. Looking at just Tier 1 residential, which is currently we’re at 0.8707 and multiplying that by 1.18, so adding 10 percent and another eight percent. Ms. Dailey: Ten cents is the proposed. Council Member Wolbach: Oh, I’m sorry, it’s 10 cents. We’re not looking at 10 percent. (crosstalk) Council Member Wolbach: But it says it’s about a 10 percent rate increase. Ms. Ratchye: On a winter bill, yeah, there’s a little apples and oranges. Council Member Wolbach: So estimating a little bit, so we’re still looking at less than a PG&E bill. So that would be still under Tier 1, for residential Tier 1. Ms. Dailey: Right. EXCERPT MINUTES 18 Finance Committee Excerpt Minutes October 18, 2016 Council Member Wolbach: And for, so that would be 0.952. Sorry I’m taking long doing the math, but doing the same for Tier 2, it would also still be cheaper, again anyone can check my math here, Tier 2 would still be cheaper than PG&E at 1.663. Again, these are estimations. So I just want to get kind of apples to apples what we would be looking at. And I appreciate the PG&E information being included in this report so we can do a comparison. As a quick comment on that, one of the most important things I think about our electricity portfolio which is carbon neutral, is that we are substantially cheaper than PG&E and being able to stay cheaper than PG&E on our gas, I think, is also important. Ms. Ratchye: I want to point out one thing about the gas rates when you’re making these comparisons, PG&E doesn’t have a fixed charge for residential and so these rates are the volumetric rates shown, plus you have to add in this monthly service charge too. Council Member Wolbach: I got you, thanks. Ms. Ratchye: So there is another part of it that does kind of effectively bump up our rates. Council Member Wolbach: Right but that’s just a fixed $10.32, right? Ms. Ratchye: Yes. Council Member Wolbach: And that’s a good reminder. I guess I’m still kind of sorting out my thoughts about all the public comments we have heard, so I’m happy to turn it over to colleagues for questions, as I continue to mull over the different pieces we’ve heard. Chair Filseth: Very good. Council Member Schmid. Council Member Schmid: I think there is no question that it is an important issue and something we’ve got to act on. The opt out decision is a big one. It’s striking that the Palo Alto Green got four percent of the customers jumping in and the green electricity had, what, 24 percent? So maybe one question is, why are there different perceptions out there in the customer land between gas and electricity. Ms. Dailey: You know, one answer, and I’ll let Jane chime in too, is we didn’t market it very heavily, and part of what was going on was so much drought EXCERPT MINUTES 19 Finance Committee Excerpt Minutes October 18, 2016 messaging over the last couple of years, particularly last year, that there is some limit to the number of messages that are going out to customers, so a lot of focus was placed on the drought and not so much on this program. Do you want to add anything else about why? Ms. Ratchye: No, I think that’s true. We didn’t market it, and then we started having all these conversations about, are we going to change it, and then we’re like, let’s not market it heavily now and then switch it up really quickly, and so we stopped kind of actively marketing it. The other aspect is, we did achieve a tremendous number of fraction of customers who joined the Palo Alto Electric Green Program, but that still amounted to less percentagewise total electric use than this program, which was not marketed as a fraction of gas use, and that’s because residential was the bigger number of participants and so it’s a bigger part of the gas use. So we actually had more participation in this program, however poorly marketed, in terms of percentage of gas use than we did after ten years of marketing the Palo Alto Electric Program. Chair Filseth: Can I chime in on that briefly? I would concur with that, so I mean, this focus group of one here, okay, you know we were one of the earliest adopters of Palo Alto Green, so I asked my spouse, “so are we doing this?” She said, “no, I don’t know much it”. So… There wasn’t much information about it so I’m concurring with sort of the, not a lot of investment in the marketing. Council Member Schmid: The thought process is a little different. I think the electricity comes easy to jump on. So my question is, you know, what’s an offset? Talk to me a little bit about what offsets are. You’re going to depend for 95 percent of your program on offsets. What is an offset? People have said gas is worse than electricity in terms of… Ms. Dailey: Right. An offset is a credit generated from a project that keeps a greenhouse gas from entering the atmosphere. Ms. Ratchye: Can you give an example. Ms. Dailey: For instance, urban forestry, it’s a large planting of trees that stay in the ground for 100 years and are verified to be there year after year. Council Member Schmid: I guess offset in electricity is easy. You buy solar power made in the desert. It doesn’t come to Palo Alto, but it substitutes for what you’re getting. EXCERPT MINUTES 20 Finance Committee Excerpt Minutes October 18, 2016 Ms. Dailey: That’s a Renewable Energy Credit. Council Member Schmid: Okay, what’s an offset? Ms. Ratchye: Can you do the cow farm thing? Ms. Dailey: Right, so if you have a, say you have a dairy farm that obviously cows leave a lot of manure that emits methane into the atmosphere. You can take that methane and generate electricity with it. That electricity has a Renewable Energy Credit associated with it, because it was generated with a renewable resource. But if you are just capturing that methane and not letting it go to the atmosphere, that’s generating an offset. So you can actually have an offset, you can have offset generation and renewable energy credit generation from the same project. Council Member Schmid: Okay, but cows in California might offset 1 percent of our natural gas usage. Where are the other 99 percent of offsets? Ms. Dailey: So you’re buying offsets from a specific project. Are you saying there are not enough dairy farm projects in California? Yeah, so they’re coming from other parts of the country. I mean, the biggest sources are landfills, but also dairy projects in other parts of the country as well. Council Member Schmid: So we are shifting our offset to somewhere else, not to the central Sierras that are most important to us? Ms. Dailey: Well, I mean, the atmosphere is the atmosphere I would argue, and you know, we’re concerned about global warming, not necessarily Palo Alto warming. Council Member Schmid: There was some discussion earlier about landfill, garbage being turned into through conversion technologies into gas. Is that an offset? Ms. Dailey: If a project is preventing methane from a landfill from going into the atmosphere, that would generate an offset. Mr. Cook: If it’s a new program. Ms. Dailey: If it’s a new program and it’s not required by some existing regulation. EXCERPT MINUTES 21 Finance Committee Excerpt Minutes October 18, 2016 Council Member Schmid: Right, but stopping garbage going into landfill would, of course, stop it for the next 50 years. Ms. Dailey: There’s no protocol for that type of project developed yet. Council Member Schmid: Why not? Ms. Dailey: Um. Council Member Schmid: There are such conversions going on. There is a big debate in Sacramento about it, so why wouldn’t that be effective? We’re dumping thousands of tons a year. Ms. Dailey: Well, we’ve only proposed to use offsets from protocols that are approved by the California Air Resources Board and… Council Member Schmid: and so far it’s just cow farms. Ms. Dailey: Sorry? Council Member Schmid: So far it’s just cow farms? Mr. Cook: No, it could be planting trees. Ms. Dailey: Yeah, I think it’s in the Staff Report actually. Chair Filseth: Forestry, livestock, landfill, coal mine methane, urban forestry, ozone depleting projects and (inaudible) projects. Ms. Dailey: Those are all the Comprehensive Air Resources Board (CARB)- approved protocols right now. Council Member Schmid: Yeah, I guess my point about those, that list, is that list would not deal with California’s gas problem. It might deal with two percent, three percent, but… Ms. Dailey: That’s right, it’s Greenhouse Gas Prevention Protocols. Not necessarily natural gas and they are different. EXCERPT MINUTES 22 Finance Committee Excerpt Minutes October 18, 2016 Council Member Schmid: Los Angeles is working very hard to try to get landfill gas conversion technologies and they feel it’s the only way they can really get offsets. Ms. Dailey: Let me put it another way, I mean, you as an individual could go out and buy an offset for your airline travel, if you wanted to, to counteract it. Or you could go out and buy offsets to counteract the gasoline that you are burning in your car, assuming you don’t have an electric vehicle. So an offset can be used to cover many different types of greenhouse gas emissions. It’s not, as opposed to biogas, which is a physical commodity that could be used in place of natural gas. Council Member Schmid: I guess I thought landfill conversion into gas is a biogas. Ms. Dailey: It is, absolutely, so that’s the other product that we’re proposing to use in this. So we’re proposing to use two things to get to carbon neutrality. One is biogas and the other is offsets, and they are separate. Council Member Schmid: I guess conversion of waste is not technically biogas because it uses a broader set of inputs than biogas? Ms. Dailey: Conversion of waste to methane is biogas, yes. Council Member Schmid: Okay, I worked it out earlier, and it’s not included on most biogas lists, and I think for that reason it has been difficult to get approval in Sacramento for it. Let me ask another question… Chair Filseth: Before you leave that one, I actually had a question on exactly the same thing. Council Member Schmid: Okay, good. Chair Filseth: Would you mind? So, yeah, I was looking at your example of offsets that pay to convert waste into methane and was used by a dairy farmer in Wisconsin I think was one of the examples, right? That sounds like biogas to me. Ms. Dailey: There is also biogas that’s generated from the same project, so if you’re preventing the methane from going into the air, that generates an EXCERPT MINUTES 23 Finance Committee Excerpt Minutes October 18, 2016 offset. If you’re using the methane from the dairy farm, that’s biogas, if you’re buying the molecules. Chair Filseth: So why is the offset only worth 12 cents/therm, but the biogas is $2/therm? Ms. Dailey: You know, all these different environmental parks have different markets that they’re being traded in, and biogas can be used for the Federal Clean Fuels Program. You can’t use an offset for the Federal Clean Fuels Program, and so that program is driving the (crosstalk). Chair Filseth: So there’s a limited supply of biogas and it’s bid up by these other programs? That’s not fair. Got it. I’m sorry, go ahead. Council Member Schmid: On Packet Page 29, Figure 8. Council Member Wolbach: Staff Report Page 15? Council Member Schmid: Page 15 of the Report. You have the environmental offsets very cheap at the moment. Things like infrastructure, water heating, space heating, stoves, get more expensive, biogas very expensive. Then you have compact vehicles pay for themselves. What do you mean by that? Ms. Ratchye: What this is is the societal abatement cost for the carbon equivalent ton, so what that’s basically saying if you bought, this is a Nissan Leaf instead, I can’t remember what it is, a Civic… Chair Filseth: A Honda Civic. Ms. Ratchye: A Honda Civic, then it’s cheaper for society just to do that alone, so if you say that it’s a negative cost divided by how many therms of carbons you saved, it’s a negative amount. That’s how all the things on this graph are done. Chair Filseth:…your cost right, because you have a bunch of government credits and so forth, right? Isn’t that what it says? Ms. Ratchye: No, this is the societal one. We do have also the customer, the participant cost. EXCERPT MINUTES 24 Finance Committee Excerpt Minutes October 18, 2016 Council Member Schmid: So why don’t we spend our $3 million per year in buying Nissan Leafs? Ms. Ratchye: This is actually the electrification analysis that we did, and Council has seen this. So, is your question, yeah, that’s like the most cost- effective way to get carbon reductions. Council Member Schmid: Yeah, as Chair pointed out, the role of the Finance Committee is to try to find the best financial option. Are you saying that we should be spending our $3 million per year to buy Nissan Leafs? Ms. Ratchye: Well, it might be a better investment for society to make, but the problem is, who is going to be making this expenditure is the gas rate payers. So I don’t know if you had anything to add to that. Council Member Schmid: I mean, you can spend it on Wisconsin cows or… (crosstalk) Ms. Ratchye: It becomes a Proposition (Prop) 26 issue. Council Member Schmid: But you want to spend it on cows in Wisconsin, and you say, “oh, that’s good”. I mean, why should we be spending it on cows in Wisconsin instead of, say, replace the bike program with a Nissan Leaf program? Put Nissan Leafs all over town bought by the City and drive (crosstalk) save $183. Ms. Dailey: Bought by the City would be fine. Mr. Shikada: Is there a protocol for that? Chair Filseth: He’s tugging on an interesting thread here. Go ahead. Mr. Shikada: Jane, is there a protocol there for hybrid cars that would allow us to do that? Ms. Ratchye: It wouldn’t be an offset, not an offset. I mean the problem is this program is to buy something for the entire portfolio for all gas rate payers. And buying Nissan Leafs, there would be… EXCERPT MINUTES 25 Finance Committee Excerpt Minutes October 18, 2016 Council Member Schmid: I don’t get what the difference is between a cow in Wisconsin and a Nissan Leaf in Palo Alto. Chair Filseth: She’s saying it’s a Prop 26 issue, is that right. Ms. Ratchye: I mean, what this electrification analysis basically shows is everyone should have a Nissan Leaf, absolutely shows that. Council Member Schmid: I guess we’re looking at it from the point of view of the City, how can the City take money from the rate payer and get the most productive use out of it. And if you are going to have an opt-out program, you want to be able to say, we are using this money effectively. Ms. Ratchye: We’re not proposing an opt-out program. Chair Filseth: UAC’s proposal was to make it mandatory, not opt out. Mandatory for everybody, right. Council Member Schmid: Well, even more so then, you have to convince people if you’re taking $43 from every citizen of Palo Alto, that you are using it in the most effective way. Chair Filseth: He’s tugged on an interesting cord here, right, which is, Prop 26 says that we’re allowed to pass the cost of the gas onto the consumer. We’re not allowed to just tax it and go off and use it to buy park space or something like that, okay. But what if we spend it on something that reduces co2 more efficiently than cows in Wisconsin? Is that legal under Prop 26? Council Member Wolbach: There has to be a protocol. We need a (CARB) Comprehensive Air Resources Board approved protocol for the offset. It will have one for car sharing, for electric vehicles, which would be interesting, but it will have one you just said, right? Mr. Shikada: Or even like more broadly than the protocol itself is the question of the legitimacy of the use of the funds, and is… Mr. Perez: What is the benefit to the gas rate payer… Council Member Schmid: Okay, let me go a step further then. Chair Filseth: The benefit to the gas rate payer is less emissions, right? EXCERPT MINUTES 26 Finance Committee Excerpt Minutes October 18, 2016 Council Member Schmid: People earlier said a more effective use of the money would be to start dealing with heating in the homes, heating water, warming homes, would that be (crosstalk) Ms. Ratchye: That’s the same answer. Council Member Schmid: But it’s not, you cannot justify it? Ms. Ratchye: You can’t use all rate payer funds to benefit just particular individuals who are going to do an electrification of their water heating or space heating or whatever. Chair Filseth: But the benefit to rate payers by this program you’re proposing is that they produce less carbon dioxide when they cook their Ramen, okay, it reduces carbon dioxide, and so if you have some other program that reduces carbon dioxide even more when they cook that Raimen, how is that not a benefit to rate payers? If the first one is a benefit to rate payers? Council Member Schmid: Let me pursue… Ms. Ratchye: It’s a use of the funds. It’s basically a Prop 26 issue. It’s, when you’re buying these offsets or biogas, that is something you’re doing for the entire customer, all customers. Council Member Schmid: Let me pursue then the other issue of opt in and opt out. Wanting to leave the opt out in, and you get rid of 26. Council Member Wolbach: Is that true? Council Member Schmid: No one has to do it. It’s their own volition. So Prop 26 is not relevant, then you could spend it on the most effective thing for Palo Alto. Mr. Shikada: Again, the nature with the opt out or opt in is the administrative costs, and effectively running a program that allowed that choice. Ms. Ratchye: I’m just trying to contemplate, I mean, we could do that. That is an option to change the Palo Alto Green Gas opt in program to an opt out EXCERPT MINUTES 27 Finance Committee Excerpt Minutes October 18, 2016 program. I’m trying to imagine a marketing campaign for it that says pay a little bit more for somebody who might get (crosstalk). Council Member Schmid: You would have to effectively convince the people, which is exactly what you want to do. You don’t have to convince all of them. You say convince 90 percent of them. And that’s what politics is, so that’s what we should be doing. Ms. Ratchye: And as you see, if you’re looking at this graph, the only thing that’s cost effective is the Nissan Leaf, that’s it. Heat pump water heaters, no,unless you value carbon at $59 a ton. Chair Filseth: Well, you’re valuing it at $8 a ton here. Ms. Ratchye: Offsets, that’s the cost of that. Council Member Schmid: A question to the Chair, keep on finances? Chair Filseth: Yes, we are still on, we are in the zone of is the City getting its money’s worth. Council Member Schmid: Okay, good. That’s the questions I had. Chair Filseth: That was yours. Well, you took all the good ones. So I have a couple of procedural questions and sort of my questions sort of come back in sort of the some of the same zone, although not as clever as Greg. If we proceed with this program, there is basically a 10 percent rate hike, right, does all that go to the commodity price or is there an expansion of sort of, it’s going to, you know we’re going to have to have… You know, the administration of it is going to take some resources, and so forth, is some going to go to overhead, or… Ms. Dailey: No, that’s just the commodity price and we would just, I mean, it’s just kind of the normal course of business. We could certainly buy biogas from the contracts we already have in place for brown gas and have a one time set up some enabling agreements for offsets, but it’s a very low administrative cost program. Chair Filseth: I assume what we’re talking about here is legal with respect to Prop 26? EXCERPT MINUTES 28 Finance Committee Excerpt Minutes October 18, 2016 Mr. Howzell: It is. And the appropriate use of gas rate payer funds. Chair Filseth: So the sense of the program is that we said, okay, we think a 10 percent rate increase is a reasonable thing for Palo Alto residents, you know, to move to a carbon neutral gas supply, okay? We think 10 percent is about appropriate. Now, we could do it for less than that if we, because we’re doing, basically we’re going to modulate the amount of biogas versus the offsets we do right? We could do it for less than that if we use less biogas and more offsets, or we could do it for more than that, if we said we’re going to buy more biogas because we think biogas is a better thing than offsets. But I assume there is a range of quality of offsets, right? I mean, you pick, for example, one which is animal waste is going to be converted into methane and it’s just going to be gone, as opposed to planted trees, which is a good thing, but in 100 years the trees going to fall down, the carbon is going to be released into the atmosphere again, right. So I assume there is a range of quality of offsets. Is that an accurate characterization? Ms. Dailey: I don’t believe so. I mean, we have placed that onto CARB and if the project meets the protocol that CARB has laid out, then it’s an offset. So we’re not going to place, we’re not proposing the place some other layer of verification or scrutiny above and beyond what CARB says is a verifiable real offset. Chair Filseth: Okay, I understand. So if I understand what you just said, it’s, excuse me, as long as you stick to the CARB schedule, you’re at the highest quality of offsets that there is? Ms. Dailey: Right, and another reason for using CARB-certified protocols is because all those offsets could be used to meet an Renewable Portfolio Standard (RPS) compliance requirement, so in effect, by us purchasing them for our gas portfolio voluntarily, we’re taking them off the market and retiring them so that someone else can’t use them to pollute. Chair Filseth: So I guess sort of the thing that I’m wondering about this is, you know, assuming the offsets are real, I mean we said well we think biogas is a higher quality thing than the offsets, why is that? I mean, Cory sort of tugged on that one a little bit. Why is that? I mean, the both get rid of carbon, right? Ms. Dailey: Right. I mean I think we’d be naïve to say that there isn’t some public perception that doesn’t quite… Biogas is a very physical, definable EXCERPT MINUTES 29 Finance Committee Excerpt Minutes October 18, 2016 thing. The offsets you have to have a bit more faith in the verification system and the CARB protocol, so again, it’s a little bit of an emotional thing. Chair Filseth: I mean, we’re paying a non-negligible price for that emotional thing, right? So let me as the question a different way, the way I’d really like to ask it. I mean given the immense difference in cost, okay, between biogas and the offsets, you know, let’s say for the sake of argument, you went to 100 percent offsets and 0 percent biogas, okay, but you kept the 10 percent rate increase, okay, and used the difference to buy a whole lot more offsets, I mean, wouldn’t you go from carbon neutral to massively carbon negative. It’s like ten times as many, or 20 times as many carbon offsets as you’re buying biogas. I mean wouldn’t that be a better use of that investment? I mean, did you guys talk about that at all? Council Member Wolbach: Can I chime in on this? Chair Filseth: Okay, if they’re done. Mr. Cook: Yeah, let me just answer (crosstalk) The UAC did not consider that. I think it’s an interesting thought exercise. That’s primarily why you guys get paid the big bucks. Chair Filseth: We’re just the bean counters on this side. Go ahead. Council Member Wolbach: I think we heard from members of the public some of the concerns around offsets are that they’re, some people interpret offsets to be green washing. That perhaps CARB’s protocols aren’t as tight as they could be. Actually that’s a quick question, do we know if CARB is considering those criticisms, and considering updating their standards to be more stringent around how they identify and measure offsets. I don’t know if you’ve paid any attention to that. Maybe that’s a question we should ask our… Ms. Ratchye: I actually think they have the strictest there are. There are protocols developed by different agencies and then CARB certifies those for their own use and they only accept a fraction of what other people accept. They, because they do it for compliance, so they’re pretty strict. I’d say they’re the strictest. EXCERPT MINUTES 30 Finance Committee Excerpt Minutes October 18, 2016 Council Member Wolbach: So if we did switch to more offsets and less biogas, that might help make up for any under valuation that was raised by members of Carbon Free Palo Alto. Chair Filseth: Or leakage for example, etc. Council Member Wolbach: And, I’m getting into comments. I’ll let you finish your questions and I have a couple of comments. Chair Filseth: I think we’re (crosstalk), so… Council Member Wolbach: Well then, since I’ve stolen the mike, that’s a really interesting idea of maybe just focusing on offsets rather than biogas entirely and my hope is that, I think if we’re talking about, you know, a plan not for just this year but setting up a process that will probably last a few years, CARB standards may continue to improve to address the concerns raised by members of Carbon Free Palo Alto that the offsets might not be as substantial as they should be, but if we’ve set up a system in saying we’re going to buy offsets and maybe offsets continue to improve, I think the concept of offsets, well, that’s the question, right, is the whole concept of offsets a joke, or is it just that the current system for evaluating them is not stringent enough? I don’t know if we can ask members of the public who spoke earlier on this. Chair Filseth: Well, that’s sort of the rub, right, which is, do we believe in offsets or not. If you believe in offsets, why are we not looking. If we don’t believe in offsets, why are we doing this, right? Council Member Wolbach: Chair, may I, may we? Chair Filseth: Yeah, you can ask them. Council Member Wolbach: Let me ask either or both members of Carbon Free Palo Alto who spoke earlier who were critical of offsets, if you would like to come to mike and weigh in on this question. Is it impossible that offsets could be improved in the future through more stringent regulation? Mr. Hodge: I think that the earlier comments that were made about CARB and the quality of the offsets is spot on. I think they are probably the highest offsets that are available, and because CARB has defined those offsets to be the equivalent of buying allowances so they are for compliance EXCERPT MINUTES 31 Finance Committee Excerpt Minutes October 18, 2016 purposes. So I don’t, I wouldn’t expect that the quality of the offsets to somehow get measurably better over time. Council Member Wolbach: So why is it still considered green washing in your view then? Mr. Hodge: It’s considered green washing, we would consider it green washing because it’s not something which is scaleable. In other words, it’s something that you can buy, there’s a limited quantity of offsets that are out there. Certainly Palo Alto could go off and buy these offsets, right, and it would solve Palo Alto’s problem, but clearly everybody cannot do that, and so one of the things that we have concentrated on as our group is to focus on innovative solutions that Palo Alto can deploy and serve as a leader for the region and state. Council Member Wolbach: While we’ve got you up there, one other question, which is people who spoke after you during the public comment period on this topic expressed their view that this proposal and your ideas are not incompatible. I would be curious if you would have any further explanation about why you think this current proposal and your proposals are not compatible. Mr. Hodge: I guess one of the things we’re concerned about is this lost revenue. So that’s the $3 million a year we’re estimated leaving the community where imagine that $3 million spent on our infrastructure instead. Buying the offsets does absolutely nothing for our community except it’s sort of a feel good thing, but it doesn’t really address the issue that we have directly. Council Member Wolbach: Did your proposal have a mechanism by which that same $3 million would be turned around in our own community? Mr. Hodge: We believe that we have a mechanism that’s too complicated to describe now, but there are financing mechanisms that are out there that we believe where the cost actually can be in the same range of costs. In other words, for the amount of money that we would be spending on offsets, we believe for instance, that you can have electrification efforts for about the same price, depending on the driving factors. Chair Filseth: Although then you may run afoul of Prop 26? EXCERPT MINUTES 32 Finance Committee Excerpt Minutes October 18, 2016 Mr. Howzell: …gas rate payer funds for those efforts, yes, a Prop 26 issue. And also we need to just be careful to say… Chair Filseth: We’re getting close to the edges we understand. Mr. Howzell: Yes, we may be on the edge. Chair Filseth: So we’re getting close to the edge, we may be on the edge. Mr. Anderson: Okay, at a simplistic level, we had the idea of a utility fee, a utility use fee. There’s already one there for gas. You could replace that, you could put another one on, but that would be used to basically finance or fund programmatic improvement in the utility to allow your rate payers options to reduce their gas use through electrification and efficiency, so if you funded it at the same level as the offset proposal, then you could get some real work done in terms of getting those options out on the bill for customers. So you allow them choice to reduce their gas use through electrification, which allows them to benefit from that investment as a gas user. Just one additional point on the quality of offsets, so offsets by nature are difficult to measure. It’s just the nature of the beast. You can put as many, as heavy a qualification and activity and protocol in place, but you can’t get away from the fact that they have to be additive. The project that they promise happens, would not happen otherwise but for your purse with that offset. They have to be measurable also. Those things are just difficult to do. They will never be surety around that and there’s always ways to cut corners and you have five years later saying, well, is it still in place, are they still monitoring it. So it’s just a hard thing to kind of keep your arms around and it’s prone to problems. So that’s one of the difficulties in just, that’s why they’re suspect in terms of… Chair Filseth: How are we going to manage that, who is going to be… Oh, I see, if we just use CARB, CARB manages it we don’t have to worry about it. Mr. Anderson: Yeah, so CARB’s are reliable. There are third parties. There are watchdogs. We just trust them. Council Member Wolbach: But you guys are saying don’t trust them. Mr. Anderson: Well, we’re saying just the principal of offsets doesn’t work in terms of we’re trying to reduce gas use, not compensate and export that EXCERPT MINUTES 33 Finance Committee Excerpt Minutes October 18, 2016 problem outside our community with something that is, by nature, suspicious. Chair Filseth: Well, I mean if offsets don’t work then we shouldn’t do this. And if they do work, then we’re sort of, what’s the right mix of biogas versus offsets, right, you know, because you could go negative, you could compensate for, you know, losses, transmission losses and stuff like that. So what’s the right, I mean, that’s what we’re grappling with, right? Mr. Cook. Mr. Cook: Yeah. I just thought what Bret said last was the most important thing, and that’s what I wanted to say when I raised my hand earlier. It’s just that what we want to do is not generate greenhouse gases, right, and by burning gas we generate greenhouse gases, so where Carbon Free Palo Alto is going and where I’d love to see this City go ultimately through the mechanism of this policy, you know they’re saying don’t do this policy, do something else and I totally respect that. But we all agree on the core problem with the offsets is just that you’re, you still are generating the greenhouse gases. Now you’re offsetting that by reducing greenhouse gas emissions somewhere else, whether it’s Wisconsin or wherever, it doesn’t matter in the way that it’s the globe, it’s our planet. But is there, should the money be spent and the effort be spent locally to reduce the initial greenhouse gas emission by reducing the use of gas to do the things that we want to do every day, so can you cut straight to that, and I guess what I’m saying is and I think what the UAC is saying, and I think what, you know, what Sandra and Lisa are saying is, hey, let’s do this as an interim step, as a transitional step to ultimately get to where we’re reducing our greenhouse gas emissions, not an offset. Chair Filseth: Can I, I don’t think there’s disagreement on that here. Mr. Cook: So the question is with policy. How do you get to that point, and we’re just saying this is the transition to that. Chair Filseth: But we’re not, that’s not agendized for tonight so we can’t… Council Member Wolbach: I hate to be asking so many questions, because we, I mean we’re almost 2 hours in, but there was some discussion about the possibility of local offsets, and that does sound like keeping the money locally or making the investment locally to some certainty, to some degree. Can we get any more color on that concept? EXCERPT MINUTES 34 Finance Committee Excerpt Minutes October 18, 2016 Ms. Ratchye: Any urban forestry project is absolutely welcome to go meet the protocol and get that done and we would then be able to buy those offsets, but it has to be verifiable. You know, it has to be those same high quality, and if the local project can actually achieve that, that would be awesome. Council Member Wolbach: So when we move to a Motion, I’m not sure if it was already in the recommendation from the UAC to prioritize identifying local offset opportunities, if they’re available, and if we move this forward to the Council, maybe that’s something that we could tag on to say that as we’re looking for offsets, it’s, what’s that? Ms. Ratchye: At a premium price? Council Member Wolbach: Maybe at a premium or... Chair Filseth: It can’t be as big a premium as biogas. Mr. Hodge: Your trees, your urban forestry is not going to offset the total emissions from the canopy. Council Member Wolbach: I would not expect any one item would be, would solve the problem, but to the degree that it’s an option, maybe that’s something we would include in directing the Staff to present an option or two to the full Council when it comes to Council. Chair Filseth: I think the point here is that there’s probably going to be a limited capacity, right, it’s a nice thing to do so I’m not arguing against it. It’s probably going to be limited. Council Member Schmid: Let me state one possibility. Palo Alto dumps tens of thousands tons of garbage each year in landfill, which produces methane gas for 50 years. If there is a conversion technology that translated that into gas, biogas. Chair Filseth: You’d like the anaerobic digester or something. Council Member Schmid: No, conversion technology (inaudible). That would directly deal with two Palo Alto problems, the need for an offset and what we do to stop the creation of future methane gas. That’s a double win. EXCERPT MINUTES 35 Finance Committee Excerpt Minutes October 18, 2016 Chair Filseth: Let me pause for a second and ask our colleague from the Legal Department. Presumably we’re going to do a Motion at some point, somebody brought it up, right, and the Motion is going to have to do with the Staff recommendation and the UAC recommendation adopting the Carbon Neutral Gas Plan. What does it mean for the Finance Committee to approve it, right? This is a policy issue that goes far beyond the purview of Finance, so I mean, let’s say we adopt the Staff recommendation unanimous. The Council is going to go debate this again, right, and much more broadly, so it doesn’t go on the consent calendar or something like that, right? Mr. Howzell: It could, but there would be a further discussion as to whether it is appropriate to have it on the consent calendar and based on your comments suggesting that it really should be something that the Council would want to necessarily discuss and they will do what they will, what the recommendation, you know, a unanimous recommendation and interpret it as they will. But you raise an interesting issue. Chair Filseth: Well, to me, I’m not comfortable having this Committee sign off on the whole program. I think it’s beyond our scope, right, to do that. I think the whole Council should look on it before we just enact it into law, right. Mr. Howzell: Well, we have to. (crosstalk) We legally can’t. Council Member Wolbach: That’s the Staff recommendation? Chair Filseth: I think in that context, so what is a Motion from us going to look like? It’s going to look like we adopt this, we vote in favor of the Staff Motion, but we have these three comments, or what does it look like? Council Member Wolbach: Can I give it a try? Mr. Howzell: You could do it that way, or you could inform the full Council of what the nature of the discussion was. The limits on what your recommendation is. Chair Filseth: Okay, right. Mr. Perez: Let me see if I can add. You have, not necessarily this Committee, but the Finance Committee have added a condition that it be an EXCERPT MINUTES 36 Finance Committee Excerpt Minutes October 18, 2016 Action Item. You know. So it could be heard and discussed by the full Council. Council Member Schmid: I guess another option is we could ask either the UAC or Staff to come back with some amendments. (Inaudible) so we don’t have to send it directly to Council without some adaptation. Chair Filseth: We could. Council Member Wolbach: I’ll try my hand at a Motion. I’m just looking at the time. So I’ll move the Staff recommendation with a couple of minor changes. Do you need me to read the Staff recommendation or… Okay, so the changes would be to provide an option for Council to consider to prioritize locally generated offsets or local offsets. That would be the first change. And the second one would be to prioritize offsets over biogas. Chair Filseth: I would second that, but I guess I’d be more comfortable with language on the second piece. It doesn’t specifically say, well I guess the Council could, maybe it works. The same discussion, prioritize offsets over biogas, but I’d like to see a discussion of the relationship between biogas, offsets and emissions. Because of it’s cost, and I’d like to see, if we’re going to spend rate payer money on reducing carbon, I’d like to see us reduce carbon as much as we possibly can, and I think that’s kind of the discussion, I’d like to hear a little more discussion on that, between UAC and Council. Council Member Wolbach: What if we, instead of saying prioritize offsets over biogas, say prioritize maximum carbon reduction within the 10 percent, I’m sorry, within the 10 cent/therm rate impact cap? And that allows flexibility. Chair Filseth: Are you okay with that? Council Member Wolbach: Well, I’ll speak to that if I have a second. Chair Filseth: So you can speak to it and I’d like to hear the response from the UAC and the… Council Member Wolbach: Do I have a second? Chair Filseth: Sure, I second it. EXCERPT MINUTES 37 Finance Committee Excerpt Minutes October 18, 2016 MOTION: Council Member Wolbach moved, seconded by Chair Filseth to recommend the City Council: A. Adopt a Resolution that: i. Approves the Carbon Neutral Gas Plan, enabling the City to achieve a carbon-neutral gas supply portfolio starting in Fiscal Year (FY) 2018 with a rate impact not to exceed ten cents per therm (10 ¢/therm); and ii. Terminates the PaloAltoGreen Gas program established by Resolution 9405; and B. Direct Staff to develop an implementation plan for the Carbon Neutral Gas Plan; and C. Direct Staff to provide an option for Council to consider prioritizing local offsets; and D. Direct Staff to prioritize maximizing carbon reduction within the 10 cents per therm (10 ¢/therm) rate impact cap. Council Member Wolbach: So that would allow the flexibility by the Utilities Department within the program to go with biogas or with offsets, understanding that their priority would be maximum carbon reduction and again, it also gives to Council the option to promote local offsets. Chair Filseth: I see a frown over here. So you’re worried about Prop 26? Ms. Dailey: No, let me take those in two different chunks. The first one was prioritizing local projects. I mean, we do have a preference for California projects in here, which could be modified to local. We’ve never put a price on that. So we’ve never said we’d be willing to spend X more on a local California project. So we just put that out there that it’s an undefined thing now and under your amendment it still stays undefined. As far as prioritizing offsets, to me that just changes the recommendation to use offsets and it changes it to spend 10 cents/therm and buy as many offsets as you can with that, no matter, without tying it to the gas burned. Chair Filseth: The territory you’ll get into is, well, actually if we did it all with offsets, it would only take a five percent rate increase. EXCERPT MINUTES 38 Finance Committee Excerpt Minutes October 18, 2016 Ms. Dailey: Well, that’s right and it’s in your Staff report already, so you have that information. Chair Filseth: But you come back and said if you spend 10 cents (crosstalk) Then we have Prop 26 issues, right? You’re offsetting more carbon than you’re actually producing, right? But you also get into the issue of the value of biogas versus offsets, right, and I think you need to grapple with that. Council Member Wolbach: Can we ask the City Clerk to read back the Motion, just to make sure it was captured. Jessica Brettle, Assistant City Clerk: Sure. Would you like me to read the full Staff recommendation as well? Chair Filseth: I think so, yeah. Ms. Brettle: I have a Motion by Council Member Wolbach, seconded by Chair Filseth to recommend the City Council adopt a Resolution that: A, approves the carbon neutral gas plan, enabling the City to achieve a carbon neutral gas supply portfolio starting in Fiscal Year 2018 with a rate impact not to exceed 10 cents/therm; B, terminates the Palo Alto Green Gas Program as established by Resolution 9405; C, to direct Staff to develop an implementation plan for the carbon neutral gas plan; D, to also provide an option for Council to consider prioritizing local offsets. And I think D, to prioritize maximizing carbon reduction within the 10 cents/therm rate impact cap. Council Member Wolbach: Right, so it’s not specifically saying prioritize offsets over biogas. It’s saying whatever Staff is deciding, you know, within this, because this program does allow flexibility already, it was intended to and that was one of the benefits we heard by UAC and analyzed it. This would just provide a little bit more encouragement to Staff to really say, as you’re working within that flexibility, rather than the emotional bias towards biogas, our emotional bias is towards maximum co2 reduction, however you do it. Chair Filseth: Right. Let me try another slice, another view on it. I’m (crosstalk) EXCERPT MINUTES 39 Finance Committee Excerpt Minutes October 18, 2016 Ms. Dailey: I’m just wondering what is it that we’re, that we’ll be looking at? What are the products. There’s biogas, there’s offsets. What other things are you thinking of that are going to reduce… Council Member Wolbach: I’m just saying, when deciding what mix, rather than stipulating fove percent and 95 percent, it’s saying you can stay flexible on the percentages, depending on Staff’s interpretation or, you know, if biogas improves, if something changes in the marketplace, if something changes in technology. Chair Filseth: …high quality offsets to buy. Ms. Dailey: If there’s no, I mean the way it’s structured now is to include as much biogas as possible, staying within the 10-cent rate cap. If it’s structured the opposite way, we will not buy any biogas, period. I think if that’s what you’re leaning toward, then it’s a different plan that just says use offsets. Chair Filseth: We didn’t understand why there was a bias in favor of biogas versus offsets. That’s one of the things I think all of came to understand here tonight, because we were all asking questions about it. Ms. Dailey: Yeah, and I think, you know, again, over, the main discussions we’ve had at the UAC and some discussions at Council around the Climate Action Plan, there’s never been a policy against offsets, but there has been a feeling about the preference for physical commodity, and so the plan that we developed was kind of the minimum rate impact you could possibly have and have any biogas in the portfolio at all. Chair Filseth: I understand, and that’s part of the reason I like this Motion, okay, as is. Because we’re not telling, and as I read this Motion, we’re not telling you to go with offsets and forget about biogas. What we’re saying is, prioritize CO2 reduction, okay, and if you can translate that feeling into tons of carbon dioxide, then go for it. But if it’s just a feeling and we really don’t know, please wait rate payer money and CO2 reduction and go for the max CO2 reduction, do the 10 percent, you know, take care of Menlo Park carbon, that’s fine. But prioritize that, because look at it this way, you’re going to like this, right. You know, look at this Wisconsin example. The question we asked Greg and I sort of scrummed on earlier, right, said, well you converted waste into methane and then you’re taking the gas and making electricity out of it and if you buy the offset, it’s 10 cents/therm and if you buy the gas it’s two bucks a therm, why is that? Well it’s because EXCERPT MINUTES 40 Finance Committee Excerpt Minutes October 18, 2016 other people are bidding on the gas. Well, I don’t think rate payers in Palo Alto, I mean the value here is the offset, right, at least to this program, so it doesn’t make sense to charge Palo Alto rate payers for these two other guys bidding against, bidding up the price of the gas, if that makes sense. Ms. Dailey: Let me try it another way. Would it be, if we could, as we said somewhere in the Staff Report, cover the entire gas portfolio with offsets, with a rate impact of two cents, would you rather be there or would you rather spend 10 cents and do something beyond that? Chair Filseth: Excellent question. I think that’s a good question for the Council, not the Finance Committee. Council Member Wolbach: So the Motion on the table is to spend up to the 10 cents and get as much CO2 reduction as you can within that 10 cent impact, 10 cents/therm. Ms. Dailey: Actually, the proposal is to spend 10 cents and to incorporate as much biogas in that as you can. Council Member Wolbach: Right and what we’re saying is spend the 10 cents. Chair Filseth: Spend up to 10 cents. Council Member Wolbach: And get as much CO2. Chair Filseth: I’ll take it the way he’s doing it. Council Member Wolbach: It’s to spend (crosstalk) and get as much CO2 reduction as you can, rather than saying buy as much biogas as you can. Ms. Ratchye: That’s getting 200 percent of the production. Council Member Schmid: Let me suggest an alternative. Chair Filseth: But you’re going to have some flexibility here. You’re going to have losses in our transmission system. You’re going to have losses in the nationwide transmission system. EXCERPT MINUTES 41 Finance Committee Excerpt Minutes October 18, 2016 Ms. Dailey: Right, I hear you. Council Member Schmid: Can I make a suggestion. Chair Filseth: Okay, go ahead. Council Member Schmid: The pressure is to do it by Fiscal Year ’18, 100 percent carbon neutral. It seems to me we’re talking about two different things. You know, get that done, meaning offsets, or work toward a program that will achieve that with local offsets, and local offsets could involve things like infrastructure changes and conversion technology, so that says spend the 10 cents/therm, but let’s use the money to have a plan, a strategic plan, to get us somewhere three, four or five years. Chair Filseth: Yeah, give the difference to those guys. Figure out some way to do that. Council Member Wolbach: Was that an Amendment, or is that, are you suggesting that’s still plausible within the Motion as it’s currently drafted. (crosstalk) Council Member Schmid: I think we’d have to change A to read, enable the City to work towards a carbon neutral gas portfolio with the rate impact, and to add the local offsets, things like conversion technology and infrastructure. Council Member Wolbach: We already have that in the Motion. Council Member Schmid: Do we have those words? Jessica Brettle, Assistant City Clerk: Do you want me to read it again? Council Member Wolbach: Could you read just the things that we added. Ms. Brettle: The two things you added were to provide an option for Council to consider prioritizing local offsets and to prioritize maximizing carbon reduction within the 10 cents/therm rate impact cap. Council Member Schmid: Yeah, such as, I want to add after that local, such as infrastructure and conversion technology. EXCERPT MINUTES 42 Finance Committee Excerpt Minutes October 18, 2016 Council Member Wolbach: I would actually not accept that Amendment. I don’t think it’s necessary. I think it’s redundant, or I think it’s getting too specific. Chair Filseth: Wait a second. Can you repeat the second addition again. Ms. Brettle: Sure. The second addition said, to prioritize maximizing carbon reduction within the 10 cents/therm rate impact cap. Chair Filseth: Right. Ms. Brettle: And Council Member Schmid added a friendly amendment, such as, or an amendment, “such as infrastructure and conversion technology”. Council Member Schmid: That would be under C. Chair Filseth: What you’d really say is, potentially include infrastructure and conversion technology. AMENDMENT: Council Member Schmid moved, seconded by Counci Member XXX to add to Motion Part C “such as infrastructure and conversion technology.” Chair Filseth: But does that take us outside the place where we’re not allowed to go tonight? I don’t know. Mr. Howzell: I think at this point I think you’re fine and obviously the caveat on everything that you’re talking about is that we will also work within the constitutional limitations of Prop 26 regarding the use of rate payer funds, won’t go beyond the cost of service parameters. Chair Filseth: So I don’t have a problem with it the maker of the Motion has a problem. Council Member Wolbach: Yeah, I’d prefer, I don’t think it’s necessary and again, you know, looking at the alternatives that are in the Staff Report on Page 16, I think that the tweaks we’ve made to the Motion reasonably fall within that range of alternatives. I think that goes a little bit further and I think that gets more towards other initiatives that should be agendized separately. I don’t see how it would be accommodated into this effort. EXCERPT MINUTES 43 Finance Committee Excerpt Minutes October 18, 2016 Chair Filseth: We’re staring into space. You want to get the idea in front of Council on the Agenda that some of it could go to future mechanisms to reduce carbon? Council Member Schmid: Yes, we could start working on things, won’t deliver them in 2017, but would work to have a long-term global impact. Mr. Howzell: And I would suggest that that is outside of what we are, the scope of what we are agendized for this particular meeting. Chair Filseth: I think you’re probably right. Council Member Wolbach: And that’s why I didn’t accept it, even though I think it’s an interesting idea. Chair Filseth: Okay, your Amendment is not accepted, your friendly Amendment is not accepted. You can offer it as an unfriendly one. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Chair Filseth: Once the City Attorney weighs in (crosstalk). Okay, so we have a Motion. Council Member Wolbach: Should we add also that we wanted to come on as Action rather than consent? Chair Filseth: Yeah, I think it should go on Action. Ms. Brettle: I’ll add that on there. Chair Filseth: Okay, I’m satisfied. All in favor? All opposed. MOTION PASSED: 2-1 Schmid no, Holman absent Chair Filseth: Okay, Motion carries with Council Members Filseth and Wolbach in favor, Council Member Schmid opposed and Council Member Holman not present. Thank you guys very much. We like it. Council Member Schmid: Yeah, very important. EXCERPT MINUTES 44 Finance Committee Excerpt Minutes October 18, 2016 Chair Filseth: Yeah, go look at the tradeoff between offsets and so forth. ADJOURNMENT: The meeting was adjourned at 9:27 P.M. City of Palo Alto (ID # 7990) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Approve Agreement with County of Santa Clara for Page Mill Road Improvements and Budget Amendment Title: Approval of an Agreement With County of Santa Clara Providing $3.2M in Transportation Impact Fees for the Design, Review, and Constructi on of Improvements at the Intersections of Page Mill Road/Hanover Street and Page Mill Road/El Camino Real and Approval of an Associated Budget Amendment in the Stanford Research Park/El Camino CS Zone Traffic Impact Fund From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council: 1. Approve and authorize the City Manager or his designee to execute a funding contribution agreement between the City of Palo Alto and the County of Santa Clara in the amount of $3,200,000 for improvements at the intersections of Page Mill Road/El Camino Real and Page Mill Road/Hanover Street; and 2. Amend the Fiscal Year 2018 Budget Appropriation Ordinance for the Stanford Research Park/El Camino Real CS Zone Traffic Impact Fund by: a. Increasing the Inter-agency expense appropriation by $1,000,000; and, b. Decreasing the reserve for fund balance by $1,000,000 Executive Summary The proposed agreement would allocate funds collected from developers via the Stanford Research Park/El Camino CS Zone Traffic Impact Fee for improvements at the intersections of Page Mill Road at El Camino Real and at Hanover Street. Uses of the impact fee are specified in Palo Alto Municipal Code Section 16.45 which identifies “designated intersections” based on mitigation measures in the Environmental Impact Report (EIR) for the City’s 1998-2010 Comprehensive Plan. City of Palo Alto Page 2 More recently, intersection improvements along Page Mill Road between El Camino Real and Foothill Expressway were classified as Tier 1 projects (highest) priority in the County’s Expressway Plan and for Measure B funding. By entering the funding agreement, the City of Palo Alto would appropriately utilize the Stanford Research Park/El Camino CS Zone Traffic Impact Fund and accelerate the design of the project in an attempt to qualify for an early allocation of Measure B funding for construction. Background & Discussion The intersection of Page Mill Road and Hanover Street has historically been a difficult intersection for cyclists travelling across Page Mill Road, as the bicycle lanes end north of the intersection in both directions. In addition, the intersection’s lane configuration with shared left and through lanes on the Hanover Street approaches require the traffic signal to operate with “split phasing” where the northbound and southbound approaches of Hanover Street have to operate separately, sometimes creating longer delays for all movements at the intersection. The more efficient operation traditionally includes protected left turn movements (arrows), which generally require dedicated left turn lanes. The intersection of Oregon Expressway/Page Mill Road and El Camino Real is one of the busiest in Palo Alto and is designated as a monitored intersection as part of the Valley Transportation Authority’s (VTA) Congestion Management Program (CMP). This intersection historically operates at Level of Service E, which is considered to be the limit of acceptable delay. These high-delay values generally indicate poor signal progression, long cycle lengths and operations at or close to capacity. Currently the configurations for some movements such as the westbound left turn lanes and several right turn movements are not optimal for the operations of multiple modes of travel including vehicles and pedestrians. While the improvements are not directly intended to increase capacity, the improvements would improve the efficiency of operations. The City has been collecting a Stanford Research Park and El Camino CS Zone area-specific traffic impact fee (in addition to the Citywide Traffic Impact Fee) intended for roadway improvements at specific locations including the intersections of Page Mill Road at Hanover Street and El Camino Real. Page Mill Road is owned and maintained the County and any improvements desired by the City need to be coordinated with the County. Prior Planning & Impact Fee Programs The County and VTA have developed long range plans which include intersections along Page Mill Road between (and including) El Camino Real and Interstate 280. During a City Council Study Session on June 24, 2015, the Council for the City of Palo Alto provided general feedback and support for improvements between El Camino Real and Hanover Street, with less support City of Palo Alto Page 3 for the widening of Page Mill Road between I-280 and Foothill Expressway which generally included widening from four to six lanes. On May 1, 2017, in the context of discussions about the Comprehensive Plan Update, the City Council voted to support the lane widening of Page Mill Road between Interstate 280 and Foothill Expressway with High Occupancy Vehicle (HOV) lanes and a separated bicycle/pedestrian trail as well as intersection improvements between Porter Drive and Hansen Way and at El Camino Real. The City of Palo Alto has generally regarded the improvements at the intersection of Hanover Street and Page Mill Road as a high priority. The City’s adopted Bicycle and Pedestrian Transportation Plan, Safe Routes to School Program, and Comprehensive Plan, as well as regional plans, consider this intersection a high priority location. The City has also desired improvements at the Page Mill Road at El Camino Real intersection for some time, and hopes to acquire right-of-way for this purpose from the developer of the parking lot on the northeast corner. The City has been assessing and collecting Transportation Impact Fees for development in the Stanford Research Park/El Camino Real CS Zones pursuant to Municipal Code Chapter 16.45, which was enacted to implement mitigation measures in the 1998-2010 Comprehensive Plan EIR. The goal and purpose of this fee is to assure that new developments collectively bear the responsibility for capital expenditures needed to provide “capacity improvements” to intersections identified in this section of the Palo Alto Municipal Code (see Section 16.45.060 (a) and (f)). This area-specific traffic impact fee is separate from the Citywide Traffic Impact Fee. Agreement Terms This agreement would provide funding to be used solely for improvements at the intersections of Page Mill Road at El Camino Real and Page Mill Road at Hanover Street that are intended to improve operations for bicyclists, pedestrians, and efficiency of vehicular operations. The funding agreement allows the County to move forward and take the lead on the design, environmental review, permitting, and construction of the improvements at the intersections of Page Mill Road at El Camino Real and Page Mill Road at Hanover Street. Under the terms of the agreement, the City of Palo Alto will be actively involved in the evaluation, design and construction aspects of this project. As part of this project development, City Staff will return to City Council for review and input when the design reaches the 35 percent level. The funding agreement is included as Attachment A. City of Palo Alto Page 4 Project Design and Evaluation The first phase of this project is to develop a plan that includes signal modifications at the intersections of Page Mill Road at El Camino Real and Page Mill Road at Hanover Street. At the intersection with El Camino Real, the intersection modifications tentatively include: Removing the free-flow, divided eastbound right-turn lane and replace with an attached right- turn lane Addition of a westbound right-turn lane Re-alignment of the dual westbound left turn lanes to provide efficient operations At the intersection with Hanover Street, the intersection modifications tentatively include: Creation of dedicated left-turn lanes for both approaches on Hanover Street and a switch to 8- phase operation Provide Continuous bicycle lanes in both directions of Hanover Street through the intersection with Page Mill Road Design for (and possibly include) and second westbound left turn lane from Page Mill Road to southbound Hanover Street Investigate and possibly include design features for a future bicycle and pedestrian pathway improvements along the east side of Hanover Street. Project Coordination A development project at 1050 Page Mill Road (at Hansen Way) is currently under construction. As part of this project, a mitigation improvement includes modifying the median island in the center of Page Mill Road between Hanover Street and Hansen Way, including minor traffic signal work at the Hanover Street intersection. The improvements required of the 1050 Page Mill Road development do not include reconstruction and modification of the entire intersection. After design is complete, County and City Staff may determine that the most efficient way to implement the intersection improvements with the least construction impacts would occur by allowing the 1050 Page Mill Road development team to lead all construction efforts at the Hanover Street Intersection. If this is the case, the County may enter an agreement with the 1050 Page Mill Road development to lead the construction effort. Policy Implications The design and construction of improvements along Page Mill Road at at El Camino Real and Page Mill Road at Hanover Street are consistent with the following Comprehensive Plan and Bicycle + Pedestrian Transportation Plan goals, policies and projects: Comprehensive Plan: Policy T-14: Improve pedestrian and bicycle access to and between local destinations, including public facilities, schools, parks, open space, employment districts, shopping centers, and multi-modal transit stations. Program T-23: Develop public sidewalks and bicycle facilities in Stanford Research Park City of Palo Alto Page 5 and other employment areas. Policy T-24: Maintain a hierarchy of streets that includes freeways, expressways, arterials, residential arterials, collectors, and local streets. Policy T-25: When constructing or modifying roadways, plans for usage of the roadway space by all users, including motor vehicles, transit vehicles, bicyclists, and pedestrians. Policy T-27: Avoid major increases in street capacity unless necessary to remedy severe traffic congestion or critical neighborhood traffic problems. Where capacity is increased, balance the needs of motor vehicles with those of pedestrians and bicyclists. Policy T-28: Make effective use of the traffic-carrying ability of Palo Alto’s major street network without compromising the needs of pedestrians and bicyclists also using this network. Goal T-6: A High Level of Safety for Motorists, Pedestrians, and Bicyclists on Palo Alto Streets Bicycle + Pedestrian Transportation Plan: INT-4 Hanover Street at Page Mill Road Intersection Spot Improvements Resource Impact The current balance of the Stanford Research Park/E; Camino CS Zone Traffic Impact Fund is $3,266,000. This fee has been collected from various projects within the Stanford Research Park Area specifically to fund transportation related improvements such as the target of this funding agreement. Staff is requesting Council’s approval of a $3.2 million funding agreement to transfer funds to the County of Santa Clara over two years. Staff requests approval of a $1.0 million budget amendment to the Fiscal Year 2018 Adopted Interagency Expense budget for the Stanford Park/El Camino CS Zone Traffic Impact Fund and will include a request for the remaining $2.2 million from this fund during the Fiscal Year 2019 budget process. The resulting transfer of $3.2 million over two years is expected to leave the fund with an approximate balance of $66,000. The remaining funds will be eligible for uses as specified in Palo Alto Municipal Code Section 16.45.060(f). Timeline In general, the City would provide funding in two stages; first for the pre-construction costs, and second for construction costs. Pre-construction costs (design, environmental, and permits,) are estimated to be $1,000,000 and would be paid in full by the city in order for work to begin on this first phase as soon as possible, and to position the project for early allocation of Measure B funds for construction. City of Palo Alto Page 6 Prior to construction contract advertisement for bids by the County, the City of Palo Alto would pay up to $2,200,000 for construction of the intersection improvements. This phase is anticipated to occur approximately one year after the start of the first phase. If the project does not move forward for any reason whatsoever, the County would be required to return any remaining funds back to the City. Environmental Review The scope of the project includes environmental review per the California Environmental Quality Act (CEQA) in the first phase of the project. Attachments: Page Mill Improvements Funding Agreement Draft 7-15-2015 (PDF) Page 1 of 6 Funding Contribution Agreement between City of Palo Alto and County of Santa Clara for Page Mill Road Expressway Improvements at Hanover Street and El Camino Real – August 2017 FUNDING CONTRIBUTION AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA FOR PAGE MILL ROAD EXPRESSWAY INTERSECTION IMPROVEMENTS AT HANOVER STREET AND EL CAMINO REAL This funding contribution agreement (“AGREEMENT”) is made and entered into as of the date it is fully executed by and between the City of Palo Alto, a municipal corporation of the State of California (hereinafter referred to as “CITY”), and the County of Santa Clara, a political subdivision of the State of California (hereinafter referred to as “COUNTY”), collectively referred to herein as the “PARTIES” and individually as a “PARTY”. RECITALS WHEREAS, COUNTY owns and operates Page Mill Road Expressway through the intersections with Hanover Street and El Camino Real (State Route 82) in Palo Alto; and WHEREAS, the Expressway Plan 2040 developed by COUNTY with participation from CITY identifies operational improvements for the Page Mill Road Expressway intersections at Hanover Street and El Camino Real as Tier 1 projects, which improvements will be hereinafter referred to as “PROJECT”; and WHEREAS, PROJECT will include constructing left-turn lane improvements and other intersection modifications, enhancing bicycle and pedestrian facilities, and converting Hanover intersection to 8-phase signal operations; and WHEREAS, both COUNTY and CITY have determined that PROJECT will improve traffic flow and enhance traffic safety for bicycle and pedestrian facilities within PROJECT’s limits; and WHEREAS, COUNTY will serve as the lead agency for the implementation of PROJECT; and WHEREAS, CITY has collected traffic impact fees for design and construction of PROJECT; and WHEREAS, PROJECT is eligible to receive funds from the Expressway Program portion of the Santa Clara Valley Transportation Authority’s 2016 Measure B Sales Tax (hereinafter referred to as “MEASURE B”); and WHEREAS, CITY has acknowledged the future benefit of PROJECT to CITY and indicated its willingness to contribute funding to PROJECT; and WHEREAS, PARTIES desire to memorialize such agreement in writing. NOW, THEREFORE, for and in consideration of their mutual promises and covenants, and subject to the terms, conditions, and provisions hereinafter set forth, PARTIES agree as follows: Page 2 of 6 Funding Contribution Agreement between City of Palo Alto and County of Santa Clara for Page Mill Road Expressway Improvements at Hanover Street and El Camino Real – August 2017 AGREEMENT 1. Scope of Work: The scope of work of PROJECT consists of designing, evaluating and constructing intersection improvements at the intersections of Page Mill Road/Hanover Street and Page Mill Road/El Camino Real. The improvements include additional and/or longer left turn lanes, modifications to enhance bicycle and pedestrian accommodations through the intersections, Class II bicycle lanes and Class I shared-use path at Hanover Street approaches to intersection, and 8-phase signal conversion for Hanover intersection. Both bikeway options will be evaluated jointly by CITY and COUNTY. Attached as Exhibit A and incorporated by reference herein is a PROJECT location map. 2. Design, Environmental and Permits: COUNTY, as the lead agency on the PROJECT, will engage a consultant ("CONSULTANT") to be approved by both COUNTY and CITY. COUNTY will be responsible for consultant management during plan preparation including issuance of payment to the CONSULTANT. The CONSULTANT will develop plans, specifications, and engineers estimate (“PS&E”), environmental documents, and Caltrans encroachment permit application for the PROJECT. COUNTY will submit to CITY for design review the 35%, 65% and 95% PS&E level of design. CITY will review and provide design review comments to COUNTY in a timely manner. If the PARTIES cannot agree on a final version of PS&E, prior to PROJECT advertisement, then PARTIES will convene and determine a mutually agreed course of action. PROJECT advertisement will not be made until PARTIES agree to the final version of PS&E. 3. Right-of-Way Acquisition: PROJECT will not require any additional right-of-way for Page Mill Road Expressway, but it may require additional right-of-way along Hanover Street, which is a CITY street. Should additional right-of-way be required for improvements on Hanover Street, CITY shall be the responsible for the acquisition. Any right-of-way acquisition costs are eligible PROJECT expenses and may be deducted from the funding to be provided from CITY to the PROJECT. 4. Award of Contract and Construction: The construction work will be performed by a contract awarded by competitive bid and administered by COUNTY pursuant to its contracting principles and applicable law. COUNTY shall provide all construction administration, construction engineering, and inspection services during and through the completion of the construction of the PROJECT. COUNTY will provide CITY with a copy of all approved project schedules. CITY staff representatives will be invited to attend PROJECT meetings with contractors. The PROJECT will be completed in a timely manner to COUNTY’s reasonable satisfaction, and such extra work as may be desired within the PROJECT limits will be accommodated, subject to being in compliance with the standards of COUNTY and with the Caltrans encroachment permit, and subject to sufficient PROJECT funds being available to ensure completion of the necessary work. 5. PROJECT Cost and Funding: The total PROJECT cost is estimated to be $5,200,000. CITY will provide up to $3,200,000 in traffic impact fees. MEASURE B will be used to provide the balance of project costs. Any changes to the scope of work as identified by COUNTY or CITY that are beyond the PROJECT description/scope of work identified in this AGREEMENT, that may increase PROJECT costs, shall receive prior written approval and agreement on a funding plan from both COUNTY and CITY. Page 3 of 6 Funding Contribution Agreement between City of Palo Alto and County of Santa Clara for Page Mill Road Expressway Improvements at Hanover Street and El Camino Real – August 2017 6. Timing of PROJECT Funding: a) Pre-construction costs (design, environmental, and permits,) are estimated to be $1,000,000 and shall be fully funded from CITY’s contribution in order for work to begin as soon as possible and to position the project for early allocation of MEASURE B funds for construction. b) Within thirty (30) days of full execution of this AGREEMENT, COUNTY shall invoice CITY in the amount of $1,000,000 for PROJECT design, environmental, and permit work. CITY shall pay the full invoice amount to COUNTY within thirty (30) days of CITY’s receipt of invoice. c) Thirty (30) days prior to construction contract advertisement for bids by COUNTY for PROJECT, COUNTY shall invoice CITY in the amount up to $2,200,000 for PROJECT construction. CITY shall pay the full invoice amount to COUNTY within thirty (30) days of CITY’s receipt of invoice. d) Upon PROJECT completion, COUNTY shall provide a final cost summary to CITY. e) If PROJECT does not move forward for any reason whatsoever, COUNTY shall promptly return to CITY any remaining funds paid by CITY to COUNTY pursuant to this AGREEMENT, and this obligation of COUNTY shall survive any termination or expiration of this AGREMENT. 7. Indemnification: In lieu of and not withstanding the pro rata risk allocation, which might otherwise be imposed between the PARTIES pursuant to Government Code Section 895.6, the PARTIES agree that all losses or liabilities incurred by a Party shall not be shared pro rata but, instead, COUNTY and CITY agree that, pursuant to Government Code Section 895.4, each of the PARTIES hereto shall fully indemnify and hold each of the other PARTIES, their officers, board members, employees, and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this AGREEMENT. No party, nor any officer, board member or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other PARTIES hereto, their officers, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other PARTIES under this AGREEMENT. 8. Additional Provisions: a) A PARTY’s waiver of any term, condition or covenant, or breach of any term, condition, or covenant shall not be construed as a waiver of any other term, condition or covenant or breach of any other term, condition or covenant. Page 4 of 6 Funding Contribution Agreement between City of Palo Alto and County of Santa Clara for Page Mill Road Expressway Improvements at Hanover Street and El Camino Real – August 2017 b) If any term, condition or covenant of this AGREEMENT is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this AGREEMENT will be valid and binding on COUNTY and CITY. c) This AGREEMENT will be governed and construed in accordance with the laws of the State of California. d) This AGREEMENT may be executed in counterparts and will be binding once executed by all PARTIES. e) The term of this AGREEMENT will commence upon execution of the AGREEMENT by both PARTIES and shall remain in effect until terminated by mutual agreement of the PARTIES or pursuant to Section 8(g), whichever first occurs. If not terminated earlier, the AGREEMENT will expire on December 31, 2021. f) All changes or extensions to the AGREEMENT must be in writing in the form of an amendment and approved in writing by both PARTIES. g) Either COUNTY or CITY may terminate the AGREEMENT at any time prior to award of the design consultant contract upon thirty (30) days' written notice. Once the consultant contract has been awarded, the AGREEMENT can be terminated only upon the mutual written consent and terms acceptable to both PARTIES; provided, nothing in this section in any way limits CITY's or COUNTY's respective ability to seek damages, restitution, or other remedies at law or in equity for damages or other harms incurred or otherwise arising out of this AGREEMENT. h) The designated project engineer for COUNTY for the duration of the PROJECT is _________________ or his/her designee. COUNTY’s project engineer will have all the necessary authority to direct technical and professional work within the scope of the AGREEMENT and will serve as the principal point of contact for COUNTY. The CITY Chief Transportation Official, Joshuah D. Mello, or his designee, will serve as the principal point of contact for CITY, responsible for coordinating the review of the design for CITY and for obtaining the necessary CITY approvals. i) This AGREEMENT does not address or change any authority or responsibility between COUNTY and CITY with regard to maintenance, operation, or future repair responsibility for Page Mill Road Expressway. 9. Notices – Notices required by this AGREEMENT may be delivered by first class mail addressed to the appropriate party at the following addresses and deemed received two (2) business days after placed in the U.S. mail, postage paid and sent to: To CITY: CITY OF PALO ALTO 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Joshuah D. Mello, Chief Transportation Official Page 5 of 6 Funding Contribution Agreement between City of Palo Alto and County of Santa Clara for Page Mill Road Expressway Improvements at Hanover Street and El Camino Real – August 2017 To COUNTY: ROADS AND AIRPORTS DEPARTMENT 101 Skyport Drive, San Jose, CA 95110-1302 Attn: Michael Murdter, Director IN WITNESS WHEREOF, the PARTIES have entered into this AGREEMENT as of the date it is fully executed. “CITY” “COUNTY” City of Palo Alto, County of Santa Clara _______________________ _______________________ James Keene Dave Cortese, President City Manager Board of Supervisors APPROVED AS TO FORM: ATTEST: _______________________ _______________________ Molly Stump Megan Doyle City Attorney Clerk of Board of Supervisors APPROVED AS TO FORM & LEGALITY: __________________________ Christopher Cheleden Lead Deputy County Counsel Page 6 of 6 Funding Contribution Agreement between City of Palo Alto and County of Santa Clara for Page Mill Road Expressway Improvements at Hanover Street and El Camino Real – August 2017 Exhibit A – Location Map City of Palo Alto (ID # 8332) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Southgate Residential Preferential Parking Contract Amendments Title: Approval of Amendment Number 3 to Contract C15156501 With SP Plus in the Amount of $16,335 for Additional Services for Parking Permits and On-Site Customer Service; Approval of Amendment Number 3 to Contract C15156763 With Serco, Inc. in the Amount of $115,140 for Enforcement of Southgate Residential Preferential Parking (RPP) District; Approval of Amendment Number 5 to Contract C15157271 With McGuire Pacific Constructors in the Amount of $142,155 for Construction Services for Southgate Residential Preferential Parking District From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council take the following actions to update the contracts in support of the Downtown RPP to accommodate recent changes to the program and to allow for implementation of the Southgate Residential Preferential Parking (RPP) program: 1. Authorize the City Manager, or his designee, to execute the attached contract amendment (Attachment A) with SP Plus in the amount of $16,335 for Additional Services for Parking Permits and On-Site support for a total contract amount not to exceed $762, 7936.. 2. Authorize the City Manager, or his designee, to execute the attached contract amendment (Attachment B) with Serco in the amount of $115,140 for Parking Enforcement for a total contract amount not to exceed $2,435,994. 3. Authorize the City Manager, or his designee, to execute the attached contract amendment (Attachment C) with McGuire Pacific Constructors in the amount of City of Palo Alto Page 2 $142,155 for Construction Services (sign installation) for a total contract amount not to exceed $846,190. Background and Discussion In December of 2014, the City Council adopted Ordinance 5294, which established a City-wide framework for the creation of neighborhood-specific Residential Preferential Parking (RPP) districts. At that time, Council approved the establishment of the first RPP district for residential areas surrounding the Downtown commercial core. Subsequently, the City released three Requests for Proposals (RFP’s) in support of the Downtown RPP program. One was a solicitation to create a new public parking website for the City and develop an online permit sales portal, the second was for parking enforcement, and the third was for installation of signage. After vetting by City staff of several proposals received, Council approved the award of contracts to SP Plus, SERCO, and McGuire Pacific Constructors respectively. On June 19, 2017 (Staff Report 7806), the City Council adopted a new resolution creating a RPP program in the Southgate Neighborhood. The implementation of this new district, which is bounded by Churchill Avenue, Caltrain Rail Corridor, Sequoia Avenue, and El Camino Real, requires amending the existing contracts with SP Plus, SERCO and McGuire Pacific Constructors in order to provide needed services. This report recommends amendments to three contracts that will support both the implementation of the Southgate RPP as well as the ongoing operations of the current Downtown RPP. Amendment Three to Contract No. C15156501: SP Plus (Attachment A) The formation of the Southgate RPP District necessitates the extension of services of SP Plus. The amendment provides Permit Fulfillment/Customer Support for the Southgate RPP, including on-site customer service support at City Hall on a regular basis. On-site service assists those customers that do not have email addresses or aren’t comfortable navigating the internet. The amendment will also extend the term of the agreement to March 15, 2019 Amendment Three to Contract No. C15156763: Serco Inc. (Attachment B) The contract amendment will enable Serco to hire, train and equip one new officer to provide parking enforcement in the Southgate RPP District. The amendment will also extend the term of the contract one additional year, to May 31, 2019. With the proposed amendment, a total of eight officers will be enforcing three RPP districts. Amendment Five to Contract No. C15157271: McGuire Pacific Constructors (Attachment C) City of Palo Alto Page 3 This amendment will extend the existing contract with the Consultant to provide and install RPP signs in the newly created Southgate RPP District. This amendment is budgeted to CIP PL- 15003, Residential Preferential Parking. Policy Implications The following comprehensive Plan goals, programs and policies are relevant to the implementation of the Southgate RPP program. POLICY T-2: Consider economic, environmental, and social cost issues in local transportation decisions. POLICY T-45: Provide sufficient parking in the University Avenue/Downtown and California Avenue business districts to address long-range needs. PROGRAM T-50: Continue working with merchants, the chamber of Commerce, neighbors, and a parking consultant to explore options for constructing new parking facilities or using existing parking more efficiently. PROGRAM 51: Work with merchants to designate dedicated employee parking areas. POLICY T-46: Minimize the need for all-day employee parking facilities in the University Avenue/Downtown and California Avenue business districts and encourage short-term customer parking. POLICY T-47: Protect residential areas from the parking impacts of nearby districts. PROGRAM T-52: Evaluate options to ensure maximum use of the City parking structures in the University Avenue/Downtown and California Avenue areas. PROGRAM 53: Discourage parking facilities that would intrude into adjacent residential City of Palo Alto Page 4 neighborhoods. Resource Impact The implementation and operation of the Southgate RPP district requires contracts amendments, with costs shown in the table below: SP Plus Amendment Three to Contract No. C15156501 $ 16335 Serco Amendment Three to Contract No. C15156763 $ 115,140 McGuire Pacific Constructors Amendment Five to Contract No. C15157271 $ 142,155 TOTAL $ 273,630 Since the amended contracts for Serco and SP Plus run through March and May 2019, respectively, the impacts of the contract amendments for this fiscal year are: SP Plus Amendment Three to Contract No. C15156501 7,988$ Serco Amendment Three to Contract No. C15156763 59,999$ McGuire Pacific Constructors Amendment Five to Contract No. C15157271 142,155$ TOTAL 210,142$ Fiscal Year 2018 Costs The SP Plus and Serco contract amendments are fully budgeted in the Fiscal Year 2018 Adopted Operating Budget for the RPP. Costs for Fiscal Year 2019 will be included in the budget submission for that year. The McGuire contract amendment is fully funded by Capital Improvement Project (CIP) PL- 15003, Residential Preferential Parking. Timeline: Upon approval of respective contract amendments, City staff will be able to disseminate information to neighborhood residents about how to purchase permits. Signs will also be installed in the area such that enforcement can begin in October or November of 2017. Environmental Review The recommended actions would allow for implementation of a parking program previously approved by the City Council on June 19, 2017. At that time, the program was determined to be exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant City of Palo Alto Page 5 to Section 15061(b)(3) and Section 15301 of the State CEQA Guidelines. Attachments: Attachment A: C15156501 SP Plus Contract Amendment No 3 Council Ready (PDF) Attachment B: C15156763 SERCO Amendment No 3.doc (PDF) Attachment C: C15157271 McGuire Amendment No 5 (A).doc (PDF) Professional Services Rev. Feb. 2014 1 of 14 AMENDMENT NO. 3 TO CONTRACT NO. C15156501 BETWEEN THE CITY OF PALO ALTO AND SP PLUS CORPORATION This Amendment No. 3 to Contract No. C15156501 (“Contract”) is entered into August 21, 2017 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SP PLUS CORPORATION, a Delaware corporation ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of design and implementation of a new hosted parking website which includes all information on permits, garages. B. CITY intends to increase the compensation from $746,458.00 by $16,335.00 to $762,793.00 for the addition of services as stated in EXHIBIT “A” Scope of Services. C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4 COMPENSATION is hereby amended to read as follows: “SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed, Year One, Not to Exceed: $160,429.00 Year Two, Not To Exceed: $142,545.00 Year Three, Not to Exceed: $227,495.00 Year Four, Not to Exceed: $232,324.00 Total Compensation for all four years shall not exceed Seven Hundred Sixty Two Thousand Seven Hundred Ninety Three Dollars ($762,793.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “RATE SCHEDULE,” which is attached to and made a part of this Agreement. If any regulatory changes, or changes in applicable laws, have a material impact on CONSULTANT’s expenses in performing its obligations under this Agreement, CONSULTANT and CITY agree that the parties will negotiate in good faith equitable adjustments in compensation. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”.” DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 2 of 14 SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “A” entitled “SCOPE OF SERVICES”. b. Exhibit “C” entitled “COMPENSATION”. c. Exhibit “C1” entitled “RATE SCHEDULE”. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: SP PLUS CORPORATION Attachments: EXHIBIT "A": SCOPE OF SERVICES EXHIBIT "C": COMPENSATION EXHIBIT "C1": RATE SCHEDULE DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198 Senior Vice President Steve Aiello Bill Kepp DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Regional Manager Professional Services Rev. Feb. 2014 3 of 14 EXHIBIT “A” SCOPE OF SERVICES CONSULTANT shall provide the following scope of work for delivery in 2015: 1. A new CITY parking website, hosted by CONSULTANT. The website will include all information on permits, garages and more as additional parking services are provided by the Parking program. 2. Provision of an online permit sales and renewals website for the new Downtown Residential Preferential Parking (RPP) District, including distribution of permits and collection of payments, hosted by CONSULTANT. A description of the new RPP program is provided in Appendix A. Parking Website 1. CONSULTANT will synthesize all data from CITY’s existing parking websites so visitors can easily access parking information. The website will be built in a manner which is consistent with CITY’s existing website design. 2. CONSULTANT will meet and interview key CITY staff members to help in the development of brand new website content, including but not limited to Parking Manager and Chief Communications Officer. CONSULTANT will develop all content for the website including, but not limited to, text, graphics, images, and maps. CITY staff will review all proposed data content prior to release to the public. 3. CONSULTANT will host the parking website. CITY will forward website traffic to the CONSULTANT-hosted site using forward URL links on CITY website, and vendor website shall include links to send users back to CITY of Palo Alto website. The website will have a link to the RPP online permit sales management system. 4. CONSULTANT will ensure that the website is compatible on all commonly used browser platforms, including MS Explorer, Google Chrome, Apple Safari, and Firefox. The website experience for the user shall be seamless, and shall include automatic algorithms to detect the platform in which the user is viewing so content can be adjusted accordingly. Required platforms include desktop computers, laptops, mobile devices, tablets, and mobile wear devices. 5. The website shall be ready for go live in 6-8 weeks from notice to proceed. Online Parking Permit System Hosting CONSULTANT, using its subcontractor, T2 Systems, Inc., will develop and host a new online parking permit management system, capable of providing and tracking online permit sales for the proposed Downtown RPP District, with the following characteristics: DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 4 of 14 1. The system must include functionality for residents and commuter employees to register and validate their residence or employment, pay for permits, and establish automatic renewal processes. 2. Permit holders shall be able to establish User IDs and Passwords to manage their parking permits; corporate accounts shall be included that allow a business to pay directly for the parking permits of their employees. 3. Individual parking permits must remain within the ownership of the employee while the permit is valid. 4. Permit sales shall be possible for annual, quarterly, monthly, weekly, and daily permit sale options. 5. Include a CITY-User Management Interface that allows CITY to establish parking permit sale caps on the number of permits that are released. 6. Commuter employee users registering into the system for the first time for parking permit procurement shall be able to easily see parking permit availability for desired RPP Districts/areas. 7. The system must provide for issuance and distribution of permits to purchasers (e.g. residents and commuter employees). It shall also accommodate requests for different types of permits (e.g. resident guest, resident, low-wage commuter). Permits will be mailed by T2 Systems, Inc. within 24-48 hours of complete online permit purchases. Temporary permits will be available for purchasers to print themselves immediately. 8. The online permits sales proposer will be expected to coordinate with the enforcement team regarding sharing of eligible permit parking permit use. 9. The system shall have the ability to process online sales, wait-lists, and account information updates by permit holders. 10. The system shall have the ability to link accounts for multiple vehicles and addresses. 11. The system must maintain complete audit trail of changes, transactions, payments, and refunds for each customer, and be able to process payments via multiple payment options. 12. Permit purchasers must immediately be provided a receipt for their purchase, and be issued a temporary permit. 13. The system must have the ability to provide for proof of residency or income level i.e., via uploaded files that will be verified by the vendor for consistency with designated resident addresses. 14. The system shall provide reporting on permit sales and other queries to CITY. 15. The system must be robust enough to accommodate expansion if ultimately CITY decides to make all permits for all programs available online. 16. The online permit sales website shall be ready for go live in 8 weeks from notice to proceed. 17. Forms to apply or renew parking permits require the following information: o Name o Address o Payment information o Vehicle data, to include but not limited to: DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 5 of 14 Make, model, year License plate Vehicle color Vehicle registration o Verification of local residency/Verification of local employment o Verification of permit eligibility (document uploads) o For commuter employee permits, include the information regarding employer (name, address, local company contact, phone number, etc.) o Other options that can be accommodated by the system User Account Requirements and Data Security Account management must have standards to protect users’ personal information. Users must be able to create and manage accounts through the website. New accounts shall be created with the following parameters: o Username (email) o Password o Name o Address o Ability to store payment information and automated email notices to renew payment information Users must have access to view history of all transactions made on the account. Customer Service Requirements and Training CONSULTANT will operate and maintain the online parking permit management system for a three- year term. CONSULTANT and CONSULTANT’s subcontractor, T2 Systems, Inc., shall provide telephone customer service for potential parking permit users, as more specifically described herein: Technical Support for City Administrators: T2 Systems, Inc. will provide technical support to CITY during the hours of 5:00 a.m. - 5:00 p.m. (PST) Mondays through Fridays. T2 Systems, Inc. will provide after hour and weekend support for emergencies. After hour and weekend support for emergencies will be responded to within 20 minutes. Customer Support: All of the online pages that users will access to process their permits will have a customer service number that will direct them to one of CONSULTANT’s team members. CONSULTANT’s team will be trained on how to assist customers with the permit process. This assistance can be available up to a 24/7 basis, but the parties shall reasonably agree to limit the hours based on CITY’s needs. CONSULTANT should provide one point of contact with CITY to support ease of communication with CITY shall any issues arise. CONSULTANT must demonstrate a strategy for handling disputes from residents, i.e., permit was never received, incorrect credit card charge, etc. DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 6 of 14 CONSULTANT will train Revenue Collections staff so that Revenue Collections staff can answer basic questions about the permit purchase process. Appendix A: Description of the Downtown RPP District The anticipated Downtown RPP program encompasses an area about 0.86 square miles around Palo Alto’s Downtown commercial core. CITY estimates that there are approximately 4500 residential addresses within these boundaries. Phase of RPP Program Description Phase 1 Permit Demand Polling Period CITY anticipates immediate release of parking permits to all residents within the Downtown RPP District and eligible Commuter Employees from the adjacent Downtown University Avenue and South of Forest Avenue (SOFA) business districts. CITY will provide each residential address up to two residential permits at no cost. Additional resident parking permits for resident visitors can be purchased through the system for a total of up to 4 permits per residence. CITY will also sell Commuter Employee (non-resident) parking permits during this phase for $466 per permit (standard wage) and $100 per permit (reduced wage). In this first phase, all resident and commuter employee permits will be valid for use within the larger RPP District boundary area. All permits provided during this phase will expire after 6 months. Phase 2 RPP District Refinement Period Phase 2 will last 12 months at a minimum, and continue if Council does not repeal the RPP program. Resident permits will continue to be eligible for use anywhere within the District. The first residential permit will be sold at no cost, and additional permits will cost $50 each. Commuter employee permits will be sold during this phase but will be limited to specific blocks or block faces, with permit sale “caps” to help evenly distribute parking demand within the larger Downtown RPP District. The system must be flexible enough to be easily modified during Phase 2. DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 7 of 14 The types of permits which will be sold for the RPP District during Phases 1 and 2 include the following: 1. Resident permits (for residents who live anywhere within the program boundaries) 2. Resident “Annual Guest” permits (for residents who live anywhere within the program boundaries) 3. Resident “Daily Visitor” permits (for residents who live anywhere within the program boundaries) 4. Commuter “Standard” permits (for employees who work anywhere within the program boundaries) 5. Commuter “Low-Income” permits; these permits will look identical to the standard commuter permit, but can only be sold to individuals who have demonstrated that their yearly income is below a certain threshold. The applicant may be required to provide an affidavit stating their yearly income, which would be subject to audit, or their employer will be required to contact the vendor and supply a list of employees who meet the low-wage income requirements. The anticipated Downtown RPP program would be expected to require the sale of anywhere from 5000 to over 15,000 permits annually. It has not yet been determined whether permits for the RPP program will be scratcher or hang-tag permits, but CONSULTANT shall be expected to provide options for both. Additional System Functionality The new online parking permit management system may be selected to replace the existing parking permit management system for the management of garage parking permits for the University Avenue Downtown and California Avenue business districts, and must be able to accommodate the following characteristics: 1. In the University Avenue Downtown District, permits are sold for specific parking facilities and wait lists for each site must be managed separately. 2. In the California Avenue business district, permits can be used for parking in any parking facility within the district. Employees are required to validate their employment location as a business within the Downtown Business District prior to release of a parking permit and continue to show eligibility during renewal. 3. For garage permit sales, CITY anticipates continued use of traditional affixed sticker permits but may in the future require the use of digital parking permit sales that can communicate remotely to Revenue & Access Control parking equipment. In order to assure the privacy and security of the personal information of the City’s customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons and other individuals and businesses, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the “Consultant”) and its subcontractors, if any, including, without limitation, any Information Technology (“IT”) infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 8 of 14 described in EXHIBIT “E”, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit A, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City’s customers. The Consultant shall fulfill the data and information security requirements as specified in EXHIBIT “E” SOFTWARE AS A SERVICE SECURITY AND PRIVACY TERMS AND CONDITIONS. AMENDMENT NO. 1 ADDITIONAL SCOPE OF SERVICE CONSULTANT will provide on-site customer service support at City of Palo Alto City Hall on an as- needed basis. Customer service support will be provided Monday through Thursday, 8:30 am to 5:30 pm, and Friday 8:30 am to 4:30 pm. CONSULTANT will provide additional physical permits per the original Scope of Services. AMENDMENT NO. 3 ADDITIONAL SCOPE OF SERVICE CONSULTANT will provide Parking Permits and On-Site support to the City for the newly created Southgate Residential Preferential Parking (RPP) program. City requests that CONSULTANT invoice each RPP program separately and submit invoices through PCEContracts@cityofpaloalto.org. DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 9 of 14 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $762,793.00. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. 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. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $762,793.00. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $43,804.00 (T2 Flex, T2 eBusiness, and T2 Travel) Task 2 $6,150.00 (Website Design) Task 3 $12,080.00 (Website Development) Task 4 $24,665.00 (Website Hosting & Maintenance) Task 5 $55,636.00 (Project Management) Task 6 $45,253.00 (T2 Flex & eBusiness Annual Subscription Fees) Task 7 $95,130.00 (T2 Flex & eBusiness Permit Fulfillment/ Customer support) Task 8 $1,350.00 (Permit Configuration Fee) DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 10 of 14 AMENDMENT NO. 1 Task 9 $25,000.00 (In-Person Support for Phase 1) Task 10 $15,000.00 (In-Person Support for Phase 2) Task 11 $54,000.00 (Permit costs for Phase 2, based on an estimate of 11,900 permits at a cost of $4.53 per permit) AMENDMENT NO. 2 Additional Compensation for year 3 $144,413.00 Year Four $223,977.00 AMENDMENT NO. 3 Southgate Residential Preferential $16,335.00 Parking (RPP) program Sub-total Basic Services $762,793.00 Maximum Total Compensation $762,793.00 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: NONE All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable 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. DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Professional Services Rev. Feb. 2014 11 of 14 Payment for additional services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 12 of 14 Revision April 28, 2014 EXHIBIT “C-1” RATE SCHEDULE Fixed Start Up Costs (based on specified scope/development hours): Task 1 T2 Flex, T2 eBusiness, and T2 Travel $43,804 Task 2 SP+ Website Design $6,150 Task 3 SP+ Website Development $12,080 Total Fixed Start Up Costs $62,034 Recurring Annual Costs: Year 1 Year 2 Year 3 Task 4 SP+ Website Hosting and Maintenance $7,980 $8,219 $8,466 Task 5 SP+ Project Management $18,000 $18,540 $19,096 T2 Recurring T2 Flex & eBusiness Annual Subscription Fees $14,355 $15,072 $15,826 Total Recurring Annual Costs $40,335 $41,831 $43,388 Optional Costs: T2 Recurring T2 Flex & eBusiness Permit Fulfillment/Customer Support Fees $31,710 $31,710 $31,710 Estimated cost to provide permits and permit support based on and estimate of 7,000 permits at a cost of $4.53 per permit ($0.99 WW&L Permits, and, $3.54 Permits Direct Fulfillment)*. T2 Fixed Permit Configuration (one time only fee) $1,350 Year 1 Year 2 Year 3 TOTAL PER YEAR $135,429 $73,541 $75,098 TOTAL NOT TO EXCEED: $284,068.00 * If more than 7,000 permits are sold, the City agrees to pay an additional $4.53 per permit over and above the not to exceed compensation amounts reflected in the agreement by issuance of an amendment to the agreement. AMENDMENT NO. 1 CITY will pay CONTRACTOR an hourly rate of $41.16 per person per hour for on-site customer service support. $25,000 (In-Person Support for Phase 1) $15,000 (In-Person Support for Phase 2) $54,000 (Permit costs for Phase 2, based on an estimate of 11,900 permits at a cost of $4.53 per permit) AMENDMENT NO. 1 TOTAL $94,000.00 Year 1 Year 2 Year 3 TOTAL PER YEAR $160,429 $142,541 $75,098 TOTAL NOT TO EXCEED: $378,068.00 DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 13 of 14 Revision April 28, 2014 AMENDMENT NO. 2 Year 3 Year 4 Recurring Annual Cost: 3/16/17 through 3/8/18 3/9/2018 through 3/9/2019 Task 4 SP+ Website Hosting and Maintenance $10,159 $10,464 Task 5 SP+ Project Management $22,915 $23,603 T2 Recurring T2 Flex & eBusiness Annual Subscription Fees $15,826 $16,617 Total Recurring Annual Costs $48,900 $50,684 Permit Administrator Based on monthly billing of $7,460 with annual 3% increase $89,520 $92,206 Permit Fulfillment T2 Recurring, T2 Flex, & eBusiness Permit Fulfillment/Customer Support fees based on an estimate of 11,900 permits at $4.53 per permit ( $0.99 WW&L, $3.54 direct fulfillment)* $53,907 $53,907 Additional Evergreen Park-Mayfield Permit Fulfillment costs 6,000 permits at $4.53* $ 27,180 $ 27,180 Total Per Year $219,507 $223,977 Total for Years 3 & 4 $443,484.00 Total for Years 1 & 2 $302,974.00 Contract Total Not to Exceed $746,458.00 *If more that 17,900 total permits are sold, the City agrees to pay an additional $4.53 per permit over and above the not to exceed compensation AMENDMENT NO. 2 TOTAL $368,390.00 Year 1 Year 2 Year 3 Year 4 TOTAL PER YEAR $160,429 $142,541 $227,495 $223,977 TOTAL CONTRACT NOT TO EXCEED: $746,458.00 DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 14 of 14 Revision April 28, 2014 AMENDMENT NO. 3 Year 3 Year 4 3/16/17 through 3/8/2018 3/9/2018 through 3/9/2019 Recurring Annual Cost: 624.31$ 643.04$ 1,408.20$ 1,450.45$ 972.55$ 1,021.18$ 3,005.06$ 3,114.66$ Permit Administrator Based on monthly billing of $7,460 with annual 3% increase $ - -$ Permit Fulfillment 4,983.00$ 5,232.15$ Total Per Year 7,988.06$ 8,346.81$ *If more that 1100 permits are sold, the City agrees to pay an additional $4.53 per permit over and above the not to exceed compensation amounts reflected in the agreement by issuance of an amendment to the agreement. T2 Recurring, T2 Flex, & eBusiness Permit Fulfillment/Customer Support fees based on an estimate of 1100 permits at $4.53 per permit ($0.99 WW&L, $3.54 direct fulfillment)* Southgate Permit Quote Task 4 SP+ Website Hosting and Maintenance Task 5 SP+ Project Management T2 Recurring T2 Flex & eBusiness Annual Subscription Fees Total Recurring Annual Costs AMENDMENT NO. 3 TOTAL $16,335.00 Year 1 Year 2 Year 3 Year 4 TOTAL PER YEAR $160,429 $142,545 $227,495 $232,324 TOTAL CONTRACT NOT TO EXCEED: $762,793.00 DocuSign Envelope ID: 5A6E6597-D6F9-4236-99A5-512D3D31C198DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Certificate Of Completion Envelope Id: 5A6E6597D6F9423699A5512D3D31C198 Status: Completed Subject: Please DocuSign: C15156501 SP Plus Contract Amendment No 3.pdf Source Envelope: Document Pages: 14 Signatures: 1 Envelope Originator: Supplemental Document Pages: 0 Initials: 0 Christopher Anastole Certificate Pages: 2 AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) Payments: 0 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 12.220.157.20 Record Tracking Status: Original 8/3/2017 3:27:13 PM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp Steve Aiello saiello@spplus.com Senior Vice President Security Level: Email, Account Authentication (None)Using IP Address: 107.77.196.228 Signed using mobile Sent: 8/3/2017 3:31:50 PM Resent: 8/8/2017 6:46:16 AM Resent: 8/10/2017 8:37:55 AM Resent: 8/15/2017 4:00:11 PM Viewed: 8/8/2017 7:37:34 AM Signed: 8/15/2017 4:48:13 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Elizabeth Egli elizabeth.egli@cityofpaloalto.org Managment Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/16/2017 7:33:39 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Sherry Nikzat Sherry.Nikzat@CityofPaloAlto.org Sr. Management Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/16/2017 7:33:39 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Carbon Copy Events Status Timestamp Yolanda Cervantes Yolanda.Cervantes@CityofPaloAlto.org Administrative Assistant City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/16/2017 7:33:40 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 8/16/2017 7:33:40 AM Certified Delivered Security Checked 8/16/2017 7:33:40 AM Signing Complete Security Checked 8/16/2017 7:33:40 AM Completed Security Checked 8/16/2017 7:33:40 AM Payment Events Status Timestamps DocuSign Envelope ID: AC6003E5-B0A3-4EFD-B953-4C2AE3920873 Certificate Of Completion Envelope Id: AC6003E5B0A34EFDB9534C2AE3920873 Status: Completed Subject: Please DocuSign: C15156501 SP Plus Contract Amendment No 3 Council Ready.pdf Source Envelope: Document Pages: 16 Signatures: 1 Envelope Originator: Supplemental Document Pages: 0 Initials: 0 Christopher Anastole Certificate Pages: 1 AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) Payments: 0 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 12.220.157.20 Record Tracking Status: Original 8/16/2017 9:49:36 AM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp Bill Kepp bkepp@spplus.com Regional Manager Security Level: Email, Account Authentication (None)Using IP Address: 54.175.87.242 Sent: 8/16/2017 9:50:38 AM Viewed: 8/16/2017 9:50:55 AM Signed: 8/16/2017 9:51:44 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 8/16/2017 9:50:38 AM Certified Delivered Security Checked 8/16/2017 9:50:55 AM Signing Complete Security Checked 8/16/2017 9:51:44 AM Completed Security Checked 8/16/2017 9:51:44 AM Payment Events Status Timestamps 1 Revision April 28, 2014 AMENDMENT NO. 3 TO CONTRACT NO. C15156763 BETWEEN THE CITY OF PALO ALTO AND SERCO INC. This Amendment No. 3 to Contract No. C15156763 (“Contract”) is entered into August 21, 2017 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SERCO INC., a New Jersey corporation, located at 1818 Library Street, Suite 1000, Reston, Virginia 20190 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of parking enforcement services for the Downtown Residential Preferential Parking (RPP) district. B. CITY intends to increase the total not to exceed compensation from $2,320,854.00 by $115,140.00 to $2,435,994.00 for additional services as specified in Exhibit “A” Scope of Service C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4 COMPENSATION is hereby amended to read as follows: “SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed per year per the following: Year One $503,210.00 Year Two $563,210.00 Year Three $675,707.00 Year Four $693,867.00 Total contract compensation shall not exceed Two Million Four Hundred Thirty Five Thousand Nine Hundred Ninety Four Dollars ($2,435,994.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. 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 in Exhibit “A”.” DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 2 Revision April 28, 2014 SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “A” entitled “SCOPE OF SERVICES”. b. Exhibit “C” entitled “COMPENSATION”. c. Exhibit “C1” entitled “HOURLY RATE SCHEDULE”. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: SERCO INC. Attachments: EXHIBIT "A": SCOPE OF SERVICES EXHIBIT "C": COMPENSATION EXHIBIT "C1": HOURLY RATE SCHEDULE DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC Chan Phuong Contracts Representative David Cornell Contracts Representative 3 Revision April 28, 2014 EXHIBIT “A” SCOPE OF SERVICES CONSULTANT will provide enforcement services for the Downtown Residential Preferential Parking (RPP) district, issuing parking citations to violators for a period of up to 3 years. Information on the design of the Downtown RPP district is found in Attachment A. TASK 1: ONBOARDING AND STARTUP – 60 DAYS CONSULTANT will provide the appropriate and necessary training to employees who work for the CITY, relevant to their respective job duties. CONSULTANT shall maintain complete training records for each employee, as well as any other records prescribed by law or CITY policy as appropriate. The CITY’s Police Department will provide all materials related to enforcement rules and regulations currently in place; all other training materials are to be provided by CONSULTANT. Training topics include, but are not limited to, to the following topics: a. Design of the Downtown RPP District, including information on employee and resident permits and history of the program development b. Enforcing parking permit violations and other parking regulations c. Marking and tagging of vehicles using Consultant-provided handheld devices d. Palo Alto Municipal Codes, California Vehicle Code, state statutes, and ordinances related to parking enforcement e. Chain of command and authority levels f. Marking, tagging, towing, and impoundment of vehicles g. Job procedures and emergency protocol h. Responding to calls for service i. Customer service delivery and expectations j. Courtroom procedures and testimony k. Workplace safety l. Civil rights law and procedures m. Information on history of Palo Alto, City Downtown, and City Attractions The training program should provide the CONSULTANT’s personnel with sufficient understanding of the RPP District as well as operation of required equipment and enforcement protocol. All personnel are to complete and pass the training course prior to starting service, and the training procedures must be approved by the CITY. The time period from CITY’s notice to proceed to start of enforcement shall not be less than sixty (60) days. CONSULTANT will also train staff to appear in court in a professional manner with related documentation and evidence to support the case. CONSULTANT’s Project Manager will represent the company on most court appearances unless an enforcement officer is specifically required to be DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 4 Revision April 28, 2014 present, in which case the Project Manager will accompany the enforcement officer or Supervisor to the hearing. Deliverable: CONSULTANT will provide a training plan upon receiving notice to proceed from the CITY. The training plan will include all training activities planned for enforcement officers and include information from the CITY required to complete the training, as well as a detailed schedule. PERSONNEL CONSULTANT will ensure that all new employees meet all CITY of Palo Alto and CONSULTANT employment requirements as listed below. CONSULTANT will comply with all existing Government code and CITY non-discrimination policies. All candidates must complete a job application and provide a DMV printout. To be offered a position, candidates must pass a pre-screening at CONSULTANT’s expense. The pre-screening includes the following: a. Pre-employment drug and alcohol testing b. Criminal history background check c. DMV record check d. Social Security Number verification e. Eligibility to work in the United States f. Ability to speak and write in English g. LiveScan/Fingerprinting h. California Department of Justice background check Drivers will undergo further screening: a. Comply with USDOT/Federal Motor Carrier Safety Administration and California DMV regulations b. DMV nationwide records check c. Pass the Smith Systems Defensive Driver Safety Training d. 40 hours on-the-job training CONSULTANT shall select and hire only persons who are well-qualified to perform the duties for their respective job positions, and should provide classifications of all employee positions within their proposal, including a job description. Classifications might include, but are not limited to: Parking Enforcement Supervisor/Manager: Assist the parking enforcement staff with day-to- day operations and staffing issues. Supervisor shall be responsible to report with the on a bi- monthly basis and provide updates on the enforcement process, any feedback from the public, incidents and number of citations issued. A supervisor should possess sufficient IT knowledge to be able to handle employee equipment issues in the field, and the capability of working with the citation processing agency for any citation issues. DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 5 Revision April 28, 2014 Parking Enforcement Staff: Responsible for the day-to-day management, supervision, and operation of parking enforcement services. These individuals must have the capacity to act as “Ambassadors” for the CITY, providing information about parking enforcement practices and other information on Palo Alto’s Downtown. CONSULTANT should provide performance metrics for each position so that performance evaluations may take place. CONSULTANT will provide eleven (11) shirts and eleven (11) pants to full-time employees. CONSULTANT will issue staff jackets, hats, and rain attire for inclement weather, all bearing the company logo. CONSULTANT and uniform company will be responsible for cleaning of uniforms. Cleaning of uniforms is not the responsibility of the CITY. CONSULTANT will provide sample uniforms for CITY review prior to any issuance of uniforms. Employees will wear CONSULTANT-issued photo ID at all times while on duty. CONSULTANT will be expected to purchase parking permits for any employees driving to Palo Alto. CONSULTANT will be responsible for all personnel supervision, discipline, and termination actions. However, the CITY may require the removal of any CONSULTANT’s personnel, when it is determined to be in the best interest of the CITY, at any time. CONSULTANT will address temporary vacancies due to vacations, illness, leaves of absence, or termination and provide continuous staffing. Deliverables: a. CONSULTANT will supply an updated organization chart and complete list of employees and roles at the CITY’s request and annually on contract anniversary date. b. CONSULTANT will provide draft design of enforcement uniforms for approval during transition phase. c. At the request of the CITY, Consultant will allow CITY to participate in employee interviews. TASK 2: Enforcement of Phase 1 and Phase 2 of RPP Program (18 Months) CONSULTANT will be responsible for issuing citations for parking permit violations within the Downtown RPP District, in accordance with the rules specified in Attachment A. Citations must include the make, model, color, and style of vehicle, license tag number or Vehicle Identification Number (VIN), violation code number and description, base fine amount and additional fine amount DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 6 Revision April 28, 2014 in the event there is a failure to respond timely, badge number, the location of the parking offense, type of offense (e.g. permit incorrectly displayed, no valid permit, not parked in the right location) and the time and date of the offense. CONSULTANT staff will be fully trained on Consultant-furbished handheld devices. Staff will also be trained on how to capture digital images of vehicle license plates, and how to issue manual paper citations. Consultant will work with CITY’s existing citation processing vendor to ensure that citations associated with the RPP district may be recorded and tracked separately from existing parking enforcement. CONSULTANT will be trained on proper placement of citations on the windshield, how to complete and issue citations for drive offs and covered VIN numbers, missing license plates, and other unusual occurrences. In the event the driver drives away, the citation will be mailed as required by the California Vehicle Code. CONSULTANT will furnish two (2) hybrid vehicles for parking enforcement services and will be responsible for all on-going operating expenses including insurance, fuel, maintenance, and repairs. The vehicles will be equipped with GPS tracking units and LPR technology as necessary. CONSULTANT’s vehicles shall be clearly identifiable as performing parking enforcement and parking meter maintenance and collection operations for the CITY. CONSULTANT’s staff shall operate all vehicles at all times in compliance with all state and local motor vehicle and emissions laws. Vehicles shall not have missing parts or dents, and the rear of all patrol vehicles shall have a sign warning of frequent vehicle stops. All vehicles used by CONSULTANT shall have blinking flasher lights installed on each vehicle's roof. CONSULTANT will obtain approval by the CITY Manager and the Chief Communications Officers or his/her designee prior to ordering decals for the marking of vehicles. CONSULTANT will also provide officers with four (4) Trek Marlin 6 bicycles, anticipating that some enforcement officers may be able to use this method of enforcement for either Phase 1 or Phase 2. Deliverable: CONSULTANT will provide draft design for vehicle marking. Consultant will provide a an enforcement strategy document for Phase 1 and Phase 2 of the program, including anticipating beats, schedule, and personnel assigned to each phase of the project. Consultant will work with CITY to identify opportunities for improving and modifying enforcement strategy at periodic intervals during Phase 2 of the program, especially opportunities which could be afforded by the introduction of technology (e.g. LPR). The Consultant will use mark-moding and chalking as the main forms of enforcement during Phase 1, but will work with the CITY to identify other modes of enforcement as the program moves forward. DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 7 Revision April 28, 2014 CONSULTANT will provide a schedule of estimated patrol routes and frequency recommendations. The CITY seeks to ensure that coverage is adequate, fair, regular, and consistent, although it is also expected that CONSULTANT will alternate the patrol routes on a regular basis to eliminate predictability. CONSULTANT can propose changes to routes and schedules to the CITY as part of their performance reporting meetings and documentation. CONSULTANT will be responsible for maintaining records of employment and, upon request, provide the CITY with personnel and training information for each employee. CONSULTANT will require Parking Enforcement Officers to submit daily reports regarding issues such as: a. Missing or damaged or conflicting parking signs, or traffic control signs, or curb markings b. Obstructed parking signs, stop signs, yield signs or any safety hazard c. Parking abnormalities or abnormal parking patterns d. Beat analysis and beat enforcement e. Incidents/accidents CONSULTANT will update and meet with CITY staff regularly, including the following: a. Weekly status reports with Parking Operations Lead and other staff as necessary b. Monthly progress meetings c. Quarterly evaluation and status report d. Annual performance review CONSULTANT will seek CITY approval on operational changes including but not limited to: a. Schedules b. Routes c. Operations ATTACHMENT A The proposed Downtown Residential Preferential Parking (RPP) Program is being introduced as part of a suite of parking management strategies aimed at improving parking and traffic conditions in Downtown Palo Alto. The program will restrict commuter parking during hours of operation, although limited numbers of commuter-employee permits will also be sold. Over time, the number of employee permits will be reduced as additional parking supply is provided within the Downtown area. The proposed RPP District includes a geographic area surrounding Palo Alto’s Downtown commercial zone and bounded by the City of Menlo Park to the Northwest. Currently, the only existing parking restrictions within this boundary include the Downtown Business District color zone and the SOFA business District: DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 8 Revision April 28, 2014 The SOFA business district has 2-hour parking along streets which house mainly local businesses. Customers may re-park after two hours in any of the spaces. The Downtown color zone has 2-hour parking which is limited to a specific color zone – Blue, Coral, Lime or Purple. Parking twice within the same color zone during the time period 8:00 to 5:00 is not permitted. The physical boundaries of the new Downtown RPP District will not include the existing SOFA and Downtown areas, which are currently enforced by the Palo Alto Police Department using mark- moding and chalking. The area within the dotted blue line will be included in the new parking District (see below). The program as currently proposed has two distinct phases, where parking restrictions will differ: DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 9 Revision April 28, 2014 Phase 1: 6 Months For the first phase of the program, the CITY will sell RPP permits to residents and to employees who live or work within the boundaries of the District. Permits will be sold online using an online issuance system by T2 Systems. It is expected that guest permits will be hangtags and that individual permits will be stickers on vehicles. There will be several types of valid permits: Resident Permit (sold to individuals living at residential addresses within the blue line area). Standard Commuter Employee Permit: This is a permit that will be sold to employee commuters who work within the RPP District Boundary. Residential Annual Guest Permits / Visitor Permits All permits shall be valid anywhere within the District during this phase. Although the CITY recognizes that license plate recognition (LPR) equipment could be used for enforcement and physical permits may not be necessary for Phase 1 enforcement, the CITY wishes to use Phase 1 of the program to collect needed parking occupancy data, and therefore will require physical permits during Phase 1. This phase of the program will be used to determine the appropriate “permit cap” for employee permit sales in future phases of the program. The CITY is proposing that Phase 1 of the program last for 6 months only. All permits sold within Phase 1 will expire at the end of 6 month period, which will be identified on the permit. Phase 2: 12+ Months After Phase 1, the CITY will begin to limit the number of employee permits which will be sold for the program. Rather than allowing employees with permits to park anywhere within the District, employee permits will be allocated in one of the following ways: 1. Employee permits may be sold specific to a block face or faces, e.g. the “900-1000 Block of Ramona”, which would be visible on the permit, or; 2. Employees with permits can only park during enforcement hours at specific “employee” spots within the District, which would be allocated along block faces within the residential area. Residential permits, Annual Guest Permits and Visitor permits will be valid anywhere within the District. Anyone without a valid permit will be allowed to park for two (2) hours, at which point they would need to move their car to a different parking space. The hours of enforcement of the program are expected to be Monday through Friday, 8:00am – 5:00pm. AMENDMENT NO. 1 ADDITIONAL SERVICES CONSULTANT will provide one additional Parking Enforcement Officer to support enforcement of DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 10 Revision April 28, 2014 newly annexed streets and approved neighborhoods in the Downtown Residential Preferential Parking (RPP) program in accordance with this Contract and as shown in Appendix B. CONSULTANT will begin enforcing street faces in yellow once signage is installed on those streets. CONSULTANT will not begin enforcing areas shown in blue until receiving further direction from the City. Once the City provides direction, CONSULTANT shall enforce newly annexed streets in accordance with the terms of this Contract. CONSULTANT will follow and be subject to all other protocols as listed previously in this exhibit. Appendix B: Annexation of Downtown RPP District DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 11 Revision April 28, 2014 AMENDMENT NO. 2 ADDITIONAL SERVICES CONSULTANT will provide one additional Parking Enforcement Officer to support enforcement of newly annexed streets and approved neighborhoods in the Evergreen Park-Mayfield Residential Preferential Parking (RPP) program in accordance with this Contract and as shown in Appendix C. CONSULTANT will begin enforcing street faces in yellow once signage is installed on those streets. CONSULTANT will not begin enforcing areas shown in blue until receiving further direction from the City. Once the City provides direction, CONSULTANT shall enforce newly annexed streets in accordance with the terms of this Contract. CONSULTANT will follow and be subject to all other DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 12 Revision April 28, 2014 protocols as listed previously in this exhibit. CITY wishes to extend term of contract for a fourth (4th) year. Appendix C: Evergreen Park-Mayfield RPP District DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 13 Revision April 28, 2014 AMENDMENT NO 3 CONSULTANT will provide one additional Parking Enforcement Officer to support enforcement of newly annexed streets and an approved neighborhood in the Southgate Residential Preferential Parking (RPP) program. CONSULTANT will begin enforcing street faces in grey once signage is installed on those streets. DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 14 Revision April 28, 2014 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed: Year One $503,210.00 (6/1/15 through 5/31/16) Year Two $563,210.00 (6/1/16 through 5/31/17) Year Three $675,707.00 (6/1/17 through 5/31/18) Year Four $693,867.00 (6/1/18 through 5/31/19) Total contract compensation shall not exceed $2,435,994. Consultant agrees to complete all Basic Services, including reimbursable expenses, within this amount. 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. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $2,435,994. BUDGET SCHEDULE NOT TO EXCEED AMOUNT YEARS 1-3 Task 1 (Project Manager per year) $141,446.00 Task 2 (Parking Enforcement Officer per year) $242,304.00 Task 3 (ODC’s & Materials per year) $119,460.00 Sub-total Basic Services per Years 1-3 $503,210.00 Sub-total Basic Services for Three Year Term $1,509,630.00 DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 15 Revision April 28, 2014 AMENDMENT NO. 1 ADDITIONAL SERVICES Additional Enforcement Officer. Year 2 $52,500.00 One-time start-up and equipment costs (Year 2) $7,500.00 Subtotal for AMENDMENT No. 1 $60,000.00 AMENDMENT NO. 2 ADDITIONAL SERVICES Additional Compensation for Year 3 $112,498.00 (2 Additional Enforcement Officers Compensation for Year 4 $638,726.00 Subtotal for AMENDMENT No. 2 $751,224.00 AMENDMENT NO. 3 ADDITIONAL SERVICES Additional Compensation for Year 3 $59,999.00 (1 Additional Enforcement Officer Includes $7,500.00 startup Fee) Compensation for Year 4 $55,141.00 Subtotal for AMENDMENT No. 2 $115,140.00 Reimbursable Expenses None Total Basic Services and Reimbursable expenses $2,435,994.00 (Includes Amendment 1 & 2) Maximum Total Compensation $2,435,994.00 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: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 16 Revision April 28, 2014 the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 17 Revision April 28, 2014 EXHIBIT “C-1” HOURLY RATE SCHEDULE TOTAL NOT TO EXCEED AMOUNT FOR TERM 3 YEARS @ $503,210.00 PER YEAR = $1,509,630.00 AMENDMENT NO. 1 City will pay CONSULTANT an hourly rate of $25.24 for the additional enforcement officer, for a total not to exceed amount of $52,499.20 annually. City will pay CONSULTANT $7,500 for one-time start-up and equipment costs for the additional enforcement officer. Year One $503,210.00 Year Two $563,210.00 Year Three $503,210.00 TOTAL NOT TO EXCEED AMOUNT FOR THE TERM: $1,569,630.00 Scope Labor Categories (e.g., Consultant, Sr. Consultant, etc.) Est Hours Hourly Rate Extended Rate Task 1 Project Manager – Direct Labor Rate 1,920 $ 40.87 $ 78,470 Overhead Rate (including Fringe, G&A and Fee) 1,920 $ 32.80 $ 62,976 Total not to exceed, Task 1 Project Manager (fully burdened) 1,920 $ 73.67 $ 141,446 Task 2 Parking Enforcement Officer (5 FT PEO) – Direct Labor Rate 9,600 $ 14.00 $ 134,400 Overhead Rate (including Fringe, G&A and Fee) 9,600 $ 11.24 $ 107,904 Total not to exceed, Task 2 Parking Enforcement Officer (fully burdened) 9,600 $ 25.24 $ 242,304 Task 3 ODCs / Materials to include: bicycles / vehicles, uniforms, ticket writers, cell phones, and other misc. supplies N/A $ 97,033 Burdens and Fee G& N/A N/A $ 22,427 Total not to exceed, Task 3 ODCs and Materials (fully burdened) N/A $ 119,460 Total not to exceed (Tasks 1 – 3) Project Manager (1), Parking Enforcement Officers (5) and ODCs / Materials (all fully burdened) N/A Annual NTE $ 503,210 DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 18 Revision April 28, 2014 AMENDMENT NO. 2 Scope Labor Categories (e.g., Consultant, Sr. Consultant, etc.) Est Hours Hourly Rate Year 1 through 3 Costs In Year 3 Hourly Rate Year 4 Extended Rate 4 Task 1 Project Manager – Direct Labor Rate 1,920 $ 40.87 $ 78,470 $ 42.83 $ 82,233.6 Overhead Rate (including Fringe, G&A and Fee) 1,920 $ 32.80 $ 62,976 $ 34.52 $ 66,278.4 Total not to exceed, Task 1 Project Manager (fully burdened) 1,920 $ 73.67 $ 141,446 $77.35 $148,512 Task 2 Parking Enforcement Officer (5 FT PEO) – Direct Labor Rate 9600 $ 14.00 $ 134,400 $ 14.67 $ 140,832 Overhead Rate (including Fringe, G&A and Fee) 9600 $ 11.24 $ 107,904 $ 11.84 $ 113,664 Parking Enforcement Officer 2 additional FT PEO - Direct Labor Rate 4160 $ 14.00 $58,240 $ 14.67 $61,027.2 Overhead Rate (including Fringe, G&A and Fee) 4160 $ 11.24 $46,758.4 $ 11.84 $49,254.4 Total not to exceed, Task 2 Parking Enforcement Officer (fully burdened) 13,760 $ 25.24 $ 347,302.4 $26.51 $364,777.6 MISC On-time start-up and equipment costs for the additional enforcement officer $7,500 Task 3 ODCs / Materials to include: bicycles / vehicles, uniforms, ticket writers, cell phones, and other misc. supplies N/A $97,033 Burdens and Fee G&A N/A $ 22,427 Total not to exceed, Task 3 ODCs and Materials (fully burdened) Per month $9,955 $ 119,460 $10,453 $ 125,436 Total not to exceed (Tasks 1 – 3) Project Manager (1), Parking Enforcement Officers (5) and ODCs / Materials (all fully burdened) N/A Annual NTE $ 615,708.40 Annual NTE $ 638,725.6 DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 19 Revision April 28, 2014 Year 4 A. Extend term of contract to 5/31/2019 B. Fees for Project Manager, Seven (7) Parking Enforcement Officer, and ODC’s have increased. Please see Exhibit C-2 $23,017.2 A. Year 3 (6/1/17 through 5/31/18) City will pay CONSULTANT for the 6th Parking Enforcement Officer that was added in year 2 at an hourly rate of $25.24 for the additional for a total not to exceed amount of $52,499.20 annually. B. Year 3 (6/1/17 through 5/31/18) City will pay CONSULTANT an hourly rate of $25.24 for a 7th enforcement officer to provided additionally staffing for the new Evergreen Park-Mayfield RPP District, for a total not to exceed amount of $52,499.20 annually. City will pay CONSULTANT $7,500 for one-time start-up and equipment costs for the additional enforcement officer. C. Year 4 (6/1/18 through 5/31/19) Year 3 A. Continuation of Additional Enforcement Officer (6th Officer). $52,499.20 B. Additional Enforcement Officer for Evergreen Park Mayfield RPP District (7th Officer). $52,499.20 On-time start-up and equipment costs $7,500.00 Subtotal for AMENDMENT No. 2 $112,498.40 Reimbursable Expenses None DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC 20 Revision April 28, 2014 D. City will pay CONSULTANT an increased hourly rate of $26.51 for the all seven (7) enforcement officers ( previous rate was $25.24): increased hourly rate of $77.35 for Project Manager (previous rate was $73.67). Year One (6/1/15 through 5/31/16) $503,210.00 Year Two (6/1/16 through 5/31/17) $563,210.00 Year Three (6/1/17 through 5/31/18) $615,708.00 Year Four (6/1/18 through 5/31/19) $638,726.00 TOTAL NOT TO EXCEED AMOUNT FOR THE TERM: $2,320,854. AMENDMENT NO. 3 Contract Year 3 (6/1/17 through 5/30/18) PEO Hourly Rate (Fully Burdened) $25.24 Total Cost Year 3 $52,499.20 Contract Year 4 (6/1/18 through 5/30/19) PEO Hourly Rate (Fully Burdened) $26.51 Total Cost Year 4 $55,140.80 One time start up and equipment cost $7,500 DocuSign Envelope ID: 8CF1AF5F-6374-4F0E-B280-CAD5A8DF32EC Certificate Of Completion Envelope Id: 8CF1AF5F63744F0EB280CAD5A8DF32EC Status: Completed Subject: Please DocuSign: C15156763 SERCO Amendment No 3.doc Source Envelope: Document Pages: 20 Signatures: 2 Envelope Originator: Supplemental Document Pages: 0 Initials: 0 Christopher Anastole Certificate Pages: 2 AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) Payments: 0 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 12.220.157.20 Record Tracking Status: Original 8/3/2017 3:34:40 PM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp Chan Phuong David.Cornell@serco-na.com Contracts Representative Security Level: Email, Account Authentication (None)Using IP Address: 208.185.76.50 Sent: 8/3/2017 3:38:37 PM Viewed: 8/4/2017 6:57:56 AM Signed: 8/4/2017 1:26:12 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign David Cornell David.Cornell@serco-na.com Contracts Representative Security Level: Email, Account Authentication (None)Using IP Address: 208.185.76.50 Sent: 8/4/2017 1:26:13 PM Resent: 8/8/2017 6:45:25 AM Viewed: 8/8/2017 7:17:36 AM Signed: 8/8/2017 7:17:56 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Elizabeth Egli elizabeth.egli@cityofpaloalto.org Managment Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/8/2017 7:17:57 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Carbon Copy Events Status Timestamp Sherry Nikzat Sherry.Nikzat@CityofPaloAlto.org Sr. Management Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/8/2017 7:17:57 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Yolanda Cervantes Yolanda.Cervantes@CityofPaloAlto.org Administrative Assistant City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/8/2017 7:17:58 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 8/8/2017 7:17:58 AM Certified Delivered Security Checked 8/8/2017 7:17:58 AM Signing Complete Security Checked 8/8/2017 7:17:58 AM Completed Security Checked 8/8/2017 7:17:58 AM Payment Events Status Timestamps 1 of 9 Revision April 28, 2014 AMENDMENT NO. 5 TO CONTRACT NO. C15157271 BETWEEN THE CITY OF PALO ALTO AND MC GUIRE PACIFIC CONSTRUCTORS This Amendment No. 5 to Contract No. C15157271 (“Contract”) is entered into August 21, 2017, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MC GUIRE PACIFIC CONSTRUCTORS, a Sole Proprietor, located at 12500 Locksley Lane, Auburn, California, 95602, Telephone Number: (530) 888-0527 (“CONTRACTOR”). R E C I T A L S A. The Contract was entered into between the parties for the provision to perform standard highway sign installations in support of a new Residential Preferential Parking (RPP) district in Downtown Palo Alto. B. CITY intends to increase the compensation from $704,035.00 by $142,155.00 to $846,190.00 for additional services as stated in Exhibit “A” Scope of Services. C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 5 COMPENSATION is hereby amended to read as follows: “5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not to exceed compensation for the full performance of the Services and reimbursable expenses, if any: A sum calculated in accordance with the fee schedule set forth in Exhibit C, not to exceed a total maximum compensation amount of Eight Hundred Forty Six Thousand One Hundred Ninety Dollars ($846,190.00). CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. ” SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “A” entitled “SCOPE OF SERVICES”. DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 2 of 9 Revision April 28, 2014 b. Exhibit “C” entitled “SCHEDULE OF FEES”. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: MC GUIRE PACIFIC CONSTRUCTORS Attachments: EXHIBIT "A": SCOPE OF SERVICES EXHIBIT "B": SCHEDULE OF FEES DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD John McGuire owner 3 of 9 Revision April 28, 2014 EXHIBIT “A” SCOPE OF SERVICES CONTRACTOR to perform standard highway sign installations in support of a new Residential Preferential Parking (RPP) district in Downtown Palo Alto. The scope of work includes fabrication of the RPP signage and the installation of the signage based on City- generated work-orders. The City shall provide Contractor with a work order-type improvement plan for RPP sign installation; Contractor should provide cost estimates for completion of the work and complete the work after written authorization to proceed. The first phase of the work is anticipated to be completed between March and May of 2015, which a potential second phase of installation during December of 2015. TECHNICAL SPECIFICATIONS The following types of signage will be required to be manufactured and installed for the project. A) Standard Regulatory Parking Signs – Sign Installation onto Existing Sign Post The Contractor shall install parking regulatory sign(s) onto existing sign posts that require the addition of a riser to accommodate new sign(s). Addition of a riser shall include the threading of the existing sign post, installation of a coupling bracket, and pole extension to support the new sign. The Contractor shall be responsible for providing all material. B) Standard Regulatory Parking Signs – Sign & Sign Post Installation The Contractor shall install parking regulatory sign(s) onto contractor-furnished and installed sign post. Installation of a new sign post shall include coordination with U.S.A. Underground, the use of a core drill with a 6-inch bit to cut through existing concrete, installation of a new 2-inch sign post, and the use of a Portland cement to secure post and finishing to grade. Signs shall be installed a minimum of 7-ft from bottom of sidewalk or existing grade. New sign post installations shall not use any pole risers to accommodate the new sign installation(s). The contractor shall be responsible for providing all material. C) Standard Regulatory Signs – Sign Installation onto Existing Streetlight The Contractor shall install city-furnished parking regulatory sign(s) onto existing street lights, including all required brackets and hardware. The contractor shall be responsible for providing all material. ADDITIONAL SERVICES DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 4 of 9 Revision April 28, 2014 The need for additional types of General Street services may be required during the term of this contract. The City shall work with the Contractor to identify a fee schedule for any additional services prior to the start of work. Provided in Attachment A is Sample Sign Bracketing Hardware used by the City of Palo Alto. The Contractor is required to use the same sign bracketing material to ensure compatibility with existing field hardware. AMENDMENT NO. 1: ADDITIONAL SERVICES CONTRACTOR to perform sign installations on newly annexed streets into the Downtown Residential Preferential Parking (RPP) district in Downtown Palo Alto shown in Appendix B. The scope of work includes fabrication of the RPP signage and the installation of the signage based on City-generated work-orders. CONTRACTOR shall also fabricate and perform installation of stickers on all existing and future signs in the Downtown RPP district per the specification chart shown below. The City shall provide CONTRACTOR with a work order-type improvement plan for RPP sign installation; CONTRACTOR should provide cost estimates for completion of the work and complete the work after written authorization to proceed. Quantity Furnish and install 3M Engineer grade sheeting 3" x 4" screen print zone stickers 2000 Furnish and install, per the current Caltrans sign specifications, 12"x18" regulatory parking sign onto a new 2" galvanized sign post, 6 inch core drill into the existing hardscape area 300 Furnish and install, per the current Caltrans sign specifications, 12"x18" regulatory parking sign onto a new 2" galvanized sign post, 6 inch core drill into the existing concrete area 50 DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 5 of 9 Revision April 28, 2014 Appendix B: Annexation of Downtown RPP District AMENDMENT NO. 4 #1 Install new RPP signage in the Evergreen Area on new 2 inch round sign posts with “L” brackets and on existing light posts. DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 6 of 9 Revision April 28, 2014 All signs mounted to light posts are mounted with side mount brackets per city requirements. Sign manufactured to match existing RPP signage in Zones 1-10 with new Zones, A, B, and C. #2 Existing RPP signage, change time from 5 pm to 6 pm with same screen design as the Zone labels. Clean the existing RPP signs and apply new “6” to cover the “5”. Signs are double face. AMENDMENT NO. 5 CONSULTANT will: 1. Install new RPP signage in the Southgate neighborhood on new 2-inch round sign posts with “L” brackets and on existing light posts. All signs mounted to light posts are mounted with side mount brackets per city requirements. Sign manufactured to match existing RPP signage in Evergreen RPP area with Zone ID labels applied. DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 7 of 9 Revision April 28, 2014 EXHIBIT C SCHEDULE OF FEES CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of compensation to be paid to Contractor, including both payment for services and reimbursable expenses, shall not exceed Eight Hundred Forty Six Thousand One Hundred Ninety Dollars ($846,190.00). Any services provided or hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to City. Furnish and install, per the current Q U A N T I T Y U N I T U N I T C O S T T O T A L Caltrans sign specifications, 12"x18" regulatory parking sign onto an existing standard 2" galvanized sign post with required galvanized riser. 100 EACH $210.00 $21,000.00 EACH $410.00 $328,000.00 Furnish and install, per the current Caltrans sign specifications, 12"x18" regulatory parking sign, new 2" Galvanized sign post, 6 inch core drill into the existing sidewalk 800 EACH $410.00 $328,000.00 Furnish and install, per the current Caltrans sign specifications, 12"x18" regulatory parking sign, installed onto the existing Streetlight pole with 3/4", type 201 stainless steel banding and heavy duty buckle with straight leg stainless steel brackets. 100 EACH $195.00 $19,500.00 TOTAL $368,500.00 AMENDMENT NO. 1 DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 8 of 9 Revision April 28, 2014 Quantity Unit Cost Total Furnish and install 3M Engineer grade sheeting 3" x 4" screen print zone stickers 2000 $11.00 $22,000.00 Furnish and install, per the current Caltrans sign specifications, 12"x18" regulatory parking sign onto a new 2" galvanized sign post, 6 inch core drill into the existing hardscape area 300 $365.00 $109,500.00 Furnish and install, per the current Caltrans sign specifications, 12"x18" regulatory parking sign onto a new 2" galvanized sign post, 6 inch core drill into the existing concrete area 50 $460.00 $23,000.00 AMENDMENT TOTAL $154,500 Total Contract Not To Exceed: $523,000.00 AMENDMENT NO. 4 Service Items Calculations Total Cost #1 Install new RPP signage in the Evergreen Area on new 2 inch round sign posts with “L” brackets and on existing light posts. All signs mounted to light posts are mounted with side mount brackets per city requirements. Sign manufactured to match existing RPP signage in Zones 1-10 with new Zones, A, B, and c. 325 signs @ 445.00 a piece $144,625.00 #2 Existing RPP signage, change time from 5 pm to 6 pm with same screen design as the Zone labels. Clean the existing RPP signs and apply new “6” to cover the “5”. 3310 sign faces @ $11.00 a piece $36,410.00 DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD 9 of 9 Revision April 28, 2014 Signs are double face. Signage Costs for Downtown and Evergreen Park-Mayfield RPP Districts $181,035.00 AMENDMENT NO. 5 Install new RPP signage in the Southgate neighborhood on new 2-inch round sign posts with “L” brackets and on existing light posts COST: 243 each @ $585.00 = $142,155.00 SCHEDULE: Lead time is estimated to be 6-8 weeks for sign production and hardware procurement from Wisconsin. The city specified sign brackets are proprietary and now have to be shipped out from Wisconsin. Total Contract not to exceed $846,190.00 DocuSign Envelope ID: 270DBE10-7F71-4999-8F68-A3FFAF83EECD Certificate Of Completion Envelope Id: 270DBE107F7149998F68A3FFAF83EECD Status: Completed Subject: Please DocuSign: C15157271 McGuire Amendment No 5.doc Source Envelope: Document Pages: 9 Signatures: 1 Envelope Originator: Supplemental Document Pages: 0 Initials: 0 Christopher Anastole Certificate Pages: 2 AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) Payments: 0 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 12.220.157.20 Record Tracking Status: Original 8/7/2017 8:26:30 AM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp John McGuire mpci@jps.net owner Security Level: Email, Account Authentication (None)Using IP Address: 47.208.207.151 Signed using mobile Sent: 8/7/2017 8:30:57 AM Viewed: 8/7/2017 8:46:33 AM Signed: 8/7/2017 8:49:08 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Elizabeth Egli elizabeth.egli@cityofpaloalto.org Managment Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/7/2017 8:49:09 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Sherry Nikzat Sherry.Nikzat@CityofPaloAlto.org Sr. Management Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/7/2017 8:49:10 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Carbon Copy Events Status Timestamp Yolanda Cervantes Yolanda.Cervantes@CityofPaloAlto.org Administrative Assistant City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/7/2017 8:49:10 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 8/7/2017 8:49:10 AM Certified Delivered Security Checked 8/7/2017 8:49:10 AM Signing Complete Security Checked 8/7/2017 8:49:10 AM Completed Security Checked 8/7/2017 8:49:10 AM Payment Events Status Timestamps City of Palo Alto (ID # 8312) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Approval of a Recycled Water Planning MOU with SCVWD and Recycled Water Addendum with Mountain View Title: Approval of a Memorandum of Understanding With the Santa Clara Valley Water District to Assess the Feasibility of Developing Water Reuse Alternatives, and an Amendment to the Recycled Water Supply Agreement With the City of Mountain View From: City Manager Lead Department: Public Works Recommendations Staff recommends that Council: 1) Approve a Memorandum of Understanding between Santa Clara Valley Water District and City of Palo Alto to assess the feasibility of various water reuse alternatives (Attachment A), and 2) Approve Amendment No. 1 (Attachment B) to the First Amended and Restated Agreement (Agreement No. C059999 – Attachment C) between the Cities of Palo Alto and Mountain View Related to Recycled Water Supply. Executive Summary Palo Alto and Santa Clara Valley Water District (Water District) are establishing a Memorandum of Understanding (MOU – Attachment A) to explore the expanded use of recycled water as an alternative local water supply for Santa Clara County. The Water District Board approved the MOU on June 27, 2017, and it is recommended for approval by Palo Alto City Council. In a related action, City staff is recommending amendments to the existing Recycled Water Supply Agreement between Mountain View and Palo Alto, the City of Palo Alto Page 2 largest partner of Palo Alto Regional Water Quality Control Plant (RWQCP). The key amendment is extending the term of the agreement to 2060, consistent with the underlying RWQCP agreement between the two cities. Background Palo Alto operates RWQCP for six partner agencies. RWQCP supplies tertiary- treated recycled water to several City-owned parks and facilities, truck-fill standpipes, Caltrans, and the City of Mountain View’s North of Bayshore recycled water distribution system. Palo Alto and the Water District are currently working on the Northwest County Recycled Water Strategic Plan to update RWQCP’s 1992 Recycled Water Master Plan. The strategic plan will include recommendations for expansion opportunities given projected demands, an evaluation of recycled water used for indirect potable reuse within Palo Alto, as well as a business plan and preliminary design for Phase III Recycled Water Pipeline Expansion through South Palo Alto and Stanford Research Park. The Water District is currently paying 90 percent of the cost for the City’s consultant contract for preparation of the strategic plan as per a previous cost sharing agreement (ID# 7024). The Water District provides review, feedback, and technical support to Palo Alto as City staff manages the consultant’s work. In conjunction with this work, the Water District would like to formalize an MOU with Palo Alto to outline high-level planning discussions being conducted between the agencies to potentially develop an additional, sustainable water supply for the Water District in Northwest Santa Clara County. At the same time, Mountain View wants to ensure its Recycled Water Supply Agreement term is extended to 2060 since Mountain View is planning to expand its non-potable recycled water program. Currently, planning-level estimates indicate the available recycled water and treated wastewater supply is enough for Palo Alto and Mountain View current use and planned recycled water expansion projects in addition to the Water District. On April 4, 2016, Palo Alto City Council considered a staff recommendation to approve several amendments to the Recycled Water Supply Agreement including the term extension (ID #6691). Council directed staff to return to Council with a more limited amendment that removed provisions regarding future capital projects specific to recycled water that will be handled in a separate agreement in the future and to attach the Basic Agreement (Attachment D), in which Mountain View’s right to the by-products of their wastewater after RWQCP treatment is set forth Section 16. City of Palo Alto Page 3 16. Rights of Parties to Use of Wastewater Products. Any party to this Basic Agreement shall have the right to acquire, at its expense, all the wastewater by-products, including wastewater for reuse that the parties require. In the event the request exceeds the available supply, each party shall be entitled to acquire wastewater by-products in proportion to the party’s percentage of wastewater input flow to the total plant flow. Council’s other comments resulted in a substantial narrowing of the topics covered by the amendment to: 1) extending the agreement to 2060, and 2) setting up a process and deadlines for charging each party, Mountain View and Palo Alto, for the incremental costs of treating water to the recycled water quality level. Currently these costs are quite small, but will be increase as the level of treatment improves, for example building a reverse osmosis system in the future to reduce the total dissolved solids. Discussion Water District and Palo Alto MOU The proposed MOU between Palo Alto and the Water District describes both agencies’ commitments to identify the requirements, issues, activities, resources, costs, and funding necessary to implement potable and non-potable water reuse alternatives. MOU provisions cover important assumptions and considerations including source water availability, permitting, reverse osmosis concentrate management, land requirements, and governance. The MOU is intended to broadly describe the mutual commitments to study the feasibility of: 1) construction and operation of an Advanced Water Purification Facility at RWQCP; 2) water recharge and reuse alternatives in the Northwest County Recycled Water Strategic Plan; and 3) future expansion of the City’s non-potable recycled water system. The MOU does not obligate either party to pursue any alternatives that are identified through the feasibility study. Depending on the outcome of the feasibility assessment, negotiations between the City and Water District may result in a more detailed MOU or comprehensive agreement. The MOU states that Palo Alto is not currently discussing or planning to discuss (during the term of this MOU) treated wastewater transfers with other agencies outside of the six RWQCP partner agencies. Terms of the proposed MOU were presented at the December 13, 2016 Water District-Palo Alto Joint Recycled City of Palo Alto Page 4 Water Committee meeting and reviewed again in summary at the June 6, 2017 meeting of the same committee. The MOU was approved by the Water District’s Board on June 27, 2017. Mountain View Recycled Water Supply Agreement Amendment No. 1 Although the Recycled Water Supply Agreement No. C059999 will not expire for 18 years; Mountain View is interested in securing a long-term recycled water supply as a critical component of expanding its recycled water distribution system to other areas of Mountain View. Recommended components of the Amendment include: 1. Extending the term of the agreement to December 31, 2060, concurrent with Mountain View’s commitment to a term extension for operating expenses and debt payments for capital improvements to the facilities covered by the Basic Agreement (Attachment D) between the cities of Mountain View, Palo Alto, and Los Altos. 2. Authorizing payment of the incremental costs of producing recycled water (e.g., additional treatment, chemical costs, costs of new regulatory requirements, etc.) by each partner agency in proportion to its usage. Palo Alto and Mountain View will establish a cost per unit of recycled water produced through a separate action which will be brought before Council for approval; the rate is expected to be effective July 1, 2020, and evaluated and adjusted annually. (Based on current costs, staff estimates charges for recycled water would be less than $0.20 per hundred cubic feet (about 748 gallons). By comparison, Palo Alto pays approximately $4.50 per hundred cubic feet of drinking water from San Francisco Public Utilities Commission.) 3. If either Palo Alto or Mountain View want to increase its recycled water allocation or wastewater entitlement beyond that in the Basic Agreement, they will meet and confer, and will not unreasonably withhold its allowance of a temporary exceedance by the other party. 4. Palo Alto and Mountain View will enter into a separate agreement to determine cost allocation for any future capital projects including replacement projects or capacity expansion projects. 5. Palo Alto and Mountain View will continue to monitor and review opportunities to increase the reliability of the recycled water system, including water storage, back-up pumping facilities, and emergency power City of Palo Alto Page 5 capabilities, and work cooperatively to incorporate improvements. Palo Alto as RWQCP Administrator will determine the cost share for improvements beyond those in the current Facility Plan. 6. If recycled water for additional uses beyond existing uses is requested, the RWQCP Administrator will determine whether the request can be accommodated and what operations and upgrades will be required. The cost to increase recycled water production capacity will be absorbed by the requesting agency. 7. Palo Alto and Mountain View agree to continue salinity reduction efforts. 8. The parties set forth an alternative dispute resolution process for disputes under the Agreement that must be exhausted prior to initiating litigation. With this report, staff has endeavored to clarify and/or eliminate the provisions Council found problematic when reviewing an earlier version of this amendment on April 6, 2016. Timeline The MOU between the Water District and City will expire December 31, 2020. With the term extension, the Palo Alto/Mountain View Recycled Water Supply Agreement will expire December 31, 2060. Policy Implications Recycled water supports the City’s sustainability and comprehensive policies on utilizing treated wastewater as a potential sustainabile water supply. Environmental Review Water District and Palo Alto MOU The MOU contemplates the conduct of planning and feasibility studies and is thus exempt from the requirements of California Environmental Quality Act (CEQA) pursuant to Section 15262 of the CEQA Guidelines, which applies to projects involving only feasibility or planning studies for future actions which have not been approved, adopted or funded. Prior to taking implementation actions on any Water Reuse Alternative identified, the Water District and the City of Palo Alto would undertake the required CEQA review. City of Palo Alto Page 6 Mountain View Recycled Water Supply Agreement Amendment No. 1 The proposed Amendment to the Recycled Water Supply Agreement with Mountain View clarifies and sets forth a process for allocating costs and responsibilities related to the use and supply of recycled water treated by the RWQCP, and for considering changes to the system. Any system changes that increase recycled water production or would result in physical changes to the environment would undergo separate CEQA review. The proposed Amendment itself involves no expansion of existing facilities and is categorically exempt from environmental review under Section 15301 of the CEQA Guidelines. Attachments: Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment B: Palo Alto Mountain View Reycled Water Extension Amendment No. 1 to Contract No. C059999 Attachment C: Palo Alto and Mountain View Recycled Water Agreement C059999 Attachment D: C2963 BasicAgreement PA_MV_LA Oct 10 1968 Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District Attachment A: MOU between Palo Alto and Santa Clara Valley Water District 1 of 8 AMENDMENT NO. 1 TO THE FIRST AMENDED AND RESTATED CONTRACT NO. C059999 BETWEEN THE CITY OF PALO ALTO AND THE CITY OF MOUNTAIN VIEW This Amendment No. 1 to the FIRST AMENDED AND RESTATED CONTRACT NO. C059999 BETWEEN THE CITY OF PALO ALTO AND THE CITY OF MOUNTAIN VIEW, is entered into ______________2017, by and between the CITY OF PALO ALTO, a chartered city and a municipal corporation of the State of California (“PALO ALTO”), and the CITY OF MOUNTAIN VIEW, a chartered city and a municipal corporation of the State of California (“MOUNTAIN VIEW”). RECITALS WHEREAS, on January 11, 2005, PALO ALTO and MOUNTAIN VIEW entered into an agreement (AGREEMENT) defining the cost sharing of the Mountain View- Moffett Area Recycled Water Facility Project, including the Project’s design and related construction expenses, the allocation of related grant revenues, and the repayment of loans; and WHEREAS, on June 18, 2007, PALO ALTO and MOUNTAIN VIEW amended and restated the entire AGREEMENT; and WHEREAS, PALO ALTO and MOUNTAIN VIEW wish to amend the AGREEMENT to extend the term of the AGREEMENT and add language defining each Party’s responsibility for the costs of operating and maintaining the recycled water portion of the Joint System. AGREEMENT NOW, THEREFORE, in consideration of the recitals and mutual promises of the Parties contained herein, PALO ALTO and MOUNTAIN VIEW agree to the below- referenced amendments to the AGREEMENT as follows: SECTION 1: The following sections of the AGREEMENT are replaced in their entirety: 1.2 Scope of AGREEMENT (a) This AGREEMENT is intended to set forth the general terms and conditions for implementation and operation of the PROJECT described in Section 1.1 of this AGREEMENT, as well as the financial obligations of each Party with respect Attachment B 2 of 8 to design, construction, construction management, State and Federal grants, and repayment of the SRF loan. (b) This AGREEMENT, including this Amendment No. 1, covers beneficial, nonpotable recycled water uses such as landscape irrigation using disinfected tertiary recycled water treated pursuant to Cal. Code Regs., Title 22, § 60301.230. This AGREEMENT does not cover activities by PALO ALTO, MOUNTAIN VIEW, or any other party to replenish groundwater resources, including spreading basins, percolation ponds, or injection through groundwater wells. Furthermore, this AGREEMENT does not cover direct potable reuse (Water Code, § 13561(b)), indirect potable reuse for groundwater recharge (Water Code, § 13561(c)), or surface water augmentation (Water Code, § 13561(d)). 1.4 Term of AGREEMENT Unless earlier terminated as provided in Section 9.3 or according to the terms set forth in Section 1.4.1, the obligations and responsibilities of the Parties commenced on January 11, 2005 and shall expire on December 31, 2060. 4.1 Recycled Water Operation and Maintenance Costs to Partner Agencies (a) Background. The RWQCP is required to produce treated wastewater of sufficient quality to meet its National Pollutant Discharge Elimination System (“NPDES”) Permit requirements for discharge to San Francisco Bay. The RWQCP’s NPDES Permit also requires the RWQCP to produce tertiary treated water of sufficient quality to meet State Title 17 and Title 22 requirements for irrigation and reuse. Historically, the RWQCP’s marginal operating and maintenance costs of recycled water production and distribution (“Marginal O&M Costs”) have been negligible and have not been charged directly to Partners who have received the recycled water. Now, the Parties wish to equitably allocate Marginal O&M Costs to the Partners using the recycled water. (b) Recycled Water Operation and Maintenance Cost Determination Process. The Marginal O&M Costs will be charged to the particular Partner agencies in proportion to their usage, as determined in Section 8.3. PALO ALTO in its capacity as the RWQCP Administrator (referred to herein as the “RWQCP Administrator”) will work cooperatively with the Partner agencies to determine the Marginal O&M Costs by December 1, 2018, and by July 1, 2019 will begin charging Partners who use recycled water. The RWQCP Administrator will evaluate and adjust the Marginal O& M Costs annually by July 1 of each year. (c) Recycled Water Production Charges. The Basic Agreement No. 2963 between PALO ALTO, MOUNTAIN VIEW, and LOS ALTOS, dated October 3 of 8 10, 1968, (“Basic Agreement”) addresses revenue from distribution of recycled water. The Marginal O&M Costs established pursuant to Section 4.1(b) of this Amendment are consistent with Section 15 of the Basic Agreement, wherein PALO ALTO, as the Administrator, determines such costs. Revenue to the RWQCP from the Marginal O&M Costs established pursuant to Section 4.1(b) shall be considered Joint System revenue for all parties to the Basic Agreement. (d) No Recycled Water Commodity Charge. There shall be no recycled water commodity charge to any Partner, as long as the receiving Partner is below its entitlement, as described in Section 16 of the Basic Agreement. Partner requests for recycled water that exceed the available recycled water supply shall be handled as described in Section 16 of the Basic Agreement. 6.2 Rights to Acquire and Sell Recycled Water (a) Right to Acquire. Section 16 of Basic Agreement addresses rights of the Parties to acquire wastewater by-products, including recycled water, from the RWQCP commensurate with the Party’s contribution of wastewater input flow to the total plant flow at the RWQCP. (b) Right to Sell. Subject to the provisions of Sections 6.1, 6.3, 6.4, and 6.5 of this AGREEMENT, MOUNTAIN VIEW and PALO ALTO maintain the right to sell recycled water, consistent with State regulations and the Water Reuse Permit, within and outside their respective jurisdictional limits provided they do not exceed their corresponding right to the use of wastewater products as set forth in Section 8.2 of this AGREEMENT. (c) Changes to Recycled Water and Wastewater Allocation and/or Entitlement. Should either MOUNTAIN VIEW or PALO ALTO desire a quantity of recycled water or wastewater that requires an increase in the current recycled water capacity allocation listed in Section 8.2 of this AGREEMENT, or the wastewater entitlement contained in Section 16 of the Basic Agreement, MOUNTAIN VIEW and PALO ALTO shall meet and confer in good faith concerning the use of their allocation or entitlement, and future plans for utilization of their allocation or entitlement. The temporary exceedance of a Party’s available allocation under Section 8.2 of this AGREEMENT, or a Party’s entitlement under Section 16 of the Basic Agreement, shall not be unreasonably withheld by MOUNTAIN VIEW or PALO ALTO, as RWQCP Administrator. Should the Parties fail to agree on such temporary use, the Administrator shall determine temporary usage allocations, consistent with the Parties’ actual usage so long as the Party not seeking a temporary exceedance is not utilizing its full Section 8.2 capacity allocation. 4 of 8 8.2 Delivery Schedules PALO ALTO, as the RWQCP Administrator, shall make recycled water available to MOUNTAIN VIEW on a demand basis, with a peak flow rate of up to two thousand eighty-five (2,085) gallons per minute (up to a total of three (3) million gallons per day), and a peak flow rate to PALO ALTO of up to six hundred ninety-five (695) gallons per minute (up to a total of one (1) million gallons per day). MOUNTAIN VIEW and PALO ALTO shall coordinate recycled water demand within their jurisdictions to maximize operational efficiency of the RWQCP. The allocations contained in this section are consistent with the rights of the Parties to use wastewater products as set forth in the Basic Agreement.” SECTION 2: The following sections are added to the AGREEMENT: 1.2.1 Future Capital Projects Future recycled water capital projects, including replacement projects, capacity expansion projects, and projects to add treatment units or improvements are not covered by this AGREEMENT. A new or modified agreement will be used to determine cost allocation and other key project parameters for the aforementioned projects. For example, PALO ALTO, MOUNTAIN VIEW, and the Santa Clara Valley Water District are evaluating the feasibility of advanced water purification at the RWQCP, and such a project, if undertaken, would require a new or modified agreement between the relevant Parties to determine cost and capacity allocations. The Parties’ consideration and exploration of these recycled water initiatives should not be interpreted to prevent the Parties from exploring other new technologies. 1.4.1 Expiration of Basic Agreement Controls Term of this AGREEMENT The Basic Agreement initial term was fifty (50) years. Addendum 8 to the Basic Agreement extended the term through December 31, 2060. The Basic Agreement is the foundation for operation of the RWQCP. If the Basic Agreement expires at any time prior to the term stated in Section 1.4 of this AGREEMENT (December 31, 2060), this AGREEMENT and all Amendments thereto shall automatically expire concurrent with the expiration of the Basic Agreement. 5.3 System Reliability MOUNTAIN VIEW and PALO ALTO acknowledge it is necessary to develop and maintain a reliable recycled water system and the RWQCP may incur capital design and construction costs to enhance reliability needs based on the nature 5 of 8 and types of use set forth in Exhibit L of the AGREEMENT. MOUNTAIN VIEW and PALO ALTO will monitor the joint system and as needs are identified, work cooperatively to incorporate improvements, including, but not limited to, water storage, backup pumping, and emergency power supply equipment. If either Party requests specific improvements to the recycled water joint system, the RWQCP Administrator will review and determine if the request is above and beyond the needs for the type of use set forth in the Facility Plan. The RWQCP Administrator will determine the cost share for improvements beyond the needs for the type of use set forth in the Facility Plan. The RWQCP, MOUNTAIN VIEW, and PALO ALTO will not unreasonably withhold approval of, and will contribute funding for, improvements that will increase system reliability and enhance the long-term use of recycled water. 5.4 Recycled Water Transmission Line to Mountain View Either Party may use the transmission line, without additional cost, to accept delivery of higher amounts of recycled water than stated in Sections 8.2 and 8.3 so long as the other (or second) Party’s ability to obtain its Section 8.2 recycled water capacity allocation is not impacted. If the second Party cannot obtain its Section 8.2 capacity allocation, the first Party must reduce incremental deliveries until the second Party can secure its Section 8.2 capacity allocation. 8.3 Usage (c) Currently, all recycled water supplied by the RWQCP to Partners is used for irrigation, construction project uses, and decorative water impoundments and features, in compliance with the RWQCP’s existing Water Reuse Permit from the RWQCB. Both the Water Reuse Permit and the Facility Plan acknowledge potential additional types of water reuse, such as dual plumbing, in the future. (d) If MOUNTAIN VIEW or PALO ALTO request additional types of use of recycled water to be supplied by the RWQCP, the RWQCP Administrator will review the RWQCP’s Water Reuse Permit, operational capability, and conditions and capacities of its facilities, and determine if the request can be accommodated. The RWQCP Administrator has the right to deny such request in favor of the safe and proper operation of wastewater treatment priorities to meet regulatory requirements. If the RWQCP Administrator determines it can accommodate such request, the RWQCP Administrator will review the operations and the type of upgrades needed, and determine the requesting Party’s costs for the upgrades and required operational and maintenance funding needed to accommodate the request. The requesting Party shall pay for any improvements needed for the RWQCP to provide recycled water for additional types of uses, including the marginal costs of production. 6 of 8 (e) MOUNTAIN VIEW has requested the addition of dual plumbing as part of its reuse, and the RWQCP has determined that dual plumbing is a permitted use under its Water Reuse Permit (Exhibit A) and current State Title 17 and 22 regulations. The total quantity, schedule, and rate of delivery of recycled water to MOUNTAIN VIEW shall remain unchanged. (f) MOUNTAIN VIEW and PALO ALTO agree to enforce any and all regulatory requirements for dual plumbing, landscape irrigation and other recycled water uses within each Party’s jurisdiction, including, but not limited to, the following requirement for dual-plumbed buildings: both Parties shall require an on- site, automatically activated potable water backup to be used when recycled water service is disrupted, shutdown, or is otherwise unavailable. 8.6 Level of Service (d) MOUNTAIN VIEW and PALO ALTO acknowledge their mutual goal of continuing to reduce the total dissolved solids (TDS), sodium, and chloride levels in the RWQCP’s recycled water over time. To that end, in 2010, MOUNTAIN VIEW and PALO ALTO each adopted a Recycled Water Salinity Reduction Policy to identify and pursue all cost-effective measures to reduce the salinity of the recycled water delivered from the RWQCP. These efforts resulted in declines in the salinity levels at the RWQCP. To continue this progress, MOUNTAIN VIEW and PALO ALTO agree to maintain their ongoing salinity level monitoring and reduction efforts for the term of the Basic Agreement, or until both Parties mutually determine that such efforts are no longer needed. In recognition of salinity reduction efforts already undertaken, each Party reserves the right to prioritize its capital improvement projects in its sole discretion. Salinity reduction efforts may include, but are not limited to: 1.) targeted public and private sewer system rehabilitation and/or repair; 2.) targeted investigation of saline water infiltration; 3.) targeted investigation and monitoring of saline water dischargers; outreach to dischargers with higher than permitted TDS, sodium, and chloride constituents; and enforcement of each agency’s sewer use ordinance; 4.) consideration of total sodium, chloride, and TDS load as criteria for prioritizing sewer rehabilitation as contemplated in each agency’s sewer master plan updates; and 7 of 8 5.) other necessary controls to reduce salinity to mutually acceptable and achievable levels. 9.15 Dispute Resolution Should any dispute or controversy arise between the Parties with respect to this AGREEMENT that cannot be settled after engaging in good faith negotiations, the Parties agree to resolve the dispute in accordance with the following: (a) Each Party shall designate a senior management or executive level representative to negotiate any dispute; (b) The representatives shall attempt, through good-faith negotiations, to resolve the dispute by any means within their authority; (c) If the issue remains unresolved after sixty (60) days of good- faith negotiations, the Parties shall attempt to resolve the dispute by negotiation between legal counsel. If the above process fails, the Parties shall resolve any remaining disputes through mediation to expedite the resolution of the dispute. (d) The mediation process shall provide for the selection within thirty (30) days by both Parties of a disinterested third person as mediation, shall commence within thirty (30) days and shall be concluded within sixty (60) days from the commencement of the mediation. Mediation shall be nonbinding. (e) The Parties shall equally bear the costs of any third party in any alternative dispute resolution process. (f) The alternative dispute resolution process is a material condition to this AGREEMENT and must be exhausted prior to either Party initiating legal action. This alternative dispute resolution process is not intended to nor shall be construed to change the time periods for filing a claim or action specified by Government Code Sections 900, et seq.” SECTION 3: All other sections of the AGREEMENT remain in full force and effect. /// /// /// 8 of 8 This Amendment No. 1, made and entered into this _______ day of _____________ 2017, by and between: “CITY OF PALO ALTO”: a chartered city and a municipal corporation of the State of California By: City Manager APPROVED AS TO FORM: City Attorney “CITY OF MOUNTAIN VIEW”: a chartered city and a municipal corporation of the State of California By: ________________________________ Public Works Director By: City Manager APPROVED AS TO FORM: City Attorney FINANCIAL APPROVAL: Finance and Administrative Services Director Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View 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View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment C: Palo Ato and Mountain View Recycled Water Agreement C059999 Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos Attachment D: Basic Agreement between Palo Alto, Mountain View and Los Altos City of Palo Alto (ID # 8127) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Approval of Airport Contract With DeSilva Gates Construction LP and Budget Amendment Title: Approval of Contract Number C18167808C With DeSilva Gates Construction LP in the Amount of $9,243,797, Amendment Number 2 With Mead & Hunt, Inc. Contract Number C15155208B, and Amendment Number 4 With C&S Engineers, Inc. Contract Number C15155208A for the Airport Apron Reconstruction Capital Improvements Program Project AP-16000; Adoption of a Resolution Authorizing the City Manager to Execute Future Grant Agreements Offered by the California Department of Transportation for Airport Improvement Program Matching Grant Funds for Apron Reconstruction at the Palo Alto Airport, and Authorizing the City Manager to Execute Supporting Documents or Contracts Associated With the Application and Acceptance of Said Grant Funds; Approval of a Budget Amendment in the Airport Enterprise Fund; and Approval of Findings that the Proposed Project is Exempt From Environmental Review under California Environmental Quality Act (CEQA) Guidelines 15301 and 15302 and Federal Aviation Administration (FAA) Order 1050.1F From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Adopt findings that, as a project that involves only the replacement of an existing structure,the Airport Apron Reconstruction Project (AP-16000) meets the requirements of the National Environmental Protection Act (NEPA) and the California Environmental Quality Act (CEQA) by qualifying for categorical exclusions (Attachments A and B, respectively); City of Palo Alto Page 2 2.Approve and authorize the City Manager or his designee to execute contract C18167808C with DeSilva Gates Construction LP, (Attachment C)in the amount not to exceed of $8,403,452 for the Airport Apron Reconstruction Project (AP-16000); 3.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract C18167808C with DeSilva Gates Construction LP.for related, additional but unforeseen work that may develop during the project, the total value of which shall not exceed $840,345; 4.Approve Amendment No. Two to Mead & Hunt, Inc. Contract C15155208B (Attachment D)to increase the contract by $597,162 for a total not-to- exceed amount of $847,162 for inspection and construction management services related to the Airport Apron Reconstruction Project (AP-16000); and 5.Approve Amendment No. Four to C & S Engineers, Inc. Contract C15155208A (Attachment E) to increase the contract by $269,456 for a total not-to-exceed amount of $1,727,785 for construction administration services related to the Airport Apron Reconstruction Project (AP-16000); and 6.Amend the Fiscal Year 2018 Budget Appropriation Ordinance for the Airport Enterprise Fund by: a.Increasing the estimate for Revenue from the Federal Government in the amount of $4,239,374; b.Increasing the Capital Improvement Airport Apron Reconstruction Project (AP-16000) appropriation in the amount of $4,680,415;and c.Decreasing the fund balance in the amount of $441,042. 7.Adopt a Resolution Authorizing the City Manager to Execute Grant Agreements Offered to the City of Palo Alto by the California Department of Transportation for Airport Improvement Program (AIP) Matching Grant Funds to be used for Apron Reconstruction Project (Attachment I). City of Palo Alto Page 3 Executive Summary Since the transfer of the management of the Palo Alto Airport (PAO) from Santa Clara County in August 2014, the City of Palo Alto has been working with the Federal Aviation Administration (FAA) to rehabilitate and update PAO to current FAA standards. To meet FAA design standards, correct deficiencies and ultimately improve airport safety, a multi-phase Airport Apron Reconstruction Project to design and reconstruct the PAO apron was established. In support of completing the project sooner, the FAA is encouraging the reconstruction of more of the apron in this phase than originally planned and is willing to fund up to 90% of the project through a reimbursable grant. With Council’s approval, the northern section of the apron will be reconstructed, including the removal and replacement of existing,outdated fuel system components, airplane washrack, laying conduit for future solar installation and constructing a pavement area south of the existing apron. Background As a General Aviation Reliever Airport for three primary Bay Area airports,PAO is an important airport in the National Plan of Integrated Airport System (NPIAS), thereby qualifying for FAA airport improvement grant money for capital improvements necessary for continued safe and efficient operation of an airport. If eligible, 90% of project costs could be awarded. In accepting grant money PAO is required by law to meet grant assurances (Attachment F)and operate the airport in compliance with FAA requirements.The California Department of Transportation (“DOT”), pursuant to Public Utilities Code Section 21683.1, is authorized to provide AIP matching grants of up to five percent (5%) of FAA grant amounts.Staff will apply for and seek the maximum amount of state matching grant funds if these funds are available from DOT (Attachment I). The Airport Apron Reconstruction Project, recommended as an important safety- related maintenance and modernization project in the results of an airport infrastructure analysis, was designed to be constructed in as many as five phases dependent on financing and the logistics of moving tie-downs and mobilization. The FAA acknowledged the difficulties of protecting-in-place outdated, underground fuel lines and the need to replace the airplane washrack;recognized the importance of future solar installation at PAO and the pecuniary implications City of Palo Alto Page 4 of temporarily paving a section of the apron and returning later to construct permanent pavement, thereby promoting inclusion of these tasks in the project scope and grant application. To provide on-call design services, construction administration, environmental studies,and planning functions required for FAA Airport Capital Improvement Program projects, PAO contracts with consultants C &S Engineers, Inc. and Mead & Hunt, Inc.On-call consultant services contracts that are compliant with FAA requirements are eligible for 90% reimbursement. To support operations and provide seed funding for capital improvement projects the General Fund has loaned PAO $3.1 million since the City took over Airport operations from Santa Clara County. The table to the right shows the breakdown of loans by fiscal year, and it is anticipated that the Airport Fund will begin to repay the General Fund in Fiscal Year 2020. Discussion Project Description Pending Council approval this phase of the Airport Apron Reconstruction Project would go beyond the removal and replacement of existing, outdated fuel system components,replacing the airplane washrack,laying conduit for future solar installation, rebuilding the asphalt pavement of the northwest section of the apron, and constructing a temporary pavement area south of the existing apron. With approval, this phase would also include laying conduit for solar and rebuilding the asphalt pavement of the northeast section of the apron and constructing a permanent pavement section in the area south of the existing apron, meeting FAA design standards, correcting deficiencies, increasing airport safety.The areas impacted by Phase I of this project are highlighted in Attachment H. Bid Process On July 3, 2017, a notice inviting formal bids (IFB) for the Apron Construction Phase I Plan Set A was posted at City Hall and on the City’s eProcurement system. Fiscal Year Loan Amount 2011 $300,000 2013 $310,000 2014 $325,000 2015 $760,000 2016 $515,601 2017 $704,150 2018 $200,000 TOTAL $3,114,751 City of Palo Alto Page 5 The bidding period was 28 days.Bids were received from four contractors on August 1, 2017 as listed on the attached Bid Summary (Attachment G). Summary of Bid Process Bid Name/Number IFB167808C Proposed Length of Project 175 days Number of notices sent to Contractors and Builder’s Exchanges via City’s eProcurement system 569 Number of Bid Packages downloaded by Contractors 19 Number of Bid Packages downloaded by Builder’s Exchanges 8 Total Days to Respond to Bid 28 Mandatory Pre-Bid Meeting Yes Number of Company Attendees at Pre-Bid Meeting 6 Number of Bids Received:4 Bid Price Range $8,403,451 to 9,025,954 Staff has reviewed the bids submitted and recommends the Base Bid and all Alternates, totaling $8,403,452 submitted by DeSilva Gates Construction LP be accepted, and DeSilva Gates Construction LP be declared the lowest responsible bidder. The low bid is approximately 3.7% less than the project estimate of $8,725,887.The change order amount of $840,345 (10 percent of the total contract)is requested for related additional, but unforeseen work that may develop during the project and brings the total construction contract to $9,243,797. Consultant services have been vital to the successful delivery of Airport Capital Improvement Program projects, providing on-call design services, construction administration, environmental studies, and planning functions required for FAA Airport Capital Improvement Program projects. To design the additional washrack and fuel system components as well as to add funding for this phase of construction to their construction administration responsibilities, the contract with C & S Engineers, Inc.will need to be amended by $269,456 for a total not-to- exceed amount of $1,727,456. Similarly, the contract with Mead & Hunt, Inc., will need to be amended to add funding of $597,162 for a total not-to-exceed amount City of Palo Alto Page 6 of $847,162 for construction management. FAA reimbursement for services under these contracts is anticipated to be 90% or $779,956. Resource Impact As part of the FY 2018 Adopted Capital Budget, the Airport Apron Reconstruction project (AP-16000) was budgeted at $5,630,490, which is insufficient to award and amend the contracts necessary to complete Phase I at a total cost of $10,110,415.Therefore additional funding of $4,680,415 will need to be appropriated to the project, offset by $4,239,374 from FAA grant revenue and $441,042 in fund balance from the Airport Fund. In FY 2018 a recommended General Fund loan of $200,000 was approved bringing the total loan to $3.1 million. Fund balance is anticipated to be available pending reimbursements from the FAA for prior year capital expenses. Due to the nature of a contingency, FAA grant funding for the construction contingency cannot be requested until an action to use contingency funds is exercised. Therefore, the current FAA grant application will not include these potential costs; however, staff will seek FAA approval for reimbursement prior to providing notices to proceed on change order requests. Environmental Review National Environmental Policy Act Based on FAA direction, C & S Engineers, Inc. prepared documentation necessary to comply with National Environmental Policy Act (NEPA) requirements for the proposed apron rehabilitation project at the Palo Alto Airport (PAO). As a project that involves only the rehabilitation and minor expansion of existing facilities it qualified as a categorical exclusion (CATEX) under FAA Order 1050.1F- Environmental Impacts: Policies and Procedures. At the request of the FAA, two separate CATEX forms were submitted for review. The initial CATEX form, which only focused on the rehabilitation of the existing pavement and ancillary facilities, was approved on 1/31/17. A second CATEX form was submitted for the minor apron expansion only. In support of that CATEX, a Western Burrowing Owl Habitat Assessment was prepared. The assessment evaluated potential impacts of the proposed expansion on the Western Burrowing Owl, as they are known to frequent similar habitat. The assessment concluded that were was no presence of the species but recommended that a qualified biologist conduct preconstruction City of Palo Alto Page 7 surveys 30 days prior to construction to confirm that no owls have moved into the area.The CATEX was approved by the FAA on 4/19/17. California Environmental Quality Act Environmental Assessment: Exempt From the Provisions of the California Environmental Quality Act (CEQA) per Guideline Section 15302 (Replacement or Reconstruction) The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the project is categorically exempt from the provisions of CEQA per Section 15301 (Existing Facilities). See the Notice of Exemption included in Attachment B, which was filed with the County following Minor Architectural Review approval of the project. Policy Implications This project is consistent with City Council’s 2017 priorities: Infrastructure. Attachments: ·Attachment A: National Environmental Protection Act (NEPA) ·Attachment B: California Environmental Quality Act (CEQA) ·Attachment C: DeSilva Gates Construction LP -Contract C18167808C ·Attachment D: Mead & Hunt Inc. -Amendment No. 2 C15155208B ·Attachment E: C&S Engineers Inc. -Amendment No. 4 C15155208A ·Attachment F: FAA Airport Grant Assurances ·Attachment G: Bid Summary ·Attachment H: Apron Reconstruction -Phase I Project Map ·Attachment I: RESO DOT Grant Agreement Western-Pacific RegionAirports Division San Francisco Airports District Office1000 Marina Boulevard, Suite 220 Brisbane, CA 94005-1835 April 19, 2017 Mr. Andrew Swanson Airport Manager Palo Alto Airport 250 Hamilton Avenue Palo Alto, CA 94301 Subject: Environmental Evaluation of Palo Alto Airport Project: Aircraft Apron Expansion Dear Mr. Swanson: The Federal Aviation Administration (FAA) has reviewed the environmental information you submitted for the Palo Alto Airport Project: Aircraft Apron Expansion. Our office issued a conditional approval of a “pen-and-ink” change to add this project to your airport layout plan by letter of April 12, 2017. The FAA has determined the proposed project is Categorically Excluded pursuant to FAA Order 1050.1F as it relates to the National Environmental Policy Act of 1969, as amended (NEPA). Therefore, no further federal environmental disclosure documentation for this project is necessary for NEPA purposes. This letter notifies you that the proposed project has complied with NEPA only. This is not a notice of final project approval of funding availability. If you have any questions regarding this matter I am available at 650-827-7612, or email me at Douglas.Pomeroy@faa.gov. Sincerely, Original signed by Douglas R. Pomeroy Environmental Protection Specialist Chron 611 621 Site 2 Attachment A Attachment A U.S. Deportment of Transportation Federal Aviation Administration January 31, 2017 Mr. Andrew Swanson Airport Manager Palo Alto Airport 250 Hamilton A venue Palo Alto, CA 94301 Western-Pacific Region Airports Division San Francisco Airports District Office 1000 Marina Boulevard, Suite 220 Brisbane, CA 94005-1835 Subject: Environmental Evaluation In Part of Palo Alto Airport Project: Aircraft Parking Apron Reconstruction Dear Mr. Swanson: The Federal Aviation Administration (FAA) has reviewed the environmental information you submitted for the Palo Alto Airport Project: Aircraft Parking Apron Reconstruction. Most of this project would occur on existing pavement, but some of the project is proposed for areas that are not on existing pavement. The portion of the project on existing pavement is depicted as aircraft parking apron on the most recent FAA conditionally-approved Airport Layout Plan (ALP) on file with our office dated Septe1uber 18, 2014. The portion of the project that is not currently paved is on undeveloped grassland and is not depicted as future aircraft parking apron on the most recent FAA conditionally-approved ALP (See Enclosure 1). Therefore, for the areas on existing pavement only, the FAA has detennined the proposed project is Categorically Excluded pursuant to FAA Order 1050.1 Fas it relates to the National Environmental Policy Act of 1969, as amended (NEPA). Therefore, no further federal environmental disclosure documentation for NEPA purposes is necessary for the project areas on existing pavement. For the proposed airport parking apron areas that are currently grassland, and not depicted as future aircraft parking apron on the FAA conditionally-approved ALP, please work with our San Francisco Airports District Office Airport Planner for your airport, Katherine Kennedy, telephone 650-827-7611 , e-mail katherine.kennedy@faa.gov, to get the remaining proposed apron area depicted as future aircraft apron on a FAA-approved ALP. Once those areas are depicted on a FAA conditionally-approved ALP, please submit an additional Documented Categorical Exclusion form to cover those areas. l recommend that the additional Documented Categorical Exclusion include an expanded preconstruction biological survey, which includes burrowing owls and all birds protected by the Migratory Bird Treaty Act. This is because a Migratory Bird Treaty Act permit is required to disturb or remove an active nest of any migratory bird, not just burrowing owls. l recommend that you conduct at least one migratory nesting bird survey not more than 30 days in advance of construction if you propose to conduct construction in the grassland areas between February l and August 31. This preconstruction survey should also fo llow the California Department of Fish and Wildlife Staff Report on Burrowing Owl Mitigation (2012). If burrowing owls or other migratory birds are found to be nesting during the monitoring survey, contact the California Department of Fish and Wildlife, the U.S. Fish and Wildlife Service, and this office for further assistance regarding how to proceed. This letter notifies you that the portion of the proposed project on existing paved surfaces has complied with NEPA only. This is not a notice of final project approval of funding availability for the rehabilitation of the existing apron. As stated above, the development of additional apron on undeveloped grassland cannot proceed until after the proposed additional apron is depicted on an updated ALP and an additional Documented Categorical Exclusion for that area is submitted, evaluated, and accepted by the FAA as adequate documentation to comply with the NEPA. If you have any questions regarding this matter I am available at 650-827-7612, or email me at Douglas.Pomeroy@faa.gov. Sincerely, Original signed by Douglas R. Pomeroy Environmental Protection Specialist Enclosure: Annotated diagram of portion of Palo Alto Airport, Airport Layout Plan Chron 611 62 1 Site 2 2 Attachment B Santa Clara. County -Clerk-Recorder Office State of California County of Santa Clara Office of the County Clerk-Recorder Business Division File Number: ENV20876 ENVIRONMENTAL FILING No. of Pages: 2 Total Fees: $50.00 County Government Center 70 West Hedding Street, E. Wing, 1st Floor San Jose, California 95110 (408) 299-5688 Fiie Date: 05/30/2017 Expires: 06/29/20.17 CEQA DOCUMENT DECLARATION REGINA ALCOMENDRAS, Clerk-Recorder · By: Mike Louie, Deputy Clerk-Recorder ENVIRONMENTAL FILING FEE RECEIPT PLEASE COMPLETE THE FOLLOWING: 1. LEAD AGENCY: City of Palo Alto 2. PROJECT TITLE: Palo Alto Airport Apron ~econstruction 3. APPLICANT NAME: City of Palo Alt~, Publi.c Works Engineering, Airport Division PHONE: 650-329-26187 4. APPLICANT ADDRESS: 1925 Embarcadero Road ,Palo Alto, CA 94303 s~ PROJECT APPLICANT IS A: Iii Local Public Agency D School District a Other Special District D State Agency D Private Entity 6. NOTICE TO BE POSTED FOR 30' DAYS. 7. CLASSIFICATION OF ENVIRONMENTAL DOCUMENT a. PROJECTS THAT ARE SUBJECT TO DFG FEES 0 1. ENVIRONMENTAL IMPACT REPORT (PUBLIC RESO!.!RCES CODE §21152) 0 2. NEGATIVE DECLARATION (PUBLIC RESOURCES CODE §21080(C) . D 3. APPLICATION FEE WATER DIVERSION (STATE WATER RESOUR<;ES CONTROL SOARD ONLY) 0 4. PROJECTS SUBJECT TO CERTIFIED REGULATORY PROGRAMS 0 5. COUNTY ADMINISTRATIVE FEE (REQUIRED FOR a-1 THROUGH a-4 ABOVE) Fish & Game Code §711.4( e) · . . b. PROJECTS THAT ARE EXEMPT FROM DFG FEES IEJ ~. NOTICE OF EXEMPTION ($50.00 <?OUNTY ADMINISTRATwE FEE REQUIRED) $ 3,078.25 $ 2,216.25 $ 850.00 -$.1,046.50 $ 50.00 $ 50.00 0 2. A COMPLETED "CEQA FILING FEE NO EFFECT DETERM.INATION FORM" FROM THE DEPARTMENT OF FISH & GAME, DOCUMENTING THE DFG'S DETERMINATION THAT THE PROJECT WILL HAVE NO EFFECT ON FISH, WILDLIFE AND HABITAT, OR AN OFFICIAL, DATED RECEIPT/· PROOF OF· PAYMENT SHOWING PREVIOUS PAYMENT OF THE DFG FILING FEE FOR THE *SA.ME PROJE~T .IS ATTACHED ($50.00. COUNTY AD~INISTRA TIVE FEE REQUIRE;D) DOCUMENT TYPE: 0 ENVIRONMENTAL IMPACT REPORT D NEGATIVE DECLARATION $ 50.00 c: NOTICES THAT ARE NOT SUBJECT TO DFG FEES OR COUNTY ADMINISTRATIVE FEES D NOTICE OF PREPARATION Cl NOTICE OF INTENT NO FEE . $ 0.00 $ 0.00 $ 0.00 ·$ 0.00 $ 0.00 $· 50.00 $ ___ o_.o_o __ $ __ __..N ..... O .... F ... E._E 8. OTHER: _________________________ FEE (!~APPLICABLE): $ ____ _ 9. i:oTAL RECEIVED ....................................................... ,................................................................................................ $ 50.00 *NOTE: "SAME PROJECT' MEANS~ CHANGES. IF. THE DOCUMENT SUBMlni;D IS NOT THE SAME {OTHER THAN DATES). A "NO EFFECT DETERMINATION" LETTER FROM THE DEPARTMENT OF FISH AND GAME fOR THE SUBSEQUENT FILING OR THE APPROPRIATE FEES ARE REQUIRED. THIS FORM" MUST BE COMPLETED AND ATTACHED TO THE FRONT OF ALL CEQA DOCUMENTS LISTED ABOVE CINCLUDING ~) - Sl)BMITIED FOR FILING •. WE WILL NEED AN ORIGINAL {WET SIGNATURE) AND lWO (2) COPIES. (YOUR ORIGINAL WILL BE RETURNED TO YOU AT THE TIME OF FILING.) -- CHECKS FOR ALL FE;ES SHOULD BF MADE PAYABLE TO: SANTA CLARA CO~NTY CLERK-RECORDER I• PLEASE NOTE: FEES ARE ANNUALLY ADJUSTED (Fish & Game Code §711.4(b); PLEASE CHECK WITH THIS OFFICE AND THE DEPARTMENT OF FISH AND GAME FOR THE LATEST FEE· INFORMATION. · " •. : NO PROJECT SHALL BE OPERA.TIVE, VESTED, OR FINAL, NOR SHALL LOCAL GOVERNMENT PERMITS FOR THE PROJECT BE VALID, · . UNTtL'THE FILING FEES REQUIRED PURSUANT TO THIS SECTION ARE PAID." Fish & Game Code §711.4(c)(3) . (Feea Effective 01-01-2017) ·~··· .. • I' CITY OF PALO Notice of Exemption ALTO Project Title: Palo Alto Airport Apron Reconstruction Project Location (include county): 1925 Embarcadero Road, Palo Alto, CA 94303 (Santa Clara Co.) Project Description: The project includes reconstruction of a portion of the aircraft parking apron and replacement of the apron security lighting. Following reconstruction, the aircraft tie-downs would be re-installed and the tie down areas re-marked to comply with FAA standards. A small area within the fenced airport boundary would be paved that is not currently paved to allow the airport to maintain the same tie-down capacity while complying with FAA standards for the tie-down dimensions. Name of Public Agency Approving Project: City of Palo Alto Name of Person or Agency Carrying Out Project: City of Palo Alto, Public Works Engineering, Airport Division Exempt Status: (check one) D Ministerial (Sec. 21080(b )( 1 ); 15268); D Declared Emergency (Sec. 21080(b)(3); 15269(a)); D Emergency Project (Sec. 21080(b)(4); 15269(b)(c)); 1tJ Categorical Exemption: 15302 Reconstruction or Replacement D Statutory Exemptions. State code number Reasons why project is exempt: Categorical Exemption Class 2 consists of replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the one replaced and will have substantially the same purpose and capacity as the structure replaced. The proposed project includes reconstruction of the existing apron parking facility area and its replacement in the same location. Although there is a minor additional paved area proposed within the facility fenceline, this paving would not increase the capacity of the parking facility area to allow for more tie-downs. The total airplane tie-down capacity would remain unchanged but is being re-marked to comply with Federal Aviation Administration standards. The light poles at the airport would also be replaced with new light poles. The number of poles and type of poles would similar to existing and replaced in approximately the same location but the light fixtures used will be more energy efficient. The photometric studies included in the project plans on file with the City show that the new lighting would not result in any spillover lighting beyond the property line of the airport. Project Planner: _Claire Hodgkins, Project Planner_ Email: Claire.hodgkins@cityofpaloalto.org If filed by applicant: 1. Attach certified document of exemption finding. 2. Has a Notice of Exemption been filed by the public agency approving the project? D Yes 181 N/A Associate Planner May 17, 2017 Signature (Public Agency) Title Date Invitation for Bid (IFB) Package 1 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT Contract No. C18167808C Apron Reconstruction Phase 1- (Bid Set A) (Re-Bid) Project Attachment C Invitation for Bid (IFB) Package 2 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS…………………………………….…………..6 1.1 Recitals…………………………………………………………………………………………………………………….6 1.2 Definitions……………………………………………………………………………………………………………….6 SECTION 2 THE PROJECT………………………………………………………………………………………………………...6 SECTION 3 THE CONTRACT DOCUMENTS………………………………………………………………………………..7 3.1 List of Documents…………………………………………………………………………………………….........7 3.2 Order of Precedence……………………………………………………………………………………………......7 SECTION 4 CONTRACTOR’S DUTY…………………………………………………………………………………………..8 4.1 Contractor's Duties…………………………………………………………………………………………………..8 SECTION 5 PROJECT TEAM……………………………………………………………………………………………………..8 5.1 Contractor's Co-operation………………………………………………………………………………………..8 SECTION 6 TIME OF COMPLETION…………………………………………………………………………………….......8 6.1 Time Is of Essence…………………………………………………………………………………………………….8 6.2 Commencement of Work…………………………………………………………………………………………8 6.3 Contract Time…………………………………………………………………………………………………………..8 6.4 Liquidated Damages…………………………………………………………………………………………………8 6.4.1 Other Remedies……………………………………………………………………………………………………..9 6.5 Adjustments to Contract Time………………………………………………………………………………….9 SECTION 7 COMPENSATION TO CONTRACTOR……………………………………………………………………….9 7.1 Contract Sum……………………………………………………………………………………………………………9 7.2 Full Compensation……………………………………………………………………………………………………9 SECTION 8 STANDARD OF CARE……………………………………………………………………………………………..9 8.1 Standard of Care…………………………………………………………………………………..…………………9 SECTION 9 INDEMNIFICATION…………………………………………………………………………………………..…10 9.1 Hold Harmless……………………………………………………………………………………………………….10 9.2 Survival…………………………………………………………………………………………………………………10 SECTION 10 NON-DISCRIMINATION……..………………………………………………………………………………10 10.1 Municipal Code Requirement…………….………………………………..……………………………….10 SECTION 11 INSURANCE AND BONDS.…………………………………………………………………………………10 Invitation for Bid (IFB) Package 3 Rev. March 17, 2017 CONSTRUCTION CONTRACT 11.1 Evidence of Coverage…………………………………………………………………………………………..10 SECTION 12 PROHIBITION AGAINST TRANSFERS…………………………………………………………….…11 12.1 Assignment………………………………………………………………………………………………………….11 12.2 Assignment by Law.………………………………………………………………………………………………11 SECTION 13 NOTICES …………………………………………………………………………………………………………….11 13.1 Method of Notice …………………………………………………………………………………………………11 13.2 Notice Recipents ………………………………………………………………………………………………….11 13.3 Change of Address……………………………………………………………………………………………….12 SECTION 14 DEFAULT…………………………………………………………………………………………………………...12 14.1 Notice of Default………………………………………………………………………………………………….12 14.2 Opportunity to Cure Default…………………………………………………………………………………12 SECTION 15 CITY'S RIGHTS AND REMEDIES…………………………………………………………………………..13 15.1 Remedies Upon Default……………………………………………………………………………………….13 15.1.1 Delete Certain Services…………………………………………………………………………………….13 15.1.2 Perform and Withhold……………………………………………………………………………………..13 15.1.3 Suspend The Construction Contract…………………………………………………………………13 15.1.4 Terminate the Construction Contract for Default………………………………………………13 15.1.5 Invoke the Performance Bond………………………………………………………………………….13 15.1.6 Additional Provisions……………………………………………………………………………………….13 15.2 Delays by Sureties……………………………………………………………………………………………….13 15.3 Damages to City…………………………………………………………………………………………………..14 15.3.1 For Contractor's Default…………………………………………………………………………………..14 15.3.2 Compensation for Losses…………………………………………………………………………………14 15.4 Suspension by City……………………………………………………………………………………………….14 15.4.1 Suspension for Convenience……………………………………………………………………………..14 15.4.2 Suspension for Cause………………………………………………………………………………………..14 15.5 Termination Without Cause…………………………………………………………………………………14 15.5.1 Compensation………………………………………………………………………………………………….15 15.5.2 Subcontractors………………………………………………………………………………………………..15 15.6 Contractor’s Duties Upon Termination………………………………………………………………...15 SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES……………………………………………………………16 16.1 Contractor’s Remedies……………………………………..………………………………..………………….16 Invitation for Bid (IFB) Package 4 Rev. March 17, 2017 CONSTRUCTION CONTRACT 16.1.1 For Work Stoppage……………………………………………………………………………………………16 16.1.2 For City's Non-Payment…………………………………………………………………………………….16 16.2 Damages to Contractor………………………………………………………………………………………..16 SECTION 17 ACCOUNTING RECORDS………………………………………………………………………………….…16 17.1 Financial Management and City Access………………………………………………………………..16 17.2 Compliance with City Requests…………………………………………………………………………….17 SECTION 18 INDEPENDENT PARTIES……………………………………………………………………………………..17 18.1 Status of Parties……………………………………………………………………………………………………17 SECTION 19 NUISANCE……………………………………………………………………………………………………….…17 19.1 Nuisance Prohibited……………………………………………………………………………………………..17 SECTION 20 PERMITS AND LICENSES…………………………………………………………………………………….17 20.1 Payment of Fees…………………………………………………………………………………………………..17 SECTION 21 WAIVER…………………………………………………………………………………………………………….17 21.1 Waiver………………………………………………………………………………………………………………….17 SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS……………………………….18 22.1 Governing Law…………………………………………………………………………………………………….18 22.2 Compliance with Laws…………………………………………………………………………………………18 22.2.1 Palo Alto Minimum Wage Ordinance…………….………………………………………………….18 SECTION 23 COMPLETE AGREEMENT……………………………………………………………………………………18 23.1 Integration………………………………………………………………………………………………………….18 SECTION 24 SURVIVAL OF CONTRACT…………………………………………………………………………………..18 24.1 Survival of Provisions……………………………………………………………………………………………18 SECTION 25 PREVAILING WAGES………………………………………………………………………………………….18 SECTION 26 NON-APPROPRIATION……………………………………………………………………………………….19 26.1 Appropriation………………………………………………………………………………………………………19 SECTION 27 AUTHORITY……………………………………………………………………………………………………….19 27.1 Representation of Parties…………………………………………………………………………………….19 SECTION 28 COUNTERPARTS………………………………………………………………………………………………..19 28.1 Multiple Counterparts………………………………………………………………………………………….19 SECTION 29 SEVERABILITY……………………………………………………………………………………………………19 29.1 Severability………………………………………………………………………………………………………….19 SECTION 30 STATUTORY AND REGULATORY REFERENCES …………………………………………………..19 Invitation for Bid (IFB) Package 5 Rev. March 17, 2017 CONSTRUCTION CONTRACT 30.1 Amendments of Laws…………………………………………………………………………………………..19 SECTION 31 WORKERS’ COMPENSATION CERTIFICATION………………………………………………….….19 31.1 Workers Compensation…………………………………………………………………………………….19 SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS………………………………..…20 32.1 General Notice to Contractor…………………………………………………………………………….20 32.2 Labor Code section 1771.1(a)…………………………………………………………………………….20 32.3 DIR Registration Required…………………………………………………………………………………20 32.4 Posting of Job Site Notices…………………………………………………………………………………20 32.5 Payroll Records…………………………………………………………………………………………………20 Invitation for Bid (IFB) Package 6 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on August 28, 2017 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and DeSilva Gates Constriction LP ("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 Limited Partnership duly organized and in good standing in the State of California, Contractor’s License Number 704195 and Department of Industrial Relations Registration Number 1000003628. 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 July 3, 2017, City issued an Invitation for Bids (IFB167808C) to contractors for the Apron Reconstruction Phase 1- (Bid Set A)(Re-bid) (“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 Apron Reconstruction Phase 1- (Bid Set A) Project, located at 1925 Embarcadero Road, Palo Alto, CA. 94303 ("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 ninety calendar days (90) for the base bid items, within sixty calendar days(60) for Alternate 1 bid items, within fifteen calendar days(15) for Alternate 2 bid items, within six calendar days(6) for Alternate 3 bid items, and within four calendar days(4) for Alternate 4 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 Two thousand dollars ($2,000) per day, or as otherwise specified in the Special Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial Invitation for Bid (IFB) Package 9 Rev. March 17, 2017 CONSTRUCTION CONTRACT Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor, including, but not limited to, setoff against release of retention. If the total amount of liquidated damages 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 Eight million four hundred three thousand four hundred fifty one Dollars ($8,403,451.00). [This amount includes the Base Bid and Additive Alternates 1-4.] 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, Airport Division 1925 Embarcadero Road Palo Alto, CA 94303 Attn: James Wadleigh 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: DeSilva Gates Construction, L.P. 11555 Dublin Boulevard Dublin, CA 94568 Attn: Richard B. Gates 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:____________________________ 1 Revision July 20, 2016 AMENDMENT NO. TWO TO CONTRACT NO. C15155208B BETWEEN THE CITY OF PALO ALTO AND MEAD & HUNT, INC. This Amendment No. Two to Contract No. C15155208B (“Contract”) is entered into August 28, 2017, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MEAD & HUNT, INC., a Wisconsin corporation, located at 133 Aviation Boulevard, Suite 100, Santa Rosa, California 95403 (“CONSULTANT”). R E C I T A L S A. The Contract was entered into between the parties for the provision of On-call engineering services including planning, design engineering, environmental analyses, grant management and construction management. B. The parties wish to amend the Contract to increase the funding to cover an additional task order. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4. NOT TO EXCEED COMPENSATION is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed Eight Hundred Forty Seven Thousand One Hundred Sixty Two Dollars ($847,162) for the entire five-year term. The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a.Exhibit “C” entitled “COMPENSATION”. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. DocuSign Envelope ID: 9FE3CC26-7A36-493C-BB10-A776299DFCC3 Attachment D 2 Revision July 20, 2016 IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ City Manager or Designee APPROVED AS TO FORM: ____________________________ City Attorney or Designee Attachment: EXHIBIT "C": COMPENSATION MEAD & HUNT, INC. By: Name: Title: DocuSign Envelope ID: 9FE3CC26-7A36-493C-BB10-A776299DFCC3 Jon J. Faucher Vice President 3 Revision July 20, 2016 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services, additional services, and reimbursable expenses shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services and Additional Services, including reimbursable expenses, within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. 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 $250 shall be approved in advance by the CITY’s project manager. DocuSign Envelope ID: 9FE3CC26-7A36-493C-BB10-A776299DFCC3 1 Revision July 20, 2016 AMENDMENT NO. FOUR TO CONTRACT NO. C15155208A BETWEEN THE CITY OF PALO ALTO AND C & S ENGINEERS, INC. This Amendment No. Four to Contract No. C15155208A (“Contract”) is entered into August 28, 2017 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and C & S ENGINEEERS, INC., a New York corporation, located at 499 Col. Eileen Collins Boulevard, Syracuse, New York 13212 (“CONSULTANT”). R E C I T A L S A. The Contract was entered into between the parties for the provision of On-call engineering services including planning, design engineering, environmental analyses, grant management and construction management. B. The parties wish to amend the Contract to increase the funding to cover additional task orders. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4. NOT TO EXCEED COMPENSATION is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services as amended above, including payment for professional services, shall not exceed One Million Seven Hundred Twenty Seven Thousand Seven Hundred Eighty Five Dollars ($1,727,785).” SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a.Exhibit “C” entitled “COMPENSATION”. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. DocuSign Envelope ID: FBE813F9-3811-407C-8213-E1088FC54FAF Attachment E 2 Revision July 20, 2016 CITY OF PALO ALTO _________________________ City Manager or Designee APPROVED AS TO FORM: _________________________ City Attorney or Designee _________________________ Director of Public Works Attachment: EXHIBIT "C": COMPENSATION C & S ENGINEERS, INC. By: Name: Title: By: Name: Title: DocuSign Envelope ID: FBE813F9-3811-407C-8213-E1088FC54FAF Department Manager Jessica Bryan Senior Vice President Michael D. Hotaling 3 Revision July 20, 2016 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services, additional services, and reimbursable expenses shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services and Additional Services, including reimbursable expenses, within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. 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 $250 shall be approved in advance by the CITY’s project manager. DocuSign Envelope ID: FBE813F9-3811-407C-8213-E1088FC54FAF FAA Airports Airport Sponsor Assurances 3/2014 Page 1 of 20 ASSURANCES Airport Sponsors A. General. These assurances shall be complied with in the performance of grant agreements for 1. airport development, airport planning, and noise compatibility program grants for airport sponsors. These assurances are required to be submitted as part of the project application by2. sponsors requesting funds under the provisions of Title 49, U.S.C., subtitle VII, asamended. As used herein, the term "public agency sponsor" means a public agency with control of a public-use airport; the term "private sponsor" means a private owner of a public-use airport; and the term "sponsor" includes both public agency sponsors and private sponsors. Upon acceptance of this grant offer by the sponsor, these assurances are incorporated3.in and become part of this grant agreement. B. Duration and Applicability. Airport development or Noise Compatibility Program Projects Undertaken by a1. Public Agency Sponsor. The terms, conditions and assurances of this grant agreement shall remain in fullforce and effect throughout the useful life of the facilities developed or equipment acquired for an airport development or noise compatibility program project, or throughout the useful life of the project items installed within a facility under a noise compatibility program project, but in any event not to exceed twenty (20) years from the date of acceptance of a grant offer of Federal funds for the project. However,there shall be no limit on the duration of the assurances regarding Exclusive Rights and Airport Revenue so long as the airport is used as an airport. There shall be no limit on the duration of the terms, conditions, and assurances with respect to real property acquired with federal funds. Furthermore, the duration of the Civil Rights assurance shall be specified in the assurances. Airport Development or Noise Compatibility Projects Undertaken by a Private2. Sponsor. The preceding paragraph 1 also applies to a private sponsor except that the useful life of project items installed within a facility or the useful life of the facilities developed or equipment acquired under an airport development or noise compatibility programproject shall be no less than ten (10) years from the date of acceptance of Federal aidfor the project. Attachment F Airport Sponsor Assurances 3/2014 Page 2 of 20 Airport Planning Undertaken by a Sponsor. 3. Unless otherwise specified in this grant agreement, only Assurances 1, 2, 3, 5, 6, 13, 18, 25, 30, 32, 33, and 34 in Section C apply to planning projects. The terms, conditions, and assurances of this grant agreement shall remain in full force and effect during the life of the project; there shall be no limit on the duration of the assurances regarding Airport Revenue so long as the airport is used as an airport. C. Sponsor Certification. The sponsor hereby assures and certifies, with respect to this grant that: General Federal Requirements. 1. It will comply with all applicable Federal laws, regulations, executive orders, policies, guidelines, and requirements as they relate to the application, acceptance and use of Federal funds for this project including but not limited to the following: Federal Legislation a. Title 49, U.S.C., subtitle VII, as amended. b. Davis-Bacon Act - 40 U.S.C. 276(a), et seq.1 c. Federal Fair Labor Standards Act - 29 U.S.C. 201, et seq. d. Hatch Act – 5 U.S.C. 1501, et seq.2 e. Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Title 42 U.S.C. 4601, et seq.1 2 f. National Historic Preservation Act of 1966 - Section 106 - 16 U.S.C. 470(f).1 g. Archeological and Historic Preservation Act of 1974 - 16 U.S.C. 469 through 469c.1 h. Native Americans Grave Repatriation Act - 25 U.S.C. Section 3001, et seq. i. Clean Air Act, P.L. 90-148, as amended. j. Coastal Zone Management Act, P.L. 93-205, as amended. k. Flood Disaster Protection Act of 1973 - Section 102(a) - 42 U.S.C. 4012a.1 l. Title 49, U.S.C., Section 303, (formerly known as Section 4(f)) m. Rehabilitation Act of 1973 - 29 U.S.C. 794. n. Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252) (prohibits discrimination on the basis of race, color, national origin); o. Americans with Disabilities Act of 1990, as amended, (42 U.S.C. § 12101 et seq.), prohibits discrimination on the basis of disability). p. Age Discrimination Act of 1975 - 42 U.S.C. 6101, et seq. q. American Indian Religious Freedom Act, P.L. 95-341, as amended. r. Architectural Barriers Act of 1968 -42 U.S.C. 4151, et seq.1 s. Power plant and Industrial Fuel Use Act of 1978 - Section 403- 2 U.S.C. 8373.1 t. Contract Work Hours and Safety Standards Act - 40 U.S.C. 327, et seq.1 u. Copeland Anti-kickback Act - 18 U.S.C. 874.1 v. National Environmental Policy Act of 1969 - 42 U.S.C. 4321, et seq.1 w. Wild and Scenic Rivers Act, P.L. 90-542, as amended. x. Single Audit Act of 1984 - 31 U.S.C. 7501, et seq.2 y. Drug-Free Workplace Act of 1988 - 41 U.S.C. 702 through 706. Airport Sponsor Assurances 3/2014 Page 3 of 20 z. The Federal Funding Accountability and Transparency Act of 2006, as amended (Pub. L. 109-282, as amended by section 6202 of Pub. L. 110-252). Executive Orders a. Executive Order 11246 - Equal Employment Opportunity1 b. Executive Order 11990 - Protection of Wetlands c. Executive Order 11998 – Flood Plain Management d. Executive Order 12372 - Intergovernmental Review of Federal Programs e. Executive Order 12699 - Seismic Safety of Federal and Federally Assisted New Building Construction1 f. Executive Order 12898 - Environmental Justice Federal Regulations a. 2 CFR Part 180 - OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement). b. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. [OMB Circular A-87 Cost Principles Applicable to Grants and Contracts with State and Local Governments, and OMB Circular A-133 - Audits of States, Local Governments, and Non-Profit Organizations].4, 5, 6 c. 2 CFR Part 1200 – Nonprocurement Suspension and Debarment d. 14 CFR Part 13 - Investigative and Enforcement Procedures14 CFR Part 16 - Rules of Practice For Federally Assisted Airport Enforcement Proceedings. e. 14 CFR Part 150 - Airport noise compatibility planning. f. 28 CFR Part 35- Discrimination on the Basis of Disability in State and Local Government Services. g. 28 CFR § 50.3 - U.S. Department of Justice Guidelines for Enforcement of Title VI of the Civil Rights Act of 1964. h. 29 CFR Part 1 - Procedures for predetermination of wage rates.1 i. 29 CFR Part 3 - Contractors and subcontractors on public building or public work financed in whole or part by loans or grants from the United States.1 j. 29 CFR Part 5 - Labor standards provisions applicable to contracts covering federally financed and assisted construction (also labor standards provisions applicable to non-construction contracts subject to the Contract Work Hours and Safety Standards Act).1 k. 41 CFR Part 60 - Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor (Federal and federally assisted contracting requirements).1 l. 49 CFR Part 18 - Uniform administrative requirements for grants and cooperative agreements to state and local governments.3 m. 49 CFR Part 20 - New restrictions on lobbying. n. 49 CFR Part 21 – Nondiscrimination in federally-assisted programs of the Department of Transportation - effectuation of Title VI of the Civil Rights Act of 1964. o. 49 CFR Part 23 - Participation by Disadvantage Business Enterprise in Airport Concessions. Airport Sponsor Assurances 3/2014 Page 4 of 20 p. 49 CFR Part 24 – Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs.1 2 q. 49 CFR Part 26 – Participation by Disadvantaged Business Enterprises in Department of Transportation Programs. r. 49 CFR Part 27 – Nondiscrimination on the Basis of Handicap in Programs and Activities Receiving or Benefiting from Federal Financial Assistance.1 s. 49 CFR Part 28 – Enforcement of Nondiscrimination on the Basis of Handicap in Programs or Activities conducted by the Department of Transportation. t. 49 CFR Part 30 - Denial of public works contracts to suppliers of goods and services of countries that deny procurement market access to U.S. contractors. u. 49 CFR Part 32 – Governmentwide Requirements for Drug-Free Workplace (Financial Assistance) v. 49 CFR Part 37 – Transportation Services for Individuals with Disabilities (ADA). w. 49 CFR Part 41 - Seismic safety of Federal and federally assisted or regulated new building construction. Specific Assurances Specific assurances required to be included in grant agreements by any of the above laws, regulations or circulars are incorporated by reference in this grant agreement. Footnotes to Assurance C.1. 1 These laws do not apply to airport planning sponsors. 2 These laws do not apply to private sponsors. 3 49 CFR Part 18 and 2 CFR Part 200 contain requirements for State and Local Governments receiving Federal assistance. Any requirement levied upon State and Local Governments by this regulation and circular shall also be applicable to private sponsors receiving Federal assistance under Title 49, United States Code. 4 On December 26, 2013 at 78 FR 78590, the Office of Management and Budget (OMB) issued the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR Part 200. 2 CFR Part 200 replaces and combines the former Uniform Administrative Requirements for Grants (OMB Circular A-102 and Circular A-110 or 2 CFR Part 215 or Circular) as well as the Cost Principles (Circulars A-21 or 2 CFR part 220; Circular A-87 or 2 CFR part 225; and A-122, 2 CFR part 230). Additionally it replaces Circular A-133 guidance on the Single Annual Audit. In accordance with 2 CFR section 200.110, the standards set forth in Part 200 which affect administration of Federal awards issued by Federal agencies become effective once implemented by Federal agencies or when any future amendment to this Part becomes final. Federal agencies, including the Department of Transportation, must implement the policies and procedures applicable to Federal awards by promulgating a regulation to be effective by December 26, 2014 unless different provisions are required by statute or approved by OMB. Airport Sponsor Assurances 3/2014 Page 5 of 20 5 Cost principles established in 2 CFR part 200 subpart E must be used as guidelines for determining the eligibility of specific types of expenses. 6 Audit requirements established in 2 CFR part 200 subpart F are the guidelines for audits. Responsibility and Authority of the Sponsor. 2. a. Public Agency Sponsor: It has legal authority to apply for this grant, and to finance and carry out the proposed project; that a resolution, motion or similar action has been duly adopted or passed as an official act of the applicant's governing body authorizing the filing of the application, including all understandings and assurances contained therein, and directing and authorizing the person identified as the official representative of the applicant to act in connection with the application and to provide such additional information as may be required. b. Private Sponsor: It has legal authority to apply for this grant and to finance and carry out the proposed project and comply with all terms, conditions, and assurances of this grant agreement. It shall designate an official representative and shall in writing direct and authorize that person to file this application, including all understandings and assurances contained therein; to act in connection with this application; and to provide such additional information as may be required. Sponsor Fund Availability. 3. It has sufficient funds available for that portion of the project costs which are not to be paid by the United States. It has sufficient funds available to assure operation and maintenance of items funded under this grant agreement which it will own or control. Good Title. 4. a. It, a public agency or the Federal government, holds good title, satisfactory to the Secretary, to the landing area of the airport or site thereof, or will give assurance satisfactory to the Secretary that good title will be acquired. b. For noise compatibility program projects to be carried out on the property of the sponsor, it holds good title satisfactory to the Secretary to that portion of the property upon which Federal funds will be expended or will give assurance to the Secretary that good title will be obtained. Preserving Rights and Powers. 5. a. It will not take or permit any action which would operate to deprive it of any of the rights and powers necessary to perform any or all of the terms, conditions, and assurances in this grant agreement without the written approval of the Secretary, and will act promptly to acquire, extinguish or modify any outstanding rights or claims of right of others which would interfere with such performance by the sponsor. This shall be done in a manner acceptable to the Secretary. Airport Sponsor Assurances 3/2014 Page 6 of 20 b. It will not sell, lease, encumber, or otherwise transfer or dispose of any part of its title or other interests in the property shown on Exhibit A to this application or, for a noise compatibility program project, that portion of the property upon which Federal funds have been expended, for the duration of the terms, conditions, and assurances in this grant agreement without approval by the Secretary. If the transferee is found by the Secretary to be eligible under Title 49, United States Code, to assume the obligations of this grant agreement and to have the power, authority, and financial resources to carry out all such obligations, the sponsor shall insert in the contract or document transferring or disposing of the sponsor's interest, and make binding upon the transferee all of the terms, conditions, and assurances contained in this grant agreement. c. For all noise compatibility program projects which are to be carried out by another unit of local government or are on property owned by a unit of local government other than the sponsor, it will enter into an agreement with that government. Except as otherwise specified by the Secretary, that agreement shall obligate that government to the same terms, conditions, and assurances that would be applicable to it if it applied directly to the FAA for a grant to undertake the noise compatibility program project. That agreement and changes thereto must be satisfactory to the Secretary. It will take steps to enforce this agreement against the local government if there is substantial non-compliance with the terms of the agreement. d. For noise compatibility program projects to be carried out on privately owned property, it will enter into an agreement with the owner of that property which includes provisions specified by the Secretary. It will take steps to enforce this agreement against the property owner whenever there is substantial non-compliance with the terms of the agreement. e. If the sponsor is a private sponsor, it will take steps satisfactory to the Secretary to ensure that the airport will continue to function as a public-use airport in accordance with these assurances for the duration of these assurances. f. If an arrangement is made for management and operation of the airport by any agency or person other than the sponsor or an employee of the sponsor, the sponsor will reserve sufficient rights and authority to insure that the airport will be operated and maintained in accordance Title 49, United States Code, the regulations and the terms, conditions and assurances in this grant agreement and shall insure that such arrangement also requires compliance therewith. g. Sponsors of commercial service airports will not permit or enter into any arrangement that results in permission for the owner or tenant of a property used as a residence, or zoned for residential use, to taxi an aircraft between that property and any location on airport. Sponsors of general aviation airports entering into any arrangement that results in permission for the owner of residential real property adjacent to or near the airport must comply with the requirements of Sec. 136 of Public Law 112-95 and the sponsor assurances. Airport Sponsor Assurances 3/2014 Page 7 of 20 Consistency with Local Plans. 6. The project is reasonably consistent with plans (existing at the time of submission of this application) of public agencies that are authorized by the State in which the project is located to plan for the development of the area surrounding the airport. Consideration of Local Interest. 7. It has given fair consideration to the interest of communities in or near where the project may be located. Consultation with Users. 8. In making a decision to undertake any airport development project under Title 49, United States Code, it has undertaken reasonable consultations with affected parties using the airport at which project is proposed. Public Hearings. 9. In projects involving the location of an airport, an airport runway, or a major runway extension, it has afforded the opportunity for public hearings for the purpose of considering the economic, social, and environmental effects of the airport or runway location and its consistency with goals and objectives of such planning as has been carried out by the community and it shall, when requested by the Secretary, submit a copy of the transcript of such hearings to the Secretary. Further, for such projects, it has on its management board either voting representation from the communities where the project is located or has advised the communities that they have the right to petition the Secretary concerning a proposed project. Metropolitan Planning Organization. 10. In projects involving the location of an airport, an airport runway, or a major runway extension at a medium or large hub airport, the sponsor has made available to and has provided upon request to the metropolitan planning organization in the area in which the airport is located, if any, a copy of the proposed amendment to the airport layout plan to depict the project and a copy of any airport master plan in which the project is described or depicted. Pavement Preventive Maintenance. 11. With respect to a project approved after January 1, 1995, for the replacement or reconstruction of pavement at the airport, it assures or certifies that it has implemented an effective airport pavement maintenance-management program and it assures that it will use such program for the useful life of any pavement constructed, reconstructed or repaired with Federal financial assistance at the airport. It will provide such reports on pavement condition and pavement management programs as the Secretary determines may be useful. Terminal Development Prerequisites. 12. For projects which include terminal development at a public use airport, as defined in Title 49, it has, on the date of submittal of the project grant application, all the safety equipment required for certification of such airport under section 44706 of Title 49, United States Code, and all the security equipment required by rule or regulation, and Airport Sponsor Assurances 3/2014 Page 8 of 20 has provided for access to the passenger enplaning and deplaning area of such airport to passengers enplaning and deplaning from aircraft other than air carrier aircraft. Accounting System, Audit, and Record Keeping Requirements. 13. a. It shall keep all project accounts and records which fully disclose the amount and disposition by the recipient of the proceeds of this grant, the total cost of the project in connection with which this grant is given or used, and the amount or nature of that portion of the cost of the project supplied by other sources, and such other financial records pertinent to the project. The accounts and records shall be kept in accordance with an accounting system that will facilitate an effective audit in accordance with the Single Audit Act of 1984. b. It shall make available to the Secretary and the Comptroller General of the United States, or any of their duly authorized representatives, for the purpose of audit and examination, any books, documents, papers, and records of the recipient that are pertinent to this grant. The Secretary may require that an appropriate audit be conducted by a recipient. In any case in which an independent audit is made of the accounts of a sponsor relating to the disposition of the proceeds of a grant or relating to the project in connection with which this grant was given or used, it shall file a certified copy of such audit with the Comptroller General of the United States not later than six (6) months following the close of the fiscal year for which the audit was made. Minimum Wage Rates. 14. It shall include, in all contracts in excess of $2,000 for work on any projects funded under this grant agreement which involve labor, provisions establishing minimum rates of wages, to be predetermined by the Secretary of Labor, in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5), which contractors shall pay to skilled and unskilled labor, and such minimum rates shall be stated in the invitation for bids and shall be included in proposals or bids for the work. Veteran's Preference. 15. It shall include in all contracts for work on any project funded under this grant agreement which involve labor, such provisions as are necessary to insure that, in the employment of labor (except in executive, administrative, and supervisory positions), preference shall be given to Vietnam era veterans, Persian Gulf veterans, Afghanistan-Iraq war veterans, disabled veterans, and small business concerns owned and controlled by disabled veterans as defined in Section 47112 of Title 49, United States Code. However, this preference shall apply only where the individuals are available and qualified to perform the work to which the employment relates. Conformity to Plans and Specifications. 16. It will execute the project subject to plans, specifications, and schedules approved by the Secretary. Such plans, specifications, and schedules shall be submitted to the Secretary prior to commencement of site preparation, construction, or other performance under this grant agreement, and, upon approval of the Secretary, shall be incorporated into this grant agreement. Any modification to the approved plans, Airport Sponsor Assurances 3/2014 Page 9 of 20 specifications, and schedules shall also be subject to approval of the Secretary, and incorporated into this grant agreement. Construction Inspection and Approval. 17. It will provide and maintain competent technical supervision at the construction site throughout the project to assure that the work conforms to the plans, specifications, and schedules approved by the Secretary for the project. It shall subject the construction work on any project contained in an approved project application to inspection and approval by the Secretary and such work shall be in accordance with regulations and procedures prescribed by the Secretary. Such regulations and procedures shall require such cost and progress reporting by the sponsor or sponsors of such project as the Secretary shall deem necessary. Planning Projects. 18. In carrying out planning projects: a. It will execute the project in accordance with the approved program narrative contained in the project application or with the modifications similarly approved. b. It will furnish the Secretary with such periodic reports as required pertaining to the planning project and planning work activities. c. It will include in all published material prepared in connection with the planning project a notice that the material was prepared under a grant provided by the United States. d. It will make such material available for examination by the public, and agrees that no material prepared with funds under this project shall be subject to copyright in the United States or any other country. e. It will give the Secretary unrestricted authority to publish, disclose, distribute, and otherwise use any of the material prepared in connection with this grant. f. It will grant the Secretary the right to disapprove the sponsor's employment of specific consultants and their subcontractors to do all or any part of this project as well as the right to disapprove the proposed scope and cost of professional services. g. It will grant the Secretary the right to disapprove the use of the sponsor's employees to do all or any part of the project. h. It understands and agrees that the Secretary's approval of this project grant or the Secretary's approval of any planning material developed as part of this grant does not constitute or imply any assurance or commitment on the part of the Secretary to approve any pending or future application for a Federal airport grant. Operation and Maintenance. 19. a. The airport and all facilities which are necessary to serve the aeronautical users of the airport, other than facilities owned or controlled by the United States, shall be operated at all times in a safe and serviceable condition and in accordance with the minimum standards as may be required or prescribed by applicable Federal, Airport Sponsor Assurances 3/2014 Page 10 of 20 state and local agencies for maintenance and operation. It will not cause or permit any activity or action thereon which would interfere with its use for airport purposes. It will suitably operate and maintain the airport and all facilities thereon or connected therewith, with due regard to climatic and flood conditions. Any proposal to temporarily close the airport for non-aeronautical purposes must first be approved by the Secretary. In furtherance of this assurance, the sponsor will have in effect arrangements for- Operating the airport's aeronautical facilities whenever required; 1) Promptly marking and lighting hazards resulting from airport conditions, 2) including temporary conditions; and Promptly notifying airmen of any condition affecting aeronautical use of the 3)airport. Nothing contained herein shall be construed to require that the airport be operated for aeronautical use during temporary periods when snow, flood or other climatic conditions interfere with such operation and maintenance. Further, nothing herein shall be construed as requiring the maintenance, repair, restoration, or replacement of any structure or facility which is substantially damaged or destroyed due to an act of God or other condition or circumstance beyond the control of the sponsor. b. It will suitably operate and maintain noise compatibility program items that it owns or controls upon which Federal funds have been expended. Hazard Removal and Mitigation. 20. It will take appropriate action to assure that such terminal airspace as is required to protect instrument and visual operations to the airport (including established minimum flight altitudes) will be adequately cleared and protected by removing, lowering, relocating, marking, or lighting or otherwise mitigating existing airport hazards and by preventing the establishment or creation of future airport hazards. Compatible Land Use. 21. It will take appropriate action, to the extent reasonable, including the adoption of zoning laws, to restrict the use of land adjacent to or in the immediate vicinity of the airport to activities and purposes compatible with normal airport operations, including landing and takeoff of aircraft. In addition, if the project is for noise compatibility program implementation, it will not cause or permit any change in land use, within its jurisdiction, that will reduce its compatibility, with respect to the airport, of the noise compatibility program measures upon which Federal funds have been expended. Economic Nondiscrimination. 22. a. It will make the airport available as an airport for public use on reasonable terms and without unjust discrimination to all types, kinds and classes of aeronautical activities, including commercial aeronautical activities offering services to the public at the airport. b. In any agreement, contract, lease, or other arrangement under which a right or privilege at the airport is granted to any person, firm, or corporation to conduct or Airport Sponsor Assurances 3/2014 Page 11 of 20 to engage in any aeronautical activity for furnishing services to the public at the airport, the sponsor will insert and enforce provisions requiring the contractor to- furnish said services on a reasonable, and not unjustly discriminatory, basis to 1) all users thereof, and charge reasonable, and not unjustly discriminatory, prices for each unit or 2)service, provided that the contractor may be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. c. Each fixed-based operator at the airport shall be subject to the same rates, fees, rentals, and other charges as are uniformly applicable to all other fixed-based operators making the same or similar uses of such airport and utilizing the same or similar facilities. d. Each air carrier using such airport shall have the right to service itself or to use any fixed-based operator that is authorized or permitted by the airport to serve any air carrier at such airport. e. Each air carrier using such airport (whether as a tenant, non-tenant, or subtenant of another air carrier tenant) shall be subject to such nondiscriminatory and substantially comparable rules, regulations, conditions, rates, fees, rentals, and other charges with respect to facilities directly and substantially related to providing air transportation as are applicable to all such air carriers which make similar use of such airport and utilize similar facilities, subject to reasonable classifications such as tenants or non-tenants and signatory carriers and non- signatory carriers. Classification or status as tenant or signatory shall not be unreasonably withheld by any airport provided an air carrier assumes obligations substantially similar to those already imposed on air carriers in such classification or status. f. It will not exercise or grant any right or privilege which operates to prevent any person, firm, or corporation operating aircraft on the airport from performing any services on its own aircraft with its own employees [including, but not limited to maintenance, repair, and fueling] that it may choose to perform. g. In the event the sponsor itself exercises any of the rights and privileges referred to in this assurance, the services involved will be provided on the same conditions as would apply to the furnishing of such services by commercial aeronautical service providers authorized by the sponsor under these provisions. h. The sponsor may establish such reasonable, and not unjustly discriminatory, conditions to be met by all users of the airport as may be necessary for the safe and efficient operation of the airport. i. The sponsor may prohibit or limit any given type, kind or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public. Airport Sponsor Assurances 3/2014 Page 12 of 20 Exclusive Rights. 23. It will permit no exclusive right for the use of the airport by any person providing, or intending to provide, aeronautical services to the public. For purposes of this paragraph, the providing of the services at an airport by a single fixed-based operator shall not be construed as an exclusive right if both of the following apply: a. It would be unreasonably costly, burdensome, or impractical for more than one fixed-based operator to provide such services, and b. If allowing more than one fixed-based operator to provide such services would require the reduction of space leased pursuant to an existing agreement between such single fixed-based operator and such airport. It further agrees that it will not, either directly or indirectly, grant or permit any person, firm, or corporation, the exclusive right at the airport to conduct any aeronautical activities, including, but not limited to charter flights, pilot training, aircraft rental and sightseeing, aerial photography, crop dusting, aerial advertising and surveying, air carrier operations, aircraft sales and services, sale of aviation petroleum products whether or not conducted in conjunction with other aeronautical activity, repair and maintenance of aircraft, sale of aircraft parts, and any other activities which because of their direct relationship to the operation of aircraft can be regarded as an aeronautical activity, and that it will terminate any exclusive right to conduct an aeronautical activity now existing at such an airport before the grant of any assistance under Title 49, United States Code. Fee and Rental Structure. 24. It will maintain a fee and rental structure for the facilities and services at the airport which will make the airport as self-sustaining as possible under the circumstances existing at the particular airport, taking into account such factors as the volume of traffic and economy of collection. No part of the Federal share of an airport development, airport planning or noise compatibility project for which a grant is made under Title 49, United States Code, the Airport and Airway Improvement Act of 1982, the Federal Airport Act or the Airport and Airway Development Act of 1970 shall be included in the rate basis in establishing fees, rates, and charges for users of that airport. Airport Revenues. 25. a. All revenues generated by the airport and any local taxes on aviation fuel established after December 30, 1987, will be expended by it for the capital or operating costs of the airport; the local airport system; or other local facilities which are owned or operated by the owner or operator of the airport and which are directly and substantially related to the actual air transportation of passengers or property; or for noise mitigation purposes on or off the airport. The following exceptions apply to this paragraph: If covenants or assurances in debt obligations issued before September 3, 1) 1982, by the owner or operator of the airport, or provisions enacted before September 3, 1982, in governing statutes controlling the owner or operator's financing, provide for the use of the revenues from any of the airport owner or Airport Sponsor Assurances 3/2014 Page 13 of 20 operator's facilities, including the airport, to support not only the airport but also the airport owner or operator's general debt obligations or other facilities, then this limitation on the use of all revenues generated by the airport (and, in the case of a public airport, local taxes on aviation fuel) shall not apply. If the Secretary approves the sale of a privately owned airport to a public 2)sponsor and provides funding for any portion of the public sponsor’s acquisition of land, this limitation on the use of all revenues generated by the sale shall not apply to certain proceeds from the sale. This is conditioned on repayment to the Secretary by the private owner of an amount equal to the remaining unamortized portion (amortized over a 20-year period) of any airport improvement grant made to the private owner for any purpose other than land acquisition on or after October 1, 1996, plus an amount equal to the federal share of the current fair market value of any land acquired with an airport improvement grant made to that airport on or after October 1, 1996. Certain revenue derived from or generated by mineral extraction, production, 3)lease, or other means at a general aviation airport (as defined at Section 47102 of title 49 United States Code), if the FAA determines the airport sponsor meets the requirements set forth in Sec. 813 of Public Law 112-95. b. As part of the annual audit required under the Single Audit Act of 1984, the sponsor will direct that the audit will review, and the resulting audit report will provide an opinion concerning, the use of airport revenue and taxes in paragraph (a), and indicating whether funds paid or transferred to the owner or operator are paid or transferred in a manner consistent with Title 49, United States Code and any other applicable provision of law, including any regulation promulgated by the Secretary or Administrator. c. Any civil penalties or other sanctions will be imposed for violation of this assurance in accordance with the provisions of Section 47107 of Title 49, United States Code. Reports and Inspections. 26. It will: a. submit to the Secretary such annual or special financial and operations reports as the Secretary may reasonably request and make such reports available to the public; make available to the public at reasonable times and places a report of the airport budget in a format prescribed by the Secretary; b. for airport development projects, make the airport and all airport records and documents affecting the airport, including deeds, leases, operation and use agreements, regulations and other instruments, available for inspection by any duly authorized agent of the Secretary upon reasonable request; c. for noise compatibility program projects, make records and documents relating to the project and continued compliance with the terms, conditions, and assurances of this grant agreement including deeds, leases, agreements, regulations, and other instruments, available for inspection by any duly authorized agent of the Secretary upon reasonable request; and Airport Sponsor Assurances 3/2014 Page 14 of 20 d. in a format and time prescribed by the Secretary, provide to the Secretary and make available to the public following each of its fiscal years, an annual report listing in detail: all amounts paid by the airport to any other unit of government and the 1) purposes for which each such payment was made; and all services and property provided by the airport to other units of government 2)and the amount of compensation received for provision of each such service and property. Use by Government Aircraft. 27. It will make available all of the facilities of the airport developed with Federal financial assistance and all those usable for landing and takeoff of aircraft to the United States for use by Government aircraft in common with other aircraft at all times without charge, except, if the use by Government aircraft is substantial, charge may be made for a reasonable share, proportional to such use, for the cost of operating and maintaining the facilities used. Unless otherwise determined by the Secretary, or otherwise agreed to by the sponsor and the using agency, substantial use of an airport by Government aircraft will be considered to exist when operations of such aircraft are in excess of those which, in the opinion of the Secretary, would unduly interfere with use of the landing areas by other authorized aircraft, or during any calendar month that – a. Five (5) or more Government aircraft are regularly based at the airport or on land adjacent thereto; or b. The total number of movements (counting each landing as a movement) of Government aircraft is 300 or more, or the gross accumulative weight of Government aircraft using the airport (the total movement of Government aircraft multiplied by gross weights of such aircraft) is in excess of five million pounds. Land for Federal Facilities. 28. It will furnish without cost to the Federal Government for use in connection with any air traffic control or air navigation activities, or weather-reporting and communication activities related to air traffic control, any areas of land or water, or estate therein, or rights in buildings of the sponsor as the Secretary considers necessary or desirable for construction, operation, and maintenance at Federal expense of space or facilities for such purposes. Such areas or any portion thereof will be made available as provided herein within four months after receipt of a written request from the Secretary. Airport Layout Plan. 29. a. It will keep up to date at all times an airport layout plan of the airport showing boundaries of the airport and all proposed additions thereto, together with the 1) boundaries of all offsite areas owned or controlled by the sponsor for airport purposes and proposed additions thereto; the location and nature of all existing and proposed airport facilities and 2) structures (such as runways, taxiways, aprons, terminal buildings, hangars and Airport Sponsor Assurances 3/2014 Page 15 of 20 roads), including all proposed extensions and reductions of existing airport facilities; the location of all existing and proposed nonaviation areas and of all existing 3) improvements thereon; and all proposed and existing access points used to taxi aircraft across the airport’s 4)property boundary. Such airport layout plans and each amendment, revision, or modification thereof, shall be subject to the approval of the Secretary which approval shall be evidenced by the signature of a duly authorized representative of the Secretary on the face of the airport layout plan. The sponsor will not make or permit any changes or alterations in the airport or any of its facilities which are not in conformity with the airport layout plan as approved by the Secretary and which might, in the opinion of the Secretary, adversely affect the safety, utility or efficiency of the airport. b. If a change or alteration in the airport or the facilities is made which the Secretary determines adversely affects the safety, utility, or efficiency of any federally owned, leased, or funded property on or off the airport and which is not in conformity with the airport layout plan as approved by the Secretary, the owner or operator will, if requested, by the Secretary (1) eliminate such adverse effect in a manner approved by the Secretary; or (2) bear all costs of relocating such property (or replacement thereof) to a site acceptable to the Secretary and all costs of restoring such property (or replacement thereof) to the level of safety, utility, efficiency, and cost of operation existing before the unapproved change in the airport or its facilities except in the case of a relocation or replacement of an existing airport facility due to a change in the Secretary’s design standards beyond the control of the airport sponsor. Civil Rights. 30. It will promptly take any measures necessary to ensure that no person in the United States shall, on the grounds of race, creed, color, national origin, sex, age, or disability be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination in any activity conducted with, or benefiting from, funds received from this grant. a. Using the definitions of activity, facility and program as found and defined in §§ 21.23 (b) and 21.23 (e) of 49 CFR § 21, the sponsor will facilitate all programs, operate all facilities, or conduct all programs in compliance with all non- discrimination requirements imposed by, or pursuant to these assurances. b. Applicability Programs and Activities. If the sponsor has received a grant (or other federal 1) assistance) for any of the sponsor’s program or activities, these requirements extend to all of the sponsor’s programs and activities. Facilities. Where it receives a grant or other federal financial assistance to 2) construct, expand, renovate, remodel, alter or acquire a facility, or part of a facility, the assurance extends to the entire facility and facilities operated in connection therewith. Airport Sponsor Assurances 3/2014 Page 16 of 20 Real Property. Where the sponsor receives a grant or other Federal financial 3)assistance in the form of, or for the acquisition of real property or an interest in real property, the assurance will extend to rights to space on, over, or under such property. c. Duration. The sponsor agrees that it is obligated to this assurance for the period during which Federal financial assistance is extended to the program, except where the Federal financial assistance is to provide, or is in the form of, personal property, or real property, or interest therein, or structures or improvements thereon, in which case the assurance obligates the sponsor, or any transferee for the longer of the following periods: So long as the airport is used as an airport, or for another purpose involving 1) the provision of similar services or benefits; or So long as the sponsor retains ownership or possession of the property. 2) d. Required Solicitation Language. It will include the following notification in all solicitations for bids, Requests For Proposals for work, or material under this grant agreement and in all proposals for agreements, including airport concessions, regardless of funding source: “The (Name of Sponsor), in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C. §§ 2000d to 2000d-4) and the Regulations, hereby notifies all bidders that it will affirmatively ensure that any contract entered into pursuant to this advertisement, disadvantaged business enterprises and airport concession disadvantaged business enterprises will be afforded full and fair opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, or national origin in consideration for an award.” e. Required Contract Provisions. It will insert the non-discrimination contract clauses requiring compliance 1) with the acts and regulations relative to non-discrimination in Federally- assisted programs of the DOT, and incorporating the acts and regulations into the contracts by reference in every contract or agreement subject to the non-discrimination in Federally-assisted programs of the DOT acts and regulations. It will include a list of the pertinent non-discrimination authorities in every 2) contract that is subject to the non-discrimination acts and regulations. It will insert non-discrimination contract clauses as a covenant running with 3)the land, in any deed from the United States effecting or recording a transfer of real property, structures, use, or improvements thereon or interest therein to a sponsor. It will insert non-discrimination contract clauses prohibiting discrimination on 4) the basis of race, color, national origin, creed, sex, age, or handicap as a Airport Sponsor Assurances 3/2014 Page 17 of 20 covenant running with the land, in any future deeds, leases, license, permits, or similar instruments entered into by the sponsor with other parties: a) For the subsequent transfer of real property acquired or improved under the applicable activity, project, or program; and b) For the construction or use of, or access to, space on, over, or under real property acquired or improved under the applicable activity, project, or program. f. It will provide for such methods of administration for the program as are found by the Secretary to give reasonable guarantee that it, other recipients, sub-recipients, sub-grantees, contractors, subcontractors, consultants, transferees, successors in interest, and other participants of Federal financial assistance under such program will comply with all requirements imposed or pursuant to the acts, the regulations, and this assurance. g. It agrees that the United States has a right to seek judicial enforcement with regard to any matter arising under the acts, the regulations, and this assurance. Disposal of Land. 31. a. For land purchased under a grant for airport noise compatibility purposes, including land serving as a noise buffer, it will dispose of the land, when the land is no longer needed for such purposes, at fair market value, at the earliest practicable time. That portion of the proceeds of such disposition which is proportionate to the United States' share of acquisition of such land will be, at the discretion of the Secretary, (1) reinvested in another project at the airport, or (2) transferred to another eligible airport as prescribed by the Secretary. The Secretary shall give preference to the following, in descending order, (1) reinvestment in an approved noise compatibility project, (2) reinvestment in an approved project that is eligible for grant funding under Section 47117(e) of title 49 United States Code, (3) reinvestment in an approved airport development project that is eligible for grant funding under Sections 47114, 47115, or 47117 of title 49 United States Code, (4) transferred to an eligible sponsor of another public airport to be reinvested in an approved noise compatibility project at that airport, and (5) paid to the Secretary for deposit in the Airport and Airway Trust Fund. If land acquired under a grant for noise compatibility purposes is leased at fair market value and consistent with noise buffering purposes, the lease will not be considered a disposal of the land. Revenues derived from such a lease may be used for an approved airport development project that would otherwise be eligible for grant funding or any permitted use of airport revenue. b. For land purchased under a grant for airport development purposes (other than noise compatibility), it will, when the land is no longer needed for airport purposes, dispose of such land at fair market value or make available to the Secretary an amount equal to the United States' proportionate share of the fair market value of the land. That portion of the proceeds of such disposition which is proportionate to the United States' share of the cost of acquisition of such land will, (1) upon application to the Secretary, be reinvested or transferred to another Airport Sponsor Assurances 3/2014 Page 18 of 20 eligible airport as prescribed by the Secretary. The Secretary shall give preference to the following, in descending order: (1) reinvestment in an approved noise compatibility project, (2) reinvestment in an approved project that is eligible for grant funding under Section 47117(e) of title 49 United States Code, (3) reinvestment in an approved airport development project that is eligible for grant funding under Sections 47114, 47115, or 47117 of title 49 United States Code, (4) transferred to an eligible sponsor of another public airport to be reinvested in an approved noise compatibility project at that airport, and (5) paid to the Secretary for deposit in the Airport and Airway Trust Fund. c. Land shall be considered to be needed for airport purposes under this assurance if (1) it may be needed for aeronautical purposes (including runway protection zones) or serve as noise buffer land, and (2) the revenue from interim uses of such land contributes to the financial self-sufficiency of the airport. Further, land purchased with a grant received by an airport operator or owner before December 31, 1987, will be considered to be needed for airport purposes if the Secretary or Federal agency making such grant before December 31, 1987, was notified by the operator or owner of the uses of such land, did not object to such use, and the land continues to be used for that purpose, such use having commenced no later than December 15, 1989. d. Disposition of such land under (a) (b) or (c) will be subject to the retention or reservation of any interest or right therein necessary to ensure that such land will only be used for purposes which are compatible with noise levels associated with operation of the airport. Engineering and Design Services. 32. It will award each contract, or sub-contract for program management, construction management, planning studies, feasibility studies, architectural services, preliminary engineering, design, engineering, surveying, mapping or related services with respect to the project in the same manner as a contract for architectural and engineering services is negotiated under Title IX of the Federal Property and Administrative Services Act of 1949 or an equivalent qualifications-based requirement prescribed for or by the sponsor of the airport. Foreign Market Restrictions. 33. It will not allow funds provided under this grant to be used to fund any project which uses any product or service of a foreign country during the period in which such foreign country is listed by the United States Trade Representative as denying fair and equitable market opportunities for products and suppliers of the United States in procurement and construction. Policies, Standards, and Specifications. 34. It will carry out the project in accordance with policies, standards, and specifications approved by the Secretary including but not limited to the advisory circulars listed in the Current FAA Advisory Circulars for AIP projects, dated ___________ (the latest approved version as of this grant offer) and included in this grant, and in accordance _ Airport Sponsor Assurances 3/2014 Page 19 of 20 with applicable state policies, standards, and specifications approved by the Secretary. Relocation and Real Property Acquisition. 35. a. It will be guided in acquiring real property, to the greatest extent practicable under State law, by the land acquisition policies in Subpart B of 49 CFR Part 24 and will pay or reimburse property owners for necessary expenses as specified in Subpart B. b. It will provide a relocation assistance program offering the services described in Subpart C and fair and reasonable relocation payments and assistance to displaced persons as required in Subpart D and E of 49 CFR Part 24. c. It will make available within a reasonable period of time prior to displacement, comparable replacement dwellings to displaced persons in accordance with Subpart E of 49 CFR Part 24. Access By Intercity Buses. 36. The airport owner or operator will permit, to the maximum extent practicable, intercity buses or other modes of transportation to have access to the airport; however, it has no obligation to fund special facilities for intercity buses or for other modes of transportation. Disadvantaged Business Enterprises. 37. The sponsor shall not discriminate on the basis of race, color, national origin or sex in the award and performance of any DOT-assisted contract covered by 49 CFR Part 26, or in the award and performance of any concession activity contract covered by 49 CFR Part 23. In addition, the sponsor shall not discriminate on the basis of race, color, national origin or sex in the administration of its DBE and ACDBE programs or the requirements of 49 CFR Parts 23 and 26. The sponsor shall take all necessary and reasonable steps under 49 CFR Parts 23 and 26 to ensure nondiscrimination in the award and administration of DOT-assisted contracts, and/or concession contracts. The sponsor’s DBE and ACDBE programs, as required by 49 CFR Parts 26 and 23, and as approved by DOT, are incorporated by reference in this agreement. Implementation of these programs is a legal obligation and failure to carry out its terms shall be treated as a violation of this agreement. Upon notification to the sponsor of its failure to carry out its approved program, the Department may impose sanctions as provided for under Parts 26 and 23 and may, in appropriate cases, refer the matter for enforcement under 18 U.S.C. 1001 and/or the Program Fraud Civil Remedies Act of 1936 (31 U.S.C. 3801). Hangar Construction. 38. If the airport owner or operator and a person who owns an aircraft agree that a hangar is to be constructed at the airport for the aircraft at the aircraft owner’s expense, the airport owner or operator will grant to the aircraft owner for the hangar a long term lease that is subject to such terms and conditions on the hangar as the airport owner or operator may impose. Airport Sponsor Assurances 3/2014 Page 20 of 20 Competitive Access. 39. a. If the airport owner or operator of a medium or large hub airport (as defined in section 47102 of title 49, U.S.C.) has been unable to accommodate one or more requests by an air carrier for access to gates or other facilities at that airport in order to allow the air carrier to provide service to the airport or to expand service at the airport, the airport owner or operator shall transmit a report to the Secretary that- Describes the requests; 1) Provides an explanation as to why the requests could not be accommodated; 2) and Provides a time frame within which, if any, the airport will be able to 3)accommodate the requests. b. Such report shall be due on either February 1 or August 1 of each year if the airport has been unable to accommodate the request(s) in the six month period prior to the applicable due date. PALO ALTO AIRPORT APRON RECONSTRUCTION PROJECT, PHASE I - BID SET A (RE-BID) FAA AIP PROJECT NO. 3-06-0182-013-2017 IFB NO. 167808C ITEM FAA UNIT UNIT UNIT UNIT UNIT NO. SPEC NO. DESCRIPTION QUANTITY UNITS PRICE TOTAL PRICE PRICE PRICE PRICE 001 P-152 UNCLASSIFIED EXCAVATION 6,100 CY $50.00 $305,000.00 $40.00 $244,000.00 $29.00 $176,900.00 $55.00 $335,500.00 $30.00 $183,000.00 002 P-151 CLEARING AND GRUBBING 3.6 ACRE $50,000.00 $180,000.00 $65,000.00 $234,000.00 $35,000.00 $126,000.00 $68,000.00 $244,800.00 $21,000.00 $75,600.00 003 P-160 PULVERIZED ASPHALT (2.5" THICKNESS)35,410 SY $1.50 $53,115.00 $2.00 $70,820.00 $1.00 $35,410.00 $1.00 $35,410.00 $2.00 $70,820.00 004 SP-19 MILLING TO MATCH EXISTING PAVEMENT 850 SY $15.00 $12,750.00 $20.00 $17,000.00 $20.00 $17,000.00 $10.00 $8,500.00 $13.00 $11,050.00 005 SP-2 RELOCATE AND RESET SURVEY MONUMENT 1 EACH $2,500.00 $2,500.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,700.00 $2,700.00 $4,000.00 $4,000.00 006 P-156 COMPLIANCE W/POLLUTION, EROSION & SILTATION CONTROL 1 LS $50,000.00 $50,000.00 $45,000.00 $45,000.00 $175,000.00 $175,000.00 $50,000.00 $50,000.00 $52,000.00 $52,000.00 007 T-906 HYDROSEEDING 2,980 SY $1.00 $2,980.00 $1.00 $2,980.00 $2.00 $5,960.00 $2.00 $5,960.00 $1.50 $4,470.00 008 SP-21 REMOVE AND REPLACE UNSUITABLE MATERIAL 2,500 CY $50.00 $125,000.00 $40.00 $100,000.00 $30.00 $75,000.00 $40.00 $100,000.00 $100.00 $250,000.00 009 P-208 AGGREGATE BASE COURSE (6" THICK)33,800 SY $15.00 $507,000.00 $20.00 $676,000.00 $18.00 $608,400.00 $22.00 $743,600.00 $13.30 $449,540.00 010 P-208 AGGREGATE BASE COURSE (4" THICK)17,780 SY $12.00 $213,360.00 $15.00 $266,700.00 $12.00 $213,360.00 $16.00 $284,480.00 $9.25 $164,465.00 011 P-403 HOT MIX ASPHALT SURFACE COURSE 7,550 TON $120.00 $906,000.00 $122.00 $921,100.00 $150.00 $1,132,500.00 $141.00 $1,064,550.00 $98.00 $739,900.00 012 P-608 EMULSIFIED ASPHALT SEAL COAT 1,600 SY $9.00 $14,400.00 $7.00 $11,200.00 $8.00 $12,800.00 $6.00 $9,600.00 $11.00 $17,600.00 013 SP-13 JOINT SEALING 510 LF $12.00 $6,120.00 $9.00 $4,590.00 $9.00 $4,590.00 $10.00 $5,100.00 $25.00 $12,750.00 014 P-602 PRIME COAT 10 TON $1,000.00 $10,000.00 $2,000.00 $20,000.00 $1,129.00 $11,290.00 $1,000.00 $10,000.00 $1,700.00 $17,000.00 015 P-160 CEMENT TREATED SUBGRADE (18" THICK)35,410 SY $6.00 $212,460.00 $6.00 $212,460.00 $4.00 $141,640.00 $2.25 $79,672.50 $3.80 $134,558.00 016 P-160 CEMENT MATERIAL 1,900 TON $100.00 $190,000.00 $100.00 $190,000.00 $141.00 $267,900.00 $140.00 $266,000.00 $165.00 $313,500.00 017 SP-20 ROLL CURB 40 LF $100.00 $4,000.00 $100.00 $4,000.00 $134.00 $5,360.00 $60.00 $2,400.00 $105.00 $4,200.00 018 P-620 MARKING REMOVAL 410 SF $10.00 $4,100.00 $3.00 $1,230.00 $10.00 $4,100.00 $10.00 $4,100.00 $11.00 $4,510.00 019 P-620 PAINTSTRIPING (YELLOW, REFLECTORIZED) 5,660 SF $4.00 $22,640.00 $5.00 $28,300.00 $4.00 $22,640.00 $4.00 $22,640.00 $4.40 $24,904.00 020 P-620 PAINTSTRIPING (WHITE, REFLECTORIZED) 1,100 SF $4.00 $4,400.00 $5.00 $5,500.00 $4.00 $4,400.00 $4.00 $4,400.00 $4.50 $4,950.00 021 P-620 PAINTSTRIPING (BLUE, NON-REFLECTORIZED)65 SF $4.00 $260.00 $3.00 $195.00 $6.00 $390.00 $6.00 $390.00 $6.60 $429.00 022 P-620 PAINTSTRIPING (GREEN, NON-REFLECTORIZED)17,400 SF $4.00 $69,600.00 $3.00 $52,200.00 $4.00 $69,600.00 $4.00 $69,600.00 $4.40 $76,560.00 023 P-620 SURFACE PAINTED TAXILANE MARKINGS 10 EACH $600.00 $6,000.00 $300.00 $3,000.00 $759.00 $7,590.00 $750.00 $7,500.00 $800.00 $8,000.00 024 P-620 TIE-DOWN NUMBERING 90 EACH $50.00 $4,500.00 $50.00 $4,500.00 $46.00 $4,140.00 $50.00 $4,500.00 $50.00 $4,500.00 025 SP-12 BLUE REFLECTORS 2 EACH $20.00 $40.00 $15.00 $30.00 $25.00 $50.00 $15.00 $30.00 $30.00 $60.00 026 L-126 INSTALL TIE-DOWN ANCHORS 165 EACH $1,000.00 $165,000.00 $400.00 $66,000.00 $1,012.00 $166,980.00 $400.00 $66,000.00 $1,100.00 $181,500.00 027 SP-25 K-RAIL BARRIER 48 EACH $500.00 $24,000.00 $900.00 $43,200.00 $643.00 $30,864.00 $700.00 $33,600.00 $700.00 $33,600.00 028 SP-16 TIE-DOWN CABLE 3,940 LF $25.00 $98,500.00 $10.00 $39,400.00 $18.00 $70,920.00 $1.00 $3,940.00 $20.00 $78,800.00 029 SP-17 REMOVE EXISTING TIE-DOWN ANCHORS 338 EACH $250.00 $84,500.00 $250.00 $84,500.00 $356.00 $120,328.00 $50.00 $16,900.00 $200.00 $67,600.00 030 SP-18 REMOVAL OF WASH RACK, SHED AND ASSOCIATED UTILITIES 1 EACH $20,000.00 $20,000.00 $25,000.00 $25,000.00 $29,356.00 $29,356.00 $20,000.00 $20,000.00 $35,000.00 $35,000.00 031 LS-1 EXISTING POLLUTION CONTROL FACILITY DEMOLITION - ELECTRICAL 1 LS $150,000.00 $150,000.00 $1,000.00 $1,000.00 $78,423.00 $78,423.00 $78,000.00 $78,000.00 $35,000.00 $35,000.00 032 SP-11 BOLLARDS 2 EACH $1,000.00 $2,000.00 $1,000.00 $2,000.00 $1,063.00 $2,126.00 $1,000.00 $2,000.00 $1,200.00 $2,400.00 033 D-751 ADJUST CATCH BASIN TO GRADE 17 EACH $3,000.00 $51,000.00 $1,600.00 $27,200.00 $5,778.00 $98,226.00 $3,500.00 $59,500.00 $2,500.00 $42,500.00 034 D-751 ADJUST MANHOLE TO GRADE 5 EACH $1,500.00 $7,500.00 $1,300.00 $6,500.00 $4,570.00 $22,850.00 $1,500.00 $7,500.00 $700.00 $3,500.00 035 SP-15 ADJUST JUNCTION BOX/HANDHOLE TO GRADE 2 EACH $2,000.00 $4,000.00 $3,300.00 $6,600.00 $1,926.00 $3,852.00 $800.00 $1,600.00 $500.00 $1,000.00 036 SP-14 ADJUST UTILITY VAULT TO GRADE 18 EACH $2,000.00 $36,000.00 $5,000.00 $90,000.00 $1,626.00 $29,268.00 $3,500.00 $63,000.00 $3,500.00 $63,000.00 037 D-751 48" MANHOLE 2 EACH $6,500.00 $13,000.00 $6,000.00 $12,000.00 $6,060.00 $12,120.00 $7,000.00 $14,000.00 $9,500.00 $19,000.00 038 D-751 CATCH BASIN 2 EACH $5,000.00 $10,000.00 $5,000.00 $10,000.00 $7,578.00 $15,156.00 $4,000.00 $8,000.00 $4,800.00 $9,600.00 039 SP-3 CATCH BASIN FILTER INSERTS 19 EACH $2,000.00 $38,000.00 $4,000.00 $76,000.00 $933.00 $17,727.00 $3,000.00 $57,000.00 $3,500.00 $66,500.00 040 SP-4 CATCH BASIN FILTRATION SYSTEM (WITH 8" VALVE AND DRAIN VALVE)1 EACH $12,000.00 $12,000.00 $30,000.00 $30,000.00 $11,134.00 $11,134.00 $5,000.00 $5,000.00 $28,500.00 $28,500.00 041 SP-9 CONCRETE RIBBON CURB 210 LF $50.00 $10,500.00 $30.00 $6,300.00 $54.00 $11,340.00 $50.00 $10,500.00 $150.00 $31,500.00 042 D-701 15-INCH DIA. RCP, CLASS III 270 LF $200.00 $54,000.00 $130.00 $35,100.00 $98.00 $26,460.00 $150.00 $40,500.00 $260.00 $70,200.00 043 D-701 21-INCH DIA. RCP, CLASS III 250 LF $250.00 $62,500.00 $130.00 $32,500.00 $121.00 $30,250.00 $150.00 $37,500.00 $280.00 $70,000.00 044 SP-27 6" DIP WATERLINE 120 LF $200.00 $24,000.00 $230.00 $27,600.00 $196.00 $23,520.00 $200.00 $24,000.00 $264.00 $31,680.00 045 SP-28 6" GATE VALVE 1 EACH $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,361.00 $2,361.00 $2,500.00 $2,500.00 $2,100.00 $2,100.00 046 L-100 REMOVAL OF EXISTING LIGHT POLE ASSEMBLY 11 EACH $4,000.00 $44,000.00 $4,000.00 $44,000.00 $5,530.00 $60,830.00 $5,500.00 $60,500.00 $6,000.00 $66,000.00 047 L-100 NEW 30-FOOT APRON AREA LIGHT POLE WITH MOUNTING APPARATUS AND LIGHT LOWERING SYSTEM 5 EACH $20,000.00 $100,000.00 $16,000.00 $80,000.00 $26,895.00 $134,475.00 $26,750.00 $133,750.00 $25,000.00 $125,000.00 048 L-100 NEW LED APRON AREA LIGHTING FIXTURE 10 EACH $5,000.00 $50,000.00 $5,000.00 $50,000.00 $6,636.00 $66,360.00 $6,600.00 $66,000.00 $7,900.00 $79,000.00 049 L-100 NEW OBSTRUCTION LIGHTING FIXTURE (DOUBLE-HEAD)5 EACH $2,000.00 $10,000.00 $2,000.00 $10,000.00 $2,111.00 $10,555.00 $2,100.00 $10,500.00 $2,800.00 $14,000.00 050 L-100 TRANSFORMER AND ENCLOSURE FOR OBSTRUCTION LIGHTING FIXTURE 5 EACH $1,500.00 $7,500.00 $1,500.00 $7,500.00 $1,659.00 $8,295.00 $1,650.00 $8,250.00 $2,050.00 $10,250.00 051 L-100 1" RGS CONDUIT 125 LF $100.00 $12,500.00 $100.00 $12,500.00 $120.00 $15,000.00 $119.00 $14,875.00 $168.00 $21,000.00 052 L-100 2" CONCRETE-ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 630 LF $25.00 $15,750.00 $25.00 $15,750.00 $30.00 $18,900.00 $30.00 $18,900.00 $43.00 $27,090.00 Ghilotti Construction Company, Inc 246 Ghilotti Avenue Santa Rosa, CA 95407 O'Grady Paving, Inc. 2513 Wyandotte Street Mountain View, CA 94043 BASE BID TOTAL TOTALTOTAL ENGINEERS OPINION OF CONSTRUCTION COST Santa Clara, CA 95054 715 Comstock Street Granite Construction CoC&S Engineers, Inc. 8950 Cal Center Drive, #112 Sacramento, CA 95826 DeSilva Gates Construction LP 11555 Dublin Blvd. Dublin, CA 94568 TOTAL Page 1 Attachment G PALO ALTO AIRPORT APRON RECONSTRUCTION PROJECT, PHASE I - BID SET A (RE-BID) FAA AIP PROJECT NO. 3-06-0182-013-2017 IFB NO. 167808C ITEM FAA UNIT UNIT UNIT UNIT UNIT NO. SPEC NO. DESCRIPTION QUANTITY UNITS PRICE TOTAL PRICE PRICE PRICE PRICE Ghilotti Construction Company, Inc 246 Ghilotti Avenue Santa Rosa, CA 95407 O'Grady Paving, Inc. 2513 Wyandotte Street Mountain View, CA 94043 TOTAL TOTALTOTAL ENGINEERS OPINION OF CONSTRUCTION COST Santa Clara, CA 95054 715 Comstock Street Granite Construction CoC&S Engineers, Inc. 8950 Cal Center Drive, #112 Sacramento, CA 95826 DeSilva Gates Construction LP 11555 Dublin Blvd. Dublin, CA 94568 TOTAL 053 L-100 #6 AWG TYPE THWN 600V CABLE 6,450 LF $2.50 $16,125.00 $2.50 $16,125.00 $3.00 $19,350.00 $3.00 $19,350.00 $4.00 $25,800.00 054 L-108 NO. 6 AWG BARE COPPER COUNTERPOISE WIRE 2,100 LF $2.50 $5,250.00 $3.00 $6,300.00 $3.00 $6,300.00 $3.00 $6,300.00 $4.40 $9,240.00 055 L-125 TAXIWAY EDGE LIGHTING BASE CAN 15 EACH $2,000.00 $30,000.00 $2,500.00 $37,500.00 $2,725.00 $40,875.00 $2,710.00 $40,650.00 $3,650.00 $54,750.00 056 L-115 ELECTRICAL PULL BOX, H20 TRAFFIC RATED 8 EACH $3,000.00 $24,000.00 $4,000.00 $32,000.00 $4,856.00 $38,848.00 $4,830.00 $38,640.00 $6,800.00 $54,400.00 057 L-110 1" CONCRETE ENCASED PVC CONDUIT 1,170 LF $5.00 $5,850.00 $5.00 $5,850.00 $5.00 $5,850.00 $5.00 $5,850.00 $7.00 $8,190.00 058 L-100 #8 AWG TYPE THWN 600V CABLE 480 LF $2.00 $960.00 $2.00 $960.00 $2.00 $960.00 $2.00 $960.00 $2.90 $1,392.00 059 L-110 2-WAY 2" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 1,910 LF $60.00 $114,600.00 $45.00 $85,950.00 $56.00 $106,960.00 $56.00 $106,960.00 $66.00 $126,060.00 060 L-115 ELECTRICAL PULL BOX, AIRCRAFT-RATED, 36" X 36" X 30"2 EACH $10,000.00 $20,000.00 $10,000.00 $20,000.00 $11,562.00 $23,124.00 $11,500.00 $23,000.00 $16,000.00 $32,000.00 061 P-612 ENGINEERS FIELD OFFICE 1 LS $75,000.00 $75,000.00 $10,000.00 $10,000.00 $8,571.00 $8,571.00 $10,000.00 $10,000.00 $46,000.00 $46,000.00 062 M-100 MAINTENANCE AND PROTECTION OF TRAFFIC 1 LS $300,000.00 $300,000.00 $30,500.00 $30,500.00 $150,000.00 $150,000.00 $488,000.00 $488,000.00 $390,000.00 $390,000.00 063 M-150 PROJECT SURVEY & STAKEOUT 1 LS $25,000.00 $25,000.00 $40,000.00 $40,000.00 $29,600.00 $29,600.00 $29,600.00 $29,600.00 $35,000.00 $35,000.00 064 020650 MISCELLANEOUS FUEL PIPE & APPURTENANCES REMOVAL & CLOSURE 1 LS $30,000.00 $30,000.00 $60,000.00 $60,000.00 $45,000.00 $45,000.00 $59,590.00 $59,590.00 $20,000.00 $20,000.00 065 136200 LEVEL AND LEAK MONITORING SYSTEM 1 EACH $30,000.00 $30,000.00 $50,000.00 $50,000.00 $57,000.00 $57,000.00 $51,310.00 $51,310.00 $20,000.00 $20,000.00 066 335647-1 2-INCH FUEL LINE 600 LF $150.00 $90,000.00 $275.00 $165,000.00 $165.00 $99,000.00 $250.00 $150,000.00 $100.00 $60,000.00 067 335648-1 AVIATION FUEL DISPENSING EQUIPMENT 2 EACH $45,000.00 $90,000.00 $50,000.00 $100,000.00 $60,000.00 $120,000.00 $48,680.00 $97,360.00 $30,000.00 $60,000.00 068 L-100 REMOVAL OF EXISTING BRANCH CIRCUIT CONDUIT AND WIRING 1 LS $1,000.00 $1,000.00 $5,000.00 $5,000.00 $11,200.00 $11,200.00 * $10,000.00 $10,000.00 $5,200.00 $5,200.00 069 L-100 PANELBOARD FOR USE WITH FUEL SERVCIE EQUIPMENT 2 EACH $1,500.00 $3,000.00 $5,000.00 $10,000.00 $11,200.00 $22,400.00 $10,888.00 $21,776.00 $7,700.00 $15,400.00 070 L-100 DISCONNECTION OF EXISTING FEEDER'S AND BRANCH CIRCUITS FROM EXISTING PANELBOARDS 2 EACH $500.00 $1,000.00 $3,000.00 $6,000.00 $12,000.00 $24,000.00 $11,500.00 $23,000.00 $3,750.00 $7,500.00 071 L-100 RECONNECTION OF EXISTING FEEDER'S AND BRANCH CIRCUITS TO PROPOSED PANELBOARDS 2 EACH $500.00 $1,000.00 $13,000.00 $26,000.00 $27,000.00 $54,000.00 $26,250.00 $52,500.00 $20,000.00 $40,000.00 072 L-108 NO. 12 AWG, 600V, TYPE THWN CABLE 300 LF $1.00 $300.00 $1.00 $300.00 $1.00 $300.00 $1.20 $360.00 $2.00 $600.00 073 SP-30 CONTAMINATE SOIL DISPOSAL 10 CY $500.00 $5,000.00 $225.00 $2,250.00 $558.00 $5,580.00 $500.00 $5,000.00 $2,000.00 $20,000.00 074 GP-105 MOBILIZATION (Shall not exceed 6% of the total amount of line items #001-072)1 LS $292,954.00 $292,954.00 $280,151.40 $280,151.40 * $306,636.84 $306,636.84 * $275,000.00 $275,000.00 $275,000.00 $275,000.00 $5,175,514.00 $4,949,341.40 *$5,417,250.84 *$5,740,453.50 $5,150,218.00 075 P-152 EMBANKMENT 1,700 CY $42.00 $71,400.00 $40.00 $68,000.00 $40.00 $68,000.00 $70.00 $119,000.00 $25.00 $42,500.00 076 P-160 PULVERIZED ASPHALT (2.5" THICKNESS)23,400 SY $1.50 $35,100.00 $2.00 $46,800.00 $1.00 $23,400.00 $1.00 $23,400.00 $3.00 $70,200.00 077 SP-19 MILLING 650 SY $15.00 $9,750.00 $20.00 $13,000.00 $17.00 $11,050.00 $7.00 $4,550.00 $15.00 $9,750.00 078 P-156 COMPLIANCE W/POLLUTION, EROSION & SILTATION CONTROL 1 LS $50,000.00 $50,000.00 $40,000.00 $40,000.00 $31,786.00 $31,786.00 $10,000.00 $10,000.00 $23,000.00 $23,000.00 079 P-208 AGGREGATE BASE COURSE (6" THICK)22,300 SY $15.00 $334,500.00 $20.00 $446,000.00 $11.00 $245,300.00 $15.00 $334,500.00 $13.30 $296,590.00 080 P-403 HMA SURFACE COURSE 4,400 TON $120.00 $528,000.00 $122.00 $536,800.00 $103.00 $453,200.00 $120.00 $528,000.00 $98.00 $431,200.00 081 P-608 EMULSIFIED ASPHALT SEAL COAT 2,140 SY $9.00 $19,260.00 $7.00 $14,980.00 $8.00 $17,120.00 $6.00 $12,840.00 $11.00 $23,540.00 082 SP-13 JOINT SEALING 560 LF $12.00 $6,720.00 $9.00 $5,040.00 $9.00 $5,040.00 $10.00 $5,600.00 $25.00 $14,000.00 083 P-602 PRIME COAT 7 TON $1,000.00 $7,000.00 $2,000.00 $14,000.00 $1,377.00 $9,639.00 $1,000.00 $7,000.00 $1,700.00 $11,900.00 084 P-160 CEMENT TREATED SUBGRADE (18" THICK)23,400 SY $6.00 $140,400.00 $6.00 $140,400.00 $3.00 $70,200.00 $2.25 $52,650.00 $3.80 $88,920.00 085 P-160 CEMENT MATERIAL (6% RATE)1,300 TON $100.00 $130,000.00 $100.00 $130,000.00 $141.00 $183,300.00 $140.00 $182,000.00 $165.00 $214,500.00 086 P-620 MARKING REMOVAL 165 SF $4.00 $660.00 $3.00 $495.00 $10.00 $1,650.00 $10.00 $1,650.00 $11.00 $1,815.00 087 P-620 PAINTSTRIPING (YELLOW, REFLECTORIZED) 3,440 SF $4.00 $13,760.00 $5.00 $17,200.00 $4.00 $13,760.00 $4.00 $13,760.00 $4.40 $15,136.00 088 P-620 PAINTSTRIPING (WHITE, NON-REFLECTORIZED) 1,740 SF $4.00 $6,960.00 $3.00 $5,220.00 $4.00 $6,960.00 $4.25 $7,395.00 $4.50 $7,830.00 089 P-620 PAINTSTRIPING (GREEN, NON-REFLECTORIZED)18,270 SF $4.00 $73,080.00 $3.00 $54,810.00 $4.00 $73,080.00 $4.00 $73,080.00 $4.40 $80,388.00 090 P-620 SURFACE PAINTED TAXILANE MARKINGS 9 EACH $600.00 $5,400.00 $300.00 $2,700.00 $759.00 $6,831.00 $750.00 $6,750.00 $800.00 $7,200.00 091 P-620 TIE-DOWN NUMBERING 45 EACH $50.00 $2,250.00 $50.00 $2,250.00 $46.00 $2,070.00 $50.00 $2,250.00 $50.00 $2,250.00 092 L-126 INSTALL TIE-DOWN ANCHORS 136 EACH $1,000.00 $136,000.00 $400.00 $54,400.00 $1,012.00 $137,632.00 $400.00 $54,400.00 $1,100.00 $149,600.00 093 SP-17 REMOVE EXISTING TIE-DOWN ANCHORS 183 EACH $250.00 $45,750.00 $250.00 $45,750.00 $183.00 $33,489.00 $50.00 $9,150.00 $200.00 $36,600.00 094 D-701 12-INCH DIA. RCP, CLASS III 180 LF $175.00 $31,500.00 $110.00 $19,800.00 $66.00 $11,880.00 $125.00 $22,500.00 $240.00 $43,200.00 095 D-701 15-INCH DIA. RCP, CLASS III 200 LF $200.00 $40,000.00 $110.00 $22,000.00 $62.00 $12,400.00 $150.00 $30,000.00 $260.00 $52,000.00 096 D-751 ADJUST CATCH BASIN TO GRADE 5 EACH $3,000.00 $15,000.00 $1,600.00 $8,000.00 $3,740.00 $18,700.00 $3,500.00 $17,500.00 $3,000.00 $15,000.00 097 D-751 CATCH BASIN 1 EACH $5,000.00 $5,000.00 $5,000.00 $5,000.00 $4,296.00 $4,296.00 $4,000.00 $4,000.00 $4,800.00 $4,800.00 098 SP-3 CATCH BASIN FILTER INSERTS 6 EACH $2,000.00 $12,000.00 $4,000.00 $24,000.00 $532.00 $3,192.00 $3,000.00 $18,000.00 $3,500.00 $21,000.00 099 D-751 ADJUST MANHOLE TO GRADE 1 EACH $1,500.00 $1,500.00 $1,300.00 $1,300.00 $2,795.00 $2,795.00 $1,500.00 $1,500.00 $700.00 $700.00 100 SP-15 ADJUST JUNCTION BOX/HANDHOLE TO GRADE 1 EACH $2,000.00 $2,000.00 $3,500.00 $3,500.00 $1,178.00 $1,178.00 $800.00 $800.00 $500.00 $500.00 101 L-100 REMOVAL OF EXISTING LIGHT POLE ASSEMBLY 5 EACH $4,000.00 $20,000.00 $4,000.00 $20,000.00 $4,183.00 $20,915.00 $4,160.00 $20,800.00 $5,500.00 $27,500.00 102 L-100 NEW 30-FOOT APRON AREA LIGHT POLE WITH MOUNTING APPARATUS AND LIGHT LOWERING SYSTEM 3 EACH $20,000.00 $60,000.00 $16,000.00 $48,000.00 $22,119.00 $66,357.00 $22,000.00 $66,000.00 $25,000.00 $75,000.00 103 L-100 NEW LED APRON AREA LIGHTING FIXTURE 6 EACH $5,000.00 $30,000.00 $5,000.00 $30,000.00 $5,630.00 $33,780.00 $5,600.00 $33,600.00 $8,000.00 $48,000.00 SUBTOTAL BASE BID (ITEMS 001 THROUGH 074) ADDITIVE ALTERNATE BID 1 Page 2 Attachment G PALO ALTO AIRPORT APRON RECONSTRUCTION PROJECT, PHASE I - BID SET A (RE-BID) FAA AIP PROJECT NO. 3-06-0182-013-2017 IFB NO. 167808C ITEM FAA UNIT UNIT UNIT UNIT UNIT NO. SPEC NO. DESCRIPTION QUANTITY UNITS PRICE TOTAL PRICE PRICE PRICE PRICE Ghilotti Construction Company, Inc 246 Ghilotti Avenue Santa Rosa, CA 95407 O'Grady Paving, Inc. 2513 Wyandotte Street Mountain View, CA 94043 TOTAL TOTALTOTAL ENGINEERS OPINION OF CONSTRUCTION COST Santa Clara, CA 95054 715 Comstock Street Granite Construction CoC&S Engineers, Inc. 8950 Cal Center Drive, #112 Sacramento, CA 95826 DeSilva Gates Construction LP 11555 Dublin Blvd. Dublin, CA 94568 TOTAL 104 L-100 NEW OBSTRUCTION LIGHTING FIXTURE (DOUBLE-HEAD)3 EACH $2,000.00 $6,000.00 $2,000.00 $6,000.00 $1,991.00 $5,973.00 $1,980.00 $5,940.00 $2,800.00 $8,400.00 105 L-100 TRANSFORMER AND ENCLOSURE FOR OBSTRUCTION LIGHTING FIXTURE 3 EACH $1,500.00 $4,500.00 $1,000.00 $3,000.00 $1,448.00 $4,344.00 $1,440.00 $4,320.00 $2,000.00 $6,000.00 106 L-100 1" RGS CONDUIT 15 LF $100.00 $1,500.00 $120.00 $1,800.00 $120.00 $1,800.00 $119.00 $1,785.00 $170.00 $2,550.00 107 L-100 2" RGS CONDUIT IN PAVEMENT 10 LF $150.00 $1,500.00 $120.00 $1,200.00 $123.00 $1,230.00 $122.00 $1,220.00 $50.00 $500.00 108 L-100 #6 AWG TYPE THWN 600V CABLE 6,400 LF $2.50 $16,000.00 $2.00 $12,800.00 $3.00 $19,200.00 $2.74 $17,536.00 $4.00 $25,600.00 109 L-115 ELECTRICAL PULL BOX, H20 TRAFFIC RATED 4 EACH $3,000.00 $12,000.00 $5,000.00 $20,000.00 $4,856.00 $19,424.00 $4,830.00 $19,320.00 $7,000.00 $28,000.00 110 L-110 1" CONCRETE ENCASED PVC CONDUIT 840 LF $5.00 $4,200.00 $5.00 $4,200.00 $5.00 $4,200.00 $5.00 $4,200.00 $7.00 $5,880.00 111 L-100 #8 AWG TYPE THWN 600V CABLE 1,110 LF $2.00 $2,220.00 $2.00 $2,220.00 $2.00 $2,220.00 $2.00 $2,220.00 $2.80 $3,108.00 112 L-108 NO. 6 AWG BARE COPPER COUNTERPOISE WIRE 1,800 LF $2.50 $4,500.00 $2.00 $3,600.00 $3.00 $5,400.00 $3.10 $5,580.00 $4.40 $7,920.00 113 L-100 4-WAY 2" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 995 LF $100.00 $99,500.00 $92.00 $91,540.00 $98.00 $97,510.00 $97.00 $96,515.00 $150.00 $149,250.00 114 L-100 2-WAY 2" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 2,360 LF $60.00 $141,600.00 $45.00 $106,200.00 $56.00 $132,160.00 $56.00 $132,160.00 $80.00 $188,800.00 115 L-100 2" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 870 LF $25.00 $21,750.00 $25.00 $21,750.00 $30.00 $26,100.00 $30.00 $26,100.00 $43.00 $37,410.00 116 L-115 ELECTRICAL PULL BOX, AIRCRAFT-RATED, 36" X 36" X 30"8 EACH $10,000.00 $80,000.00 $10,000.00 $80,000.00 $11,562.00 $92,496.00 $11,500.00 $92,000.00 $17,000.00 $136,000.00 117 L-125 TAXIWAY EDGE LIGHTING BASE CAN 15 EACH $2,000.00 $30,000.00 $2,500.00 $37,500.00 $2,584.00 $38,760.00 $2,570.00 $38,550.00 $3,500.00 $52,500.00 118 SP-29 ENGINEERS FIELD OFFICE 1 LS $45,000.00 $45,000.00 $5,000.00 $5,000.00 $2,822.00 $2,822.00 $2,700.00 $2,700.00 $12,000.00 $12,000.00 119 M-100 MAINTENANCE AND PROTECTION OF TRAFFIC 1 LS $100,000.00 $100,000.00 $60,000.00 $60,000.00 $84,136.00 $84,136.00 $35,000.00 $35,000.00 $17,000.00 $17,000.00 120 M-150 PROJECT SURVEY & STAKEOUT 1 LS $25,000.00 $25,000.00 $20,000.00 $20,000.00 $14,000.00 $14,000.00 $10,940.00 $10,940.00 $15,000.00 $15,000.00 121 GP-105 MOBILIZATION (Shall not exceed 6% of the total amount of line items #074-120)1 LS $145,696.00 $145,696.00 $136,000.00 $136,000.00 $60,000.00 $60,000.00 $94,000.00 $94,000.00 $150,000.00 $150,000.00 $2,573,956.00 $2,432,255.00 $2,180,775.00 *$2,252,761.00 $2,660,537.00 122 P-152 UNCLASSIFIED EXCAVATION 2,600 CY $50.00 $130,000.00 $10.00 $26,000.00 $9.00 $23,400.00 * $25.00 $65,000.00 $16.50 $42,900.00 123 P-160 PULVERIZED ASPHALT (2.5" THICKNESS)3,100 SY $1.50 $4,650.00 $2.00 $6,200.00 $9.00 $27,900.00 *$1.00 $3,100.00 $2.00 $6,200.00 124 SP-19 MILLING 2,545 SY $15.00 $38,175.00 $10.00 $25,450.00 $2.00 $5,090.00 *$4.00 $10,180.00 $14.00 $35,630.00 125 P-156 COMPLIANCE W/POLLUTION, EROSION & SILTATION CONTROL 1 LS $5,000.00 $5,000.00 $1,000.00 $1,000.00 $6.00 $6.00 * $2,000.00 $2,000.00 $11,000.00 $11,000.00 126 P-208 AGGREGATE BASE COURSE (ADDITIONAL 2" THICK TO FORM A 6" THICK SECTION)15,900 SY $3.00 $47,700.00 $6.00 $95,400.00 $3.00 $47,700.00 $3.00 $47,700.00 $5.00 $79,500.00 127 P-208 AGGREGATE BASE COURSE (6" THICK)2,500 SY $15.00 $37,500.00 $20.00 $50,000.00 $12.00 $30,000.00 $15.00 $37,500.00 $13.30 $33,250.00 128 P-403 HMA SURFACE COURSE 1,280 TON $120.00 $153,600.00 $122.00 $156,160.00 $102.00 $130,560.00 $100.00 $128,000.00 $98.00 $125,440.00 129 P-602 PRIME COAT 6 TON $1,000.00 $6,000.00 $2,000.00 $12,000.00 $1,193.00 $7,158.00 $1,000.00 $6,000.00 $1,700.00 $10,200.00 130 P-160 CEMENT TREATED SUBGRADE (18" THICK)18,200 SY $6.00 $109,200.00 $6.00 $109,200.00 $3.00 $54,600.00 $2.25 $40,950.00 $3.80 $69,160.00 131 P-160 CEMENT MATERIAL (6% RATE)975 TON $100.00 $97,500.00 $100.00 $97,500.00 $141.00 $137,475.00 $140.00 $136,500.00 $165.00 $160,875.00 132 P-620 PAINTSTRIPING (YELLOW, REFLECTORIZED) 200 SF $4.00 $800.00 $5.00 $1,000.00 $4.00 $800.00 $3.80 $760.00 $4.40 $880.00 133 P-620 "TUG OR TOW ONLY" MARKINGS 2 EACH $500.00 $1,000.00 $250.00 $500.00 $445.00 $890.00 $418.00 $836.00 $500.00 $1,000.00 134 L-126 INSTALL TIE-DOWN ANCHORS 15 EACH $1,000.00 $15,000.00 $400.00 $6,000.00 $1,012.00 $15,180.00 $400.00 $6,000.00 $1,100.00 $16,500.00 135 SP-17 REMOVE EXISTING TIE-DOWN ANCHORS 18 EACH $250.00 $4,500.00 $350.00 $6,300.00 $278.00 $5,004.00 $50.00 $900.00 $200.00 $3,600.00 136 D-751 ADJUST CATCH BASIN TO GRADE 3 EACH $3,000.00 $9,000.00 $1,500.00 $4,500.00 $3,533.00 $10,599.00 $3,500.00 $10,500.00 $3,000.00 $9,000.00 137 SP-3 CATCH BASIN FILTER INSERTS 3 EACH $2,000.00 $6,000.00 $4,000.00 $12,000.00 $571.00 $1,713.00 $3,000.00 $9,000.00 $3,500.00 $10,500.00 138 L-110 2" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 1,910 LF $25.00 $47,750.00 $25.00 $47,750.00 $30.00 $57,300.00 $30.00 $57,300.00 $43.00 $82,130.00 139 L-115 ELECTRICAL PULL BOX, H20 TRAFFIC RATED 4 EACH $3,000.00 $12,000.00 $4,500.00 $18,000.00 $4,856.00 $19,424.00 $4,830.00 $19,320.00 $6,800.00 $27,200.00 140 L-100 2-WAY 2" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 760 LF $60.00 $45,600.00 $45.00 $34,200.00 $56.00 $42,560.00 $56.00 $42,560.00 $65.00 $49,400.00 141 L-110 1" CONCRETE ENCASED PVC CONDUIT 730 LF $5.00 $3,650.00 $5.00 $3,650.00 $5.00 $3,650.00 $5.00 $3,650.00 $7.00 $5,110.00 142 L-100 #6 AWG BARE COPPER COUNTERPOISE WIRE 760 LF $2.50 $1,900.00 $2.00 $1,520.00 $3.00 $2,280.00 $3.10 $2,356.00 $4.40 $3,344.00 143 GP-105 MOBILIZATION (6% MAXIMUM)1 LS $46,592.00 $46,592.00 $40,000.00 $40,000.00 $20,000.00 $20,000.00 * $25,000.00 $25,000.00 $29,000.00 $29,000.00 $823,117.00 $754,330.00 $643,289.00 *$655,112.00 $811,819.00 144 L-100 1" CONDUIT IN PAVEMENT 1,120 LF $20.00 $22,400.00 $5.00 $5,600.00 $5.00 $5,600.00 $5.00 $5,600.00 $7.00 $7,840.00 145 L-100 3-WAY 4" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 240 LF $30.00 $7,200.00 $85.00 $20,400.00 $96.00 $23,040.00 $95.00 $22,800.00 $130.00 $31,200.00 146 L-100 4-WAY 4" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 465 LF $40.00 $18,600.00 $90.00 $41,850.00 $105.00 $48,825.00 $104.00 $48,360.00 $140.00 $65,100.00 147 L-100 5-WAY 4" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 415 LF $50.00 $20,750.00 $100.00 $41,500.00 $115.00 $47,725.00 $114.00 $47,310.00 $150.00 $62,250.00 148 L-100 17"X30" PULL BOX (H20 TRAFFIC RATED)7 EACH $2,500.00 $17,500.00 $5,000.00 $35,000.00 $4,856.00 $33,992.00 $4,830.00 $33,810.00 $7,000.00 $49,000.00 149 L-100 24"X36" PULL BOX (H20 TRAFFIC RATED)1 EACH $3,500.00 $3,500.00 $7,000.00 $7,000.00 $7,440.00 $7,440.00 $7,400.00 $7,400.00 $10,000.00 $10,000.00 150 L-100 12"X12" PULL BOX (H20 TRAFFIC RATED)8 EACH $2,000.00 $16,000.00 $4,500.00 $36,000.00 $4,856.00 $38,848.00 $4,830.00 $38,640.00 $7,000.00 $56,000.00 $105,950.00 $187,350.00 $205,470.00 $203,920.00 $281,390.00SUBTOTAL ADDITIVE ALTERNATE BID 3 (ITEMS 144 THROUGH 150) SUBTOTAL ADDITIVE ALTERNATE BID 2 (ITEMS 122 THROUGH 143) SUBTOTAL ADDITIVE ALTERNATE BID 1 (ITEMS 075 THROUGH 121) ADDITIVE ALTERNATE 2 BID ADDITIVE ALTERNATE BID 3 Page 3 Attachment G PALO ALTO AIRPORT APRON RECONSTRUCTION PROJECT, PHASE I - BID SET A (RE-BID) FAA AIP PROJECT NO. 3-06-0182-013-2017 IFB NO. 167808C ITEM FAA UNIT UNIT UNIT UNIT UNIT NO. SPEC NO. DESCRIPTION QUANTITY UNITS PRICE TOTAL PRICE PRICE PRICE PRICE Ghilotti Construction Company, Inc 246 Ghilotti Avenue Santa Rosa, CA 95407 O'Grady Paving, Inc. 2513 Wyandotte Street Mountain View, CA 94043 TOTAL TOTALTOTAL ENGINEERS OPINION OF CONSTRUCTION COST Santa Clara, CA 95054 715 Comstock Street Granite Construction CoC&S Engineers, Inc. 8950 Cal Center Drive, #112 Sacramento, CA 95826 DeSilva Gates Construction LP 11555 Dublin Blvd. Dublin, CA 94568 TOTAL 151 L-100 1" CONDUIT IN PAVEMENT 420 LF $20.00 $8,400.00 $5.00 $2,100.00 $5.00 $2,100.00 $5.00 $2,100.00 $7.00 $2,940.00 152 L-110 3-WAY 4" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 75 LF $30.00 $2,250.00 $85.00 $6,375.00 $96.00 $7,200.00 $95.00 $7,125.00 $130.00 $9,750.00 153 L-110 6-WAY 4" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 320 LF $60.00 $19,200.00 $110.00 $35,200.00 $129.00 $41,280.00 $128.00 $40,960.00 $170.00 $54,400.00 154 L-110 11-WAY 4" CONCRETE ENCASED SCH. 40 PVC CONDUIT IN PAVEMENT 30 LF $100.00 $3,000.00 $200.00 $6,000.00 $253.00 $7,590.00 $252.00 $7,560.00 $330.00 $9,900.00 155 L-100 17"X30" PULL BOX (H20 TRAFFIC RATED)2 EACH $2,500.00 $5,000.00 $5,000.00 $10,000.00 $4,856.00 $9,712.00 $4,830.00 $9,660.00 $7,000.00 $14,000.00 156 L-100 24"X36" PULL BOX (H20 TRAFFIC RATED)1 EACH $3,500.00 $3,500.00 $7,000.00 $7,000.00 $7,440.00 $7,440.00 $7,400.00 $7,400.00 $10,000.00 $10,000.00 157 L-100 12"X12" PULL BOX (H20 TRAFFIC RATED)3 EACH $2,000.00 $6,000.00 $4,500.00 $13,500.00 $4,856.00 $14,568.00 $4,830.00 $14,490.00 $7,000.00 $21,000.00 $47,350.00 $80,175.00 $89,890.00 $89,295.00 $121,990.00 $8,725,887.00 $8,403,451.40 *$8,536,674.84 *$8,941,541.50 $9,025,954.00 C&S ENGINEERS, INC. I CERTIFY THAT THIS IS A TRUE AND CORRECT TABULATION OF BIDS RECEIVED AUGUST 1, 2017 SIGNED:DATE: * Math error - Incorrect "Total Item Price" (also changes total bid amount) * Mobilization corrected to not exceed 6% of corrected total Base Bid amount *DENOTES MATH ERROR. CORRECTED AMOUNT SHOWN. ADDITIVE ALTERNATE BID 4 SUBTOTAL ADDITIVE ALTERNATE BID 4 (ITEMS 151 THROUGH 157) GRAND TOTAL - BASE AND ALL ADDITIVE ALTERNATE BIDS * Math error - Incorrect "Total Item Price" (also changes total bid amount) * Mobilization corrected to not exceed 6% of corrected total Base Bid amount Page 4 Attachment G Attachment H At t a c h m e n t H - --.. 11"""1 =>< -. Cl~~~~~ __ _ f i ! I ~ • I I LEGEND I 1--: -:::J-BIDIET A· l'MI. 11117 1 •• I BID8EI' I· SU•Ell 11118 ' ' 4 c • NO. --MIE PALO ALTO AIRPORT PALO Al.TO, CALFORNIA PROJECT ~A [_ ______ ] I APRON AEOONS1RUCl10N, PHASE I I OVERALL PHASING PLAN A • I [: I BIDIETC· ......... EIUll8 l B I: : : :1 :g~:::=lllJI-~ =------·---- • 4 ==-~='==="'-:..~: r -I -·-·---·--.. --.-...---:1 )I> • 1~11&11 111.1aea&A111 &111 • • • lmFT. _" _ __._._._..,_•-••...-I c.: " A1 ., ... !""6""""89Nr111111 '" P""" -·~-·--~ .. - • t I I I a 4 I • i:asengtneen1,.,._ I _ .. i:--~,.,...,t: C lY OF 'E"°~:" 0 PALO ALTO DmMt 1= WT~lll PH-1 Page 1 Resolution No. Resolution of the City Council of the City of Palo Alto Authorizing the City Manager to Execute Grant Agreements Offered to the City of Palo Alto by the California Department of Transportation for Airport Improvement Program (AIP) Matching Grant Funds to be Used for Apron Reconstruction, Phase 1, for the Palo Alto Airport; and Authorizing the City Manager or his Designee to Execute, on Behalf of the City, any Other Documents Associated with the Application and Acceptance of Grant Funds from the California Department of Transportation; and Certifying that the Airport Enterprise Fund has Sufficient Local Matching Funds to Finance One Hundred Percent (100%) of the California Department of Transportation Grant Funded Projects R E C I T A L S A. The City of Palo Alto (“the City”) and the Federal Aviation Administration are parties to federal Airport Improvement Program (AIP) grant 3-06-0182-13 for Apron Reconstruction, Phase 1, at Palo Alto Airport. B. The California Department of Transportation (“DOT”), pursuant to Public Utilities Code Section 21683.1, is authorized to provide AIP matching grants of up to five percent (5%) of FAA grant amounts. C. The DOT requires a local agency, as a condition of receiving these AIP matching grant funds, to adopt a resolution authorizing the submittal of an application and the execution of grant agreements for the acceptance of said grant funds and to certify the availability of the local matching funds for AIP grants. D. The Council wishes to authorize the City to receive the maximum of available DOT grant funds for Apron Reconstruction, Phase 1, for the Palo Alto Airport. E. The Council has recommended that grant agreements offered to the City by DOT for the Palo Alto Airport be executed by the City Manager or his designee on behalf of the City. F. This Council has considered the recommendation of the City Manager. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE, as follows: SECTION 1. Authorizes the City Manager to execute AIP Matching Grant agreements offered to the City by the California Department of Transportation to be used for Apron Reconstruction, Phase 1, for Palo Alto Airport. SECTION 2. Authorizes the City Manager or his designee to execute on behalf of the City any other documents associated with the application and acceptance of the allocation of AIP Matching grant funds from the California Department of Transportation. SECTION 3. Certifies that the Airport Enterprise Fund has sufficient local matching funds to finance one hundred percent (100%) of the California Department of Transportation grant funded projects. Attachment I Page 2 SECTION 4. The Council finds that the adoption of this resolution does not constitute a ‘project’ under Section 21065 of the California Public Resources Code and Sections 15378(b)(4) and 9b)(5) of the California Environmental Quality Act (CEQA) and the CEQA Guidelines, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ____________________________ Chief Assistant City Attorney City Manager ____________________________ Director of Public Works City of Palo Alto (ID # 8136) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Workers Comp third-party administration services contract Title: Approval of a Contract With York Risk Services Group Inc. for up to Five Years in a Total Not-to-Exceed Amount of $1,206,015 for Workers’ Compensation Claims Administration Services From: City Manager Lead Department: Human Resources Recommended Motion Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with York Risk Services Group Inc. effective July 1, 2017 ending June 30, 2022 to provide workers’ compensation claims administration services in an amount not to exceed $1,206,016; subject to the annual appropriation of funds. Background The work to be performed under the contract is for third-party claims administration services for the City’s workers’ compensation program. These services are currently provided by York Risk Services Group Inc. These services include: the processing of all workers’ compensation claims in accordance with applicable Labor Code regulations; engaging services related to the investigation and defense of claims; engaging the services of appropriate medical providers; determining what benefits, if any, should be paid; handling all the necessary forms in each reported claim; and performing all tasks in a timely manner as required under California workers’ compensation laws. The term of the proposed contract with York Risk Services Group Inc. ends on June 30, 2022 unless terminated earlier pursuant to Section 19 of the agreement. As it is the City’s obligation to ensure that administration of the workers’ compensation program is managed in the most effective and innovative manner, the City requested proposals from other claims administrators to see what alternatives other firms had to offer. Discussion Selection Process Staff sent a request for proposals to seventeen firms on March 21, 2017. The City of Palo Alto Page 2 proposal period was twenty-eight days. A total of seven firms submitted proposals ranging between $190,109 and $261,068 in the first year. Human Resources staff carefully reviewed the proposals in response to the Request for Proposal relative to the following criteria: Public agency experience, specifically with medium size cities including public safety officers benefits (California Labor Code 4850 provides injured public safety employees with salary continuation up to one year in lieu of temporary disability and requires additional handling and knowledge); Stability of ownership, high level management and claims examiner experience; Ability to provide innovative programs and services; Established, reliable, claim system capabilities; advanced reporting technology: and Quality customer service. Three finalists were selected to be interviewed. York was selected to continue serving as the City’s third party administrator at approximately $241,203 per year. York has an exhaustive list of California cities clients and thus are able to offer knowledge and resources to meet the needs of the City’s workers’ compensation program. They have a proactive claims management philosophy focused on communication, quality control and partnership. Renewing with York avoids interruptions to the City’s program and provides continuity in claims services for City employees, their benefits and medical treatment. Claim frequency and cost have decreased in the ten-year period since York has been working with Palo Alto. This continues to be attributed to the diligence of the York claim handling team, their familiarity with the unique needs of Palo Alto’s program and the collaboration established with the City’s risk management staff managing claim costs. In the past nine years, totals of new claim frequency have decreased 46.8 percent from 139 in 2006-2007 to 74 (all-time low) in 2014-2015. The total claim cost also decreased by 46 percent. Attached is Exhibit B showing Claim Frequency and Severity between FY06-16 with values as of June 30, 2016, which shows that indemnity (lost work time) claims make up the majority of the workers compensation program costs despite claim frequency continuing to decrease. York has successfully demonstrated its ability to provide a high level of quality, innovative services and results in its claims administration services and it was not evident that other vendors would provide any higher level of service or quality. During this RFP process, we realized that York is steps ahead of their competitors in providing innovative solutions such as Predictive Modeling, data visuals and dashboard tools, and a mobile app for injured employees to access their claim information. HR staff will partner with York to develop a new integrated report for the City to upload injured employee information to the York claims system which will not only streamline processes but also save time by eliminating information requests via email or phone. Resource Impact: York will charge a flat annual fee, not to exceed $251,000 (in the fifth and highest year) for the City of Palo Alto Page 3 first five years of the contract, less than a two (2) percent increase from the highest year in the previous contract. Funding for this agreement is currently provided in the Fiscal Year 2018 budget in the amount of $264,000 for this year. Based on the not to exceed actual amount of the new contract in FY 2018 of $232,000, the City will experience $32,000 savings in the FY 18 Workers’ Compensation Fund. This savings will be factored in year-end projections for FY 2018 and into the development of the FY 2019 budget. Attachments: Attachment A - Contract Attachment B - 10 year Workers' Compensation Claims statistics CITY OF PALO ALTO CONTRACT NO. C17167840 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND YORK RISK SERVICES GROUP, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 1st day of July, 2017, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and YORK RISK SERVICES GROUP, INC., a New York corporation authorized to do business in California, located at 1101 Creekside Ridge Drive, Suite 100, Roseville, California, 95678 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to administer the Workers’ Compensation Program (“Project”) and desires to engage a consultant to perform services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2022 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Attachment A Professional Services Rev. April 27, 2016 2 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 Million Two Hundred Six Thousand Sixteen Dollars ($1,206,016.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 3 SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Bettina Hopper to have supervisory responsibility for the performance, progress, and execution of the Services and Tony Zuniga as the Sr. Account Executive to represent CONSULTANT during the day-to- day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 4 CITY’s project manager is Vanda McCauley , Human Resources Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2582. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) to the extent resulting from, resulting from the negligent performance, willful misconduct or negligent 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 The following is the exclusive process to obtain indemnification rights hereunder: the Indemnified Party shall promptly notify in writing Consultant of any Claims for which indemnification is sought, following actual knowledge of such Claim. Notwithstanding anything herein to the contrary, neither party shall concede or settle or compromise any Losses without the prior written approval of the other party, which consent will not be unreasonably withheld. 16.3. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.4. The acceptance of CONSULTANT’s services and duties by CITY shall DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 5 not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage. Consultant will not cancel, or materially reduce coverage or limits, except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 6 or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above with a copy to York Risk Services Group One Upper Pond Rd. Building F, 4th Floor DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 7 Parsippany, NJ 07054 Attention: General Counsel SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person 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. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 8 limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 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 DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Professional Services Rev. April 27, 2016 9 action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 10 CONTRACT No. C17167840 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: YORK RISK SERVICES GROUP, INC. Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC EVP E. Harry Creasey Sr. Vice President Jody A Moses 11 EXHIBIT “A” SCOPE OF SERVICES I. INTRODUCTION CITY is permissible self-insured for workers’ compensation in the State of California through a combination of self-insurance (Certificate #7102) and excess coverage. Under this Scope of Services, CONSULTANT, shall administer the Workers’ Compensation Program of CITY, related to such obligations in accordance with the terms of this agreement. The intent of this Scope of Services is to insure that CITY and CONSULTANT agrees on the service levels outlined herein this agreement in an effort to maintain the highest customer service standards to the benefit of the City’s employees. II. CLAIMS MANAGEMENT CONSULTANT agrees: A. To examine, on behalf of CITY, all reports of industrial injury or illness relating to CITY employees and reported to CONSULTANT; B. To engage the services of person(s) or firm(s), upon approval from CITY, for services relating to the investigation and defense of claims, subject to the conditions set forth in this Agreement at the expense of CITY; C. To determine in a timely and accurate manner, on behalf of CITY, what benefits, if any, should be paid or rendered under the applicable workers’ compensation laws in each reported claim; D. To pay compensation, medical expenses, Allocated Loss Expenses, and other benefits as prescribed by law out of funds provided by CITY; E. To maintain a claim file on each reported claim which shall be available to CITY at all times for inspection and to conduct, at a time and frequency to be determined by the City, claim file reviews with CITY at a location to be determined by CITY; F. To aggressively handle subrogation claims against responsible parties in order to preserve CITY’s right to recovery; G. To consult with and advise CITY on any matter arising in conjunction with the business of CITY which involves the subject matter of this Agreement; H. To provide all necessary forms and supplies for the efficient operation of the Workers’ Compensation Program, including customized checks bearing CITY name and seal, and to prepare and file all legally required forms and documents; DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 12 I. To ensure that the claims examiner shall be able to appropriately handle CITY claims, the claims examiner shall not be assigned a caseload in excess of one- hundred fifty (150) open indemnity (or equivalent weighted) claims. J. CITY shall be notified prior to any staffing changes with any claims person assigned to the account. In the event that CONSULTANT at any time during this agreement, intends to reassign any claims person assigned to the account, CONSULTANT shall notify CITY prior to reassignment of any staff member and allow CITY to be involved in the decision-making process. In addition, CITY shall retain the right to participate in the selection of the senior and assistant examiners assigned to the account; K. In the event that CITY, at any time during the term of this agreement, is dissatisfied with any claims person assigned to the account, CITY will notify CONSULTANT of their dissatisfaction. If after 60 days from notification, CITY is still dissatisfied, CONSULTANT shall remove said person assigned immediately upon receiving written notification from CITY of the desire for the removal of such person; L. To provide CITY with computer system -generated loss runs, case reports, risk management reports and any other claim related reports requested by CITY, at a frequency to be determined by CITY; M. To biannually provide a loss report for claims that have had no activity for the previous six months; N. To provide monthly, a comprehensive claims detail report as described by CITY one week or less after the end of the reporting period; O. To coordinate Bill Review services, to review all medical, hospital and drug bills and to assist CITY with cost control, designating industrial medical clinics and hospitals which will provide CITY with a preferred provider (PPO) discount at fees less than the Industrial Fees Schedule (IFS), and to provide an itemized list of all medical savings resulting from this program, at a frequency to be determined by CITY; P. To, coordinate Utilization Review services consistent with ACOEM guidelines and the California Labor Code to monitor frequency, duration and appropriateness of all services during the claim life, and to provide an itemized list of all medical savings resulting from this program, at a frequency to be determined by CITY; Q. To subscribe to and pay on behalf of CITY, enrollment in the Index Bureau System on behalf of CITY, for workers’ compensation claims in California and to report to the Index Bureau each and every Indemnity claim filed; R. To provide toll-free “800" telephone numbers for employees of CITY to contact DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 13 CONSULTANT regarding questions or concerns regarding claims information, website for online new claim reporting; S. To provide a complete and detailed electronic conversion of all claims data at any if needed. T. To coordinate Pharmacy Benefit Management program and include summary information such as costing in Stewardship report; and, U. At the beginning of each fiscal year, determine new “S.M.A.R.T.” (Specific, Measureable, Achievable, Relevant, Time Senstive) goal or metric representing performance to be included in Stewardship report. III. SPECIAL CLAIMS HANDLING SERVICES 1. CONSULTANT agrees to provide the following Special Claims Handling Service: A. To establish Indemnity of Lost Time Claims within five (5) days upon receipt of the Employers First Report of Injury (Form 5020) from CITY; The definition of an Indemnity Claim shall be an industrial injury or illness claim for which any of the following benefits are claimed: 1. Temporary Disability 2. Permanent Disability 3. Life Pension 4. Death; B. To confer with the CITY’s Risk Manager or Senior HR Administrator regarding questions, reports, or issues concerning claims and to assist City department managers and supervisors regarding questions, concerns, or issues involving employee claims; C. To immediately notify the Risk Manager, by providing a copy of a Reserve Computation Sheet, of any reserve changes over twenty-thousand dollars ($20,000.00); D. To review and obtain advance notice and approval by Risk Manager or Senior HR Administrator of any Claim Denials; E. To close Medical Only Claims within twelve (12) months from the date of injury, exceptions to this requirement shall be reported to CITY; F. To consistently maintain a high level of customer service with CITY staff and injured employees; G. To promptly acknowledge receipt of voicemail and email messages; DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 14 H. To promptly furnish the Risk Manager or Senior HR Administratorwith all required material papers, which consist of but shall not be limited to: Applications and Other Legal Documents Work Restrictions Letters from Defense Counsel Private Investigation Reports and Summaries Benefit Notices Delay and/or Denial of Claim Notices Medical Reports, as needed, in cases involving an Industrial Disability Retirement; I. To submit for approval and closure within five (5) days of receipt of written notice, all undisputed Advisory Ratings; J. To provide CITY a monthly check register. These reports will be emailed no later than ten (10) days following the end of each month to CITY Payroll team; K. To provide Quarterly, accurate OSHA log 300 reports; L. To establish controls and procedures to manage and control the cost of defense; M. To take enhanced efforts to identify possible fraudulent claims, including recorded statements from injured worker and discussions with witnesses and supervisor; N. To confer with the Risk Manager or Senior HR Administrator as conditions arise: To approve a Vocational Rehabilitation Plan for injuries prior to 1/1/04 To refer a claim to a law firm or attorney To approve surveillances, sub rosa, or other investigations To obtain settlement authority over fifteen-thousand dollars ($15,000.00); IV. SPECIAL CLAIMS HANDLING SERVICES OF THE CITY CITY agrees to provide the following claims handling response: A. To promptly report to CONSULTANT all incidents of employee industrial injuries or illnesses; B. To promptly forward to CONSULTANT all applications, reports, notices, or any legal correspondence pertaining to claims administration; C. When applicable, to make all attempts possible to assign employees to modified duty pursuant to CITY of Palo Alto Workers’ Compensation Modified Duty Policy; D. To make available to CONSULTANT funds for the payment of benefits or services for industrial injuries or illnesses; DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 15 E. To pay all Allocated Loss Expenses defined as: all losses incurred in the adjustment, handling, settlement, of claims, including litigation expenses; and F. To pay CONSULTANT all service fees as prescribed and included in Exhibit - Fee Schedule. V. PROGRAM MANAGEMENT A. The Claims Supervisor shall be responsible for the following: 1. Review and assign all new claims; 2. Review to determine if referral to outside investigation firm is appropriate. Supervisor will document each review whether investigation is conducted or not; 3. Review to determine if referral to defense counsel is appropriate when any of the following occur: a. Notification of applicant attorney representation b. Suspected fraud c. Subrogation d. Filing of 132A or Serious and Willful Misconduct e. Need for legal discovery or depositions, etc f. Issues that may need to be resolved by the WCAB g. Claims involving presumptions h. Claims with incurred value over $25,000 The supervisor will document every claim file in which one or more of the above criteria exists indicating whether or not the claim should be referred to defense counsel and the reasoning for the referral; 4. Oversee the development of the action plan in those cases in which various alternatives may be appropriate. Supervisor will contact CITY of Palo Alto by telephone or email to communicate the need to consider alternative action plan options and solicit their input and/or concurrence; 5. File review meetings will be coordinated with CITY staff and claims staff on a quarterly basis and may include additional meetings with City department heads; and 6. Establish a personal relationship with the primary medical vendors used by the City of Palo Alto and maintain a professional rapport and ongoing communication. The Senior Claims Examiner shall be responsible for the following: 1. To make initial contact with all injured workers by telephone within twenty-four (24) hours (and in any event no later than forty-eight (48) hours following the date DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 16 CONSULTANT receives an indemnity claim from the City to explain benefits and obtain medical history, prior workers' compensation claim information and any other pertinent information. Follow-up phone contact shall be made with the injured worker every two (2) weeks thereafter provided the injured worker remains off work and unrepresented by council. All telephone contacts must be documented in the claim file; 2. To contact injured workers by telephone when any of the following occurs, unless the injured worker is represented: a. Explain the delay process when claims are placed on delay; b. Explain the reason for denial when a claim is denied; c. Explain permanent and stationary findings, permanent disability and ratings; 3. To contact CITY on delay claims to determine action plan; 4. The claims examiner shall adhere to the following three-tier system: a. Schedule the most appropriate medical treatment utilizing the designated medical scheduling service or authorized physicians as needed or upon City request: 1. Physical therapy treatment shall only be authorized at facilities located in Palo Alto unless otherwise approved by the Risk Manager or Senior HR Administrator; 2. In order to expedite proper diagnosis of an injury, the claims examiner shall have the discretion to authorize initial diagnostic tests such as MRI’s, CT Scans, and nerve conduction studies without referral to Utilization Review; b. Employees on lost time status shall be closely monitored and returned to modified work status as soon as medically possible. Claims examiners should aggressively pursue a release to modified duty for all CITY employees through written and verbal communication with the medical provider c. Employees on modified work status shall be returned to their usual and customary duty status as soon as medically possible 5. In all cases, the claims examiner must attempt to gain and maintain medical control of cases unless a physician’s statement is on file or a written change in treating physician is provided by the applicant; and, 6. Medical only claims shall be transferred to Claims Examiner handling Indemnity claims if injured employee has not returned to full status after six months of working modified duty. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 17 VI. COST REDUCTION GUARANTEE CONSULTANT agrees: A. To guarantee CITY at least a 1:1 indemnity closure ratio in each calendar year of service under this contract. If this goal is not attained, CONSULTANT will credit CITY $5,000.00 of the annual service fee. VII. PENALTIES Penalties imposed by the Workers’ Compensation Appeals Board (WCAB), the Department of Industrial Relations, the Division of Workers’ Compensation, the Federal Government, or any judicial forum or quasi-judicial forum in the State of California, arising out of the denial of claims shall be the responsibility of the City if imposed as a result of actions taken by CONSULTANT at the express direction of CITY. Penalties imposed as a result of improper denial of claims shall be the responsibility of CONSULTANT if no formal request for denial was obtained by the Risk Manager. Penalties imposed as a result of either party’s failure to comply with the administrative rules, regulations and the Labor Code of the State of California shall be the responsibility of the culpable party. CONSULTANT shall provide CITY with a quarterly accounting of all penalties paid by CONSULTANT on behalf of CITY, including a listing of each penalty payment and the specific claim file to which the penalty payment was charged. Penalties shall be paid out of CITY’s benefit account and CONSULTANT shall then reimburse the City within thirty days (30) of the issuance of the penalty and fines report, for those penalties and fines which are the responsibility of CONSULTANT under the terms and conditions of this agreement. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 18 EXHIBIT “B” SCHEDULE OF PERFORMANCE All work as specified in Exhibit “A” Scope of Services shall be scheduled by the City’s Project Manager on an ongoing basis for the term of this agreement. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 19 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $1,206,016.00 (Workers Compensation Administration) Sub-total Basic Services $1,206,016.00 Reimbursable Expenses $0.00 (None) Total Basic Services and Reimbursable expenses $1,206,016.00 Maximum Total Compensation $1,206,016.00 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: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 20 ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 21 EXHIBIT “C-1” SCHEDULE OF RATES Option 1 WC Administration Designated Sr. Examiner Designated FM/MO Examiner Consultant’s fees include Sr. Level Examiner with annual salaries in the mid $80’s to low $90’s range. Not to exceed annual fee per year: YEAR FEE 2017 - 2018 $231,746.00 2018 - 2019 $236,380.92 2019 - 2020 $241,108.54 2020 - 2021 $245,930.71 2021 - 2022 $250,849.32 5 Years Not to Exceed = $1,206,015.49 The City’s weighted caseload (FM & MO 2:1) equals out to just under 150 files, therefore, it is virtually dedicated. A dedicated examiner managing all files balances out quite nicely. There is additional expense as there is a Sr. level examiner at a higher salary managing the future medical and medical only files. The option of two Sr. Examiners managing all files equals out to the same fee as a dedicated as it is the same number of files, only split between two Sr. Again, this fee is higher than option one due to a higher level examiner CONSULTANT shall be open to further disclosure of labor and expense costs upon request. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 22 No data conversion fee. All reports are included in the flat annual administration fee. ALLOCATED LOSS ADJUSTMENT EXPENSES CONSULTANT will arrange for various services and other costs as agent for our client. These costs are referred to as Allocated Loss Adjustment Expenses (ALAE). A list of these expenses follows. Payment of ALAE is the responsibility of the City of Palo Alto. York’s fees do not cover ALAE, and York is under no obligation to pay ALAE with its own funds. Fees of outside counsel for claims in suit, coverage opinions and litigation and for representation at hearings or pretrial conferences Fees of court reporters All court costs, court fees and court expenses Fees for service of process Costs of undercover operatives and detectives Costs for employing experts for the preparation of maps, professional photographs, accounting, chemical or physical analysis, diagrams Costs for employing experts for the advice, opinions or testimony concerning claims under investigation or in litigation or for which a declaratory judgment is sought Costs for independent medical examination or evaluation for rehabilitation Costs of legal transcripts of testimony taken at coroner’s inquests, criminal or civil proceeding Costs for copies of any public records or medical records Costs of depositions and court reported or recorded statements Costs and expenses of subrogation Costs of engineers, handwriting experts or any other type of expert used in the preparation of litigation or used on a one-time basis to resolve disputes Witness fees and travel expenses Costs of photographers and photocopy services DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 23 Costs of appraisal fees and expenses (not included in flat fee or performed by others) Costs of indexing claimants Services performed outside York’s normal geographical regions Costs of outside investigation, signed or recorded statements Out of the ordinary expenses incurred in connection with an individual claim or requiring meeting with Customer Any other extraordinary services performed by York at Customer’s request Investigation of possible fraud including SIU services and related expenses Any other similar cost, fee or expense reasonably chargeable to the investigation, negotiation, settlement or defense of a claim or loss or to the protection or perfection of the subrogation rights of Customer. CONSULTANT may, but need not, elect to utilize its own staff or affiliated entities to perform any of these services. Associated fees and costs will be charged as ALAE. MANAGED CARE SERVICES Scope Labor Categories (e.g. Consultant, Sr. Consultant, etc. Rate Extended Rate Bill Review Per Bill $9.00 Transactional PPO & Enhanced Savings 25% Based on Savings No charge for duplicates Utilization Review Examiner Pass through $67.00 Transactional per event Nurse Review $149.00 Transactional per event Physician Review $235.00 Transactional per event Specialty Review $400.00 Transactional per event Nurse Case Management Telephonic Case Management $98.00 Hour Field Case Management $98.00 +IRS Mileage Hour DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 24 MEDICARE SECONDARY PAYER SERVICES (MSA) Mandatory CMS MMSEA Reporting $8.75 per claim Standard MSA $2,950.00 per Referral Complex/Catastrophic MSA $3,500.00 per Referral Rush MSA Additional $500.00 per Referral MSA CMS Submission $500.00 per Referral Medical Cost Projections $1,750.00 per Referral Conditional Payment Request $150.00 per Inquiry Conditional Payment Dispute Resolution $125.00 per Hour Final Settlement Document Submission $125.00 per Referral Medicare / Medicaid Investigation $50.00 per Inquiry Medical Cost Projection to MSA Conversion $1,200.00 per Referral Managed care rates will have an annual 1% escalator. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 25 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC 26 A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 05807732-2163-4D47-A3A8-20B39671A0CC Attachment B CITY OF PALO ALTO OFFICE OF THE CITY CLERK August 28, 2017 The Honorable City Council Palo Alto, California Vote to Endorse the Slate of Candidates for the Division’s Executive Committee for 2017-18 and Direct the City Clerk to Forward to Seth Miller, the Regional Public Affairs Manager for the Peninsula Division, League of California Cities the Completed Ballot for the City of Palo Alto RECOMMENDATION: The City Council should formally vote to endorse the slate of candidates for the Division’s Executive Committee for 2017-18 and direct the City Clerk to forward to Seth Miller, the Regional Public Affairs Manager for the Peninsula Division, League of California Cities the completed ballot for the City of Palo Alto. BACKGROUND: The election for the Executive Committee for the Peninsula Division of the League of California Cities will be held on Thursday, September 14, 2017 at the Division’s annual election luncheon during the League of California Cities Annual Conference in Sacramento, CA. The Peninsula Division Nominating Committee’s Division President and Redwood City Council Member Alicia Aguirre, and League 2nd Vice President and South San Francisco Council Member, Rich Garbarino, submit the following candidates for the Peninsula Division’s Executive Committee for the 2016-17 Ballot. Each city is entitled to one vote for each office on the ballot. President: Emily Lo, Council Member, City of Saratoga Vice President: Larry Moody, Council Member, City of East Palo Alto Treasurer: Shelly Masur, Council Member, Redwood City Secretary- Charles Stone, Council Member, City of Belmont Board of Director (Two Year Term) Liz Kniss, Council Member, City of Palo Alto Legislative Action Committee Co-Chair, Santa Clara County Page 2 Cory Wolbach, Council Member, City of Palo Alto Legislative Action Committee Co-Chair, San Mateo County Kirsten Keith, Council Member, City of Menlo Park Past President Alicia Aguirre, Council Member, Redwood City At-Large – VOTE FOR ONE CANDIDATE FOR EACH COUNTY Santa Clara County Marico Sayoc, Council Member, Town of Los Gatos San Mateo County Emily Beach, Council Member, Burlingame The ballots will be opened and tabulated at the annual election luncheon. The new officers will be introduced at that time. Attached please find the biographies submitted for these candidates. ATTACHMENTS: Attachment A: Division Officers (PDF) Department Head: Beth Minor, City Clerk Page 3 CITY OF PALO ALTO OFFICE OF THE CITY CLERK August 28, 2017 The Honorable City Council Palo Alto, California SECOND READING: Adoption of an Ordinance Authorizing an Amendment to the Contract Between the City of Palo Alto and the Board of Administration of the California Public Employees’ Retirement System (PERS) to add Cost-Sharing Pursuant to Government Code Section 20516 (FIRST READING: August 14, 2017 PASSED: 9-0) This was first heard by the Council on August 14, 2017 and it was passed 9-0 with no changes. It is now before you for a second reading. ATTACHMENTS: Attachment A: PERS Ordinance (PDF) Department Head: Beth Minor, City Clerk Page 2 Not Yet Approved AY/HR/2017-07-26 Ord Amending CalPERS Contract 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Authorizing an Amendment to the Contract between the City of Palo Alto and the Board of Administration of the California Public Employees’ Retirement System to Add Cost-Sharing Pursuant to Government Code Section 20516 The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. That an amendment to the contract between the City of Palo Alto and the Board of Administration, California Employees’ System is hereby authorized, a copy of said amendment hereto, marked Exhibit A, and such reference made a part hereof as though herein set out in full. SECTION 2. The City Manager, or his designee is authorized, empowered, and directed to execute said amendment for and on behalf of the City of Palo Alto. SECTION 3. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Human Resources ____________________________ Director of Administrative Services Not Yet Approved AY/HR/2017-07-26 Ord Amending CalPERS Contract 2 EXHIBIT A CONTRACT AMENDMENT City of Palo Alto (ID # 8231) City Council Staff Report Report Type: Action Items Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Finding Palo Alto Fire Station No.3 Substantially Complex Title: PUBLIC HEARING: Adoption of Finding That the Fire Station No. 3 Replacement Project (CIP PE-15003) is "Substantially Complex" Under Public Contract Code Section 7201 and Direction to Increase the Retention Schedule From 5 Percent to 10 Percent From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council consider the following motions: 1.Find the proposed Fire Station No.3 Replacement Project “substantially complex” under Public Contract Code Section 7201 based on the reasons set forth in the staff report, and 2.Allow this project to be advertised for bid with a retention amount of ten percent. Executive Summary State law limits the City to five percent retention on public works projects unless City Council makes a formal finding that the project is “substantially complex.” This finding must be made before the project can be advertised for bid. Staff is preparing to issue the formal Invitation for Bids (IFB) for the Fire Station No.3 Replacement Project. The IFB is expected to be released in September 2017. Background Public Contract Code Section 7201 requires public agencies to limit contract retention on public works projects to 5%, unless the project is found to be a “substantially complex project”. Retention is a contractual withholding of money by the City to cover any unexpected expenses, such as liens or poor workmanship, City of Palo Alto Page 2 that may occur before the project is completed and accepted. The standard procedure is to return the retention once the following occurs: work is completed, the contractor provides the maintenance bond, the City accepts the project, and the lien period expires. Public Contract Code Section 7201(b) states, “retention proceeds withheld from any payment by a public entity from the original contractor…shall not exceed 5 percent of the payment” and “…in no event shall the total retention proceeds withheld exceed 5 percent of the contract price.” However, Section 7201(b)(4) provides that an awarding agency may withhold in excess of five percent (5%) on specific projects where the governing body has approved a finding during a properly noticed and normally scheduled public hearing and prior to bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent. Section 7201(5) further provides that any finding by a public entity that a project is substantially complex “shall include a description of …why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.” The awarding entity must include both this finding and the actual retention amount in the bid documents. Discussion The Fire Station No. 3 Replacement Project is part of the Council Infrastructure Plan.Funding for the Project was approved in Fiscal Year 2017 Adopted Capital Budget, and is available in the Capital Improvement Program project PE-15003 in the amount of $7.2 million. The existing Fire Station No.3, located at 799 Embarcadero Road in Palo Alto is a one-story,wood-framed structure built in 1958 and has had minimal improvements over the past 59 years. The new Fire Station No.3 will replace the aging station and be built as an Essential Services Facility in accordance with the Essential Service Building Seismic Safety Act. The new two-story, 6,663 square foot fire station will meet current California Building Codes, Americans with Disabilities Act, National Fire Protection Association codes and standards,follow Environmental, Health, Safety guidelines,and comply with OSHA laws and regulations. City of Palo Alto Page 3 The Architectural Review Board recommended approval of this project, and the Director of Planning and Community Environment approved the project in March 2017. The plans include site integration features that relate with the surrounding environment. The main materials to be used on the project are a red/orange terra cotta and zinc metal paneling which will be installed using rain screen application to maximize energy performance as well as indoor air quality. The roof will contain a photovoltaic array and be screened with high parapets. The station will be a wood-framed structure with supporting steel elements on a structural mat foundation.The station will include a pedestrian plaza, a bicycle queuing area, public art, landscaping that will incorporate protected trees, new regional indigenous drought resistant plant material,and a stormwater collection system integrated with a cobblestone dry steam bed. All these features and more will allow for a Silver Certification in Leadership in Energy and Environmental Design (LEED).Additionally the new station will incorporate an alarm and communication system essential for fire and medic response to the neighborhood served by Fire Station No. 3. The construction of New Fire Station No. 3 will require the station to be relocated to an interim facility located at 2000 Geng Road. The temporary facility will accommodate the station’s three on-duty personnel and two apparatus (the engine, and medic car) for a span of approximately 18 months while the existing site is demolished and the new fire station is constructed. The construction cost is estimated to be $5.5 million and is expected to be completed at the end of 2018. The contractor will be required to subcontract for numerous specialties including abatement of asbestos-containing material, building envelope, fire alarm and communication systems. The project will require the coordination of multiple construction disciplines while maintaining right-of- way access within a heavily used intersection of Newell and Embarcadero Roads. City staff has determined and recommends that Council find the Fire Station No. 3 Replacement Project to be “substantially complex”based on the large amount of work required, the various disciplines and trades involved in the construction,the measures to obtain LEED certification, and the work associated with Essential Services construction.The Essential Services Buildings Seismic Safety Act requires the facility be “constructed to minimize fire hazards and to resist…the forces generated by earthquakes, gravity, and winds.” The City Clerk has published the City of Palo Alto Page 4 required notice of this hearing in the Palo Alto Weekly starting on August 18, 2017. The retention will be released as described in the City of Palo Alto’s standard contract General Conditions Section 9.8.1 which states, “Upon receipt of notice from Contractor that the Work is ready for final inspection, City will make such inspection. The City will file a Notice of Completion (NOC) with the County Clerk within ten (10) days after Acceptance by the City. Thirty-five (35) Days after filing the NOC, the City may release the final retention provided the requirements in this paragraph are met.” Timeline Staff plans to issue an IFB for the project in September. Fire Station No. 3 will be relocated to the temporary site at 2000 Geng Road in October 2017. Demolition and construction of Fire Station No. 3 is expected to begin shortly after relocation to Geng Road and completion anticipated in early 2019. Resource Impact There are no resource impacts associated with finding the project “substantially complex”.Funding for the Fire Station No.3 Replacement Project including the temporary station is available in Capital Improvement Program (CIP) Project PE- 15003. Policy Implications The proposed action is consistent with City policy. Environmental Review This project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15302 of the CEQA Guidelines as “Replacement or Reconstruction of Existing Structures”and no further Environmental review is necessary. A notice of CEQA exemption was filed in early March 2017. City of Palo Alto (ID # 8384) City Council Staff Report Report Type: Action Items Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: 3877 El Camino Real Mixed-Use Project Title: PUBLIC HEARING / QUASI-JUDICIAL. 3877 El Camino Real [14PLN- 00464]: Adoption of a Mitigation Monitoring and Reporting Plan and Approval of a Site and Design Review for the Demolition of the Vacant 5,860 Square-Foot Commercial Building and Construction of a new Mixed-Use Project. The Project Includes a 4,027 Square Foot Commercial Building and 17 Dwelling Units (Flats and Townhouses). Parking for the Project is Provided in a Basement. The Applicant Also Requests Approval of a Design Enhancement Exception to Allow the Basement to Encroach Into the Required Rear Yard Setback Below Grade. Environmental Assessment: A Mitigated Negative Declaration was circulated between March 6, 2017 and April 7, 2017. Both the Planning & Transportation Commission (March 8, 2017) and Architectural Review Board (May 18, 2017) have Recommended Approval of the Project. Zoning Districts: CS and RM-30. (Continued From August 21, 2017) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council take the following actions: 1. Adopt the attached Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program as set forth in the Record of Land Use Action (Attachment B) 2. Adopt the Record of Land Use Action approving Site and Design and Design Enhancement Exception applications, based on findings and subject to conditions of approval as recommended by the Planning & Transportation Commission (March 8, 2017) and Architectural Review Board (May 18, 2017) Executive Summary The applicant requests approval of a Site and Design and a Design Enhancement Exception to allow the demolition of a vacant commercial building and construction of a City of Palo Alto Page 2 new mixed-use project. The project is located on a 32,825-square foot L-shaped parcel with street frontage along El Camino Real and Curtner Avenue. The site includes two zoning designations: commercial and residential zoning. The project includes a three- story mixed-use building including six residential flats along the site’s frontage on El Camino Real (the CS zoned area), 11 residential two-story townhouses in the rear portion of the site (RM-30 zoned area), and a below-grade garage that would include all of the required parking for the site. A total of two deed restricted affordable housing units are being provided on site. The requested Exception is for a reduction in the rear setback of the basement garage from 10’-0” to 6’-2” and will be entirely below grade. The Planning and Transportation Commission conducted a public hearing on the project on March 8, 2017 and recommended approval of the project to the City Council (3-1). The Architectural Review Board conducted a public hearing on the project on May 18, 2017 and recommended approval of the project to the City Council (3-0-2). Background The project site consists of approximately 32,825 square feet (0.75 acres) and supports an existing 5,860 square-foot vacant building and parking lot. The site is “L” shaped with street frontage on both El Camino Real (CS zoning district) and Curtner Avenue (RM-30). The proposed project involves demolition of the existing building along El Camino Real and construction of a new mixed-use project (mixed-use building & 11 townhomes). The contemporary-designed mixed-use building is proposed to be three stories containing 4,035 square feet of commercial area (including 896 square feet of common area—lobby, etc.) and six residential flats (five market rate and one affordable unit) on the commercially zoned portion of the property (0.25 acres). The project is designed with smooth stucco, composite paneling, rain-screens and glass. Behind this building on the portion of the lot zoned RM-30 (0.50 acres), the proposed residential townhouses would be two stories each and are configured as four duplexes and one triplex for 11 more two bedroom units, for a total of 17 units for the site. The total residential floor area is 22,243 square feet; and the total project floor area is 26,278. All the parking for the project is provided below grade. The garage would include 34 spaces assigned to the residential units, seven guest spaces, and 21 commercial parking spaces for a total of 62 parking spaces. The proposed parking slightly exceeds the City’s requirements. Garage access is provided with a two-way driveway ramp accessed from Curtner Avenue and an ingress-only (one-way) ramp on El Camino Real. Trash facilities for the project are in the basement area as well as bicycle lockers. Both stairwells and elevators are provided. The Design Enhancement Exception (DEE) request is for the decrease in the 10’-0” setback in the rear at the basement to 6’-2”. This allows for the basement to provide the necessary dimensions accommodating the parking spaces and drive aisles. City of Palo Alto Page 3 The project is proposing ownership units (condos), so 15% of the units are required to be affordable. This equates to two units, plus in-lieu fees for the remaining fraction (17 DU x 15% = 2.55). The provision of on-site affordable housing qualifies the project for design concessions under the State density bonus law and the applicant is seeking a code-authorized concession related to floor area (see discussion below). The pedestrian access to the commercial portion of the project would be provided from the existing sidewalk along El Camino Real. A wide walkway would be created at the southwestern corner of the building leading to the interior of the site. This would provide access to the lobby for the residential portion of the mixed-use building and to a pedestrian gate leading to the common open space area at the northern end of the mixed-use building and farther into the site to access the residential townhouses. Security proposed for the site includes both active and passive measures including the use of patrols, cameras and security gates. Other measures will be reviewed as part of a security plans submitted to the City prior to the operation of the site. Previous Meetings The project was the subject of one preliminary ARB meeting, one study session ARB meeting, two formal ARB meetings and one PTC meeting. December 19 2013 Preliminary ARB The ARB conducted a preliminary meeting to provide comments on the proposal. At that time, the project had a similar amount of dwelling units and commercial square footage, however, it had a a different design and vehicular ingress/egress proposal with an entry from El Camino Real. Staff report: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=38231 December 2015 ARB Study Session (no staff report) The ARB conducted a study session on the project receiving an update on the project. At that time, the El Camino Real entry was eliminated. The ARB commented that the retail component would be more successful with the entry along El Camino Real to be restored. Video http://midpenmedia.org/architectural-review-board-34/ March 8, 2017 PTC The PTC conducted a hearing on the application and recommended approval of the project 3-0-0-2 to the City Council. There was public testimony regarding the historic resources evaluation completed for the project site. The evaluation concluded that the existing building was not considered eligible for historic listing. Staff report: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=56281 Video: http://midpenmedia.org/planning-transportation-commission-44/ City of Palo Alto Page 4 Minutes: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=56645 April 6, 2017 Formal ARB The ARB conducted a formal meeting and provided comments to the applicant to revise the project including landscaping, colors/materials, security and commemorative plaque to acknowledge former use of site. The vehicular entry to the basement at El Camino Real was restored. Staff report: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=56818 Video: http://midpenmedia.org/architectural-review-board-60/ Minutes: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=57470 May 18, 2017 Formal ARB The applicant returned with a revised project that addressed the Board’s issues from the previous meeting. The Board recommended approval of the project 3-1 to the City Council. Staff report: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=57841 Video: http://midpenmedia.org/architectural-review-board-62/ Minutes: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=58269 Discussion & Summary of Key Issues The City Council is requested to adopt the project’s Mitigated Negative Declaration (MND) along with its Mitigation and Monitoring Reporting Program (MMRP); approve the project’s Site and Design application; and approve the project’s Design Enhancement Exception application. The following summarizes the key issues that arose during the public meetings this year leading to the PTC and ARB recommendations including the historic resource evaluation associated with the existing building, traffic, affordable housing, and neighborhood compatibility. Existing Building The project site currently contains one approximately 5,860 square-foot building, the vacant former Compadres restaurant. A portion of the building dates to 1938; however, the building has been substantially modified since that time and retains very little architectural character of the original building. Because the project proposes to demolish the structure to make way for the development and due to its age, a Historic Resources Evaluation was prepared by Dudek (authors of the CEQA document) on behalf of the City. The methodology included the review of City Building records, review of any records that the Palo Alto Historical Association may have had, personal communication with the Silvestre family (previous owners) and other community members with knowledge of the building and City of Palo Alto Page 5 site and a field survey evaluating the exterior and interior of the building. The existing building has not been recognized by City Council resolution, is not listed on the City’s Historic Inventory, and was not surveyed as part of the City’s Historic Survey Update completed in 2000. Upon review, the building does not appear eligible for listing on the City’s inventory, the National Register of Historic Places, or the California Register of Historical Resources eligible due in large part to its lack of physical integrity resulting from numerous exterior and interior alterations. Some of the comments from the public centered on whether the existing building was eligible for historic listing. The following summary from the Historic Resources Evaluation describes why the building is not considered eligible. Significance Criteria There are strict significance criteria that need to be made for any structure to be eligible for historic listing under the California Register of Historic Resources and the National Register of Historic Resources. Archival research on the subject property failed to indicate associations with events that have made a significant contribution to the broad patterns of history. While the subject property is associated with the life of a historic person (Gonzalo Silvestre, a master blacksmith of ornamental iron), it suffers from a lack of physical integrity that prevents it from conveying those associations. The subject property is a vernacular adobe building altered with more recent building materials. While it may have stood as an intact example of a twentieth century adobe building at one time in history, it no longer retains requisite integrity of its original design, setting, materials, workmanship, feeling, or association to convey its original architectural character. There is no evidence to indicate that the subject property is likely to yield any information important in prehistory or history, beyond what has already been identified as a result of the current study. The subject property is also not associated with an archaeological site or a known subsurface cultural component. More detailed analysis on these findings and the evaluation in its entirety can be found in Appendix C of the Mitigated Negative Declaration. Traffic The project’s transportation was evaluated by Hexagon Transportation Consultants in 2016 (included as Appendix G of the project Mitigated Negative Declaration). The traffic study evaluated a larger, but similar project (18 dwelling units and 4,024 square feet of commercial compared to 17 dwelling units and 3,139 square feet). Using industry City of Palo Alto Page 6 standards, the study indicated that the project would generate 256 daily trips that would include 14 peak hour morning trips and 23 peak hour afternoon trips. Based on standard criteria, the traffic study indicates no impacts to signalized intersections within the study area. The study also evaluated the parking for the project and determined that since the project proposes to be consistent with the standards (drive aisle widths) that there would be adequate back up distance; provided the DEE is ultimately approved. The study recommends that additional red-curb be added on either side of the ramp along Curtner Avenue to ensure adequate sight-distance. The project provides an amount of vehicular and bicycle parking that exceeds the City requirements and access to and throughout the site is sufficient. Each townhouse provides bicycle parking near the front entrance in a void caused by the stairwell of each building. This area would be secured and include bicycle parking apparatus so that the space can only be used for parking bicycles. The Curtner Avenue frontage is a suggested walking and bicycle route to Barron Elementary School. The opposite side of El Camino Real is a suggested walking route to Barron Elementary School. To alleviate potential conflicts with temporary construction activities, the conditions of approval require that a “logistics plan” be submitted to the City for review and approval. This would include information about phasing, construction staging and construction routes. This would be the opportunity for the City to ensure that construction, while temporary, does not impact the safety of those within the vicinity of the project site. Affordable Housing Ownership housing projects with three or more units are required to meet the City’s Below Market Rate (BMR) Housing Program. In accordance with PAMC Section 16.65.030, this project’s total BMR requirement is 2.55 units. When the BMR requirement results in a fractional unit, an in-lieu payment to the Residential Housing Fund may be made for the fractional unit. To satisfy this requirement, the applicant is required to provide two BMR for-sale housing units affordable to lower income households within the project in accordance with the requirements set forth in Program H3.1.2 of the City of Palo Alto Comprehensive Plan, Chapter 16.65 of the Palo Alto Municipal Code, and the BMR Program rules and regulations. The fractional unit will result in an in-lieu payment to the housing fund. By meeting the City’s BMR requirements, the project also qualifies as a state density bonus housing project pursuant to state law, which is codified in the City’s municipal code in PAMC Chapter 18.15. This law allows a developer to increase the density of housing units in a project beyond the standard provided in local regulations; take City of Palo Alto Page 7 advantage of reduced parking requirements; and, receive concessions, or deviations from the development standards in order to help off-set the cost of providing the affordable units. The amount of concessions granted is dependent on the percentage and restricted income level of the affordable units provided. To help guide developers toward incentives that do not have a specific adverse impact to the public health, safety or the physical environment, the city has adopted a list of incentives that the city has already determined acceptable. The proposed project is below the maximum allowed density for the site (22 units allowed 17 units proposed) and the applicant is not seeking a density bonus for additional units. However, the applicant proposes two deed restricted housing units or 11.7% of the units as affordable to moderate income levels (120% of the median County income). This qualifies the applicant to receive one development concession. As authorized in the City’s zoning code (PAMC 18.15.050[d][iv]) the applicant selected an increase to residential floor area. The code allows an increase in the floor area ratio up to 25% or up to the square footage of the restricted affordable units, whichever is less. A 25% increase to the project’s floor area ratio dedicated to housing is 4,924 square feet of area. The proposed deed restricted housing includes a total of 2,596 square feet of area. Since the latter floor area is less than the 25% calculation, this is the maximum floor area that can be added. According to the applicant, the additional floor area offsets area that would attributed to the lobbies and elevator shafts and offsets the costs of providing the BMR units. While eligible for a parking reduction, the applicant is not seeking any modification to required parking requirements. As designed, the project complies with the requirements of the City’s BMR program, the state density bonus law, and the City’s implementing regulations. Neighborhood Compatibility Context-Based Findings According to Section 18.16.090 (CS zoned area) of the PAMC, compatibility is achieved when apparent scale and mass of new buildings is consistent with the pattern of achieving a pedestrian oriented design, and when new construction shares general characteristics and establishes design linkages with the overall pattern of buildings, so that the visual unity of the street is maintained. In addition, according to Section 18.13.060 (RM-30 zoned area) of the PAMC, compatibility is achieved when the apparent scale and mass of new buildings share general characteristics and establishes design linkages with the overall pattern of buildings so that the visual unity of the neighborhood or street is maintained. The project site is mid-block on El Camino Real. A coffee shop (Starbucks) is located immediately east of the project site and an automobile service use (Nine Minute Oil & City of Palo Alto Page 8 Lube) is immediately west. A medical office (Agile Physical Therapy) is on the corner of El Camino Real and Curtner Avenue. A multi-family residential development is located to the north of the commercial properties that front on El Camino Real. Land uses on the southern side of El Camino Real are similar, with commercial properties fronting El Camino Real and multi-family and single-family residential properties to the south. Within the vicinity of the site, buildings are generally low, one to two-story buildings. Buildings are located along the sidewalk, however, the sidewalk within the vicinity is not wide. The project proposes development that is consistent with the zoning code development standards and the vision of the South El Camino Real Design Guidelines. This includes providing the wide sidewalk, where none exists now and providing the build-to setback as encouraged in the guidelines. The buildings within the vicinity are not mixed-use; only commercial buildings. The proposed mixed-use building is consistent with the zoning development standards and design guidelines, however, there is no other comparable development nearby. Performance Standards The project is consistent with the City’s performance standards (PAMC Chapter 18.23) which are applicable because of the project’s adjacency to other land uses. The project includes adequate screening areas that act as buffers between the project and adjacent residential uses. It is not expected that the operations of the site will interfere with the privacy and general welfare of the neighboring properties. Design Enhancement Exception The applicant requests a DEE to allow for a reduced setback in the basement. This will allow for the basement to accommodate all the parking for the project. Alternatively, surface parking would need to be considered. Having the parking below grade is ideal from an aesthetic perspective and is consistent with the context-based findings. Policy Implications The proposed project has been analyzed for conformance with the City’s zoning regulations and the South El Camino Real Design Guidelines as described above, and has also been analyzed for conformance with the City’s Comprehensive Plan. The project is exempt from the Retail Preservation ordinance because the discretionary entitlement project was submitted prior to March 2, 2015. Relevant Comprehensive Plan Policies are identified in the Record of Land Use Action in Attachment B, and while some may find inconsistencies with individual policies, the project complies with the applicable Comprhensive Plan land use designations and on balance, the project is consistent with the Comprehensive Plan as a whole. Resource Impact The site was expected to develop with residential and commercial uses so the impact on resources (fire/police protection) is within expectations. The project is subject to development impact fees to support various government functions including parks. City of Palo Alto Page 9 Environmental Review The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the project is subject to a Mitigated Negative Declaration (MND). The document was circulated on March 6, 2017 for 20 days. A link to the MND is provided in Attachment G. There are mitigation measures related to biological resources. Attachments: Attachment A Location Map Attachment B RLUA Attachment C Zoning Comparison RM-30 Attachment D Zoning Comparison CS Attachment E Performance Criteria Attachment F Project Narrative Attachment G CEQA Document Attachment H MMP 3877 El Camino Real Attachment I Project Plans ACTION NO. 2017-____ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 3877 EL CAMINO REAL: SITE AND DESIGN REVIEW, DESIGN ENHANCEMENT EXCEPTION, MITIGATED NEGATIVE DECLARATION, AND MITIGATION MONITORING AND REPORTING PROGRAM (14PLN-00464) On ____________, 2017, the Council of the City of Palo Alto approved the Site and Design Review and Design Enhancement Exception applications for the demolition of a 5,860 square foot commercial building and construction of a new mixed-use project. The project includes a three-story 35-foot tall, 4,027 square foot mixed use building and 17 two-story (29’-8”) dwelling units (flats and townhouses). Parking for the project is provided in a basement and includes 62 parking spaces on a 32,825 square foot lot having two zoning districts (CS and RM-30). The project also includes a reduction in a rear setback for the basement from 10 feet to 6’-2”. The City Council made its determination by making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. Stuart Welte of EID Architects on behalf of Zijin, LLC, property owner, has requested the City’s approval to allow the demolition of the existing building and on-site improvements and the construction of a three-story mixed-use building including six residential flats along the site’s frontage on El Camino Real (the CS zoned area), 11 residential two-story townhouses in the rear portion of the site, and a below-grade parking garage that would include all of the required parking for the site. A total of two income deed restricted housings units are being provided on site. (“The Project”). B. The project site is a single parcel (APN 132-41-091) of 0.75 acres in size in the Palo Alto Ventura Neighborhood. The site is currently developed with a vacant two-story 5,860 square foot restaurant building and the site contains and is accessible to existing utilities. The site is designated on the Comprehensive Plan land use map as Service Commercial and Multiple Family Residential and is located within the Service Commercial (CS) and Residential Multi-Family (RM-30) zoning districts. The project includes the demolition of existing on-site structures and the construction of a new mixed-use project. C. The Planning and Transportation Commission (Commission) reviewed and recommended approval of the Project on March 8, 2017. The Commission’s recommendations are contained in CMR_______ and the attachments to it. D. The Architectural Review Board (Board) reviewed and recommended approval of the Project on May 18, 2017. The Board’s recommendations are contacted in CMR _______ and the attachments to it. SECTION 2. Environmental Review and Findings. The City as the lead agency for the Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA) under Guideline section 15070, Decision to Prepare a Negative or Mitigated Negative Declaration. An Initial Study/Mitigated Negative Declaration was prepared in March 2017 for the project and identified potential significant impacts with the implementation of the project. Those impacts can be reduced to a level of less than significant with the incorporation of mitigation measures. On the basis of the whole record before it, that there is no substantial evidence that the project will have significant effect on the environment and that the mitigated negative declaration reflects the lead agency’s independent judgment and analysis. The City of Palo Alto Planning & Community Environment Department is the custodian of these documents. The City Council hereby approves the Mitigated Negative Declaration and incorporates the Mitigation and Monitoring Report attached as Exhibit A into the Record of Land Use. SECTION 3. Site and Design Review Findings 1. The use will be constructed and operated in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. According to the project’s Mitigated Negative Declaration (MND), the project’s construction would result in some temporary impacts; however, they would not result in any incompatible activities. A logistics plan is required to ensure that construction activities would not be harmful to the neighborhood. Regarding the operation of the site, the site would comply with regulations regarding late-night uses, noise ordinance, and solid waste handling. These are in place to ensure compatibility between different sites and uses. While at this time, there is no specific use proposed, the project would develop commercial spaces that would include retail and office uses. Those uses are consistent with other uses along El Camino Real and the surrounding neighborhoods that include both commercial and multi-family residential. Future specific uses would need to be consistent with the City’s regulations. The design of the site includes appropriate separation between the mixed-use building and the solely residential component and the adjacent multi-family properties. The project is consistent with the City’s Performance Standards set forth in Palo Alto Municipal Code 18.23, ensuring compatibility between commercial and residential uses. Proposed lighting is directed downward to prevent spillover to adjacent properties. Trash enclosures are located in the basement of the project. The project provides the required setback above ground and includes vegetation and tree plantings within the setback and open spaces. Mechanical equipment areas are screened appropriately. The site circulation facilitates access for all modes of transportation. The project includes short- term and long-term bike parking. On-site vehicular traffic will be directed underground, leaving the above-ground for pedestrians and bicyclist. Wide walkways and plazas surround the commercial areas and provide connectivity to the residential areas. In compliance with the City’s affordable housing requirements, the project proposes to include two below market rate dwelling units. This makes the project eligible for the State’s density bonus concessions. In which the project proposes to provide additional square footage to the project (2,596 square feet). Even with the additional square footage, the design of the project blends the additional square footage into the overall site design. 2. The project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. The project proposes a transformation in the site from a vacant commercial building with a large surface parking lot into a mixed-use (vertical and horizontal) site that is consistent with current zoning regulations, with the exception of a setback deviation for the basement parking, which does not affect the above ground improvements. The mixed-use building along El Camino Real proposes ground-floor commercial that is consistent with the City’s requirements and would provide a place for commerce and interactions for residents and business owners. The project is located in an area that has numerous older low-intensity commercial buildings. The proposed project is an example of a project that is consistent with the South El Camino Real Design Guidelines and the vision for mixed-use development. The project’s mixed-use building along El Camino Real is larger than the surrounding buildings along El Camino Real as expected because it includes both commercial on the first and second floor and residential uses on the upper floors, however, the balance of the site transitions to solely residential and is consistent in massing and height with the adjacent properties. 3. To ensure that sound principles of environmental design and ecological balance are observed in the project. The project provides the required setback above ground and includes vegetation and tree plantings within the setback and open spaces. The site includes plazas and open areas to promote connectivity spaces for wildlife to flourish. These open spaces include vegetation and trees along the side and rear setbacks of the property. While the plant palette demonstrates many non-native species of plants, these trees will provide the potential habitat for birds and other wildlife. The parking for the project is located completely underground, which avoids a surface parking lot. However, at the same time the project will follow the appropriate regulations regarding dewatering and providing the basement space. 4. The use will be in accord with the Palo Alto Comprehensive Plan. The project proposal complies with the policies of the Land Use and Community Design element of the Comprehensive Plan, including: The project is consistent with a number of Comprehensive Plan goals and policies. These include: Goal L-1, Policy L-4, Policy L-5, Policy L-9, Goal L-4, Policy L-19, Policy L-20, Policy L-21, Policy L-22, Goal L-9, Policy L-72, Goal T-3, Policy T-23, Goal, N-4, Policy N- 21 and Goal B-5. The project is a mixed-use development that would include commercial and residential spaces, with some affordable housing units consistent with the City’s regulations. The project will comply with the stormwater codes, and include the appropriate amount of vehicular and bicycle parking. The site includes plazas and open space to encourage connectivity and interaction between the residents and commercial spaces. The buildings are placed orderly providing a mixed-use building along El Camino Real, where it is expected to have more intensive commercial development, with multi-family density located on the balance of the property, which is consistent with the surrounding development. Parking for the site is located completely below ground, which avoids many negative aspects of parking lots. The project provides two below market rate housing units, which promotes the availability of affordable housing. SECTION 4. Site and Design Approvals Granted. Site and Design Approval is granted by the City Council under Palo Alto Municipal Code Section 18.82.070 for application 14PLN-00464, subject to the conditions of approval in Section 7 of the Record. SECTION 5. Architectural Review Findings The design and architecture of the proposed improvements, as conditioned, complies with the Findings for Architectural Review as required in Chapter 18.76 of the PAMC. 1. Finding #1: The design is consistent with applicable provisions of the Palo Alto Comprehensive Plan, Zoning Code, coordinated area plans (including compatibility requirements), and any relevant design guides. The project is consistent with Finding #1 because: The El Camino frontage is Service Commercial, while the Curtner Avenue frontage is Multi-Family. On balance, this project is consistent with the Comprehensive Plan Goals and Policies as further described in Attachment C. The project is consistent in mass and scale and considers appropriate transitions between commercial and residential properties. The project has streetscape consideration along El Camino Real and Curtner Avenue providing context-based treatment. The project redevelops a site and is considered infill. Along El Camino the project includes a vertical mixed-use component including a large sidewalk consistent with the South El Camino Real Design Guidelines. The project also includes an outdoor plaza area for the ground floor retail and on-site bicycle parking for the commercial and residential uses. The buildings onsite are placed orderly and provide sufficient open space and connectivity between the streets, entrances and open spaces. The parking for the site is provided below ground, which frees up space on the ground level for the buildings and landscaping. The project provides plazas that are open to the public and include seating areas. The project supports full height tenant facades to help create a high-quality streetscape. The project will pay the in-lieu fee to support the public art program and is required to comply with the NPDES Stormwater Permit, which includes bio-retention areas for stormwater management. The project is consistent with the City’s Zoning Code with the exception of the request to deviate from the rear setback requirement for the below-grade garage. This request is supported through the affirmative findings for the Design Enhancement Exception (DEE) request as further discussed below. The project is consistent with the South El Camino Design Guidelines in that it creates a wide sidewalk along El Camino Real, provides the required build-to setback, and massing for the building is considered by stepping the upper floors back. 2. Finding #2: The project has a unified and coherent design, that: a. creates an internal sense of order and desirable environment for occupants, visitors, and the general community, b. preserves, respects and integrates existing natural features that contribute positively to the site and the historic character including historic resources of the area when relevant, c. is consistent with the context-based design criteria of the applicable zone district, d. provides harmonious transitions in scale, mass and character to adjacent land uses and land use designations, e. enhances living conditions on the site (if it includes residential uses) and in adjacent residential areas. The project is consistent with Finding #2 because: The area is comprised of various commercial buildings of differing heights and size. The commercial buildings range between one and two stories. Residential buildings range between one and three stories in height in the area. The project proposes to construct a building that is taller and includes residential along El Camino as well as removing a surface parking lot and creating townhouses to the rear with frontage along Curtner Avenue. The proposed mixed-use building is three stories and is no taller than 35 feet, which is consistent with the zoning development standards. The commercial component is two-stories, consistent with commercial properties in the vicinity, while the residential component is on the second and third floors. The proposed townhouse buildings are two stories and under 30 feet in height, which is lower than the maximum zoning development standards. The project’s design includes consistency throughout with similar colors and provides plaza spaces near commercial spaces and other areas in the residential component of the project site to allow for connectivity and gathering places. The mixed-use building along El Camino Real is taller by one story than the commercial buildings within the vicinity. However, the building provides both commercial and residential, and a taller building is appropriate to accommodate both uses. The balance of the site with the residential buildings are consistent in height with other surrounding development. The project is consistent with the context-based design criteria for the applicable zone district: (a) Pedestrian and Bicycle Environment. The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements. This finding can be made in the affirmative in that the project provides bike racks near the building entrances for short term use as well bike lockers in the garage to support the bicycle environment. In addition, the townhouses include bicycle lockers. The project meets the requirements for vehicular egress along El Camino Real that limits conflicts with pedestrians since it is one-way. Vehicular access is two-way off Curtner Avenue and provides sufficient sight-distance at the driveway curb cut. As required, the project creates a 12-foot sidewalk along the frontage of the building. (b) Street Building Facades. Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s), to create an environment that supports and encourages pedestrian activity through design elements. This finding can be made in the affirmative in that project’s mixed-use building provides a 12-foot sidewalk and maintains a build- to line setback (50% of the property frontage). The entry plaza is designed to guide pedestrians to the building entry. A planter is in the front to provide visual interest. The residential component provides a larger setback to accommodate a vehicular ramp and elevator access to the basement garage. (c) Massing and Setbacks. Buildings shall be designed to minimize massing and conform to proper setbacks. This finding can be made in the affirmative in that the proposed project complies with the CS zoning development standards and the design is consistent with the South El Camino Real Design Guidelines since the project complies with the height and setback requirements and the performance standards for projects adjacent to different land uses. Additionally, the use of balconies, light colored materials and appropriate fenestration facilitates the appearance of reducing the mass of the mixed-use building. The residential components include angled roofing that reduces the mass of the building and provides visual interest, while providing a uniform design. As with the mixed-use building, the colors palette is warm with balconies and fenestration provide adequate relief. Setbacks and open spaces are provided that include vegetation and trees that help offset perceived massing. (d) Low-Density Residential Transitions. Where new projects are built abutting existing lower scale residential development, care shall be taken to respect the scale and privacy of neighboring properties. This finding is not applicable to the project since there is no low-density residential development adjacent to the site. (e) Project Open Space. Private and public open space shall be provided so that it is usable for residents, visitors, and/or employees of the site. This finding can be made in the affirmative in that the project provides a plaza near the entry of the mixed-use building and between the building and the residential component. In addition, the project provides balconies for the enjoyment of the employees and residents. The residential component includes open spaces for outdoor gathering. (f) Parking Design. Parking needs shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment. This finding can be made in the affirmative in that the project provides all of its parking below grade. The El Camino Real access to the garages is limited to a one-way ingress into the garage, while access from Curtner Avenue is two-way. Curtner Avenue at El Camino Real is signal-controlled intersection. The basement design requires a deviation from the required rear setback through a Design Enhancement Exception (DEE). However, no changes are required on the surface to accommodate this request. Providing basement parking for the project allows for the site to be used efficiently for site planning of buildings and open space with limited amount of space required for the ramps from the basement to the streets. (g) Large (Multi-Acre) Sites. Large sites (over one acre) shall be designed so that street, block, and building patterns are consistent with those of the surrounding neighborhood. This finding can be made in the affirmative in that the project is consistent with the contemporary development patterns of the vicinity. The project is adjacent to the newly constructed multi-family project (six-units) on Curtner Avenue that has similar design themes. (h) Sustainability and Green Building Design. Project design and materials to achieve sustainability and green building design should be incorporated into the project. This finding can be made in the affirmative in that the project is subject to the California Green Building Code (CalGreen, Tier 2), as further detailed on Finding #6. 3. Finding #3: The design is of high aesthetic quality, using high quality, integrated materials and appropriate construction techniques, and incorporating textures, colors, and other details that are compatible with and enhance the surrounding area. The project proposes a contemporary style that is compatible with recent development along El Camino Real. Likewise, the residential component is consistently designed and is similar to the newly constructed multi-family (six-unit) project adjacent to the project along Curtner Avenue. The project as a whole includes metal, smooth troweled stucco finish, and composite wood paneling. All of which work cohesively to portray a high-quality mixed-use project. The mixed-use building along El Camino Real is consistent with the residential townhouses on the balance of the site. In response to the Board’s direction, the project uses trespa “wood” panels and modified the colors to be more muted. The use of trespa will aid in the long-term maintenance of the building and preserving its high-quality look. 4. Finding #4: The design is functional, allowing for ease and safety of pedestrian and bicycle traffic and providing for elements that support the building’s necessary operations (e.g. convenient vehicle access to property and utilities, appropriate arrangement and amount of open space and integrated signage, if applicable, etc.). The project is consistent with Finding #4 because: The design of the new building is consistent with contemporary development within the City and the use of the space as office and retail on the ground floor for the mixed-use building. The site layout provides common areas for employees, patrons, residents and enlivens El Camino Real with the outdoor patio space adjacent to the building entry. For the residential component, the design includes appropriate setbacks and separation between buildings. The design is consistent in massing and design to the surrounding development. The project provides all of its parking below grade. The El Camino Real access to the garages is limited to a one-way ingress into the garage, while access from Curtner Avenue is two-way. Curtner Avenue at El Camino Real is signal-controlled intersection. The basement design requires a deviation from the required rear setback through a Design Enhancement Exception (DEE). However, no changes are required on the surface to accommodate this request. Providing the basement parking for the project allows for the site to be used efficiently for site planning of buildings and open space with limited amount of space required for the ramps from the basement to the streets. The project will include a security plan that would address concerns regarding the safety of those using the basement. This security plan would outline the proposed passive and active security measures that would be implemented. These measures include, but not limited to the physical design of the basement, cameras, patrols and security gate. With the implementation of these measures, the parking design is enhanced. 5. Finding #5: The landscape design complements and enhances the building design and its surroundings, is appropriate to the site’s functions, and utilizes to the extent practical, regional indigenous drought resistant plant material capable of providing desirable habitat that can be appropriately maintained. The project is consistent with Finding #5 because: The project will protect off-site trees during construction. The project provides a variety of drought-tolerant species. The site proposes open space areas that are designed to encourage gathering and connectivity between the mixed-use building and the residential units to the rear. The trees would provide appropriate habitat for wildlife as a part of a bigger neighborhood and community wide system. In response to the Board’s direction, the project includes additional trees along the northern property line adjacent to the multi-family property. These trees add more visual screening and are consistent with the performance standards for this project that is adjacent to other residential uses. 6. Finding #6: The project incorporates design principles that achieve sustainability in areas related to energy efficiency, water conservation, building materials, landscaping, and site planning. The project is consistent with Finding #6 because: In accordance with the City’s Green Building Regulations, the building will satisfy the requirements for CALGreen Mandatory + Tier 2. Many green building elements are included in the design and construction including a reduction in heat island effect, light pollution reduction, water efficiency with low-irrigation systems and appliances; and reduction in material and resource waste through reduction in cement use, pre-cut materials and details, prefinished building materials. SECTION 6. Design Enhancement Exception Findings 1. There are exceptional or extraordinary circumstances or conditions applicable to the property or site improvements involved that do not apply generally to property in the same zone district. The site is “L”-shaped, has frontage on two streets and includes two separate zoning and comprehensive plan land use designations. There are no other properties within the vicinity with similar design and shape characteristics that would support a mixed-use project. While the adjacent property has a similar “L”-shape with frontage on two streets, there is not sufficient area in the rear to do anything more than a driveway and parallel parking, unlike the project site where there is sufficient land area to develop. The project proposes to transform a vacant restaurant building and adjacent surface parking lot into a vertical and horizontal mixed-use project that would be compatible with the zoning development standards and the South El Camino Real Design Guidelines. To do so, the parking for the site would need to be underground, which is consistent with the South El Camino Real Design Guidelines and the context-based findings for development. The only vehicular designed area that would be visible from the streets would be the ramps leading down to the basement. The exception is to allow a reduction in the required rear setback that applies to the basement from 10-feet to six feet. This would allow for the necessary space to provide drive aisles, appropriate turning radius and back-up distance and parking spaces to accommodate the project. 2. The granting of the application will enhance the appearance of the site or structure, or improve the neighborhood character of the project and preserve an existing or proposed architectural style, in a manner which would not otherwise be accomplished through strict application of the minimum requirements of this title (Zoning) and the architectural review findings set forth in Section 18.76.020(d). Not granting the setback deviation from 10-feet to 6-feet would necessitate surface parking and would compromise the congruent design of the site introducing negative aspects of vehicular activity. Having the parking below ground allows for the site above ground to have more flexibility in site design, which leads to more open space for gathering and wildlife to flourish. 3. The exception is related to a minor architectural feature or site improvement that will not be detrimental or injurious to property or improvements in the vicinity and will not be detrimental to the public health, safety, general welfare or convenience. Allowing the setback deviation of four feet below ground does not affect the surrounding development above ground. The above ground project provides an additional four feet at the surface than what is required. The types of tree species chosen and the setback between the property line and the edge of the basement would allow for the perimeter trees to grow sufficiently. Traffic associated with the site would enter either from El Camino Real or Curtner Avenue, while traffic exiting the site will only exit onto Curtner Avenue and it is expected that traffic would then use the signalized intersection of Curtner and El Camino Real, rather than traverse through the residential neighborhood. The design of the frontage and vehicular ramp at Curtner Avenue would have sufficient sight-distance to ensure that pedestrians would not be at any unduly risk. SECTION 7. Conditions of Approval. Planning Division 1. SUBSTANTIAL CONFORMANCE. Construction and development shall conform to the approved plans entitled “3877 El Camino Real May 4, 207” stamped as received by the City on May 5, 2017 on file with the Planning Department, 250 Hamilton Avenue, Palo Alto, California except as modified by these conditions of approval. 2. BUILDING PERMIT. Apply for a building permit and meet any and all conditions of the Planning, Fire, Public Works, and Building Departments. 3. BUILDING PERMIT PLAN SET. The ARB approval letter including all Department conditions of approval for the project shall be printed on the plans submitted for building permit. 4. PROJECT MODIFICATIONS: All modifications to the approved project shall be submitted for review and approval prior to construction. If during the Building Permit review and construction phase, the project is modified by the applicant, it is the responsibility of the applicant to contact the Planning Division/project planner directly to obtain approval of the project modification. It is the applicant’s responsibility to highlight any proposed changes to the project and to bring it to the project planner’s attention. 5. INDEMNITY: To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. 6. Density Bonus/Below Market Rate (BMR) Housing Requirement: This project’s total BMR requirement is 2.7 units. When the BMR requirement results in a fractional unit, an in-lieu payment to the Residential Housing Fund may be made for the fractional unit instead of providing an actual BMR unit, except that larger projects of 30 or more units must provide a whole BMR unit for any fractional unit of one-half (0.50) or larger. To satisfy this requirement, the applicant shall provide 2 BMR for-sale housing units affordable to lower income households within the project in accordance with the requirements set forth in Program H3.1.2 of the City of Palo Alto Comprehensive Plan, Chapters 18.14 and 18.15 of the Palo Alto Municipal Code, and the BMR Program rules and regulations. The applicant shall also provide in lieu fees equal to 7.5 percent of the greater of the actual sales price or fair market value of each unit in accordance with the schedule set forth in H3.1.2 (e) to satisfy the fractional component of the BMR requirement. The fractional in-lieu fee shall be paid prior to issuance of any building permits for the project; provided, however, that prior to issuance of the first building permit for the project, the applicant may elect to provide one additional inclusionary unit instead of paying the fractional in lieu payment. All Density Bonus/BMR units constructed under this condition shall be in conformance with the City’s BMR Program rules and regulations. A BMR Agreement in a form acceptable to the City Attorney for the 2 BMR units shall be executed and recorded prior to final map approval or building permit issuance, whichever occurs first. Failure to comply with the timing of this condition and any adopted BMR Program rules and regulations shall not waive its later enforcement. 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 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. 7. DEVELOPMENT IMPACT FEES: Estimated Development Impact Fees in the amount of $311,130.37 plus the applicable public art fee, per PAMC 16.61.040, shall be paid prior to the issuance of the related building permit. 8. IMPACT FEE 90-DAY PROTEST PERIOD. California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. If these requirements constitute fees, taxes, assessments, dedications, reservations, or other exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide notification that, as of the date of this notice, the 90-day period has begun in which you may protest these requirements. This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. 9. COMMEMORATIVE PLAQUE. The owner or designee shall produce and mount a bronze plaque in the retail plaza with a description of the work that Gonzalo Silvestre and Carlos Campos created on the site. The specific verbiage would be developed in consultation with the heirs of Gonzalo Silvestre to develop the most complete picture of the artist work. The plaque would be mounted on a built-in bench in the plaza area, facing into the plaza. As feasible and in conjunction with the Silvestre family any ironworks salvaged should be integrated into the bench design. 10. SECURITY PLAN. The owner or designee shall prepare, submit and receive approval from the City for a plan that would include passive and active security measures for the project site including the basement area. Such measures shall include, but not limited to increased lighting levels, glass backed stair/elevator towers, access control, monitored cameras, intercoms and panic buttons, security guard patrols, blue light system, public safety escort services, security gates and effective signage. 11. NOISE PRODUCING EQUIPMENT: All noise producing equipment shall be located outside of required setbacks, except they may project 6 feet into the required street side setbacks. In accordance with Section 9.10.030, No person shall produce, suffer or allow to be produced by any machine, animal or device, or any combination of same, on residential property, a noise level more than six dB above the local ambient at any point outside of the property plane. 12. FINAL INSPECTION: A Planning Division Final inspection will be required to determine substantial compliance with the approved plans prior to the scheduling of a Building Division final. Any revisions during the building process must be approved by Planning, including but not limited to; materials, landscaping and hard surface locations. Contact your Project Planner, Sheldon S. Ah Sing at sahsing@m-group.us to schedule this inspection. 13. ARCHITECTURAL REVIEW BOARD SUBCOMMITTEE: Prior to submittal of a Building Permit for the project, the owner or designee shall obtain approval from the Architectural Review Board Subcommittee for the following items: a. The owner or designee shall provide details on the wall pack lighting used in the project in particular at the first floor of the mixed-use building along the area with the building overhang. b. The owner or designee shall provide updated landscape plans that incorporate native plantings that would improve the habitat for native birds and animals. c. The owner or designee shall revise the plans to provide detail on the hardscape proposed for the project. d. The owner or designee shall revise the plans to increase the size of the commemorative plaque to a minimum 16 inches by 24 inches. 14. MITIGATION MEASURE (BIOLOGICAL). BIO-1 If feasible, vegetation on the project site shall be removed outside of the bird-nesting season. If the start of site clearing, tree removal, or building demolition occurs between February 1 and August 31, a pre-construction survey for nesting birds protected under the Migratory Bird Treaty Act shall be conducted by a qualified biologist to identify the location of nests in active use that were established prior to the start of project implementation activities. The pre-construction survey shall take place no more than 7 days prior to initiation of construction. All trees and shrubs on the site shall be surveyed, with particular attention to any trees or shrubs that would be removed or directly disturbed. Further, the project applicant shall retain a qualified biologist to perform additional nesting bird surveys at least every 2 weeks during all phases of construction that occur during the nesting season. If an active nest of a protected bird is found on site at any time, the qualified biologist shall, in consultation with the California Department of Fish and Wildlife (CDFW), determine whether construction work would affect the active nest or disrupt reproductive behavior. Criteria used for this evaluation shall include presence of visual screening between the nest and construction activities and behavior of adult raptors in response to the surveyors or other ambient human activity. If construction could affect the nest or disrupt reproductive behavior, the qualified biologist shall, in consultation with CDFW, determine an appropriate construction- free buffer zone around the nest to remain in place until the young have fledged or other appropriate protective measures are taken to ensure no take of protected species occurs. If it is determined that construction will affect an active raptor nest or disrupt reproductive behavior, then avoidance is the only mitigation available. Construction shall not be permitted within 300 feet of such a nest until a qualified biologist determines that the subject nest is no longer active. Prior to issuance of a demolition permit, the City shall verify that pre-construction surveys have been conducted within 7 days of the proposed start of demolition. If active bird nests are present, the City shall verify that CDFW has been consulted and either determined that construction will not affect an active bird nest or that appropriate construction-free buffer zones have been established or other appropriate protective measures have been taken. 15. MITIGATION MEASURE (BIOLOGICAL). BIO-2 A pre-construction survey shall be conducted by a qualified biologist (i.e., a biologist holding a California Department of Fish and Wildlife (CDFW) collection permit and a Memorandum of Understanding with CDFW allowing the biologist to handle bats) no earlier than 30 days prior to initiation of construction and demolition activities to determine if active bat roosts or maternal colonies are present on or within 300 feet of the construction demolition area. Surveys shall include the structures proposed for demolition. Should an active maternity roost be identified, the roost shall not be disturbed, and demolition and construction within 300 feet of the maternity roost shall be postponed or halted until the juveniles have fledged and the roost is vacated, as determined by a qualified biologist. Consultation with CDFW shall also be initiated. Under no circumstance shall an active roost be directly disturbed. If nonbreeding bat hibernacula are found on the project site, the individuals shall be safely evicted under the direction of a qualified bat biologist and with consultation with CDFW. These actions shall allow bats to leave during nighttime hours, increasing their chance of finding new roosts with a minimum of potential predation during daylight. If it is determined that demolition or construction will not affect roosting behavior or disrupt a maternal colony, demolition or construction may proceed without any restriction or mitigation measure. If it is determined that demolition or construction will affect an active bat roost or disrupt reproductive behavior, then avoidance is the only mitigation available. Under no circumstance shall an active roost be directly disturbed. Demolition or construction within 300 feet shall be postponed or halted until the roost is naturally vacated as determined by a qualified biologist. Prior to issuance of a demolition permit, the City of Palo Alto (City) shall verify that pre- construction surveys have been conducted within 30 days of the proposed start of demolition. If bats are present, the City shall verify that CDFW has been consulted and either determined that construction will not affect an active bat roost or disrupt a maternal colony or that individuals in a nonbreeding bat hibernacula have been safely evicted. Due to regulations from the California Department of Public Health, direct contact by construction workers with any bat is not allowed. Public Works Engineering PRIOR TO BUILDING PERMIT AND GRADING AND EXCAVATION PERMIT SUBMITTAL 15. MAPPING: Applicant shall file for a Minor or Major Subdivision Application. Five parcels would trigger a major subdivision. Public Works’ Tentative Maps and Preliminary Parcel Maps checklist must accompany the completed application. All existing and proposed dedications and easements must be shown on the submitted map. The map would trigger further requirements from Public Works, see Palo Alto Municipal Code section 21.12 for Preliminary Parcel Map or Tentative Map requirements and section 21.16 for Parcel Map or Final Map requirements. If a Map is required, it shall be recorded prior to issuance of a building permit or excavation and grading permit. 16. PUBLIC ACCESS EASEMENT: Owner shall create a public access easement for the additional area behind the property line needed to create a 12-foot wide sidewalk along El Camino Real. Plot and label the Public Access Easement along El Camino Real that provides the 12-foot wide sidewalk. 17. Subdivision Improvement Agreement is required to secure compliance with condition of approval and security of improvements onsite and offsite per PAMC Section 21.16.220. 18. Please verify if the existing sub-surface transformer within the sidewalk will continue to serve the development. If the existing transformer cannot serve the project then a new transformer upgrade may be required. The new transformer shall be located completely within private property. Plot and label the location of the new transformer, if needed. Or provide a note on the plans that indicate existing transformer to be used and if a new one is needed it will be located within private property. 19. OFF-SITE IMPROVEMENTS: Submit a copy of the off-site improvement plans that includes the replacement of curb, gutter, sidewalk, utilities, landscape, etc. Provide Caltrans standard details along the project frontage. Plans shall include the proposed public access easement, grades along the conforms. 20. Submit a construction cost estimate associated with the off-site improvements. PRIOR TO DEMOLITION BUILDING PERMIT ISSUANCE 21. Map shall be recorded prior to issuance of a Building Permit or Grading and Excavation Permit. 22. LOGISTICS PLAN: The contractor must submit a logistics plan to the Public Works Department prior to building permit demolition that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. Plan shall include the following, but not limited to, construction fence, construction entrance and exit, stockpile areas, equipment and material storage area, workers parking area, construction office trailer, temporary bathroom, measures for dewatering if needed, crane location, working hours, contractor’s contact information, truck traffic route, setbacks from environmentally sensitive areas, erosion and sediment control measures to be implemented during construction. 23. DEMOLITION PLAN: Place the following note adjacent to an affected tree on the Site Plan and Demolition Plan: “Excavation activities associated with the proposed scope of work shall occur no closer than 10-feet from the existing street tree, or as approved by the Urban Forestry Division contact 650- 496-5953. Any changes shall be approved by the same”. Also plot and label the tree protection zone. 24. GRADING PERMIT: The grading and drainage plan must include an earthworks table with the estimated cut and fill volumes. If the total is more than 100 cubic yards, a grading permit will be required. An application and plans for a grading permit are submitted to Public Works separately from the building permit plan set. The application and guidelines are available at the Development Center and on our website. Provide a Rough Grading Plan for the work proposed as part of the Grading and Excavation Permit application. The Rough Grading Plans shall include the following: pad elevation, basement elevation, elevator pit elevation, ground monitoring wells, shoring for the proposed basement, limits of over excavation, stockpile area of material, overall earthwork volumes (cut and fill), temporary shoring for any existing facilities, ramps for the basement access, crane locations (if any), etc. Plans submitted for the Grading and Excavation Permit, shall be stand- alone, and therefore the plans shall include any conditions from other divisions that pertain to items encountered during rough grading for example if contaminated groundwater is encountered and dewatering is expected, provide notes on the plans based Water Quality’s conditions of approval. Provide a note on the plans to direct the contractor to the approve City of Palo Alto Truck Route Map, which is available on the City’s website. Provide the following note on the Rough Grading Plan and the Final Grading Plan. “In my professional judgement, the highest projected groundwater level to be encountered in the area of the proposed basement in the future will be feet below existing grade.” 25. LOGISTICS PLAN: The applicant and contractor shall submit a construction logistics plan to the Public Works Department that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, on-site staging and storage areas, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact. The plan shall be prepared and submitted along the Rough Grading and Excavation Permit. Plot the construction fence, entrances, shoring, limits of over excavation, tree protection zone, construction workers parking area, staging and storage areas within the private site for equipment and material. The plans shall include notes as indicated on the approved Truck Route Map for construction traffic to and from the site. Note that there is a project immediately adjacent to another active construction site located at 405 Curtner Avenue. On the Logistics Plan provide a note for the project contractor to coordinate directly with the general contractor of 405 Curtner Avenue, to avoid conflicts in right-of- way. At no point, will both projects be permitted to close off Curtner Avenue. 26. BASEMENT SHORING: Shoring for the basement excavation, including tiebacks, must not extend onto adjacent private property or into the City right-of-way without having first obtained written permission from the private property owners and/or an encroachment permit from Public Works or Caltrans. On the Basement Plan, provide a dimension between the property lines and the basement walls, to verify that the shoring will be located completely within the subject property. In particular, near the proposed driveway ramps. 27. BASEMENT DRAINAGE: Due to high groundwater throughout much of the City and Public Works prohibiting the pumping and discharging of groundwater, perforated pipe drainage systems at the exterior of the basement walls or under the slab are not allowed for this site. A drainage system is, however, required for all exterior basement-level spaces, such as lightwells, patios or stairwells. This system consists of a sump, a sump pump, a backflow preventer, and a closed pipe from the pump to a dissipation device onsite at least 10 feet from the property line, such as a bubbler box in a landscaped area, so that water can percolate into the soil and/or sheet flow across the site. The device must not allow stagnant water that could become mosquito habitat. Additionally, the plans must show that exterior basement-level spaces are at least 7-3/4” below any adjacent windowsills or doorsills to minimize the potential for flooding the basement. Public Works recommends a waterproofing consultant be retained to design and inspect the vapor barrier and waterproofing systems for the basement. 28. DEWATERING: Basement excavations may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is disallowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater level. We recommend a piezometer to be installed in the soil boring. The contractor must determine the depth to groundwater immediately prior to excavation by using the piezometer or by drilling an exploratory hole if the deepest excavation will be within three (3) feet of the highest anticipated groundwater level. If groundwater is found within two (2) feet of the deepest excavation, a drawdown well dewatering system must be used, or alternatively, the contractor can excavate for the basement and hope not to hit groundwater, but if he does, he must immediately stop all work and install a drawdown well system before he continues to excavate. Public Works may require the water to be tested for contaminants prior to initial discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for the contaminants Public Works specifies and submit the results to Public Works. Applicant shall install a water station for the reuse of dewatering water. This water station shall be constructed next to the right-of-way and shall be accessible 24 hours a day for the filling of water carrying vehicles (i.e. street sweepers, etc.). The water station shall also be sued for onsite dust control. Applicant shall meet with Public Works to coordinate the design details. Public Works reviews and approves dewatering plans as part of a Street Work Permit. The applicant can include a dewatering plan in the building permit plan set in order to obtain approval of the plan during the building permit review, but the contractor will still be required to obtain a street work permit prior to dewatering. The street work permit to dewater must be obtained in August to allow ample to time to dewater and complete the dewatering by October 31st. Alternatively, the applicant must include the above dewatering requirements in a note on the site plan. Public Works has a sample dewatering plan sheet and dewatering guidelines available at the Development Center and on our website http://www.cityofpaloalto.org/gov/depts/pwd/forms_and_permits.asp The following links are included to assist the applicant with dewatering requirements. http://www.cityofpaloalto.org/civicax/filebank/documents/30978 http://www.cityofpaloalto.org/civicax/filebank/documents/51366 http://www.cityofpaloalto.org/civicax/filebank/documents/47388 . Green Building Green Building Requirement for Mixed-Use Projects 29. The project shall meet both the residential and non-residential requirements for the corresponding areas. Green building requirements are subject to field inspection. Residential Area 30. For design and construction of residential projects, the City requires use of the Build It Green (BIG), Green Point Rated (GPR) program to comply with the mandatory measures of Chapter 4.(Ord. 5220 § 1 (part), 2013) The project is a new construction residential building and therefore must achieve BIG GPR minimum requirements and achieve 70 points + 1 point per additional 70 square feet over 2500 square feet. The applicant must hire a Green Point Rater and should use Green Point Rated Multi-family Checklist. The project must meet the enhanced construction waste reduction at tier 2 (75% construction waste reduction). PAMC 16.14.160 (Ord. 5220 § 1 (part), 2013) The project is a new multifamily residential project and therefore must comply with the City of Palo Alto Electric Vehicle Charging Ordinance 5263. For resident parking, the project must supply one EVSE-Ready Outlet or EVSE Installed for each residential unit in the structure. For guest parking, the project shall provide Conduit Only, EVSE Ready Outlet, or EVSE Installed for at least 25% of the guest parking, among which at least 5% (and no fewer than one) shall be EVSE installed. See PAMC 16.14.370 for definitions on the types of EVSE parking. (Ord. 5263§ 1 (part), 2013). Non-Residential Area 31. For design and construction of non-residential projects, the City requires compliance with the mandatory measures of Chapter 5, in addition to use of the Voluntary Tiers. (Ord. 5220 § 1 (part), 2013) 32. The project is a new nonresidential construction project greater than 1,000 square feet and therefore must comply with California Green Building Standards Code Mandatory plus Tier 2 requirements, as applicable to the scope of work. PAMC 6.14.180 (Ord. 5220 § 1 (part), 2013). The project has indicated sustainable design objectives. The project applicant shall indicate the requirements on the Permit Plans. Green building requirements are subject to field inspection. The submittal requirements are outlined here: www.cityofpaloalto.org/gov/depts/ds/green_building/default.asp. 33. The project is a nonresidential new construction projects with a landscape of any size included in the project scope and therefore must comply with Potable water reduction Tier 2. Documentation is required to demonstrate that the Estimated Total Water Use (ETWU) falls within a Maximum Applied Water Allowance (MAWA) using the appropriate evapotranspiration adjustment factor (ETAF) designated by the prescribed potable water reduction tier. PAMC 16.14.220 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. The submittal requirements are outlined on the following site: http://www.cityofpaloalto.org/gov/depts/utl/residents/resrebate/landscape.asp. 34. The project is outside the boundaries of the recycled water project area and is greater than 1,000 square feet and therefore must install recycled water infrastructure for irrigation systems. PAMC 16.14.230 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. 35. The project is either new construction or a rehabilitated landscape and is greater than 1,000 square feet and therefore must install a dedicated irrigation meter related to the recycled water infrastructure. PAMC 16.14.230 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. 36. The project includes a new or altered irrigation system and therefore must be designed and installed to prevent water waste due to overspray, low head drainage, or other conditions where water flows onto adjacent property, non-irrigated areas, walks, roadways, parking lots, or structures. PA 16.14.300 (Ord. 5220 § 1 (part), 2013). 37. The project includes a new or altered irrigation system and therefore the irrigation must be scheduled between 8:00 p.m. and 10:00 a.m. unless weather conditions prevent it. Operation of the irrigation system outside the normal watering window is allowed for auditing and system maintenance. Total annual applied water shall be less than or equal to maximum applied water allowance (MAWA) as calculated per the potable water use reduction tier. PAMC 16.14.310 (Ord. 5220 § 1 (part), 2013)). The project applicant shall indicate the requirements on the Permit Plans. 38. C&D: The project is a nonresidential new construction project and has a value exceeding $25,000 and therefore must meet Enhanced Construction Waste Reduction Tier 2. PAMC 16.14.240 (Ord. 5220 § 1 (part), 2013). The project shall use the Green Halo System to document the requirements. 39. The project includes non-residential demolition and therefore must meet the Enhanced Construction Waste Reduction - Tier 2. PAMC 16.14.270 (Ord. 5220 § 1 (part), 2013). The project shall use the Green Halo System to document the requirements. 40. Energy Star: The project is a nonresidential projects exceeding $100,000 valuation and therefore must acquire an Energy STAR Portfolio Manager Rating and submit the rating to the City of Palo Alto once the project has been occupied after 12 months. PAMC 16.14.250 (Ord. 5220 § 1 (part), 2013). Submittal info can be found at: https://www.cityofpaloalto.org/gov/depts/utl/business/benchmarking_your_building.asp. 41. EVSE: The project is a new non-residential structure and therefore must comply with the City of Palo Alto Electric Vehicle Charging Ordinance 5263. The project shall provide Conduit Only, EVSE-Ready Outlet, or EVSE Installed for at least 25% of parking spaces, among which at least 5% (and no fewer than one) shall be EVSE Installed. The requirements shall be applied separately to accessible parking spaces. See Ordinance 5263 for EVSE definitions, minimum circuit capacity, and design detail requirements. PAMC 16.14.380 (Ord. 5263 § 1 (part), 2013) See https://www.cityofpaloalto.org/civicax/filebank/documents/43818 for additional details. 42. Zero Net Energy Design Review: The project is a new construction commercial project and therefore may elect to engage the City of Palo Alto consultant, BASE Energy Inc, free of charge. BASE will assist the project in targeting Zero Net Energy and exceeding the Title 24 Energy Code. Rebates may be available via working with Base. For more information, visit www.cityofpaloalto.org/commercial program or call 650.329.2241. The applicant may also contact Ricardo Sfeir at BASE Energy at rsfeir@baseco.com to schedule a project kick-off. 43. Utilities Incentives & Rebates: The project may be eligible for several rebates offered through the City of Palo Alto Utilities Department. These rebates are most successfully obtained when planned into the project early in design. For the incentives available for the project, please see the information provided on the Utilities website: http://www.cityofpaloalto.org/gov/depts/utl/business/rebates/default.asp 44. Bird-Friendly Building Design: The west elevation on sheet A4.2 contains a glazed façade that covers a large area. Glazing shown on A4.1 does not indicate finish and appears to be clear. The project should consider bird-safe glazing treatment that typically includes fritting, netting, permanent stencils, frosted glass, exterior screens, physical grids placed on the exterior of glazing or UV patterns visible to birds. Vertical elements of the window patterns should be at least 1/4 inch wide at a minimum spacing of 4 inches, or have horizontal elements at least 1/8 inch wide at a maximum spacing of 2 inches. The applicant should consider consulting the San Francisco Standards for Bird Safe Buildings. Transportation 45. The turn-around area in the parking garage adjacent to parking stall #1 as shown on sheet A1.1 may be mistaken as a common parking space. The area shall be filled with crosshatching and potentially additional pavement markings and/or signage to prohibit parking or stopping within the turn-around area. Utilities-Water, Gas & Wastewater PRIOR TO ISSUANCE OF A DEMOLITION PERMIT 46. Prior to demolition, the applicant shall submit the existing water/wastewater fixture unit loads (and building as-built plans to verify the existing loads) to determine the capacity fee credit for the existing load. If the applicant does not submit loads and plans they may not receive credit for the existing water/wastewater fixtures. 47. The applicant shall submit a request to disconnect all utility services and/or meters including a signed affidavit of vacancy. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued by the building inspection division after all utility services and/or meters have been disconnected and removed. FOR BUILDING PERMIT 48. The applicant shall submit completed water-gas-wastewater service connection applications – load sheets for City of Palo Alto Utilities for each unit or place of business. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.p.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 49. City prefers to have the utilities installed on Curtner Ave instead of El Camino Real. 50. Water meter(s) up to 2” to be located in the public right of way. 51. Due to limited space for individual meters, applicant can consider possibility for master metering. The buildings can only be master metered for gas if: The building will contain central heating, air conditioning, or central domestic hot Water and can be shown (using methods of calculation acceptable to CPAU) to be more energy efficient and at a more favorable cost-benefit ratio than would be the case if individual Metering were installed. 52. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. Plans for new wastewater laterals and mains need to include new wastewater pipe profiles showing existing potentially conflicting utilities especially storm drain pipes, electric and communication duct banks. Existing duct banks need to be daylighted by potholing to the bottom of the ductbank to verify cross section prior to plan approval and starting lateral installation. Plans for new storm drain mains and laterals need to include profiles showing existing potential conflicts with sewer, water and gas. 53. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). 54. The applicant may 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. 55. The applicant's engineer shall submit flow calculations and system capacity study showing that the on- site and off-site water and sanitary sewer mains and services will provide the domestic, irrigation, fire flows, and wastewater capacity needed to service the development and adjacent properties during anticipated peak flow demands. Field testing may be required to determined current flows and water pressures on existing water main. Calculations must be signed and stamped by a registered civil engineer. The applicant is required to perform, at his/her expense, a flow monitoring study of the existing sewer main to determine the remaining capacity. The report must include existing peak flows or depth of flow based on a minimum monitoring period of seven continuous days or as determined by the senior wastewater engineer. The study shall meet the requirements and the approval of the WGW engineering section. No downstream overloading of existing sewer main will be permitted. 56. For contractor installed water and wastewater mains or services, the applicant shall submit to the WGW engineering section of the Utilities Department four copies of the installation of public water, gas and wastewater utilities improvement plans (the portion to be owned and maintained by the City) in accordance with the utilities department design criteria. All utility work within the public right-of-way shall be clearly shown on the plans that are prepared, signed and stamped by a registered civil engineer. The contractor shall also submit a complete schedule of work, method of construction and the manufacture's literature on the materials to be used for approval by the utilities engineering section. The applicant's contractor will not be allowed to begin work until the improvement plan and other submittals have been approved by the water, gas and wastewater engineering section. After the work is complete but prior to sign off, the applicant shall provide record drawings (as-builts) of the contractor installed water and wastewater mains and services per City of Palo Alto Utilities record drawing procedures (see last condition). For projects that take more than one month to complete, the applicant shall provide progress record drawings of work completed on a monthly basis. 57. 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. 58. An approved reduced pressure detector assembly is required for the existing or new water connection for the fire system to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive (a double detector assembly may be allowed for existing fire sprinkler systems upon the CPAU’s approval). reduced pressure detector assemblies shall be installed on the owner's property adjacent to the property line, within 5’ of the property line. Show the location of the reduced pressure detector assembly on the plans. 59. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. 60. Existing wastewater laterals that are not plastic (ABS, PVC, or PE) shall be replaced at the applicant’s expense. 61. Existing water services (including fire services) that are not a currently standard material shall be replaced at the applicant’s expense. 62. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 63. Each unit or place of business shall have its own water and gas meter shown on the plans. Each parcel shall have its own water service, gas service and sewer lateral connection shown on the plans. 64. All WGW utility installations shall be from Curtner Street instead of El Camino Real (see note #31). 65. A separate water meter and backflow preventer is required to irrigate the approved landscape for landscaping areas in excess of 1,500 SF (including tree canopies). Show the location of the irrigation meter on the plans. This meter shall be designated as an irrigation account an no other water service will be billed on the account. The irrigation and landscape plans submitted with the application for a grading or building permit shall conform to the City of Palo Alto water efficiency standards. 66. A new water service line installation for domestic usage is required. For water meters 4” and larger the applicant's contractor must provide and install an 4’ by 8’ meter vault with meter reading lid covers and other required control equipment in accordance with the utilities standard detail WD-05. Water meters 4” and larger shall be in a PUE on private property, water meters 2” and smaller shall be located in the public right of way per the CPA WGW Utilities Standards. Show the location of the new water service and meter on the plans. 67. If a new water service line installation for irrigation usage is required. Show the location of the new water service and meter on the plans. 68. A new water service line installation for fire system usage is required. Show the location of the new water service on the plans. The applicant shall provide to the engineering department a copy of the plans for fire system including all fire department's requirements. 69. A new gas service line installation is required. Show the new gas meter location on the plans. The gas meter location must meet the WGW Utility Standards. The City of Palo Alto normal service pressure is 7” WC (.25 PSI). Increased pressure must be requested in writing and is only provided if the houseline size calculates out at greater than 2” diameter for domestic (note: domestic can only be increased to 14” WC max.) and greater than 4” diameter for commercial at standard houseline pressure (7” WC) or the appliance requires increased pressure at the inlet. Further, due to meter limitations there must a minimum of 800 CFH demand for pressures greater than 14” WC. The only available pressure increments above 7” WC are 14” WC (1/2 psi), 1#, 2# and 5# after approval. Pressures in excess of 14” WC, will require testing the house piping at not less than 60 psig for not less than 30 minutes per the California Plumbing Code section 1204.3.2, witnessed by Palo Alto Building Inspection. The City of Palo Alto will not provide increased pressure just to save contractor money on the houseline construction. Requests to increase the pressure will be evaluated with the following submittals: The manufacturer’s literature for the equipment requiring increased pressure; the specific pressure you are requesting; the gas load; and the length of house gas piping from the gas meter to where the gas houseline starts branching off. 70. A new sewer lateral installation per lot is required. Show the location of the new sewer lateral on the plans. 71. The applicant shall secure a public utilities easement for facilities installed in private property. The applicant's engineer shall obtain, prepare, record with the county of Santa Clara, and provide the utilities engineering section with copies of the public utilities easement across the adjacent parcels as is necessary to serve the development. 72. Where public mains are installed in private streets/PUEs for condominium and town home projects the CC&Rs and final map shall include the statement: “Public Utility Easements: If the City’s reasonable use of the Public Utility Easements, which are shown as P.U.E on the Map, results in any damage to the Common Area, then it shall be the responsibility of the Association, and not of the City, to Restore the affected portion(s) of the Common Area. This Section may not be amended without the prior written consent of the City”. 73. All existing water and wastewater services that will not be reused shall be abandoned at the main per WGW utilties procedures. 74. Flushing of the fire system to sanitary sewer shall not exceed 30 GPM. Higher flushing rates shall be diverted to a detention tank to achieve the 30 GPM flow to sewer. 75. Sewage ejector pumps shall meet the following conditions: The pump(s) shall be limited to a total 100 GPM capacity and The sewage line changes to a 4” gravity flow line at least 20’ from the City clean out. The tank and float is set up such that the pump run time not exceed 20 seconds each cycle. 76. Utility vaults, transformers, utility cabinets, concrete bases, or other structures cannot be placed over existing water, gas or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas or wastewater mains/services or meters. New water, gas or wastewater services/meters may not be installed within 10’ or existing trees. Maintain 10’ between new trees and new water, gas and wastewater services/mains/meters. 77. To install new gas service by directional boring, the applicant is required to have a sewer cleanout at the front of the building. This cleanout is required so the sewer lateral can be videoed for verification of no damage after the gas service is installed by directional boring. 78. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas & wastewater. 79. The applicant shall obtain an encroachment permit from Caltrans for all WGW utility work in the El Camino Real right-of-way. The applicant must provide a copy of the permit to the WGW engineering section. 80. The applicant shall obtain an encroachment permit from Santa Clara county department of transportation for all utility work in the county road right-of-way. The applicant must provide a copy of the permit to the WGW engineering section. 81. The applicant shall obtain a construction permit from Santa Clara county valley water district for the utility service line to be installed by the City of Palo Alto Utilities. Public Works-Urban Forestry PRIOR TO DEMOLITION, BUILDING OR GRADING PERMIT ISSUANCE 82. BUILDING PERMIT SUBMITTAL‐ PROJECT ARBORIST CERTIFICATION LETTER. Prior to submittal for staff review, attach a Project Arborist Certification Letter that he/she has; (a) reviewed the entire building permit plan set submittal and, (b)* verified all his/her updated TPR mitigation measures and changes are incorporated in the plan set, (c) affirm that ongoing Contractor/Project Arborist site monitoring inspections and reporting have been arranged with the contractor or owner (see Sheet T‐1) and, (d) understands that design revisions (site or plan changes) within a TPZ will be routed to Project Arborist/Contractor for review prior to approval from City. i. (b above) Other information. The Building Permit submittal set shall be accompanied by the project site arborist’s typed certification letter shall state that the plans have incorporated design changes and are consistent with City Standards, Regulations and following information: ii. Applicant/project arborist’s final revised Tree Protection Report (TPR) with said design changes and corresponding mitigation measures. (e.g.: if Pier/grade beam=soils report w/ specs required by Bldg. Div.; if Standard foundation= mitigation for linear 24” cut to all roots in proximity) a. Palo Alto Tree Technical Manual Construction Standards, Section 2.00 and PAMC 8.10.080. b. Specialty items. Itemized list of any activity impact--quantified and mitigated, in the Tree Protection iii. Zone (TPZ) for each tree. i.Oaks, if present. That landscape and irrigation plans are consistent with CPA Tree Technical iv. Manual, Section 5.45 and Appendix L, Landscaping under Native Oaks and PAMC 18.40.130. 83. BUILDING PERMIT CORRECTIONS/REVISIONS‐‐COVER LETTER. During plan check review, provide a separate cover letter with Correction List along with the revised drawings when resubmitting. State where the significant tree impacts notes occur (bubble) and indicate the sheet number and/or detail where the correction has been made. Provide: 1) corresponding revision number and 2) bubble or highlights for easy reference. Responses such as “see plans or report” or “plans comply” are not acceptable. Your response should be clear and complete to assist the recheck and approval process for your project. 84. PLAN SET REQUIREMENTS. The final Plans submitted for building permit shall include the following information and notes on relevant plan sheets: d. SHEET T‐1, BUILDING PERMIT. The building permit plan set will include the City’s full‐ sized, Sheet T‐1 (Tree Protection‐it's Part of the Plan!), available on the Development Center website at http://www.cityofpaloalto.org/civicax/filebank/documents/31783. The Applicant shall complete and sign the Tree Disclosure Statement and recognize the Project Arborist Tree Activity Inspection Schedule. Monthly reporting to Urban Forestry/Contractor is mandatory. (Insp. #1: applies to all projects; with tree preservation report: Insp. #2‐6 applies; with landscape plan: Insp. #7 applies.) e. The Tree Preservation Report (TPR). All sheets of the Applicant’s TPR approved by the City for full implementation by Contractor, Monarch Consulting Arborists, Tree Inventory and Assessment Plan, dated September 18, 2014, shall be printed on numbered Sheet T‐1 (T‐ 2, T‐3, etc.) and added to the sheet index. 85. PLANS‐‐SHOW PROTECTIVE TREE FENCING. The Plan Set (esp. site, demolition, grading & drainage, foundation, irrigation, tree disposition, utility sheets, etc.) must delineate/show Type I or Type II fencing around each Regulated Trees, using a bold dashed line enclosing the Tree Protection Zone as shown on Standard Dwg. #605, Sheet T‐1, and the City Tree Technical Manual, Section 6.35‐Site Plans; or using the Project Arborist’s unique diagram for each Tree Protection Zone enclosure. 86. SITE PLAN REQUIREMENTS: Plans with Public Trees shall show (a) Type II street tree fencing enclosing the entire parkway strip or, (b) Type I protection to the outer branch dripline (for rolled curb & sidewalk or no‐sidewalk situations.) f. Add Site Plan Notes. i. Note #1. Apply to the site plan stating, "All tree protection and inspection schedule measures, design recommendations, watering and construction scheduling shall be implemented in full by owner and contractor, as stated on Sheet T‐1, in the Tree Protection Report and the approved plans”. ii. Note #2. All civil plans, grading plans, irrigation plans, site plans and utility plans and relevant sheets shall add a note applying to the trees to be protected, including neighboring trees stating: "Regulated Tree‐‐before working in this area contact the Monarch Project Site Arborist at 818.331.8982"; iii. Note #3. Utility (sanitary sewer/gas/water/backflow/electric/storm drain) plan sheets shall include the following note: “Utility trenching shall not occur within the TPZ of the protected tree. Contractor shall be responsible for ensuring that no trenching occurs within the TPZ of the protected tree by contractors, City crews or final landscape workers. See sheet T‐1 for instructions.” iv. Note #4. “Basement or foundation plan. Soils Report and Excavation for basement construction within the TPZ of a protected tree shall specify a vertical cut (stitch piers may be necessary) in order to avoid over‐excavating into the tree root zone. Any variance from this procedure requires Urban Forestry approval, please call (650) 496‐ 5953.” v. Note #5. “Pruning Restrictions. No pruning or clearance cutting of branches is permitted on City trees. Contractor shall obtain a Public Tree Permit from Urban Forestry (650‐ 496‐5953) for any work on Public Trees”. 87. TREE REMOVAL—PROTECTED & RIGHT‐OF‐WAY TREES. Existing trees (Publicly‐owned or Protected) to be removed, as shown accurately located on all site plans, require approval by the Urban Forestry Tree Care Permit prior to issuance of any building, demolition or grading permit. Must also be referenced in the required Street Work Permit from Public Works Engineering. i. Add plan note for each tree to be removed, “Tree Removal. Contractor shall obtain a completed Urban Forestry Tree Care Permit # (contractor to complete) separate from the Building or Street Work Permit. Permit notice hanger and conditions apply. Contact (650‐ 496‐5953).” ii. Copy the approval. The completed Tree Care Permit shall be printed on Sheet T‐2, or specific approval communication from staff clearly copied directly on the relevant plan sheet. The same Form is used for public or private Protected tree removal requests available from the Urban Forestry webpage: http://www.cityofpaloalto.org/gov/depts/pwd/trees/default.asp 88. NEW RIGHT‐OF‐WAY TREES‐‐PLAN REQUIREMENTS. New trees shall be shown on all relevant plans: site, utility, irrigation, landscape, etc. in a location 10’ clear radius from any (new or existing) underground utility or curb cut (see Note #4 above). g. Add note on the Planting Plan that states, “Tree Planting. Prior to in‐ground installation, Urban Forestry inspection/approval required for tree stock, planting conditions and irrigation adequacy. Contact (650‐496‐5953).” i. Plans shall state the Urban Forestry approved species, size and include relevant Standard Planting Dwg. #603, #603a or #604 (reference which), and shall note the tree pit dug at least twice the diameter of the root ball. h. Landscape plan shall include planting preparation details for trees specifying digging the soil to at least 30‐inches deep, backfilled with a quality topsoil and dressing with 2‐inches of wood or bark mulch on top of the root ball keeping clear of the trunk by 1‐ inch. i. Add note on the Planting & Irrigation Plan that states, “Irrigation and tree planting in the right‐of‐way requires a street work permit per CPA Public Works standards.” ii. Automatic irrigation shall be provided for each tree. Standard Dwg. #513 shall be included on the irrigation plans and show two bubbler heads mounted on flexible tubing placed at the edge of the root ball. Bubblers mounted inside an aeration tube are prohibited. The tree irrigation system shall be connected to a separate valve from other shrubbery and ground cover, pursuant to the City's Landscape Water Efficiency Standards. 89. NEW RIGHT-OF-WAY TREES—SOIL VOLUME. Unless otherwise approved, each new large* tree shall be provided with 1,200 cubic feet of rootable soil area, utilizing Standard Dwg. #604/513. Rootable soil shall mean compaction less than 90% over the area, not including sidewalk base areas except when mitigated. Sidewalk Mitigation in lieu of compacted root conditions may use Alternative Base Material methods such as: structural grid (Silva Cell), Engineered Soil Mix base or other method as approved. 90. Minimum soil volume for tree size growth performance (in cubic feet): Large: 1,200 cu.ft. Medium: 800 cu.ft. Small: 400 cu.ft. a. Landscape Plan. When qualifying for parking area shade ordinance compliance (PAMC 18.40.130) trees shall be labeled (as S, M or L). i. Engineered Soil Mix (ESM). When applied, Engineered Soil Mix base material shall be utilized in specified areas, such as a sidewalk base or channeling to a landscape area, to achieve expected shade tree rooting potential and maximum service life of the sidewalk, curb, parking surfaces and compacted areas. Plans and Civil Drawings shall use CPA Public Works Engineering ESM Specifications, Section 30 and Standard Dwg. #603a. Designated areas will be identified by crosshatch or other symbol, and specify a minimum of 24" depth. The technology may be counted toward any credits awarded for LEED or Sustainable Sites certification ratings. 87. LANDSCAPE PLANS a. Include all changes recommended from civil engineer, architect and staff, including planting specifications if called for by the project arborist, b. Provide a detailed landscape and irrigation plan encompassing on‐and off‐site plantable areas out to the curb as approved by the Architectural Review Board. A Landscape Water Use statement, water use calculations and a statement of design intent shall be submitted for the project. A licensed landscape architect and qualified irrigation consultant will prepare these plans, to include: i. All existing trees identified both to be retained and removed including street trees. ii. Complete plant list indicating tree and plant species, quantity, size, and locations. iii. Irrigation schedule and plan. iv. Fence locations. v. Lighting plan with photometric data. vi. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. vii. All new trees planted within the public right‐of‐way shall be installed per Public Works (PW) Standard Planting Diagram #603 or 604 (include on plans), and shall have a tree pit dug at least twice the diameter of the root ball. viii. Landscape plan shall include planting preparation details for trees specifying digging the soil to at least 30‐inches deep, backfilled with a quality topsoil and dressing with 2‐inches of wood or bark mulch on top of the root ball keeping clear of the trunk by 1‐inch. ix. Automatic irrigation shall be provided to all trees. For trees, Standard Dwg. #513 shall be included on the irrigation plans and show two bubbler heads mounted on flexible tubing placed at the edge of the root ball. Bubblers shall not be mounted inside an aeration tube. The tree irrigation system shall be connected to a separate valve from other shrubbery and ground cover, pursuant to the City's Landscape Water Efficiency Standards. Irrigation in the right‐of‐way requires a street work permit per CPA Public Works standards. b. Landscape Plan shall ensure the backflow device is adequately obscured with the appropriate screening to minimize visibility (planted shrubbery is preferred, painted dark green, decorative boulder covering acceptable; wire cages are discouraged). c. Add Planting notes to include the following mandatory criteria: i. Prior to any planting, all plantable areas shall be tilled to 12” depth, and all construction rubble and stones over 1” or larger shall be removed from the site. ii. Note a turf‐free zone around trees 36” diameter (18” radius) for best tree performance. 88. TREE PROTECTION VERIFICATION. Prior to demolition, grading or building permit issuance, a written verification from the contractor that the required protective fencing is in place shall be submitted to the Building Inspections Division. The fencing shall contain required warning sign and remain in place until final inspection of the project. DURING CONSTRUCTION 89. EXCAVATION RESTRICTIONS APPLY (TTM, Sec. 2.20 C & D). Any approved grading, digging or trenching beneath a tree canopy shall be performed using ‘air‐spade’ method as a preference, with manual hand shovel as a backup. For utility trenching, including sewer line, roots exposed with diameter of 1.5 inches and greater shall remain intact and not be damaged. If directional boring method is used to tunnel beneath roots, then Table 2‐1, Trenching and Tunneling Distance, shall be printed on the final plans to be implemented by Contractor. 90. PLAN CHANGES. Revisions and/or changes to plans before or during construction shall be reviewed and responded to by the (a) project site arborist, Monarch Consulting Arborists, 831.331.8982, or (b) landscape architect with written letter of acceptance before submitting the revision to the Building Department for review by Planning, PW or Urban Forestry. 91. CONDITIONS. All Planning Department conditions of approval for the project shall be printed on the plans submitted for building permit. 92. TREE PROTECTION COMPLIANCE. The owner and contractor shall implement all protection and inspection schedule measures, design recommendations and construction scheduling as stated in the TPR & Sheet T‐1, and is subject to code compliance action pursuant to PAMC 8.10.080. The required protective fencing shall remain in place until final landscaping and inspection of the project. Project arborist approval must be obtained and documented in the monthly activity report sent to the City. The mandatory Contractor and Arborist Monthly Tree Activity Report shall be sent monthly to the City (pwps@cityofpaloalto.org) beginning with the initial verification approval, using the template in the Tree Technical Manual, Addendum 11. 93. TREE DAMAGE. Tree Damage, Injury Mitigation and Inspections apply to Contractor. Reporting, injury mitigation measures and arborist inspection schedule (1‐5) apply pursuant to TTM, Section 2.20‐2.30. Contractor shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged during the course of construction, pursuant to Title 8 of the Palo Alto Municipal Code, and city Tree Technical Manual, Section 2.25. 94. GENERAL. The following general tree preservation measures apply to all trees to be retained: No storage of material, topsoil, vehicles or equipment shall be permitted within the tree enclosure area. The ground under and around the tree canopy area shall not be altered. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. PRIOR TO OCCUPANCY 95. URBAN FORESTRY DIGITAL FILE & INSPECTION. The applicant or architect shall provide a digital file of the landscape plan, including new off‐site trees in the publicly owned right‐of‐ way. A USB Flash Drive, with CAD or other files that show species, size and exact scaled location of each tree on public property, shall be delivered to Urban Forestry at a tree and landscape inspection scheduled by Urban Forestry (650‐496‐5953). 96. LANDSCAPE CERTIFICATION LETTER. The Planning Department shall be in receipt of a verification letter that the Landscape Architect has inspected all trees, shrubs, planting and irrigation and that they are installed and functioning as specified in the approved plans. 97. PROJECT ARBORIST CERTIFICATION LETTER. Prior to written request for temporary or final occupancy, the contractor shall provide to the Planning Department and property owner a final inspection letter by the Project Arborist. The inspection shall evaluate the success or needs of Regulated tree protection, including new landscape trees, as indicated on the approved plans. The written acceptance of successful tree preservation shall include a photograph record and/or recommendations for the health, welfare, mitigation remedies for injuries (if any). The final report may be used to navigate any outstanding issues, concerns or security guarantee return process, when applicable. 98. PLANNING INSPECTION. Prior to final sign off, contractor or owner shall contact the city planner (650‐ 329‐2441) to inspect and verify Special Conditions relating to the conditions for structures, fixtures, colors and site plan accessories. POST CONSTRUCTION 99. MAINTENANCE. All landscape and trees shall be maintained, watered, fertilized, and pruned according to Best Management Practices‐Pruning (ANSI A300‐2008 or current version) and the City Tree Technical Manual, Section 5.00. Any vegetation that dies shall be replaced or failed automatic irrigation repaired by the current property owner within 30 days of discovery. SECTION 8. Term of Approval. Site and Design Approval. In the event actual construction of the project is not commenced within two years of the date of council approval, the approval shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.30(G).080. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney Exhibit A Mitigation Monitoring and Reporting Program 3877 El Camino Real INTRODUCTION Section 15097 of the Guidelines for the California Environmental Quality Act (CEQA) requires that, whenever a public agency approves a project based on a Mitigated Negative Declaration (MND) or an Environmental Impact Report (EIR), the public agency shall establish a mitigation monitoring or reporting program to ensure that all adopted mitigation measures are implemented. This Mitigation Monitoring and Reporting Program (MMRP) is intended to satisfy this requirement of the CEQA Guidelines as it relates to the 3877 El Camino project. This MMRP would be used by City staff and mitigation monitoring personnel to ensure compliance with mitigation measures during project implementation. Mitigation measures identified in this MMRP were developed in the Initial Study prepared for the proposed project. As noted above, the intent of the MMRP is to ensure the effective implementation and enforcement of all adopted mitigation measures. The MMRP will provide for monitoring of construction activities, as necessary, and in the field identification and resolution of environmental concerns. MITIGATION MONITORING PROGRAM DESCRIPTION The City of Palo Alto will coordinate monitoring activities and ensure appropriate documentation of mitigation measure implementation. The table below identifies each mitigation measure for the 3877 El Camino Real Project and the associated implementation, monitoring, timing and performance requirements. The MMRP table presented on the following pages identifies: 1. the full text of each applicable mitigation measure; 2. the party or parties responsible for implementation and monitoring of each measure; 3. the timing of implementation of each mitigation measure including any ongoing monitoring requirements; and 4. performance criteria by which to ensure mitigation requirements have been met. Following completion of the monitoring and documentation process, the final monitoring results will recorded and incorporated into the project file maintained by the City’s Department of Planning and Community Environment. The mitigation measure numbering reflects the numbering used in the Initial Study prepared for the 3877 El Camino Real (Dudek 2016). No mitigation measures are required for the following resources: Aesthetics Agricultural Resources Air Quality Cultural Resources Geology, Soils, and Seismicity Hazards and Hazardous Materials Hydrology and Water Quality Land Use and Planning Mineral Resources Noise Population and Housing Public Services Recreation Transportation and Traffic Utilities and Service Systems Greenhouse Gas Emissions Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria BIOLOGICAL RESOURCES Mitigation Measure BIO-1: If feasible, vegetation on the project site shall be removed outside of the bird-nesting season. If the start of site clearing, tree removal, or building demolition occurs between February 1 and August 31, a pre- construction survey for nesting birds protected under the Migratory Bird Treaty Act shall be conducted by a qualified biologist to identify the location of nests in active use that were established prior to the start of project implementation activities. The pre- construction survey shall take place no more than 7 days prior to initiation of construction. All trees and shrubs on the site shall be surveyed, with particular attention to any trees or shrubs that would be removed or directly disturbed. Further, the project applicant shall retain a qualified biologist to perform additional nesting bird surveys at least every 2 weeks during all phases of construction that occur during the nesting season. If an active nest of a protected bird is found on site at any time, the biologist shall, in consultation with the California Department of Fish and Wildlife (CDFW), determine whether construction work would affect the active nest or disrupt reproductive behavior. Criteria used for this evaluation shall include presence of visual screening between the nest and construction activities, and behavior of adult raptors in response to the surveyors or other ambient human activity. If construction could affect the nest Applicant City of Palo Alto Department of Planning and Community Environment Prior to issuance of demolition permit Pre- construction survey is completed prior to demolition. Surveys are repeated throughout construction. Protection measures are implemented during demolition and construction. Nesting birds are not disturbed until young have fledged. Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria or disrupt reproductive behavior, the biologist shall, in consultation with CDFW, determine an appropriate construction-free buffer zone around the nest to remain in place until the young have fledged or other appropriate protective measures are taken to ensure no take of protected species occurs. If it is determined that construction will affect an active raptor nest or disrupt reproductive behavior, then avoidance is the only mitigation available. Construction shall not be permitted within 300 feet of such a nest until a qualified biologist determines that the subject nests are no longer active. Prior to issuance of a demolition permit, the City of Palo Alto (City) shall verify that pre-construction surveys have been conducted within 7 days of the proposed start of demolition. If active bird nests are present, the City shall verify that CDFW has been consulted and either determined that construction will not affect an active bird nest or that appropriate construction-free buffer zones have been established or other appropriate protective measures have been taken. Mitigation Measure BIO-2: A pre- construction survey shall be conducted by a qualified biologist (i.e., a biologist holding a California Department of Fish and Wildlife (CDFW) collection permit and a Memorandum of Understanding with CDFW allowing the biologist to handle bats) no earlier than 30 days prior to initiation of construction and demolition activities to determine if active bat roosts or Applicant City of Palo Alto Department of Planning and Community Environment Prior to issuance of demolition permit Pre- construction survey is completed prior to demolition. Avoidance measures are implemented during demolition and construction. Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria maternal colonies are present on or within 300 feet of the construction demolition area. Surveys shall include the structures proposed for demolition. Should an active maternity roost be identified, the roost shall not be disturbed, and demolition and construction within 300 feet of the maternity roost shall be postponed or halted until the juveniles have fledged and the roost is vacated, as determined by a qualified biologist. Consultation with CDFW shall also be initiated. Under no circumstance shall an active roost be directly disturbed. If nonbreeding bat hibernacula are found on the project site, the individuals shall be safely evicted under the direction of a qualified bat biologist and with consultation with CDFW. These actions shall allow bats to leave during nighttime hours, increasing their chance of finding new roosts with a minimum of potential predation during daylight. If it is determined that demolition or construction will not affect roosting behavior or disrupt a maternal colony, demolition or construction may proceed without any restriction or mitigation measure. If it is determined that demolition or construction will affect an active bat roost or disrupt reproductive behavior, then avoidance is the only mitigation available. Under no circumstance shall an active roost be directly disturbed. Demolition or construction within 300 feet shall be postponed or halted until the roost is naturally vacated as determined by a qualified biologist. Prior to issuance of a demolition Nonbreeding bat hibernacula may be safely evicted under the direction of a qualified bat biologist and with consultation with CDFW. Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria permit, the City of Palo Alto (City) shall verify that pre-construction surveys have been conducted within 30 days of the proposed start of demolition. If bats are present, the City shall verify that CDFW has been consulted and either determined that construction will not affect an active bat roost or disrupt a maternal colony or that individuals in a nonbreeding bat hibernacula have been safely evicted. Due to regulations from the California Department of Public Health, direct contact by construction workers with any bat is not allowed. ATTACHMENT C ZONING COMPARISON TABLE 3877 El Camino Real, 14PLN-00464 Table 1: COMPARISON WITH CHAPTER 18.13 (RM-30 DISTRICT) Regulation Required Existing Proposed Minimum/Maximum Site Area, Width and Depth 8,500 sf area, 70 foot width, 100 foot depth 21,867.8 sf (0.50 acres) 21,867.8 sf (0.50 acres) Minimum Front Yard (2) 20 feet Parking lot 23 feet Rear Yard 10 feet Parking lot 14 feet above grade 6’1” below grade* Interior Side Yard 6 feet Parking lot 6 feet above grade 6 feet below grade Street Side Yard 16 feet Not applicable Not applicable Max. Building Height 35 feet Parking lot 29’8” Side Yard Daylight Plane 10 feet at interior side lot line then 45 degree angle Not Applicable Complies Rear Yard Daylight Plane 10 feet at rear setback line then 45 degree angle Not Applicable Complies Max. Site Coverage 40% (8,747 sf) Parking lot 37% (8,067 sf) Max. Total Floor Area Ratio 60% (13,121 sf) Parking lot 60% (13,105 sf) + 1,311 sf for BMR floor area ** Minimum Site Open Space 30% (6,560 sf) Not Applicable 56.3% (12,333 sf) Minimum Usable Open Space 150 sf per unit (1,650 sf) Not Applicable 7,001 sf Minimum Common Open Space 75 sf per unit (825 sf) Not Applicable 1,114 sf Minimum Private Open Space 50 sf per unit (550 sf) Not Applicable 5,887 sf * Design Enhancement Exception requested. ** Increase per 18.15.050d Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking) for Multiple-Family Residential Type Required Proposed Vehicle Parking 2 spaces per unit, of which at least one space per unit must be covered. 34 spaces required Guest Parking: 1 space + 10% of total number of units. 3 required 34 spaces 7 spaces Bicycle Parking 1 space per unit (100% long term) 17 required 28 spaces ATTACHMENT D ZONING COMPARISON TABLE 3877 El Camino Real, 14PLN-00464 Table 1: COMPARISON WITH CHAPTER 18.16 (CS DISTRICT) Mixed-Use Development Standards Regulation Required Existing Proposed Minimum Site Area, width and depth None 0.25 acres (10,957.5 sf) 0.25 acres (10,957.5 sf) Minimum Front Yard 0-10 feet to create an 8-12 foot effective sidewalk width (1), (2), (8) 9 feet 12 feet Rear Yard 10’ for residential portion; no requirement for commercial portion 75 feet 16 feet Interior Side Yard 10 feet Not applicable Not applicable Street Side Yard 5 feet Not Applicable Not Applicable Build-to-lines 50% of frontage built to setback on El Camino Real 33% of side street built to setback (7) 70 feet (97%) No Street side yard 36 feet (50%) Special Setback 24 feet – see Chapter 20.08 & zoning maps Not applicable Not applicable Max. Site Coverage None 53.47% (5,860 sf) 50% (5,462.5 sf) Landscape/Open Space Coverage 30% (3,287 sf) Not Applicable 5,307 sf Usable Open Space 150 sq ft per unit for 6 units or more (9) Not Applicable 333 sf per unit Max. Building Height 50 ft or 35 ft within 150 ft. of a residential district (other than an RM-40 or PC zone) abutting or located within 50 feet of the site 22 feet 37’-6” Daylight Plane for lot lines abutting one or more residential zoning districts Daylight plane height and slope shall be identical to those of the most restrictive residential zoning district abutting the lot line Not Applicable Consistent Max. Floor Area Ratio (FAR) Retail: 0.4:1 (4,383 sf) Residential: 0.6:1 (6,574.5 sf) Total: 1.0:1 (10,957.5 sf) 53.47% (5,860 sf) Retail: 36.75% (4,027 sf) Residential: 59.7% (6,542 sf) + 1,285 sf BMR bonus (18.15.050d) Total: 0.96:1 (10,569 sf) Minimum Mixed-Use Ground Floor Commercial FAR 0.15:1 (1,644 sf) Not applicable 1,682 sf (1) No parking or loading space, whether required or optional, shall be located in the first 10 feet adjoining the street property line of any required yard. (2) Any minimum front, street side, or interior yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. A solid wall or fence between 5 and 8 feet in height shall be constructed along any common interior lot line.. (7) 25 foot driveway access permitted regardless of frontage, build-to requirement does not apply to CC district. (8) A 12 foot sidewalk width is required along El Camino Real frontage (9) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space); (3) minimum private open space dimension six feet; and (4) minimum common open space dimension twelve feet. 18.16.080 Performance Standards. All development in the CS district shall comply with the performance criteria outlined in Chapter 18.23 of the Zoning Ordinance, including all mixed use development 18.16.090 Context-Based Design Criteria. As further described in a separate attachment, development in a commercial district shall be responsible to its context and compatible with adjacent development, and shall promote the establishment of pedestrian oriented design. Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) for Retail Services* Type Required Existing Proposed Vehicle Parking 1/200 sf of gross floor area for a total of 21 parking spaces 63 spaces 21 spaces Bicycle Parking 1/2,400 sf (20% long term and 80% short term) equals 2 spaces Zero 2 (1 long term, 1 short term) Loading Space 0 loading spaces for 0- 4,999 sf Zero Zero * On-site employee amenity space is exempted from the parking requirements Performance Criteria 18.23 3877 El Camino Real 14PLN-00464 These performance criteria are intended to provide additional standards to be used in the design and evaluation of developments in the multi-family, commercial, and industrial zones. The purpose is to balance the needs of the uses within these zones with the need to minimize impacts to surrounding neighborhoods and businesses. The criteria are intended to make new developments and major architectural review projects compatible with nearby residential and business areas, and to enhance the desirability of the proposed developments for the site residents and users, and for abutting neighbors and businesses. Assure that development provides adequate and accessible interior areas or exterior enclosures for the storage of trash and recyclable materials in appropriate containers, and that trash disposal and recycling areas are located as far from abutting residences as is reasonably possible. The trash enclosures are located in the basement parking area. Prior to trash/recycling pick up days, the bins/carts will be brought up to the staging area along the vehicular ramp along Curtner Avenue. Once the bins/carts are serviced, then they are brought back down to the basement. To minimize the visual impacts of lighting on abutting or nearby residential sites and from adjacent roadways. The proposed exterior lighting is sufficient to provide safe circulation and is directed downward to reduce glare and impacts to the project’s residents. The purpose is to restrict retail or service commercial businesses abutting (either directly or across the street) or within 50 feet of residentially zoned properties or properties with existing residential uses located within nonresidential zones, with operations or activities between the hours of 10:00 p.m. and 6:00 a.m. Operations subject to this code may include, but are not limited to, deliveries, parking lot and sidewalk cleaning, and/or clean up or set up operations, but does not include garbage pick up. Future commercial uses will have to comply with the City’s Late Night Ordinance requirements. At this time, it is unknown what tenants would occupy the commercial spaces. Any loading would occur off of El Camino Real for the commercial component. Privacy of abutting residential properties or properties with existing residential uses located within nonresidential zones (residential properties) should be protected by screening from public view all mechanical equipment and service areas. Landscaping should be used to integrate a project design into the surrounding neighborhood, and to provide privacy screening between properties where appropriate. The project provides the required setback above ground and includes vegetation and tree plantings within the setback and open spaces. In response to the Board’s direction, the project includes additional screening trees along the north property line and also in- between the townhome buildings. Mechanical equipment areas are screened appropriately. 18.23.020 Trash Disposal and Recycling Project Consistency 18.23.030 Lighting 18.23.040 Late Night Uses and Activities 18.23.050 Visual, Screening and Landscaping The requirements and guidelines regarding noise and vibration impacts are intended to protect residentially zoned properties or properties with existing residential uses located within nonresidential zones (residential properties) from excessive and unnecessary noises and/or vibrations from any sources in abutting industrial or commercially zoned properties. Design of new projects should reduce noise from parking, loading, and refuse storage areas and from heating, ventilation, air conditioning apparatus, and other machinery on nearby residential properties. New equipment, whether mounted on the exterior of the building or located interior to a building, which requires only a building permit, shall also be subject to these requirements. The project will comply with the City’s noise ordinance. The trash enclosures are located in the garage basement. The commercial areas are located along El Camino Real and there is a buffer area between the commercial building and the surrounding residential buildings. The visual impact of parking shall be minimized on adjacent residentially zoned properties or properties with existing residential uses located within nonresidential zones. The project provides all of its parking below grade. The guidelines regarding site access impacts are intended to minimize conflicts between residential vehicular, pedestrian, and bicycle uses and more intensive traffic associated with commercial and industrial districts, and to facilitate pedestrian and bicycle connections through and adjacent to the project site. The site circulation facilitates access for all modes of transportation. The project includes short-term and long-term bike parking. On-site vehicular traffic will be directed underground, leaving the above-ground for pedestrians and bicyclist. Wide walkways and plazas surround the commercial areas and provide connectivity to the residential areas. The requirements for air quality are intended to buffer residential uses from potential sources of odor and/or toxic air contaminants. No proposed uses on the project site would produce odor or toxic air. In accordance with Titles 15 and 17 of the Palo Alto Municipal Code, minimize the potential hazards of any use on a development site that will entail the storage, use or handling of hazardous materials (including hazardous wastes) on-site in excess of the exempt quantities prescribed in Health and Safety Code Division 20, Chapter 6.95, and Title 15 of this code. This is not applicable to the proposed uses associated with the project. 18.23.060 Noise and Vibration Project Consistency 18.23.070 Parking 18.23.080 Vehicular, Pedestrian and Bicycle Site Access 18.23.090 Air Quality 18.23.100 Hazardous Materials February 28 2017 1 EID 3877 El Camino Mixed Use Site & Design Review Resubmittal 412 Olive Avenue, Palo Alto, 94306 off 650.226.8770 l Environmental Innovations in Design Eco-functional Architecture ---------------------------------------------------------------------------------------------------- 412 Olive Avenue | Palo Alto | CA | 94306 dir. 650.793.2856 | off. 650.226.8770 Application Number: 14PLN-00464 Company Name: EID Architects, Environmental Innovations in Design Contact: Stuart Welte stuart@EIDarchitects.com Mark Wommack mark@EIDarchitects.com Project Address: 3877 El Camino Real, Palo Alto, CA Regarding: ARB Submittal for Major Project Planning Commission Hearing Document: Project Narrative including summary of comprehensive City Department review comments and EID responses. ------------------------------------------------------------------------------------------------------------------------------------------------------------ March 08, 2016 To: Sheldon Ah Sing | Senior Planner SAhsing@m-group.us City of Palo Alto Department of Planning and Community Environment Fifth Floor Palo Alto City Hall 250 Hamilton Avenue Palo Alto, CA 94301 EID is resubmitting revised drawing sets for 3877 El Camino Real, Palo Alto, CA for Major Architectural Review. EID Responses to City comments are below the project summary section of this letter. Scope of work: Existing Use: The parcel is an “L” shaped lot with frontage on both El Camino Real and Curtner Ave. There is a vacant 2-story commercial building on El Camino Real with on grade parking accessed from Curtner Avenue. All existing structures and paving is to be removed. Proposed Use: A new mixed use project to include (17) residential units and approximately 4,035 square feet of commercial/retail area. The commercial/retail space will be combined into a 3-story mixed use building that will also include (6) residential flats. The remaining (11) residential units will be within 2- story townhomes located behind the mixed use building and on the portion of the site that extends to Curtner Ave. All vehicular parking will be located within a parking garage that will be completely below grade. February 28 2017 2 EID 3877 El Camino Mixed Use Site & Design Review Resubmittal 412 Olive Avenue, Palo Alto, 94306 off 650.226.8770 Design Concept: The parcel is divided by a zoning boundary. The El Camino Real frontage is zoned CM and requires a more urban design solution that conforms to the requirements of the ECR Design Guidelines. The rest of the site is zoned RM-30. This includes the leg of the parcel that extends to Curtner Ave. This portion of the site is surrounded with other RM-30 zoned lots, so a more residentially scaled design solution is needed in this area to respect the context of the existing residential community. Our design concept responds to this by transitioning in form and scale from the larger urban mixed use building that fronts on ECR down to the smaller scaled townhomes that we propose on the balance of the site. Below-grade parking, provides significantly more open space and landscaping than typical of the surrounding neighborhood, enhancing both the private and public open spaces within the site, creating a welcoming, pedestrian friendly community. The townhomes are clustered to create open areas between the units and to break the massing of the buildings down into a residentially scaled structure. Materials and Methods of Construction: To reflect the complexity of the contextual aspects of the site, we’ve selected sustainably minded materials that respond to the functions of each building with the intention of creating a synergy among our two public entrances, the surrounding residential neighborhoods, and the vitality of the ECR. Contextually there is little to draw from the immediate neighborhood in terms of style or detailing, as the neighborhood is primarily comprised of painted stucco and concrete block construction, with nondescript modular aluminum sliding windows and very little focus on neighborhood greeting, nor particularly identifiable public open space. All proposed entrances to this new design create recessed plaza courts allowing for ease of access to generous common use areas. The commercial building employs large storefront windows to connect the retail functions with ECR, and external terra cotta sunshades to filter the sunlight from this direction while allowing inviting views into the Ground Level retail-commercial event spaces. We’ve framed the storefront with refined smooth finishes comprised of composite wood-resin building panels, smooth hard troweled stucco, and complimentary bronze colored metal and glass storefront entry systems which are arranged to focus the eye in towards the retail plaza and storefront. As the site moves away from the busy ECR corridor, we reduce the scale of the windows and transition into more residentially scaled materials. Individual home entries and balconies are accented with the warmer hues and texture of the composite wood-resin siding materials rendered in narrower board widths to complement the human scale. Each resident’s private bicycle parking is conveniently located in sheltered, lockable closets adjacent to their front door and multidirectional, landscaped walking paths allow for variety in one’s daily commute, whether it be to the basement parking garage via stair or elevator, or to public sidewalks and convenient bicycle, bus and commuter vehicle transportation, all the while provided with a variety of landscaped seating, waiting, meeting areas. Zoning Summary: • Zoning: RM-30 & CS • Lot Size: 32,825 SF / 0.75 Acre CS Zone: 10,957.5 SF RM-30 Zone: 21,867.8 February 28 2017 3 EID 3877 El Camino Mixed Use Site & Design Review Resubmittal 412 Olive Avenue, Palo Alto, 94306 off 650.226.8770 • APN: 132 41 091 CS Zone: • Lot area: 10,957.5 SF • Density Du/Ac : Permitted = 7.5 / Proposed = 6 (5 flats plus one BMR flat) • Max FAR Allowed: Commercial: 0.4 = 4,035 s.f. Residential: 0.6 = 6,574 s.f. BMR FAR Increase: 1,285 s.f. • Proposed Floor Area: Total Commercial: 4,034 s.f. Total Residential: 7,859 s.f. RM-30 Zone: • Lot area: 21,867 SF • Density Du/Ac : Permitted = 15 / Proposed = 11 townhomes (10 townhomes plus one BMR townhome) • Max FAR Allowed: Residential: 0.6 = 13,120 s.f. BMR FAR Increase: 1,311 s.f. • Proposed Floor Area: Total Residential: 14,416 s.f. Project Description: The proposed design will transform this blighted parcel into a vibrant and sustainable mixed-use community at the southeast corner of El Camino Real and Curtner Avenue. The project will include a mix of commercial and townhome style condominiums, which will be provided with ample parking located within the basement below grade. The existing structure, which has been unoccupied since 2008, is located on a parcel with two long and narrow legs. The existing structure is an eclectic mix of poorly executed additions and renovations. The balance of the site is paved to provide on-grade parking for this commercial building, this parking being accessed from Curtner Ave. The immediate neighborhood is a mix of older structures in various stages of reuse and condition. On El Camino, the immediate neighbors are a Starbucks that occupies a building that formerly served as a fast food restaurant and an auto oil changer in a WWII vintage Quonset hut with a “western storefront” facade. The residential neighborhood is predominantly comprised of 1960’s vintage two-story residential apartment blocks. On one adjacent parcel a new 3-story 6-unit townhome building is under construction. Our team is collaborating with the City of Palo Alto Community Development staff to thoughtfully synthesize a highly sustainable mixed use community for the proposed site. The project will complement and support the existing urban fabric, and will be harmonious with the new developments underway in close proximity to our site. The commercial spaces within the mixed use structure will contribute significantly to the revitalization of El Camino Real. New retail will be located on two levels and will open onto a large open courtyard space. February 28 2017 4 EID 3877 El Camino Mixed Use Site & Design Review Resubmittal 412 Olive Avenue, Palo Alto, 94306 off 650.226.8770 Designed for pedestrian interaction, the commercial spaces are open, inviting, and buffered from the busy El Camino Real traffic. We are proposing a mix of housing options that includes two bedroom flats and three bedroom townhomes. These units are planned to maximize energy efficiency and provide a range of entry level housing options that will promote a healthy living environment for residents. This, in conjunction with the inclusion of two affordable housing units within the project will provide housing for a diverse range of income levels. Parking is provided on site for the variety of uses including residential, retail and office, in numbers consistent with the requirements of the zoning ordinance. The proposed parking infrastructure has been carefully designed to meet the demands of each use and is supported by the analysis contained in the project traffic report. Locating this parking completely below grade maximizes site landscaping and enhances both the private and common open spaces within the parcel to an extent that far exceeds the requirements of the zoning ordinance. Summary of design revisions: The purpose of the redesign was to respond to comments received during the previous ARB hearing that identified areas of concern that had not been raised in prior ARB hearings. The objective of this redesign was to address the following concerns raised at our last ARB meeting: 1. We moved the parking level down to position the parking and podium deck completely below grade. This resulted in a reduction of the mass and bulk of the proposed project to levels that are smaller than the adjacent neighborhood. This solution also creates much larger and more functional private yard areas for the townhome residents. 2. Direct access from El Camino Real to the parking garage is provided via a one-way driveway ramp. This ramp is limited to entering the site to balance concerns regarding negative impacts on traffic on El Camino Real that a new driveway would create with ARB’s desire to provide direct access to parking from El Camino Real. All traffic leaving the garage would exit onto Curtner Ave, where a signalized intersection facilitates a safe path to re-enter El Camino Real traffic. 3. Provide a redesigned commercial building façade that conforms to the build-to setback line and to provide a more contextual design solution for the community. 4. Provide enhanced common open areas that are positioned located closer to the intended users. 5. Provide a more direct, more open pedestrian path through the property with a clear link to El Camino Real. 6. Reduce overall commercial area to conform to the maximum permitted based on the more clearly identified boundary of the CS district. BMR concession and Design Enhancement Exception. We are requesting one on-menu concession consistent with providing 15% low income BMR units and one Design Enhancement Exception for the rear yard setback of the underground basement parking. We are requesting one on-menu concession to permit an increase in FAR by an amount that equals the area of the BMR units that will be provided. This area is equal to the area of the BMR units and does not exceed the maximum 25% permitted by section 18.15.050 (d) (iv). February 28 2017 5 EID 3877 El Camino Mixed Use Site & Design Review Resubmittal 412 Olive Avenue, Palo Alto, 94306 off 650.226.8770 We are also requesting one Design Enhancement Exception for a 6 foot rear yard setback in the RM-30 zone for the below grade parking garage, which occurs entirely underground. This exception conforms to the criteria outlined in 18.76.050 (b) Applicability and (c) Findings: (1) There are exceptional or extraordinary circumstances or conditions applicable to the property or site improvements involved that do not apply generally to property in the same zone district: This parcel is very unusual in regards to the parcel size and shape. The L shaped parcel extends to both El Camino Real and Curtner Avenue and crosses a zoning boundary. The narrow width of the parcel affords few options for resolving vehicular parking and circulation while balancing the need to create an attractive pedestrian environment. All of the neighboring residential parcels along Curtner Avenue employ long driveways to access on grade parking and/or rows of garages and carports. The narrow 55’ width of the Curtner frontage would make a similar solution on this site very unattractive. The requested 6’ rear yard setback would apply only to the below grade parking structure and would be completely invisible to all of the neighbors. This reduced setback permits double loaded parking within the basement, which is necessary to achieve the required parking count for the various uses proposed for the site. (2) The granting of the application will enhance the appearance of the site or structure, or improve the neighborhood character of the project and preserve an existing or proposed architectural style, in a manner which would not otherwise be accomplished through strict application of the minimum requirements of this title (Zoning) and the architectural review findings set forth in Section 18.76.020(d); This DEE promotes the development of a project that will enhance the residential character of the RM-30 portion of the site with generous open space and landscaping while facilitating the more urban use of the CS portion of the site with the requisite build-to setback requirements and corresponding density. Given the limited options for vehicular access and the narrow lot dimensions, a more traditional parking solution is not possible and would require significantly more on grade vehicular paving. (3) The exception is related to a minor architectural feature or site improvement that will not be detrimental or injurious to property or improvements in the vicinity and will not be detrimental to the public health, safety, general welfare or convenience. Far from being detrimental, this solution will enhance the property or improvements in the vicinity by minimizing vehicular circulation and is in no way detrimental to the public. Sincerely, MARK WOMMACK, ARCHITECT Director of Architecture Environmental Innovations in Design Eco-functional Architecture EID A R C H I T E C T S ---------------------------------------------------------------------------------------------------- 412 Olive Avenue | Palo Alto | CA | 94306 dir 650.226.8862 | off 650.226.8770 mark@EIDarchitects.com www.EIDarchitects.com Please be advised that our office has a new address. Thank you! Attachment G Project Mitigated Negative Declaration Initial Study The project Mitigated Negative Declaration Initial Study is available on-line at the following address, which includes the Initial Study, response to comments and Appendices. A hardcopy of the Initial Study/Mitigated Negative Declaration, response to comments, Traffic Study, and Historical Analysis is available to the City Council members. http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2488&TargetID=319 3877 El Camino Real Project Mitigation Monitoring Program 3877 El Camino Real Project Page 1 Mitigation Monitoring & Reporting Program February 2017 INTRODUCTION Section 15097 of the Guidelines for the California Environmental Quality Act (CEQA) requires that, whenever a public agency approves a project based on a Mitigated Negative Declaration (MND) or an Environmental Impact Report (EIR), the public agency shall establish a mitigation monitoring or reporting program to ensure that all adopted mitigation measures are implemented. This Mitigation Monitoring Program (MMP) is intended to satisfy this requirement of the CEQA Guidelines as it relates to the 3877 El Camino project. This MMP would be used by City staff and mitigation monitoring personnel to ensure compliance with mitigation measures during project implementation. Mitigation measures identified in this MMP were developed in the Initial Study prepared for the proposed project. As noted above, the intent of the MMP is to ensure the effective implementation and enforcement of all adopted mitigation measures. The MMP will provide for monitoring of construction activities, as necessary, and in the field identification and resolution of environmental concerns. MITIGATION MONITORING PROGRAM DESCRIPTION The City of Palo Alto will coordinate monitoring activities and ensure appropriate documentation of mitigation measure implementation. The table below identifies each mitigation measure for the 3877 El Camino Real Project and the associated implementation, monitoring, timing and performance requirements. The MMP table presented on the following pages identifies: 1. the full text of each applicable mitigation measure; 2. the party or parties responsible for implementation and monitoring of each measure; 3. the timing of implementation of each mitigation measure including any ongoing monitoring requirements; and 4. performance criteria by which to ensure mitigation requirements have been met. Following completion of the monitoring and documentation process, the final monitoring results will recorded and incorporated into the project file maintained by the City’s Department of Planning and Community Environment. The mitigation measure numbering reflects the numbering used in the Initial Study prepared for the 3877 El Camino Real (Dudek 2016). 3877 El Camino Real Project Mitigation Monitoring Program 3877 El Camino Real Project Page 2 Mitigation Monitoring & Reporting Program February 2017 No mitigation measures are required for the following resources: Aesthetics Agricultural Resources Air Quality Cultural Resources Geology, Soils, and Seismicity Greenhouse Gas Emissions Hazards and Hazardous Materials Hydrology and Water Quality Land Use and Planning Mineral Resources Noise Population and Housing Public Services Recreation Transportation and Traffic Utilities and Service Systems Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria BIOLOGICAL RESOURCES Mitigation Measure BIO-1: If feasible, vegetation on the project site shall be removed outside of the bird-nesting season. If the start of site clearing, tree removal, or building demolition occurs between February 1 and August 31, a pre- construction survey for nesting birds protected under the Migratory Bird Treaty Act shall be conducted by a qualified biologist to identify the location of nests in active use that were established prior to the start of project implementation activities. The pre-construction survey shall take place no more than 7 days prior to initiation of construction. All trees and shrubs on the site shall be surveyed, with particular attention to any trees or shrubs that would be removed or directly disturbed. Further, the project applicant shall retain a qualified biologist to perform additional nesting bird surveys at least every 2 weeks during all phases of construction that occur during the nesting season. If an active nest of a protected bird is found on site at any time, the biologist shall, in consultation with the California Department of Fish and Wildlife (CDFW), determine whether construction work would affect the active nest or disrupt reproductive behavior. Criteria used for this evaluation shall include presence of visual screening between the nest and construction activities, and behavior of adult Applicant City of Palo Alto Department of Planning and Community Environment Prior to issuance of demolition permit Pre-construction survey is completed prior to demolition. Surveys are repeated throughout construction. Protection measures are implemented during demolition and construction. Nesting birds are not disturbed until young have fledged. 3877 El Camino Real Project Mitigation Monitoring Program 3877 El Camino Real Project Page 3 Mitigation Monitoring & Reporting Program February 2017 Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria raptors in response to the surveyors or other ambient human activity. If construction could affect the nest or disrupt reproductive behavior, the biologist shall, in consultation with CDFW, determine an appropriate construction-free buffer zone around the nest to remain in place until the young have fledged or other appropriate protective measures are taken to ensure no take of protected species occurs. If it is determined that construction will affect an active raptor nest or disrupt reproductive behavior, then avoidance is the only mitigation available. Construction shall not be permitted within 300 feet of such a nest until a qualified biologist determines that the subject nests are no longer active. Prior to issuance of a demolition permit, the City of Palo Alto (City) shall verify that pre-construction surveys have been conducted within 7 days of the proposed start of demolition. If active bird nests are present, the City shall verify that CDFW has been consulted and either determined that construction will not affect an active bird nest or that appropriate construction- free buffer zones have been established or other appropriate protective measures have been taken. Mitigation Measure BIO-2: A pre-construction survey shall be conducted by a qualified biologist (i.e., a biologist holding a California Department of Fish and Wildlife (CDFW) collection permit and a Memorandum of Understanding with CDFW allowing the biologist to handle bats) no earlier than 30 days prior to initiation of construction and demolition activities to determine if active bat roosts or maternal colonies are present on or within 300 feet of the construction demolition area. Surveys shall include the structures proposed for demolition. Should an active maternity roost be identified, the roost shall not be disturbed, and demolition and construction within 300 feet of the maternity roost shall be postponed or halted until the juveniles have fledged and the roost is vacated, as determined by a qualified biologist. Consultation with CDFW shall also be Applicant City of Palo Alto Department of Planning and Community Environment Prior to issuance of demolition permit Pre-construction survey is completed prior to demolition. Avoidance measures are implemented during demolition and construction. Nonbreeding bat hibernacula may be safely evicted under the direction of a qualified bat biologist and with 3877 El Camino Real Project Mitigation Monitoring Program 3877 El Camino Real Project Page 4 Mitigation Monitoring & Reporting Program February 2017 Mitigation Measure Implementation Responsibility Monitoring Responsibility Timing Performance Evaluation Criteria initiated. Under no circumstance shall an active roost be directly disturbed. If nonbreeding bat hibernacula are found on the project site, the individuals shall be safely evicted under the direction of a qualified bat biologist and with consultation with CDFW. These actions shall allow bats to leave during nighttime hours, increasing their chance of finding new roosts with a minimum of potential predation during daylight. If it is determined that demolition or construction will not affect roosting behavior or disrupt a maternal colony, demolition or construction may proceed without any restriction or mitigation measure. If it is determined that demolition or construction will affect an active bat roost or disrupt reproductive behavior, then avoidance is the only mitigation available. Under no circumstance shall an active roost be directly disturbed. Demolition or construction within 300 feet shall be postponed or halted until the roost is naturally vacated as determined by a qualified biologist. Prior to issuance of a demolition permit, the City of Palo Alto (City) shall verify that pre-construction surveys have been conducted within 30 days of the proposed start of demolition. If bats are present, the City shall verify that CDFW has been consulted and either determined that construction will not affect an active bat roost or disrupt a maternal colony or that individuals in a nonbreeding bat hibernacula have been safely evicted. Due to regulations from the California Department of Public Health, direct contact by construction workers with any bat is not allowed. consultation with CDFW. Attachment I Project Plans Hardcopies of project plans are provided to ARB Members. These plans are available to the public by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Directions to review Project plans online: 1. Go to: https://paloalto.buildingeye.com/planning 2. Search for “3877 El Camino Real” and open record by clicking on the green dot 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 “5-4-2017 3877 El Camino Real Submittal” City of Palo Alto COLLEAGUES MEMO August 28, 2017 Page 1 of 5 (ID # 8409) DATE: August 28, 2017 TO: City Council Members FROM: Council Member Filseth, Council Member Holman, Council Member DuBois, Council Member Kniss SUBJECT: COLLEAGUES MEMO FROM COUNCIL MEMBERS DUBOIS, FILSETH, HOLMAN, AND VICE MAYOR KNISS REGARDING AN ANTI-IDLING ORDINANCE (AIO) Goals: The City’s S/CAP plan calls for a reduction in citywide CO2-equivalent emissions of 224,600 tons by 2030, of which 111,900 tons are expected to come from mobility1. Emissions from stationary idling of cars, trucks and buses are one source of these emissions, and according to some studies the average US city emits about 13 tons of carbon each day, just from idling. An anti-idling ordinance would additionally support the Council’s Healthy Cities, Healthy Communities Priority and, as stated in State Resolution 160, emission from idling vehicles “is linked to asthma, decreased lung function, cardiac disease, cancer, and other serious health problems.” 2 The Bay Area Air Quality Management District states that inhaling particulate matter resulting from idling can aggravate asthma, cause coughing or difficult breathing, decrease lung function, exacerbate cardiovascular problems, lead to chronic bronchitis. 3 A city ordinance requiring drivers to shut off their engines after the more feasible of two or three minutes of stationary idling would make a modest but measurable contribution to our 80-30 goal and improved health conditions at a low cost. We further understand that some exceptions are necessary for public safety and possibly for some specific health conditions. Examples include: Fire trucks when responding to emergency calls Police vehicles when responding to emergency situations Public Works vehicles under certain specific and detailed conditions listed in City Fleet Policies & Procedures Possibly some particular health conditions August 28, 2017 Page 2 of 5 (ID # 8409) Background and Discussion: Idling vehicles in Palo Alto produce an estimated 6.2 tons of CO2-equivalent emissions per year (see Appendix A: DOE). Some of this is short-duration idling done by vehicles at intersections; such as waiting for a stoplight to change, or in stop-and-go traffic. However, other idling is done at curbsides, such as by vehicles waiting to pick up passengers or deliver goods, and may last 10 minutes or more; tech-employee and tourist buses, have been observed to idle for even longer. Perhaps the greatest contributors to CO2 emissions due to idling are construction vehicles that idle for long periods of time while in queue to make deliveries or pick up excavation dirt, for instance because they often use diesel fuel There is not a good reason for such extended curbside idling. Modern vehicle engines do not suffer wear and tear from simply being turned on and off, and now use very little fuel in start-up. Some cars now automatically turn-off and on when idling. The efficiency tradeoff between keeping a car idling vs restarting it has largely disappeared. The S/CAP 80-30 goal calls for the City to reduce transportation emissions by 117,900 tons between now and 2030. An Anti-Idling Ordinance (AIO) would target extended curbside idling and construction idling, and would likely reduce City emissions by 600- 1200 tons per year, or .5-1% of the 2030 goal. This is a modest amount to be sure, yet still measurable; and the expense and effort would be low. And it would still be the equivalent of permanently taking 120-240 cars off the road/year. Furthermore, there are other benefits; for example, reducing auto fumes outside schools, where considerable idling is done by parents waiting to pick up kids will create a healthier environment for children and adults. The primary costs would likely be: posting signs in idle-rich places such as schools, truck delivery stops, and employee-bus stops; community education and outreach to promote awareness of the problem and the ordinance; and any ongoing enforcement costs. The first two of these are likely to be modest. The third is unclear, but independent of enforcement, even just signs and education are likely to have at least some impact. Recommendation: Develop a City ordinance to implement Programs N5.2.1 and N5.2.2 in the Draft Comprehensive Plan and to support Healthy Cities, Healthy Communities Priority by requiring drivers to shut off their engines after two or three minutes of stationary idling if not in an active traffic path, noting exceptions. The ordinance would be August 28, 2017 Page 3 of 5 (ID # 8409) patterned after city ordinances adopted in Minneapolis, Salt Lake City, and Ann Arbor. Staff Impact: While adoption of a new ordinance itself would require minimal staff resources, the new ordinance would raise community expectations that more will be spent on the installation of signs and on enforcement of the new ordinance. Resource impacts will depend on the number of signs installed and on the type and level of enforcement that is desired. If no additional staff resources are added, efforts towards education, response to complaints, citation and prosecution would compete with other priorities of existing staff in Transportation, Code Enforcement, the Police Department and the Attorneys Office. Since violations of the idling ordinance would be a lesser priority for enforcement than many other moving violations, there is likely to be limited or no enforcement without the addition of staff resources. 1. http://www.cityofpaloalto.org/civicax/filebank/documents/51856 2. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160ACR160 3. http://www.baaqmd.gov/~/media/files/planning-and-research/planning- healthy- places/draft_planninghealthyplaces_marchworkshop- pdf.pdf?la=en Appendix A: Potential GHG Impact of an Anti-Idling Ordinance in Palo Alto Appendix B: Background on Vehicle Idling (Idle Free Bay Area) Appendix A: Potential GHG Impact of an Anti-Idling Ordinance in Palo Alto E. Filseth, June 2017 While estimates of total nationwide idling emissions are available, little quantitative analysis is available on the direct impact of anti-idling ordinances (AIO) on reducing these emissions. Although a few idling studies have examined specific vehicle types such as police cars, an estimate for AIO impact on general auto emissions must rely on considerable guesswork. 1.0 Annual Vehicle Idling Emissions in Palo Alto - Estimate Tons of CO2 Total US Annual Personal-Vehicle Emissions from Idling (1) 30,000,000 Population of USA 321,000,000 Population of Palo Alto 66,000 2.0 What Range of Possible Idling Reduction from an AIO? % Reduction A. Minneapolis Study on Police Car idling after ordinance adopted (2) 25% B. Columbus, OH Study on Police Car idling after equipment install (3) 35% C. Crown Delivery Services study after anti-idle policy established (4) 90% D. American Transportation Research Inst. 2009 Trucking Study (5) 42%-78% E. 2009 Survey by Vanderbilt University ("warming time" excluded) (6) 30% Estimated Total Annual Palo Alto Idling Emissions (30M x population ratio) 6,168 August 28, 2017 Page 4 of 5 (ID # 8409) F. Bottom-up Estimate for Palo Alto: Avg # of stoplights per vehicle trip - guess 3 Avg idling minutes at each stoplight - guess 0.5 Avg # of in-traffic idling minutes per vehicle trip (ordinance won't affect) 1.5 % of vehicle trips which include an extended curbside idle - guess 5% Avg minutes per extended-idle - guess 10 Avg Extended-Idle Minutes per vehicle trip (ordinance will affect) 0.5 Total Idle-Minutes per vehicle trip before Ordinance 2 % of Extended-Idle Minutes an ordinance would eliminate - guess 60.0% # of Extended-Idle Minutes per vehicle trip an ordinance would eliminate 0.3 Total Idle-Minutes per vehicle trip after Ordinance 1.7 Net % Reduction in Idle-Minutes per Vehicle Trip 15.0% 3.0 Estimated GHG Impact of an AIO in Palo Alto Low High Annual idling emissions in Palo Alto (from 1.0 above) 6,168 6,168 Estimating the actual % emissions reduction from an ordinance is difficult. Studies based on Police and delivery vehicles (2.0 A-D above) may not represent general auto transit (though one poll, 2.0 E, suggests they may). However, even if general auto transit savings were half that of Police and commercial vehicles, they might still reach 15% overall. 2.0 F above suggests 15% could indeed be achievable given reasonable assumptions. Therefore assume 10-20% range. Estimated idling % reduction from an AIO 10% 20% Estimated GHG reduction from an AIO (tons) 617 1,234 4.0 References 1 https://www.afdc.energy.gov/uploads/publication/idling_personal_vehicles.pdf 2 http://aceee.org/files/pdf/case-studies/Minneapolis_Anti-Idling.pdf 3 http://www.assetworks.com/resource-items/city-of-columbus-gps-case-study/ 4 https://www.geotab.com/wp-content/themes/geotab-template/resources/case-study/Anti-Idling-Program-Slashes-Fleet- Fuel- Costs.pdf 5 http://atri-online.org/research/results/ATRI1pagesummaryMIRTDemo.pdf 6 https://pdfs.semanticscholar.org/ea09/c74c727b6211097735d4e6a39ea961c0a63e.pdf Appendix B: Background on Vehicle Idling Source: Idle Free Bay Area, 2017 https://idlefreebayarea.org/about/ About Idling % of City's SCAP Target Reduction of 117,900 tons from Transportation 0.52% 1.05% August 28, 2017 Page 5 of 5 (ID # 8409) Idling means leaving a vehicle’s engine running when it is parked or not in use. Idling happens while: Waiting to pick someone up from school, sports practice or the library Sitting at a drive-through or car wash Checking email and voicemail – check before you start the car Myths about idling: “I need to warm up my car.” Idling is NOT the best way to warm up your car – driving is “Shutting off and restarting my car is hard on the engine and uses more gas than if I leave it running.” Frequent restarting has little impact on engine components Top reasons to be idle free: Save money –30 seconds of idling uses more fuel than restarting the engine Breathe easier – car exhaust can aggravate asthma and decrease lung function – especially in children Keep the sky blue – car exhaust is the #1 source of summertime air pollution in the Bay Area Reduce your carbon footprint How Idling Affects Your Health: The pollutants found in exhaust not only affect our environment, they also affect our health. Particulate matter (PM) is the name for tiny particulates, such as soot, dust and dirt found in the air. When inhaled, these small particles travel into the lungs and sometimes into the bloodstream. Inhaling PM can: Aggravate asthma Cause coughing or difficult breathing Decrease lung function Exacerbate cardiovascular problems Lead to chronic bronchitis 30-second Rule: Turn off the car’s engine if you’ll be waiting for more than 30 seconds and help us all breathe easier. Take the pledge! City of Palo Alto (ID # 8415) City Council Staff Report Report Type: Inter-Governmental Legislative Affairs Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Support for SB 797 (Hill), increasing regional sales tax by 1/8 cent to partially fund Caltrain Title: Declaration of Support for SB 797 (Hill), a Bill Allowing Regional Entities and Residents of Santa Clara, San Francisco, and San Mateo Counties to Vote to Increase the Sales Tax by 1/8 Cent for Caltrain Operations and Capital Purposes From: City Manager Lead Department: City Manager Recommendation Staff recommends that Council declare its support for SB 797 (Hill), a bill allowing the Peninsula Corridor Joint Powers Board to petition regional entities and the voters of Santa Clara, San Francisco, and San Mateo counties, to increase the sales tax by 1/8 cent to fund Caltrain operations and capital expenditures, and direct the City Manager to advocate for its adoption, including submitting letters of support to the legislature, contacting the author to offer support, and directing the City’s lobbyist to testify on behalf of the bill in committee hearings and meet with the legislative offices to advocate for the bill on behalf of the City. Background SB 797 is a bill primarily seeking to alleviate the gridlock on Highway 101 and reduce regional traffic congestion by expanding Caltrain service. Caltrain is owned and operated by the Peninsula Corridor Joint Powers Board, comprised of representatives from the City and County of San Francisco, the San Mateo County Transit District and the Santa Clara Valley Transportation Authority. In support of the bill, Caltrain notes that its Fiscal Year 2017 operating budget is fully balanced, without cutting services or increasing fares. However, a balanced budget depends on one-time-only funds, which in turns depends on ridership. Ridership fluctuates and is not a dependable source of revenue year over year. Additionally, Caltrain still must address a structural deficit that leaves the agency vulnerable in years of ridership decline or economic downturn. To address these budget impacts as well as capital improvements, SB 797 seeks to create an additional revenue City of Palo Alto Page 2 source for Caltrain from the citizens of the region in which it operates through a sales tax increase. The increase would not exceed 0.125 percent, or 1/8 cent. Discussion This recommendation meets two of the City’s 2017 legislative priorities: promoting local rail and other local and regional transportation programs that reduce single occupancy vehicle trips, and supporting the regional improvement of air quality. Caltrain is a local rail service that reduces single occupancy vehicle trips; ridership reduces the number of autos and auto emissions on our roads, which positively affects air quality. If the bill becomes law, it must be approved by a majority vote of the Supervisors of Santa Clara, San Francisco, and San Mateo counties and the San Francisco County Transportation Authority, the San Mateo County Transit District, and the Santa Clara Valley Transportation Authority. It must also receive approval of 2/3 of the Peninsula Corridor Joint Powers Board before going to the voters for their approval by a 2/3 vote. Timeline, Resource Impact, Policy Implications, Environmental Review (If Applicable) SB 797 has passed Senate and Assembly committees, and is returning to the Senate for final votes. If it passes the legislature by a majority vote, the Governor must sign the bill within twelve days of receiving it for the bill to become law on January 1, 2018. At that time, the County Supervisors and entities above may vote on the measure before sending it to regional voters. There is no resource impact or policy implication associated with this action. This is not a “project” under CEQA requiring environmental review as it will not cause a direct or indirect physical change in the environment. City of Palo Alto (ID # 8238) City Council Staff Report Report Type: Informational Report Meeting Date: 8/28/2017 City of Palo Alto Page 1 Summary Title: Gifts to the City, FY 2016 Title: Significant Gifts to the City, Fiscal Year 2016 From: City Manager Lead Department: Administrative Services This is an informational report and no Council action is required. Discussion The City of Palo Alto’s Policy and Procedure 1-18, Gifts and Donations to the City of Palo Alto, (Attachment A) requires annual reports to the City Council regarding significant gifts that have been accepted on behalf of the City. This policy was updated in October 2014, to help clarify reporting of significant gifts over $5,000 only. In compliance with this policy, Attachment B lists all of the significant gifts (over $5,000) received during Fiscal Year 2016. All gifts had a designated purpose as stated under the “Use of Gift” column. Staff monitors designated restrictions to comply with the Donor’s request. In addition, the Fair Political Practices Commission (FPPC) regulates gifts to employees. The regulations contain guidelines on when these types of gifts should be disclosed as gifts to the City. Gifts required to be disclosed pursuant to this regulation are now also reported on FPPC Form 801, and that gift information is now posted to the City Clerk’s web page as required by the FPPC. Annual reports of gifts will continue to be provided to the Council, and Form 801 information will be available on the City Clerk’s website throughout the year as gifts are received. Attachments: Attachment A: Gifts to City Policy Attachment B: Significant Gifts Over $5,000 POLICY AND PROCEDURES 1-18 Revised: October 1, 2014 Effective: December 1, 1989 GIFTS AND DONATIONS TO THE CITY OF PALO ALTO POLICY STATEMENT The purpose of this policy is to: • Establish uniform procedures for the receipt of gifts to the City of Palo Alto; • Cultivate and maintain an environment where residents and businesses want to contribute to the City's programs and facilities; • Promptly acknowledge and express appreciation for the gifts; • Assure the gifts are properly inventoried, and Comply with the Political Reform Act and Fair Political Practices Commission Regulations. It is essential that gifts be properly reported and reviewed carefully for impact on the City's resources and for consistency with City policies and procedures concerning cash handling and inventory. City employees are prohibited from accepting personal gifts (see Section 1301, Merit System Rules and Regulations). Gifts to elected and appointed City officials and “designated” City employees (see Palo Alto Municipal Code, Chapter 2.09) are also regulated by the State of California Fair Political Practices Commission. Applicability of this Policy The procedures stated in Section A apply to gifts offered or given to the City, gifts actively solicited by the City, and gifts from community groups that support various City operations (e.g. Friends of the Library, the Recreation Foundation, etc.). They do not apply to minor individual contributions which will be quickly consumed in a City- sponsored event, work contributed by individual volunteers, sponsorship of a City activity, or donations of advertising, publicity, graphics, etc. in exchange for City acknowledgment. The procedures are consistent with those applicable to grants and other funding requests (see Policy and Procedures 1-12). The Fair Political Practices Commission has adopted requirements (2 Cal.Code Regs. § 18944.2) for reporting payments made to agencies that would otherwise constitute gifts to public officials. Payments may be considered gifts to the City when the City receives and controls the payment, uses the payment for official business, and identifies the recipient. Such payments must be reported as provided in section B of this policy. Table 1 summarizes acknowledgement and reporting requirements for gifts. PROCEDURES A. City Requirements for Accepting and Acknowledging Gifts Department heads, including Council Appointed Officers, are authorized to accept gifts tendered by cash or cash equivalents or by electronic funds transfers (e.g., ACH transfer, credit card payment or online gifts) on behalf of the City. The City Clerk’s Office will report on behalf of the City Council. Implementation of this policy is the responsibility of the department head, including Council Appointed Officers. Thresholds for implementation of the procedures vary with the category of the gift, as shown in Table 1. The estimated value of a gift is based on the donor's estimate. The City will not independently assign a value to the gift unless it is cash. Gifts accepted by the City become the property of the City of Palo Alto and are to be used for public benefit. Unless a special agreement concerning the ultimate disposition of the gift is entered into at the time the gift is accepted, it is understood that the City has sole authority to determine the use, transfer, handling, or disposition of the gift. Gifts made to officials directly or for which the donor donors designates by name, class, or other title the official who may use the payment are not gifts to the City, but rather individual gifts that may be required to be reported on FPPC Form 700. Employees may not accept individual gifts. Department heads should review material gifts to: • determine what the estimated costs to the City will be for any related installation, maintenance, operation, storage or liability that may be incurred by acceptance of the object; • ensure that the gift is properly documented, catalogued, and/or inventoried in the department and division records; • prepare and install an appropriate sign or nameplate consistent with the City’s naming policy; • ensure that the object will be satisfactorily maintained. Acknowledgment of Gifts The manner in which a gift is acknowledged must be appropriate to the nature of the gift and consistent with the donor's wishes. 1. Within thirty (30) days of receipt of a gift, the department head must send an acknowledgment letter if the gift is worth $100 or more, thanking the donor on behalf of the City of Palo Alto. a. The letter should clearly identify the gift and confirm the placement of the object that has been given to the City, or the use to which the gift will be devoted. b. Gifts to a governmental entity are treated similarly to charitable contributions for purposes of tax deductions. However, the donor will be responsible to the Internal Revenue Service and Franchise Tax Board for substantiating his or her own tax deduction. The City will not provide any tax services to donors. c. Except for gifts of cash or cash equivalents, where the donor amount is apparent, no dollar amount should be stated in the letter. Instead, the letter should contain the following paragraph: Your gift may be tax deductible. To determine the amount you may properly deduct for tax purposes, you should consult your tax preparer or tax attorney. d. The department head or his/her designee will sign the letter and forward a copy to the ASD Director. e. For a particularly significant gift (over $5,000), recipient department head in consultation with the ASD Director may ask that a letter be prepared for the Mayor's signature. 2. The recipient department head, in consultation with the ASD Director, will determine if the gift warrants a public announcement and in what manner it should be made. The donor will be notified in advance of any announcement, and has the right to request anonymity. 3. The ASD Director is responsible for: a. maintaining a record of all gifts that are accepted, including a description of the gift, the donor’s name and address (unless anonymous), the date the gift was received, and the disposition of the gift. b. reporting annually any significant gifts over $5,000 to the City Council regarding the gifts that have been accepted on behalf of the City. 4. Each department should also maintain a record of all gifts that are accepted, which includes a description of the gift, the donor's name and address, the date the gift was received, and the disposition of the gift. B. Fair Political Practices Commission Requirements for Accepting and Reporting Gifts to the City In addition to the requirements listed above, departments receiving gifts to the City must comply with Title 2 of the California Code of Regulations section 18944.2, summarized below: Payments or similar gifts that are controlled by the City and used for official City business may be considered gifts to the agency rather than gifts to an individual although the individual may receive a personal benefit from the payment, if all of the following requirements are met:. (1) City controls use of payment: The city manager or designee must determine and control the City’s use of a payment. The donor may identify a purpose for the payment, but may not designate by name, title, class, or otherwise, the official/employee who may use the payment. The City Manager or designee shall select the individual(s) who will use the payment any may not select himself or herself as the user. (2) Official City business. The payment must be used for official City business. (3) Reporting. Within 30 days after use of the payment, the head of the department of the official/employee who used the gift must report the payment on the Form 801 and forward it to the City Clerk. Form 801 is available at the Fair Political Practices Commission website online at http://www.fppc.ca.gov/forms/801.pdf. The City Clerk shall post a copy of the form or the information in the form on the City website, and shall maintain the forms for a period of not less than four years. (4) Limitations on payments for travel. Payments for travel, including transportation, lodging, and meals, are not gifts to the City but are considered personal gifts or income that the official or employee may be required to report on his or her FPPC Form 700 (a) if the donor designates by name, title, class, or otherwise, the official or employee who may use the payment, (b) if the City Manager or designee has not preapproved the travel in writing by signing the Form 801 or other travel pre-approval in advance or the trip, and/or (c) to the extent that such payments exceed the City’s reimbursement rates for travel, meals, lodging, and other actual and necessary expenses. NOTE: Questions and/or clarification of this policy should be directed to the Administrative Services Department. Questions and/or clarification of the Form 801 reporting requirements should be directed to the City Clerk or City Attorney’s Office. Attachments: Attachment A: Table 1- Summary of Gift Categories and Reporting Requirements Attachment A Table 1 Summary of Gift Categories and Reporting Requirements Gift Category Acknowledge‐ ment Letter Copy of acknowledge‐ ment to ASD? Account information re deposit to ASD? Form 801 to City Clerk? Other Requirements Cash or cash equivalent that will be used for official City business over $100 (cash, check, money order, travelers check, cashier’s check or online donation) X X X Cash or cash equivalent that will be used by an individual employee for official city business X X X X For payments used for official travel, see limitations set forth in policy section B(4). Stocks, other securities X X Contact ASD re deposition of this type of gift. The City’s investment policy (1‐39) precludes purchase of stocks, but the City may accept them as gifts if sold within a reasonable amount of time and ASD Director determines that cost of sale will not exceed cost of stock. Services (skilled services performed by a business or professional firm) X X Department head evaluates services to determine impact to department’s operating budget or CIP. Contact City’s Risk Manager to determine potential liability exposure. Material Gifts (Objects of art, equipment, property, other tangibles) X X If item has a value of $5,000 or more, also provide ASD Director with documentation regarding value of gift for fixed assets accounting. Real Property (Privately owned land and/or land improvements) All gifts require approval from ASD Real Estate Division and should be referred there. Real Estate/ASD will submit a written recommendation to the City Council for acceptance or rejection of the gift. Date Donor Dept Description of Gift July 24, 2017 Aletha Coleman Community Services 379,578.34 September 29, 2016 Sherrie A. Inness Estate Community Services 54,350.00 November 21, 2016 Baranoff ‐ Andreyeva Trust c/o Ms Maria Andreyeva Police 12,885.09 December 1, 2016 Pacific Library Partnership Library 14,000.00 January 5, 2017 Silicon Valley Community Foundation Police $15,000 Peery Fund Donation January 24, 2017 Art Center Foundation Community Services 81,000.00 March 17, 2017 Kathryn F Selvidge Revocable Trust Police 10,000.00 March 20, 2017 Friends of the Palo Alto Children's Theatre Community Services 45,000.00 June 29, 2017 National Endownment for the Arts; Art Works Grant Community Services 30,000.00 Varies Friends of the Palo Alto Library Library 50,000.00 Varies Friends of the Palo Alto Library Library 70,000.00 Use of Gift Designating the funds towards our department canine program To help care for and buy supplies for the animals shelter. The gift was a bequest in the Sherrie Inness estate to fund the Art Center’s ceramic program. To help care for and buy supplies for the animals shelter. Donations to the Friends of JMZ Offset the cost of contract theatre artists for the Palo Alto Children's Theatre. To support Cultural Kaleidoscope Coordinator position, Project LOOK! Director position, Project LOOK! Assistant position, and Children’s Fine Art Assistant position Received a $14,000 innovation grant for use of two technology advancements: greeter robots and a design‐oriented workstation to be used to assist 3D‐printing. To support the Code:ART event. Collection replacement Support for youth and adult programs at all libraries (Friends paid performers and associated program supplies throughout the year); includes $2,000 for purchase, throughout the year, of refreshments at staff meetings and staff supplies, supplies for staff break rooms, and other small items of staff recognition.