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2017-11-06 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, November 6, 2017 Regular Meeting Council Chambers 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 11 days preceding the meeting. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Closed Session 6:00-7:00 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH CITY ATTORNEY-EXISTING LITIGATION Subject: Cal River Watch v. City of Palo Alto United States District Court, Northern District of California Case No. C17-01126 MMC Authority: Government Code Section 54956.9(d)(1) 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. 2 November 6, 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. Minutes Approval 7:25-7:30 PM 2.Approval of Action Minutes for the October 23, 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. 3.Approval and Authorization for the City Manager to Execute Contract Amendment Number 1 With RMC Water and Environment to Extend the Term of the Agreement Three Additional Years to end November 9, 2020 for Professional Services Related to the Implementation of the Regional Water Quality Control Plant Long Range Facilities Plan CIP WQ-10001 4.Approval of Contract Amendment Number 2 With Townsend Public Affairs for State Legislative Representation to Extend the Contract for Two-years Through December 31, 2019 and add $204,000 for a Total Not-to-Exceed Amount of $595,000 5.Approval of a Contract With Van Scoyoc Associates Inc. for Federal Legislative Advocacy Services for a Term of Four-years, From January 1, 2018 to December 31, 2022, for a Total Not-to-Exceed Amount of $331,200 6.Approval of the Fiscal Year 2017 Re-appropriation Requests to be Carried Forward Into Fiscal Year 2018 and Approve Budget Amendments in Various Funds 7.Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of June 30, 2017 Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:35-8:45 PM 8.Adoption of a Resolution Authorizing the Filing of an Application to the Metropolitan Transportation Commission for a Priority Development Area Grant for the North Ventura Coordinated Area Plan (CAP), Expressing Local Support and Committing any Necessary Matching Funds, and Stating Assurance to Complete the Project; and Approval and Authorization to the City Manager to Execute a Funding Agreement With the Sobrato Organization for Sobrato to Provide the Local Matching Funds and Additional Supporting Funds for Environmental Review in the Amount of $250,000; and Initiation of the North Ventura Coordinated Area Plan Process. Environmental Q&A Q&A Q&A Q&A 3 November 6, 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. Assessment: Exempt Under California Environmental Quality Act (CEQA) Guidelines Sections 15061(b)(3) and 15262 8:45-9:30 PM 9. PUBLIC HEARING/QUASI-JUDICIAL. 425 Portage Avenue: Council Review of an Approval of the Planning and Community Environment Director’s Determination to Authorize a Waiver From the Retail Preservation Ordinance. The City Council Will Approve, Deny or Modify the Director’s Determination. Environmental Assessment: Exempt in Accordance With the California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) 9:30-9:45 PM 10. Adoption of Annual Amendments to the Employment Agreements Between the City of Palo Alto and Council Appointed Officers (City Manager, City Attorney, City Auditor and City Clerk) 9:45-10:00 PM 11. Approval of a Contract With Nichols Consulting Engineers, Chtd. (NCE) in the Amount of $191,300 for the Sidewalk Assessment Study to Determine Next Steps Following the Completion of the Sidewalk District Cycle for Capital Improvements Program Project PO-89003 (Continued from October 23, 2017) 10:00-10:45 PM 12. Colleagues' Memo Regarding Zoning Updates to Encourage Diverse Housing Near Jobs, Transit, and Services Inter-Governmental Legislative Affairs Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 4 November 6, 2017 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. Finance Committee Meeting November 8, 2017 Sp. Rail Committee Meeting November 8, 2017 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Consolidated Annual Performance and Evaluation Report (CAPER) for the Community Development Block Grant (CDBG) Program for Fiscal Year 2017 Proclamation Honoring Law Enforcement Records and Support Personnel Day –November 7, 2017 City of Palo Alto Sales Tax Digest Summary First Quarter Sales (January - March 2017) Public Letters to Council Set 1 Sp. City Council Meeting November 7, 2017 CITY OF PALO ALTO OFFICE OF THE CITY CLERK November 6, 2017 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the October 23, 2017 Council Meeting Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS: Attachment A: 10-23-17 DRAFT Action Minutes (DOCX) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 4 Special Meeting October 23, 2017 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:04 P.M. Present: DuBois, Filseth, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Participating remotely: Fine participating from Club Quarters Hotel, Main Lobby, 1628 Chestnut St., Philadelphia, PA 19103 Absent: Closed Session 1. CONFERENCE WITH CITY ATTORNEY Subject: Written Liability Claim Against the City of Palo Alto By Sarah Syed (Claim No. C16-0081) Authority: Government Code Section 54956.9. MOTION: Council Member Wolbach moved, seconded by Council Member Filseth to go into Closed Session. MOTION PASSED: 9-0 Council went into Closed Session at 5:05 P.M. Council returned from Closed Session at 6:57 P.M. Mayor Scharff announced no reportable action. Agenda Changes, Additions and Deletions Staff requests Agenda Item Number 4- SECOND READING: Adoption of an Ordinance of the City Of Palo Alto to Update the Fiscal Year 2018 Municipal Fee Schedule… be continued to November 13, 2017. MOTION: Mayor Scharff moved, seconded by Council Member Tanaka to continue Agenda Item Number 4- SECOND READING: Adoption of an Ordinance of the City Of Palo Alto to Update the Fiscal Year 2018 Municipal Fee Schedule… to November 13, 2017. DRAFT ACTION MINUTES Page 2 of 4 City Council Meeting Draft Action Minutes: 10/23/17 MOTION PASSED: 7-0 Kniss, Wolbach not participating Consent Calendar MOTION: Council Member Tanaka moved, seconded by Council Member Holman, third by Council Member Kou to pull Agenda Item Number 3- Approval of a Contract Number C18168777 With Nichols Consulting Engineers, Chtd. (NCE)… to be heard on a date uncertain. MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to approve Agenda Item Number 2. 2. Resolution 9715 Entitled, “Resolution of the Council of the City of Palo Alto Donating a Surplus Fire Engine to our Sister City, Oaxaca, Mexico and Accepting $5,000 From Neighbors Abroad as the Purchase Price of the Fire Engine. 3. Approval of a Contract Number C18168777 With Nichols Consulting Engineers, Chtd. (NCE) in the Amount of $191,300 for the Sidewalk Assessment Study to Determine Next Steps Following the Completion of the Sidewalk District Cycle for Capital Improvements Program Project PO-89003. 4. SECOND READING: Adoption of an Ordinance of the City Of Palo Alto to Update the Fiscal Year 2018 Municipal Fee Schedule to Adjust Development Services Department Fees (FIRST READING: October 2, 2017 PASSED: 7-1 Tanaka no, Scharff Absent). MOTION PASSED: 9-0 Action Items 5. PUBLIC HEARING/QUASI-JUDICIAL: 3001 El Camino Real [16PLN- 00097 and 16PLN-00220]. Recommendation on Applicant’s Request for Approval of a Site and Design Review to Allow for Construction of a Four-story Mixed-use Development With 19,800 Square Feet of Retail and 30 Residential Units in the CS Zone as Well as a Three-story Multi-family Residential Building With 20 Units in the RM-30 Zone. The Project Also Includes a Request for Approval of a Preliminary Parcel Map for a Lot Merger to Allow for the Proposed Development, a Design Enhancement Exception, and a Parking Adjustment for Shared Parking. Environmental Assessment: A Draft Mitigated Negative Declaration (MND) was Circulated for Public Review on July 3, 2017 and the Circulation Period Ended on August 2, 2017. A Final MND is Available DRAFT ACTION MINUTES Page 3 of 4 City Council Meeting Draft Action Minutes: 10/23/17 for Review. Zoning District: CS (Service Commercial), RM-30 (Multi-family Residential), and R-1 (Single-family Residential). Public Hearing opened at 7:39 P.M. Public Hearing closed at 7:51 P.M. MOTION: Vice Mayor Kniss moved, seconded by Mayor Scharff to: A. Adopt a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan prepared pursuant to the California Environmental Quality Act (CEQA); and B. Adopt a Record of Land Use Action approving a Site and Design application, including a Director’s Parking Adjustment and Design Enhancement Exception, as well as a Preliminary Parcel Map for the merger of three parcels based on findings and subject to conditions of approval included in the Staff Report, Attachment B. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “add a Condition of Approval that the landscaping buffer between the RM-30 and the R-1 along Olive Avenue be maintained for the life of the project.” (New Part C) AMENDMENT: Council Member DuBois moved, seconded by Mayor Scharff to add to the Motion, “remove Condition of Approval 17a and 17b.” AMENDMENT FAILED: 3-6 DuBois, Holman, Kou yes MOTION AS AMENDED RESTATED: Vice Mayor Kniss moved, seconded by Mayor Scharff to: A. Adopt a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan prepared pursuant to the California Environmental Quality Act (CEQA); and B. Adopt a Record of Land Use Action approving a Site and Design application, including a Director’s Parking Adjustment and Design Enhancement Exception, as well as a Preliminary Parcel Map for the merger of three parcels based on findings and subject to conditions of approval included in the Staff Report, Attachment B; and C. Add a Condition of Approval that the landscaping buffer between the RM-30 and the R-1 along Olive Avenue be maintained for the life of the project. DRAFT ACTION MINUTES Page 4 of 4 City Council Meeting Draft Action Minutes: 10/23/17 MOTION AS AMENDED PASSED: 8-0-1 Holman abstain 6. Discussion and Consideration of the Planning & Transportation Commission's Recommendations Regarding the Comprehensive Plan Update and Adoption of Resolutions Certifying the Final Environmental Impact Report (EIR) for the Comprehensive Plan Update; Adopting Findings Pursuant to the California Environmental Quality Act (CEQA), and Adopting the Updated Comprehensive Plan Dated June 30, 2017 With Desired Corrections and Amendments, Which Comprehensively Updates and Supersedes the City's 1998-2010 Comprehensive Plan (Two Public Hearings Will be Held: October 23, 2017 and November 13, 2017. On October 23, 2017, the City Council may Consider Action on the Planning & Transportation Commission’s Recommendations, Providing Direction to Staff, and Certification of the Final EIR. Other Actions Will be Deferred Until the Hearing on November 13, 2017.). Public Hearing opened at 9:37 P.M. Public Hearing continued to October 30, 2017. MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to continue this Item to October 30, 2017. MOTION PASSED: 9-0 Inter-Governmental Legislative Affairs None. Council Member Questions, Comments and Announcements Council Member Holman shared her attendance at the United Nations Association Film Festival (UNAFF) last night and encouraged Council Members and the community to attend films included in this Festival. This year marks the twentieth anniversary of UNAFF. Council Member Kou shared her attendance along with Council Member Tanaka at the Baha’i Celebration of Oneness on Friday. The group gifted a painting to the City. Vice Mayor Kniss reported that she opened UNAFF last Thursday and shared her excitement at helping celebrate the Festival’s anniversary. Adjournment: The meeting was adjourned at 11:06 P.M. City of Palo Alto (ID # 8210) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Adoption of Amendment No. 1 to Contract with RMC Water and Environment for Professional Services Title: Approval and Authorization for the City Manager to Execute Contract Amendment No. 1 with RMC Water and Environment to Extend the Term of the Agreement Three Additional Years to End November 9, 2020 for Professional Services Related to the Implementation of the Regional Water Quality Control Plant Long Range Facilities Plan CIP WQ-10001 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute Contract Amendment Number 1 to Contract C15153692 with RMC Water and Environment, Inc. (Attachment A) to extend the contract term to November 9, 2020 for program management services for Capital Improvement Program projects being implemented via the Regional Water Quality Control Plant Long Range Facilities Plan. Background The Palo Alto Regional Water Quality Control Plant (RWQCP) is currently implementing its Long Range Facilities Plan (LRFP). The LRFP was adopted by Council in July 2012 to upgrade facilities and treatment processes to reduce RWQCP’s carbon footprint, increase treatment efficiency and reliability, and provide dependable and sustainable treatment. Identified in the plan are facilities/process replacement projects to be constructed over a ten-year period at a total cost of $197.5 million. The existing Contract between the City of Palo Alto and RMC to provide program management services for implementation of the LRFP was entered into on City of Palo Alto Page 2 November 10, 2014, with the original term through November 9, 2017 and compensation not-to-exceed $4,357,899, including $390,718 in additional services. To date $746,945 has been expended. Due to the State Water Resources Control Board (SWRCB) Clean Water State Revolving Fund (CWSRF) funding being in higher demand than anticipated and availability not being certain, program activities were delayed. Although CWSRF funding for the Sludge Dewatering and Load Out Facility project was finally secured, staff have learned that funding for the remainder of projects is uncertain, therefore are working with RMC and RWQCP partner agencies to develop alternate financing mechanisms including revenue bond financing and pay-as-you-go approaches, enabling the program to proceed should future CWSRF funds not be available. RMC assisted in reaching the following major milestones: Sludge Dewatering and Load Out Facility Project (WQ-14001) o Secured $29.7M in CWSRF funding, City Council approved the CWSRF Agreement on April 17, 2017. o Completed design and constructability reviews. o Approved construction contract with C. Overaa & Co., City Council approved the contract on April 17, 2017. o Selected a Consultant for Construction Management Services, City Council approved the Tanner Pacific Agreement on April 17, 2017. o Submitted the first CWSRF construction reimbursement request to the SWRCB to cover $3.2 million soft costs. The reimbursement request was submitted on July 5, 2017 and reimbursement was received August 21, 2017. New Laboratory & Environmental Services Building project (WQ-14002) o Completed a Siting Study to identify the proposed location of the new Operations Center proposed to house the laboratory, environmental services, and operations staff. Primary Sedimentation Tank Rehabilitation (WQ-14003) City of Palo Alto Page 3 o Released the Request for Proposals (RFP No. 168129) for design of the project, proposals were due May 24, 2017. o Received three proposals on May 24, 2017. o Interviewed two consultants on June 29, 2017. o Selected the design consultant. o Drafted scope of work for the design of project. Fixed Film Reactor Rehabilitation (WQ-14004) Initiated the Secondary Process Evaluation to confirm whether the fixed film reactors have a long term role in the treatment process at the RWQCP or if the funds should be invested in an alternative treatment process. Plant Equipment Replacement project (WQ-80021) Drafted scope of work for the Medium and Low Voltage Electrical Distribution Network project. Updating AutoCAD site plans for future facility layout coordination. Assisted with ongoing capital program finance planning. Discussion The numerous improvements identified in the LRFP are necessary to ensure compliance with regulatory wastewater treatment requirements, protection of San Francisco Bay, and staff workplace and safety improvements. Due to the following program work that remains, staff recommends extending the contract term three years to end November 9, 2020. Primary Sedimentation Tank Rehabilitation project design and construction Fixed Film Reactor Rehabilitation project design and construction Laboratory and Environmental Services Building project design and construction Biosolids and Secondary Treatment Assessment Headworks Facility Replacement project design and construction 72” Interceptor Rehabilitation project design and construction Ongoing LRFP program financial planning – assisting in lining up funding for the program City of Palo Alto Page 4 No changes to compensation are needed in this contract amendment. Resource Impact No additional funds are associated with adoption of the contract amendment. Policy Implications Adoption of the amendment does not represent a change in existing policies. Environmental Review Adoption of the amendment of the contract term extension is not an action that requires CEQA review. This action does not meet the definition of a project for the purposes of CEQA, under Public Resources Code Section 21065 and CEQA guidelines Section 15378(b)(5), because they are administrative governmental activities which will not cause a direct or indirect physical change in the environment. Attachments: Attachment A - Amendment No. 1 S15153692 RMC Water Attachment B - C15153692-RMC Water and Environment AMENDMENT NO. 1 TO CONTRACT NO. C15153692 BETWEEN THE CITY OF PALO ALTO AND RMC WATER AND ENVIRONMENT This Amendment No. 1 to Contract No. C15153692 (“Contract” or “Agreement”) is entered into November 6, 2017 (“Amendment Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and RMC WATER AND ENVIRONMENT, a California corporation, located at 100 West San Fernando, Suite 320, San Jose, CA 95113 ("CONSULTANT"). City and Consultant are referred to herein collectively as the “Parties.” R E C I T A L S A. The Contract, dated effective November 3, 2014 was entered into between the Parties for the provision of Program Management Services for the Projects under the Long Range Facilities Plan of the Regional Water Quality Control Plant. B. Section 25.4 of the Contract authorizes the Parties to modify the Contract by written amendment. C. The Parties now desire to amend the Contract to extend the Term an additional 3 years from its current expiration date November 9, 2017 to November 9, 2020, to enable program management services for the Long Range Facilities Plan to continue, and to add Exhibit “C-2” (Hourly Rate Schedule – Amendment No. 1) to the Contract to set forth the hourly rates applicable to the additional 3 years of the Contract, with no increase in the maximum compensation under the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Section 2, “TERM”, of the Contract is hereby amended to read as follows: “The term of this Agreement is from the date of its full execution through November 9, 2020, unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. Section 4, “NOT TO EXCEED COMPENSATION”, of the Contract is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Three Million Nine Hundred Sixty-Seven Thousand One Hundred and Eighty One Dollars ($3,967,181.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed Four Million Three Hundred Fifty-Seven Thousand Eight Hundred Ninety-Nine Dollars ($4,357,899.00). The applicable rates and schedule of payment are set out at Exhibit “C-1” and “C- Page 1 of 6 DocuSign Envelope ID: 2719AE5C-9CE5-40E1-9B8F-5047608EA074 2”(Amendment No.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 “C12-1, C12-2, C12-3, C3-1 C3-2, and C3-3”. 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 3. The following exhibit(s) to the Contract is/are hereby amended and/or added to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “B” entitled “Schedule of Performance, Amendment No. 1”.- Amended b. Exhibit “C-2” entitled “Hourly Rate Schedule, Amendment No. 1”.- Added SECTION 4. 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. Page 2 of 6 DocuSign Envelope ID: 2719AE5C-9CE5-40E1-9B8F-5047608EA074 CITY OF PALO ALTO ____________________________ City Manager or designee APPROVED AS TO FORM: _____________________________ City Attorney or designee RMC WATER AND ENVIRONMENT Officer 1: By:___________________________ Name:_________________________ Title:________________________ Officer 2: By:___________________________ Name:_________________________ Title:________________________ Attachments: EXHIBIT “B”: SCHEDULE OF PERFORMANCE, AMENDMENT NO. 1- AMENDED EXHIBIT "C-2": HOURLY RATE SCHEDULE- ADDED Page 3 of 6 DocuSign Envelope ID: 2719AE5C-9CE5-40E1-9B8F-5047608EA074 Alyson Watson President Bruce Nicholson Secretary EXHIBIT “B” SCHEDULE OF PERFORMANCE AMENDMENT NO.1 CONSULTANT shall perform the Services so as to complete each milestone within the number of weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Weeks From NTP 1. Year One Components 52 Weeks 1, 2, & 3 2. Year Two Components 104 week 1, 2, & 3 3. Year Three Components 156 Weeks 1, 2, & 3 4. Year Four Components 208 Weeks 5. Year Five Components 260 Weeks 6. Year Six Components 312 Weeks Page 4 of 6 DocuSign Envelope ID: 2719AE5C-9CE5-40E1-9B8F-5047608EA074 City of Palo Alto (0038-014.01) Page 1 of 1 Woodard & Curran May 31, 2017 Standard Billing Rates 2016 Labor Category 2017/18/19/20 Labor Category 2017 Rate 2018 Rate 2019 Rate 2020 Rate EPS-1 Engineer 1 (E1) $152 $156 $160 $164 Scientist 1 (S1) Geologist 1 (G1) Planner 1 (P1) Technical Specialist 1 (TS1) EPS-2/EPS-3 Engineer 2 (E2) $178 $182 $187 $192 Scientist 2 (S2) Geologist 2 (G2) Planner 2 (P2) Technical Specialist 2 (TS2) EPS-4 Engineer 3 (E3) $201 $206 $211 $216 Scientist 3 (S3) Geologist 3 (G3) Planner 3 (P3) Technical Specialist 3 (TS3) EPS-5 Project Engineer 1 (PE1) $205 $210 $215 $221 Project Scientist 1 (PS1) Project Geologist 1 (PG1) Project Planner 1 (PP1) Project Technical Specialist 1(PTS1) EPS-6 Project Engineer 2 (PE2) $222 $228 $233 $239 Project Scientist 2 (PS2) Project Geologist 2 (PG2) Project Planner 2 (PP2) Project Technical Specialist 2(PTS2)EPS-7 Project Manager 1 (PM1)$237 $243 $249 $255Technical Manager 1 (TM1) EPS-8 Project Manager 2 (PM2)$249 $255 $262 $268Technical Manager 2 (TM2) EPS-9/EPS-10 Senior Project Manager (SPM)$266 $273 $279 $286Senior Technical Manager (STM) EPS-11 to EPS-13 Senior Technical Practice Leader(STPL)$295 $302 $310 $318Service Line Leader (SLL) EPS-13/EPS-14 National Practice Leader (NPL)$310 $318 $326 $334Strategic Business Unit Leader(SBUL)Tech-1 Software Engineer 1 (SE1)$136 $139 $143 $146 Tech-2 Designer 1 (D1)$140 $144 $147 $151 Tech-3 Designer 2 (D2)$150 $154 $158 $162 Tech4/Tech-5 Designer 3 (D3)$153 $157 $161 $165Senior Software Developer (SSD) Tech-6/Tech-7 Senior Designer (SD)$165 $169 $173 $178 AD-1/AD2 Project Assistant (PA)$105 $108 $110 $113 AD-3 Marketing Assistant (MA)$113 $116 $119 $122Graphic Artist (GA) AD-4/AD-5 Senior Accountant (SA)$125 $128 $131 $135Billing Manager (BM) AD-6/AD-7 Marketing Manager (MM)$145 $149 $152 $156Graphics Manager (GM) AMENDMENT NO.1 Rates shall apply to services performed by CONSULTANT from November 10, 2017 to November November 9, 2020. Page 5 of 6 Exhibit C-2 Hourly Rate ScheduleDocuSign Envelope ID: 2719AE5C-9CE5-40E1-9B8F-5047608EA074 Carollo Engineers, Inc. 2018 – 2020 Fee Schedule 2018 2019 2020 Engineers/Scientists Assistant Professional $175 $182 $189 Professional $213 $222 $231 Project Professional $253 $263 $273 Lead Project Professional 1 $272 $283 $295 Lead Project Professional 2 $202 $210 $218 Senior Professional 1 $295 $307 $319 Senior Professional 2 $292 $304 $316 Senior Professional 3 $276 $287 $298 Technicians Technicians $131 $136 $142 Senior Technicians $183 $190 $198 Support Staff Document Processing / Clerical $115 $120 $125 Project Equipment Communication Expense (PECE) Per DL Hour $11.70 $12.00 $12.30 Other Direct Expenses Travel & Subsistence At cost At cost At cost Mileage IRS rate per mile Subconsultant Cost + 10% Cost + 10% Cost + 10% Other Direct Cost Cost + 10% Cost + 10% Cost + 10% Expert Witness Rate x 2.0 Rate x 2.0 Rate x 2.0 This fee schedule is subject to annual revisions due to labor adjustments. EXHIBIT "C-2" HOURLY RATE SCHEDULE AMENDMENT NO.1 Rates shall apply to services performed by CONSULTANT from November 10, 2017 to November November 9, 2020. Page 6 of 6 DocuSign Envelope ID: 2719AE5C-9CE5-40E1-9B8F-5047608EA074 Professional ServicesRev. Feb. 2014 CITY OF PALO ALTO CONTRACT NO. C15153692 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND RMC WATER AND ENVIRONMENT FOR PROFESSIONAL SERVICES This Agreement is entered into on this 10th day of November, 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and RMC WATER AND ENVIRONMENT, a California Corporation, located at 100 West San Fernando, Suite 320, San Jose, CA 95113 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to implement the Long Range Facilities Plan (“Project”) and desires to engage a consultant to provide program management for the implementation of the LRFP while maintaining plant operation and full permit compliance at all times 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 in 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 the City, as needed, with a Task Order assigned and approved by the 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 the City may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. C15153692 Program Management Services for the RWQCP 1 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached as Exhibit “B” unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CONSULTANT is not responsible for schedule delays due to events or actions by others that are beyond the reasonable control of 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”, including both payment for professional services and reimbursable expenses, shall not exceed Three Million Nine Hundred Sixty-Seven Thousand One Hundred and Eighty One Dollars ($3,967,181.00). In the event Additional Services are authorized, the total compensation for Services, Additional Services and reimbursable expenses shall not exceed Four Million Three Hundred Fifty-Seven Thousand Eight Hundred Ninety-Nine Dollars ($4,357,899.00).The applicable rates and schedule of payment are set out in Exhibit “C12-1, C12-2, C12-3, C3-1 C3-2, and C3-3”, 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”. 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 C15153692 Program Management Services for the RWQCP 2 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in its work product submitted to CITY, to the extent that such errors, omissions, or ambiguities were not materially caused by erroneous or ambiguous information provided by others and, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement until expiration of statutes of limitations and repose applicable to Consultant’s services for a period of four (4) years. CITY shall furnish CONSULTANT available studies, reports and other data pertinent to Consultant’s services. 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 the CITY’s stated construction budget, CONSULTANT shall make recommendations to the 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. CONSULTANT shall use due diligence and current market data in preparing the construction cost estimates. 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 the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of C15153692 Program Management Services for the RWQCP 3 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 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: Carollo Engineers Covello Group 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 Steve Clary as the Program Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Marc Nakamoto as the Deputy Program 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. The City’s project manager is Padmakar Chaobal, Public Works Department, Environmental Services Division, RWQCP 2501 Embarcadero Way, Palo Alto, CA 94303, Telephone:(650) 329-2287. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery and final payment by CITY, 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 C15153692 Program Management Services for the RWQCP 4 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the 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. In the event an action alleges negligence on the part of CONSULTANT and/or CITY, or any third parties not under contract with CONSULTANT, CONSULTANT’S obligations regarding reimbursement of CITY’S reasonable defense costs incurred to the extent of CONSULTANT’S negligence as expressly determined by a final judgment, arbitration, award, order, settlement, or other final resolution. C15153692 Program Management Services for the RWQCP 5 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 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 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 Purchasing Manager 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. C15153692 Program Management Services for the RWQCP 6 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 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. Prior to giving notice of termination or suspension for cause, CITY will provide CONSULTANT two weeks opportunity to remedy the cause. 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. CONSULTANT makes no representation of the suitability of work product for use in, or application to, circumstances not contemplated by the scope of work, or for incomplete work products. 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. This obligation shall survive termination of the Agreement. 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 C15153692 Program Management Services for the RWQCP 7 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 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. C15153692 Program Management Services for the RWQCP 8 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the 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 the 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: All printed materials provided by Consultant to City generated from a personalcomputer 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 the 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. Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products andpackaging. A copy of this policy is on file at the Purchasing Office. Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the 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. NON-APPROPRIATION 24.1. 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 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. 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. 25.3. 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. 25.4. This document represents the entire and integrated agreement between the C15153692 Program Management Services for the RWQCP 9 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 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. 25.5. 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. 25.6. 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. 25.7. 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. 25.8 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. 25.9 All unchecked boxes do not apply to this agreement. / / / / / / / / / / / / / / / / / / / / C15153692 Program Management Services for the RWQCP 10 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 25.10 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. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement 25.12 In the event of a dispute under this agreement, CITY and CONSULTANT agree to attempt a resolution by mediation. The mediator shall be acceptable to the CITY and CONSULTANT. 25.13 CONSULTANT shall be named as additional primary insured(s) by the construction contractor’s General Liability and Builder’s All Risk insurance policies and all Construction Documents and insurance certificates shall include wording acceptable to the parties herein with reference to such provisions. 25.14 CONSULTANT shall not be responsible for the means, methods, techniques, sequences, or procedures of construction selected by construction contractors or the safety precautions and programs incident to the work of construction contractors and will not be responsible for construction contractor’s failure to carry out work in accordance with the Contract Documents unless the means, methods, techniques, sequences, or procedures of construction are specified by the CONSULTANT. 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 APPROVED AS TO FORM: Senior Asst. City Attorney RMC WATER AND ENVIRONMENT By: Name: Title: Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C12-1”: SCHEDULE OF RATES EXHIBIT “C12-2”: SCHEDULE OF RATES EXHIBIT “C12-3”: SCHEDULE OF RATES EXHIBIT “C3-1”: SCHEDULE OF RATES EXHIBIT “C3-2”: SCHEDULE OF RATES C15153692 Program Management Services for the RWQCP 11 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Executive Vice President Stephen Clary Professional Services Rev. Feb. 2014 EXHIBIT “C3-3”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS C15153692 Program Management Services for the RWQCP 12 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “A” SCOPE OF SERVICES PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT PROGRAM MANAGEMENT SCOPE OF SERVICES The Palo Alto Regional Water Quality Control Plant (RWQCP) was originally constructed in 1934 and had undergone several expansions and upgrades throughout the years. To date, the RWQCP is an advanced treatment facility that provides treatment and disposal of wastewater for the Cites of Palo Alto, Mountain View, and Los Altos; the Town of Los Altos Hills; the East Palo Alto Sanitary District; and Stanford University. The RWQCP currently has a designed average dry weather flow (ADWF) capacity of 39 million gallons per day (MGD), and a current average flow of about 20 MGD. The RWQCP effluent is partly discharged to the San Francisco Bay, and partly diverted to the RWQCP recycled water facility for reuse. A Long Range Facilities Plan (LRFP) was prepared in 2012 to provide a road map for the RWQCP’s future. Most recently, an Organics Facilities Plan ( OFP ) has been prepared to address the biosolids from the RWQCP, food scraps from residents and businesses, and yard trimmings from residents and businesses. The RWQCP seeks professional program management services to assist staff with the implementation of the LRFP and the OFP. BACKGROUND The RWQCP was originally constructed in 1934 for treatment of local waste. In 1972, the RWQCP was upgraded to a secondary treatment facility and expanded to the average dry weather flow capacity of 35 mgd and the peak hour wet weather capacity of 80 mgd. With this expansion, in addition to Palo Alto, the RWQCP provides wastewater treatment and disposal from the cities of Mountain View, Los Altos, East Palo Alto Sanitary District, Los Altos Hills, and Stanford University. In 1980, construction was completed for an upgrade to provide nitrification and tertiary treatment. In 1988, a capacity expansion project increased the overall permitted average dry weather flow capacity to 39 mgd. In case there is a need for essential maintenance or to handle wet weather flows exceeding 40 mgd, provisions were made so the nitrification and tertiary treatment processes can be bypassed. The existing treatment processes at the RWQCP consist of headworks, primary, two-stage secondary, tertiary, ultra-violet disinfection, solids incineration, and recycled water treatment. Some of the original structures are still in use. In 2012, the RWQCP conducted the LRFP to upgrade its facilities and treatment processes. The goals are to reduce the RWQCP’s carbon footprint, increase treatment efficiency and reliability, and provide dependable and sustainable treatment. The LRFP was accepted by the Palo Alto City Council on July 2, 2012. The LRFP and information about the Plant are available at the C15153692 Program Management Services for the RWQCP 13 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 plant website: http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2101&TargetID=65 In March, 2014 the attached Organics Facilities Plan ( OFP ) was developed to address the biosolids from the RWQCP, food scraps, and yard trimmings. The first two components of the 4-component OFP address biosolids and are also contained in the LRFP. Therefore it is critical that the LRFP and the OFP be fully coordinated as planning and design occur. Therefore the Project Management Consultant being selected via this RFP, must integrate the LRFP and the OFP. Components 3 and 4 of the OFP address food scraps and yard trimmings, respectively. The LRFP identified a total cost of $192 million of facilities/process replacement projects to be constructed over a ten year period. It is anticipated that varying phases of the projects would overlap. The RWQCP seeks to retain a consulting engineering firm to act as Program Manager for these projects. The Program Manager will be responsible for planning and coordinating project activities, acquiring and managing the preparation of designs and environmental documents by other consultants, conducting design reviews, coordinating or managing construction of projects, working with RWQCP engineering staff to monitor overall budgets and schedules, facilitating the RWQCP with regulatory and partner agencies liaison, and assisting the RWQCP on public relations, as needed. PROJECT APPROACH The LRFP provides a basis for the Consultant to understand City and community goals. Consultant shall assist the RWQCP to implement the projects following the road map outlined in the LRFP. The LRFP identified seven major facilities/processes that need to be upgraded or replaced: Solids handling Primary sedimentation Lab/environmental services Fixed film reactors Headworks Recycled water filters and chlorine contact tank Joint interceptor sewer The RWQCP anticipates awarding separate consulting contracts for the above projects. The RWQCP is also considering the use of design-build process for some projects. A tentative implementation schedule and budget of the LRFP is included with this request for proposal as Attachment A. Subsequent to Council’s acceptance of the LRFP, the RWQCP is completing the Biosolids Facility Plan in accordance with the LRFP recommendation regarding the solids handling process. Council’s decisions on the Biosolids Facility Plan recommendations shall be the guide to the Solids handling project. Additionally, the City is considering two projects, one for preprocessing of food scraps, and one for processing of yard trimmings, which would be related to the Biosolids Facilities Plan. These two projects are Components #3 and #4 of the City’s Organics Facilities Plan OFP and shall be C15153692 Program Management Services for the RWQCP 14 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 referred to as Components #3 and #4 of the OFP. Component #3 projects will be managed by Consultant in the same way as the LRFP projects, except that the funding source is different (largely the City’s Refuse Fund ), and therefore the financial management will be kept separate. CONSULTANT SERVICES GENERAL Consultant shall provide program management for the implementation of the LRFP while maintaining plant operation and full permit compliance at all times. The LRFP would provide an overall rehabilitation as well as new processes and facilities in the existing RWQCP. The program requires Consultant to provide a large variety of services. The Consultant team shall have experience in competitive bid process and possess a full spectrum of engineering/financial expertise, including structural, civil, process mechanical, instrumentation & controls, environmental, and construction management. Consultant shall be knowledgeable of laws and regulations related to wastewater treatment facilities including NPDES permit regulations, California and Federal air regulations, greenhouse gas regulations, OSHA , and environmental documentation requirements. Consultant shall put together a flexible team with flexible time allocation to accommodate the needs of the program. The program manager will report to the senior engineer of the RWQCP. For Components #3 and #4 of the OFP, the program manager shall report to the City’s Solid Waste Manager. Consultant shall become familiar with the City’s procedures and be an extension of the RWQCP engineering group. It is therefore important that the Consultant team shares common values with the RWQCP staff and a communication style for successful integration with RWQCP staff. It is the RWQCP’s expectation that Consultant will operate in an advisory capacity on matters requiring decisions, and be able to implement the LRFP with minimal assistance from RWQCP staff. Consultant is not expected to navigate the projects through City procedures, but is expected to provide all support documents needed for RWQCP staff to move the project through City process. There is limited office space available at the RWQCP. RWQCP staff will work with Consultant to determine how best to accommodate Consultant team for optimal efficiency. Consultant shall keep its work properly organized at all times. As much as possible, records shall be in electronic format compatible with the RWQCP’s software, hardware and security protocols. Records of work shall be available to the RWQCP at all times. City will have ownership rights of all records and documents. Consultant shall not share City documents or information with anyone outside of the City organization, except the Consultant program team, without the City’s approval. Any preliminary design performed by Consultant under this Contract shall be the property of the City and City has the right to allow the design engineer to use the preliminary design documents to complete the final design. BASIC SERVICES Task 1: Planning and coordination Consultant shall review the work requirements of the LRFP, and make projection of the impacts C15153692 Program Management Services for the RWQCP 15 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 on the RWQCP’s treatment process, operation, and finance. Consultant shall lay out the schedule for the funding, environmental review, design, regulatory, and construction activities for a phased implementation of the LRFP. A separate schedule for Components #3 and #4 of the OFP shall be prepared. Consultant shall plan and coordinate the activities of the various phases/projects to maintain conformance with the LRFP budget and schedule. Consultant shall: 1.1 Determine phasing of work, critical paths, milestones for projects to minimize impact while ensuring the RWQCP complies with regulatory requirements, consistent with the LRFP recommendations 1.2 Set deadlines for funding, permitting, environmental review, design, and construction for the various phases/projects 1.3 Refine and customize program management tools to fit the specific needs of the LRFP, including tools for budget management, schedule management, cash flow & forecasting and accounting & financing 1.4 Develop and maintain a master schedule of all the projects under the LRFP, perform CPM analysis as needed 1.5 Develop and maintain a comprehensive overall program budget and cash flow projection for the LRFP 1.6 Develop reporting tool to provide updates and alert the RWQCP of issues in a timely manner Task 2: Acquisition and management of project consultants Consultant shall assist the RWQCP in obtaining the services of consulting engineering firms to complete the environmental documentations and designs of projects under the LRFP and Components #3 and #4 of the OFP, keeping all financial management and billings separate for these two projects. Consultant will not be allowed to propose on any of these projects. Consultant shall: 2.1 Prepare scope of work and Requests for Proposal 2.2 Assist RWQCP staff to navigate project through City’s acquisition process to obtain the engineering services 2.3 Evaluate proposals and assist RWQCP with the selection of engineering firms for the projects 2.4 Oversee and provide consistency across multiple designers and ensure that the designs of multiple projects would result in consistency across multiple contractors 2.5 Develop document management requirements and ensure consistency in project reporting and products C15153692 Program Management Services for the RWQCP 16 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Task 3: Design/Document reviews Consultant shall conduct review of the reports, plans and specifications prepared by the consulting engineering firms for projects under the LRFP and Components #3 and #4 of the OFP. Consultant shall: 3.1 Coordinate and engage plant staff with projects to ensure proper basis of planning and design 3.2 Review all reports, design submittals, scope changes, project products and establish a QA/QC program 3.3 Coordinate and provide information needed for environmental documents and design of projects, and ensure consistency across multiple projects 3.4 Provide value engineering and constructability review 3.5 Review and ensure regulatory compliance Task 4: Services for project construction Consultant shall assist the RWQCP to ensure proper execution of construction contracts under the LRFP and Components #3 and #4 of the OFP. Consultant shall: 4.1 Prepare invitation for bid packages 4.2 Assist RWQCP staff to navigate through City’s acquisition procedures to obtain the contracts for construction of the LRFP projects 4.3 The RWQCP has the option to and may request the Consultant to provide or assist staff with construction management services. Consultant shall prepare the scope and budget. City will amend the Consultant’s annual contract to include the agreed upon fee for the construction management services. Consultant will then perform the construction management services under the amended Basic Services 4.4 Alternatively, the RWQCP has the option to request Consultant to prepare “Request for Proposal” document to obtain the services of construction management firm to oversee the construction project. Consultant and/or its Sub-consultants may propose on this task 4.5 Coordinate and ensure consistency and continuity across multiple construction projects 4.6 Coordinate multiple construction project activities with plant operations / project phasing / shutdowns 4.7 Coordinate and review the progress of multiple construction projects to ensure that conflicts/issues are resolved by the appropriate parties in a timely manner C15153692 Program Management Services for the RWQCP 17 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 4.8 Keep the RWQCP informed of the progress of the projects Task 5: Services for alternate project delivery (DELETED) Task 6: Budget and schedule management Consultant shall monitor overall budgets and schedules and maintain conformance with the LRFP budget and schedule. Consultant shall: 6.1 Monitor the budget and schedule of multiple projects under varying phases of design and construction 6.2 Coordinate and monitor funding activities for the projects 6.3 Prepare cash flow and forecast for the individual project and for the combined projects under the program 6.4 Prepare accounting and financing documents/reports for City, partner agencies, and funding agencies 6.5 Document accounting, financing, and reporting activities in sufficient detail, suitable for internal and outside audits Task 7: Participation with in-house project Consultant shall coordinate with RWQCP engineering group on activities of in-house projects to avoid or resolve any conflicts with schedules or work. Coordination with plant staff shall be an on-going continuous effort of the Consultant’s services. Consultant may be asked to assist RWQCP staff with minor in-house project design and/or construction management. Upon request by the RWQCP engineering staff, Consultant shall prepare the scope of work and budget. If RWQCP desires Consultant’s service for the minor in- house project, such work shall be performed under the Additional Task component of the contract. Task 8: Regulatory and partner agencies liaison Consultant shall facilitate with regulatory and partner agencies as a liaison. As needed, Consultant shall: 8.1 Prepare informational material and assist the RWQCP with the presentation of workshops and updates for the City management, Council Committees, City Council, and partner agencies 8.2 Coordinate and prepare applications and regulatory documents as needed for the projects, C15153692 Program Management Services for the RWQCP 18 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 collaborate with regulatory agencies, establish permit requirements, and assist the RWQCP in the permitting process 8.3 Update and assist the RWQCP with regulatory changes and compliance requirements Task 9: Public outreach For public relations, the city typically takes a lead role and utilizes outside help on an as needed basis. Consultant shall assist the RWQCP with any required public outreach. Most of the public outreach for the program has been done during the preparation of the LRFP. The RWQCP does not expect any project controversy or a significant need for outside assistance with public outreach. Consultant shall: 9.1 Prepare program communications plan if needed 9.2 Perform technical, regulatory and environmental analyses if needed to prepare for public outreach effort 9.3 Prepare slides, handouts, and outreach materials 9.4 Assist with public meetings 9.5 Incorporate stakeholders/public inputs 9.6 Document the outreach process, issues, discussions, goals, and outcome Task 10: Funding acquisition City anticipates funding the LRFP projects with the State Revolving fund loan. Consultant may be required to assist City with funding acquisition. When requested by the RWQCP, assist with acquisition of funding, such as the State Revolving Fund loan or bond financing. With respect to Components #3 and #4 of the OFP, consultant will be asked to seek grant funding from all available sources. Consultant shall be knowledgeable and be prepared to provide the full spectrum of services needed to secure funding. Services would include preparation of the necessary documents required by funding agency, meeting and coordination with funding agency, preparation of documents for council approval, coordination with credit review agency, etc. Task 11: Project management Consultant shall provide necessary administration, minutes, proper invoicing meeting funding agencies’ requirements, budget control, project controls, quality assurance and reviews, and professional oversight. Project staffing shall be maintained at acceptable levels to keep the project on schedule, ensure continuity of information, and satisfy the requirements of the scope of work. Task 12: Office Trailer Consultant shall provide office space, office equipment, furniture and all items required to function as a field office for managing various phases of the program. ADDITIONAL SERVICES C15153692 Program Management Services for the RWQCP 19 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 The City may elect to have Consultant perform any or all of the following additional services. Consultant shall perform these services only if pre-authorized in writing by the City Project Manager. Consultant shall provide an hourly rate sheet and include annual escalation for future years if any. 1. When requested by the RWQCP, assist with minor in-house project design and construction management 2. Assist City with public outreach efforts in excess of task 9 due to unforeseen controversies 3. Assist City with regulatory compliance or permitting efforts in excess of task 8 due to unforeseen regulatory/permitting changes. Related links 1. Biosolids Facility Plan (BFP) http://www.cityofpaloalto.org/civicax/filebank/documents/39964 2. Long Range Facility Plan (LRFP)http://www.cityofpaloalto.org/civicax/filebank/documents/32042 3. Preliminary Design for the Dewatering & Loadout Facilityhttp://www.cityofpaloalto.org/civicax/filebank/documents/32042x 4. Site Assessment and Design Guidelines for Baylands Natural Preserve http://www.cityofpaloalto.org/civicax/filebank/documents/13318 5. Palo Alto Municipal Codehttp://www.amlegal.com/nxt/gateway.dll/California/paloalto_ca/paloaltomunicipalcode?f=tmplat es$fn=default.htm$3.0$vid=amlegal:paloalto_ca 6. PA Goals, Policies and Programs http://www.cityofpaloalto.org/civicax/filebank/documents/8176 C15153692 Program Management Services for the RWQCP 20 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 \ Attachment A Long Range Facility Plan Tentative Implementation Schedule and Budget Project Title Project Start Year Project Cost Solids handling Facility Planning – 2013 Phase I – 2014 Phase II – 2015 $69,000,000 Primary Sedimentation Tank Rehabilitation 2015 $7,313,000 Lab & Environmental Services Building 2015 $17,903,763 Fixed Film Reactors Structure and Equipment 2017 $19,420,440 Headworks Facility (including Grit Removal System 2020 $38,856,627 Recycled Water Filters and Chlorine Contact Tank 2022 $14,209,044 Joint Interceptor Sewer 2022 $30,800,000 Total LRFP Program $197,502,874.00 C15153692 Program Management Services for the RWQCP 21 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 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 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Days/Weeks From NTP 1.Year One Components1, 2, & 3 52 Weeks 2.Year Two Components 1, 2, & 3 104 Weeks 3.Year Three Components 1, 2, & 3 156 Weeks 4. 5. 6. 7. 8. 9. 10. C15153692 Program Management Services for the RWQCP 22 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C12-1” YEAR 1 COMPENSATION FOR COMPONENTS 1 & 2 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 $582,807. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $641,088. 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 $582,807 and the total compensation for Additional Services does not exceed $58,281. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $164,881 (Planning & coordination) Task 2 $108,563 (Acquisition and management of project consultants) Task 3 $138,255 (Design/document reviews) Task 4 $12,381 (Services for project construction) Task 5 $0 (Deleted) Task 6 $18,002 (Budget and schedule management) Task 7 $9,210 (Participation with In-house projects) C15153692 Program Management Services for the RWQCP 23 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Task 8 $7,974 (Regulatory and partner agencies liaison) Task 9 $8,528 (Public outreach) Task 10 $27,615 (Funding acquisition) Task 11 $63,999 (Project management) Task 12 $23,400 (Office trailer) Sub-total Basic Services Year 1 $582,807 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $582,807 Additional Services (Not to Exceed) $58,281 Maximum Total Compensation $641,088 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. C15153692 Program Management Services for the RWQCP 24 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1000 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: C15153692 Program Management Services for the RWQCP 25 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C12-2” YEAR 2 COMPENSATION FOR COMPONENTS 1 & 2 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 $1,528,621. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $1,681,483. 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 $1,528,621 and the total compensation for Additional Services does not exceed $152,862. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $33,425 (Planning & coordination) Task 2 $588,383 (Acquisition and management of project consultants) Task 3 $497,282 (Design/document reviews) Task 4 $52,335 (Services for project construction) Task 5 $0 (Deleted) Task 6 $73,157 (Budget and schedule management) Task 7 $20,448 C15153692 Program Management Services for the RWQCP 26 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 (Participation with In-house projects) Task 8 $31,918 (Regulatory and partner agencies liaison) Task 9 $11,686 (Public outreach) Task 10 $0 (Funding acquisition) Task 11 $187,627 (Project management) Task 12 $16,800 (Office trailer) Sub-total Basic Services Year 2 $ 1,528,621 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $1,528,621 Additional Services (Not to Exceed) $152,862 Maximum Total Compensation $1,681,483 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. C15153692 Program Management Services for the RWQCP 27 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1000 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: C15153692 Program Management Services for the RWQCP 28 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C12-3” YEAR 3 COMPENSATION FOR COMPONENTS 1 & 2 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 $1,502,711. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $1,652,982. 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 $1,502,711 and the total compensation for Additional Services does not exceed $150,271. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $31,877 (Planning & coordination) Task 2 $558,786 (Acquisition and management of project consultants) Task 3 $375,005 (Design/document reviews) Task 4 $173,754 (Services for project construction) Task 5 $0 (Deleted) Task 6 $93,991 (Budget and schedule management) Task 7 $21,266 C15153692 Program Management Services for the RWQCP 29 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 (Participation with In-house projects) Task 8 $30,690 (Regulatory and partner agencies liaison) Task 9 $11,236 (Public outreach) Task 10 $28,694 (Funding acquisition) Task 11 $176,169 (Project management) Task 12 $16,800 (Office trailer) Sub-total Basic Services Year 3 $ 1,502,711 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $1,502,711 Additional Services (Not to Exceed) $150,271 Maximum Total Compensation $1,652,982 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. C15153692 Program Management Services for the RWQCP 30 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1000 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: C15153692 Program Management Services for the RWQCP 31 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C3-1” YEAR 1 COMPENSATION FOR COMPONENT 3 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 $105,326. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $115,859. 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 $105,326 and the total compensation for Additional Services does not exceed $10,533. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $16,179 (Planning & coordination) Task 2 $0 (Acquisition and management of project consultants) Task 3 $62,030 (Design/document reviews) Task 4 $0 (Services for project construction) Task 5 $0 (Deleted) Task 6 $7,032 (Budget and schedule management) Task 7 $0 (Participation with In-house projects) C15153692 Program Management Services for the RWQCP 32 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Task 8 $7,974 (Regulatory and partner agencies liaison) Task 9 $0 (Public outreach) Task 10 $0 (Funding acquisition) Task 11 $12,112 (Project management) Task 12 $0 (Office trailer) Sub-total Basic Services Year 1 $105,326 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $105,326 Additional Services (Not to Exceed) $10,533 Maximum Total Compensation $115,859 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. C15153692 Program Management Services for the RWQCP 33 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1000 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: C15153692 Program Management Services for the RWQCP 34 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C3-2” YEAR 2 COMPENSATION FOR COMPONENT 3 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 $118,032. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $129,835. 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 $118,032 and the total compensation for Additional Services does not exceed $11,803. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $0 (Planning & coordination) Task 2 $0 (Acquisition and management of project consultants) Task 3 $67,706 (Design/document reviews) Task 4 $0 (Services for project construction) Task 5 $0 (Deleted) Task 6 $7,313 (Budget and schedule management) Task 7 $0 (Participation with In-house projects) C15153692 Program Management Services for the RWQCP 35 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Task 8 $8,293 (Regulatory and partner agencies liaison) Task 9 $0 (Public outreach) Task 10 $21,557 (Funding acquisition) Task 11 $13,163 (Project management) Task 12 $0 (Office trailer) Sub-total Basic Services Year 2 $ 118,032 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $118,032 Additional Services (Not to Exceed) $11,803 Maximum Total Compensation $129,835 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. C15153692 Program Management Services for the RWQCP 36 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1000 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: C15153692 Program Management Services for the RWQCP 37 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C3-3” YEAR 3 COMPENSATION FOR COMPONENT 3 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 $129,684. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $142,652. 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 $129,684 and the total compensation for Additional Services does not exceed $12,968. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $0 (Planning & coordination) Task 2 $46,210 (Acquisition and management of project consultants) Task 3 $38,394 (Design/document reviews) Task 4 $0 (Services for project construction) Task 5 $0 (Deleted) Task 6 $13,014 (Budget and schedule management) Task 7 $0 (Participation with In-house projects) C15153692 Program Management Services for the RWQCP 38 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Task 8 $9,175 (Regulatory and partner agencies liaison) Task 9 $0 (Public outreach) Task 10 $8,393 (Funding acquisition) Task 11 $14,498 (Project management) Task 12 $0 (Office trailer) Sub-total Basic Services Year 3 $ 129,684 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $129,684 Additional Services (Not to Exceed) $12,968 Maximum Total Compensation $142,652 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. C15153692 Program Management Services for the RWQCP 39 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1000 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: C15153692 Program Management Services for the RWQCP 40 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 EXHIBIT “C-1” HOURLY RATE SCHEDULE RMC Water and Environment 2014 Standard Billing Rates Billing Classifications 2014 Rates Engineer-Planner-Scientist EPS-1 $ 146.00 EPS-2 $ 156.00 EPS-3 $ 168.00 EPS-4 $ 184.00 EPS-5 $ 194.00 EPS-6 $ 205.00 EPS-7 $ 215.00 EPS-8 $ 226.00 EPS-9 $ 236.00 EPS-10 $ 250.00 EPS-11 $ 265.00 EPS-12 $ 276.00 EPS-13 $ 286.00 EPS-14 $ 297.00 Intern $ 53.00 Technician TECH-1 $ 127.00 TECH-2 $ 130.00 TECH-3 $ 135.00 TECH-4 $ 140.00 TECH-5 $ 146.00 TECH-6 $ 154.00 TECH-7 $ 156.00 Administrative AD-1 $ 94.00 AD-2 $ 99.00 AD-3 $ 104.00 AD-4 $ 114.00 AD-5 $ 125.00 C15153692 Program Management Services for the RWQCP 41 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 AD-6 $135.00 AD-7 $146.00 Note: The individual hourly rates include salary, overhead and profit. Other direct costs (ODCs) such as reproduction, delivery, mileage (as allowed by IRS guidelines), and travel expenses will be billed at actual cost plus 10%. Subconsultants will be billed as actual cost plus 10%. RMC reserves the right to adjust its hourly rate structure at the beginning of each year for all ongoing contracts. CAROLLO ENGINEERS, INC. FEE SCHEDULE As of January 1, 2014 California Engineers/Scientists Hourly Rate Assistant Professional $154.00 Professional 188.00 Project Professional 223.00 Lead Project Professional 244.00 Senior Professional 265.00 Technicians Technicians 115.00 Senior Technicians 162.00 Support Staff Document Processing / Clerical 102.00 Project Equipment Communication Expense (PECE) Per DL Hour 11.70 Other Direct Expenses Travel and Subsistence at cost Mileage at IRS Reimbursement Rate Effective January 1, 2014 $.56 per mile Subconsultant cost + 10% C15153692 Program Management Services for the RWQCP 42 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev. Feb. 2014 Other Direct Cost cost + 10% Expert Witness Rate x 2.0 This fee schedule is subject to annual revisions due to labor adjustments. C15153692 Program Management Services for the RWQCP 43 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev Feb. 2014 The Covello Group, Inc. Billing Rate Schedule July 1, 2014 through June 30, 2015 Principals ……………………………………………………………………………………………………….. $205 - $255 per hour Bruce Presser, P.E. $225 Gary Skrel, P.E. $225 Construction Managers ………………………………………………………………………………….. $175 - $205 per hour Chris Davenport, P.E. $200 Mike Jaeger, P.E.; QSD/QSP $190 Resident Engineers …………………………………………………………………………………………. $140 - $185 per hour Mike Redig, P.E. $165 Danielle Green, P.E. $150 Project Controls Engineers ……………………………………………………………………………… $110 - $165 per hour Gerrit Post, P.E. $155 Andy Deal $110 Office Engineers ……………………………………………………………………………………………… $95 - $140 per hour Zack Downing $125 Andrew Matey $115 Alex Page $95 Inspectors ………………………………………………………………………………………………………. $130 - $140 per hour Dennis Budasz $135 James Williams $135 Jonathan Cowsert $130 Administrative Assistants ……………………………………………………………………………….. $80 -$95 per hour Hourly Billing Rates include all normal expenses. Extraordinary expenses, such as out-of-town travel, lodging, major field office equipment, etc. are billed at cost. Subconsultants are billed at cost plus 5% mark-up. C15153692 Program Management Services for the RWQCP 44 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev Feb. 2014 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: REQUIRE D 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. THE RMC WATER AND ENVIRONMENT DEDUCTIBLE AMOUNT OF $100,000 HAS BEEN APPROVED BY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. 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 C15153692 Program Management Services for the RWQCP 45 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 Professional Services Rev Feb. 2014 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 ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE EMAILED OR MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303. EMAIL: InsuranceCerts@CityofPaloAlto.org C15153692 Program Management Services for the RWQCP 46 DocuSign Envelope ID: 6A3702AE-16F8-4B4A-84A2-9391CB094AD5 City of Palo Alto (ID # 8476) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Extension of the State Lobbying Contract with Townsend for Two Years and $204,000 Title: Approval of Contract Amendment No. 2 with Townsend Public Affairs for State Legislative Representation to Extend the Contract for Two Years through December 31, 2019 and add $204,000 for a Total Not to Exceed Amount of $595,000 From: City Manager Lead Department: City Manager Recommended Motion Staff recommends that City Council approve the second amendment to the current agreement with Townsend Public Affairs Inc. for state legislative advocacy services to (1) increase the term length by twenty-four months from December 31, 2017 to December 31, 2019 and, (2) increase the not-to-exceed amount from $391,000 to $595,000. Background For many years, the City has contracted for state legislative advocacy services. This Sacramento based representation allows Palo Alto to have a presence and voice with our state representatives, regulators, and their Sacramento staff. Since 2014, the City has contracted with Townsend Public Affairs Inc. (Townsend) to provide this state representation. (Attachment A). The current agreement with Townsend expires on December 31, 2017. (Attachment B). Discussion State legislative advocacy generally, and through Townsend specifically, has proven effective for the City. Staff believes it is important to have Sacramento-based representatives to take actions such as collaborating with City staff in tracking issues that might impact Palo Alto, building relationships with key elected officials and their offices, testifying on behalf of the City in legislative committees, and advocating for the City in furtherance of its goals. Staff recommends the City continue to retain Townsend to provide comprehensive state legislative advocacy services. The relationship between the City and Townsend is very effective and highly collaborative, with staff of each entity communicating frequently and strategizing on advocacy regularly. Additionally, as Townsend has worked with the City for the past 2.5 years, City of Palo Alto Page 2 the firm has learned what makes Palo Alto unique and bolstered relationships with the offices of policymakers representing our City. Continuing to leverage this knowledge and relationships is an important benefit to the City. Attachment C sets out Amendment number two, extending the original agreement to December 31, 2019 and preserving the City’s usual 10-ten termination clause. Resource Impact Funding for extending the current contract by twenty-four months has an impact of $204,000. Funding for state legislative services is included in the City Manager’s Office based budget and reviewed with City Council during the annual budget hearings. Attachments: Attachment A: Original agreement Attachment B: Amendment number 1 and current agreement Attachment C: Amendment number 2 extending the term to December 2019 PURCHASINGl OOPY CITY OF PALO ALTO CONTRACT NO. C14152163 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND TOWNSEND PUBLIC AFFAIRS, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 24 day of February, 2014, ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY'), and TOWNSEND PUBLIC AFFAIRS, INC., a California corporation, located at 1401 Dove Street, Ste. 330, Newport Beach, California, 92660, Telephone (949) 399-9050 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to be represented in all state 1egislative advocacy matters ("Project") and desires to engage a consultant to provide representation 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 in Exhibit "A" in accordance with the terms and conditions contained in this Agreement. The performanceofall Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date March 1, 2014 through December 31, 2015 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is ofthe 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 promLt 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 Professional Services - - Rev. Nov.- 1-, 2011 1 2 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", including both payment for professional services and reimbursable expenses, shall not exceed 0ne Hundred Eighty Seven Thousand Dollars ($187,000.00). The applicable rates and schedule 0fpayment are set out in Exhibit "C-1", entitled 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". 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 verificationby 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. 0UALIFICATIONS/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 1egally 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 ofthe Services. SECTION 8. _ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any Professional Services Rev.Nov 1,2011 and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction ofthe Project. This obligation shall survive termination ofthe Agreement. 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 the CITY's stated construction budget, CONSULTANT shall make recommendations to the 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 ofthe 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 ofthe 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 ofa subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval ofthe city manager or his designee. SECTION 13. PROJECT MANAGEMENT.CONSULTANT will assign Niccolo De Luca as the project manager to have supervisory responsibility for the performance, progress, and execution of the Services to represent CONSULTANT during the day40-day work on the Project. Ifcircumstances cause the substitution ofthe 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. 3 Professional Services Rev. Nuv. 1,2011 3 The City's project manager is Richard Hackmann, City Manager's Office, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 617-3174. The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. 0WNERSHIP OF MATERIALS. Upon delivery, all work product, including without 1imitation, 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 1imitation upon their use. CONSULTANT agrees that all copyrights which arise from creation ofthe 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 ofthe suitability ofthe 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 1east 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 1iability 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 ofthis 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. Professional Services Rcv Nov. 1, 201-1- - 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 Kev Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or 1imits, 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 Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to 1imit CONSULTANTs 1iability 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 ofthe 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 0nly in the event of a substantial failure 0fperformance by CITY. 4 19.3. _ Upon such_suspension or termination, CONSULTANT shall-deliverto-the Professional Services Rcv. Nov. 1, 2011 5 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 ofthis Agreement: 14,15,16,19.4, 20,and25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY ofany 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 ofthe City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention ofthe 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 ofthe Services. 21.2. CONSULTANT further covenants thaL 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. Professional Services R:v.Nuv.1,2011 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 ofthe 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 REOUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the 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 the 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: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the 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. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not 1imited to Extended Producer Responsibility requirements for products and packaging. A copy ofthis policy is on file at the Purchasing Office. • Reusable/retumable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the palletsto verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City ofPalo 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 ofthe fiscal year and funds for this Agreement are no 1onger available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision ofthis Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. - 6 Professional Services -Rev.-Novr17201-1 25.1. This Agreement will be governed by the laws ofthe State of California. 25.2. 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 Califomia in the County of Santa Clara, State of California. 25.3. 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. 25.4. 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. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply.to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants ofthe parties. 25.6. If a court of competent jurisdiction finds or rules that any provision ofthis 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. 25.7. 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 ofthis Agreement. 25.8 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 1earning 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. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the 1egal capacity and authority to do so on behalfoftheir respective 1egal entities. 25.11 This Agreemerit may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement 7 Professional Services Rcv.Nov.-172011 8 IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. OF PALO TO City Manager TO INC. BY: 1 '//*/1731 4-='0/ Nam*UXuU prt*; A€.g. Title: 94ROVED «0*RM: U.6/ Senior Asst. CNy Attorne0 Attachments: EXHIBIT "A":SCOPE OF WORK EXHIBIT "B":SCHEDULE OF PERFORMANCE EXHIBIT"C":COMPENSATION EXHIBIT"C-1 „.SCHEDULE OF RATES EXHIBIT "D":INSURANCE REQUIREMENTS Professional Services R:p: Nuv. 1, 2011 EXHIBIT"A" SCOPE OF SERVICES CONSULTANT shall represent CITY in all state 1egislative advocacy matters including grant and funding advocacy. The CONSULTANT'S objective shall be to execute a comprehensive 1egislative strategy on behalf of CITY. CONSULTANT shall not attempt to achieve CITY'S goals while disadvantaging another entity, city or county. When possible, CONSULTANT shall work towards win- win scenarios. In order to achieve the CITY'S objectives, advocacy must encompass an understanding of all matters related to the CITY'S 1egislative program. CONSULTANT shall: GeneraI • Develop an annual state 1egislative strategic plan by outlining action that should be taken in a given year to achieve CITY'S goals related to 1egislation, appropriations, and grants. 0nce approved by CITY, this plan will outline an approach for working with the appropriate elected officials and agencies on CITY'S 1egislative priorities. • Track 1egislation, appropriations, and grants through the entire 1egislative process so CITY knows both the status of 1egislation, appropriations, and grants and when advocacy measures, such as correspondence, are necessary. • Conduct a strategic assessment of 1egislative opportunities by gaining a complete understanding of CITY priorities and services to ensure that CITY is taking advantage of every opportunity·for state assistance whether through 1egislation, appropriations, or grants. • Provide assistance in setting short and 1ong-term legislative priorities for CITY and perform in- depth analysis of current and anticipated 1egislation and state funding opportunities on an on- going basis. Grants • Assist CITY in obtaining state grants by making CITY aware of grant opportunities and helping CITY obtain them through coordination with state agencies. Reporting • On a weekly basis, conduct conference calls with CITY staffto ensure the state 1egislative program is being implemented and to inform them of the status of 1egislation, appropriations, and grants. • On a weekly basis, provide CITY with analysis of current events and the implications they may have on CITY'S 1egislative program. • On a weekly basis, provide a comprehensive picture of what actions are expected by the Assembly, Senate, and Governor. Correspondence • Work with CITY to help draft correspondence that will be used to influence 1egislation and seek funding opportunities. • When appropriate, review CITY press releases prior to distribution. MeetinEs • When appropriate, attend meetings on behalfofCITY and, when appropriate, provide spoken comments, testimony, and/or written correspondence on behalf of CITY. _L When_aPpropIiate, arrange meetings for CITY officials with state officials and their staffs and prepare CITY officials for those meetings in order to optimize effectiveness. Professional Services Rev.Nuv.1,2011 10 Coalition Building • Build support for CITY endorsed.legislation, appropriations, and grants by working with stakeholders at the local, regional, and state 1evel. Support shall be conveyed through 1etters, phone calls, and visits. 11 Professional Services Rcv.Nov.1,2011 EXHIBIT"B" SCHEDULE OF PERFORMANCE (NOT APPLICABLE) I2 Professional Services Rcv.Nuv. 1, 2011 EXIIIBIT "C" COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions ofthis Agreernent based on the rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "A" ("Services") and reimbursable expenses shall not exceed $187,000.00. CONSULTANT agrees to complete all 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. 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 anticipated to be more than $0.00 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, 1evel of effort, and CONSULTANT's proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1.The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. 13 Professional Services Rev.Nuv.1,2011 Advocacy Services EXHIBIT "C-1" RATE SCHEDULE (22 months @ $8,500.00 = NTE $187,000.00) 14 $8,500.00/Per Month Professional Services RevNuv.1,2011 YES YES REQUIRE D YES YES YES YES I. II. III. EXHIRIT "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 CALIFORNLL AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS 5 PECIFIED, BELOW· MINIMUM LIMITS TYPE OF COVERAGE WORKER'S COMPENSATION EMPLOYER'S LIABILITY GENERAL LlABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND 0MISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE STATUTORY STATUTORY REQUIREMENT BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED ALL DAMAGES EACH 0CCURRENCE $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 AGGREGATE $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MA1NTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENL THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT 0NLY 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 EMPLOYEE& rNSURANCE 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. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OFTHEOPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY 0THER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDmONAL INSUREDS. B. CROSS LIABILITY 15 Professional Services Rev Nov.-1,2011 THE NAMING OF MORE THAN 0NE PERSON, FIRM, OR CORPORAT[ON AS INSUREDS UNDER THE POLICY SHALL NOL FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST AN0THER, 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 0THER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITrEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITrEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 16 Professional Services RovNov.1,2011 Professional Services Rev. Nov. 1, 2011 13 AMENDMENT NO. 1 TO CONTRACT NO. C14152163 BETWEEN THE CITY OF PALO ALTO AND TOWNSEND PUBLIC AFFAIRS, INC. This Amendment No. 1 to Contract No. C14152163 (“Contract”) is entered into December 8, 2015, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and TOWNSEND PUBLIC AFFAIRS, INC., a California corporation, located at 1401 Dove Street, Ste. 330, Newport Beach, California, 92660, Telephone (949) 399-9050 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of representation in all state legislative advocacy matters. B. CITY intends to extend the term and increase compensation by $204,000.00 from $187,000.00 to $391,000.00 for continuation of services per 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 2 TERM is hereby amended to read as follows: “SECTION 2. TERM. The term of this Agreement shall be from the date March 1, 2014 through December 31, 2017 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. 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 Three Hundred Ninety One Thousand Dollars ($391,000.00). 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. 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”. ” SECTION 3. 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: DocuSign Envelope ID: C5324E77-0670-4349-A9D7-8DEE2939F05FDocuSign Envelope ID: 285007BB-8A07-45B1-8E05-57509E4CCA52 Professional Services Rev. Nov. 1, 2011 14 a. Exhibit “C” entitled “COMPENSATION”. b. Exhibit “C1” entitled “RATE SCHEDULE”. SECTION 4. 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: TOWNSEND PUBLIC AFFAIRS, INC. Attachments : EXHIBIT "C": COMPENSATION EXHIBIT "C1": RATE SCHEDULE DocuSign Envelope ID: C5324E77-0670-4349-A9D7-8DEE2939F05F President DocuSign Envelope ID: 285007BB-8A07-45B1-8E05-57509E4CCA52 Senior Deputy City Attorney City Manager Professional Services Rev. Nov. 1, 2011 15 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed $391,000.00. CONSULTANT agrees to complete all 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. 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 anticipated to be more than $0.00 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 expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: C5324E77-0670-4349-A9D7-8DEE2939F05FDocuSign Envelope ID: 285007BB-8A07-45B1-8E05-57509E4CCA52 16 Revision April 28, 2014 EXHIBIT “C-1” RATE SCHEDULE Advocacy Services $8,500.00/Per Month (46 months @ $8,500.00 = NTE $391,000.00) DocuSign Envelope ID: C5324E77-0670-4349-A9D7-8DEE2939F05FDocuSign Envelope ID: 285007BB-8A07-45B1-8E05-57509E4CCA52 Certificate Of Completion Envelope Number: C5324E7706704349A9D78DEE2939F05F Status: Completed Subject: Please DocuSign this document: C14152163 Townsend Amendment No 1.pdf Source Envelope: Document Pages: 4 Signatures: 1 Envelope Originator: Certificate Pages: 2 Initials: 0 Christopher Anastole AutoNav: Enabled EnvelopeId Stamping: Enabled 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 199.33.32.254 Record Tracking Status: Original 11/2/2015 8:06:03 AM PT Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp Christopher Townsend ctownsend@townsendpa.com President Security Level: Email, Account Authentication (None)Using IP Address: 174.47.27.138 Sent: 11/2/2015 8:10:52 AM PT Viewed: 11/3/2015 6:07:34 PM PT Signed: 11/4/2015 10:23:18 AM PT Electronic Record and Signature Disclosure: Not Offered ID: 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 Richard Hackmann Richard.Hackmann@CityofPaloAlto.org Security Level: Email, Account Authentication (None) Sent: 11/4/2015 10:23:19 AM PT Electronic Record and Signature Disclosure: Not Offered ID: Nikki Yamat nyamat@townsendpa.com Security Level: Email, Account Authentication (None) Sent: 11/4/2015 10:23:20 AM PT Electronic Record and Signature Disclosure: Not Offered ID: Notary Events Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 11/4/2015 10:23:20 AM PT DocuSign Envelope ID: 285007BB-8A07-45B1-8E05-57509E4CCA52 Envelope Summary Events Status Timestamps Certified Delivered Security Checked 11/4/2015 10:23:20 AM PT Signing Complete Security Checked 11/4/2015 10:23:20 AM PT Completed Security Checked 11/4/2015 10:23:20 AM PT DocuSign Envelope ID: 285007BB-8A07-45B1-8E05-57509E4CCA52 Certificate Of Completion Envelope Id: 285007BB8A0745B18E0557509E4CCA52 Status: Completed Subject: Please DocuSign this document: C14152163 Townsend Amendment No 1 Council Ready.pdf Source Envelope: Document Pages: 6 Signatures: 2 Envelope Originator: Certificate Pages: 5 Initials: 0 Christopher Anastole AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 199.33.32.254 Record Tracking Status: Original 12/8/2015 7:52:38 AM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp Albert S Yang Albert.Yang@CityofPaloAlto.org Senior Deputy City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Using IP Address: 199.33.32.254 Sent: 12/8/2015 7:56:22 AM Viewed: 12/8/2015 8:45:05 AM Signed: 12/8/2015 8:47:03 AM Electronic Record and Signature Disclosure: Not Offered ID: James Keene James.Keene@CityofPaloAlto.org City Manager City of Palo Alto Security Level: Email, Account Authentication (None) Using IP Address: 199.33.32.254 Sent: 12/8/2015 8:47:04 AM Resent: 12/14/2015 2:28:00 PM Resent: 12/14/2015 2:28:15 PM Viewed: 12/15/2015 3:19:13 PM Signed: 12/15/2015 3:19:24 PM Electronic Record and Signature Disclosure: Accepted: 4/14/2015 5:40:07 PM ID: 44fe333a-6a81-4cb7-b7d4-925473ac82e3 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 Richard Hackmann Richard.Hackmann@CityofPaloAlto.org Security Level: Email, Account Authentication (None) Sent: 12/15/2015 3:19:26 PM Electronic Record and Signature Disclosure: Not Offered ID: Carbon Copy Events Status Timestamp Tabatha Boatwright Tabatha.Boatwright@CityofPaloAlto.org Administrative Associate III City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 12/15/2015 3:19:27 PM Electronic Record and Signature Disclosure: Not Offered ID: Notary Events Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 12/15/2015 3:19:27 PM Certified Delivered Security Checked 12/15/2015 3:19:27 PM Signing Complete Security Checked 12/15/2015 3:19:27 PM Completed Security Checked 12/15/2015 3:19:27 PM Electronic Record and Signature Disclosure CONSUMER DISCLOSURE From time to time, City of Palo Alto (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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All notices and disclosures will be sent to you electronically Unless you tell us otherwise in accordance with the procedures described herein, we will provide electronically to you through your DocuSign user account all required notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to you during the course of our relationship with you. To reduce the chance of you inadvertently not receiving any notice or disclosure, we prefer to provide all of the required notices and disclosures to you by the same method and to the same address that you have given us. Thus, you can receive all the disclosures and notices electronically or in paper format through the paper mail delivery system. If you do not agree with this process, please let us know as described below. Please also see the paragraph immediately above that describes the consequences of your electing not to receive delivery of the notices and disclosures electronically from us. Electronic Record and Signature Disclosure created on: 10/1/2013 3:33:53 PM Parties agreed to: James Keene How to contact City of Palo Alto: You may contact us to let us know of your changes as to how we may contact you electronically, to request paper copies of certain information from us, and to withdraw your prior consent to receive notices and disclosures electronically as follows: To contact us by email send messages to: david.ramberg@cityofpaloalto.org To advise City of Palo Alto of your new e-mail address To let us know of a change in your e-mail address where we should send notices and disclosures electronically to you, you must send an email message to us at david.ramberg@cityofpaloalto.org and in the body of such request you must state: your previous e-mail address, your new e-mail address. 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By checking the 'I Agree' box, I confirm that: • I can access and read this Electronic CONSENT TO ELECTRONIC RECEIPT OF ELECTRONIC CONSUMER DISCLOSURES document; and • I can print on paper the disclosure or save or send the disclosure to a place where I can print it, for future reference and access; and • Until or unless I notify City of Palo Alto as described above, I consent to receive from exclusively through electronic means all notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to me by City of Palo Alto during the course of my relationship with you. Professional Services Rev. Nov. 1, 2011 13 AMENDMENT NO. 2 TO CONTRACT NO. C14152163 BETWEEN THE CITY OF PALO ALTO AND TOWNSEND PUBLIC AFFAIRS, INC. This Amendment No. 2 to Contract No. C14152163 (“Contract”) is entered into January 1, 2018 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and TOWNSEND PUBLIC AFFAIRS, INC., a California corporation, located at 1401 Dove Street, Ste. 330, Newport Beach, California, 92660, Telephone (949) 399-9050 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of representation in all state legislative advocacy matters. B. CITY intends to extend the term and increase compensation by $204,000 from $391,000 to $595,000 for continuation of services per 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 2 TERM is hereby amended to read as follows: “SECTION 2. TERM. The term of this Agreement shall be from the date March 1, 2014 through December 31, 2019 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. 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 Five Hundred Ninety Five Thousand Dollars ($595,000). 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. 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”. SECTION 3. 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: DocuSign Envelope ID: E0B9EA31-4297-4C00-85A0-8E5F6D464F5D Professional Services Rev. Nov. 1, 2011 14 a. Exhibit “C” entitled “COMPENSATION”. b. Exhibit “C-1” entitled “RATE SCHEDULE”. SECTION 4. 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: TOWNSEND PUBLIC AFFAIRS, INC. Attachments : EXHIBIT "C": COMPENSATION EXHIBIT "C-1": RATE SCHEDULE DocuSign Envelope ID: E0B9EA31-4297-4C00-85A0-8E5F6D464F5D President Christopher Townsend Professional Services Rev. Nov. 1, 2011 15 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement 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: NONE All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: E0B9EA31-4297-4C00-85A0-8E5F6D464F5D 16 Revision April 28, 2014 EXHIBIT “C-1” RATE SCHEDULE Advocacy Services $8,500/Per Month (70 months @ $8,500.00 = NTE $595,000.00) DocuSign Envelope ID: E0B9EA31-4297-4C00-85A0-8E5F6D464F5D Certificate Of Completion Envelope Id: E0B9EA3142974C0085A08E5F6D464F5D Status: Completed Subject: Please DocuSign: C14152163 Townsend Amendment No 2.pdf Source Envelope: Document Pages: 4 Signatures: 1 Envelope Originator: Certificate Pages: 2 Initials: 0 Christopher Anastole AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 12.220.157.20 Record Tracking Status: Original 10/4/2017 9:25:18 AM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Signer Events Signature Timestamp Christopher Townsend ctownsend@townsendpa.com President Security Level: Email, Account Authentication (None)Using IP Address: 174.47.27.138 Sent: 10/4/2017 9:30:07 AM Resent: 10/12/2017 3:56:30 PM Viewed: 10/12/2017 6:59:35 PM Signed: 10/13/2017 5:08:42 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 Khashayar Alaee Khashayar.Alaee@CityofPaloAlto.org Senior Management Analyst City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 10/13/2017 5:08:42 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Heather Dauler Heather.Dauler@CityofPaloAlto.org Security Level: Email, Account Authentication (None) Sent: 10/13/2017 5:08:43 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 10/13/2017 5:08:43 PM Envelope Summary Events Status Timestamps Certified Delivered Security Checked 10/13/2017 5:08:43 PM Signing Complete Security Checked 10/13/2017 5:08:43 PM Completed Security Checked 10/13/2017 5:08:43 PM Payment Events Status Timestamps City of Palo Alto (ID # 8562) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Federal advocacy agreement with VSA starting January 1, 2018 and ending December 31, 2022 Title: Approval of a Contract With Van Scoyoc Associates Inc. for Federal Legislative Advocacy Services for a term of Four Years, from January 1, 2018 to December 31, 2022, With a Total Not-to-Exceed Amount of $331,200 From: City Manager Lead Department: City Manager Recommendation Authorize the City Manager to execute a contract with Van Scoyoc Associates Inc. for federal legislative advocacy services for a term of 4 years, from January 1, 2018 to December 31, 2022, with a total not to exceed amount of $331,200 over the full term of the agreement. Background For many years, the City has contracted for federal legislative advocacy services. This Washington-DC based representation affords Palo Alto a presence and voice with our federal representatives. From 2012 to present day, the City has contracted with Van Scoyoc Associates Inc. (VSA) to provide this federal representation; the current agreement with VSA expires on December 31, 2017. To ensure the City continues to receive the most effective and financially efficient representation and because the current agreement will soon expire, staff issued a Request for Proposal (RFP) for federal legislative services in July 2017. The RFP was posted with the bidding system used by the City, which notified 153 vendors. Additionally, the RFP was sent directly to six DC-based lobbying firms, including VSA. After a month-long bidding window, only VSA responded. Discussion The new contract with VSA (Attachment A) represents the continuation of the City’s relationship with the firm, and allows VSA to continue leveraging its knowledge of City issues with policymakers in D.C. Based on our past and present experiences with VSA and the recent issuance of an RFP, staff suggests a contract length of 48 months. VSA agreed to reduce its monthly fee amount to $6,500, which is $1,500 lower than its current fee of $8,000. City of Palo Alto Page 2 This new monthly amount coupled with the term length allows the City to capture significant savings while preserving the City’s standard ten-day termination clause, which allows the City to end the agreement prior to the full 48 months. The not to exceed amount of the new agreement is $331,200, representing the $6,500 monthly retainer plus a potential monthly fee of $400 in expenses. The monthly expense fee, rarely used by VSA, represents $100 less than the current monthly amount of $500. Resource Impact Funding for January 1, 2018 to July 31, 2018 is included in the Fiscal Year 2018 Adopted Budget for the City Manager’s Office. Funding for federal legislative services is included in the City Manager’s Office annual budget and reviewed with City Council during the annual budget hearings. Funding for subsequent years of this contract is subject to the annual appropriation of funds through the annual budget process. Attachments: Attachment A: Agreement with VSA 1of 17 CITY OF PALO ALTO CONTRACT NO. C18169630 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND VAN SCOYOC ASSOCIATES, INC., FOR PROFESSIONAL SERVICES This Agreement is entered into on this 1st day of January, 2018, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and VAN SCOYOC ASSOCIATES, INC., a Washington DC Corporation, located at 1201 Maryland Ave., SW, Suite 880, Washington, D.C. 20024 (PH) 202-638-1950, ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to obtain Federal Legislative Representation (“Project”) and desires to engage CONSULTANT to provide Federal Legislative and Regulatory Representation to advance the City’s objectives in Washington DC (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 31, 2021 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: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 2 of 17 SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Three Hundred Thirty One Thousand Two Hundred Dollars ($331,200.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit 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: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 3 of 17 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 Steven O. Palmer to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 4 of 17 CITY’s project manager is Heather Dauler, City Manager’s Office, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone (650) 329-2214. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the 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, DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 5 of 17 ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving 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 DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 6 of 17 only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. 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 DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 7 of 17 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 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 DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 8 of 17 addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and 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 DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 9 of 17 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: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 10 of 17 CONTRACT No. C18169357 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: VAN SCOYOC ASSOCIATES, 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: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Steve Palmer Vice President Professional Services Rev. April 27, 2016 11 of 17 EXHIBIT “A” SCOPE OF SERVICES CONSULTANT to provide federal legislative representation per the following: Work with CITY staff to implement the CITY’s Federal advocacy and action plans on energy, transportation, flood control, housing, tax, telecommunications, and other federal issues that might arise. Continue to build and strengthen working relationships and promote the CITY’s Federal legislative agenda. Prepare regular summaries of congressional hearings, committee meetings, floor debates, regulatory actions, budgetary and tax proposals, and third party analysis of issues of concern. As needed, draft legislation, analyze Federal grant proposals, prepare briefings and updates, and travel to Palo Alto to meet with CITY staff and elected officials. Advocate for the CITY’s priorities and examine which needs and assets will create momentum and fit Federal trends for the best chances of Congressional and Executive Branch support. Evaluate how best to achieve the CITY’s long-term goals and examine several methods for securing Federal support for projects and programs. As needed, analyze budget requests and forecasts for policies and programs of importance to the CITY, including white papers and public relations materials, legislative or report language, support or request letters, any necessary forms for appropriations or authorizations requests, and, a briefing book for pertinent Members of Congress, House and Senate Committees, the Executive Branch agencies, and their staffs. Provide other regular and usual advocacy services for the CITY in support of its financial and legislative objectives, including, but not limited to: meeting with elected and appointment officials or their staff, meeting with committee staff, attending or testifying in hearings, communicating with federal offices on behalf of the CITY, tracking relevant congressional and agency actions, preparing regular reports for CITY staff, engaging in stakeholder meetings and developing key relationships, and preparing and/or delivering letters of support, concern, or opposition, as needed. Assist CITY staff with any CITY visits to Washington, D.C., including scheduling meetings, preparing briefing sheets and talking points, attending meetings, and following-up with staff after meetings. Communicate with CITY staff as needed and as reasonably requested via email and calls. DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 12 of 17 EXHIBIT “B” SCHEDULE OF PERFORMANCE (Not Applicable) DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 13 of 17 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, 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. 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 $312,000.00 Federal Legislative Representation (48 months @ $6,500.00 per month) Reimbursable Expenses $19,200.00 Total Basic Services and Reimbursable expenses $331,200.00 Maximum Total Compensation $331,200.00 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the greater Washington, D.C. area on City business, including transportation and meals, will be reimbursed at actual cost subject to the following conditions: • Meals will be reimbursed pursuant to section (B). • Air travel costs will be reimbursed at the economy coach class pricing level for the most direct route to the final destination, which could reasonably include scheduled layovers. • Any hotel stay shall be reimbursed at a single occupancy, standard, non- DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 14 of 17 deluxe level. • Any rental cars will be reimbursed at the economy or compact pricing level, unless the upgrade is provided by the rental agency at no cost. B. Meals within in furtherance of City business will be reimbursed at actual cost subject to the following conditions: • The City will not reimburse any alcohol purchases. • Meals shall be reimbursed at the daily per diem rate by set by the U.S. General Services Administration website: https://www.gsa.gov/portal/content/104877 • The City will not reimburse meals attended solely by Consultant, its employees or agents, City Council members, City staff, or any combination thereof. • Reimbursement requests must include a list of attendees and receipt(s) All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $3,000.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 15 of 17 EXHIBIT “C-1” SCHEDULE OF RATES Monthly Federal Legislative Representation $6,500.00 per month (48 months x $6,500.00 = $312,000.00) DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 16 of 17 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. B. CROSS LIABILITY DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C Professional Services Rev. April 27, 2016 17 of 17 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.A SP DocuSign Envelope ID: 174483DE-07B3-4AB6-8C40-B4805CD1C94C City of Palo Alto (ID # 8451) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Approval of Fiscal Year 2017 Reappropriation Requests and Budget Amendments Title: Approve the Fiscal Year 2017 Reappropriation Requests to be Carried Forward into Fiscal Year 2018 and Approve Budget Amendments in Various Funds From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the City Council amend the Fiscal Year 2018 Budget Appropriation Ordinance for various funds as identified in Attachment A and various capital projects as identified in Attachment B. Background As a part of the fiscal year-end process, staff reviews the City’s unencumbered and unspent appropriations of the fiscal year just ended, along with the City’s spending plans. Encumbered amounts are those subject to the legal claims of other parties due to contractual obligations (for example, commitments made through purchase orders), which are carried forward from one fiscal year to the next. Each year there are a small number of important projects which staff was not able to complete or encumber funds against. The reappropriation process allows staff to bring forward funding recommendations to City Council to continue these projects. On September 22, 2014, the City Council approved a recommendation to amend Chapter 2.28, Section 2.28.090 of the Municipal Code, reducing the previous two-step reappropriations process (preliminary and final reappropriation authorization) to one step as long as the Administrative Services Director certifies that sufficient unencumbered and unexpended funds are available in the current Fiscal Year to be carried forward to the subsequent Fiscal Year. Additionally, the City Council amended the Municipal Code to eliminate the provision allowing for the automatic reappropriation of capital project funds. However, capital projects may be delayed or deferred for various reasons. Therefore, there remains a need to carry forward funds in some instances. This carryforward is completed through a review of the status of projects as part of the annual budget process and built into the annual adopted budget. Now City of Palo Alto Page 2 that the Fiscal Year 2017 has closed and staff has processed necessary accounting transactions, any unexpended and unencumbered funds for each capital project have been reviewed one more time. Based on that review, staff recommends capital dollars remaining for some projects in various funds through Fiscal Year 2017 be reappropriated to Fiscal Year 2018. Also, as part of this review, staff realized that for some projects too much funding was recommended for reappropriation as additional expenditures occurred in Fiscal Year 2017. Therefore, this staff report also recommends reversing a portion of previously authorized reappropriations. Discussion Attachment A identifies those operating budget reappropriation requests that staff recommends for approval, while Attachment B lists recommended capital project reappropriations. With the submission of this report for City Council consideration, the Administrative Services Director certifies sufficient unencumbered and unexpended funds are available from Fiscal Year 2017 to be carried forward to Fiscal Year 2018. The projects for which operating budget reappropriations are recommended can generally be grouped into the following categories: Timing and Workload Delays: Certain projects were delayed due to competing workload demands, appropriation of funds late in the fiscal year, or other unanticipated delays. Examples of projects in this category include but are not limited to: Police Modems ($63,000), Body Worn Cameras ($58,000), Retiree Medical (OPEB) Actuarial Study ($50,000), Risk Assessment Consultancy ($50,000), Human Service Resource Allocation ($50,000), Art Center Equipment Repair ($49,130), Council Meeting Radio Broadcast Services ($40,000), and Acterra Donkey Maintenance Grant ($15,000). Technology Services: Funding was approved for technology system evaluation and upgrade projects but contracts were not awarded by the end of the fiscal year. Projects in this category include the Service Management (ITSM) Tool ($160,000), Council Chambers AV Design ($152,000), Data Center Failover Project ($120,000), Virtual Library software ($75,000), Police Public Safety Mobile Responder Technology ($82,000), and Project Portfolio Management (PPM) Tool ($40,000). Library Donation and Grant: In June 2015, the City received a $320,000 donation from the Palo Alto Library Foundation. The Library has utilized this funding for the purchase of additional technology, such as tablets, e-readers, and other devices for staff development and customer instruction. This action will reappropriate $83,530 necessary for contractual services to continue workflow efficiency improvements, provide staff training, and help improve customer service efforts for the new facilities and products. An additional reappropriation of $104,900 will fund the exploration of technologies that complement the new service platform and aid in further staff development and customer instruction. City of Palo Alto Page 3 Human Services Resource Allocation Process (HSRAP) Reserve: At the June 9, 2014 City Council meeting, the Council established a one-time reserve of $50,000 for the HSRAP as part of the Budget Adoption for Fiscal Year 2015 and remained unspent through the close of Fiscal Year 2017. These unspent dollars are requested to be reappropriated to FY 2018. Teen Services Programs: At the June 2, 2014 City Council meeting, the City Council approved a recommendation from the Policy and Services Committee to use a portion of the net revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 to fund Teen Programs for Fiscal Year 2015 (CMR #4776). Staff returned to Policy and Services in the fall of 2015 for Committee Review of the FY 2015 and FY 2016 use of the Bryant Street Garage Fund for Teen Services and options for a FY 2017 spending plan (CMR #6167). Staff anticipates returning to City Council during Fiscal Year 2018 to present an updated spending plan outlining how funds will be used to enhance the scope and quality of programs. Teen Services programming includes but is not limited to: makeX, Project Enybody, Click PA, Ghost Bike, and Ceramics class drop-ins. As a result, this action will reappropriate $309,607 to continue supporting these programs as well as a sustainable, long-term approach for Teen Services utilizing Bryant Street funds. Capital Reappropriations: As discussed in the Background section of this report, starting with the Fiscal Year 2016 capital budget, all capital project reappropriations require City Council approval. The FY 2018 Adopted Budget included approximately $60.7 million in reappropriated funds, across all City funds based on estimates of anticipated spending in FY 2017. Since the adoption of the capital budget, some adjustments and refinements to project reappropriations are required since FY 2017 year-end actuals and projects costs have been updated. These primarily reflect either increases or decreases to assumed reappropriations in the FY 2018 Adopted Budget: o Additional reappropriations are recommended, as project expenditures originally anticipated to occur before the end of FY 2017 will now likely occur in FY 2018; o Downward adjustments in FY 2017 are recommended, as some expenses were not anticipated to occur until FY 2018 and were therefore reappropriated in the budget document to FY 2018. However, the activities were realized in Fiscal Year 2017 and therefore an adjustment to reduce the FY 2018 appropriation is recommended. In addition, revenue adjustments are necessary for several projects funded by revenue that is paid to the City on a reimbursement basis, usually grants. In order to align the actual revenue collected for the projects, revenue estimates are recommended for reappropriation to the year it will be reimbursed from the granting agency. The table on the following page summarizes the recommended net reappropriation adjustments as detailed in Attachment B. These Fiscal Year 2018 adjustments represent the City of Palo Alto Page 4 final step in the City Council-approved change to the reappropriation process. There are sufficient expenditure savings in Fiscal Year 2017 to support all recommended reappropriation adjustments. It should be noted that the revised process and active review of all project reappropriations results in a reduced level of carryforward from one year to the next, compared to the process of automatically carrying forward all unspent capital funding. A total of $25.7 million, which would have been reappropriated under the prior model, is being returned to reserves across several funds, including $0.5 million in the Capital Improvement Fund. Fund Number of Projects Recommended Revenue Reappropriation Adjustment Recommended Expense Reappropriation Adjustment Airport Fund 4 $287,953 $20,671 Capital Improvement Fund 51 $750,591 $1,069,453 Cubberley Property Infrastructure Fund 4 $0 $314,610 Electric Fund 16 $0 $2,576,039 Fiber Optics Fund 1 $0 $136,824 Gas Fund 5 $0 $290,879 Storm Drainage Fund 2 $0 $963,482 Wastewater Collection Fund 4 $0 $159,316 Wastewater Treatment Fund 4 $0 ($6,890,986) Water Fund 7 $0 $1,292,320 Technology Fund 5 $0 $353,286 Vehicle Replacement and Maintenance Fund 3 $0 ($2,002,828) Total All Funds 106 $1,038,544 ($1,716,934) There are several projects that were over expended in Fiscal Year 2017 that did not have reappropriated funding to reduce in FY 2018 and return to FY 2017. In order to keep the overall projects’ budgets the same across the entire 5 year CIP, the projects noted below will be reduced in FY 2018 and increased in FY 2017 as part of the Fiscal Year 2017 Year End process. City of Palo Alto Page 5 Project ID Project Title Fund FY 2018 Project Adjustment PE-14015 Lucie Stern Buildings Mechanical and Electrical Upgrades Capital Improvement Fund ($104,641) PE-15007 New Downtown Parking Garage Capital Improvement Fund ($405,083) PE-86070 Street Maintenance Capital Improvement Fund ($420,867) PL-04010 Bicycle and Pedestrian Plan Improvement Project Capital Improvement Fund ($31,324) SD-13003 Matadero Creek Storm Water Pump Station and Trunk Line Improvements Storm Drainage ($64,388) WQ-80022 System Flow Meters Wastewater Treatment ($89,705) WS-80013 Water System, Customer Connections Water ($239) Total All Funds ($1,116,247) Resource Impact The requested items have been previously reviewed and approved by City Council as part of annual budget processes. The Director of Administrative Services has certified that sufficient funds exist for the recommended Fiscal Year 2017 Operating Budget reappropriations (Attachment A) and Capital Budget reappropriations (Attachment B). Staff recommends $1.4 million in carryover funds in the General Fund, $0.6 in Internal Service Funds and $0.3 million in Special Revenue Funds. For capital projects staff recommends $0.4 million to be added to reappropriations assumed in the FY 2018 Adopted Budget in the Capital Improvement Funds and $0.8 million in additional revenue. Also recommended is a net $1.6 million reduction in the various Enterprise Funds with additional revenue of $0.3 million, and a net reduction of $1.6 million in the Internal Service Funds. Policy Implications This recommendation is consistent with adopted Council policy. Environmental Review The action recommended is not a project for the purposes of the California Environmental Quality Act. Attachments: Attachment A: Operating FY 2017 Reappropriation Requests Attachment B: FY 17 to FY 18 CIP Reappropriations FY 2018 Operating Budget Adjustments: FY 2017 Reappropriations ATTACHMENT A Attachment A - 1 OF 6 Fund Name Department Title Description Recommended Adjustment General Fund Administrative Services Administration Other Post-Employment Benefits (OPEB) Actuarial Study This action reappropriates $50,000 for an OPEB Actuarial Study focused on retiree medical benefits in FY 2018. The OPEB actuarial study is done every 2 years. The actuarial studies are reported to the City Council and inform financial decision-making and planning regarding active employees and retirees. 50,000$ General Fund Administrative Services Administration Consultant to Conduct Risk Assessment and provide a consolidated report for GASB 68 This action reappropriates $50,000 to fund a risk assessment for three special funds and provide a consolidated report for GASB 68. As part of the City's Comprehensive Annual Financial Report, a consolidated report is needed for GASB 68 reporting of the City's miscellaneous and safety risk pools. A third party review some of the key funds in the organization will help determine if there any weaknesses in the structure, controls, segregation of duties or financial reviews. These projects were delayed in FY 2017 due to vacancies. 50,000$ General Fund Administrative Services Administration Pension & OPEB Modeling Software This action reappropriates $20,000 for software that can model Pension and OPEB liabilities. This software is expected to provide a comprehensive dashboard that conveys, analyzes, and interacts with dynamic information. It is anticipated that these features will bolster the City's modeling capability with regards to pension benefits and other pensionable benefits such as retiree medical. Due to contract negotiations, the procurement was not completed in time for the FY 2017 year end close. 20,000$ General Fund Community Services Department Administration and Human Services Human Services Resource Allocation Process Reserve This action reappropriates the Human Services Resource Allocation Program (HSRAP) Reserve into Fiscal Year 2018. At the June 9, 2014 City Council meeting, the Council established a one-time reserve of $50,000 for the HSRAP as part of the Budget Adoption for Fiscal Year 2015. This reserve funding has remained unspent through the close of Fiscal Year $ 50,000 General Fund Community Services Department Arts and Sciences Art Center Bequest This action provides funding for the repair and replacement of various equipment in the Palo Alto Art Center's Ceramics Studio. During Fiscal Year 2017, the Palo Alto Art Center received a bequest of $54,350 from the Sherrie Innis Estate specific to the City's ceramics program that the Council approved at the June 17, 2017 City Council meeting. The Ceramics Studio has multiple pieces of equipment that will need repair or replacement in Fiscal Year 2018. The program does not have budgeted funds programmed for major equipment replacement and repair but will use the bequest for those needs. 49,130$ FY 2018 Operating Budget Adjustments: FY 2017 Reappropriations ATTACHMENT A Attachment A - 2 OF 6 Fund Name Department Title Description Recommended Adjustment General Fund Community Services Department Teen Programs Bryant Street Garage Fund This action reappropriates remaining funds in the Bryant Street Garage Teen Program that were previously allocated from the net revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 to fund Teen Programs. Community Services staff continues to evaluate the best use of the Mitchell Park Community Center and the Teen Center for the best use of the facility and programming for Teen Services at the Teen Center and elsewhere throughout the City utilizing the Bryant Street Funds. The reappropriation of these funds ensures appropriate resources will be available for the provision of Teen Services and for a long-term approach to the delivery of these services. 309,607$ General Fund City Clerk's Office Administration Council Meeting Radio Broadcast Services This action reappropriates funds for radio broadcast services previously rendered. These services were for radio broadcasts of City Council meetings that occurred prior to Fiscal Year 2018. There was a significant invoicing delay that caused the need for the reappropriation. 40,000$ General Fund Library Collection & Technology Services Technology tools from Library Foundation Donation & Pacific Library Partnership Grant This action reappropriates funding to purchase technology tools for staff development and customer instruction. The Library purchases and utilizes technology that meets the expectations of a community with high technical aptitude. To successfully adopt and keep pace with new technology, funds from donations and grants are used to augment technology tools and training. 104,900$ General Fund Library Administration Contractual Services for Workflow Efficiency, Staff Training, and Customer Service Improvements This action reappropriates funding for contractual services to improve workflow efficiency, provide staff training, and enhance customer service improvements for new facilities and new products. With the implementation of the new library service platform, the adoption of Lean Library Principles to library operations, and the ongoing education needed to adopt new technologies, this action will provide funding to improve and support outreach efforts and staff development/training. 83,530$ General Fund Office Of Sustainability Reserve Sustainability Reserve This action reappropriates the Sustainability Reserve, originally appropriated in FY 2017 and unspent through June 30, 2017, into FY 2018. As part of Budget Adoption for FY 2017, the Council established a one- time reserve of $250,000 to potentially fund specific requests brought forth by the Office of Sustainability. Potential uses of the reserve include community engagement around the S/CAP, S/CAP implementation scenarios, and management of existing and pending pilots. 250,000$ FY 2018 Operating Budget Adjustments: FY 2017 Reappropriations ATTACHMENT A Attachment A - 3 OF 6 Fund Name Department Title Description Recommended Adjustment General Fund Police Technical Services Body Worn Cameras This action reappropriates funding necessary to purchase body worn cameras for sworn Police personnel on duty. These cameras integrate with and enhance the current in-car camera system, which only capture a portion of police field patrol interaction with the public. The use of body worn cameras will assist in criminal prosecution, potentially reduce civil liability, and aid in the review of alleged misconduct. The Department piloted ten (10) test units beginning in June 2016, and has made initial purchases toward the 90 units approved in the FY 2016 Adopted Budget. Necessary funding was reappropriated in FY 2017, and this action ensures that the City has sufficient funds to complete the procurement and outfitting of officers in FY 2018. 58,000$ General Fund Police Technical Services PD Modems This action reappropriates funding necessary to continue the replacement of modems in 27 Police vehicles. The project to replace Police vehicle modems was approved in FY 2017 to resolve connectivity issues experienced with wireless signals for the in car Mobile Data Computers (MDCs). Multiple complications occur when there are connectivity issues including data loss, inability to connect various law enforcement systems (including 9-1-1 Emergency Communication Center) and overall safety concerns for personnel in the field. This is a multi-year project that runs concurrent to the vehicle replacement schedule; modems are equipped in new Police vehicles when they come online. This action ensures that sufficient funding is available to complete modem purchases for the remaining vehicles. 63,000$ General Fund Community Services Department Open Space, Parks and Golf Acterra Donkey Maintenance Grant This action reappropriates unused funds earmarked to support the Barron Park Donkey Project fundraising effort by Acterra. At the December 12, 2016 City Council meeting, the Council committed $15,000 from Council contingency to support the Barron Park Donkey Project fundraising goal of $125,000, which will cover five years of donkey-related expenses. Of the $15,000, the first $10,000 signaled the Council's commitment to this important community resource. The final $5,000 is contingent upon a successful match of the $10,000 from the community. As a result, $15,000 was moved from the Council contingency into the Community Service Department's budget in FY 2017. However, the funds were not expended and are requested to be reappropriated to be expended in FY 2018. 15,000$ General Fund City Auditor Performance Audits Training and Professional Development This action reappropriates funding for training and mentoring services. Some of the funding is anticipated to be used for a training to enhance written communication, especially with regards to enhancing the effectiveness of audits. 6,810$ FY 2018 Operating Budget Adjustments: FY 2017 Reappropriations ATTACHMENT A Attachment A - 4 OF 6 Fund Name Department Title Description Recommended Adjustment General Fund Human Resources Administration Management Training Funds This action reappropriates funding to continue and develop a citywide management training program, research new and improved learning management systems, implement innovative hiring practices and development tools, and continue building data collection capacity for Employee engagement and analysis of that data. Training programs will focus on the following areas: Ethics, Civics and Citizen Engagement, Leadership and Management, Budget, Finance, Procurement, Interpersonal Communication, Presentation Skills, Business Writing, Time Management, Project Management, Change Management, Online based education, and Safety & Security. $ 260,000 Total General Fund Reappropriation 1,409,977$ Housing In- Lieu/Residential Planning and Community Environment Affordable Housing Development Affordable Housing Loan Agreement: El Dorado This action will reappropriate $323,500 to finance the $375,000 loan to the Palo Alto Housing Corporation (PAHC) from the Residential Housing Fund to deed restrict a specific property and rehabilitate that property. The deed restriction will ensure that the property at 110-130 El Dorado Avenue will only be leased to low income households. To date $51,500 has already been drawn by the PAHC and this reappropriation will ensure that sufficient funding is available to finish the rehabilitation. 323,500$ Total Special Revenue Funds Reappropriations 323,500$ Technology Fund Information Technology New Technology IT Service Management (ITSM) Tool This action reappropriates funding to migrate the City of Palo Alto’s existing technology work order management tool. The current tool, Track- it, is over 10 years old, is past its serviceable life, and is no longer supported by the vendor. This funding will be used to migrate to a next generation cloud-based solution that integrates Work Order Management and Asset Management and will allow for mobile entry of work orders by all city staff. The migration was anticipated to occur in FY 2016, however due to project delays the migration will now occur in FY 2018. 160,000$ Technology Fund Information Technology New Technology IT Project Portfolio Management (PPM) Tool This action reappropriates funding to procure and operationalize a Project Management software solution. This solution will centralize projects for the Project Management Office (PMO) in one view, enabling staff to keep projects on-track and manage projects in the pipeline. The procurement and installment was anticipated to occur in FY 2017, however due to project delays it will now occur in FY 2018. 40,000$ FY 2018 Operating Budget Adjustments: FY 2017 Reappropriations ATTACHMENT A Attachment A - 5 OF 6 Fund Name Department Title Description Recommended Adjustment Technology Fund Information Technology New Technology Council Chambers AV Design This action reappropriates funding to replace the current analog media and recording equipment in the Council Chambers with digital equipment. The current equipment is past its serviceable life and is past its warranty. The current system has no back-up and does not have a redundancy capability, which jeopardizes the ability to stream meetings in the Council Chambers and to record them. Initial work to upgrade the equipment began in FY 2017 and is anticipated to be completed during FY 2018. The upgrade will ensure that the general function of City Council meetings will not be disrupted. 152,000$ Technology Fund Information Technology New Technology Data Center Failover Project This action reappropriates funding to identify, build-out, and deploy a secondary offsite facility to house and support critical data center infrastructure. Providing a redundant set of servers offsite ensures accessibility to core systems that otherwise could be inaccessible in the event that servers at the primary location are damaged. This project was anticipated to occur in FY 2017, however due to project delays it will now occur in FY 2018. 120,000$ Technology Fund Information Technology Application Maintenance Virtual Library Software This action reappropriates funding necessary for continuation of the software service platform for the Palo Alto City Library's Virtual Branch. The Virtual Branch is a digital environment, accessible from anywhere, for City residents to explore library resources. This solution makes collections, customer services, programs, and community more broadly available through the use of technological tools. The project was delayed due to the need to evaluate whether to build or buy the software. Working collaboratively, the Library and Technology departments recommended to use an existing vendor, where this action ensures that the City has sufficient funds to support the second year of a three year contract. 75,000$ FY 2018 Operating Budget Adjustments: FY 2017 Reappropriations ATTACHMENT A Attachment A - 6 OF 6 Fund Name Department Title Description Recommended Adjustment Technology Fund Information Technology Project Services Administration Public Safety Technology - Police: Mobile Responder Application and Online Reporting Application This action reappropriates funding necessary to complete implementation of two Police Department applications. The Mobile Responder Application and the Online Reporting Application both provide enhanced functionality to the Computer Aided Dispatch (CAD) system. The Mobile Responder Application allows field personnel to view and update events and maps, access databases, and send and receive messages on a smart phone or tablet. The online reporting application facilitates direct integration to the Records Management System (RMS) from the field, thereby minimizing staff report time and enhancing service delivery to the public. This project was anticipated to occur in FY 2017, however due to project delays it will now occur in FY 2018. 82,000$ Total Internal Services Funds Reappropriation 629,000$ All Reappropriations 2,362,477$ FY 2017 to FY 2018 Capital Project Reappropriations ATTACHMENT B Page 1 of 2 Project ID Project Title Fund Revenue Reappropriation Adjustment Expense Reappropriation Adjustment AP-15003 Runway & Taxiway Rehabilitation Airport (13,086) AP-16000 Airport Apron Reconstruction Airport 2,641 33,757 AP-16002 Wildlife Hazard Plan Airport 1,909 0 AP-16003 Airport Perimeter Fencing Airport 283,403 0 AC-14001 Baylands Nature Interpretive Ctr Exh Imp Capital Improvement Fund (50,000) AC-17000 Performing Arts Venues Soft Goods Replacement Capital Improvement Fund (45,684) AC-86017 Art in Public Places Capital Improvement Fund (154,813) OS-00001 Open Space Trails & Amenities Capital Improvement Fund 26,892 OS-00002 Open Space Lakes/Ponds Maintenance Capital Improvement Fund (1,021) PE-11011 Highway 101 Pedestrian/Bicycle Overcrossing Capital Improvement Fund 64,661 PE-12003 Rinconada Park Master Plan & Design Capital Improvement Fund 75,879 PE-12011 Newell Road Bridge / SFC Bridge Replacement Capital Improvement Fund 25,000 PE-12017 City Hall 1st Floor Capital Improvement Fund 232,272 PE-13011 Charleston Arastradero Capital Improvement Fund 725,000 67,163 PE-13012 Structural Assessment Capital Improvement Fund 11,142 PE-13020 Byxbee Park Trails Capital Improvement Fund 19,183 PE-14018 Bayland Interpretive Center Capital Improvement Fund 10,973 PE-15001 New Public Safety Building Capital Improvement Fund (8,992) PE-15003 Fire Station 3 Replacement Capital Improvement Fund 122,371 PE-15011 Ventura Building Improvements Capital Improvement Fund 8,227 PE-15028 Baylands Levee Improv Feasibility Study Capital Improvement Fund (157,500) PE-15029 Baylands Interpretive Center Improv Capital Improvement Fund 10,000 PE-17000 Michell Park Adobe Creek Bridge Replacement Capital Improvement Fund 2,995 PE-17002 City Hall 3rd Floor Capital Improvement Fund 9,024 PE-17004 City Hall 4th Floor Capital Improvement Fund 9,573 PE-17005 City Hall 5th Floor Capital Improvement Fund 7,019 PE-18000 New California Avenue Area Parking Garage Capital Improvement Fund (333,308) PE-18012 Hoover Park Improvements Capital Improvement Fund 49,335 PE-86070 Street Maintenance Capital Improvement Fund (232,139) PF-00006 Roofing Replacement Capital Improvement Fund 31,402 PF-01003 Building Systems Improvements Capital Improvement Fund 107,991 PF-02022 Interior Finishes Construction Capital Improvement Fund 120,608 PF-16003 Parking Lot Elevator Q Modernization Capital Improvement Fund 25,591 0 PF-16006 Municipal Service Center Improvements Capital Improvement Fund (44,939) PF-93009 Americans With Disabilities Act Compliance Capital Improvement Fund 129,627 PG-06001 Tennis & Basketball Court Resurfacing Capital Improvement Fund (13,908) PG-06003 Benches, Signage, Fencing, Walkways, Landscaping Capital Improvement Fund (1,616) PG-09002 Park & Open Space Emergency Repairs Capital Improvement Fund 47,638 PG-13001 Stanford / PA Soccer Capital Improvement Fund (502,139) PG-13003 Golf Reconfig & Baylands Capital Improvement Fund 44,099 PG-15000 Buckeye Creek Hydrology Study Capital Improvement Fund (22,639) PG-17000 Baylands Comprehensive Conservation Plan Capital Improvement Fund (330,000) PL-00026 Safe Routes to School (Local/Neigh. Coll St. Calming)Capital Improvement Fund 34,950 PL-05030 Traffic Signal Upgrades Capital Improvement Fund 175,978 PL-12000 Transportation and Parking Improvements Capital Improvement Fund 41,940 PL-15001 Embarcadero Road Corridor Improvements Capital Improvement Fund 543,128 PL-15003 Residential Preferences Capital Improvement Fund 56,444 PL-15004 Parking Wayfinding Design Capital Improvement Fund 330,165 PL-16000 Quarry Road Capital Improvement Fund 113,402 PL-16001 Downtown Mobility and Safety Improvements Capital Improvement Fund 358,306 PL-17001 Railroad Grade Separation Capital Improvement Fund 34,696 PO-05054 Street Lights Improvements Capital Improvement Fund 23,112 PO-11000 Sign Reflectivity Upgrade Capital Improvement Fund 57,835 PO-12001 Curb and Gutter Repairs Capital Improvement Fund 68,077 PO-89003 Sidewalk Repairs-GF Capital Improvement Fund (102,956) CB-16001 Cubberley Community Center Master Plan Cubberley 62,414 CB-16001 Cubberley Roof Replacements Cubberley 274,858 CB-17001 Cubberley Repairs Cubberley (22,000) CB-17002 Cubberley Field Restroom Cubberley (662) EL-02010 SCADA System Upgrade Electric 125,903 EL-02011 Electric Utility GIS Electric 10,391 EL-06001 230 kV Electric Intertie Electric 51,233 EL-10006 Rebuild Underground District 24 Electric (50) EL-11010 Underground District 47 Electric 41,796 FY 2017 to FY 2018 Capital Project Reappropriations ATTACHMENT B Page 2 of 2 Project ID Project Title Fund Revenue Reappropriation Adjustment Expense Reappropriation Adjustment EL-12001 Underground District 46 Electric 474,425 EL-13003 Rebuild UG District 15 Electric 300,000 EL-13006 Sand Hill/Quarry Road 12Kv Tie Electric 99,121 EL-13007 UG Dist System Secur Electric (290,534) EL-13008 Upgrade Electrical Estimating System Electric 108,614 EL-14005 Reconfigure Quarry Feeders Electric 581,616 EL-16000 Rebuild Underground District 26 Electric 99,019 EL-16003 Substation Security Electric 87,319 EL-17008 Utility Control Center Upgrade Electric 397,186 EL-89031 Communications System Electric 90,000 EL-98003 Electric System Imp Electric 400,000 FO-10001 Fiber Optics Network System Improvements Fiber Optics 136,824 GS-11000 GMR - Project 21 Gas 100,000 GS-11002 Gas System Improvements Gas (12,147) GS-12001 Gas Main Replacement - Project 22 Gas (157,140) GS-13001 GMR- Project 23 Gas 337,000 GS-15001 Security at City's Gate Gas 23,166 SD-06101 Storm Drain System R Storm Drainage 910,433 SD-11101 Channing Ave/Lincoln Storm Drainage 53,049 WC-11000 Wastewater Collection Rehabilitation/Augmentation - Project 24 Wastewater Collection 34,852 WC-12001 Wastewater Collection Rehabilitation/Augmentation - Project 25 Wastewater Collection 160,888 WC-13001 Wastewater Collection Rehabilitation/Augmentation - Project 26 Wastewater Collection 51,119 WC-14001 Wastewater Collection Rehabilitation/Augmentation - Project 27 Wastewater Collection (87,543) WQ-10001 Plant Master Plan Wastewater Treatment 25,944 WQ-14001 Dewatering and Loadout Facility Wastewater Treatment (6,953,783) WQ-14002 New Laboratory & Environmental Services Building Wastewater Treatment 9,653 WQ-14003 Primary Sedimentation Tank Replacement Wastewater Treatment 27,200 WS-07000 Water Regulation System Improvements Water 152,209 WS-08001 Water Reservoir Coating Improvements Water 391,935 WS-09000 Seismic Water System Upgrades Water (244,641) WS-11000 Water Main Replacement - Project 25 Water 381,939 WS-11003 Water Distribution System Improvements Water 863,136 WS-12001 Water Main Replacement - Project 26 Water (332,258) WS-13001 WMR-Project 27 Water 80,000 TE-01012 IT Disaster Recovery Plan Technology 65,599 TE-11002 Mobile In-Car Video System Replacement Technology 13,109 TE-12001 Development Center Blueprint Technology Enhancement Technology 151,219 TE-13004 Infrastructure Management System Technology 50,000 TE-95016 Permit Information Tracking System Technology 73,359 VR-15000 Vehicle Replacement FY 2015 Vehicle (549,368) VR-16000 Vehicle Replacement FY 2016 Vehicle (569,102) VR-17000 Vehicle Replacement FY 2017 Vehicle (884,358) Total All Funds 1,038,544 (1,716,934) CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 6, 2017 The Honorable City Council Palo Alto, California Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of June 30, 2017 The Office of the City Auditor recommends acceptance of the Auditor’s Office Quarterly Report as of June 30, 2017. At its meeting on August 22, 2017, the Policy and Services Committee approved and unanimously recommended the City Council accept the report. The Policy and Services Committee minutes are included in this packet. Respectfully submitted, Harriet Richardson City Auditor ATTACHMENTS: Attachment A: Auditor's Office Quarterly Report as of June 30, 2017 (PDF) Attachment B: Policy and Services Committee Meeting Minutes Excerpt (August 22, 2017) (PDF) Department Head: Harriet Richardson, City Auditor Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR August 22, 2017 The Honorable City Council Palo Alto, California Auditor's Office Quarterly Report as of June 30, 2017 RECOMMENDATION The City Auditor’s Office recommends the Policy and Services Committee review and recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of June 30, 2017. SUMMARY OF RESULTS In accordance with the Municipal Code, the City Auditor prepares an annual work plan and issues quarterly reports to the City Council describing the status and progress towards completion of the work plan. This report provides the City Council with an update on the fourth quarter for FY 2017. Respectfully submitted, Harriet Richardson City Auditor ATTACHMENTS: Attachment A: Auditor's Office Quarterly Report as of June 30, 2017 (PDF) Department Head: Harriet Richardson, City Auditor Attachment A Quarterly Report as of June 30, 2017 Office of the City Auditor “Promoting honest, efficient, effective, economical, and fully accountable and transparent city government.” Attachment A PAGE 2 Fiscal Year (FY) 2017 Fourth Quarter Update (April – June 2017) Overview The audit function is essential to the City of Palo Alto’s public accountability. The mission of the Office of the City Auditor, as mandated by the City Charter and Municipal Code, is to promote honest, efficient, effective, economical, and fully accountable and transparent city government. We conduct performance audits and reviews to provide the City Council and City management with information and evaluations regarding how effectively and efficiently resources are used; the adequacy of internal control systems; and compliance with policies, procedures, and regulatory requirements. Taking appropriate action on our audit recommendations helps the City reduce risks and protect its good reputation. Activity Highlights We published and presented the audit of the cross bore inspection contract. We published and presented the continuous monitoring audit of payments. We published and presented the audit of green purchasing practices. Four audit staff participated in a three‐day on‐site training on performance auditing. City Auditor Harriet Richardson and Senior Performance Auditor Houman Boussina gave a presentation on our Cable Franchise and PEG Fees Audit to the Bay Area Local Government Auditors Association (BALGA). Senior Performance Auditor Houman Boussina participated on the peer review team for Multnomah County, Oregon. Audit and Project Work Below is a summary of our audit and project work for the fourth quarter of FY 2017: Title Objective(s) Start Date End Date Status Results/Comments Utilities: Water Meter Billing Accuracy Audit Evaluate whether the Utilities Department accurately billed customers for water services. 06/15 08/17 In Process The audit report has been drafted and is undergoing final review. It is scheduled for presentation at the August Policy and Services Committee meeting. Citywide Analytic Development and Continuous Monitoring: Overtime Determine if implementing a continuous monitoring process for overtime could improve the City’s oversight and management of overtime. 06/15 09/17 In Process The audit is in the reporting phase and is scheduled for presentation at the September Policy and Services Committee. ERP Planning Audit: Data and System Governance and Security Evaluate the adequacy of data and system governance and security in the current SAP system and make recommendations to ensure that identified deficiencies are corrected for the new ERP system 05/17 12/17 In Process The audit is in the planning phase, and we expect to complete it in late 2017. Attachment A PAGE 3 Title Objective(s) Start Date End Date Status Results/Comments ERP Planning Audit: Data Reliability and Integrity Evaluate the integrity and reliability of data in the current SAP system and make recommendations to ensure that identified deficiencies are corrected prior to transferring data to the new ERP system. 05/17 12/17 In Process This will be a series of reports that focus on different aspects of data reliability or specific data sets, with an initial focus on data standardization. It is currently in the planning phase, and we expect to complete it in late 2017. ERP Planning Audit: Segregation of Duties Evaluate the adequacy of segregation of duties for various activities in the current SAP system and make recommendations to ensure that identified deficiencies are corrected for the new ERP system. 05/17 12/17 In Process The audit is in the planning phase, and we expect to complete it in late 2017. Code Enforcement Audit Evaluate code enforcement policies and practices for responsiveness, consistency, and follow‐up. Resident opinions to help inform our audit will be gathered through a custom citizen survey, as described below 05/17 12/17 In Process The audit is in the planning phase, and questions for the custom citizen survey are being drafted. We expect to complete the audit in late 2017. ERP Nonaudit Service Provide advisory services to the Department of Information Technology regarding its planning of a new enterprise resource planning (ERP) system. 09/16 Ongoing During the third quarter of FY 2017, we attended 27 ERP system requirement validation sessions and three strategic and tactical team meetings, providing verbal and written advice based on our technical expertise and best practice information readily available to us. We also issued a memo to the IT Director that discusses what is going well with the project and challenges we identified. Custom Citizen Survey Conduct a citizen survey, separate from the annual National Citizen Survey™, to obtain resident opinions about code enforcement activities and the built environment. 06/17 11/17 In process We are in the process of amending the contract with the National Research Center to add this survey, with an estimated cost not to exceed $20,000, and have begun drafting questions for the survey. National Citizen Survey™ Obtain resident opinions about the community and services provided by the City of Palo Alto and benchmark our results against other jurisdictions. 06/17 12/17 In process Attachment A PAGE 4 Other Monitoring and Administrative Assignments Below is a summary of other assignments as of June 30, 2017: Title Objective(s) Status Results/Comments Sales and Use Tax Allocation Reviews 1)Identify businesses that do business in Palo Alto that may have underreported or misallocated their sales and use tax and submit inquiries to the state for review and tax reallocation. 2)Monitor sales taxes received from the Stanford University Medical Center Project and notify Stanford of any differences between their reported taxes and state sales tax information, in accordance with the development agreement. 3)Provide Quarterly Status Updates and Sales Tax Digest Summaries for Council review. Ongoing 1)Total sales and use tax recoveries for the fourth quarter were $54,538 from our inquiries and $48,387 from the vendor inquiries, for a total of $380,290 year‐to‐date. Due to processing delays at the State Board of Equalization, 60 potential misallocations are waiting to be researched and processed: 18 from our office and 42 from the vendor. 2)The City of Palo Alto received $879,285 as a result of the development agreement with Stanford Medicine (formerly Stanford University Medical Center). The amount included $883,767 for calendar year 2016 and a reduction of $4,482 for prior‐year adjustments. The City has received $2,896,941 for 2011 through 2016 as a result of this agreement. 3)Quarterly sales tax reports are published on the Office of the City Auditor website at www.cityofpaloalto.org/gov/depts/aud/reports/defaul t.asp. City Auditor Advisory Roles Provide guidance and advice to key governance committees within the City. Ongoing The City Auditor serves as an advisor to the Utilities Risk Oversight Committee, Information Security Steering Committee, and Information Technology Governance Review Board. We are also serving as an advisor for the strategic and technical planning groups for planning the new Enterprise Resource Planning (ERP) system (see comment in the Audit and Project Work section above). Status of Audit Recommendations Seventy‐three recommendations were open at the beginning of the fourth quarter of FY 2017, and 35 were closed, although we have not yet verified 26 of those. We added 19 recommendations during the fourth quarter of FY 2017. All of the past‐due status reports are scheduled to be presented to the Policy and Services Committee before December 2017. Below is a summary of the open audit recommendations as of June 30, 2017: Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Citywide Cash Handling and Travel Expense Issued 09/15/10 Past Due 11/10/15 09/23/14 09/10/13 10/22/12 04/19/11 Recommendations: 11 Open: 1 Implemented during quarter: 1 Review practice of reimbursing employee meals when not in a travel status and report the amounts as income to employees to conform to Internal Revenue Service requirements. Attachment A PAGE 5 Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Contract Oversight: Trenching and Installation of Electrical Substructure Issued 11/05/13 Complete 06/13/17 12/15/15 09/23/14 Recommendations: 6 Open: 0 Implemented during quarter: 2 N/A – all recommendations are closed Inventory Management Issued 02/18/14 Past Due 09/23/14 Recommendations: 14 Open: 2 Reported as implemented during quarter, but Auditor’s Office has not yet validated their completion: 12 Implement City’s inventory management policies and procedures Ensure staff identify and use key SAP inventory management reports and appropriately configure and update SAP parameters that affect inventory levels Reported as completed, but not yet validated: Review inventory accounting policies and correct any misstatements in accounting records Update and enforce inventory count policies and procedures to ensure consistent and accurate inventory records Update and enforce inventory transaction policies and procedures to ensure proper authorization and accountability Avoid use of generic user accounts to issue inventory Identify, formalize, and communicate inventory management goals and objectives to City departments Update/develop policies and procedures to address roles and responsibilities, management of slow‐moving or dead stock, and transitioning to new materials Perform a physical access risk assessment to identify, prioritize, and address access control weaknesses Develop policies and procedures to address citywide physical security Configure fleet access control system to support the City’s security goals and objectives or determine if technology should replace it Review technology system access authorization records to ensure access card holders can be uniquely identified Assess and ensure accuracy and completeness of assigned keys records and replace or rekey locks for high‐risk areas where records are not clear of who has keys Improve physical security of City Hall storage area Attachment A PAGE 6 Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Utility Meters: Procurement, Inventory, and Retirement Issued 03/10/15 Past Due None Recommendations: 15 Open: 1 Reported as implemented during quarter, but Auditor’s Office has not yet validated their completion: 14 Notify and backbill or refund customers for incorrect water billings Reported as completed, but not yet validated: Establish policies and procedures that define roles and responsibilities for utility meters Update engineering specifications to explicitly include all utility meter types purchased and used by the City and update as changes occur Review and update existing list of utility meter types in the SAP material master list Provide SAP technology to assign meter badge numbers at time of purchase to mitigate errors resulting from manual assignment Establish a policy for meter inventory error tolerance and develop a plan to identify and correct errors in high‐risk meters Provide training in SAP and on policies and procedures to Utilities Department staff involved in meter activities Integrate various SAP modules to automate controls or implement appropriate processes to ensure that meter descriptions carry through from procurement to retirement Correct purchase order documents to accurately reflect the engineering specifications Ensure that bidders’ Affidavits of Compliance for meters are received and documented Assign responsibility to ensure that meter testing is appropriately and consistently performed and that meters comply with performance specifications; analyze test data to determine need for manufacturer warranties Develop a process for timely and accurate retirement of meters Align meter types when adding and retiring meters in the SAP asset management module Coordinate the process for meter recycling credits Attachment A PAGE 7 Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Police Department: Palo Alto Animal Services Issued 04/22/15 Past Due 03/22/16 Recommendations: 8 Open: 8 Implemented during quarter: 0 Explore options for retaining Palo Alto Animal Services as a regional animal shelter facility Assign responsibility for carrying Animal Services through its transition into the future after the acting superintendent retires Conduct analysis to determine appropriate staffing for shelter operations during transition and feasibility of expanded operating hours Engage in discussions with animal service organizations for strategies to operate Animal Services Analyze the feasibility of separating animal control activities from shelter activities Develop a marketing strategy for Palo Alto Animal Services with a focus on promoting awareness of services and available cost savings Assess feasibility of obtaining funding to build a new animal shelter that meets modern‐day standards for animal care and safety Seek future opportunities to provide animal licensing services to San Mateo County Parking Funds Issued 12/15/15 Past Due None Recommendations: 8 Open: 4 Implemented during quarter: 4 Develop policies and procedures to clarify roles and responsibilities and ensure accurate calculation and reporting of parking‐in‐lieu fees Establish policies and procedures to clarify roles and responsibilities for parking programs and parking permit funds Identify financial and performance data required for effective evaluation of parking program Provide financial and performance data on parking program in annual report to Council Attachment A PAGE 8 Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Disability Rates and Workers’ Compensation Issued 05/10/16 Past Due None Recommendations: 15 Open: 15 Implemented during quarter: 0 Allocate sufficient resources to implement and maintain and monitor compliance with the City’s Injury and Illness Prevention Program Update the safety manual/supplemental tools Review departmental procedures and safety requirements to ensure they align with citywide policies and procedures Identify useful safety statistics, their recipients, and reporting frequency, and develop an automated process for providing the statistics Identify and provide industry‐specific ergonomics and general wellness training opportunities Address the disability leave benefits incorrectly reported as compensation to CalPERS Review claims that had differences in additional city benefits and correct any errors identified Determine optimal structure, update tools and procedures, and allocate sufficient and skilled resources to ensure accuracy of benefit eligibility and work status of injured employees Ensure that data for managing disability leave is accurately captured through SAP time reporting Provide online access to claims data and establish procedures for granting, monitoring, and removing access and safeguarding data Streamline workers’ compensation reporting process and improve accuracy/completeness of claim forms Monitor and follow‐up on third‐party administrator’s performance against key contract terms Streamline third‐party administrator’s reporting processes Clarify workers’ compensation in City budget Identify useful performance measures and establish procedures to ensure reliable reporting Attachment A PAGE 9 Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Cable Franchise and Public, Education, and Government (PEG) Fees Issued 06/14/16 Past Due None Recommendations: 9 Open: 7 Implemented during quarter: 2 Assess ongoing need for PEG fees; place fees in restricted account until decisions are made about use of fees Determine whether to allocate unrestricted funds, instead of PEG fees, to subsidize the Media Center’s operations. Send letters to cable companies to demand payment of underpaid franchise and PEG fees Work with cable companies to ensure accuracy of address databases and assign separate billing codes for each Cable Joint Powers service area Develop criteria for assessing the accuracy of future cable franchise and PEG fee payments and require more detail with payment remittances Assign responsibility for the cable communications program and provide effective oversight of the program Draft an ordinance to update the Palo Alto Municipal Code based on clarified assignment of responsibility Community Services Department: Fee Schedule Audit Issued 02/14/17 Past Due None Recommendations: 3 Open: 3 Implemented during quarter: 0 Revise City’s cost recovery policy to align with relevant laws and reconfigure the Questica budget system to support fees that recover more than 100 percent of costs Establish procedures in CSD to align with the City’s updated cost recovery policy Configure SAP or the new ERP system to align cost centers with CSD programs Continuous Monitoring: Payments Issued 04/13/17 02/13/18 None Recommendations: 7 Open: 7 Implemented during quarter: 0 Build a continuous monitoring process into the new ERP system to identify potential duplicate invoices and seek recovery of duplicate payments Update invoice processing policies and procedures to facilitate identification of duplicate payments Review unconfirmed potential duplicate payments and prioritize recovery of confirmed duplicate payments Update policies and procedures to clarify guidance for creation of vendor master records and develop standardize coding vendor records Build a continuous monitoring process into the new ERP system to identify duplicate, incomplete, or unused vendor records Develop a requirement for the proposed ERP system to support entry of multiple vendor addresses when needed Clean vendor master file before merging data into new ERP system Attachment A PAGE 10 Audit Title and Report Date Status and Prior Status Report Dates Total Recommendations/ Number Open Summary of Open Recommendations Green Purchasing Practices Issued 04/13/17 02/13/18 None Recommendations: 8 Open: 8 Implemented during quarter: 0 Clearly define department(s) responsible for implementing green purchasing policies and determine if additional staffing and funding are needed to implement the policies Align Municipal Code with green purchasing policies Develop consolidated procedures to implement green purchasing policies Educate City staff on green purchasing policies Evaluate quality of 40 percent postconsumer fiber paper towels, monitor janitorial contractor’s use of cleaning and paper products, and evaluate feasibility of including additional green products in janitorial contract Evaluate if new e‐procurement system or other technology solution can help with tracking and reporting green purchases and establish appropriate green purchasing performance measures Utilities Department: Cross Bore Inspection Contract Issued 06/01/17 02/13/18 None Recommendations: 4 Open: 4 Implemented during quarter: 0 Prioritize uninspected sewer pipelines for inspection and disclose potential inspection challenges in future contract solicitations Identify and update missing data in laterals database Incorporate relevant provisions from National Assn. of Sewer Service Companies’ contract template in future sewer inspection contracts Identify gaps in staff expertise and develop a training and certification plan for field staff who will monitor field inspections 000 Verified: 9 000 Not Yet Verified: 26 0 5 10 15 20 25 30 35 40 Q1 Q2 Q3 Q4 # Implemented Recommendations by Quarter From Prior Fiscal Years: 42 From FY 2017: 22 0 20 40 60 80 100 # Open Recommendations ‐FY 2017 Attachment A PAGE 11 Fraud, Waste, and Abuse Hotline Administration The hotline review committee, composed of the City Auditor, the City Attorney, and the City Manager, or their designees, meets as needed to review hotline‐related activities. We did not receive or close any hotline complaints during the fourth quarter of FY 2017, and no prior complaints remain open. The chart below summarizes the status of complaints received in each fiscal year since the hotline was implemented. Source: City of Palo Alto hotline case management system as of June 30, 2017 7 3 2 15 9 0 2 4 6 8 10 12 14 16 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Status of Complaints Received by Fiscal Year Closed Complaints Open Complaints Attachment A POLICY AND SERVICES COMMITTEE TRANSCRIPT EXCERPT Page 1 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 Special Meeting August 22, 2017 Chairperson Wolbach called the meeting to order at 6:06 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: DuBois, Kniss, Kou, Wolbach (Chair) Absent: Agenda Items 3.Auditor's Office Quarterly Report as of June 30, 2017. Chair Wolbach: Let’s move onto our third and final Action Item of the night. Auditor’s Office Quarterly Report as of June 30, 2017, so again, Harriet to present. Go ahead Harriet Richardson, City Auditor: Thank you. This is our standard Quarterly Report but I do have a couple format changes in here that I will talk about as we go through. One of them was a request at our last presentation of our third quarter – at the presentation of our third quarter quarterly report; get that straight. This is our fourth quarter update for April through June 2017 and a few highlights are we published and presented the auditor of the Cross Bore Inspection Contract. We published and presented the continuous monitoring of payments audits and we published and presented the audit of green purchasing practices. We had four of my Audit Staff who participated in a three-day onsite training on performance Auditor and I gave a presentation along with Senior Performance Auditor Houman Boussina at our Local Bay Area, Local Government Auditors’ Association of our cable franchise and PEG Fees Audit. The Senior Performance Auditor Houman Boussina participated on the peer review team for Multnomah County, Oregon. The next section is our audit and project work so one little difference here is I’ve usually put the audits that we completed in there with just a little comment that it was completed but since I also put in the activity highlights, I’ve decided to stop putting it in the project works since it’s kind of redundant. The first one -- remembering that this is of the end of June so there’s a little bit of a lag in time from presenting what happens than through what’s happening now. The first one was that the audit you just Attachment B TRANSCRIPT EXCERPT Page 2 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 heard was still in process and was undergoing final review so the next quarterly report will give the update that it’s completed. The continuous monitoring audit of overtime is in the final stages of reporting. It's scheduled for presentation at the September Policy and Services Committee. We have started an audit of Enterprise Resource Planning (ERP), we actually have several ERP planning audits on our audit plan. The first one is data and system governance and security and the purpose of that audit is really to look at the overarching governance policy regarding our IT systems and data. So, this audit we expect to complete before the end of the calendar year. It’s – we have some planning work that’s being done right now but it’s going to be –field work is going to be pretty quick so this will be a very quick audit to get done and we have some very good criteria to help us with that audit. We are also doing an ERP planning audit of data reliability and integrity so one of the things on this audit is we originally started thinking this would be one audit but it’s become –as we started, we realized that this really needs to be a series of audit reports to help the City to be able to move along quicker as it starts getting ready to implement a new ERP system. The idea of this is to try to prevent garbage out from becoming garbage in in the new ERP system and making sure that the data is consistent and reliable. One example of that is the meter audit you just heard and so that we get to exclude from this audit because we already did the data reliability piece on the meters. Another example was the vendor master file which we did in our continuous monitoring audit of payments. So those two are out of the way but in working with ASD and trying to identify which would be more – what would be most helpful for them, we decided to do a data standardization audit first as part of this and that’s really looking at data that is used throughout different sets of tables, they call them tables, that collect data on different types of things in the system to make sure it’s entered consistently. A good example of that is addresses where someone might spell out the street, another person might put St, another person might put St., someone else might put Str. and that happens with a lot of different types of data. Even like with the meters, we’d see meters spelled out, we’d see it mtr, and those kinds of things make it difficult when you are trying to do reports and find similarities and do trends and all sorts of different things that you can do for data analysis if you don’t have consistency. So, we’re going to come up with some data standardization guidelines that will help them with an implementation that they can implement before they transition the data over. The next sets of those audits will look more at specific data sets similar to what we just did on the meter audit. We’re expecting the data standardization piece to be done by the end of this calendar year. The next audit is segregation of duties and that is also for ERP planning and that’s to help to make sure that when the new ERP system is set up, that it’s set up so that there’s a concept called Concept of Least Privilege which means that an employee only has access to Attachment B TRANSCRIPT EXCERPT Page 3 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 those tasks in the system that they need to do their job and no more. That prevents people from doing things that they shouldn’t do that could compromise the City’s assets in some way. So we are doing that and will be giving a sort of different levels of security. The ideal would be the best – there will probably be an intermediate layer and then a very basic level and then we’ll identify mitigating controls that the City would need to implement if they can’t do the highest level and they have to notch down on each of those. We’re again, expecting that one by the end of this calendar year. We’ve also started our code enforcement audit and that one is wrapping up the planning phase and getting into field work and as part of that, the Council approved a $20,000 budget for a custom survey that focuses on code enforcement and some, a little bit of the built environment. That survey as of June was still being drafted but that is with the NRC and will start being mailed to residents next week. That will be used to help inform our recommendations in the audit. Vice Mayor Kniss: What was the amount? Ms. Richardson: Twenty thousand dollars. Then our – we’re also doing an ERP non-audit service where one of our auditors is sitting on – in on our information – IT has a series of meetings with departments. They are strategic planning meetings and there are technical planning meetings and so our auditor is sitting in on those meetings and providing advice as she sees things that are maybe not – that could impair a successful implementation of the system – the new ERP system if they aren't implemented – caught earlier so it’s really a preventive tool that we’re providing to IT. We – during this last quarter she attended 27 ERP system validations sessions and three strategic and – I can’t speak here – tactical team meetings and provided both verbal and written advice. So, we provided some written memos to the IT Director with some recommendations. They don’t have the same weight as our audit recommendations in that they don’t have to respond to them in the same way that they would in an audit. That’s an ongoing project that will – we expect to just continue throughout the planning and design and implementation phase of the ERP system. I also have on here the custom citizen survey because it does – I put it as a separate item because this is the one that I just mentioned that includes the code enforcement questions but I put it as separate because it’s also a little bit broader and that includes questions about the built environment and a little bit about housing. As I said, that was in draft format at the end of June but it is finalized and going out in the mail next week. I’ve started collecting input for custom questions on our National Citizen Survey. I’m hoping to wrap that up this week and get that out in the – over to the National Research Center to start mailing out – it will be about mid-September when that goes out but it was – I was just Attachment B TRANSCRIPT EXCERPT Page 4 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 gathering input on the questions as of the end of June. Then we also do our ongoing sales and use tax reviews and so for the fourth quarter, total tax recoveries were $54,538 from our – my office’s inquiries and another $48,387 from vendor inquiries for a total of $380,290 year to date. There are still sixty potential misallocations waiting to be processed – researched and processed at the State Board of Equalization; eighteen of those are from our inquiries and forty-two are from our consulting vendor. This quarter is the quarter each year that we also report on the tax – the sales tax that we receive as a result of the Development Agreement with Stanford Medicine regarding the hospital construction. So, for this year it was $879,000 and it included $883,000 for this past calendar year but it was a reduction of – in prior year adjustments because some adjustments that they had to make were some things were misallocated. From -- since 2011 we’ve received $2.9 million dollars by having this agreement in place. Then we continue to do our advisory roles; sitting in on the Utilities Risk Oversight Committee meetings, the Information Security Steering Committees and the Information Technology Governance Review Board meetings as needed. So, this next section is the status of audit recommendations and this is one where I’ve made quite a change and I’m hoping the format works for you given the size of the paper here; where I can press some columns together but last time I was asked not to just put the number of open recommendations but also to put a list of some of what those recommendations were. I’ll go through the numbers and not read all of these to you but if you have questions about any of them, feel free to ask; again, remembering that these were as of the end of June. So, the Citywide cash handling, we did receive – even though it was just presented tonight, we did receive the status of that as of the end of June and so we have one recommendation left open which we discussed earlier tonight and there was one that was implemented during the quarter. On the utility meters, procurement inventory and retirement audit that has 15 recommendations. They reported that 14 of those were closed and one was still open but we did not have a chance to validate some of those. Some of those tie back to the first set of meter discrepancies that we identified in finding one in the Audit that we presented tonight so I think that we will – we separated those out in the graph that we have attached here because we still feel like there may be some that we disagree with. So, I put them kind of in a not yet validated category and we’ll come back later and say whether they are or not validated. We have the Animal Services Audit, that still has all eight recommendations open but there is an update coming to Council very soon. I’ve seen it on an agenda but I’m not sure if it’s the next meeting or the one after that but there is an update coming to Council soon. It was last night, ok, so – but those recommendations as of June were not implemented. The Parking Funds Audit, that one had 8 recommendations and that one is scheduled to come to Council in October – actually to Policy and Services in Attachment B TRANSCRIPT EXCERPT Page 5 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 October we all – did already receive the update on that and there are four open recommendations and four that were implemented during the quarter. The Disability Rates and Workers Compensation Audit, that one is also scheduled for October and that one has 15 recommendations and those are all still open and there has not been an update provided yet. Just a kind of quick comment on those, the updates on these – there was kind of a – there was a restructuring of how these updates were done and so it was hard getting that practice – that protocol for that established so now I think we’re on a good schedule for how they’re all scheduled to be presented. So, the departments are working on these and I think as you are starting to see, some of these are getting implemented where they were just sitting for a little while because we didn’t have our protocols set up for that transition but you’ll start seeing more of them when we get closed as the year goes on. The Cable Franchise and PEG Fees Audit, as of June and as presented tonight, there were nine recommendations with seven open and two implemented during the quarter. The Community Services Department Fee Schedule Audit, that had 3 recommendations, three of them are still open and that one is due for its first update in October but I think it may not be scheduled until November. I would have to go back and look but that one is the first update, it’s not past due. The continuous monitoring payments that had 7 recommendations and 7 were still open. It’s not scheduled for its first update until February. Green Purchasing Practices Audit, that also had 8 recommendations and is not scheduled for a status report until February and then same with utilities cross bore inspection contract audit for recommendations due for that first status update in February. Then we have a little graph here that shows what were implemented during the quarter so this is where you can start seeing some action happening after got our protocols in place, it’s your Packet Page 27, where 9 of them were implemented during the quarter and then the not yet verified are the 26 that we have received but haven’t had a chance to go back and look at in detail. The number of open recommendations has declined quite a bit, so it’s down to 38 from prior fiscal years, 22 from the current Fiscal Year. So that number had been up to about 70 and so it has come down quite a bit from where it was a year ago. Then on the last page our fraud, waste and abuse hotline, we did not receive any complaints or allegations during this year – this quarter and all of the prior complaints have been closed. That completes my presentation and I’ll answer any questions. Chair Wolbach: Any questions or comments from my Colleagues? Vice Mayor Kniss: That’s exhausting. Attachment B TRANSCRIPT EXCERPT Page 6 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 Council Member DuBois: I just want to say thank you for the format change, I find that useful. Ms. Richardson: Ok, thank you. Chair Wolbach: I’ll agree with that. Anyone else? Any Motions? Alright, does anyone want to move the Staff recommendation? Vice Mayor Kniss: I maybe – I’ll move that. Go right ahead. Chair Wolbach: Alright and I’ll second it. Would you like to speak to your Motion? MOTION: Vice Mayor Kniss moved, seconded by Chair Wolbach to recommend the City Council accept the Auditor’s Office Quarterly Report as of June 30, 2017. Vice Mayor Kniss: I just have one question, one of the things that we used to do – oh I’m sorry. We used to list what was going to come up in what month and I can – I mean I can put it together but figuring out what month you said it’s going to come up in but for example, what comes up in September at 7 o’clock at Policy and Services on the 12th? Ms. Richardson: We have – so the parking… Vice Mayor Kniss: Am I missing the table? Ms. Richardson: That date is changing. Vice Mayor Kniss: It was where? Oh, At Places. Well, then… Chair Wolbach: (Inaudible) Vice Mayor Kniss: Maybe I just didn’t see that one among all of the other papers. So, we’ve got one that says…(crosstalk) Chair Wolbach: Did we all get this or did just I get a copy of this? Jessica Brettle, Assistant City Clerk: Yes Liz, you should have received a copy. Here, you can use mine for right now. Attachment B TRANSCRIPT EXCERPT Page 7 of 7 Policy and Services Committee Special Meeting Transcript Excerpt 08/22/17 Vice Mayor Kniss: Thanks. Ms. Brettle: You’re welcome. Vice Mayor Kniss: It’s probably at the bottom of the bucket here. So, this is very helpful, I hadn’t seen this before so thanks. That takes care of my issue. Chair Wolbach: Alright, I don’t need to speak to my second and anyone else questions or comments before we vote? Alright, all in favor of the Motion which is recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of June 30, 2017. All in favor? Alright, that passes unanimously. Thank you very much, City Auditor for sticking with us for all these and providing all these report updates. MOTION PASSED: 4-0 Attachment B City of Palo Alto (ID # 8424) City Council Staff Report Report Type: Action Items Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: North Ventura Coordinated Area Plan: Initiation and Funding Agreements Title: Adoption of a Resolution Authorizing the Filing of an Application to the Metropolitan Transportation Commission for a Priority Development Area Grant for the North Ventura Coordinated Area Plan (CAP), Expressing Local Support and Committing Any Necessary Matching Funds, and Stating Assurance to Complete the Project; and Approval and Authorization to the City Manager to Execute a Funding Agreement With the Sobrato Organization for Sobrato to Provide the Local Matching Funds and Additional Supporting Funds for Environmental Review in the Amount of $250,000; and Initiation of the North Ventura Coordinated Area Plan Process. Environmental Assessment: Exempt Under CEQA Guidelines Sections 15061(b)(3) and 15262 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council: 1. Adopt the Resolution in Attachment A approving the filing of the application for a Priority Development Area grant for federal funding assigned to the Metropolitan Transportation Commission (MTC), expressing local support for preparation of a North Ventura Coordinated Area Plan, committing the necessary matching funds, and affirming the City’s commitment to pursue to completion the planning effort; 2. Approve and authorize the City Manager to execute an agreement with the Sobrato Organization (Attachment B) for $112,000 in matching funds required by the grant and an additional $138,000 to pay for environmental analysis; 3. Direct staff to return to Council as soon as possible with a grant agreement and/or resolution meeting requirements of the funding agency and making necessary budget adjustments; 4. Initiate the local planning process for a North Ventura Coordinated Area Plan in City of Palo Alto Page 2 accordance with Palo Alto Municipal Code Section 19.10.020; 5. Direct staff to return to Council for identification of goals, objectives, formal plan boundaries, and a schedule for preparation of the North Ventura Coordinated Area Plan; and 6. Find these actions exempt from review under the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15061(b)(3) and Section 15262 (Feasibility and Planning Studies). Executive Summary The Valley Transportation Authority (VTA) has awarded grant funding to the City of Palo Alto for preparation of a Coordinated Area Plan for the northern part of the Ventura neighborhood. This area includes a parcel owned by the Sobrato Organization which is commonly referred to as “the Fry’s Site,” and the Sobrato Organization has agreed to provide matching funds to meet the grant requirements, as well as funding for environmental review. The requested actions this evening include adoption of a resolution indicating the City’s intention to pursue the planning effort with the grant funding, and execution of an agreement with the Sobrato Organization for their portion of the funding. Staff is also requesting that the City Council formally initiate the planning effort in accordance with the Palo Alto Municipal Code. The Sobrato site and the surrounding parcels included in the suggested planning area represent a significant opportunity to plan for a walkable, mixed use neighborhood with multifamily housing, commercial services, well-defined connections to transit, bicycle and pedestrian facilities, urban design strategies, and design guidelines to strengthen and support the neighborhood fabric. Community engagement will be key to the success of the planning effort, as will technical and design/planning work by qualified consultants funded by the grant. Background & Discussion In 2008, the City designated a Priority Development Area (PDA) as part of a program established by the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) to prioritize areas for transportation funding throughout the region. The Palo Alto PDA contains approximately 95 acres and is located roughly between El Camino Real and Alma Street, and College and Lambert Avenues. (See Attachment C.) In 2014, the City Council authorized City staff to submit an application to VTA for a PDA grant to prepare a coordinated area plan for the North Ventura area within the City in proximity to the California Avenue Caltrain station, the California Avenue business district, the El Camino Real corridor and the Stanford Research Park. The City Council put the grant application on hold and delayed the planning effort until the completion of the City’s Comprehensive Plan Update, in part at the request of the Sobrato Organization, a property owner within the North Ventura area, with the Sobrato Organization’s commitment to provide funding to make up for the City of Palo Alto Page 3 foregone grant funds. The Comprehensive Plan Update is now near completion and includes proposed Program L4.8.1, which calls for the preparation of a coordinated area plan for the Fry’s Electronics site and surrounding California Avenue area. The Fry’s Electronics site, owned by the Sobrato organization, is one of the few sizeable parcels in the City that could accommodate significant redevelopment. It is envisioned that redevelopment of the Fry’s site will strengthen the North Ventura area as a walkable, human-scaled mixed-use neighborhood. Grant Proposal and Award In anticipation of the completion of the Comprehensive Plan Update and upcoming Fry’s Electronics’ lease expiration, in July 2017, City staff applied to the Valley Transportation Authority (VTA) for a PDA grant for the new North Ventura Coordinated Area Plan community planning effort. (The grant proposal is in Attachment E.) In the proposal, staff identified the project boundaries as the southern portion of the PDA (south of Page Mill Road) and the northern section of the North Ventura neighborhood. The entire area represents about 39 acres and includes the Sobrato Organization’s site. (See map in Attachment C) The grant application requirements stipulated that the planning area had to be wholly within the PDA, however staff understands from VTA staff that there may be some flexibility as to these boundaries and the Council’s input on any desired adjustments can be provided now or at a future meeting. On September 7, 2017, the VTA Board of Directors voted to award the City a $638,000 grant. The PDA grant requires a local funding match of at least 11.47% of the total project cost as a condition of grant award and acceptance, and prohibits the use of grant funds for environmental analysis. The Sobrato Organization has agreed to provide the required matching funds in the amount of $112,000 and contribute an additional $138,000 to pay for the environmental analysis that will be required for this project. The Funding Agreement in Attachment B would memorialize Sobrato’s commitments and the City’s obligations to expend the funds for the planning and environmental review process. Under both the grant resolution and funding agreement, the City would be committing to completing the planning process for the North Ventura CAP, though the Council’s ultimate determination on plan adoption would be at its discretion. A summary the money available is provided below: Table 1: Grant Summary Grant Award $638,000 Matching Funds $112,000 - private funds from the Sobrato Organization Total Project Cost (Grant Funded Project) $750,000 Environmental Assessment* $138,000 – private funds from the Sobrato Organization Total Project Cost * $888,000 City of Palo Alto Page 4 (with Environmental Assessment) *The grant funded project does not include environmental review. Source: Planning & Community Environment, October 2017 The VTA has requested that the City provide a resolution of local support for the proposed project confirming the City’s commitment to proceed, provide local matching funds and complete the project (Attachment A). The resolution is required by VTA and MTC for eligibility to accept federal funds and for commencement of a funding agreement process. Because the funding is assigned to MTC, the resolution references MTC; however, the funding will be provided by the California Department of Transportation (Caltrans) and VTA and MTC will play a minor role, receiving quarterly updates and monitoring project delivery. The grant agreement with Caltrans and/or another resolution accepting the grant will appear on the Council’s agenda at a later date, along with necessary actions to reflect the grant (and matching) funds and expenses in the City’s budget. Coordinated Area Plan Process The process for implementing a coordinated area plan is set forth in Palo Alto Municipal Code (PAMC) Title 19, Chapter 19.10. (Attachment D) This section details the purpose of a coordinated area plan, the initiation process, procedures to create the plan, required contents, and regulatory procedures once adopted. Coordinated Area Plans are similar to “precise plans” or “specific plans” (terminology used in other jurisdictions and State law) and provide both policy and regulations for development within a specific area. The South of Forest Area (I and II) is the City’s only existing Coordinated Plan Area. Consistent with PAMC requirements, the final deliverables expected as part of the Coordinated Area Plan process include the following components: Planning Objectives and Site Context Goals and Policies Site Plan and Land Uses Development Standards and Criteria Architectural and Site Design Objectives & Standards Transportation Connections and Improvements Capital Improvements and Implementation Measures A financial feasibility analysis of site alternatives will be an important part of the planning process, as will a transportation study, urban design studies, and community engagement. City of Palo Alto Page 5 Where the plan considers the potential future configuration and development of privately- owned sites like the Fry’s Electronics site, the value inherent in existing development and existing zoning will be a key issue for the property owners. It’s also important to note that under a new State law, the Sobrato Organization could potentially redevelop the Fry’s site “by right” with over 350 dwelling units if they proposed a 100% code compliant project that met conditions in the law. This emphasizes the need to view the planning process as a collaboration to seek mutually beneficial outcomes for multiple stakeholders (e.g. property owners, neighborhood residents, businesses) and the City. Community Engagement Community engagement will be of primary importance for the success of the planning process. Consistent with PAMC Section 19.10.030, a working group comprised of residents, business owners, property owners, and community representatives will need to be appointed by the Council and will meet regularly to consider existing conditions, analyses, and policy development. The working group will include seven (7) to fourteen (14) individuals, and will be advisory to staff, the Planning and Transportation Commission (PTC) and Council. Following initiation of the Coordinated Area Plan process, staff will solicit applications from interested stakeholders and return to Council for appointment of the working group members. Goals and Objectives Establishing goals and objectives is another essential part of developing a Coordinated Area Plan and the City Council will have an opportunity to identify their goals, objectives, and a schedule for the Coordinated Area Plan when staff returns with the grant agreement in a couple of months. Ultimately, the Coordinated Area Plan will be a comprehensive document that identifies the distribution, location and extent of land uses, planning policies, development regulations and design guidelines to enable development and needed infrastructure investments in the project area. A detailed description of the proposed North Ventura CAP can be found in the grant application (Attachment E). Attachment F includes the VTA Board staff report and minutes confirming the awarding of the grant for this project. Project Boundaries As described in the grant application, the project boundaries are proposed to extend beyond the Sobrato Organization’s site to capture a portion of the surrounding neighborhood. This includes smaller opportunity sites for redevelopment, recent projects that support the project objectives and provide context in the greater planning area, and sites that provide key connections to transit and activity centers (namely, California Avenue and El Camino Real). See the map in Attachment C. The project boundaries are in the southern portion of the PDA. Although not all sites (or even a majority of the sites) within these boundaries are expected to redevelop, this area includes opportunities for potential land use changes and is important to understand the context of the City of Palo Alto Page 6 Fry’s Electronics site. Additionally, the plan will identify transportation improvements and connections to the greater surrounding area: El Camino Real to the southwest, Lambert Avenue to the southeast, Park Boulevard to the northeast, and Page Mill Road/Olive Avenue to the northwest. As mentioned earlier, Council’s input on any desired boundary adjustments can be provided now or at a future meeting. Consultant Selection Following Council’s initiation of the Coordinated Area Plan process tonight and approval of a grant agreement or resolution meeting requirements of the funding agency at a future meeting, staff will issue a request for proposals (RFP) for consultant services necessary to prepare the Coordinated Area Plan and accompanying studies/guidelines, and to assist with community engagement. Consultant expertise in the following areas will be required: urban design, community outreach and facilitation, economic/fiscal analysis, transportation planning and analysis, and environmental analysis. Policy Implications During the Comprehensive Plan Update process, the Council, the PTC, and the public indicated their interest in preparation of more Coordinated Area Plans like SOFA I and II. The Sobrato Organization’s site in particular was mentioned because it remains one of the few sizeable pieces of land in the City for redevelopment and has the potential for significant residential development under the existing Housing Element and zoning. The updated Comprehensive Plan is anticipated to include a program specifically directing the creation of a Coordinated Area Plan for this area (Program L4.8.1). The City’s updated Housing Element, adopted in late 2014 and certified by the State in January 2015, identified the Sobrato Organization’s property as a location for multi-family housing consistent with its current Multiple Family (RM-30) zoning and is one of the largest housing opportunity sites. The site is identified with a realistic capacity of 221 dwelling units and could accommodate 249 dwelling units even if it’s developed a density of 20 dwelling units/acre (rather than the maximum of 30 dwelling units/acre allowed in the RM-30 zoning district). The Coordinated Area Plan will have to be consistent with the City’s Comprehensive Plan, including its Housing Element. The Sobrato Organization’s property currently contains approximately 220,000 square feet of retail and office area. The Palo Alto Municipal Code includes a provision that specifically allows for the retention of the existing nonconforming uses at the Sobrato Organization’s property, which will be an important consideration in the planning process. The Coordinated Area Plan will also have to consider other relevant plans, such as the Parks, Trails, and Open Space Master Plan, and the Bicycle & Pedestrian Implementation Plan. The City of Palo Alto Page 7 later plan identifies policies and programs that support improving sidewalks and bicycle paths in the area and design enhancements to improve mobility. Resource Impact The City has applied for a grant in the amount of $638,000 for the North Ventura CAP. In compliance with a grant requirement, the 11.47% local funding matchrequirement will be achieved with a pledge of $112,000 in private funds from the Sobrato Organization. No City funds have been pledged. The Sobrato Organization has also agreed to provide an additional $138,000 to fund the environmental review process. Staff will request a budget amendment when the staff returns to Council for approval of the PDA grant agreement. If the cost of the planning effort and environmental review exceeds the budgeted amount, the City will need to identify other resources to complete the project. Timeline Following the Council’s initiation of the Coordinated Area Plan process, staff will work directly with MTC and Caltrans to complete the disbursement process. Some the key initial milestones are summarized below: Milestone Tentative Timeframe* Plan Initiation, Resolution confirming grant support, and agreement with Sobrato Organization for matching funds November 6, 2017 Return to Council with formal grant agreement and budget adjustments January/February 2018 Council consideration of NVCAP Project Boundaries, Goals & Objectives, Project Schedule Solicit Applications for the Working Group RFP for Consultant Services February 2018 Council Appointment of Working Group Members March 2018 Consultant Selection/Contract Award April 2018 Project Kickoff May 2018 Plan Adoption (18 Months Following Project Kickoff) December 2019 *All milestones and dates subject to modification. Source: Planning & Community Environment, October 2017 Environmental Review The actions recommended in this report are exempt from review under the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Sections 15061(b)(3) and Section 15262 (Feasibility and Planning Studies). The actions would initiate a planning process and are not determinative of any specific outcome. The Coordinated Area Plan that will result from this effort will be subject to CEQA prior to adoption and may also require review City of Palo Alto Page 8 under the National Environmental Policy Act (NEPA) because of the (federal) source of grant funding. While the environmental review may be able to “tier” off of the certified Comprehensive Plan Environmental Impact Report (EIR) to some extent, it’s anticipated that significant additional site- and neighborhood-specific analysis will be required. Attachments: Attachment A: Resolution Local Support for Grant Application to MTC VTA (PDF) Attachment B: Funding Agreement (PDF) Attachment C: North Ventura Coordinated Area Plan Boundary Map (PDF) Attachment D: PAMC Chapter 19.10 Coordinated Area Plan Process (PDF) Attachment E: Palo Alto PDA Grant Application 2017 (PDF) Attachment F: VTA Board 09/07/2017 Excerpt Minutes and Packet (PDF) 1 171019 SL/PLANNING/LONGRANGE/North Ventura CAP/Local Support for MTC Resolution No. ____ Resolution of the Council of the City of Palo Alto Authorizing the Filing of an Application for Funding Assigned to the Metropolitan Transportation Commission, Expressing Local Support and Committing Any Necessary Matching Funds, and Stating Assurance to Complete the North Ventura Coordinated Area Plan Project R E C I T A L S A. The City of Palo Alto (herein referred to as APPLICANT) submitted an application to the Metropolitan Transportation Commission (MTC), through the Santa Clara Valley Transportation Authority (VTA) as grant program administrator, for $638,000 in funding assigned to MTC for programming discretion, which includes federal funding administered by the Federal Highway Administration (FHWA) and federal or state funding administered by the California Transportation Commission (CTC) (herein referred to as REGIONAL DISCRETIONARY FUNDING) for the PDA Planning Grant Program Application (herein referred to as PROJECT) for the North Ventura Coordinated Area Plan (herein referred to as PROGRAM). B. The United States Congress from time to time enacts and amends legislation to provide funding for various transportation needs and programs, (collectively, the FEDERAL TRANSPORTATION ACT) including, but not limited to the Surface Transportation Block Grant Program (STP) (23 U.S.C. § 133), the Congestion Mitigation and Air Quality Improvement Program (CMAQ) (23 U.S.C. § 149) and the Transportation Alternatives (TA) set-aside (23 U.S.C. § 133). C. State statutes, including California Streets and Highways Code §182.6, §182.7, and §2381(a)(1), and California Government Code §14527, provide various funding programs for the programming discretion of the Metropolitan Planning Organization (MPO) and the Regional Transportation Planning Agency (RTPA). D. Pursuant to the FEDERAL TRANSPORTATION ACT, and any regulations promulgated thereunder, eligible project sponsors wishing to receive federal or state funds for a regionally-significant project shall submit an application first with the appropriate MPO, or RTPA, as applicable, for review and inclusion in the federal Transportation Improvement Program (TIP). E. MTC is the MPO and RTPA for the nine counties of the San Francisco Bay region. F. MTC has adopted a Regional Project Funding Delivery Policy (MTC Resolution No. 3606, revised) that sets out procedures governing the application and use of REGIONAL DISCRETIONARY FUNDING. G. APPLICANT is an eligible sponsor for REGIONAL DISCRETIONARY FUNDING. H. As part of the application for REGIONAL DISCRETIONARY FUNDING, MTC requires a resolution adopted by the responsible implementing agency stating the following: • the commitment of any required matching funds; and 2 171019 SL/PLANNING/LONGRANGE/North Ventura CAP/Local Support for MTC • that the sponsor understands that the REGIONAL DISCRETIONARY FUNDING is fixed at the programmed amount, and therefore any cost increase cannot be expected to be funded with additional REGIONAL DISCRETIONARY FUNDING; and • that the PROJECT will comply with the procedures, delivery milestones and funding deadlines specified in the Regional Project Funding Delivery Policy (MTC Resolution No. 3606, revised); and • the assurance of the sponsor to complete the PROJECT as described in the application, subject to environmental clearance, and if approved, as included in MTC's federal Transportation Improvement Program (TIP); and • that the PROJECT will have adequate staffing resources to deliver and complete the PROJECT within the schedule submitted with the project application; and • that the PROJECT will comply with all project-specific requirements as set forth in the PROGRAM; and • that APPLICANT has assigned, and will maintain a single point of contact for all FHWA- and CTC-funded transportation projects to coordinate within the agency and with the respective Congestion Management Agency (CMA), MTC, Caltrans, FHWA, and CTC on all communications, inquires or issues that may arise during the federal programming and delivery process for all FHWA- and CTC-funded transportation and transit projects implemented by APPLICANT. I. APPLICANT is authorized to submit an application for REGIONAL DISCRETIONARY FUNDING for the PROJECT. J. There is no legal impediment to APPLICANT making applications for the funds. K. There is no pending or threatened litigation that might in any way adversely affect the proposed PROJECT, or the ability of APPLICANT to deliver such PROJECT. L. APPLICANT authorizes its City Manager or designee to execute and file an application with MTC for REGIONAL DISCRETIONARY FUNDING for the PROJECT as referenced in this resolution. M. MTC requires that a copy of this resolution be transmitted to the MTC in conjunction with the filing of the application. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Palo Alto as follows: SECTION 1: APPLICANT is authorized to execute and file an application for funding for the PROJECT for REGIONAL DISCRETIONARY FUNDING under the FEDERAL TRANSPORTATION ACT or continued funding. 3 171019 SL/PLANNING/LONGRANGE/North Ventura CAP/Local Support for MTC SECTION 2: APPLICANT will provide any required matching funds. SECTION 3: APPLICANT understands that the REGIONAL DISCRETIONARY FUNDING for the project is fixed at the MTC approved programmed amount, and that any cost increases must be funded by the APPLICANT from other funds, and that APPLICANT does not expect any cost increases to be funded with additional REGIONAL DISCRETIONARY FUNDING. SECTION 4: APPLICANT understands the funding deadlines associated with these funds and will comply with the provisions and requirements of the Regional Project Funding Delivery Policy (MTC Resolution No. 3606, revised) and APPLICANT has, and will retain the expertise, knowledge and resources necessary to deliver federally-funded transportation and transit projects, and has assigned, and will maintain a single point of contact for all FHWA- and CTC- funded transportation projects to coordinate within the agency and with the respective Congestion Management Agency (CMA), MTC, Caltrans, FHWA, and CTC on all communications, inquires or issues that may arise during the federal programming and delivery process for all FHWA- and CTC-funded transportation and transit projects implemented by APPLICANT. SECTION 5: The PROJECT will be implemented as described in the complete application and in this resolution, subject to environmental clearance, and, if approved, for the amount approved by MTC and programmed in the federal TIP. SECTION 6: APPLICANT has reviewed the PROJECT and has adequate staffing resources to deliver and complete the PROJECT within the schedule submitted with the project application. SECTION 7: The PROJECT will comply with the requirements as set forth in MTC programming guidelines and project selection procedures for the PROGRAM. SECTION 8: APPLICANT is an eligible sponsor of REGIONAL DISCRETIONARY FUNDING funded projects. SECTION 9: APPLICANT is authorized to submit an application for REGIONAL DISCRETIONARY FUNDING for the PROJECT. SECTION 10: There is no legal impediment to APPLICANT making applications for the funds. SECTION 11: There is no pending or threatened litigation that might in any way adversely affect the proposed PROJECT, or the ability of APPLICANT to deliver such PROJECT. SECTION 12: APPLICANT authorizes its City Manager or designee to execute and file an application with MTC for REGIONAL DISCRETIONARY FUNDING for the PROJECT as referenced in this resolution. SECTION 13: A copy of this resolution will be transmitted to the MTC upon adoption. 4 171019 SL/PLANNING/LONGRANGE/North Ventura CAP/Local Support for MTC SECTION 14: The MTC is requested to support the application for the PROJECT described in the resolution, and if approved, to include the PROJECT in MTC's federal TIP upon submittal by the project sponsor for TIP programming. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ___________________________ Assistant City Attorney City Manager or Designee ___________________________ Director of Administrative Services ___________________________ Director of Planning and Community Environment Palo Alto Municipal Code Chapter 19.10 COORDINATED AREA PLANS Sections: 19.10.010 Purposes. 19.10.020 Initiation. 19.10.030 Procedures. 19.10.040 Contents of coordinated area plans. 19.10.050 Coordinated development permit required. 19.10.060 Development must be consistent with coordinated area plan. 19.10.010 Purposes. This chapter establishes procedures for preparation of coordinated area plans. This chapter is intended to achieve, and shall be implemented to accomplish, the following purposes: (a) To create enhanced opportunities for building a sense of community through public involvement in planning processes which are designed not only to satisfy constitutional due process requirements, but also to provide residents, and business and property owners with early, meaningful opportunities to help shape the physical components of their neighborhoods and community. (b) To emphasize and enhance architectural qualities, public improvements, and site design by providing a graphic, visual linkage between policies and programs established in the Comprehensive Plan and specific development entitlements and public improvements. (c) To facilitate physical change by each of the following methods: (1) Accelerating and coordinating the planning process within selected areas so that private development and re-use can proceed under streamlined city review processes. (2) Encouraging rational private investment by providing specific, dependable information about the design requirements, development standards, and uses allowed on a particular site. (3) Analyzing and considering the economic environment so that the planning process works in conjunction with the marketplace, rather than independent of it. (4) Coordinating and timing public infrastructure investment to facilitate desirable private land uses. Page 1 of 5Chapter 19.10 COORDINATED AREA PLANS http://library.amlegal.com/alpscripts/get-content.aspx (d) To assure Palo Alto's environmental quality by using the Comprehensive Plan Environmental Impact Report to focus environmental review on area and site-specific issues and changed circumstances. (e) To facilitate orderly and consistent implementation of the city's Comprehensive Plan and development regulations. (Ord. 4454 § 2 (part), 1997) 19.10.020 Initiation. Coordinated area plans shall be initiated as set forth in this section. (a) Initiation. Coordinated area plans shall be initiated by motion of the city council, upon its own initiative or upon request of the planning commission. Planning commission or council action may be based upon the request of any person or the director of planning and community environment. The council will consider support or opposition from residents, and property and business owners, but such support or opposition shall not compel or preclude council action. The council will further consider whether the area has been identified in the comprehensive plan for coordinated area planning. (b) Minimum Area Size. Coordinated area plans may be prepared for any area that includes more than one parcel. (c) The city may from time to time establish application forms, submittal requirements, fees, and such other requirements, administrative guidelines and regulations as will aid in the efficient preparation and implementation of coordinated area plans. (Ord. 4454 § 2 (part), 1997) 19.10.030 Procedures. Coordinated area plans shall be prepared in accordance with the procedures set forth in this section. (a) Council Goals and Policies. Council will establish goals, objectives, and a schedule for each coordinated area plan at the time the plan is initiated or shortly thereafter. The goals and objectives will be supplemental to existing Comprehensive Plan policies and programs. Council may establish goals, objectives, and a schedule during preliminary review pursuant to Chapter 18.97. (b) Community Involvement. Each coordinated area plan will be prepared pursuant to a program for city-facilitated interaction between residents, business and property owners, and other interested persons. The program shall contain, at a minimum, the following elements: (1) Working Group Formation. The city council shall appoint a seven-to-fourteen-member working group comprising residents, business and property owners, and persons representing broader community interests including, but not limited to, environmental, community design, and business perspectives. The working group shall be advisory to the staff, planning Page 2 of 5Chapter 19.10 COORDINATED AREA PLANS http://library.amlegal.com/alpscripts/get-content.aspx commission, and city council. The working group shall be assisted by a city-designated facilitator who may be a consultant. (2) Working Group Tasks. The working group shall assist staff in preparing a draft coordinated area plan that contains each of the components set forth in Section 19.10.040. The working group shall, at a minimum, accomplish each of the following tasks to facilitate preparation of the coordinated area plan: (A) Initial Public Meeting. The working group shall conduct an initial public meeting to accomplish the following: (1) Establish the general parameters of the plan; (2) Conduct environmental scoping; (3) Identify any known public infra-structure needs and plans; (4) Explain any known private development proposals; (5) Introduce staff and consultants to the public; (6) Identify additional important participants; (7) Identify any other relevant constraints and opportunities. (B) Regular Public Meetings. The working group shall conduct regular meetings. The working group may also form subcommittees to meet from time to time to address particular issues or components of the coordinated area plan. All working group or subcommittee meetings shall be open to the public, with notice provided to property owners and other persons who have expressed an interest in the matter to the city. At least one regular meeting during the first half of the scheduled working group tasks will be conducted as a joint meeting with the city council. The city council may direct additional or revised goals and objectives during or following such meeting(s). (C) Community Update Forum. The working group will schedule and notice at least one community update forum designed to keep the larger community informed of progress on the plan, and to seek the ideas and advice of the larger community regarding the content of the coordinated area plan. (c) Schedule. Coordinated area plans, including review and action by the planning commission and city council, will generally be completed within twelve to fifteen months of the initial public meeting of the working group. (d) Public Hearings. The coordinated area plan shall be considered at public hearings before the planning commission and city council prior to adoption. Notice of the public hearings, initial meeting and community update forum(s) shall be given in the same manner required by law for amendments to the Comprehensive Plan and Zoning Ordinance. (e) Planning Commission and Other Board and Commission Advice and Recommendation. The planning commission shall make a recommendation to the city council upon each coordinated area plan. The director of planning and community environment may seek advice of any other city board or commission if such advice is deemed desirable. Page 3 of 5Chapter 19.10 COORDINATED AREA PLANS http://library.amlegal.com/alpscripts/get-content.aspx (f) Adoption. coordinated area plans shall be adopted by ordinance upon a determination of the city council that the public interest, health, safety and general welfare will be served by the plan, and that the plan is consistent with the Comprehensive Plan. The city council shall also consider the manner in which the proposed coordinated area plan will integrate with and be implemented by the capital improvement program. The city council may approve, reject or modify all or part of the coordinated area plan. (g) Amendments. An ordinance adopting a coordinated area plan may establish procedures for amendments of the plan, including but not limited to procedures authorizing minor amendments by the director of planning and community environment. (h) Fees. As part of the ordinance adopting a coordinated area plan, the city council may impose a coordinated area plan fee upon persons seeking governmental approvals which are required to be consistent with the coordinated area plan. The fees shall be established so that, in the aggregate, they fully recover but as estimated do not exceed, the cost of preparation, adoption, and administration of the coordinated area plan, including costs incurred pursuant to the California Environmental Quality Act. The fee charged will be reasonably prorated to take into account the applicant's relative benefit derived from the plan. It is the intent of the city council to charge persons who benefit from coordinated area plans for the costs of developing those plans which result in savings to them by reducing the cost of documenting environmental consequences and advocating changed land uses which may be authorized. The city council may require a person who requests adoption, amendment, or repeal of a coordinated area plan to deposit with the city an amount equal to the estimated cost of preparing the plan, amendment, or repeal prior to its preparation. (Ord. 4454 § 2 (part), 1997) 19.10.040 Contents of coordinated area plans. Each coordinated area plan shall contain at least the following components. (a) The distribution, location, and extent of land uses, including, but not limited to, industrial, office, commercial, residential, public facilities and open space, within the area covered by the plan. The land uses established by the plan may be supplemental to or different from the uses permitted and specified in the city's zoning districts. For retail commercial and professional office designations, the coordinated area plan shall also include the preferred and allowable uses, their respective orientation, articulation, and floor area ratio. For housing designations, the coordinated area plan shall also include density, floor area ratio, orientation, setbacks, and graphical design prototypes. (b) The proposed distribution, location, and extent and intensity of major components of public and private transportation, sewage, water, drainage, solid waste disposal, energy, and other public improvements proposed to be located within the area covered by the plan and needed to support the land uses described in the plan. (c) A program of implementation measures including development regulations, public works projects, and financing measures necessary to carry out the plan. This program shall be Page 4 of 5Chapter 19.10 COORDINATED AREA PLANS http://library.amlegal.com/alpscripts/get-content.aspx specifically coordinated with the city's capital improvement program ("CIP"), and may include CIP revisions necessary to implement the plan. (d) Standards and criteria by which development will proceed, if needed. (e) Specific architectural and site design objectives and requirements, including but not limited to the scale of streets, building orientation, placement and design of public and private parks or plazas, courtyards, arcades, porches, walls, fences, trellises, sidewalk treatments, and parking configuration. Design guidelines that are specific to the conditions of the area shall be included to address each land use type, streets, parks, and any public facilities. Specific objectives and requirements may be adopted in addition to, or in lieu of, existing zoning and design requirements. The coordinated area plan shall include preliminary elevations and information regarding facades, roofs and building materials. (f) A determination of the economic and fiscal feasibility of the plan with specific analysis of market place factors and incentives and disincentives to the desired development product, as well as a cost-benefit analysis of public infra-structure investments and projected economic benefits to the city and community. (g) Environmental review, provided that to the maximum extent feasible the Comprehensive Plan Environmental Impact Report shall be used as a master or tiered EIR in order to streamline and focus environmental review of the coordinated area plan. (Ord. 4454 § 2 (part), 1997) 19.10.050 Coordinated development permit required. A coordinated development permit shall be required before any building or structure is erected, constructed, enlarged, altered on the exterior, placed or installed on any site located within an area subject to an approved coordinated area plan. (Ord. 4454 § 2 (part), 1997) 19.10.060 Development must be consistent with coordinated area plan. No coordinated development permit shall be issued, nor shall any building or structure be erected, constructed, enlarged, altered on the exterior, placed, installed or moved within an area subject to an approved coordinated area plan except upon a finding that the resulting building or structure is consistent with the coordinated area plan. (Ord. 4454 § 2 (part), 1997) Page 5 of 5Chapter 19.10 COORDINATED AREA PLANS http://library.amlegal.com/alpscripts/get-content.aspx ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION Applications due July 6, 2017 Submit to: Celeste.Fiore@VTA.org General Background Information Project Title North Ventura Coordinated Area Plan Brief Project Description The North Ventura Coordinated Area Plan project would develop a comprehensive planning document similar to a specific plan for a mixed-use neighborhood in proximity to the California Avenue Caltrain station, the California Avenue business district, the El Camino Real corridor, and the Stanford Research Park. The planning process and the plan’s contents would be governed by Palo Alto Municipal Code Section 19.10 and would seek to build a sense of community through public involvement, providing residents, businesses and property owners with a meaningful opportunity to shape the land uses, transportation connections, infrastructure needs, and other physical attributes of the planning area. The boundaries of the planning area comprise the southernmost portion of the Californi a Avenue Area Planned Development Area (PDA) and the northernmost section of the City’s Ventura Neighborhood. (See map provided.) A key component of this planning area is the 12.5 acre site owned by the Sobrato Organization and commonly referred to as the Fry’s site due to the long-time presence of Fry’s Electronics. The site includes approximately 250,000 square feet of office/R&D, retail, and warehouse and is zoned for multifamily housing. Alternatives considered could include repurposing existing buildings as well as complete redevelopment of the site with new construction. The purpose of the North Ventura Coordinated Area Plan is to identify opportunities for transit-oriented housing and employment in a well- planned and designed mixed use area of residential and commercial uses. Open space will also respond to the planning area’s transit oriented character by incorporating pedestrian and bicycle connections to nearby transit services. The plan will identify allowable uses and development standards, including the density, floor area ratio, orientation, and setbacks. Specific architectural and site design objectives and requirements will be identified, including the scale of streets, building orientation, placement and design of public and private parks or plazas, courtyards, arcades, porches, walls, fences, trellises, sidewalk treatments, and parking configuration. Design guidelines will be developed to address each land use type, streets, parks, and any public facilities. ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION By furthering the goals and policies of the City’s updated general plan (an update to the Palo Alto Comprehensive Plan is expected to be adopted this fall) and providing detailed development standards to replace existing zoning, the Plan is intended to facilitate and incentivize orderly development in the area. The plan will consider existing site specific conditions, the economic environment, as well as public infrastructure needs. A determination of the economic feasibility of the plan will be key, with a specific analysis of market place factors and incentives and disincentives to the desired development products, including market demand, costs of development, and other economic factors impacting overall financial feasibility. A cost-benefit analysis will assess public infrastructure investments and overall benefits to the city and community. The plan will encourage the architectural qualities, public improvements and site design that is desired while providing for a streamlined permitting process and certainty regarding resulting community benefits. Planning Activity (Check One Box) Advanced Planning Preliminary Planning Policy Planning Project Sponsor City of Palo Alto Project Contact Name: Elena Lee Title: Senior Planner Agency: City of Palo Alto Phone Number: 650-617-3196 Email Address: Elena.Lee@cityofpaloalto.org Other Project Partners Tim Steele The Sobrato Organization Email Address: tsteele@sobrato.com Project Location Project Location/Target Population If applicable, please attach project area maps: Map #1: Location within agency jurisdiction Map #2: Project Area detail map Is the project in a Community of Concern or CARE Community? See Attachments D and E. ___ Yes _X__ No X ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION Does the project target low-income populations? _X__ Yes* ___ No *Via Below Moderate Residential (BMR) units constructed within the project area Project Budget (Maximum Fund Request is $1,000,000; Minimum $250,000) Total Project Cost $750,000 Grant Request (88.53% maximum) $638,000 Matching Funds (amount & source) $112,000 - private funds from the Sobrato Organization. (The Sobrato Organization has also agreed to provide an additional $138,000 for CEQA review, which would be undertaken simultaneously with and separate from preparation of the coordinated area plan.) Estimated Project Timeline and Draft Non- Infrastructure Project Work Plan Project Work Plan Grant Application due July 6, 2017 Submit E-76 Request to Caltrans (Projects > $500,000): November 1, 2017 Execute Funding Agreement with VTA (Projects < $500,000): Obligation/Authorization – January 31, 2018 Begin Reimbursable Work: February 2018 Project Completion: October 2019 City Council Approval: October 2019 Grant Close-out: January/February 2020 Interim Project Milestones: Milestone #1: City Council initiation of the project, including approval of a scope of work (December 2017), confirmation of plan boundaries, and adoption of plan goals and a schedule together with appointment of a Community Working Group (January/February 2018) Milestone #2: Existing conditions and issues/opportunities report, including known development in the area; Neighborhood Community Meeting #1 (Summer 2018) Milestone #3: Land use alternatives & project definition; joint session with the Community Working Group and the City Council (Fall 2018). ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION Milestone #4: Transportation impacts analysis and financial feasibility report; Neighborhood Community Meeting #2 (Spring 2019). Milestone #5: Draft plan; hearings of the Architectural Review Board, Planning & Transportation Commission, and City Council (Summer 2019) Milestone #6: Final plan; recommendation from the Community Working Group and the Planning & Transportation Commission; hearing by the City Council (Fall 2019) Project Completion: October, 2019 (Note: the Community Working Group would meet regularly during the planning process; CEQA review would be conducted concurrently to allow for plan adoption in the Fall of 2019.) Attach draft version of Exhibit 3-R Non-infrastructure Project Work Plan (application incomplete without draft Exhibit 3-R) Project Questions 1. Describe how the project or its implementation will help achieve One Bay Area Grant program goals and objectives and facilitate PDA implementation in the following categories: a. Increase housing supply, including affordable housing1 for low-income residents. b. Increase and jobs within PDAs. c. Increase land use intensities in PDAs. d. Boost transit ridership within PDAs. e. Increase walking, bicycling, carpooling and/or car-sharing within PDAs. f. Manage parking and driving. g. Promote multimodal connections within the PDAs. h. Locate key services and retail businesses within PDAs. Please highlight plan benefits, including (but not limited to): • enhanced walkability and bikeability • safety and security; enhanced economic activity • protection of environmental resources • public transit access or amenities 1 Affordable housing, for the purposes of this application is defined by the limits set by HUD for Santa Clara County, found at https://www.huduser.gov/portal/datasets/il/il2017/2017summary.odn ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION • parking design, streetscape design • gap closure of an essential pedestrian/ bicycle route or network • access to services that meet daily needs The intent of the North Ventura Coordinated Area Plan (CAP) is to develop a comprehensive document that will identify the distribution, location and extent of land uses, planning policies, development regulations and design guidelines to enable private development and needed infrastructure investments in the project area. The project area includes one of the City’s largest housing opportunity sites, and the CAP will encourage multifamily housing throughout the area, including affordable housing for low income residents, while allowing for a mix of non-residential uses, and enhancing connectivity and circulation for pedestrians and cyclists seeking to access nearby transit services (the California Avenue Caltrain station and VTA bus service on El Camino Real). The enhanced connectivity will be one part of a comprehensive plan for area streetscapes and open spaces, providing connections to the California Avenue Business District and to Park Boulevard, identified as a bicycle boulevard in the City’s Bicycle + Pedestrian Transportation Plan and an important pathway to other parts of the City. Park Boulevard also serves an important pedestrian path for area residents and employees to the California Avenue Business District, one the City’s important commercial centers. This project offers an opportunity to improve not just connectivity, but the quality of these facilities. The Cal Ave Business District, designated in the General Plan as a multi-neighborhood center, contains both neighborhood services and a significant employment center. The CAP will also provide parking design standards for future development that are appropriate for the mix of uses proposed and the transit-accessible location of the area. An alternatives analysis will examine the financial feasibility of daylighting a small section of the creek that currently traverses the Sobrato Organization’s site in a culvert. With excellent access to transit and the availability of larger underutilized parcels of land, the larger California Avenue area has been a popular area for redevelopment since the end of the recession. This redevelopment has happened in an area that was not really anticipated for growth when the City’s current general plan, the 1998 Comprehensive Plan, was adopted. As a result, there have been unanticipated demands on area infrastructure, and an increase in area population. This project offers the City a comprehensive approach to improvements, something that was not possible when development happened on a project by project approach The subset of the PDA proposed for focus in this coordinated area plan has remained – with a few exceptions -- largely unchanged and represents an opportunity for more proactive planning. The Sobrato Organization’s property, for example, could provide approximately 360 multifamily dwelling units under its current zoning (RM-30). While adjacent parcels owned by the Sobrato Organization are currently being developed for a total of 50 units of rental housing and 19,000 square feet of retail, their site within the planning area provides an opportunity to consider higher densities and a mix of uses appropriate for its proximity to transit, jobs and services. The Coordinated Area Plan will build upon the area’s existing strengths and help to focus growth in a location that can provide multi-modal opportunities for future residents, visitors and employees. The plan would also emphasize better connectivity for all modes of travel. Because the includes some large campuses, the plan will examine opportunities to update the street network, potentially connecting sections of the grid between Park Boulevard and El Camino Real, and will examine other ways to make area streets attractive and stress free for all users. The project area is located within walking distance of existing and future transit facilities of regional significance including the existing Caltrain – California Avenue Station, the existing El Camino Real transit routes, future El Camino Real Bus Rapid Transit ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION Station, and local Stanford University Marguerite and VTA routes. These existing public transit systems provide direct access to significant destinations and employers inside and outside the planning area, including Stanford University Research Park, the County Courthouse, and the California Avenue Business District. In addition, the plan would help support the vision of the City’s 2012 Bicycle + Pedestrian Master Plan by focusing attention on one the City’s primary bicycle corridors on Park Boulevard. 2. Describe how the jurisdiction in which the project is located has demonstrated a commitment to provide an increase in housing, employment, and transportation choices through its’ existing policies. These policies may include (but are not limited to)policies and regulations, such as innovative parking policies, TOD zoning, transportation demand management strategies, existing citywide affordable housing policies and approved projects, supportive general plan policies, sustainability policies, including green building policies and alternative energy policies. A majority of the planning area, is located within the Transit-Oriented Residential land use designation (TOR) established by the City’s general plan. This designation allows high density residential development in areas that are within 2,000 feet of a multi-modal transit station and reflects the City’s commitment to placing higher densities (commercial and residential) in proximity to transit. Similarly, parcels located at the northern half of the project site (primarily 395 Page Mill Road) has been zoned Pedestrian Transit Oriented Development (PTOD). The PTOD designation is intended to allow higher density residential uses on commercial, industrial and multi-family parcels within a walkable distance of the Caltrain station. The City’s current Transportation Element (Goal T-3 - Bicycling and Walking) and Land use and Design Element (Goal L-4 - Centers) of the Comprehensive Plan include policies encouraging a mix of uses and walkable neighborhoods with new streets and pedestrian connections for the project area. The policies encourage the provision and enhancement of pedestrian and bicycle access between transit stations, shopping centers and employment centers. The City’s adopted Housing Element of the Comprehensive Plan policies, under Goal H2, also encourages the creation of higher density residential development near schools, transit, parks, shopping, employment and cultural institutions. The policies support development of higher density, along with a mix of uses, on parcels within walking distance of the California Avenue Caltrain Station. In the current RHNA cycle (2014 to 2022), the City has so far permitted 310 units, of which 121 are affordable, and the proposed plan would put Palo Alto on track to accelerate production of multifamily housing. The City has also adopted a Sustainability and Climate Action Plan (S/CAP) framework to guide the City towards climate and sustainability leadership. This strategic plan sets direction and overall policy goals, including reducing greenhouse gas (GHG) emissions and single occupant vehicle trips through encouraging walkable and bikeable neighborhoods and conserving energy, water, and other natural resources. The general plan update that is currently underway (anticipated to be completed this fall) also includes policies that would encourage greater density near the City’s two multi-modal transit areas, including California Avenue, as well as the use of transit and TDM measures. For example, the proposed update includes policies and programs that recognize areas near the Cal Ave and University Avenue Caltrain stations as appropriate locations for greater residential density and mix of uses. One of the proposed policies calls for a coordinated area plan for the project site that would help create a walkable neighborhood with multi-family housing, retail, a public park, creek improvements and an interconnected street grid. The update also includes policies and programs that would encourage cooperation between residents, business owners, and other agencies to implement innovative solutions and expand comprehensive programs that would reduce reliance on single-occupant vehicles and increase the use of alternatives, such as walking and public transit. ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION This City’s adopted Bicycle + Pedestrian Master Plan guides public and private investment in non- motorized transportation facilities and related programs, and laid a foundation for the use of Park Boulevard as an important access route by designating it as a bicycle boulevard to and through the planning area. The Rail Corridor Study approved in 2013 also covered this portion of Palo Alto and established a community vision for land use, transportation and urban design opportunities along the Caltrain corridor. The Study identifies this area as an important one for strong pedestrian and transit- oriented uses, as well as one that can accommodate future development. The City is also proposing a new Public Safety Building, designed both for compatibility and resiliency, near the planning area at 250 Sherman Avenue, a more central location for the City. The project also includes an approximately 600 space parking garage that will serve the Cal Ave Business District. Palo Alto has also consistently demonstrated its commitment to sustainability. The City’s first Climate Protection Plan was adopted in 2007. Since then the City has adopted a green building ordinance that goes above and beyond State requirements and the Sustainability and Climate Adaptation Plan Framework (S/CAP). The S/CAP is a roadmap for the City’s environmental stewardship and commitment to exceed the State’s requirements for greenhouse gas (GHG) emission reductions. The proposal to focus density near transit, such as this project, is a key example of the implementation of these policies and goals. 3. What are the outcomes of this plan that the jurisdiction hopes to achieve through this grant? A) Please list and describe desired outcomes. B) What implementation actions will this planning effort lead to? (For example, capital project lists, zoning change, implementation of parking management practice, change of City design standards, LOS standards, etc.) What is the proposed schedule for these actions? C) How does the jurisdiction propose to measure whether housing and/or employment with the PDAs increased as a result of implementing the PDA Planning Grant funded project? The City’s desired outcomes include the following: • preparation of a coordinated area plan that both reflects the community’s vision for the area and provides property owners with certainty about the development standards and process they will use to seek approval for new development; • high density multifamily housing, including affordable units; • a mix of commercial uses, including retail and public services; • financially feasible community benefits in the form of open space infrastructure improvements; • an improved relationship between the planning area and adjacent neighborhoods, including enhanced connectivity and circulation for pedestrians, cyclists and drivers; • context-sensitive, pedestrian-scaled development; and • a planning process and a final work products that balance the needs of neighborhood residents, property owners, and the daytime population of the area. The proposed plan would include implementation actions in the form of development (zoning) standards, design guidelines, and a list of capital projects for implementation by private investors and the City. The plan would include parking standards appropriate to the mix of uses and transit-accessible location, and would also include an area-wide transportation demand management program. All of ATTACHMENT B PDA PLANNING GRANT PROGRAM APPLICATION these implementing actions would be identified in the plan and would thus be adopted by October 2019. The success of the program would be measured by determining the increased number of housing units (as well as variety of type), non-residential square footage, and community benefits that accrue from the plan. Due to limited housing sites and the higher return on investment from non-residential development, there has not been as much multi-family housing development in Palo Alto as in other nearby jurisdictions. The coordinated area plan provides an opportunity to change this paradigm and encourage higher density housing and a mix of non-residential uses, while also ensuring that negative impacts would be avoided and that the larger community would see a benefit. 4. Please describe the project’s community outreach component. Is it designed to involve the affected community, including existing residents and business owners, to ensure that community concerns are understood and reflected in the plan? Preparation of a coordinated area plan requires a minimum of two neighborhood community meetings and seven meetings of a 7-14 member community working group appointed by the City Council (community working group meetings are open to the public). In addition, the plan would be reviewed by the Planning and Transportation Commission, Historic Resources Board, Architectural Review Board, and the City Council at public hearings scheduled for this purpose. The City Council would establish the goals, objectives and schedule for the planning process, including a detailed program for City facilitated outreach and feedback between residents, business and property owners and other interested members of the public. The City Council appointed community working group would be comprised of residents, business and property owners and other stakeholders, and would be the focal point for community involvement during the planning process. The working group would work with staff and consultants to analyze issues/opportunities and alternatives, and to develop the draft plan for the City Council’s consideration. The group would hold regular meetings that are open to the public, and at least one of the initial working group meetings would be a joint meeting with the City Council to enable early dialogue between the bodies. Public meetings and hearings would be complemented by a robust online and electronic outreach effort. A website would be created to both gather and disseminate information as part of the outreach process. The City has used an online forum for civic engagement successfully in the past, and would request feedback from the general public on goals and concepts, alternatives, and on draft documents. Similar to what was done from the Comprehensive Plan Update, this forum would be used throughout the planning process to get public feedback from those who may not be able to attend meetings or participate in the entire process. Local Assistance Procedures Manual DRAFT EXHIBIT 3-R North Ventura Coordinated Area Plan Page 3-63 LPP 12-01 January 27, 2012 Date: 6/26/2017 Project Number:SRTSLNI-XXXX(XXX) Project Location:City of Palo Alto Task Summary:Start End Cost Task "A"November, 2017 October, 2019 612,000$ 138,000$ Task "B"$ Task "C"$ Task "D" Task "E"$ 750,000$ TASK "A" DETAIL: Start Date:Month-Year End Date:Month-Year 1 Deliverables:2 3 4 GRAND TOTAL (This sample is for projects performed by local agency staff. It may be modified for work performed by consultant.) Project Description: The North Ventura Coordinated Area Plan project would develop a comprehensive planning document similar to a specific plan for a mixed-use neighborhood in proximity to the California Avenue Caltrain station, the California Avenue business district, the El Camion Camino Real corridor, and the Stanford Research Park. The planning process and the plan’s contents would be governed by Palo Alto Municipal Code Section 19.10 and would seek to build a sense of community through public involvement, providing residents, businesses and property owners with a meaningful opportunity to shape the land uses, transportation connections, infrastructure needs, and other physical attributes of the planning area. The purpose of the North Ventura Coordinated Area Plan is to identify opportunities for transit-oriented housing and employment in a well-planned and designed mixed use area of residential and commercial uses. Open space will also respond to the planning area’s transit oriented character by incorporating pedestrian and bicycle connections to nearby transit services. The plan will identify allowable uses and development standards, including the density, floor area ratio, orientation, and setbacks. Specific architectural and site design objectives and requirements will be identified, including the scale of streets, building orientation, placement and design of public and private parks or plazas, courtyards, arcades, porches, walls, fences, trellises, sidewalk treatments, and parking configuration. Design guidelines will be developed to address each land use type, streets, parks, and any public facilities. North Ventura Coordinated Area Plan (Concurrent CEQA Process for the North Ventura CAP to be funded separately) Task Summary:Preparation of a Coordinated Area Plan for North Ventura Area and public process Schedule: Activities/ Project initiation, approval of work scope and appointment of Community Working Group (CWG) by City Council. November 2017-February 2018. ($150,000) Preparation of Existing Conditions Opportunity Report, Land use Alternatives, Transportation Analysis and Financial Feasibility Report. Neighborhood Community Meetings #1 & 2, and kick-off of regular CWG Meetings. February 2018- May 2019. ($230,000) Preparation of Draft Plan and continued public meetings. May-August 2019 ($220,000) Public hearings on Draft Plan with Architectural Review Board, Planning & Transportation Commission (PTC) and CWG. August-October 2019. ($70,000) Chapter 3 Local Assistance Procedures Manual DRAFT Project Authorization Page 3-64 January 27, 2012 LPP 12-01 5 Staff Costs: Staff Time Hours Rate Total $ Other Costs: $750,000 Final plan, recommendation from CWG/PTC to City Council for adoption September-October 2019. ($80,000) " TOTAL $750,000 Other Direct Costs: Total Other Costs: TASK GRAND TOTAL: Task Notes: Staff Costs: Indirect Costs: Total Staff Costs: Travel: Equipment: Suppies/Materials: " Local Assistance Procedures Manual DRAFT EXHIBIT 3-R North Ventura Coordinated Area Plan Page 3-63 LPP 12-01 January 27, 2012 • Repeat Task Details table for all identified tasks • Include a Gantt Chart for the tasks, if appropriate. BOARD OF DIRECTORS MEETING Thursday, September 7, 2017 MINUTES 1. CALL TO ORDER AND ROLL CALL The Regular Meeting of the Santa Clara Valley Transportation Authority’s (VTA) Board of Directors (Board) was called to order by Chairperson Bruins at 5:34 p.m. in the Board of Supervisors’ Chambers, County Government Center, 70 West Hedding Street, San José, California. 1.1. ROLL CALL Attendee Name Title Status Jeannie Bruins Chairperson Present Larry Carr Board Member Present Cindy Chavez Board Member Present David Cortese Alternate Board Member Absent Dev Davis Alternate Board Member Absent Lan Diep Board Member Present Daniel Harney Alternate Board Member Absent Glenn Hendricks Board Member Present Chappie Jones Board Member Present Johnny Khamis Board Member Present Sam Liccardo Vice Chairperson Present John McAlister Alternate Board Member Present Bob Nunez Alternate Board Member Present Teresa O'Neill Board Member Present Raul Peralez Board Member Present Rob Rennie Alternate Board Member Absent Savita Vaidhyanathan Board Member Present Ken Yeager Board Member Absent * Alternates do not serve unless participating as a Member. A quorum was present. 1.2. Orders of the Day Chairperson Bruins noted that staff requested Agenda Item #8.1.B., Receive Safety and Security Report, be heard prior to Agenda Item #8.1.A., Receive Government Affairs Update. MINUTES BOARD OF DIRECTORS Thursday, September 07, 2017 Page 2 of 13 Chairperson Bruins noted the addendum to the Agenda, Agenda Item 8.1.B.X., Silicon Valley Rapid Transit (SVRT) Operations and Maintenance Agreement Update. Board Member Vaidhyanathan requested Agenda Item 6.10., Update on Silicon Valley Express Lanes Electronic Toll Systems Integration Services, be removed from the Consent Agenda and placed on the Regular Agenda. M/S/C (Chavez/Carr) to accept the Orders of the Day. RESULT: ACCEPTED [UNANIMOUS] – Agenda Item #1.2 MOVER: Cindy Chavez, Board Member SECONDER: Larry Carr, Board Member AYES: Bruins, Carr, Chavez, Hendricks, Jones, Khamis, O'Neill, Peralez, Vaidhyanathan NOES: None ABSENT: Diep, Liccardo, Yeager Vice Chairperson Liccardo arrived and took his seat at 5:36 p.m. Board Member Diep arrived and took his seat at 5:37 p.m. 2. AWARDS AND COMMENDATION 2.1. Retiree's Recognition September 2017 The Board recognized the following retirees for their distinguished public service with VTA: Arthur Douwes, Operations Manager, Engineering, for 37 years of service; Kim Alejandro, Service Mechanic, for 36 years of service, and; Richard Terry, Coach Operator, for 29 years of service; The following retirees were unable to attend, but were recognized for their distinguished public service with VTA: Rick Melatti, Transit Foreperson, for 37 years of service; Rely Villanueva, Transit Foreperson, for 35 years of service; Horacio Ubillos, Coach Operator, for 31 years of service, and; Derrick McCray, Coach Operator, for 33 years of service. Vice Chairperson Liccardo recognized Kurt Evans, Government Affairs Manager, for 25 years of distinguished public service with VTA. Cassie Mancini, on behalf of the Assembly Member Evan Low, presented a Certificate of Recognition to Kurt Evans in recognition of 22 years of dedicated and impactful service to the residents of Santa Clara County. NOTE: M/S/C MEANS MOTION SECONDED AND CARRIED AND, UNLESS OTHERWISE INDICATED, THE MOTION PASSED UNANIMOUSLY. MINUTES BOARD OF DIRECTORS Thursday, September 07, 2017 Page 3 of 13 3. PUBLIC COMMENT Angelia Doerner, Interested Citizen, provided a handout and made the following comments: 1) Silicon Valley’s economic vitality and housing crisis created re-routing of regional cut- through traffic, thereby causing devastating impacts in Los Gatos, and 2) requested a stop sign be placed at Massol Avenue and Highway 9, noting this intersection has already claimed one life. John Rainville, Interested Citizen, requested VTA continue Bus Route 180, noting its importance to the community. Eugene Bradley, Silicon Valley Transit Users, made the following comments: 1) commended VTA for providing free bus and light rail service during the heat wave; 2) requested, in writing, the cost to VTA of not collecting fares during the heat wave, and; 3) expressed appreciation to VTA for running service to cooling centers throughout Santa Clara County. Roland Lebrun, Interested Citizen, offered the following comments: 1) a potential site has been identified for “tiny home villages” near the Santa Teresa Light Rail Station and requested VTA look into the possible leasing agreements, and; 2) suggested VTA consider twin bore tunneling without cut and cover for - Phase 2 of the VTA’s BART Silicon Valley Extension Project. James Wightman, Interested Citizen, made the following comments: 1) queried about the implementation of Next Network Service Changes; 2) queried about October 2017 and January 2018 Service Changes; 3) expressed safety and operations concerns at VTA stops and park and ride lots. William MacDonald, Interested Citizen, expressed concern on the following: 1) passenger vehicles pulling out in front of buses; 2) bus annunciators are not working; and 3) undue litigation VTA is faced with. 4. PUBLIC HEARINGS There were no Public Hearings. 5. COMMITTEE REPORTS 5.1. Citizens Advisory Committee (CAC) Chairperson's Report The Citizens Advisory Committee (CAC) Chairperson’s report was contained in the Board Members’ reading folders and placed on the public table. 5.2. Policy Advisory Committee (PAC) Chairperson’s Report Chairperson Bruins noted Mr. Miller would provide the Policy Advisory Committee (PAC) Chairperson’s Report upon his arrival. MINUTES BOARD OF DIRECTORS Thursday, September 07, 2017 Page 4 of 13 5.3. Policy Advisory Board Chairpersons' Report There were no Policy Advisory Board reports. 6. CONSENT AGENDA Public Comment Mr. Lebrun referenced Agenda Item #6.11., Pedestrian Access to Transit Plan, and expressed the importance of providing a pedestrian overpass to connect the 200 affordable housing units on Cottle Road in San Jose to the VTA light rail platform and Kaiser Hospital. Chairperson Bruins referenced Agenda Item #6.2., Transit Assistance Program (TAP), which authorizes the General Manager to contract with Santa Clara County for the TAP program. TAP successfully helped economically challenged residents to access public transportation. The current contract is expiring and this action will allow VTA to fund this program from reserves until the 2016 Measure B funds become available. Vice Chairperson Liccardo noted his recusal on the following: Agenda Item 6.3., SR 237 Express Lanes Phase 2 – Mark Thomas and Company Contract Amendment, and; Agenda Item 6.4., Electric Bus Charging Infrastructure, Cerone Phase 1 Contract (C17156). 6.1. Board of Directors Regular Meeting Minutes of August 3, 2017 M/S/C (Hendricks/Peralez) to approve the Board of Directors Regular Meeting Minutes of August 3, 2017. 6.2. Transit Assistance program (TAP) M/S/C (Hendricks/Peralez) to authorize the General Manager to execute an agreement with the County of Santa Clara to continue the Transit Assistance program (TAP) for one year with four one-year extensions for an aggregate total of $1,000,000. 6.3. SR 237 Express Lanes Phase 2 – Mark Thomas and Company Contract Amendment M/S/C (Hendricks/Peralez) on a vote of 10 ayes, 0 noes, and 1 recusal to authorize the General Manager to execute contract amendments with Mark Thomas and Company, Inc. in an amount not to exceed $410,000, increasing the not-to-exceed total contract value to $3,728,769 for the SR 237 Express Lanes Project (Project). This authorization would cover the cost of the additional Design Services to complete final design and the cost of Design Services During Construction (DSDC). Vice Chairperson Liccardo recused. MINUTES BOARD OF DIRECTORS Thursday, September 07, 2017 Page 5 of 13 6.4. Electric Bus Charging Infrastructure, Cerone Phase 1 contract (C17156). M/S/C (Hendricks/Peralez) on a vote of 10 ayes, 0 noes, and 1 recusal to authorize the General Manager to execute a contract with DMZ Builders, the lowest responsive and responsible bidder, for the construction of the Electric Bus Charging Infrastructure, Cerone Phase 1 contract (C17156). Vice Chairperson Liccardo recused. 6.5. Fiscal Year 2017 Federal Transit Administration (FTA) Grants M/S/C (Hendricks/Peralez) to: 1) authorize the General Manager to submit Federal Fiscal Year 2017 grant applications and execute grant agreements with the Federal Transit Administration (FTA) for Section 5307 Urbanized Area Formula, Section 5309 New Starts, Section 5337 Fixed Guideway and High Intensity Motorbus, and Section 5339 Bus and Bus Facilities funds, and; 2) Adopt Resolution Number 2017.09.28 authorizing the filing of applications with the Federal Transit Administration for Federal transportation assistance authorized by 49 U.S.C. chapter 53, title 23 United States Code, and other Federal statutes administered by the Federal Transit Administration. 6.6. PDA Investment and Growth Strategy M/S/C (Hendricks/Peralez) to approve the Priority Development Area (PDA) Investment and Growth Strategy, Third Edition, as a requirement of receiving future OBAG grant funding. 6.7. Priority Development Area Planning Grant Program of Projects M/S/C (Hendricks/Peralez) to approve the 2017 Priority Development Area (PDA) Planning Grant Program of Projects for funding. 6.8. Legislative Update Matrix. M/S/C (Hendricks/Peralez) to review the Legislative Update Matrix. 6.9. VTA-ATU Pension Plan Actuarial Valuation as of January 1, 2017 M/S/C (Hendricks/Peralez) to receive the report on VTA-ATU Pension Plan Actuarial Valuation as of January 1, 2017. 6.10. (Removed from the Consent Agenda and placed on the Regular Agenda.) Receive information on a new contract for Silicon Valley Express Lanes Electronic Toll Systems Integration Services with TransCore, LP. 6.11. Pedestrian Access to Transit Plan M/S/C (Hendricks/Peralez) to review the Draft Pedestrian Access to Transit Plan. MINUTES BOARD OF DIRECTORS Thursday, September 07, 2017 Page 6 of 13 RESULT: APPROVED [UNANIMOUS] – Agenda Items 6.1-6.2; 6.5-6.9, and; 6.11 MOVER: Glenn Hendricks, Board Member SECONDER: Raul Peralez, Board Member AYES: Bruins, Carr, Chavez, Diep, Hendricks, Jones, Khamis, Liccardo, O'Neill, Peralez, Vaidhyanathan NOES: None ABSENT: Yeager RESULT: APPROVED – Agenda Items 6.3-6.4 MOVER: Glenn Hendricks, Board Member SECONDER: Raul Peralez, Board Member AYES: Bruins, Carr, Chavez, Diep, Hendricks, Jones, Khamis, O'Neill, Peralez, Vaidhyanathan NOES: None RECUSAL: Liccardo ABSENT: Yeager 5. COMMITTEE REPORTS (CONTINUED) 5.2. Policy Advisory Committee (PAC) Chairperson's Report (continued) Policy Advisory Committee (PAC) Chairperson Miller provided a brief report, noting the Committee received an update on the 2016 Measure B Program Category Guidelines and expressed its support for maintaining the 50 percent cap, per jurisdiction, for the Bicycle and Pedestrian Program Category. 7. REGULAR AGENDA Chairperson Bruins stated Agenda Item #6.10., Update on Silicon Valley Express Lanes Electronic Toll Systems Integration Services, would now be heard. The Agenda was taken out of order. 6.10. Update on Silicon Valley Express Lanes (SVEL) Electronic Toll Systems Integration Services Upon inquiry of Board Member Vaidhyanathan, Casey Emoto, Deputy Director, Project Development, indicated State Route (SR) 85-related solutions will be brought up through the policy advisory board process. BOARD OF DIRECTORS MEETING Thursday, September 7, 2017 5:30 p.m. Board of Supervisors’ Chambers County Government Center 70 West Hedding Street San Jose, California ADDENDUM TO AGENDA 8.1.B.X. INFORMATION ITEM - Receive an update on the Silicon Valley Rapid Transit (SVRT) Operations and Maintenance Agreement. (Verbal Report) BOARD OF DIRECTORS MEETING Thursday, September 7, 2017 5:30 PM Board of Supervisors’ Chambers County Government Center 70 West Hedding Street San Jose, CA 95110 AGENDA To help you better understand, follow, and participate in the meeting, the following information is provided: Persons wishing to address the Board of Directors on any item on the agenda or not on the agenda are requested to complete a blue card located at the public information table and hand it to the Board Secretary staff prior to the meeting or before the item is heard. Speakers will be called to address the Board when their agenda item(s) arise during the meeting and are asked to limit their comments to 2 minutes. The amount of time allocated to speakers may vary at the Chairperson's discretion depending on the number of speakers and length of the agenda. If presenting handout materials, please provide 25 copies to the Board Secretary for distribution to the Board of Directors. The Consent Agenda items may be voted on in one motion at the beginning of the meeting. The Board may also move regular agenda items on the consent agenda during Orders of the Day. If you wish to discuss any of these items, please request the item be removed from the Consent Agenda by notifying the Board Secretary staff or completing a blue card at the public information table prior to the meeting or prior to the Consent Agenda being heard. AGENDA BOARD OF DIRECTORS Thursday, September 07, 2017 Page 2 of 6 Disclosure of Campaign Contributions to Board Members (Government Code Section 84308) In accordance with Government Code Section 84308, no VTA Board Member shall accept, solicit, or direct a contribution of more than $250 from any party, or his or her agent, or from any participant, or his or her agent, while a proceeding involving a license, permit, or other entitlement for use is pending before the agency. Any Board Member who has received a contribution within the preceding 12 months in an amount of more than $250 from a party or from any agent or participant shall disclose that fact on the record of the proceeding and shall not make, participate in making, or in any way attempt to use his or her official position to influence the decision. A party to a proceeding before VTA shall disclose on the record of the proceeding any contribution in an amount of more than $250 made within the preceding 12 months by the party, or his or her agent, to any Board Member. No party, or his or her agent, shall make a contribution of more than $250 to any Board Member during the proceeding and for three months following the date a final decision is rendered by the agency in the proceeding. The foregoing statements are limited in their entirety by the provisions of Section 84308 and parties are urged to consult with their own legal counsel regarding the requirements of the law. All reports for items on the open meeting agenda are available for review in the Board Secretary’s Office, 3331 North First Street, San Jose, California, (408) 321-5680, the Monday, Tuesday, and Wednesday prior to the meeting. This information is available on our website, www.vta.org, and also at the meeting. Any document distributed less than 72-hours prior to the meeting will also be made available to the public at the time of distribution. Copies of items provided by members of the public at the meeting will be made available following the meeting upon request. In accordance with the Americans with Disabilities Act (ADA) and Title VI of the Civil Rights Act of 1964, VTA will make reasonable arrangements to ensure meaningful access to its meetings for persons who have disabilities and for persons with limited English proficiency who need translation and interpretation services. Individuals requiring ADA accommodations should notify the Board Secretary’s Office at least 48-hours prior to the meeting. Individuals requiring language assistance should notify the Board Secretary’s Office at least 72-hours prior to the meeting. The Board Secretary may be contacted at (408) 321-5680 or *e-mail: board.secretary@vta.org or (408) 321-2330 (TTY only). VTA’s home page is on the web at: www.vta.org or visit us on Facebook at: www.facebook.com/scvta. (408) 321-2300: ୰ᩥ / Español / ᪥ᮏㄒ / 䞲ῃ㠊 / tiếng Việt / Tagalog. NOTE: THE BOARD OF DIRECTORS MAY ACCEPT, REJECT OR MODIFY ANY ACTION RECOMMENDED ON THIS AGENDA. 70 West Hedding St., San Jose, California is served by bus lines *61, 62, 66, 181, and Light Rail. (*61 Southbound last trip is at 8:55 pm for this location.) For trip planning information, contact our Customer Service Department at (408) 321-2300 between the hours of 6:00 a.m. to 7:00 p.m. Monday through Friday and 7:30 a.m. to 4:00 p.m. on Saturday. Schedule information is also available on our website, www.vta.org. AGENDA BOARD OF DIRECTORS Thursday, September 07, 2017 Page 3 of 6 1. CALL TO ORDER AND ROLL CALL 1.1. ROLL CALL 1.2. Orders of the Day 2. AWARDS AND COMMENDATION 2.1. INFORMATION ITEM - Adopt a Retirement Commendation recognizing Arthur Douwes, Operations Manager, Engineering, for 37 years of service; Rick Melatti, Transit Foreperson, for 37 years of service; Kim Alejandro, Service Mechanic, for 36 years of service; Rely Villanueva, Transit Foreperson, for 35 years of service; Derrick McCray, Coach Operator, for 33 years of service; Horacio Ubillos, Coach Operator, for 31 years of service; Richard Terry, Coach Operator, for 29 years of service; David Ramos, Paint and Body Foreperson, for 27 years of service; Kurt Evans, Government Affairs Manager, for 25 years of service. 3. PUBLIC COMMENT This portion of the meeting is reserved for persons desiring to address the Board of Directors on any item within the Board's jurisdiction. Speakers are limited to 2 minutes. The law does not permit Board action or extended discussion of any item not on the agenda except under special circumstances. If Board action is requested, the matter can be placed on a subsequent agenda. All statements that require a response will be referred to staff for reply in writing. 4. PUBLIC HEARINGS There are no public hearings. 5. COMMITTEE REPORTS 5.1. Citizens Advisory Committee (CAC) Chairperson's Report. (Verbal Report) (Wadler) 5.2. Policy Advisory Committee (PAC) Chairperson's Report. (Verbal Report) (Miller) 5.3. Policy Advisory Board Chairpersons' Report. (No Report) AGENDA BOARD OF DIRECTORS Thursday, September 07, 2017 Page 4 of 6 6. CONSENT AGENDA 6.1. ACTION ITEM: Approve the Board of Directors Regular Meeting Minutes of August 3, 2017. 6.2. ACTION ITEM - Authorize the General Manager to execute an agreement with the County of Santa Clara to continue the Transit Assistance program (TAP) for one year with four one-year extensions for an aggregate total of $1,000,000. 6.3. ACTION ITEM - Authorize the General Manager to execute contract amendments with Mark Thomas and Company, Inc. in an amount not to exceed $410,000, increasing the not-to-exceed total contract value to $3,728,769 for the SR 237 Express Lanes Project (Project). This authorization would cover the cost of the additional Design Services to complete final design and the cost of Design Services During Construction (DSDC). 6.4. ACTION ITEM - Authorize the General Manager to execute a contract with DMZ Builders, the lowest responsive and responsible bidder, for the construction of the Electric Bus Charging Infrastructure, Cerone Phase 1 contract (C17156). 6.5. ACTION ITEM - 1) Authorize the General Manager to submit Federal Fiscal Year 2017 grant applications and execute grant agreements with the Federal Transit Administration (FTA) for Section 5307 Urbanized Area Formula, Section 5309 New Starts, Section 5337 Fixed Guideway and High Intensity Motorbus, and Section 5339 Bus and Bus Facilities funds; and 2) Adopt a resolution authorizing the filing of applications with the Federal Transit Administration for Federal transportation assistance authorized by 49 U.S.C. chapter 53, title 23 United States Code, and other Federal statutes administered by the Federal Transit Administration. 6.6. ACTION ITEM - Approve the Priority Development Area (PDA) Investment and Growth Strategy, Third Edition, as a requirement of receiving future OBAG grant funding. 6.7. ACTION ITEM - Approve the 2017 Priority Development Area (PDA) Planning Grant Program of Projects for funding. 6.8. INFORMATION ITEM - Review the Legislative Update Matrix. 6.9. INFORMATION ITEM - Receive the report on VTA-ATU Pension Plan Actuarial Valuation as of January 1, 2017 6.10. INFORMATION ITEM - Receive information on a new contract for Silicon Valley Express Lanes Electronic Toll Systems Integration Services with TransCore, LP. AGENDA BOARD OF DIRECTORS Thursday, September 07, 2017 Page 5 of 6 6.11.INFORMATION ITEM - Review the Draft Pedestrian Access to Transit Plan. 7. REGULAR AGENDA Administration and Finance Committee 7.1.ACTION ITEM - Adopt a resolution that approves the Loan Agreement and related documents that are on file with the Board Secretary and authorizes entry into a loan for a not to exceed principal amount of $24,000,000, (the “Loan”) from Western Alliance Business Trust, a wholly-owned affiliate of Western Alliance Bank (“Western Alliance”), to fund costs of the Silicon Valley Express Lanes Program SR 237, Phase 2 Project (the “Project”). NOTE: Motion must be approved by at least 2/3 of the Board (8 members). Safety, Security, and Transit Planning and Operations Committee 7.2.ACTION ITEM - Approve the original FY18-19 "Next Network" Transit Service Plan proposals for: 1) Discontinuing Route 45 due to low ridership, and; 2) Operating the Rapid 500 on Santa Clara Street. Governance and Audit Committee 7.3.ACTION ITEM - Approve appointments to the 2016 Measure B Citizens' Oversight Committee. This action is contingent upon the recommendation of the Governance & Audit Committee. 8. OTHER ITEMS 8.1. General Manager Report. (Verbal Report) 8.1.A.Receive Government Affairs Update. (Verbal Report) 8.1.B.Receive Safety and Security Report. (Verbal Report) 8.2. Chairperson's Report. (Verbal Report) 8.3. ITEMS OF CONCERN AND REFERRAL TO ADMINISTRATION 8.4. Unapproved Minutes/Summary Reports from VTA Committees, Joint Powers Boards (JPB), and Regional Commissions 8.4.A.VTA Standing Committees 8.4.B.VTA Advisory Committees 8.4.C.VTA Policy Advisory Boards (PAB) 8.4.D.Joint Powers Boards and Regional Commissions AGENDA BOARD OF DIRECTORS Thursday, September 07, 2017 Page 6 of 6 8.5. Announcements 9. CLOSED SESSION 9.1. Recess to Closed Session A. Conference with Real Property Negotiators [Government Code Section 54956.8] Property: 801 Newhall Street, San Jose, CA. VTA Negotiator: Ron Golem Negotiating parties: Sprint Communications Co., L.P. Under Negotiation: Price and terms of payment (ground lease extension) B. Conference with Legal Counsel - Existing Litigation [Gov’t Code Section 54956.9(d)(1)] Claim of the Estate of Lawrence Thompson, Claim No. 1893575 9.2. Reconvene to Open Session 9.3. Closed Session Report 10. ADJOURN Date: September 1, 2017 Current Meeting: September 7, 2017 Board Meeting: September 7, 2017 BOARD MEMORANDUM TO: Santa Clara Valley Transportation Authority Board of Directors THROUGH: General Manager, Nuria I. Fernandez FROM: Director - Planning & Programming, Chris Augenstein SUBJECT: Priority Development Area Planning Grant Program of Projects Policy-Related Action: No Government Code Section 84308 Applies: No ACTION ITEM RECOMMENDATION: Approve the 2017 Priority Development Area (PDA) Planning Grant Program of Projects for funding. BACKGROUND: On July 27, 2016, the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG) adopted the One Bay Area Grant Cycle 2 (OBAG 2) program to distribute Federal funds to the nine-county Bay Area. The Commission revised the program October 26, 2016 to reflect additional housing requirements. The OBAG 2 program provides the programming framework for Federal fiscal years 2018 - 2022. MTC's OBAG 2 program guidelines allowed each county Congestion Management Agency (CMA) to set aside funding for local agencies to do planning work designed to promote growth within their Priority Development Areas (PDA). VTA is the CMA for Santa Clara County. The VTA Board of Directors set aside $2 million of OBAG 2 Federal Surface Transportation Program (STP) for PDA Planning when it adopted the OBAG 2 program structure on November 1, 2015. DISCUSSION: VTA staff released the first competitive OBAG 2 PDA Planning Grant call-for-projects on May 22, 2017, with $2,000,000 available. VTA staff announced the call at the Capital Improvement Program Working Group and Land Use/Transportation Integration Working Group, Technical Advisory Committee and Policy Advisory Committee meetings and the notice was sent to all 6.7 Page 2 of 3 groups via e-mail. VTA Planning staff offered to consult with any local agency requesting assistance during the application process. Following the July 6, 2017 due date, VTA staff received three applications: (1) City of Palo Alto - North Ventura Coordinated Area Plan, (2) City of San José - Downtown San José Mobility, Streetscape, and Public Life Plan, and (3) City of San José - East Side Alum Rock Urban Village. Attachment A - Project Recommendations shows each application’s requested and recommended amount; Attachment B - Project Descriptions provides additional project details; and Attachment C - Maps indicates the project location in relationship with the PDA. The total request of all the applications was slightly less than the amount available. Therefore, an external review was waived. However, both VTA Planning and Programming staff reviewed each application and addressed points of clarification with the applicants. All three applications are recommended for the full grant amount requested. As noted on Attachment A, the program is undersubscribed by $149,000. VTA staff propose to roll these funds into the next PDA Planning call for projects. ALTERNATIVES: The Board may choose to fund or not fund any and or all of the recommended projects. FISCAL IMPACT: There is no direct fiscal impact associated with the adoption of the PDA Planning Grant Program of Projects. ADVISORY COMMITTEE DISCUSSION/RECOMMENDATION: The Technical Advisory Committee (TAC) considered this item at their August 9, 2017 meeting and it was forwarded to the VTA Board of Directors (Board) with no discussion. The Policy Advisory Committee (PAC) considered this item at their August 10, 2017 meeting and voted unanimously to recommend Board approval of 2017 Priority Development Area Planning Grant Recommended Program of Projects. Members asked staff about program guidelines and criteria; staff responded that the program and requirements are set by federal government, and/or MTC; VTA only administers the program. Staff reiterated that the grant program is for planning studies only in PDAs. When asked about the few applicants, staff provided overview of application process, outreach efforts, and follow ups conducted. STANDING COMMITTEE DISCUSSION/RECOMMENDATION: The Congestion Management Program and Planning Committee (CMPP) considered this item at their August 17, 2017 meeting and voted unanimously to recommend Board approval of the 2017 Priority Development Area Planning Grant Recommended Program of Projects. Prepared by: Celeste Fiore 6.7 Page 3 of 3 Memo No. 6025 ATTACHMENTS: x Attach A (PDF) x Attach B (PDF) x Attach C (PDF) 6.7 ATTACHMENT A 2017 Priority Development Area Planning Grant Recommended Program of Projects Agency Application Name Requested Amount Recommended Amount Cumulative Amount Palo Alto North Ventura Coordinated Area Plan $638,000 $638,000 $638,000 San Jose Downtown San José Mobility, Streetscape, and Public Life Plan $813,000 $813,000 $1,451,000 San Jose East Side Alum Rock Urban Village $400,000 $400,000 $1,851,000 Grant $ Available $2,000,000 Grant $ Requested $1,851,000 Grant $ Recommended $1,851,000 (Over)/Under $149,000 6.7.a ATTACHMENT B 2017 PDA Planning Grant Program Project Descriptions C-1 City of Palo Alto – North Ventura Coordinated Area Plan The North Ventura Coordinated Area Plan project would develop a comprehensive planning document similar to a specific plan for a mixed-use neighborhood in proximity to the California Avenue Caltrain station, the California Avenue business district, the El Camino Real corridor, and the Stanford Research Park. Project limits: The boundaries of the planning area comprise the southernmost portion of the California Avenue Area Planned Development Area (PDA) and the northernmost section of the City’s Ventura Neighborhood. A key component of this planning area is the 12.5 acre site owned by the Sobrato Organization and commonly referred to as the Fry’s site due to the long-time presence of Fry’s Electronics. The site includes approximately 250,000 square feet of office/R&D, retail, and warehouse and is zoned for multifamily housing. Alternatives considered could include repurposing existing buildings as well as complete redevelopment of the site with new construction. Potential outcomes: to identify opportunities for transit-oriented housing and employment in a well-planned and designed mixed use area of residential and commercial uses. “Open space will respond to the planning area’s transit oriented character by incorporating pedestrian and bicycle connections to nearby transit services.” City of San José – Downtown San José Mobility, Streetscape, and Public Life Plan The existing guiding documents for transportation improvements in Downtown San José (DTSJ) are out-of-date and inadequate: they do not incorporate anticipated developments like BART, California High Speed Rail, and Google, nor do they acceptably reflect current community, city, and regional visions and goals. This plan will provide clear, well-vetted direction for implementation of a world class multimodal transportation system in DTSJ. This community-based planning effort will be jointly led by the City of San José and VTA. These solutions will be safe, convenient, and comfortable, and fulfilling for all ages, abilities, incomes, and walks of life. This Plan seeks to contribute to and support a thriving Downtown San José that embodies environmental, fiscal, and social sustainability. Project limits: Downtown San José. Reference Attachment C-2. Potential outcomes: The outcome of this community-based planning effort will be a clear vision accompanied by a clear implementation strategy which will improve the mobility, streetscapes, and public life of DTSJ. This effort will synthesize, leverage, and advance past and ongoing planning efforts, multimodal innovations, and strategies for vibrant public life to create a unified, comprehensive, detailed, prioritized, and implementable plan. Efforts to be unified by this planning effort include, but are not limited to: San José Downtown Association’s Downtown 6.7.b ATTACHMENT B 2017 PDA Planning Grant Program Project Descriptions C-2 Streetlife Plan (2014), SPUR’s The Future of Downtown San José (2014), and several plans of the City of San José and VTA’s existing plans. City of San José – East Side Alum Rock Urban Village The vision for the PDA known as the East Side Alum Rock Urban Village is to further the transit-oriented development and infill growth strategies of the recently approved Envision San José 2040 General Plan. By developing a corridor-specific land use policy, the plan will facilitate high-density residential uses serving a mix of income levels, higher-intensity commercial/office uses, and mixed-uses that are in a more urban, vibrant, and walkable corridor on Alum Rock Avenue. Further, it will provide a connection to the planned 28th Street Bay Area Rapid Transit (BART) station, the Alum Rock Light Rail Station, and the adjacent Alum Rock Transit Center on Capital Avenue. Project limits: along the VTA Bus Rapid Transit (BRT) system on Alum Rock Avenue (east of 680). Potential outcomes: The East Side Alum Rock Urban Village Plan will provide the policy framework for new development to create a vibrant, walkable, mixedǦuse urban community, at a strategic location in San Jose. East Side Alum Rock is a Local Transit Urban Village and one of the 63 urban villages within the City of San Jose. This Urban Village planning process will identify key infill opportunity areas in the East Side Alum Rock Plan area to create a higherǦ density, mixedǦused, urban district or “Urban Village”. This Plan will integrate commercial uses and public services in close proximity to residential and employee populations to increase existing transit ridership, biking, and walking. Additionally, the Plan will promote urban development that is environmentally and fiscally beneficial to the City by reducing greenhouse gases and providing services more efficiently to a growing population. 6.7.b 6.7.cAttachment C: Maps C-1 ''ba ''ba ''ba ''ba ''ba £¤101 §¨¦280 §¨¦880 §¨¦680 ¬«87 ¬«17 ¬«85 I021 MilesDowntown San Jose PDA and Project Area Downtown San Jose PDA BART Extension''ba VTA Light Rail Priority Development Areas Caltrain, Amtrak, ACE, HSR BRT/Rapid Bus Routes 6.7.c C-2 ! ! ! ! ! ! ! ! ! ! ! ! ! ! San Jose +#87 £¤101 £¤280 £¤680 £¤87 £¤880 Eastridge Transit Center Ocala Story Alum Rock Transit Center Capitol & Alum Rock Jackson King 14th City Hall Transit Mall Arena 7th Market Bird DT DT East Side Alum Rock Urban Village-PDA ° !.28th Urban Growth Boundary Planned VTA BRT Stevens Creek CalTrain VTA Light Rail Urban Village Priority Dev Area !BRT Stops East Side Alum Rock Urban Village City Limits Downtown Proposed 28th Street BARTStation!. Freeways VTA BRT El Camino Real VTA BRT Santa Clara - Alum Rock 0 2,000 4,000 6,0001,000 Feet 6.7.c C-3 City of Palo Alto (ID # 8430) City Council Staff Report Report Type: Action Items Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: 425 Portage Avenue: Request for a Retail Preservation Waiver Title: PUBLIC HEARING/QUASI-JUDICIAL. 425 Portage Avenue: Council Review of an Approval of the Planning and Community Environment Director's Determination to Authorize a Waiver From the Retail Preservation Ordinance. The City Council Will Approve, Deny or Modify the Director's Determination. Environmental Assessment: Exempt in Accordance With the California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council accept the Director’s decision approving the subject waiver request. Background This report transmits the Planning and Community Environment Director’s tentative approval for a waiver from the retail preservation ordinance adopted by Council on March 20, 2017. Pursuant to that ordinance and Section 18.40.160 of the Municipal Code, owners of properties outside the Ground Floor (GF) and Retail (R) combining districts may apply for an adjustment or waiver from ground floor retail protections based on a showing that the a permitted retail or retail-like use is not viable, that the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation, and that the proposed use will encourage active pedestrian-oriented activity and connections. Applicants must provide substantial evidence to support their application and bear the burden of proof. The Director renders a tentative decision, which is then placed on the City Council’s Consent agenda. The Council may accept this decision on Consent, or alternatively, three councilmembers may pull this item and require a future public hearing before Council. City of Palo Alto Page 2 On August 14, 2017, the City Council pulled this item from consent to have this public hearing. Discussion & Policy Implications The owner of the property at 425 Portage requested a waiver from ground floor retail protections on June 29, 2017 and provided supporting information about leasing efforts since then; tenant/broker inquiries; surrounding land uses; the lack of on-site parking to support retail and retail-like uses; and, other information (Attachment B). An updated parking layout is provided in Attachment C. The last known tenant to occupy the building was the Pet Food Depot. At the time the interim ground floor retail protection ordinance was enacted in May and June of 2015, this use was operating and included a retail services component. Retail services were never authorized by the City at this location and could not have been approved based on the lack of on-site parking to support that land use. Prior uses were warehouse and storage related. The property owner provided testimony to the Council regarding the waiver provisions when the updated ground floor retail protection ordinance was being considered, suggesting that the interim ordinance provided too difficult a standard for this owner and other owners to meet. Accordingly, the Council, when enacting the current ordinance, sought to include an additional standard that would still be protective of most ground floor retail uses, but that provided an opportunity to grant a waiver under appropriate conditions and locations. The ordinance gives the director the authority to waive or adjust the provisions requiring preservation of a retail or retail-like tenant space. This decision is based on a determination that a retail or retail-like use is not viable at the location, that an alternative use will support the purposes of the zoning district and comprehensive plan, and that the proposed use will encourage active pedestrian-oriented activity and connections. The Director reviewed the attached waiver request including the supporting information that was provided, and believes that it meets the standards of the Section 18.40.160(c)(1)(B). In accordance with the provisions of the ordinance, the Director’s decision letter is included with this report as Attachment A. The subject site is zoned Service Commercial (CS) and has a similar designation in the Comprehensive Plan. The CS zone is intended for services that “may be inappropriate in… pedestrian-oriented shoping areas, and which generally require automotive access for customer convenience…” (18.16.101(d)). While there is no identified replacement use, staff anticipates another warehouse or storage use would occupy the building, which is consistent with the historic use of the site. Surrounding land uses are mostly office, though an office use City of Palo Alto Page 3 would not be permitted at this site due to a lack of on-site parking. Redevelopment is also a possibilty, and any new project would be subject to applicable codes with provisions to ensure adequate parking, compatible design, and appropriate pedestrian access. This is the first request the City has received for a waiver pursuant to the new provision in Ordiance No. 5407 approved in March 2017. A second request was filed and will be also considered by the City Council on November 6th. The subject waiver approval is not precedent setting as each request received will be evaluated on its own merits and be subject to Council acceptance. Any future use of the site must comply with applicable zoning regaulations and the Comprehensive Plan. Resource Impact The recommendation in this report has no significant budget or fiscal impacts. However, granting relief from the retail presevation ordinance is anticipated to address the long standing vacancy of the site, which may have marginal fiscal benefits to the city and other unquantifiable benefits to area businesses. Timeline Council’s acceptance of this determination takes place immediately and is final. A request to pull this item would result in a future public hearing before Council in October. Environmental Review This determination is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3) of the CEQA Guidelines in that it can be seen with certainty that there is no possibility the decision to waive this property from the city’s retail preservation ordinance will not cause a significant effect on the environment. Attachments: Attachment A: 425 Portage Ave Waiver Determination (PDF) Attachment B: 425 Portage Ave Waiver Request (PDF) Attachment C: Parking Diagram (Portage) (PDF) Attachment D: Response to Council Questions (DOCX) CITY OF PALO ALTO PLANNING & COMMUNITY ENVIRONMENT 250 Hamilton Avenue. 5th Floor Palo Alto, CA 94301 650 329 2441 July 5, 2017 Lund Smith O&B Properties 3260 Ash Street Palo Afto, CA 94306 Subject: 425 Portage Avenue: Retail Preservation Waiver Determination Dear Mr. Lund, In accordance with Palo Alto Munlcipal Code Section 18.40.160 (c){l){b), your request for a waiver from the city's retaH preservation ordinance is tentatively approved. This determination will be placed on the City Council's August 14, 2017 consent calendar agenda. If pulled by three or more council members, you will be notified of a future public hearing on the request. If accepted on consent, this decision will be final. The determination is based on information prov~ded to the city, including effort over the last 16 months to lease the property, information on tenant/broker inquires, surrounding land uses, substandard parking spaces to support retail and reta il-like uses, testimony from your last tenant, and, a ten year history of previous land uses. It is further noted that the last tenant's transition from warehousing to retail services was not authorized by the city and would not have been approved due to the lack of required on-site parking to support retail services. Adoption of the retail preservation ordinance required the subject location remain as retail even though it was never developed, intended or approved to be a retail use. Based on the foregoing information, I find that retail and retail-like uses are not viable at this location at this time. Any future non-retail or retail-like uses that complies with the underlying zoning for permitted and conditionally permitted uses, and other applicable provisions of the municipal code, would be consistent with the purposes of the zoning district and consistent with the city's Comprehensive Plan. In terms of encouraging active pedestrian-oriented activity and connections, the existing site does little to advance and promote these objectives. To the extent a future tenant requires building improvements or upon site redevelopment, the dty through it's discretionary design review process will encourage design elements that enhance pedestrian connections, as appropriate. If you have any questions regarding this determination, please do not hesitate to contact me, or Assistant Director, Jonathan Lait. c ltyO f Pa I oA lto.org Printed with soy·based inks on 100% recyclad paper processed without chlorine Page 1 of 2 D&B Properties ______________________________________________________________________ 3260 ASH STREET • PALO ALTO, CA 94306 • TELEPHONE (650) 493-5484 June 29, 2017 City of Palo Alto Attn: Hillary Gitelman Director of Planning and Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 Re: Waiver from enforcement of City of Palo Alto Retail Preservation Ordinance 18.40.180 for 425 Portage Avenue, Palo Alto, CA. (Building). Dear Hillary Gitelman: Pursuant to multiple conversations and meetings we have had with Jonathan Lait and Amy French, as well as written and oral communications we have made to the Palo Alto City Council, we respectfully request approval in waiving the City of Palo Alto Retail Preservation Ordinance 18.40.180 for 425 Portage Ave, Palo Alto, CA. Retail use for this Building is not viable due to i) site constraints and existing parking that make our building suited for warehouse, not retail, use (ii) a location whose surrounding uses lack retail vibrancy, accessibility, and visibility, and (iii) an existing building design that is unsuitable to support a retail use. We have marketed the space since March of 2016, and retail businesses have again and again shown no interest in our warehouse building. For this Building, Palo Alto’s Retail Preservation Ordinance 18.40.180 has created a vacancy that does not serve public safety or appeal for the area. Instead, the vacancy allows for potential homeless trespassing, vandalism and criminal activity. For 15 months, we have been actively marketing the Building to prospective retail tenants at an annual square foot price of $21, and later, $18 (per square foot annually). According to Exhibit 1 (attached), we are offering the Building at 60% to 75% below the Palo Alto market rents. Our marketing includes hiring Cushman and Wakefield to engage in a widespread marketing of the building including internet advertisements, email distribution to retailers in the area, mailers to retail brokers, building sign, and targeted phone calls to pet food stores and other retail showroom tenants in the area. In addition, we have posted full page advertisements in the Palo Alto Weekly on several occasions and advertised on Craigslist. See Exhibit 2 (attached) showing advertisements. Despite our efforts, no retail tenant has expressed serious interest. Please refer to Exhibit 3 (attached) that provides a detailed list of tenant/broker inquiries who have expressed initial interest for their clients and subsequently declined. Even with offering the Building at deeply discounted rent and using all marketing efforts possible, we have had only eleven inquiries from prospective tenants in 15 months and of the eleven inquires, only eight would comply with the retail ordinance. Each prospective tenant has subsequently declined interest in leasing the Building due to the following viability issues: 1) Site characteristics: Insufficient parking for retail use: The Building offers 9 parking spaces, and the City of Palo Alto requires 24 parking spaces for the least intensive retail use of the Building. A restaurant or health club would require significantly more parking. For Palo Alto parking requirements, refer to Exhibit 4 (attached). Additionally, there are no opportunities to expand the existing parking, given the small lot size and shared fire easement with the adjacent office building at 435 Portage Avenue. The property was originally developed in the 1950’s in conjunction with 435 and 455 Portage as three freestanding warehouse structures with minimal surface parking. Today the narrow site of 425 EXHIBIT 2 EXHIBIT 3 425 Portage Avenue (Tenant/Broker Inquiries) Prospective Client Inquiry Use Date Reason for Not Pursuing AltSchool school February, 2016 Does not comply with retail ordinance Book Store from Mountain View retail March, 2016 Not a retail friendly location and un-insulated and un-air conditioned Health club recreational use April, 2016 Use requires more onsite parking than can be provided The Learning Experience school August, 2016 Does not comply with retail ordinance Gym / Personal Training recreational use October, 2016 Use requires more onsite parking than can be provided Art gallery showroom October, 2016 Not a retail friendly location Coupa Café warehouse / café November, 2016 Not a retail friendly location, un-insulated, un-air conditioned, and lack of parking Golden Road Brewing restaurant December, 2016 Significantly short of parking requirement Planet Granite rock climbing gym February, 2017 Use requires more onsite parking than can be provided C&W Services Warehouse March, 2017 Very interested in the space, but does not comply with retail ordinance Samsung retail showroom March, 2017 Lack of parking and unsuitability of structure (un- insulated and un-air conditioned) YELLOW HIGHLIGHT: Even with offering the Building at deeply discounted rent for over one year and using all marketing efforts possible, 8 client inquires would comply with the retail ordinance, yet most declined due to insufficient parking. Fergus Garber Young Architects 81 Encina Avenue Palo Alto CA 94301 phone 650/473-0400 June 27, 2017 City of Palo Alto Hillary Gitelman Director of Planning and Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 Re: 425 Portage – Waiver from Retail Preservation Ordinance Request Parking requirements for CS Zone allowed uses 425 Portage = 8,352 sf gross sf Existing Site provides 9 parking spaces CS Zone Allowed Uses Vehicle Parking Requirement Required Spaces Business & Trade Schools 1 per 250 gross sf 33 spaces Churches & Religious Institutions 1 per each 4-person capacity1 38 spaces Private Schools & Education(a)(b) 2 per teaching station 2 8 spaces Private Schools & Education (c) 4 per teaching station 2 16 spaces Private Clubs or Lodges 1 per each 4-person capacity1 25 spaces Office/General Business Uses 1 per 250 gross sf 33 spaces Eating & Drinking 1 per 60 gross sf 3 70 spaces 1 per 200 gross sf 3 21 spaces 91 spaces total Retail – Intensive 1 per 200 gross sf 42 spaces Retail – Extensive 1 per 350 gross sf 24 spaces Service Use – Animal Care 1 per 350 gross sf 24 spaces Service Use – Banks & Financial 1 per 250 gross sf 33 spaces Service Use – Personal Service 1 per 200 gross sf 42 spaces Commercial Recreation 1 per each 4-person capacity4 30 spaces Warehouse 1 per 1,000 gross sf 8 spaces Allowed Uses as per PAMC 18.16.040 Parking requirements as per PAMC 18.52.040 Required Parking less than .5 space rounded down 1Assume 150 person capacity 2Assume 4 teaching stations 3Assume 50% of space is public service and 50% is other areas (service/back of house) 4Assume 120 person capacity Exhibit 4 FE R G U S G A R B E R Y O U N G A R C H I T E C T S 81 E N C I N A A V E N U E P A L O A L T O , C A 9 4 3 0 1 PH O N E : 6 5 0 . 4 7 3 . 0 4 0 0 © FERGUS GARBER YOUNG ARCHITECTS 2017 42 5 P o r t a g e A v e . - Ex i s t i n g S u r r o u n d i n g U s e s Mo n d a y , J u n e 2 6 , 2 0 1 7 RM-30 R-1 CS CS PF CS CS CS CS CS GM SU B J E C T PR O P E R T Y OF F I C E / R&D OF F I C E OF F I C E OF F I C E AU T O S E R V I C E S RES I D E N T I A L / STO R A G E OFF I C E / R&D OF F I C E OF F I C E OF F I C E OF F I C E OF F I C E OF F I C E AUT O M O T I V E SER V I C E S OF F I C E OF F I C E / R&D HO T E L OFF I C E H O T E L RES T A U R A N T CO M M E R C I A L REC R E A T I O N SF H UTI L I T Y FA C I L I T Y (AT &T) PA R K (PU B L I C FA C I L I T Y ) OF F I C E / R& D OF F I C E / R&D OF F I C E SIN G L E F A M I L Y H O M E S PRO P O S E D MIX E D -USE OF F I C E / R& D RE T A I L S E R V I C E S HO T E L PRO P O S E D MIX E D -USE SF H SF H RET A I L SER V I C E S RES T A U R A N T HO T E L AUT O M O T I V E SER V I C E S AU T O M O T I V E SE R V I C E S MUL T I -FA M . RES . OF F I C E RE T A I L SE R V I C E S & R E T A I L SER V I C E S RETAIL USES - RETAIL SERVICES - EATING & DRINKING SERVICES OFFICE, SERVICE, RECREATION & RESIDENTIAL USES - OFFICE/R&D, COMMERCIAL RECREATION, AUTOMOTIVE SERVICES, SINGLE FAMILY & MULTIFAMILY HOMES PROPOSED MIXED-USE PROJECTS - CURRENTLY IN REVIEW WITH THE CITY OF PALO ALTO PUBLIC FACLITY - CITY PARK RES T A U R A N T EXHIBIT 5 EXHIBIT 6 425 Portage Avenue (10 Year History of the Site) Square Footage Time Frame Tenant Suite # Use Prior to 2010 Windows System Group A 4,773 Warehouse with 1,500 SF of office Windows System Group B 3,579 Storage TOTAL: 8,352 01/01/2010 - 12/31/2011 Windows System Group A 4,773 Warehouse with 1,500 SF of office Pet Food Depot B 3,579 Storage / warehouse TOTAL: 8,352 01/01/2010 - 3/31/2016 Pet Food Depot A 4,773 Wholesale sales with 1,500 SF of office Pet Food Depot B 3,579 Storage / warehouse TOTAL: 8,352 04/01/2016 - 2/28/2017 Pet Food Depot stopped paying rent, and we allowed them to stay and try to sell their business, but no retailer was interested due to its site constraints and location. We then allowed them to liquidate their inventory and close their business. (Property was marketed for rent beginning March 2016) 03/31/2017 - PRESENT VACANT EXHIBIT 7 PET FOOD DEPOT 425 Portage Avenue, Palo Alto, CA 94306 650.852.1277 February 10, 2017 Mayor Gregory Scharff & The Palo Alto City Council Members: Liz Kniss, Tom DuBois, Eric Filseth, Karen Holman, Adrian Fine, Lydia Kou, Greg Tanaka, and Cory Wolbach Palo Alto City Hall, 7th Floor 250 Hamilton Avenue Palo Alto, CA 94301 Dear Mayor Gregory Scharff, Vice Mayor Liz Kniss, and City Council Members Tom DuBois, Eric Filseth, Karen Holman, Adrian Fine, Lydia Kou, Greg Tanaka, and Cory Wolbach: I am Heghnar Balian and my father, Hrair (Harry) Tashjian is the owner of the Pet Food Depot, Inc. I Have helped my father run our family business since 2001. In January of 2012 we moved from our El Camino Real location where Equinox now sits to the 425 Portage site. We moved to the warehouse on Portage because we had no choice. We were given 30 days to move and in that short time frame there was nothing else available. We had no choice but to settle for a warehouse building. Since our occupancy at the 425 Portage Avenue location, our business has struggled to survive. We have not been able to attract new customers because it is not a retail location given its poor location, lack of visibility, lack of parking, and the fact that the building is a warehouse. Specifically the move from El Camino to this location resulted in a drop of sales of about 45% and unfortunately we are closing shop because we cannot survive. We have no doubt that new business trying to establish itself here would fail given the constraints we mention above. It is simply put not a retail building or a retail location and the parking shortfall has a major hindrance on attracting customers to the location. Our landlord, Mr. Boyd Smith has been very generous and helpful. He even substantially reduced our rent in order to help us. Despite our landlord’s help in reduced rents and despite our making every effort to make the business profitable, retail just doesn’t work here. EXHIBIT 8 A few years ago, we approached the City about purchasing the City’s pet supplies from our store. We were told the City does its purchasing online. It’s unfortunate that the City of Palo Alto does not support its own small businesses. The City can mandate whatever it wants, but that doesn’t make it a reality. This property is not conducive as a retail business location. Our experience has shown that this property should be used for a non-retail use that does not require visibility, parking, and can operate in a warehouse building. Sincerely yours, Hrair Tashjian and Heghnar Balian Pet Food Depot, Inc. EXHIBIT 9 FERGUS GARBER YOUNG ARCHITECTS 81 ENCINA AVENUE PALO ALTO, CA 94301 PHONE: 650.473.0400 FAX: 650.473.0410 WSJ PROPERTIES 3201 ASH STREET PALO ALTO, CA 94306 PHONE: 650.493.5310 DATE: OCT 17, 2017 425 and 435 Portage Avenue, Palo Alto, CA 94306 EXISTING PARKING DIAGRAM © FERGUS GARBER YOUNG ARCHITECTS 2017 8'- 0 " 8'- 0 " 6'- 0 " 6'- 0 " 12'-0" 12 ' - 0 " 12'-0" <E> 16' WIDE ONE- WAY DRIVE AISLE TO SERVE 425, 435 AND 455 PORTAGE PROPERTY LINE REQUIRED 16' WIDTH x150' DEPTH SITE ACCESS FOR FIRE EMERGENCY VEHICLES FIRE SEPARATION DISTANCE BETWEEN STRUCTURE AND PROPERTY LINE IMAGINARY CENTER LINE BETWEEN TWO STRUCTURES ON SINGLE PROPERTY TO CREATE FIRE SEPARATION DISTANCE REQUIRED 16' WIDTH x 150' DEPTH SITE ACCESS FOR FIRE EMERGENCY VEHICLES INCLUDES PORTION OF 12' WIDE ONE-WAY VEHICULAR EGRESS EASEMENT FROM 425 PORTAGE PO R T A G E A V E N U E 435 PORTAGEPU B L I C R I G H T O F W A Y 1425 2425 3425 4425 5425 6425 7425 8425 9425 NO P A R K I N G 425 PORTAGE TRASH AND RECYCLING 10 ' - 1 " 1 0 ' - 1 " 12' WIDE ONE-WAY VEHICULAR EGRESS EASEMENT FOR 425 PORTAGE 425 PORTAGE 455 PORTAGE 3200 ASH STREET 3250 ASH STREET 430 LAMBERT 450 LAMBERT 64255525242 7425 8425 942524255525242342544255425 425 PORTAGE 1425 12 ' -0" 2' 0"0212'-0" 425 PORTAGE TRASH AND RECYCLING PROPERTYLINE Responses to Council Questions On August 14, 2017 Consent Item The following questions were submitted by Councilmember DuBois prior to the August 14, 2017 Council meeting when the 425 Portage retail waiver was pulled from the Consent calendar. Responses are provided below for the benefit of all: Question 1: Have we suggested that the Coupa Cafe warehouse move out of El Camino Retail space to this location? Response: Applicant has been in contact with Coupa Café and reports this tenant is not interested in the space. Question 2: I have been a long time customer of Pet Food Depot, it was always open as a retail location with plenty of parking. The map on packet Page 506 [reference to August 14, 2017 packet] suggests 9 spots long the building - is this the 9 spots referred to in the report? Visiting the property today you can see an additional 10 spots marked PDF right along the entrance drive, along the wall of 435 Portage Avenue - this was primary parking for Pet Food Depot. Why weren't these additional 10 spots included? Response: The property lot dimensions and parking arrangements are somewhat unique. Shared ingress/egress patterns cross property boundaries and parking spaces on various lots are leased to other nearby and adjacent tenants. The map referenced in the question is not representative of current parking conditions. This map was provided by the broker in advertisements of the tenant space. The subject property has three parking spaces located at the rear of the lot and available to 935 Portage. There are portions of parking spaces located on the subject property that are leased to other nearby tenants. The nine spaces located at 935 Portage are available for the sole use of 925 Portage. Access agreements between property owners have resulted in the current parking pattern that results in no fewer parking spaces to 925 Portage than can be accommodated onsite and likely yields one or two more spaces. Question 3: If this is an error in counting parking spots as it appears based on the way the retail operation was run, this would be 19 parking spots (staff report says 24 are required). This does not count street parking in front of the building. Would the Director's decision be the same if all of this parking was considered? Response: Staff does not believe there is an error in the number of parking spaces available to 925 Portage. Question 4: How does the department evaluate rental comps in Exhibit 1 when Addresses are withheld? Response: Rental comps were accepted as presented without further analysis. The City Council in its deliberation could request additional information from the applicant if the values presented do not seem representative. City of Palo Alto (ID # 8620) City Council Staff Report Report Type: Action Items Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Amendment to CAO Employment Agreements Title: Adoption of Annual Amendments to the Employment Agreements Between the City of Palo Alto and Council Appointed Officers' (City Manager, City Attorney, City Auditor and City Clerk) From: City Manager Lead Department: Human Resources Recommended Motion Staff recommends that Council consider the following motion: Approve and authorize the Mayor to execute the following contract amendments for Council Approved Officers: 1) Amendment No. Seven to Employment Agreement between the City of Palo Alto and James R. Keene; 2) Amendment No. Five to Employment Agreement between the City of Palo Alto and Molly S. Stump; 3) Amendment No. Three to Employment Agreement between the City of Palo Alto and Harriet M. Richardson and, 4) Amendment No. Three to Employment Agreement between the City of Palo Alto and Beth D. Minor. Recommendation The City Council has completed annual merit reviews for Council Appointed Officers (CAOs) for the prior fiscal year’s performance (FY2016/17). Staff has been directed by City Council to forward amendments to employment agreements to implement merit-based increases to the CAO’s annual salaries, effective July 1, 2017, as follows: City Manager James R. Keene, Jr., merit increase of 5% from $298,542 to $313,477 (Attachment A); City Attorney Molly S. Stump, merit increase of 5% from $270,712 to $284,253 (Attachment B); City Auditor Harriet Richardson, merit increase of 4% from $180,315 to $187,533 (Attachment C); and City Clerk Beth Minor, merit increase of 4% from to $141,148 to $146,806 (Attachment D). Discussion In accordance with the CAO employment agreements, the City Council evaluates performance and determines any merit-based salary increases at the conclusion of each fiscal year, with an effective date of July 1. The evaluation process begins in approximately May of each year but often takes several months to complete, as it is an extensive process with multiple steps. Since 2014, City Council has obtained facilitation services from the Municipal Resources Group (MRG) City of Palo Alto Page 2 to assist with the annual process. MRG’s role includes conducting Council interviews and surveys, collecting data and facilitating closed session discussions. The CAO employment agreements do not include provisions for general wage or other adjustments provided to other management employees. Thus, the merit-based pay increase for each CAO described in this memo is the only annual increase to be provided. All other terms and conditions of the employment agreements remain the same. Resource Impact Sufficient funding is available for the additional cost of approximately $55,000 in the respective departmental FY2018 Adopted Budgets. Policy Implication/Environmental Review Approval of these amended employment agreements will not result in any policy implications or environmental impacts. Attachments: Attachment A: Amendment No. Seven to Keene Employment Agt Attachment B: Amendment No. Five to Stump Employment Agt Attachment C: Amendment No. Three to Richardson Employment Agt Attachment D: Amendment No. Three to Minor Employment Agt Attachment E CAO Salary Schedule 1 AMENDMENT NO. SEVEN TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. This Amendment No. SEVEN to EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. (“Agreement”) is entered into on November 6, 2017 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and JAMES R. KEENE, JR. (“Manager”), an individual, located at 250 Hamilton Avenue 7th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR., attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Manager on or about August 21, 2008; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about August 21, 2008; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered into between the parties on or about August 2, 2010; and WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated herein as Exhibit “D” was entered into between the parties on or about March 24, 2014; and WHEREAS, AMENDMENT NO. FOUR to the Agreement, attached hereto and incorporated herein as Exhibit “E” was entered into between the parties on or about December 8, 2014; and WHEREAS, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein as Exhibit “F” was entered into between the parties on or about February 1, 2016; and WHEREAS, AMENDMENT NO. SIX to the Agreement, attached hereto and incorporated herein as Exhibit “G” was entered into between the parties on or about December 12, 2016; and WHEREAS, the parties wish to amend the Agreement; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: Attachment A 2 SECTION 1: Section 3 of the Agreement, Compensation, is hereby amended to read as follows: 3. Compensation. Manager shall be compensated as provided in this Section 3. 3.1 Compensation. Commencing on and continuing from the pay period including July 1, 20162017, Manager’s annual base salary shall be increased to Two Hundred Ninety Eight Thousand Five Hundred Forty Two and 40/100Three Hundred Thirteen Thousand Four Hundred Seventy Seven and No/100 Dollars ($298,542.40313,477.00), prorated and paid on the City’s normal paydays. SECTION 2. 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. ATTEST: _____________________________ City Clerk APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:______________________ MANAGER ___________________________ James R. Keene, Jr. Dated:______________________ Attachments: 3 Exhibit A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit C: AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit D: AMENDMENT NO. THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit E: AMENDMENT NO. FOUR TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit F: AMENDMENT NO. FIVE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit G: AMENDMENT NO. SIX TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. EXHIBIT F 1 AMENDMENT NO. SIX TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. This Amendment No. FIVE to EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. (“Agreement”) is entered into on December 12, 2016 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and JAMES R. KEENE, JR. (“Manager”), an individual, located at 250 Hamilton Avenue 7th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR., attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Manager on or about August 21, 2008; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about August 21, 2008; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered into between the parties on or about August 2, 2010; and WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated herein as Exhibit “D” was entered into between the parties on or about March 24, 2014; and WHEREAS, AMENDMENT NO. FOUR to the Agreement, attached hereto and incorporated herein as Exhibit “E” was entered into between the parties on or about December 8, 2014; and WHEREAS, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein as Exhibit “E” was entered into between the parties on or about February 1, 2016; and WHEREAS, the parties wish to amend the Agreement; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3 of the Agreement, Compensation, is hereby amended to read as follows: 3. Compensation. Manager shall be compensated as provided in this Section 3. DocuSign Envelope ID: F56C9938-817B-42F9-A445-F19304815E2E EXHIBIT G 2 3.1 Compensation. Commencing on and continuing from the pay period including July 1, 2016, Manager’s annual base salary shall be increased to Two Hundred Ninety Eight Thousand Five Hundred Forty Two and 40/100 Dollars ($298,542.40), prorated and paid on the City’s normal paydays. SECTION 2. 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. ATTEST: _____________________________ City Clerk APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:______________________ MANAGER ___________________________ James R. Keene, Jr. Dated:______________________ Attachments: Exhibit A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit C: AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit D: AMENDMENT NO. THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit E: AMENDMENT NO. FOUR TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. Exhibit F: AMENDMENT NO. FIVE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JAMES R. KEENE, JR. DocuSign Envelope ID: F56C9938-817B-42F9-A445-F19304815E2E 5/22/2017 5/22/2017 1 AMENDMENT NO. FIVE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP This AMENDMENT NO. FIVE to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on November 6, 2017 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and MOLLY S. STUMP (“Stump”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Molly S. Stump., attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Attorney on or about April 18, 2011; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about March 24, 2014; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered into between the parties on or about December 8, 2014. WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated herein as Exhibit “D” was entered into between the parties on or about February 1, 2016. WHEREAS, AMENDMENT NO. FOUR to the Agreement, attached hereto and incorporated herein as Exhibit “E” was entered into between the parties on or about December 12, 2016. WHEREAS, the parties wish to amend the Agreement; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3.1 of the Agreement, Compensation, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 20162017, Stump’s annual base salary shall be increased to Two Hundred Seventy Eighty Four Thousand Seven Hundred TwelveTwo Hundred Fifty Three and No/100 Dollars ($270,712.00284,253.00), prorated and paid on City’s regular paydays. Stump shall be an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. City agrees that the amount of Stump's base annual salary shall not decrease, except as part of a Attachment B 2 permanent decrease that is consistent with the Fair Labor Standards Act and that is applicable to either all Council Appointed Officers or all City Executive Staff (which includes all Council Appointed Officers). SECTION 2. 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. ATTEST: _____________________________ City Clerk APPROVED AS TO FORM: _____________________________ Deputy City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ MOLLY S. STUMP __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT C: AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT D: AMENDMENT NO. THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT E: AMENDMENT NO. FOUR TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D 1 AMENDMENT NO. FOUR TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP This AMENDMENT NO. FOUR to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on ___________, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and MOLLY S. STUMP (“Stump”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Molly S. Stump., attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Attorney on or about April 18, 2011; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about March 24, 2014; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered into between the parties on or about December 8, 2014. WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated herein as Exhibit “D” was entered into between the parties on or about __________. WHEREAS, the parties wish to amend the Agreement; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3.1 of the Agreement, Compensation, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 2016, Stump’s annual base salary shall be increased to Two Hundred Seventy Thousand Seven Hundred Twelve and No/100 Dollars ($270,712.00), prorated and paid on City’s regular paydays. Stump shall be an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. City agrees that the amount of Stump's base annual salary shall not decrease, except as part of a permanent decrease that is consistent with the Fair Labor Standards Act and that is applicable to either all Council Appointed Officers or all City Executive Staff (which includes all Council Appointed Officers). December 12, 2016 February 1, 2016 DocuSign Envelope ID: 555B7A99-5BA6-4F5E-8CFD-6EA180EAF461 EXHIBIT E 2 SECTION 2. 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. ATTEST: _____________________________ City Clerk APPROVED AS TO FORM: _____________________________ Principal City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ MOLLY S. STUMP __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT C: AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT D: AMENDMENT NO. THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP DocuSign Envelope ID: 555B7A99-5BA6-4F5E-8CFD-6EA180EAF461 5/24/2017 5/24/2017 1 AMENDMENT NO. THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON This AMENDMENT NO. THREE to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on November 6, 2017, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and HARRIET RICHARDSON (“Richardson”), an individual, located at 250 Hamilton Avenue, 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Harriet Richardson, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Auditor on or about April 4, 2014; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about February 1, 2016; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered into between the parties on or about December 12, 2016; and WHEREAS, the parties wish to amend the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3.1 of the Agreement, Compensation, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 20162017, Richardson’s annual base salary shall be increased to One Hundred Eighty Thousand Three Hundred Fifteen and 20/100One Hundred Eighty Seven Thousand Five Hundred Thirty Three and No/100 Dollars ($180,315.20187,533.00), prorated and paid on City’s regular paydays. This amount is subject to authorized or required deductions and withholding, prorated and paid on City’s regular paydays. Richardson is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Richardson’s base annual salary will not decrease, except as part of a permanent decrease that is consistent with the Fair Labor Standards Act and that is applicable to either all Council Appointed Officers or all City Executive Staff (including Council Appointed Officers). // // Attachment C 2 SECTION 2. 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. ATTEST: _____________________________ City Clerk APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ HARRIET RICHARDSON __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON EXHIBIT B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON EXHIBIT C: AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON Exhibit A DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF 1 AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON This AMENDMENT NO. ONE to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on February 1, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and HARRIET RICHARDSON (“Richardson”), an individual, located at 250 Hamilton Avenue, 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Harriet Richardson, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Auditor on or about April 4, 2014; and WHEREAS, the parties wish to amend the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3.1 of the Agreement, Compensation, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 2015, Richardson’s annual base salary shall be increased to One Hundred Seventy Three Thousand Three Hundred Sixty Eight and No/100 Dollars ($173,368.00), prorated and paid on City’s regular paydays. This amount is subject to authorized or required deductions and withholding, prorated and paid on City’s regular paydays. Richardson is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Richardson’s base annual salary will not decrease, except as part of a permanent decrease that is consistent with the Fair Labor Standards Act and that is applicable to either all Council Appointed Officers or all City Executive Staff (including Council Appointed Officers). // // // // // DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF EXHIBIT B 2 SECTION 2. 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. ATTEST: CITY OF PALO ALTO City Clerk APPROVED AS TO FORM: Patrick Burt Dated: HARRIET RICHARDSON City Attorney Dated: DocuSign Envelope ID: 527ACF19-9F84-48D3-8192-46FFBF1907DF 3/2/2016 3/2/2016 1 AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON This AMENDMENT NO. TWO to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on ___________, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and HARRIET RICHARDSON (“Richardson”), an individual, located at 250 Hamilton Avenue, 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Harriet Richardson, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Auditor on or about April 4, 2014; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about _______; and WHEREAS, the parties wish to amend the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3.1 of the Agreement, Compensation, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 2016, Richardson’s annual base salary shall be increased to One Hundred Eighty Thousand Three Hundred Fifteen and 20/100 Dollars ($180,315.20), prorated and paid on City’s regular paydays. This amount is subject to authorized or required deductions and withholding, prorated and paid on City’s regular paydays. Richardson is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Richardson’s base annual salary will not decrease, except as part of a permanent decrease that is consistent with the Fair Labor Standards Act and that is applicable to either all Council Appointed Officers or all City Executive Staff (including Council Appointed Officers). // // // // 12/12/2016 02/01/2016 DocuSign Envelope ID: A4C9C37E-50D4-4DE3-AF75-C801C0E6DF63 EXHIBIT C 2 SECTION 2. 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. ATTEST: _____________________________ City Clerk APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ HARRIET RICHARDSON __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON EXHIBIT B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HARRIET RICHARDSON DocuSign Envelope ID: A4C9C37E-50D4-4DE3-AF75-C801C0E6DF63 5/31/2017 6/7/2017 1 AMENDMENT NO. THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR This AMENDMENT NO. THREE to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on November 6, 2017, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and BETH MINOR (“Minor”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Beth Minor, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Clerk on or about June 9, 2015; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about February 1, 2016; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered into between the parties on or about December 12, 2016; and WHEREAS, the parties wish to amend the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3 of the Agreement, Salary, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 20162017, Minor’s annual base salary shall be increased to One Hundred Forty One Thousand One Hundred Forty Eight and 80/100 One Hundred Forty Six Thousand Eight Hundred Forty Six and No/100 Dollars ($141,148.80146,846.00), prorated and paid on City’s regular paydays. This amount is subject to authorized or required deductions and withholding, prorated and paid on City’s regular paydays. Minor is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Minor’s base annual salary will not decrease, except as part of the permanent decrease that is consistent with the Fair Labor Standards Act. // // Attachment D 2 SECTION 2. 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. ATTEST: _____________________________ Assistant City Clerk APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ BETH MINOR __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR EXHIBIT B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR EXHIBIT C: AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR Exhibit A DocuSign Envelope ID: AE88153D-54C7-4842-BD07-AC68605161AE DocuSign Envelope ID: AE88153D-54C7-4842-BD07-AC68605161AE DocuSign Envelope ID: AE88153D-54C7-4842-BD07-AC68605161AE DocuSign Envelope ID: AE88153D-54C7-4842-BD07-AC68605161AE 1 AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR This AMENDMENT NO. ONE to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on February 1, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and BETH MINOR (“Minor”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Beth Minor, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Clerk on or about June 9, 2015; and WHEREAS, the parties wish to amend the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: follows: SECTION 1: Section 3 of the Agreement, Salary, is hereby amended to read as Commencing on and continuing from the pay period including July 1, 2015, Minor’s annual base salary shall be increased to One Hundred Thirty Six Thousand Three Hundred Sixty Four and No/100 Dollars ($136,364.00), prorated and paid on City’s regular paydays. This amount is subject to authorized or required deductions and withholding, prorated and paid on City’s regular paydays. Minor is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Minor’s base annual salary will not decrease, except as part of the permanent decrease that is consistent with the Fair Labor Standards Act. // // // // DocuSign Envelope ID: AE88153D-54C7-4842-BD07-AC68605161AE EXHIBIT B 2 SECTION 2. 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. ATTEST: CITY OF PALO ALTO Assistant City Clerk APPROVED AS TO FORM: Patrick Burt Dated: BETH MINOR City Attorney Dated: DocuSign Envelope ID: AE88153D-54C7-4842-BD07-AC68605161AE 3/7/2016 3/16/2016 1 AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR This AMENDMENT NO. TWO to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on December 12, 2016 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and BETH MINOR (“Minor”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. R E C I T A L S: WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Beth Minor, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Clerk on or about June 9, 2015; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered into between the parties on or about February 1, 2016; and WHEREAS, the parties wish to amend the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1: Section 3 of the Agreement, Salary, is hereby amended to read as follows: Commencing on and continuing from the pay period including July 1, 2016, Minor’s annual base salary shall be increased to One Hundred Forty One Thousand One Hundred Forty Eight and 80/100 Dollars ($141,148.80), prorated and paid on City’s regular paydays. This amount is subject to authorized or required deductions and withholding, prorated and paid on City’s regular paydays. Minor is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Minor’s base annual salary will not decrease, except as part of the permanent decrease that is consistent with the Fair Labor Standards Act. // // // // DocuSign Envelope ID: E7B127EF-F0B6-4947-8AF9-4BA113347BB4 EXHIBIT C 2 SECTION 2. 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. ATTEST: _____________________________ Assistant City Clerk APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ BETH MINOR __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR EXHIBIT B: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BETH MINOR DocuSign Envelope ID: E7B127EF-F0B6-4947-8AF9-4BA113347BB4 5/17/2017 5/24/2017 Job Code FLSA Status Group Classifications Hourly Rate Monthly Annual Salary Effective 1 Exempt Council Council Person $5.77 $1,000.13 $ 12,001.60 1/1/2017 2 Exempt CAO City Manager $150.71 $26,123.07 $ 313,476.80 7/1/2017 3 Exempt CAO City Attorney $136.66 $23,687.73 $ 284,252.80 7/1/2017 4 Exempt CAO City Auditor $90.16 $15,627.73 $ 187,532.80 7/1/2017 5 Exempt CAO City Clerk $70.58 $12,233.87 $ 146,806.40 7/1/2017 City of Palo Alto Councilperson and Council Appointed Offical Salary Schedule Attachment E City of Palo Alto (ID # 8611) City Council Staff Report Report Type: Action Items Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Sidewalk Assessment Study Title: Approval of a Contract With Nichols Consulting Engineers, Chtd. (NCE) in the Amount of $191,300 for the Sidewalk Assessment Study to Determine Next Steps Following the Completion of the Sidewalk District Cycle for Capital Improvements Program Project PO-89003 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute Contract No. C18168777 (Attachment A) with Nichols Consulting Engineers, Chtd. (NCE) in an amount not-to-exceed $191,300 for the Sidewalk Assessment Study including $173,800 for basic services and $17,500 for additional services for the Sidewalk Assessment Study, Capital Improvement Program project PO-89003. Background The City has over 250 miles of existing sidewalk. In 1985 a sidewalk survey was conducted by Public Works staff to determine the existing sidewalk conditions and amount of damaged sidewalk requiring repair. Following the 1985 survey, the City was divided into 23 sidewalk districts: Districts 11 to 17 and Districts 21 to 36 (Attachment B). The 23 sidewalk districts were ranked (from high to low) based on the amount of damaged sidewalk. The City’s annual sidewalk repair program started in 1986. The program objectives were to alleviate the existing sidewalk repair backlog, eliminate pedestrian hazards, and enhance pedestrian safety; improving sidewalk conditions reducing potential for sidewalk-related injuries. The City’s annual City of Palo Alto Page 2 sidewalk repair program consisted of two programs: sidewalk repair capital contract program and sidewalk repair in-house program. The program was contracted out each year to the lowest responsible bidder and scope of work restricted to the availability of annual funding that varied from $500,000 to $2,000,000 with approximately $600,000 used to fund the in-house program. Sidewalk Repair Capital Contract Program The annual sidewalk repair Capital Contract Program for the 23 sidewalk districts, administered by Public Works Department’s Engineering Services Division, was scheduled using the district ranking assigned in the 1985 survey. The program concentrated on a district-by-district repair. The program’s scope of work included the removal and replacement of damaged sidewalk in accordance with the City’s approved criteria for sidewalk replacement, curb and gutter if integral to the sidewalk to be repaired, installation of curb ramps on street corners to comply with American with Disabilities Act (ADA), and sidewalk grinding and other associated work. The program completed all 23 sidewalk districts in 2016, a 30 year (1986 to 2016) sidewalk repair district cycle. The 23 sidewalk districts and fiscal year of completion are shown in Attachment B. Sidewalk Repair In-House Program The sidewalk repair in-house program, administered by Public Works Department’s Public Services Division, handled sidewalk repair requests from the public and City employees independent of the current sidewalk repair Capital Contract Program districts. The program concentrated on damaged sidewalk (hot spots) and severely broken sidewalk. The sidewalks were typically repaired with a temporary asphalt patch until a full repair can be made. Discussion With the recent completion of the 30-year cycle, staff wants to evaluate the overall program and implement potential improvements before beginning a new cycle. The planned study has been described in the Sidewalk Repairs Capital Improvement Program budget page and in previous Council reports (Staff Report ID #6267). City of Palo Alto Page 3 A Request for Proposals (RFP) for the project was sent to prospective consultants and posted on the City’s website on June 15, 2017. On July 11, 2017 staff received two proposals from California Tree and Landscape Consulting, Inc. and NCE. Summary of Solicitation Process Proposal Description/Number Sidewalk Assessment Study/ RFP #168777 Proposed Length of Project 90 calendar days Number of Consultants Contacted 17 Number of Builders Exchanges 3 Number of websites 1 (PlanetBids) Total Days to Respond to Proposal 26 Number of Proposals Received 2 Company Name Address California Tree & Landscape Auburn, CA NCE Richmond, CA Proposal Basic Services Fee Range: $170,280 to $172,200 Non-respondents who City staff contacted after the close of the RFP indicated they did not submit proposals due to their current workload; the scope of work’s focus on management rather than detailed engineering work; and their inability to provide the services under the given budget. Staff reviewed and evaluated the two proposals and selected NCE because of the proposal quality, performance and effectiveness of the solutions, and the proposer’s experience and staff to be assigned to the project and prior record of performance with the city and other cities. NCE has worked with multiple California cities on similar sidewalk assessment studies. NCE will inspect 20 percent of each of the 23 sidewalk districts to identify the types and locations of sidewalk distresses and will have a certified arborist to perform field reviews in areas where there are tree root issues. NCE will also survey existing curb ramps to identify those that are not compliant with ADA. The data collection portion of the contract is $88,800 (Task 2 in Exhibit C of Attachment A), including $53,500 for the survey of 55 miles of sidewalk and $35,300 to survey 900 curb ramps. This includes over 450 hours of inspection time by a field technician and certified arborist and 200 hours by professional City of Palo Alto Page 4 staff to develop a geodatabase of the inspection results. The sidewalk survey cost is $970 per mile. The remaining scope of the contract includes NCE using the inspection information collected in combination with historical information from the sidewalk repair capital contract program to model the needed repairs for each district in relation to the elapsed time since the last capital contract, and to determine estimated costs for several different potential cycle lengths (i.e. 30 years, 25 years, 20 years). NCE will also prioritize repair locations, propose alternate construction materials, methods and costs; and recommend methods to minimize future sidewalk lifts and tree root damage. Once the survey is complete, staff will issue a construction contract to repair identified locations of sidewalk distress. Non-compliant curb ramps will be built into the new district cycle work. Resource Impact Funding for this project is available in Capital Improvement Program project PO- 89003 Sidewalk Repairs. Policy Implications This contract is in conformance with City of Palo Alto’s Comprehensive Plan and does not represent any changes to existing City policies. Environmental Review Preparation of reports is not a project for the purpose of the California Environmental Quality Act (CEQA). The work contemplated under the proposed study would be exempt under Section 15301 (Existing Facilities) of the CEQA Guidelines. Attachments: Attachment A: Nichols Consulting Engineers C18168777 Attachment B: Sidewalk District Map Professional Services Rev. April 27, 2016 1 CITY OF PALO ALTO CONTRACT NO. C18168777 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND NICHOLS CONSULTING ENGINEERS, CHTD. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 23rd day of October, 2017, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and NICHOLS CONSULTING ENGINEERS, Chtd., a Nevada Corporation, located at 501 Canal Blvd., Suite 1, Pt. Richmond, CA 94804 and authorized to do business in California ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to implement the Sidewalk Assessment Study (“Project”) and desires to engage a consultant to assess the sidewalk and curb ramps 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 its full execution and expires upon satisfactory completion of the Services in accordance with the Schedule, but in no event later than June 30, 2018 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 DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 2 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 One Hundred Seventy Three Thousand Eight Hundred Dollars ($173,800). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed One Hundred Ninety One Thousand Three Hundred Dollars ($191,300). 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 email all invoices to the City’s project manager at pweinvoices@CityofPaloAlto.org. 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 DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 3 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: HortScience, Inc. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 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 Margot Yapp as the principal in-charge to have supervisory responsibility for the performance, progress, and execution of the Services and Hal Williams 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 Holly Boyd, Public Works Department, Engineering Division, email: holly.boyd@cityofpaloalto.org, Telephone: 650-329-2612. 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 DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 5 fees, court costs and disbursements (“Claims”) to the extent the Claims 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. [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 approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 6 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. DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 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 with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 8 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 include a public works alteration, demolition, repair, or maintenance (collectively, DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 9 ‘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. DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 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. DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 11 CONTRACT No. C18168777 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) APPROVED AS TO FORM: City Attorney or designee (Contract over $25k) NICHOLS CONSULTING ENGINEERS, Chtd. (NCE) 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”: HOURLY RATE SCHEDULE EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Margot Yapp Vice President Debbie Smith Chief Financial Officer Professional Services Rev. April 27, 2016 12 EXHIBIT “A” SCOPE OF SERVICES CONSULTANT will provide a Sidewalk Assessment Study per task listed below: Task 1 – Kick-Off and Progress Meetings a. CONSULTANT will meet with CITY staff involved with the sidewalk repair programs (both in-house and contract) to kick-off the project by reviewing the project approach and goals. In addition, administrative matters that may need to be addressed will be included. At a minimum, items to be discussed will include the following: - Scope of work, project schedule, budget, and invoicing requirements - Points of contacts - Relevant information on sidewalk repairs, such as: Existing criteria for identifying distresses Repair alternatives Historical records of repairs Standard plans and specifications Field work, including: Scheduling and access requirements Public safety concerns, requirements, and procedures ADA requirements and checklists Criteria for data collection Hardware and accuracy requirements - Other issues as appropriate b. A maximum of three additional progress meetings will be scheduled with City staff at appropriate milestones to review the work performed and to address questions or issues that arise as the work progresses. Typically, these meetings will cover issues, such as: - Questions on review of documents and materials reviewed - Final acceptance of criteria to be used for identifying repairs - Anomalies that do not match criteria - Repair recommendations - Progress updates c. In addition, CONSULTANT will provide monthly progress reports to the City indicating the status of the data collection and other tasks. d. Deliverables. CONSULTANT shall prepare: - Agenda for meetings - Technical memoranda summarizing meetings. Task 2A – Data Collection – Sidewalks CONSULTANT will review CITY’s historical records of sidewalk repairs from the CITY’s in-house DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 13 program to identify both the location of repairs and the type and quantity of repairs, as well as cost information. This information is not all geographically mapped, but is available electronically. For locations that are known, the Consultant will map locations and determine if trends exist. If there is a trend, then Consultant will analyze in Task 3 to see if relationship exists between underlying contributory factors, such as age of sidewalks, materials, type and date of repairs. CONSULTANT will perform sidewalk condition surveys on 20% of the approximately 275 miles of sidewalks within the CITY’s sidewalk network. The 20% will be distributed across all districts. Prior to conducting the surveys, CONSULTANT and CITY will discuss and finalize the survey criteria. They may include the following elements: - Vertical displacements or slab uplifts - Cracking - Holes - Other damage around utility poles - Brick or concrete improvements that are not level with sidewalk - Obstacles - Severities – High Priority, Medium Priority, and Low Priority - Sensitive sidewalk locations, e.g., schools, senior housing, public buildings, transit routes/stops, commercial areas, and high-use pedestrian areas CONSULTANT will develop a survey list for sidewalk distress identifying the principal distresses, e.g., cracking, faulting, vaulting, and holes. Typically, CONSULTANT recommends narrowing the focus of the assessment to damage that would pose a tripping hazard and filter out “cosmetic” damage that poses no threat to public safety. CONSULTANT will work with CITY staff to refine and develop the criteria. The following data elements will be collected: - Location of sidewalk by street name - Sidewalk distress and severity level - Repair Quantities Task 2B – Field Data Collection – Curb Ramps CONSULTANT will include a survey of the curb ramps throughout the entire sidewalk network. CONSULTANT will on identifying the locations of ramps that may not be in compliance with the ADA and the necessary costs to bring them to compliance. Curb ramps on private driveways and mid-block (where no intersection exists) are not included in the scope of work. The following data elements will be included in this task: - Location of curb ramp (X,Y coordinates, Northing and Easting) - Compliance with ADA Task 3 – Analysis (Priority Ranking and Costs) A. Determine Relationships/Trends In this task, CONSULTANT will review the data collected from Task 2A to determine the locations of sidewalk distresses. CONSULTANT will create geodatabase and maps using DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 14 geographical locations from historical logs and the following information: - Age of sidewalk - Tree species nearby - Past sidewalk repairs - Material of sidewalk (e.g., asphalt, concrete) - Sidewalk district boundaries - Others, such as underlying soils (expansive clays), recent utility work, e.g., replacement of laterals, undergrounding. CONSULTANT will then determine if trends are present, particularly as they relate to past repairs. B. Prioritization Criteria Most prioritization criteria used in cities are based on risk management practices, i.e., the highest priority is on areas where the risks of trip hazards are highest. Examples include: - Connectivity to key facilities, such as: Commercial/retail centers with high pedestrian traffic, e.g., downtown Schools or other educational institutions Community or senior centers Hospitals or other medical facilities where wheelchairs may be present - Demographics and volume of pedestrian traffic - Tree species - Premature failures in sidewalk materials (e.g., alkali-silica reactivity) - Premature failures in past repair practices - Coordination with street paving program Typical Pedestrian Master Plans will include the factors above. CONSULTANT will discuss with City staff the above factors and additional factors that are not included. CONSULTANT will then develop a weighting system (can be low/moderate/high, 1-10 scale, or other) so that the repairs can be prioritized. C. Cost Analysis/Replacement Cycle CONSULTANT will then analyze the data collected above and determine appropriate repair strategies and to determine funding required for various replacement cycles including 5, 10, 20, 25 and 30-year cycles. Task 4 – Program Options/Findings This task will be performed concurrently with Task 3 as they are inter-related. Under this task, CONSULTANT will identify the types of sidewalk distresses and the types of repairs required for each one. Alternate Construction Materials and Methods Grinding, patching, and removal/replacement of the slabs are the most common repair techniques employed for sidewalks. However, there are additional methods and materials that may be considered (most accommodate tree root issues), including: DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 15 Steel Plate Sidewalk Rubber Sidewalks Mitigate Tree Root Damage Permeable Sidewalks Bridging CONSULTANT will review the City’s existing studies/reports and make recommendations on additional construction materials and methods as appropriate. CONSULTANT will also review standard plans and specifications, revise if necessary, or prepare additional specifications as needed. The examples described above are possible options for discussion. Task 5 – Report At the completion of Tasks 1 to 4, CONSULTANT will prepare a draft report for the City’s review that will contain the following: - Description of methodology for data collection - Description of survey criteria used - Prioritization criteria - Summaries of existing condition of sampled sidewalks and curb ramps Condition assessment of sidewalks and curb ramps Prioritized list of locations and repairs - Cost estimate to perform repairs Trends for future repairs - Recommendations for: Repair strategies Replacement cycles Recommended annual budget - Detailed drawings (AutoCAD and pdf) for: Sidewalk repair guidelines and alternate construction methods Technical specifications for sidewalk repair Finally, a meeting with CONSULTANT and CITY will be scheduled to review the draft report and discuss questions. Upon receipt of the CITY’s comments, CONSULTANT will prepare a final report: five (5) hard copies, as well as an electronic copy. Deliverables: Draft report (one electronic copy) Final report (5 hard copies and one electronic copy) Geodatabase with sidewalk distresses containing the attributes and data collected Geodatabase with curb ramps containing the attributes and data collected DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 16 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 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Weeks From NTP 1. Complete Data Collection( Sidewalks) 4 weeks 2. Complete Data Collection (Ramps) 7 weeks 3. Submit Draft Report 12 weeks 4. Submit Final Report 18 weeks DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 17 EXHIBIT “C” COMPENSATION 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. 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 $12,900 (Meetings) Task 2 $88,800 (Data Collection) Task 3 $18,100 (Analysis) Task 4 $29,300 (Program Options/Findings) Task 5 $24,700 (Report) Sub-total Basic Services $173,800 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $173,800 Additional Services (Not to Exceed) $17,500 Maximum Total Compensation $191,300 REIMBURSABLE EXPENSES DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 18 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: N/A 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. There are no reimbursable expenses. 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 19 EXHIBIT “C-1” HOURLY RATE SCHEDULE PROFESSIONAL SERVICES Principal $245 per hour Associate $195 per hour Senior $170 per hour Project $140 per hour Staff $125 per hour TECHNICAL SERVICES Senior Construction Manager $130 per hour Senior Designer $135 per hour Senior Technician/Construction Inspector $120 per hour CAD Technician $110 per hour Senior Field Scientist $115 per hour Field Scientist $95 per hour Project Administrator $95 per hour Field/Engineering Technician $95 per hour Technical Word Processing $80 per hour Clerical $80 per hour DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 20 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Professional Services Rev. April 27, 2016 21 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: DF3C5C67-D532-47F3-BCAC-B974D6400204 Attachment B City of Palo Alto COLLEAGUES MEMO November 06, 2017 Page 1 of 4 (ID # 8630) DATE: November 6, 2017 TO: City Council Members FROM: Council Member Fine, Vice Mayor Kniss, Council Member Wolbach SUBJECT: COLLEAGUES' MEMO REGARDING ZONING UPDATES TO ENCOURAGE DIVERSE HOUSING NEAR JOBS, TRANSIT, AND SERVICES Objectives: Palo Alto and the Bay Area region are experiencing a housing crisis, years in the making, which causes significant economic, social, and environmental harm. While Palo Alto may never be a truly affordable place to live, the City Council has an obligation to current and future residents to explore policies that expand housing choices for people of different incomes, generations, and needs. This memo intends to begin the process to: 1. Update and improve the zoning code and other regulations to facilitate a greater variety and quantity of both below market rate (BMR) and moderately-sized market-rate housing; and 2. Increase housing density near jobs, transit, and services; and 3. Streamline the approval process for new housing projects. Recommendation: We recommend our colleagues refer this memo to staff to return to Council with a Work Plan outlining the process and resources to study and implement the proposals listed in the Discussion section (and other relevant recommendations to support the Objectives). Following Council approval of the Work Plan, proposals should be reviewed by the Planning & Transportation Commission (PTC) and ultimately by Council for adoption. Some proposals will require less work than others, and so may be considered in advance of others. Discussion: There are many policy tools to promote additional moderately-sized and reasonably-priced homes, especially near job centers, transit, and services. The following suggestions should be considered by the PTC and staff as a starting point. Any changes should be appropriately applied in different areas of our community with sensitivity to location and current land use patterns. For example, CD, CN, CS, CC1, CC2 zones in Downtown should be treated differently than an RM zone in a predominantly residential neighborhood. ●Housing Floor Area Ratio (FAR): ○Increase housing FAR where appropriate. 10 November 06, 2017 Page 2 of 4 (ID # 8630) ○ Allow non-retail commercial FAR to convert to residential FAR. ● Affordable Housing: ○ Explore increasing affordable housing (Below Market Rate - BMR) percentage requirements in market-rate developments up to 20%, based on economic analysis. ○ Explore implementing inclusionary BMR program for rental units. ○ Height and density for BMR projects: Allow additional height (not exceeding the city-wide height limit) or FAR for projects that contain substantially more BMR units than required. ● Units/Acre: ○ Explore eliminating housing unit limits where/when possible, and use FAR in place of units/acre. ○ Explore housing unit minimums rather than unit maximums (e.g. require building at least 80% of the units allowed under applicable zoning or land use designation). ○ Implement a no net-loss policy when housing is redeveloped and preserve existing non-conforming cottage clusters. ● Parking: ○ Allow residential projects to consolidate parking and TDM efforts with other projects or the Palo Alto TMA. ○ Explore bringing underutilized parking spaces into a public market. ○ Car-light housing: Explore car-light housing with reduced or eliminated off-street parking requirements. (e.g. TransForm’s GreenTRIP Certification) ○ Transportation Demand Management (TDM): explore reducing residential parking requirements for projects which provide effective TDM measures. ● Retail/Residential Mixed-Use Projects: Encourage mixed-use zoning with ground-floor retail, community, or non-profit space; and one or more floors of housing; but no commercial office uses. ● Transit-Oriented Development: Expand and augment the Pedestrian Transit-Oriented Development (PTOD) zone. ● And other compatible housing-related implementation programs from the Comprehensive Plan update. Background: The current housing shortage is a threat to our city’s prosperity, diversity, stability, environment, and community character. In City-sponsored polling in 2016, 76% of Palo Alto residents indicated that housing was an “extremely serious” or “very serious” problem. Housing is one of our Council Priorities for 2017. Our new Comprehensive Plan will encourage exploration of policy changes to enable more housing. November 06, 2017 Page 3 of 4 (ID # 8630) The housing crisis has many symptoms including displacement, separated families, long commutes, lack of diversity, environmental impacts, etc. The City is attempting to address several of these. This memo’s recommendations focus on the central cause of these symptoms: the lack of adequate housing options to meet current and growing demand. Government and academic research consistently point to the need for more housing at a variety of price-points as essential to solving the housing crisis. To prevent urban sprawl and congestion, new housing is best located near transit, jobs, and services. Few Palo Altans prefer to see new office buildings instead of housing, or luxury penthouses instead of apartments which working professionals and families can afford. Rather than indefinitely continue the practice of responding to each site or housing proposal on its own - and rather than struggling to adapt our policies in each case - we suggest proactively identifying and changing policies which are counterproductive toward our housing goals. Palo Alto has made progress. We preserved Buena Vista and helped keep over 100 families in our community. We are considering new affordable and market-rate housing proposals. We have taken steps toward making permanent an annual office-cap. But we can still do more to address the other side of our jobs-housing imbalance. Doing so requires we understand and reduce some of the barriers to creating more housing. Some of Palo Alto’s regulations operate in practice to skew development away from reasonably-priced housing. Instead, we currently incentivize commercial development over housing, large housing units over smaller ones, and pricier housing over more affordable. Of particular concern are our consistently low limits on numbers of units per-acre, low-FAR allowances for housing (including in mixed-use projects), requirements for more parking than is used, and requirement for on-site (rather than adjacent or nearby) parking. Creating more housing for a range of ages and incomes is the most equitable and environmentally sustainable path for Palo Alto. As a collective-action problem, the housing crisis requires all cities to share in the solution. Cities which have added to the regional demand by creating jobs have a particular obligation to permit housing in a manner appropriate for their local character. Palo Alto’s housing production has lagged behind our commitments, while several neighboring communities have pursued new housing development near jobs, transit, and services. Palo Alto can do its part to address the housing shortage by increasing housing density in a responsible manner. Resource Impact: A modest amount of existing planning and legal staff and consultant resources will be required to develop the proposed Work Plan and return to Council. Development of a Work Plan can be accomplished within existing departmental budgets and staff capacity. The amount of detail and supporting analysis associated with elements of the Work Plan that may be required will November 06, 2017 Page 4 of 4 (ID # 8630) be dependent on the process and the time frame desired for this discussion and its return to Council. Thereafter, depending on what Council chooses to pursue and on what timeline, implementation of some or all of the proposals may require additional resources, such as consultants and specialists, and adjustments to other priorities and timelines. Staff will provide additional information in the initial Work Plan. City of Palo Alto (ID # 8504) City Council Staff Report Report Type: Informational Report Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: CAPER for the CDBG Program for FY 2017 Title: Consolidated Annual Performance and Evaluation Report (CAPER) for the Community Development Block Grant (CDBG) Program for Fiscal Year 2017 From: City Manager Lead Department: Planning and Community Environment Recommendation This is an informational report and no Council action is required. Background The preparation and submittal of a Consolidated Annual Performance and Evaluation Report (CAPER) is a requirement of the U.S. Department of Housing and Urban Development (HUD) for the receipt of Federal Community Development Block Grant (CDBG) funds. The attached document, Attachment A, was submitted to HUD on September 27, 2017, following the required 15-day public review period. It is being provided to the Council for informational purposes only. Discussion This CAPER represents the second year of the City’s Five-Year Consolidated plan covering the period 2015-2020 and summarizes the accomplishments under the CDBG program for the period July 1, 2016 to June 30, 2017. As required, the CAPER consists of specific program narratives, an assessment of annual performance, and an assessment of progress toward meeting goals and objectives contained in the Consolidated Plan. Finally, this CAPER summary report is intended to inform the public on how the CDBG funds administered by the City of Palo Alto during the 2017 Fiscal Year have been expended and describes the extent to which the purposes of the grant program have been carried out. The amount funded to specific activities is reported the year they are funded. However, due to the City of Palo Alto Page 2 nature of certain projects, it is common for projects to overlap program years. Accomplishments are reported when the project has been completed and in some cases when the units become occupied. Summary of Accomplishments CDBG funds were used for public services and economic development activities. Palo Alto has five primary CDBG program activity areas in which to allocate funds: Public Services, Planning and Administration, Economic Development, Housing, and Public Facilities. Funds were allocated in accordance with the goals and objectives set forth in the 2015-2020 Consolidated Plan, available online at: http://www.cityofpaloalto.org/civicax/filebank/documents/59739. The major accomplishments include the following: Continued implementation of the Workforce Development Program which led to 31 previously unemployed individuals reentering the workforce; Assisted 16 individuals in investigating their fair housing complaints; and Continued successful partnerships with five public service providers. The CAPER, Attachment A, provides a detailed description of the various programs and project accomplishments within the fiscal year. Resource Impact The total investment of CDBG funds in Palo Alto approved for Fiscal Year 2017 was $754,418. Of this amount, $76,619 was directed to public service activities, $290,723 for Economic Development, $278,825 for housing rehabilitation, $30,941 for Fair Housing Services, and $77,310 was allocated for administration activities. Environmental Review For purposes of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA), this action itself is not a project; therefore, no environmental impact assessment is necessary. Prior to commitment or release of funds for each of the proposed projects, staff will carry out the required environmental reviews or assessments and certify that the review procedures under CEQA, HUD, and NEPA regulations have been satisfied for each particular project. Attachments: Fiscal Year 2016-17 CAPER (PDF) FY 2016 - 17 CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT July 1, 2016 through June 30, 2017 Public Review and Comment Period: August 28, 2017 – September 12, 2017 Erum Maqbool, CDBG Staff Specialist Department of Planning and Community Environment 250 Hamilton Avenue, Palo Alto, CA 94301 T: 650-329-2660 E: erum.maqbool@cityofpaloalto.org | Table of Contents CR-05 - Goals and Outcomes ..............................................................................................................4 Progress made in carrying out strategic plan and action plan. 91.520(a) ........................................... 4 Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan 91.520(g) ................................................................................................... 4 Assess how the jurisdiction’s use of funds addresses the priorities and specific objectives identified in the plan...................................................................................................................................... 5 CR-10 - Racial and Ethnic composition of families assisted...................................................................6 Describe the families assisted (including the racial and ethnic status of families assisted). 91.520(a) 6 CR-15 - Resources and Investments 91.520(a) .....................................................................................7 Identify the resources made available .................................................................................................. 7 Identify the geographic distribution and location of investments ....................................................... 7 Leveraging ............................................................................................................................................. 7 CR-20 - Affordable Housing 91.520(b) ............................................................................................... 10 Evaluation of the jurisdiction's progress in providing affordable housing. ........................................ 10 Discuss the difference between goals and outcomes and problems encountered in meeting these goals. ........................................................................................................................................... 10 Discuss how these outcomes will impact future annual action plans. ............................................... 11 Include the number of extremely low-income, low-income, and moderate-income persons served by each activity. ........................................................................................................................... 11 CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) ................................ 12 Reaching out to homeless persons (especially unsheltered persons) and assessing needs .............. 12 Addressing the emergency shelter and transitional housing needs of homeless persons ................. 12 Helping low-income individuals and families avoid becoming homeless ........................................... 13 Helping homeless persons .................................................................................................................. 13 CR-30 - Public Housing 91.220(h); 91.320(j) ....................................................................................... 15 Actions taken to address the needs of public housing ....................................................................... 15 Actions taken to encourage public housing residents to become more involved in .......................... 15 Actions taken to provide assistance to troubled PHAs ....................................................................... 15 CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) ................................................................................ 16 Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) .............................................................................. 16 Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j)................ 17 Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) ........................................... 17 Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) ........................ 18 Actions taken to develop institutional structure. 91.220(k); 91.320(j)............................................... 20 Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j) ..................................................................................................... 20 | Identify actions taken to overcome the effects of any impediments identified in the jurisdictions analysis of impediments to fair housing choice. 91.520(a) ........................................................ 20 CR-40 - Monitoring 91.220 and 91.230 .............................................................................................. 21 Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long-term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements ............ 21 Citizen Participation Plan 91.105(d); 91.115(d) .................................................................................. 21 Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports. .................................................................................................................. 21 CR-45 - CDBG 91.520(c) .................................................................................................................... 22 Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences... 22 Brownfields Economic Development Initiative grants ........................................................................ 22 [BEDI grantees] Describe accomplishments and program outcomes during the last year. .............. 22 Table of Figures Table 1 – Accomplishments – Program Year & Strategic Plan to Date ...................................................... 4-5 Table 2 – Table of assistance to racial and ethnic populations by source of funds ...................................... 6 Table 3 – Resources Made Available ............................................................................................................ 7 Table 4 – Identify the geographic distribution and location of investments ................................................ 7 Table 6 – Number of Households ............................................................................................................... 10 Table 7 – Number of Households Supported.............................................................................................. 10 Table 8 – Number of Persons Served .......................................................................................................... 11 APPENDICES A - Public Hearing Notice B - IDIS Reports C - Public Comments D - Section 3 Report | CR-05 - Goals and Outcomes Progress the jurisdiction has made in carrying out its strategic plan and its action plan. 91.520(a) This could be an overview that includes major initiatives and highlights that were proposed and executed throughout the program year. Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g) Categories, priority levels, funding sources and amounts, outcomes/objectives, goal outcome indicators, units of measure, targets, actual outcomes/outputs, and percentage completed for each of the grantee’s program year goals. Table 1 – Accomplishments – Program Year & Strategic Plan to Date Goal Category Source / Amount Indicator Unit of Measure Expected – Strategic Plan Actual – Strategic Plan Percent Complete Expected – Program Year Actual – Program Year Percent Complete Affordable Housing Affordable Housing CDBG: $278,825 Rental units rehabilitated Household Housing Unit 300 60 20.00% 156 156 100% Economic Development Non-Housing Community Development CDBG: $ 290,723 Jobs created/retai ned Jobs 125 31 24.80% 30 31 103.33% Fair Housing Non-Housing Community Development CDBG: $32,016 Public service activities other than Low/Moderat e Income Housing Benefit Persons Assisted 100 21 21.00% 15 16 106.66% Homelessness Homeless CDBG: $22,983 Public service activities other than Low/Moderat e Income Housing Benefit Persons Assisted 0 151 0.00% 131 151 86.75% Homelessness Homeless CDBG: $35,592 Public service activities for Low/Moderat e Income Housing Benefit Household s Assisted 2500 554 22.16% 400 554 138.5% Strengthen Neighborhood s Non- Homeless Special Needs Non-Housing Community Development CDBG: $ Public Facility or Infrastructure Activities other than Low/Moderat e Income Housing Benefit Persons Assisted 500 0 0.00% 0 0 0.00% Strengthen Neighborhood s Non- Homeless Special Needs Non-Housing Community Development CDBG: $18,044 Public service activities other than Low/Moderat e Income Housing Benefit Persons Assisted 2500 478 19.12% 486 753 154.93% | Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the plan, giving special attention to the highest priority activities identified. The City of Palo Alto was able to achieve many of its goals outlined in the 2016 Action Plan and 2015-2020 Consolidated Plan. In total, the City’s CDBG program assisted 1401 persons access needed services. Of these persons, nine hundred fifty two (952) were extremely low-income, fifty-six (56) were very low-income, two hundred and eleven (211) were low-income and one hundred and eighty two (182) were moderate income. The City’s subrecipient (Mid-Peninsula Housing Corporation) received $392,368 in FY2015-16 and $278,825 in FY 2016-17 for a total CDBG loan of $671,193. Mid-Peninsula Housing Corporation who was awarded a CDBG loan for $278,825 to rehabilitate 156 affordable rental units at Palo Alto Gardens for low income households in FY 2016/17 encountered unexpected issues involving the approvals. As a result, the project was delayed. However, the City worked diligently with Mid Pen over the last year to ensure that the project moved forward in a timely fashion and met its goal of providing 156 rehabilitated rental affordable housing units. Rehabilitation work began at Palo Alto Gardens in December 2016 and is expected to be completed in the summers of 2017. 6 CR-10 - Racial and Ethnic composition of families assisted Describe the families assisted (including the racial and ethnic status of families assisted). 91.520(a) Table 2 – Table of assistance to racial and ethnic populations by source of funds Narrative The City of Palo Alto’s CDBG funded programs and services served a diverse population and provided needed resources to those residents most in need. Sixty percent (60%) were White, eighteen percent (18%) were African American, and ten percent (10%) were Asian. Twenty percent (20%) of all the clients served were Hispanic. CDBG White 844 Black or African American 249 Asian 136 American Indian or American Native 49 Native Hawaiian or Other Pacific Islander 13 American Indian and Black 8 Black and White 5 American Indian and White 22 Asian and White 2 Other, multi-racial 73 Total 1401 Hispanic 274 Not Hispanic 1,127 7 CR-15 - Resources and Investments 91.520(a) Identify the resources made available Table 3 – Resources Made Available Source of Funds Source Resources Made Available Amount Expended During Program Year CDBG HUD $1,625,402 $1,085,654.76 Narrative See discussion below. Identify the geographic distribution and location of investments Table 4 – Identify the geographic distribution and location of investments Target Area Planned Percentage of Allocation Actual Percentage of Allocation Narrative Description N/A N/A N/A See below Narrative The City considers the provisions of all types of housing assistance on a citywide basis consistent with the policies of the Comprehensive Plan. Palo Alto does not have specific target areas for housing activities; instead the City attempts to provide housing affordable to lower- income persons throughout the City. Minority concentration includes areas in the City where the concentration of racial and ethnic minority population is 10% or higher than their total citywide representation. There are only a few areas that are considered to have a concentration of minority populations or low-income residents in Palo Alto. The CDBG Program defines low-income concentration as any census block group where 51% or more residents earn 80% of MFI or less. An exception exists for a jurisdiction that does not have any areas meeting this definition, such as Palo Alto, which includes the highest quartile of all areas in the City in terms of degree of concentration, is used. However, Palo Alto does not qualify activities under the LMI area benefit category. Leveraging Explain how federal funds leveraged additional resources (private, state and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were used to address the needs identified in the plan. 8 Palo Alto leverages federal and private housing funds to the greatest extent feasible consistent with the goals identified in the 2015-2020 Consolidated Plan. Moreover, the City continues to encourage non-profit organizations to seek other local, state, and federal funding for both housing and non-housing community development activities. HSRAP The City of Palo Alto provided $ 884,672 General Funds during fiscal year 2016/2017 to address primary human service needs in the community. These funds include multi-year agreements with others allocated by HSRAP and administered by the Office of Human Services in the Community Services Department. Funded projects addressed the Human Relations Commission’s priority needs in the following categories: early child care and education, youth programs, senior nutrition and social services, homelessness, and basic needs such as health care and mental health. HOUSING IN-LIEU The City of Palo Alto maintains a local housing fund consisting of two sub-funds: the “Commercial Housing Fund” and the “Residential Housing Fund.” Palo Alto, under Chapter 16.65 of the Municipal Code, requires commercial and industrial development projects to pay a housing mitigation fee. The fees are deposited in the “Commercial Housing Fund”, and the accumulated fees and interest earned on the fund are made available for the creation of new low and moderate-income housing units under the “Affordable Housing Fund Guidelines” adopted by the City Council. As of June 30, 2017, the Commercial Housing Fund had an available balance of approximately $6,073,316. Pursuant to Program H-3.1.2, the Below Market Rate Program of the City’s Housing Element, Palo Alto collects housing in-lieu fees from residential development when it is infeasible to provide below market rate units on-site. These fees, along with interest earnings of the Fund and other miscellaneous revenues related to housing, are placed in a special fund; “the Residential Housing Fund”. This fund is used to provide funding for acquisition or rehabilitation of low and moderate-income housing, but may also be used for assistance to new housing construction projects. As of June 30, 2017, the Residential Housing fund had an available balance of approximately $6,367,042. These are the only local sources of funding and subsidies available for affordable housing within the City. They are used to provide matching funds, pay for expenses which exceed HUD income and cost limits, to fund the cost of features and amenities classified as ineligible under federal housing programs, pre-development expenses, feasibility studies, site acquisition, and other similar purposes. 9 | CR-20 - Affordable Housing 91.520(b) Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low-income, low-income, moderate-income, and middle-income persons served. Table 5 – Number of Households One-Year Goal Actual Number of homeless households to be provided affordable housing units 0 0 Number of non-homeless households to be provided affordable housing units 0 0 Number of special-needs households to be provided affordable housing units 156 156 Total 156 156 Table 6 – Number of Households Supported One-Year Goal Actual Number of households supported through rental assistance 0 0 Number of households supported through the production of new units 0 0 Number of households supported through the rehab of existing units 156 156 Number of households supported through the acquisition of existing units 0 0 Total 156 156 | Discuss the difference between goals and outcomes and problems encountered in meeting these goals. In fiscal year 2015/16, the City of Palo Alto provided a CDBG rehabilitation loan in the amount of $278,825 to Mid-Peninsula Housing Corporation (Mid Pen) of the rehabilitation of 156 units at Palo Alto Gardens. Due to a number of factors outside of the City’s control involving subordination of the CDBG loan and Mid Pen’s requirements to obtain investor approval, the project was delayed. The City worked in partnership with Mid Pen to expedite the loan process so work could begin. Work on the project began in December 2016 and is expected to be completed in the summers of 2017. Discuss how these outcomes will impact future annual action plans. As discussed previously, the rehabilitation work at Palo Alto Gardens began in December 2016 and is expected to be completed in the summers of 2017. The FY 2016/17 CAPER includes 156 units from the Palo Alto Gardens rehabilitation project that were detailed in the 2015 Annual Action Plan. The City anticipate meeting all of its goal highlighted in the 2015-2020 Consolidated Plan despite not meeting last year’s annual goal. Include the number of extremely low-income, low-income, and moderate-income persons served by each activity where information on income by family size is required to determine the eligibility of the activity. Table 7 – Number of Persons Served Number of Persons Served CDBG Actual HOME Actual Extremely Low-income 952 0 Very Low-income 56 0 Low-income 211 0 Moderate-income 182 0 Total 1401 0 Narrative Information In total, the City’s CDBG program provided programs and services to 1401 persons. Nine hundred fifty two (952) of these persons were extremely low-income, fifty-six (56) were very low-income, two hundred and eleven (211) were low-income, and one hundred and eighty two (182) were moderate income. | CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) Evaluate the jurisdiction’s progress in meeting its specific objectives for reducing and ending homelessness through: Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs The City’s entitlement amount for FY 2016/2017 was $441,253. The City had $100,000 in program income and $ 213,165 in uncommitted funds from previous years. In total, the City provided $754,418 in direct CDBG funding and $ 884,672 in HSRAP funding. The following details the accomplishments of the CDBG funded subrecipients targeted to benefit persons who are low income, homeless, or at risk of homelessness. Addressing the emergency shelter and transitional housing needs of homeless persons LIFEMOVES OPPORTUNITY CENTER CDBG: $35,592 The Opportunity Services Center continued to provide services to homeless individuals and those at-risk of becoming homeless. Services include drop-in services, showers and laundry facilities, lockers, light snacks, information and referral, transportation assistance, a clothes closet, medical and psychiatric screening and referral, inter-faith chaplaincy, and fellowship. In addition, the Hotel de Zink program along with the Breaking Bread Program continued with the operation. During the program year, the Opportunity Center served 554 unduplicated individuals. 415 unduplicated individuals received case management, housing/job search, referral and mentoring services; and 6,842 shelter nights were provided. PALO ALTO HOUSING CORPORATION DOWNTOWN SRO HOTEL COUNSELING CDBG: $24,861.00 Palo Alto Housing Corporation provided one-on-one counseling, case management, and educational activities at Alma Place and Barker Hotel. The one-on-one sessions provided by the Resident Service Coordinator affords a systematic manner of addressing a diversity of issues these residents face. During the program year there was an increase in demand for more in- depth support counseling services to address mental health and emotional health issues. The SRO Resident Services Coordinator works closely with residents with severe mental health issues to ensure compliance with treatment guidelines and to reduce the risk of relapse. PAHC continued to expand the health and wellness program by collaborating with other non-profit organizations to host a health and resource fair. The goal of the event was to provide | information and resources on topics of the areas of health care, counseling, transportation programs, social services, and food programs. During the program year, nutrition and fitness coaching services were initiated to provide residents with information, guidance and support as to how to develop an exercise and plan programs in order to improve their health and quality of life. Finally, Palo Alto Housing Corporation staff has continued to serve as a partner with the City’s Pilot Microenterprise Assistance Program. Two of the MAP grantees currently live at Alma Place. Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: likely to become homeless after being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs CATHOLIC CHARITIES LONG TERM CARE OMBUDSMAN CDBG: $5,012.00 During the program year 383 unduplicated residents were contacted within the Palo Alto Long term care residences in Lytton Gardens Health Care Center, Lytton Gardens Residential Care for the Elderly and Palo Alto Nursing Center. A total of 56 complaints were received and investigated. DOWNTOWN STREETS INC. WORKFORCE DEVELOPMENT PROGRAM CDBG: $290,723.00 During the program year DST was able to continue their success rate and introduced a number of new programs into the existing Workforce Development Program. A total of 31 participants enrolled in the program and were placed in a variety of employment opportunities. Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again YWCA SILICON VALLEY DOMESTIC VIOLENCE SERVICES CDBG: $8,020 | The YWCA Support Network Program provides domestic violence support services including counseling, case management, crisis counseling, and legal assistance. During the program year the Support Network Program provided 10 unduplicated clients with counseling, therapy and/or legal advocacy services. Crisis Counselors provided crisis line assistance to 49 individuals receiving crisis counseling services. Additionally, the Domestic Violence Program was able to provide 2 unduplicated Palo Alto resident with emergency shelter, including basic needs (food/clothing) and comprehensive case management services. SILICON VALLEY INDEPENDENT LEARNING CENTER HOUSING & EMERGENCY SERVICES CDBG: $5,012 During the program year, Silicon Valley Independent Living Center (SVILC) conducted extensive outreach in Palo Alto which resulted in 99 persons having improved accessibility to decent affordable housing. In addition, SVILC provided 153 people with information and referral services and 68 people with disabilities were given Housing Search training through a housing workshop at the Palo Alto Opportunity Services Center. SVILC will continue to reach out to other organizations, businesses and non-profits in Palo Alto to ensure the word continues to spread that SVILC is a valuable resource for Palo Alto residents with disabilities. PROJECT SENTINEL FAIR HOUSING SERVICES CDBG: $30,941 During the program year, Project Sentinel provided community education and outreach regarding fair housing law and practices, investigation, counseling and legal referral for victims of housing discrimination, and analyses for City staff and officials regarding fair housing practices. In total, 16 fair housing complaints were investigated by Project Sentinel. 19 residents were provided individual consultation relating to specific fair housing questions and 131 individuals were assisted through outreach and presentations. CITY OF PALO ALTO PILOT MAP CDBG: $1,314.08 The Microenterprise Assistance Program provided access to new opportunities to improve the economic self-sufficiency of LMI families and individuals. The program built on the foundation of entrepreneurship and empowered clients by increasing their economic literacy, business skills, self-esteem, and personal behavior appropriate to the workplace. In total, one MAP participant was assisted in FY 2016/17. | CR-30 - Public Housing 91.220(h); 91.320(j) Actions taken to address the needs of public housing Not applicable. The Housing Authority of the County of Santa Clara (HACSC) owns and manages four public housing units, which are all located in the City of Santa Clara. Actions taken to encourage public housing residents to become more involved in management and participate in homeownership While the majority of their units have been converted to affordable housing stock, HACSC is proactive in incorporating resident input into the agency’s policy-making process. An equitable and transparent policy-making process that includes the opinions of residents is achieved through the involvement of two tenant commissioners, one being a senior citizen, on the HACSC board. HACSC has been a MTW agency since 2008. In this time the agency has developed 31 MTW activities. The vast majority of its successful initiatives have been aimed at reducing administrative inefficiencies, which in turn opens up more resources for programs aimed at LMI families. As mentioned previously, there are no public housing facilities in the City of Palo Alto. Actions taken to provide assistance to troubled PHAs Not applicable. | CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) The City of Palo Alto has undertaken a number of actions to eliminate barriers to the development of affordable housing including participation in a county-wide effort to provide additional affordable housing units; programs in the 2014-2023 Housing Element Update to increase the supply of affordable housing; and the development impact fees for housing. Housing Trust Silicon Valley (Housing Trust) The Housing Trust, formerly the Housing Trust Fund of Santa Clara County (HTSCC), was created to provide additional financial resources to address the County’s affordable housing deficit. The Housing Trust’s mission is to make Silicon Valley a more affordable place to live. Loans and grants are issued to increase the supply of affordable housing, assist first-time home buyers, prevent homelessness and stabilize neighborhoods. Palo Alto was among the contributors during its founding and has continued to allocate funding. A provision was added to ensure the City’s funds be used exclusively for qualifying affordable housing projects within the City of Palo Alto. The most recent included $200,000 from the City’s Residential Housing Fund for Fiscal Year 2014/2015. Participation in the Housing Trust has increased the available housing funding for a number of Palo Alto Projects as summarized in the table below. In addition, the Housing Trust has invested over $100,000 assisting 16 households to purchase homes in Palo Alto through its first- time homebuyer program. Project Name Number of Units HTSCC Loan Amount Leveraged Amount Opportunity Center 89 $650,000 $20,050,000 Oak Court Apartments 53 $400,000 $19,700,000 Alta Torre 56 $689,439 $18,110,561 Tree House 35 $500,000 $11,016,525 Alma Street 50 $500,000 $28,536,801 801 Alma 50 $500,000 $30,000,000* Total 333 $2,739,439 $127,413,887 | *Estimated Amount Adjustments or Improvements to Affordable Housing Strategies 2015-2023 Housing Element Update: The Palo Alto Housing Element, which is part of the City’s Comprehensive Plan is the chief policy document describing the City’s housing needs and the policies and programs the City will use to meet those needs. The 2015-2023 Housing Element Update has been certified by the California State Department of Housing and Community Development. Development Impact Fees for Housing: The City’s impact fees are comprised of four categories: Housing, traffic, community facilities, and Parkland dedication. The City recently completed Nexus Studies for Residential and Commercial Development. The studies served as a basis for an update to both residential and non-residential housing fees and became effective on June 19, 2017. The housing fee for non-residential development is $20.37 per square foot for retail and hotel uses. The fee for commercial uses increased to $30 per square foot. The fee rate applies to all net new commercial square footage on a site. Full payment is required at building permit issuance with some exemptions including hospitals and convalescent facilities, private education facilities, public facilities and private clubs, lodges and fraternal organizations. Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j) The City’s CDBG program diligently works with other purveyors of funding to provide the most value per dollar. This is actualized by partnering with other City resources such as HSRAP and leveraging dollars invested in site acquisition for low-income housing with a multitude of other funding sources. However, Palo Alto is at a disadvantage in removing or eliminating obstacles to meeting underserved needs due to the consistently shrinking amount of CDBG funds available in recent years. To address this, the City supplements its CDBG funding with other resources and funds, such as: The City’s Human Service Resource Allocation Process (HSRAP) provides approximately $ 884,672 from the General Fund in support of human services. The HSRAP funds, in conjunction with the CDBG public service funds, are distributed to local non-profit agencies. The Palo Alto Commercial Housing Fund is used primarily to increase the number of new affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from developers of commercial and industrial projects. The Palo Alto Residential Housing Fund is funded with mitigation fees provided under Palo Alto’s BMR housing program from residential developers and money from other | miscellaneous sources, such as proceeds from the sale or lease of City property. The City’s Below Market Rate Emergency Fund was authorized in 2002 to provide funding on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s stock of BMR ownership units. HOME Program funds are available on an annual competitive basis through the State of California HOME program, and the County’s HOME Consortium. Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) Lead poisoning can cause permanent damage to the brain and many other organs, and can result in reduced intelligence and behavioral problems in young children. More than 80,000 children younger than 6 years old living in the United States have lead in their blood that is above the level of concern set by the Centers for Disease Control and Prevention (CDC). A significant number of these children are in families of low income and are living in old homes with heavy concentration of lead-based paint and lead-contaminated dust and soil in the environment. The City’s housing and CDBG staff provide information and referral to property owners, developers, and non-profit organizations rehabilitating older housing about lead-based paint hazards. There is no information that indicates lower income households are more likely to be exposed to lead paint hazards in Palo Alto than are families in the general population. The City’s 2015-2020 Consolidated Plan has a more detailed discussion of lead based paint in the City. Any house to be rehabilitated with City financial assistance is required to be inspected for the existence of lead paint and lead paint hazards. The City will provide financial assistance for the abatement of such hazards in units rehabilitated with City funding. Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) The City, in its continuing effort to reduce poverty, prioritized funding agencies that provide direct assistance to the homeless and those in danger of becoming homeless. In FY 2016-2017, these programs included the following: The Microenterprise Assistance Program provided access to new opportunities to improve the economic self-sufficiency of LMI families and individuals. The program built on the foundation of entrepreneurship and empowered clients by increasing their economic literacy, business skills, self-esteem, and personal behavior appropriate to the workplace. The Workforce Development Program provided a transition from unemployment and homelessness to regular employment and housing through case management, job training, mentoring, housing, and transportation assistance. - Downtown Streets Team is a nonprofit in the City that works to reduce homelessness | through a “work first” model. Downtown Streets Team utilized their community connections to provide training and job opportunities to homeless people, specifically in the downtown area. The Downtown Streets Team has helped over 687 team members maintain employment for 90 days or more and housed 737 individuals, including 539 team memberssince its inception.. The Downtown Streets Team has initiatives in Palo Alto, Sunnyvale, San Jose, and San Rafael. Actions taken to develop institutional structure. 91.220(k); 91.320(j) The City is striving to improve intergovernmental and private sector cooperation to synergize efforts and resources and develop new revenues for community service needs and the production of affordable housing. Collaborative efforts include: Regular quarterly meetings between entitlement jurisdictions at the CDBG Coordinators Meeting and Regional Housing Working Group Joint jurisdiction Request for Proposals and project review committees Coordination on project management for projects funded by multiple jurisdictions HOME Consortium between member jurisdictions for affordable housing projects Recent examples include the effort by the County to create a regional affordable housing fund, using former redevelopment funds that could be returned to the County to use for affordable housing. Another effort underway involves the possible use of former redevelopment funds to create a Countywide pool for homeless shelters and transitional housing. These interactions among agencies generate cohesive discussion and forums for bridging funding and service gaps on a regional scale. Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j) The City benefits from a strong jurisdiction and region-wide network of housing and community development partners, such as the County and the CoC. To improve intergovernmental and private sector cooperation, the City will continue to participate with other local jurisdictions and developers in sharing information and resources. In addition to the actions listed above, the City will continue to coordinate with the City’s human services funding efforts to comprehensively address community needs. Identify actions taken to overcome the effects of any impediments identified in the jurisdictions analysis of impediments to fair housing choice. 91.520(a) The City makes every effort to affirmatively further fair housing in compliance with the adopted | Analysis of Impediments. During Fiscal Year 2016/2017, the City continued to support actions to affirmatively further fair housing through a subrecipient agreement with Project Sentinel, a non-profit organization dedicated to assisting individuals with housing problems discussed in detail below. The following is a list of actions taken to affirmatively further fair housing: HCD has certified the City’s 2015-2023 Housing Element update The City targeted the majority of its CDBG and local housing funds to increasing and preserving the supply of affordable housing The Office of Human Services regularly met with the County of Santa Clara Housing Authority to place homeless individuals with section 8 vouchers Affordable housing information and referral services were provided by the Office of Human Services During Fiscal Year 2016/2017, the City continued to support actions to affirmatively further fair housing choice through a subrecipient agreement with Project Sentinel, a non-profit organization dedicated to assisting individuals with housing problems. Project Sentinel responded to and investigated 16 cases of housing discrimination in Palo Alto during the fiscal year. | CR-40 - Monitoring 91.220 and 91.230 Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long-term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements Under the CDBG Program, the City conducts desk reviews and on-site monitoring of subrecipients. Last year the City completed on-site monitoring of four non-profit organizations. Since the City operates under a two-year funding cycle there are some subrecipients that receive funding for two years and are only required to have one on-site monitoring during this time. Typically, subrecipients who have had trouble implementing projects or have been identified as having compliance issues in a previous monitoring are selected for the annual monitoring. There were no major deficiencies identified during the previous monitoring. The City will be conducting on-site monitoring of three subrecipients in the next two to three months consistent with the Subrecipient Monitoring Plan. Citizen Participation Plan 91.105(d); 91.115(d) Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports. A notice regarding the availability of the draft CAPER was emailed to interested organization and persons. In addition, a notice informing the public of the availability of the CAPER was published in the Palo Alto Weekly on August 25, 2017. The notice was also displayed on the City’s website during the public review period. The draft CAPER was available for public review and comment for a 15-day period, beginning August 28, 2017 and concluding on September 12, 2017. Copies of the draft report were available at the City’s Planning Department reception desk, the Development Center, and on the CDBG website. Finally, the Human Relations Commission held a public hearing on Thursday, September 14, 2017 to take public comment and discuss the CAPER. The City Council will receive a copy of the final CAPER along with any public comments received in early November. | CR-45 - CDBG 91.520(c) Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences. Not applicable. Does this Jurisdiction have any open Brownfields Economic Development Initiative (BEDI) grants? Not applicable. [BEDI grantees] Describe accomplishments and program outcomes during the last year. Not applicable. | City of Palo Alto (ID # 8566) City Council Staff Report Report Type: Informational Report Meeting Date: 11/6/2017 City of Palo Alto Page 1 Summary Title: Proclamation-Law Enforcement Records Personnel Title: Proclamation Honoring Law Enforcement Records and Support Personnel Day – November 7, 2017 From: City Manager Lead Department: Police Attachments: Attachment A: Proclamation Honoring Law Enforcement Records and Support Personnel Day Proclamation Law Enforcement Records and Support Personnel Day November 7, 2017 WHEREAS, law enforcement agencies throughout the State depend upon law enforcement records and support personnel to provide them with vital services; and WHEREAS, law enforcement records and support personnel are crucial to helping law enforcement agencies identify, pursue, capture and process suspected law breakers; and WHEREAS, these professionals continually use their expertise and experience to assist in tracking felons, maintaining criminal statistics and improving apprehension strategies; and WHEREAS, the California Law Enforcement Association of Records Supervisors will hold its 44th Annual Training and Technology Conference on November 13-17, 2017; and WHEREAS, it is important to recognize the City of Palo Alto’s law enforcement records and support personnel for their valuable contributions to our law enforcement system. NOW, THEREFORE, I, H. Gregory Scharff, Mayor of the City of Palo Alto, on behalf of the City Council do hereby proclaim November 7th, 2017 as “Law Enforcement Records and Support Personnel Day.” Presented: October 19, 2017 ______________________________ H. Gregory Scharff Mayor CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 6, 2017 The Honorable City Council Palo Alto, California City of Palo Alto Sales Tax Digest Summary First Quarter Sales (January - March 2017) The following files are attached for this informational report for which no action is required. ATTACHMENTS: Attachment A: Sales Tax Highlights (PDF) Attachment B: MuniServices Sales Tax Digest Summary (PDF) Attachment C: Economic Categories and Segments (PDF) Attachment D: MuniServices Economic News and Trends (PDF) Department Head: Harriet Richardson, City Auditor Page 2 Informational Report to the City Council BACKGROUND Sales and use tax represents $29.2 million, or 15 percent, of projected General Fund revenue in the City’s adopted operating budget for fiscal year 2017. This revenue includes sales and use tax for the City of Palo Alto and pool allocations from the state and Santa Clara County.1 We contract with MuniServices LLC (MuniServices) for sales and use tax recovery services and informational reports. We use the recovery services and informational reports to help identify misallocation of tax revenue owed to the City, and to follow up with the California Department of Tax and Fee Administration (formerly the State Board of Equalization) to ensure that the City receives identified revenues. We include sales and use tax recovery information in our quarterly reports to the Policy and Services Committee. The California Revenue and Taxation Code, Section 7056, requires that sales and use tax data remain confidential. Therefore, the City may not disclose amounts of tax paid, fluctuations in tax amounts, or any other information that would disclose the operations of a business. This report, including the attached Sales Tax Digest Summary, includes certain modifications and omissions to maintain the required confidentiality of taxpayer information. MuniServices prepares the Sales Tax Digest Summary and Economic & News Trends report (Attachments B and D), which we share with the Administrative Services Department (ASD) for use in revenue forecasting and budgeting. Sales tax information is reported on a calendar-year basis. DISCUSSION The Sales Tax Digest Summary covers first quarter sales for calendar year 2017, which are reported as part of the City’s fiscal year 2017 revenue. In September 2017, ASD should receive information from the state on aggregate sales and use tax receipts for the second quarter of 2017. Following are some highlights of the sales and use tax information: •Palo Alto’s overall sales and use tax revenue (cash receipts) for the first quarter of 2017 increased by $880,000, or 14.1 percent, including pool allocations, compared to the first quarter of 2016. Excluding one-time prior period adjustments of $590,000, the first quarter of 2017 increased by $290,000, or 4.7 percent, including pool allocations, compared to the first quarter of 2016. For all Santa Clara County jurisdictions, sales and use tax revenue for the first quarter of 2017 decreased by $2.5 million, or 2.6 percent, compared to the first quarter of 2016. •Statewide, most regions in California experienced an increase in sales and use tax revenue for the year ending in March 2017, with a one-year statewide increase of 2.1 percent. •Palo Alto’s sales and use tax revenue totaled $29.3 million for the year ending in March 2017, an increase of 7.2 percent from $27.4 million during the prior one-year period. Most of this revenue increase came from a small number of businesses. 1 See definitions of state and county pools on page 3. Office of the City Auditor Sales Tax Highlights – First Quarter Sales (January – March 2017) Attachment A Office of the City Auditor | Sales Tax Highlights 2 •Excluding pool allocations and adjusting for prior-period and late payments, Palo Alto’s sales and use tax revenue for the first quarter of 2017 increased by 5.8 percent compared to the first quarter of 2016 and increased by 4.6 percent compared to the prior year. Economic Influences on Sales and Use Tax The Economic News & Trends report discusses economic influences, including national and state economic trends, auto, gasoline, retail, e-commerce, restaurant and grocery trends, that may affect the City’s sales and use tax revenue. Preliminary estimates from the California Employment Development Department show that the June 2017 unemployment rate, which is not seasonally adjusted, was 3.5 percent in Santa Clara County and 2.4 percent in Palo Alto. Economic Category Analysis MuniServices’ analysis of economic categories for the year ending March 2017 shows: Economic category Percent of Palo Alto’s sales and use tax revenue Percent Increase (Decrease) compared to prior year General retail 35.6% 4.9% Food products 20.1% 5.1% Business-to-business 18.1% 0.3% Construction 3.2% (15.3%) Miscellaneous 23.4% 10.9% The following chart shows sales and use tax revenue by geographic area: Palo Alto’s Sales and Use Tax Revenue by Geographic Area For the Year Ending March 2017 (Amounts include tax estimates and exclude county pool allocations) Attachment A Office of the City Auditor | Sales Tax Highlights 3 DEFINITIONS In California, either sales tax or use tax may apply to a transaction, but not both. The sales and use tax rate in Palo Alto was 8.75 percent during the first quarter of 2017. Effective April 1, 2017, the sales and use tax rate in Palo Alto changed to 9.0 percent. Sales tax – imposed on all California retailers; applies to all retail sales of merchandise (tangible personal property) in the state. Use tax – generally imposed on consumers of merchandise (tangible personal property) that is used, consumed, or stored in this state; purchases from out-of-state retailers when the retailer is not registered to collect California tax or does not collect California tax for some other reason; and leases of merchandise (tangible personal property). Countywide/statewide pools – mechanisms used to allocate local tax that cannot be identified with a specific place of sale or use in California. Local tax reported to the pool is distributed to the local jurisdiction each calendar quarter using a formula that relates to the direct allocation of local tax to each jurisdiction for a given period. Examples of taxpayers who report use tax allocated through the countywide pool include: •Construction contractors who consume materials used when improving real property and whose job site is regarded as the place of business •California or out-of-state sellers who ship goods directly to consumers in the county from inventory located outside the state •Auctioneers, catering trucks, itinerant vendors, and vending machine operators and other permit holders who operate in more than one local jurisdiction but are unable to readily identify the particular jurisdiction where the taxable transaction takes place Respectfully submitted, Harriet Richardson City Auditor Sources: MuniServices California Department of Tax and Fee Administration California Employment Development Department City of Palo Alto Fiscal Year 2017 Adopted Operating Budget Audit staff: Lisa Wehara Attachment A City of Palo Alto Sales Tax Digest Summary Collections through June 2017 Sales through March 2017 (2017Q1) www.MuniServices.com (800) 800‐8181 Page 1 California Overview The percent change in cash receipts from the prior year was 2.1% statewide, 2.7% in Northern California and 1.6% in Southern California. The period’s cash receipts include tax from business activity during the period, payments for prior periods and other cash adjustments. When we adjust for non‐period related payments, we determine the overall business activity increased for the year ended 1st Quarter 2017 by 1.4% statewide, 1.2% in Southern California and 1.8% in Northern California. City of Palo Alto For the year ended 1st Quarter 2017, sales tax cash receipts for the City increased by 7.2% from the prior year. On a quarterly basis, sales tax revenues increased by 14.1% from 1st Quarter 2016 to 1st Quarter 2017. The period’s cash receipts include tax from business activity during the period, payments for prior periods and other cash adjustments. Excluding state and county pools and adjusting for anomalies (payments for prior periods) and late payments, local sales tax increased by 4.6% for the year ended 1st Quarter 2017 from the prior year. On a quarterly basis, sales tax activity increased by 5.8% in 1st Quarter 2017 compared to 1st Quarter 2016. Regional Overview This seven‐region comparison includes estimated payments and excludes net pools and adjustments. % of Total / % Change City of Palo Alto California Statewide S.F. Bay Area Sacramento Valley Central Valley South Coast Inland Empire North Coast Central Coast General Retail 35.6 / 4.9 28.1 / 0.8 26.3 / ‐0.3 27.6 / 1.9 31.4 / 5.7 28.8 / ‐0.2 27.0 / 3.2 28.5 / 1.9 31.4 / ‐5.7 Food Products 20.1 / 5.1 21.0 / 3.9 22.4 / 3.7 17.2 / 4.6 16.8 / 4.3 22.3 / 4.1 17.4 / 3.7 18.8 / 3.6 30.0 / ‐8.3 Construction 3.2 / ‐15.3 9.4 / ‐0.5 9.5 / 1.5 11.6 / 4.2 11.9 / 1.7 8.3 / 1.1 10.7 / ‐11.0 13.5 / 4.6 8.6 / ‐11.7 Business to Business 18.1 / 0.3 16.5 / 1.3 19.6 / ‐0.8 13.9 / 1.3 12.4 / ‐0.7 16.2 / 1.6 16.2 / 6.2 8.2 / ‐2.1 6.6 / 1.5 Miscellaneous/Other 23.4 / 10.9 25.0 / 0.8 22.2 / 2.7 29.7 / 3.0 27.4 / 1.7 24.3 / ‐0.9 28.7 / 2.6 31.0 / 1.1 23.4 / 0.0 Total 100.0 / 4.6 100.0 / 1.4 100.0 / 1.3 100.0 / 2.9 100.0 / 3.1 100.0 / 1.0 100.0 / 1.8 100.0 / 2.0 100.0 / ‐5.3 City of Palo Alto State Wide S.F. Bay Area Sacramento Valley Central Valley South Coast Inland Empire North Coast Central Coast Largest Segment Restaurants Restaurants Restaurants Restaurants Department Stores Service Stations Restaurants Auto Sales ‐ New Restaurants % of Total / % Change 17.7 / 4.2 15.0 / 5.0 16.0 / 4.1 16.5 / 5.3 13.3 / 1.8 18.5 / ‐57.9 11.6 / 6.3 12.2 / 9.3 21.7 / ‐8.8 2nd Largest Segment Auto Sales ‐ New Auto Sales ‐ New Auto Sales ‐ New Auto Sales ‐ New Auto Sales ‐ New Restaurants Auto Sales ‐ New Restaurants Auto Sales ‐ New % of Total / % Change 15.7 / 16.2 11.4 / 4.2 11.3 / 5.7 11.4 / 2.5 11.0 / 6.2 14.5 / ‐32.6 11.2 / 5.0 10.9 / 4.3 10.6 / 20.6 3rd Largest Segment Miscellaneous Retail Department Stores Department Stores Department Stores Restaurants Auto Sales ‐ New Department Stores Department Stores Misc. Retail % of Total / % Change 11.2 / 24.6 9.3 / ‐0.8 7.6 / ‐2.1 9.0 / ‐1.3 10.9 / 5.6 11.8 / 11.8 10.3 / 0.2 10.7 / ‐1.3 10.4 / ‐8.4 *** Not specified to maintain confidentiality of tax information CITY OF PALO ALTO ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 1ST QUARTER 2017 ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 1ST QUARTER 2017 BENCHMARK YEAR 2017Q1 COMPARED TO BENCHMARK YEAR 2016Q1 Attachment B City of Palo Alto www.MuniServices.com (800) 800‐8181 Page 2 Gross Historical Sales Tax Performance by Benchmark Year and Quarter (Before Adjustments) $‐ $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 BENCHMARK YEAR QUARTERLY Net Cash Receipts for Benchmark Year 1st Quarter 2017: $29,330,293 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2017Q1 BMY is sum of 2017 Q1, 2016 Q4, Q3, & Q2) Restaurants 15% Miscellaneous Retail 9% Department Stores 7% Apparel Stores 6% Electronic Equipment 4% Food Markets 2% Recreation Products 1% All Other 39% Net Pools & Adjustments 17% Attachment B City of Palo Alto www.MuniServices.com (800) 800‐8181 Page 3 TOP 25 SALES/USE TAX CONTRIBUTORS The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended 1st Quarter 2017. The Top 25 Sales/Use Tax contributors generate 40.1% of Palo Alto’s total sales and use tax revenue. Anderson Honda Integrated Archive Systems The Pace Gallery Apple Stores Macy's Department Store Tiffany & Company Audi Palo Alto Magnussen's Toyota Urban Outfitters Bloomingdale's Neiman Marcus Department Store USB Leasing Bon Appetit Management Co. Nordstrom Department Store Varian Medical Systems Eat Club Space Systems Loral Volvo Cars Palo Alto Fry's Electronics Stanford University Hospital CVS Hewlett‐Packard Tesla Lease Trust Houzz Shop Tesla Motors Sales Tax from Largest Non‐Confidential Economic Segments $‐ $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 Benchmark Year 2017Q1 Benchmark Year 2016Q1 Attachment B City of Palo Alto www.MuniServices.com (800) 800‐8181 Page 4 Historical Analysis by Calendar Quarter Economic Category % 2017Q1 2016Q4 2016Q3 2016Q2 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 General Retail 23.6% 1,684,023 2,784,731 1,983,231 2,141,794 1,673,846 2,526,551 1,935,178 2,009,743 1,797,756 2,591,589 1,994,264 Miscellaneous/Other 19.5% 1,392,756 1,621,044 1,727,134 1,617,307 1,413,133 1,491,158 1,609,541 1,564,157 1,400,769 1,655,225 1,400,415 Food Products 16.7% 1,192,662 1,235,801 1,213,382 1,194,369 1,126,103 1,166,195 1,146,174 1,167,014 1,061,755 1,096,087 1,054,462 Business To Business 17.4% 1,240,962 1,004,883 1,027,730 1,140,526 974,162 1,428,210 888,609 833,370 757,827 885,327 596,226 Net Pools & Adjustments 22.8% 1,631,125 1,351,709 831,377 1,313,745 1,072,794 1,226,261 1,060,979 1,039,250 968,777 1,178,482 945,653 Total 100.0% 7,141,528 7,998,168 6,782,854 7,407,741 6,260,038 7,838,375 6,640,481 6,613,534 5,986,884 7,406,710 5,991,020 Economic Segments % 2017Q1 2016Q4 2016Q3 2016Q2 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 Miscellaneous/Other 40.7% 2,910,133 2,939,228 3,027,081 2,973,047 2,607,097 3,237,983 2,720,241 2,549,852 2,370,361 2,906,134 2,211,697 Restaurants 14.6% 1,043,747 1,071,053 1,068,101 1,068,502 1,005,688 1,029,733 1,019,505 1,045,011 942,709 962,018 936,160 Miscellaneous Retail 6.1% 435,757 1,002,389 581,831 681,345 469,360 714,151 478,994 479,298 415,270 628,099 508,061 Department Stores 5.5% 392,565 641,541 491,433 546,629 435,470 714,831 553,325 595,374 503,590 750,481 548,595 Apparel Stores 5.2% 372,033 553,250 398,170 444,383 337,880 519,318 397,534 428,100 370,810 507,843 398,747 Service Stations 1.7% 119,552 130,396 138,155 144,735 123,004 140,758 173,082 181,582 148,902 166,861 203,484 Food Markets 1.8% 131,676 145,179 126,755 109,108 104,676 116,778 113,092 106,818 104,856 117,245 105,600 Business Services 0.6% 43,548 102,095 47,066 65,510 51,647 76,156 51,885 120,003 103,773 131,505 66,163 Recreation Products 0.9% 61,392 61,328 72,885 60,737 52,422 62,406 71,844 68,246 57,836 58,042 66,860 Net Pools & Adjustments 22.8% 1,631,125 1,351,709 831,377 1,313,745 1,072,794 1,226,261 1,060,979 1,039,250 968,777 1,178,482 945,653 Total 100.0% 7,141,528 7,998,168 6,782,854 7,407,741 6,260,038 7,838,375 6,640,481 6,613,534 5,986,884 7,406,710 5,991,020 *Net Pools & Adjustments reconcile economic performance to periods’ net cash receipts. The historical amounts by calendar quarter: (1) include any prior period adjustments and payments in the appropriate category/segment and (2) exclude businesses no longer active in the current period. Attachment B City of Palo Alto www.MuniServices.com (800)800‐8181 Page 5 Quarterly Analysis by Economic Category, Total and Segments: Change from 2016Q1 to 2017Q1 Ge ne r a l Re t a i l Fo o d Pr o d u c t s Co n s t r u c t i o n Bu s i n e s s to Bu s i n e s s Mis c / O t h e r 20 1 7 / 1 To t a l 20 1 6 / 1 To t a l % Ch g La r g e s t Ga i n Se c o n d La r g e s t Ga i n La r g e s t De c l i n e Se c o n d La r g e s t De c l i n e Campbell ‐0.7% 3.0%‐2.8% 2.5% 9.3% 2,168,648 2,123,453 2.1% Restaurants Business Services Bldg.Matls‐Retail Furniture/Appliance Cupertino ‐2.7% 13.8%‐22.8% 20.5% 8.0% 5,589,716 4,962,144 12.6% Office Equipment Business Services Bldg.Matls‐Whsle Department Stores Gilroy ‐2.6% 6.2% 0.9% 5.1% 23.2% 3,415,420 3,187,426 7.2% Auto Sales ‐ New Misc. Vehicle Sales Apparel Stores Bldg.Matls‐Whsle Los Altos ‐1.2% 1.0%‐7.0% 544.1% 12.1% 645,283 516,701 24.9% Office Equipment Service Stations Furniture/Appliance Bldg.Matls‐Whsle Los Gatos ‐5.3%‐0.6%‐9.9%‐3.1% 1.6% 1,482,477 1,502,881 ‐1.4% Auto Sales ‐ New Service Stations Miscellaneous Other Furniture/Appliance Milpitas ‐3.8% 3.7% 18.8% 69.8% 8.3% 5,512,241 4,522,982 21.9% Office Equipment Electronic Equipment Light Industry Apparel Stores Morgan Hill 16.8% 8.3% 0.4% 19.7% 2.4% 1,843,374 1,702,478 8.3% Electronic Equipment Furniture/Appliance Auto Parts/Repair Light Industry Mountain View ‐4.1%‐1.2%‐26.6%‐52.7% 4.8% 3,462,490 4,392,629 ‐21.2% Service Stations Auto Sales ‐ New Office Equipment Business Services Palo Alto 0.5% 5.5%‐25.3% 27.2% 1.8% 5,510,398 5,210,069 5.8% Leasing Office Equipment Bldg.Matls‐Whsle Department Stores San Jose ‐2.6% 5.2%‐5.6%‐19.4% 5.4% 34,783,010 36,239,144 ‐4.0% Restaurants Service Stations Light Industry Office Equipment Santa Clara ‐1.3%‐1.2% 2.6% 8.7% 5.2% 10,755,900 10,262,401 4.8% Office Equipment Business Services Electronic Equipment Health & Government Santa Clara Co.‐7.8%‐2.4%‐36.6%‐44.7% 5.9% 205,884 215,928 ‐4.7% Auto Parts/Repair Light Industry Electronic Equipment Miscellaneous Retail Saratoga ‐5.8% 2.1%‐20.0%‐21.4%‐3.6% 5,413,432 6,072,404 ‐10.9% Service Stations Restaurants Electronic Equipment Bldg.Matls‐Retail Sunnyvale ‐1.2% 5.3%‐5.0%‐6.2%‐13.1% 851,986 877,922 ‐3.0% Restaurants Heavy Industry Health & Government Miscellaneous Retail Attachment B City of Palo Alto www.MuniServices.com (800)800‐8181 Page 6 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 El Camino Real 2,563,317 1,084,815 1,108,045 1,102,757 1,105,340 1,090,236 1,088,571 1,140,412 1,188,495 1,210,148 1,258,506 1,282,296 1,261,233 Town and Country 570,860 590,134 624,333 629,346 637,224 644,288 636,497 639,830 642,372 632,157 645,939 634,372 629,484 Midtown 185,472 185,910 187,120 188,251 192,122 194,028 195,907 192,190 193,066 207,568 206,960 206,327 201,948 East Meadow Area 107,316 109,171 114,419 104,735 117,701 172,602 166,805 161,897 173,019 185,564 192,748 191,467 199,789 Charleston Center 84,760 86,432 86,288 87,413 88,622 89,612 90,642 91,711 91,991 92,121 91,914 92,495 92,258 City of Palo Alto ‐ Selected Geographic Areas of the City Benchmark Year 1st Quarter 2017 $‐ $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 El Camino Real Town and Country Midtown East Meadow Area Charleston Center *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2017Q1 BMY is sum of 2017 Q1, 2016 Q4, Q3 & Q2) Attachment B City of Palo Alto www.MuniServices.com (800)800‐8181 Page 7 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Stanford Shopping Ctr 5,647,210 5,685,894 5,713,169 5,726,273 5,769,236 5,775,751 5,765,715 5,670,796 5,501,966 5,464,490 5,371,067 5,309,725 5,425,743 Stanford Research Park 4,299,015 4,027,889 3,724,671 3,304,003 3,082,331 2,869,143 2,411,043 2,953,900 2,924,944 3,119,427 3,257,664 2,999,685 3,177,058 Downtown 3,108,592 3,124,224 3,189,273 3,220,248 3,251,198 3,318,323 3,351,331 3,399,758 3,445,331 3,672,532 3,838,501 4,144,463 4,202,364 San Antonio 2,234,235 2,393,463 2,453,548 2,495,915 2,504,156 2,465,311 2,483,850 2,476,949 2,517,603 2,451,491 2,414,093 2,448,764 2,420,850 California Avenue 1,104,237 1,109,685 1,119,047 1,120,996 1,113,385 1,108,904 1,106,175 1,097,493 1,091,796 1,090,901 1,073,085 1,048,035 1,034,377 City of Palo Alto ‐ Selected Geographic Areas of the City Benchmark Year 1st Quarter 2017 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 Stanford Shopping Ctr Downtown #REF!San Antonio California Avenue 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Stanford Shopping Ctr Downtown San Antonio California Avenue $‐ $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Stanford Shopping Ctr Stanford Research Park Downtown San Antonio California Avenue *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2017Q1 BMY is sum of 2017 Q1, 2016 Q4, Q3 & Q2) Attachment B City of Palo Alto www.MuniServices.com (800)800‐8181 Page 8 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Valley Fair 6,885,378 6,958,214 7,108,448 7,455,179 7,588,546 7,273,028 7,282,265 7,248,371 7,228,310 7,063,549 7,053,562 6,851,598 6,714,146 Stanford Shopping Ctr 5,647,210 5,685,894 5,713,169 5,726,273 5,769,236 5,775,751 5,765,715 5,670,796 5,501,966 5,464,490 5,371,067 5,309,725 5,425,743 Oakridge Mall 3,934,469 3,972,556 4,005,370 4,040,521 4,159,367 4,236,080 4,215,653 4,158,194 4,075,061 3,871,802 3,909,043 3,831,354 3,625,692 Hillsdale 2,374,185 2,401,370 2,438,295 2,450,278 2,494,792 2,513,866 2,470,404 2,434,086 2,410,095 2,363,729 2,363,729 2,251,467 2,197,768 Santana Row 2,453,638 2,523,193 2,525,349 2,565,665 2,634,908 2,706,867 2,735,522 2,834,796 2,807,754 2,754,804 2,933,889 3,005,007 3,047,779 City of Palo Alto ‐ Regional Shopping Mall Comparison Benchmark Year 1st Quarter 2017 $‐ $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Valley Fair Stanford Shopping Ctr Oakridge Mall Hillsdale Santana Row *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2017Q1 BMY is sum of 2017 Q1, 2016 Q4, Q3 & Q2) Attachment B Economic Categories and Segments Economic Category Economic Segment Description Business to Business - sales of tangible personal property from one business to another business and the buyer is the end user. Also includes use tax on certain purchases and consumables. Business Services Advertising, banking services, copying, printing and mailing services Chemical Products Manufacturers and wholesalers of drugs, chemicals, etc. Electronic Equipment Manufacturers of televisions, sound systems, sophisticated electronics, etc. Energy Sales Bulk fuel sales and fuel distributors and refiners Heavy Industry Heavy machinery and equipment, including heavy vehicles, and manufacturers and wholesalers of textiles and furniture and furnishings Leasing Equipment leasing Light Industry Includes, but is not limited to, light machinery and automobile, truck, and trailer rentals Office Equipment Businesses that sell computers, and office equipment and furniture, and businesses that process motion pictures and film development Construction Building Materials – Retail Building materials, hardware, and paint and wallpaper stores Building Materials - Wholesale Includes, but is not limited to, sheet metal, iron works, sand and gravel, farm equipment, plumbing materials, and electrical wiring Food Products Food Markets Supermarkets, grocery stores, convenience stores, bakeries, delicatessens, health food stores Food Processing Equipment Processing and equipment used in mass food production and packaging Liquor stores Stores that sell alcoholic beverages Restaurants Restaurants, including fast food and those in hotels, and night clubs Attachment C Economic Categories and Segments Economic Category Economic Segment Description General Retail – all consumer focused sales, typically brick and mortar stores Apparel Stores Men’s, women’s, and family clothing and shoe stores Department Stores Department, general, and variety stores Drug Stores Stores where medicines and miscellaneous articles are sold Florist/Nursery Stores where flowers and plants are sold Furniture/Appliance Stores where new and used furniture, appliances, and electronic equipment are sold Miscellaneous Retail Includes, but is not limited to, stores that sell cigars, jewelry, beauty supplies, cell phones, and books; newsstands, photography studios; personal service businesses such as salons and cleaners; and vending machines Recreation Products Camera, music, and sporting goods stores Miscellaneous/Other Miscellaneous/Other Includes but not limited to health services, government, nonprofit organizations, non- store retailers, businesses with less than $20,000 in annual gross sales, auctioneer sales, and mortuary services and sales Transportation Auto Parts/Repair Auto parts stores, vehicle and parts manufacturing facilities, and vehicle repair shops Auto Sales - New New car dealerships Auto Sales - Used Used car dealerships Miscellaneous Vehicle Sales Sale and manufacture of airplanes and supplies, boats, motorcycles, all-terrain vehicles, trailers and supplies Service stations Gas stations, not including airport jet fuel Attachment C ECONOMIC NEWS & TRENDS July 18, 2017 ECONOMIC NEWS & TRENDS Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 HIGHLIGHTS GDP: Real GDP increased at an annual rate of 1.4% in 1Q2017. In 4Q2016, the GDP increased 2.1%. U.S. Sales for Retail and Food Services, June 2017: Sales were down 0.1% from May 2017, and up 3.0% from last year. Non‐store retailers were up 9.2% from June 2016. Restaurants dropped 0.6% in June, department stores fell 0.7% and 1.3% for service stations. Spending improved 0.4% at non‐store retailers (also on‐line outlets), building materials up 0.5% and auto dealers and furniture sales gained (0.1%). Auto dealers (includes purchases of rental cars) fell 3% in June. California Retail Sales and Use Tax for June: $2.32 billion were $57.2 million, or 2.5% higher than May. E‐Commerce Results for 1Q2017: 8.50% for 1Q2017, up from 8.20 from last quarter or a 3.66% change. Retail Trends Nationwide: Macy’s closed 68 stores this year. Another 34 stores are planned to close in the next 4 years. At the end of this month, JC Penny will begin to close 138 stores. Sears and Kmart are closing 72 more stores after announcing that more than 180 stores will close. Companies Creating Shopping Holidays: Amazon’s 2017 Prime Day is a big hit and further its retail dominance. Starting July 10 at 9 p.m. ET, Amazon offered deals to Prime members for 30 hours. Walmart and others will have deals on Prime Day. And China‐based Alibaba has its own shopping holiday on 11/ 11. Auto Sales Forecast for 2017: Sales of new vehicles will hit 17 million, versus 17.5 million in 2016; and the first downturn since the recession of 2009. The market will contract again in 2018; about 16.4 million sales. Used Vehicles: A jump in leasing that started several years ago means more late‐model autos coming off lease. California Retail Car Registrations for 1Q2017: Changed by ‐9.3% (254,409 from 280,616 in 2016). After seven years of increasing sales, the market has fully recovered from the low point in 2009, and as a result, pent up demand is easing. In addition, interest rates are increasing, used ve‐ hicle prices are weakening, and incentives are on the rise, all signs of a market that has likely reached its peak. Gasoline Prices: AAA shows (July 16, 2017) the national average price of self‐serve regular at $2.25 per gallon which is four cents less than one week and one month ago, and 14 cents more than the same date last year. California Gas Average: $2.91 (July 16, 2017): $2.94 (May 10, 2017); $2.79 (May 10, 2016). California Home Sales: The median home price in May was $550,200, up 2.3%, and up 5.8% from May 2016. April 2017 was $537,920. Fine Dining and Upscale Casual Show Strength for 2Q2017: Affluent restaurant consumers continue to respond positively to brands that provide experience‐ driven dining occasions. Amazon‐Whole Foods: Amazon in June acquired Whole Foods (over 460 stores). It was also granted a patent for future technology that would prevent brick‐and‐mortar shoppers from online price checking. Wireless Telephone Service: Fell 13.2% over the past year Logistics: The rise of e‐commerce means big business for the warehouse industry as more retailers invest in distribution centers to facilitate fast delivery of goods. Sharing Economy: Uber, Airbnb lead the way as sharing economy expands. 56.5 million people will use sharing economy service this year; this is over a quarter (26%) of U.S. adult internet users. Construction in May 2017: 4.5% above the May 2016 estimate. During the first 5 months of this year, construction spending amounted to $469.2 billion, 6.1% above the $442.4 billion for the same period in 2016. Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 3 www.MuniServices.com SECTION 1: U.S. ECONOMY U.S. Economy and Indicators https://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm (June 29, 2017); www.bls.gov/news.release/pdf/cpi.pdf ; https://www.bls.gov/news.release/cpi.htm; www.usa.today (July 14, 2017); https://www.census.gov/economic‐indicators/ GDP: Real GDP increased at an annual rate of 1.4% in 1Q2017. In 4Q2016, real GDP increased 2.1%. June 2017 Snapshot: Sales for Retail and Food Services: Consumers account for roughly 70% of the U.S. economic activity. Sales were down 0.1% from May 2017, and up 3.0% from last year. Non‐store retailers were up 9.2% from June 2016, while sporting goods, hobby, book, & music stores were down 8.9% from last year. Restaurants dropped 0.6% in June, department stores fell 0.7% and 1.3% for service stations. Spending improved 0.4% at non‐store retailers (also on‐line outlets), building materials up 0.5% and auto dealers and furniture sales gained (0.1%). Auto dealers (includes purchases of rental cars) fell 3% in June. Construction in May 2017: 4.5% above the May 2016 estimate. During the first 5 months of this year, construction spending amounted to $469.2 billion, 6.1% above the $442.4 billion for the same period in 2016. Income for May: Personal: Increased 0.4% in May. Disposable: Increased 0.5%. Consumer Price Index (CPI) for June 2017 https://www.bls.gov/news.release/cpi.nr0.htm (July 14, 2017) U.S. CPI for June 2017: Unchanged. Decreased 0.2% in May. Gasoline: Declined 2.8% in June; declined 6.4% in May. Food: Unchanged in June. Rose 0.2% in May. Shelter: Increased 0.2% in June and May. Apparel (from proceeding month): For January 2017 (1.4%); February 2017 (.6%); March 2017 (‐.7%); April (‐ .3%); May (‐.8%); June (‐0.1%). Rent: Increased 0.3% in June and 0.2% in May. Tobacco: Decreased 4% in June. April 2017 is the largest increase (4.2%) since April 2009. Alcohol: Increased 0.2% in June. New Vehicles (from proceeding month): For January 2017 (.9%); February 2017 (‐.2%); March 2017 (‐.3%); April (‐.2%); May (‐.2%); June (‐.3%). Used Cars and Trucks (from proceeding month): For January 2017 (‐.4); February 2017 (‐.6); March 2017 (‐.9); April (‐.5%); May (‐.2%); June (‐.7%). Car and Truck Rental: Increased 9.9% in June and 2.3% in May. Wireless Telephone Service: Fell 13.2% over the past year. Lodging Away from Home: Fell 1.9% in June. Rose 2.1% in April after declining 2.4% in March. Services Sector for 1Q2017 https://www.census.gov/services/qss/qss‐current.pdf (June 8, 2017) Services Sector Total Revenue: 1Q2017 was $3,569.6 billion (‐1.3%); in 4Q2014 was $3,616.9 billion (+2.4%). Utilities: $148.2 billion, an increase of 6.2% from 4Q2016 and up 2.8% from the 1Q2016. Transportation and Warehousing: Decrease of 3.9% from the 4Q2016 and up 3.3% from 1Q2016. Real Estate and Rental and Leasing: Decrease of 4.0% from 4Q2016 and up 8.1% from 1Q2016. Accommodation: $58.9 billion, an increase of 1.4% from 4Q2016 and up 6.6% from 1Q2016. Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 4 www.MuniServices.com Economic Outlook http://www.kiplinger.com/tool/business/T019‐S000‐kiplinger‐s‐economic‐outlooks/index.php (July 2017) GDP Outlook: 2.1% pace in 2017; 2.4% in 2018. Interest Rates: 10‐year T notes at 2.5% by end of 2017. Inflation: 1.6% in 2017, down from 2.1% in 2016. Energy: Crude trading from $40 to $45 barrel in September 2017. Gasoline: $2.10 to $2.30 in September 2017. Retail Sales: Growing by 3.5% n 2017 (excluding gas) falling below its 3.8% pace in 2016. E‐commerce: Will grow 15% this year, compared with 13% in 2016. The flip side of strong e‐commerce gains is that in‐store sales will pick up only gradually, at about a 2% rate. Consumer Price Changes for 12/ 2016 to 12/17: Food 1.6% (more competitive); Gasoline at ‐4.8% (down slightly in second‐half of 2017); Cell Plans at 1.9%. Total Inflation: Picking up a bit in second half of 2017 as energy stabilizes (1.3%). Employment / Wages http://dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2017/Jun‐17.pdf; www.bls.com U.S. Unemployment: 4.4% in June. Employment increased in health care, social assistance, financial activities, and mining. The unemployment is the lowest for the US economy since the Great Recession ended in 2009, when unemployment peaked at 10%. (BLS) California’s Unemployment: Fell by 0.1% to 4.7% in May, below the pre‐recession low of 4.9% in December 2006 and tying with the historic low of 4.7% in November‐December 2000. California’s labor force rate is at a new low of 62%. (DOF) Sector Gains and Losses in May: Largest gain is from local government, information, trade, transportation, and utility, other services, financial activities, educational and health services. Losses from leisure and hospitality. (DOF) U.S. Allows More Season‐Worker Visas: The Department of Homeland Security announced it would make 15,000 more visas for seasonal workers available, increasing the current amount by 50%. The currently shortfall has left hotels, restaurants, and other businesses in demand for workers. Share of Goods Through US Ports: Total California goods exports were up $0.2 billion from May 2016 (up 1.2%), the 8th month in a row reporting year‐over‐year export growth. California remained in 2nd place with 11.32% of all US goods exports (12 month moving total), behind Texas at 16.25%. US goods trade (exports and imports) through California ports edged up to 18.43% (12 month moving total; up from 18.41% in April 2017). http://centerforjobs.org/ Travel and Tourism Spending Turned Up in the First Quarter: Spending: 0.4% increased for 1Q2017 after decreasing 2.7% in 4Q2016. Related GDP for the nation increased 1.2% in 1Q2017 after a 2.1% increase in 4Q2016. Traveler accommodations increased 5.3% after decreasing 5.9% in 4Q2016. Prices for all other transportation‐related goods and services, which includes gasoline, increased 7.0% in 1Q2017 after increasing 16.8% in 4Q2016. Total Tourism‐Related Output: $1.6 trillion in 1Q 2017, comprising 58% of direct tourism spending and 42% of indirect tourism‐related spending. https://bea.gov/newsreleases/industry/tourism/2017/tour117.htm Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 5 www.MuniServices.com SECTION 2: CALIFORNIA ECONOMY / FISCAL FOCUS http://www.sco.ca.gov/Files‐EO/07‐17summary.pdf http://dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2017/Jun‐17.pdf California GDP: Increased by 1.2% in 1Q2017. California’s economy in 2016 was the sixth largest economy in the world as measured by GDP, just behind the United Kingdom and ahead of France. (DOF, June 2017) Retail Sales and Use Tax for June: $2.32 billion were $57.2 million, or 2.5% higher than May estimates. For FY 2016‐17, total receipts of $24.71 billion missed the Budget Act projections by $1.03 billion. Personal Income Tax for June: $10.94 billion lagged by $161 million, or 1.5. (Controller) Corporation Tax for June: $2.42 billion were 12.5% lower than assumptions in the May Revision. (Controller, July 2017) June State Government Revenues: $16.63 billion which fell short of projections in the 2017 Budget by 2.5%. (Controller, July 2017) California Home Sales: Median existing single‐family sales price increased by 2.3% to $550,200 in May compared with April. This was $44,330 lower than the pre‐recession peak of $594,530 in May 2007. For the first five months of 2017, the year‐over‐year median home price growth was 6.1%, which follows 5.6% year‐over‐year growth for all of 2016. In May, the number of existing homes sold was 430,060, 5.4% higher than April, and 2.6% higher than May of 2016. (DOF, July 2017) California Wages and Salaries: Comprised 51% of the total personal income of $2.25 trillion in 1Q2017. Wages and salaries increased 4.9% while supplements to wages and salaries increased 4.5%. (DOF, July 2017) Tax Expenditures (Revenue Loss) for Fiscal Year 2016‐17 http://dof.ca.gov/Forecasting/Economics/Tax_Expenditure_Reports/documents/Tax_ExpenditureReport_2016‐17.pdf Sales and Use Tax: About $10 billion. Examples include food; prescription medicines; gas, electricity, and water delivered through mains; farm equipment; and fuel sold to common carriers. Local Property Taxes: Excess of $100 million Corporation Tax: Over $6 billion. Examples include provisions for research and development, interest on state and local government obligations, and provisions for water’s edge election. Personal Income Tax: Estimated at more than $41 billion. Other Taxes: Estimated by over $100 million annually; from aircraft jet fuel used by common carriers and the armed services, and diesel fuel used by transit districts and schools. Expenditures that cannot be quantified include livestock, meals furnished by institutions, property tax exemptions for intangibles and air carrier ground time. SECTION 3: AUTO SALES California Car Sales Covering 1Q2017 http://www.cncda.org/CMS/Pubs/CA%20Auto%20Outlook%201Q%202017.pdf After seven years of increasing sales, the market has fully recovered from the low point in 2009, and as a result, pent up demand is easing. In addition, interest rates are increasing, used vehicle prices are weakening, and incentives are on the rise, all signs of a market that has likely reached its peak. The state new vehicle market is expected to plateau and decline slightly over the next several years, but sales should remain strong, based on historical standards. Retail Car Registrations for 1Q2017: Changed by ‐9.3% (254,409 from 280,616 in 2016). New vehicles sold: YTD for 2017 is 506,745; Total: 1,927,640 (2016); 2,052,750 (2015); 1,848,254 (2014). Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 6 www.MuniServices.com Auto Trends / Forecast Sources: Kiplinger; Wall Street Journal; Federal Reserve Auto Sales in 2017: Sales of new vehicles will hit 17 million, versus 17.5 million in 2016; and the first downturn since the recession of 2009. The market will contract again in 2018; about 16.4 million sales. Used Vehicles: A jump in leasing that started several years ago means more late‐model autos coming off lease. Discounts and Incentives: Discounts average $3,550, up 10% from a year ago; BMW, Mercedes and Nissan will exceed $4,000. Expect deals to get better in the second half of 2017. There will be offers on pickup trucks and SUVs. Impact on Manufacturing: GM, Ford and Honda have already announced short‐term plant shutdowns. GM moving some jobs from Mexico to the U.S. Pay to go: Such service could capture 20% of consumer spending on transportation. In California, Los Angeles is considered a risky regulatory market, San Francisco a likely launch market, yet risky, and San Diego, risky. Auto Financing During and After the Great Recession https://www.federalreserve.gov/econres/notes/feds‐notes/auto‐financing‐during‐and‐after‐the‐great‐recession‐ 20170622.htm (June 22, 2017) In 2007, before funding of finance companies dried up, U.S. households bought about 16 million new cars at an annual rate. When the financial crisis hit, retail auto sales collapsed to 7.9 million at an annual rate in 2009. A considerable share of consumer credit is originated by nonbanks that rely on short‐term funding markets. During the financial crisis, counties in which consumers historically relied most on nonbank financing for auto purchases exhibited the largest drop in auto sales. SECTION 4: GASOLINE Prices: AAA shows (July 16, 2017) the national average price of self‐serve regular at $2.25 per gallon which is four cents less than one week and one month ago, and 14 cents more than the same date las year. MuniServices’ May 16, 2017 report noted $2.35 per gallon and in December 16, 2016 $2.15. MuniServices’ February 17, 2017 report noted $2.26 per gallon and in December 16, 2016 $2.15. California Average: $2.91 (July 16, 2017): $2.94 (May 10, 2017); $2.79 (May 10, 2016). National Average: On July 3, 2017 the national average dropped to a low for 2017 at $2.23. On April 17, the national average price for a gallon of regular unleaded gasoline was at a 2017 high at $2.41 which is 30 cents more than one year ago. http://gasprices.aaa.com/ Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 7 www.MuniServices.com SECTION 5: RETAIL TRENDS/ E‐COMMERCE (Selection from May 16, 2017 to July 17, 2017) Abercrombie & Fitch: 60 closures in 2017; opening five new prototype stores including a Century City location. Ascena Retail Group (Ann Taylor, Loft, Dress Bard, Lane Bryant, Justice): 667 closures (268 by 2019). Alfred Angelo: Largest bridal retailer in mid‐July closed locations including those in California. American Apparel: 110 closures in 2017. Bennigans: Will open in Sacramento. Burlington: Looking to grow store base; currently has 592 units and plans to expand to 1,000. Bebe: 180 closures in 2017. BCBG: 120 closures in 2017. Chick‐fil‐A is the ‘hottest’ big chain in the country expected to overtake Dunkin’ Donuts. Coach: To acquire Kat Spade. CVS: 70 closures in 2017. Crocs: 160 closures in 2017. Dollar General: Stores remodeled to include perishables. Dave and Busters: Considers big box locations; opened locations, including one in Carlsbad. Dd’s Discounts: Launched in 2004 with 10 stores; in June opened 7 new stores and now 200 locations. Dicks: Opening two locations including Milpitas. Elements: Fastest growing therapeutic massage to open 30 studios in 2017. Family Christian: 240 closures in 2017. Floor and Décor: Opening three stores including one in California, which has 7. Gamestop: 100 store closures. Guess: 60 closures in 2017. Goodwill: Will close 5 of its 42 retail stores by year end. Gymboree: 350 closures (14 in California). hhgregg: 88 closures in 2017. Hollar: On‐line version of a Dollar Store; has two‐million active monthly users. Ikea: Sets up shop on Amazon. JCPenny: 135 closures in 2017. K‐Mart: 109 closures in 2017. Luna Grill: San Diego fast casual chain to open as many as two dozen restaurants by end of next year; now top five fast casual chains in the country, outranking Shake Shack and Starbucks. Macys: 68 closures in 2017. Nike: Experience deflating sales; starting pilot program to sell sneakers through Amazon. Nutella Café: Opening first store in Chicago. Mountain Gender: 30 closures in 2017. Michael Kors: 100 to 125 closures; to purchase Jimmy Choo. Payless: 400 closures in 2017. Papa Murphys: To close 16 company‐owned restaurants; will focus on franchises and on‐line ordering. Pedego Electric Bikes: Opening 100th store, including a San Diego location. Pet Supplies Plus: Reached 75 franchises, expanded in six states, including California. Radio Shack: 550 closures in 2017. Rue 21: 400 closures in 2017. Staples: Staples: 70 closures in 2017. Sprint: Expansion includes 78 new stores in Southern California in 2017. Sears: 41 closures in 2017. The Limited: 250 closures in 2017. Togos: Opening up to four locations in the Bakersfield area. T‐Mobile: Expects to open an additional 1,000 stores by mid‐year, with 500 more by the end of the year. Tiffany: About 45% of sales come from lower‐priced items of $530 or less. T.J. Maxx: Defying retail slump. Sales per square foot in 2017: TJX ($332) and Macys ($188). True Religions: Closing 27 stores. Vampire Penguin: Opened first store in Sacramento in 2013 and has 9 locations in Northern California. Wet Seal: 170 closures in 2017. Walgreens: Pulled from alliance to acquire Rite Aid. Walmart: Remodeling hundreds of stores to ease in‐store pickup. William‐Sonoma: Opening “dual concept” stores in the San Francisco area and Orange County. Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 8 www.MuniServices.com E‐Commerce Results for 1Q2017: U.S. E‐Commerce sales as percent of retail sales is 8.50% for 1Q2017, up from 8.20 from last quarter or a 3.66% change. Represents an annualized growth rate of 14.63%. For the U.S. totaled $102.7 billion, an increase of 1.9% from 3Q2016. Total retail sales for 1Q2017 were estimated at $105.7 billion, an increase of 4.1% from 4Q2016. California’s e‐commerce sales comprise approximately 13‐14% the total sales, based on California’s portion of the national economy. Marketplace Fairness Act – Allowing States to Collect Taxes from Residents on Goods Purchased Online: S.976, The Marketplace Fairness Act (MFA), has a small‐seller exemption for annual sales of less than one million. H.R. 2193, The Remote Transactions Parity Act (RTPA), also has a small seller exemption, but sets the threshold at $10 million per year. Based on research by ICSC and the National Conference of State Legislatures, states lost an estimated $26 billion to the online sales tax loophole in 2015. “The 2017 Retail Fallout” http://californiaforecast.com/july‐2017/ (July 2017) Causes: Too many stores and shopping malls. Rents are expensive for retailers. Baby Boom generation is buying less “stuff”, opting more for experiential purchases such as education and travel. The Millennials do not want stuff either, other than phones, food, and craft beer; because they are not buying many homes, they are not having to furnish those homes. Future of Retail: The Internet and the growth of the online retail experience continues to evolve as one of the most disruptive forces in the economy. The transition from the current retail environment to a steady state retail economy where rising rents for retail space do not exceed the growth in retail sales is ahead of us. This transition could span years. Future of Online Stores: The biggest factor is the widespread and pervasive migration to online stores for many goods, even clothing. Despite the view that shoppers prefer to try on clothing in physical stores, apparel and accessories are expected this year to overtake computers and consumer electronics as the largest e‐commerce category as a percentage of total online sales. And though total online sales account for only 9% of total retail sales in the U.S, the growth of online purchasing is rising geometrically. Sales in Stores: Comprise over 90% percent of all retail sales. Consequently, making the retail experience more compelling will be the challenge to retailers. What ‘s Ahead: To the extent that online shopping for goods and services becomes more mainstream among consumers (as it threatens to be), more store closures are likely until the supply of stores is compatible with the demand for stores. Retail Trends Back to School Season All Year: Discounts seem modest, like the 10% off backpacks at Target; others run deep, like 60% off school uniforms at JCPenney. Parents plan to spend an average of $501 per student; this is a projected total of $27 billion. Mark Cohen, Director of Retail Studies at Columbia University during a recent interview on back to school shopping season spoke of his best memory as a retailer: “We very carefully calibrated our stores' inventory and staffing to coincide with the actual school districts opening throughout the markets that Mervyn's served. And so, we were ready for it. And that's the heart and soul of retailing. It's ringing the bell for the parade that you're going to put on for your customers. It's the excitement of retail that I think, unfortunately, has diminished to some degree, especially in physical retailing.” USA Today, July 13, 2017; https://www.marketplace.org/2017/07/17/economy/its‐back‐school‐season‐all‐year Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 9 www.MuniServices.com Companies Creating Shopping Holidays: Amazon’s 2017 Prime Day will be a big hit and further its retail dominance. Starting July 10 at 9 p.m. ET, Amazon offered deals to Prime members for 30 hours. The day, started in 2015, rings up more in sales for Amazon than does Black Friday or Cyber Monday, while also landing lots of customers for its $99‐per‐year buying club. Other retailers are scrambling to respond. Walmart and others will have deals on Prime Day. And China‐based Alibaba has its own shopping holiday on 11/ 11. (Kiplinger, July 7 and 11) Furniture Sales: Furniture is one of the fastest growing segments of the U.S. online retailing, growing 18% in 2015, second to groceries. About 15% of the $70 billion U.S. furniture market has moved online. (IBISWorld & Barclays) High Debt Loads Shake Retailers: Sales at traditional retailers have come under pressure with the rising of online rivals, a squeeze intensified by the heavy debt burden of many firms. The slowdown has made raising debt more difficult in the sector. (Wall Street Journal, July 18, 2017) On‐Line Challenge – Box Shopping: Giving shoppers reason not to visit stores. Amazon Prime members can try on clothes at home under Prime Wardrobe. The service would let members fill a box with three or more eligible items to try on at home for seven days and ship back what they don’t want for free. Impact on Self‐Storage Industry: About 8% of the U.S. population uses a storage facility, up from 3% in 1980. Slowing population growth and a shift from the consumption of storage goods towards services points to shift. SECTION 6: RESTAURANT INDUSTRY Weakest Segments for 2Q2017: Fast casual and the bar‐and‐grill sub‐segment within casual dining. “Quick service,” which was the best‐performing segment in 2016, and among the top three segments in 2015, is now struggling to keep building on rapid growth. A positive secular trend is a greater propensity of Millennials to eat away from home. Cyclically, rising incomes and lower unemployment should help restaurant sales. Trends: Growth of the sale of meal kits by the likes of Blue Apron; sales are insignificant now and estimated to have been $1.5 billion in 2016, compared with combined restaurant and grocery sales of $1.2 trillion, but could be a major threat long term. As this niche grows, it is likely to take sales away from restaurants. Growth of delivery is another trend, as well as Millennials’ greater propensity to eat out because of a lack of cooking skills. http://www.nrn.com/finance/opinion‐what‐restaurants‐can‐learn‐retail‐s‐decline, June 26, 2017 Top Restaurant Segments by Share of Total Top 100 Sales: Burger (30.5%); Casual Dining (15.2%); Beverage/ Snack (11.1%); Chicken (8.5%) and Pizza (8.1%). www.restaurant.org California Restaurant Industry in 2017: Restaurant and Food Service Jobs: 10% of employment in the State, and by 2017 that is projected to grown by 10.6%; Projected Sales in California’s Restaurants: $82.2 billion. U.S. Restaurant Industry in 2017: Sales: 4% of the U.S. GDP; Employment: 10% of the nation’s workforce; Share of the Food Money: In 1955, 25% and 48% for the present time. Sales and Traffic for June: Same‐store sales and traffic fell in June and in the second quarter of 2017. Year over year, same‐store sales have declined for the last six consecutive quarters. Fine Dining and Upscale Casual Show Strength for 2Q2017: Fine dining was the best‐performing segment based on same‐ store sales growth in the second quarter, followed by upscale casual. The increased competition for dining occasions both from within the industry (independent operators) and from other sectors (prepared food, meal kits, convenience stores and food trucks) continue to steal additional share from traditional restaurant chains. Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 10 www.MuniServices.com SECTION 7: GROCERY INDUSTRY Trends and News http://www.theshelbyreport.com/ (from May 16, 2017 to July 17, 2017) Amazon‐Whole Foods: Amazon in June acquired Whole Foods (over 460 stores). It was also granted a patent for future technology that would prevent brick‐and‐mortar shoppers from online price checking. Amazon Prepared Food Kits: Prior to the acquisition of Whole Foods, Amazon claimed the word mark “We do the prep. You be the chef.” Amazon’s delivery service poses a major threat to Blue Apron. This is a relatively small market at $4 billion, and a total addressable market of $36 billion annually by 2026. The total US grocery market currently stands at $750 billion per year. Sprouts/ Amazon Prime: Sprouts plans to more than double a current 10‐store e‐commerce business through a partnership with Amazon Prime Now. Blue Apron: Trying to carve a slice of the $600 billion U.S. grocery market; on the verge of an IPO. Churning through customers; 60% of customers stop using the service after 6 months. Amazon’s meal kit delivery service poses a threat. Grocery Store Expansions: Expected to be robust. Amongst those include Kroger and Sprouts Farmers Markets as well as Aldi and Lidl. Estimated U.S. Market Share of Food and Beverage Sales: Walmart (25%); Kroger (10%); Albertsons (7%); Costco (6%); Whole Foods 2.0; Amazon (1.0). Noting the Amazon acquisition of Whole Foods will make Amazon even more competitive. SECTION 8: LOCAL REVENUES Sweetened Beverage Tax: Tuft University in a June 2017 article notes “at the local level alone, there is potential for soda taxes to spread to cover up to 40% of the US population.” Berkeley in 2015 became the first city in the U.S. to tax soda, tacking on 20 cents to the cost of a 20‐ounce drink. http://now.tufts.edu/news‐releases/spread‐local‐taxes‐sugar‐ sweetened‐beverages‐likely. MuniServices is proud to note its partnership with the City of Berkeley in helping to implement the sweetened beverage tax ordinance. The U.S. Conference of Mayors 2017 Best Practices book, Mayors and Businesses Driving Economic Growth, features this partnership. http://www.usmayors.org/wp‐ content/uploads/2017/07/BestPracticesReport2017.pdf.; http://www.theshelbyreport.com/2017/04/18/nations‐first‐soda‐ tax‐study/ “Dark Store” Strategy – Big Box Retailers Battle Locals Over Property Taxes: It’s a series of rulings by the Michigan Tax Tribunal that have allowed large retailers to reduce their property tax assessments, in many cases by as much as half. Big‐ box retailers argue that the market value of their commercial property should be the sale price of similarly sized but vacant retail buildings. They point out that these buildings are extremely hard to sell as‐is once the retailer moves out. Thus, the assertion is, they aren’t worth nearly as much as local tax assessors have traditionally assumed in valuing the property. This appeals approach was first largely successful in the Detroit area following the recession, when nearly all retailers were dealing with depressed property values. The assessment community has even given it a name, dubbing it the “dark‐store” strategy. http://www.governing.com/topics/finance/gov‐big‐box‐retail‐property‐taxes.html Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 11 www.MuniServices.com “Who Pays the Local Tax Bill?”: Some creative‐class cities have become victims of their own success, unable to keep up with demand for housing, local public services and livable‐wage jobs for the lower‐middle class. The result is a crisis of affordability driven by huge spikes in home prices, rents and homelessness. In the past 18 months, Los Angeles, San Francisco, Seattle, Silicon Valley in Santa Clara County, Calif., and other localities have proposed new local taxes to expand affordable housing and bolster services for the homeless. As they grapple with this new challenge of affordability, they must also confront an old question at the heart of local public finance: Who actually pays local taxes? There are two ways to think about who pays. One is the “statutory incidence,” or who is required to remit a tax to the government. The other is the “economic incidence,” or who pays a tax because they’re unable to avoid it. http://www.governing.com/columns/public‐money/gov‐local‐sales‐property‐ taxes.html?utm_term=Who%20Pays%20the%20Local%20Tax%20Bill&utm_campaign=Uncertain%20of%20the%20Future%2 C%20States%20Save%20and%20Save%20Some%20More&utm_content=email&utm_source=Act‐ On+Software&utm_medium=email SECTION 9: THE FUTURE OF RETAIL SPACE Logistics: The rise of e‐commerce means big business for the warehouse industry as more retailers invest in distribution centers to facilitate fast delivery of goods ordered online. The warehouse sector will add 50,000 jobs this year, more than the number of jobs that brick‐and‐mortar stores will shed as traditional retailers keep struggling. Amazon broke ground first fulfillment center in Fresno which is Amazon’s fifth fulfillment center in the Central Valley, with three operating fulfillment centers located in Tracy and Patterson, and a fourth facility under construction in Sacramento. Other Amazon California fulfillment facilities are in San Bernardino, Redlands, Moreno Valley, Rialto, Eastvale and Newark. Food Hall/ Restaurants and Other Eateries Are More than 20% of Units in New and Redeveloped Shopping Centers: With spending on eating out expected to grow over the next 10 years and consumers’ desire to enhance a shopping trip with social and leisure experiences increasing, food and beverage is now critical to the success of any retail development, the report asserts. Other concepts, such as the food hall, have evolved, while there’s also a move toward creating different eating and drinking zones within shopping centers. https://www.cpexecutive.com/post/economy‐watch‐food‐beverage‐ sales‐may‐help‐ailing‐shopping‐centers/ International Council of Shopping Centers: The death of U.S. malls is being greatly exaggerated according to the ICSC. Demographics: U.S. demographics could give a boost to malls in the coming years Millennials, who account for 27% of the U.S. population, are entering their late 30s, an active phase of buying goods and services as they form families. Technology: Artificial intelligence, robotics, 3‐D printing, virtual reality and drones will be used in the future. Consumers will have goods, such as shoes, printed on demand by 3‐D machines while drones will move items around stores. Automated Purchases: Recurring purchases of commodity items will become more automated and stores more social hubs. https://www.reviewjournal.com/business/despite‐store‐closings‐us‐retail‐industry‐sees‐bright‐future/ SECTION 10: SHARED ECONOMY Sharing Economy: Uber, Airbnb lead the way as sharing economy expands. 56.5 million people will use sharing economy service this year; this is over a quarter (26%) of U.S. adult internet users. This year 16.9% of U.S. adult internet users are expected to use their Airbnb account at least once (36.8 million people); 20.4% or 44 million people will book a ride on their Uber account. Airbnb rolled out a program last fall that would give landlords who allow tenants to rent units a cut of the revenue. (Source: www.emarketer.com, June 30, 2017) Attachment D ECONOMIC NEWS & TRENDS July 18, 2017 12 www.MuniServices.com SECTION 11: “BATTLE BETWEEN KING KONG AND GODZILLA” The battle between King Kong and Godzilla retail has moved to the cloud. Walmart is telling some technology companies that if they want its business, they can’t run their application serving Amazon. (Wall Street Journal, June 22, 2017) Attachment D