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Home My WebLink About2021-12-13 City Council Agenda Packet1 Pursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference/video conference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. HOW TO PARTICIPATE VIRTUAL PARTICIPATION >/<,ZdK:K/E (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900-6833 The meeting will be broadcast on Cable TV Channel 26, live on YouTube at https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center at https://midpenmedia.org. IN PERSON PARTICIPATION REQUIREMENT: •Provide Proof of Vaccination or negative COVID-19 test (taken within 48 hours) and a photo ID •Wear a mask at all times •Maintain social distancing •If you cannot or do not wish to comply, you can still participate virtually 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. PUBLIC COMMENTS Public Comments will be accepted both in person and via Zoom meeting. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public co mments can be submitted in advance to city.council@cityofpaloalto.org and will be provided to the Co uncil and available for inspection on the City’s website. Please clearly indicate which agenda item y ou are referencing in your email subject line. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the publ ic discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. City Council Special Meeting Monday, December 13, 2021 5:00 PM Council Chambers AMENDED AGENDA Agenda changes will appear in red below 2 Special Meeting December 13, 2021 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. CALL TO ORDER CLOSED SESSION (5:00 - 6:00 PM) Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (Ed Shikada, Kiely Nose, Rumi Portillo, Sandra Blanch, Nicholas Raisch, Molly Stump, and Terence Howzell) Employee Organization: Service Employees International Union, (SEIU) Local 521, Utilities Management and Professional Association of Palo Alto (UMPAPA)Palo Alto Peace Officer’s Association (PAPOA), Palo Alto Police Management Association (PMA), International Association of Fire Fighters (IAFF) local 1319, Palo Alto Fire Chiefs Association (FCA), ; Authority: Government Code Section 54957.6 (a) AT THIS TIME THE COUNCIL WILL CONVENE TO A REGULAR MEETING City Council Regular Meeting Monday, December 13, 2021 6:00 PM SPECIAL ORDERS OF THE DAY (6:00- 6:25 PM) 2.Adoption of Resolution for Karen McAdams Upon Her Retirement 3.Appointment of Candidates for the Architectural Review Board, Historic Resources Board, Parks and Recreation Commission, and Planning and Transportation Commission AGENDA CHANGES, ADDITIONS AND DELETIONS PUBLIC COMMENT (6:25 - 6:50 PM) Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. CONSENT CALENDAR (6:50 - 7:00 PM) Items will be voted on in one motion unless removed from the calendar by three Council Members. 4.Approval of Minutes November 29, 2021 City Council Meeting Public Comments 3 Special Meeting December 13, 2021 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. 5.Approval of Amendment Number 1 to Contract Number C21179861 with Downtown Streets, Inc., for Downtown Cleaning Services, in Order to Extend the Term by Two Years (through January 11th, 2024), Increase the Total Not to Exceed Amount to $323,244, and Correct a Clerical Error in the Contractor's Name. 6.Approval of Contract Number C20182200 With Cratus, Inc. in the Amount of $3,444,302 for Sanitary Sewer Replacement Project 30 (WC-17001) in the Ventura, Charleston Meadows, Fairmeadow, and Palo Verde Neighborhoods; Authorization for the City Manager to Negotiate and Execute Related Change Orders Not-to-Exceed $344,430, for a Total Not-to-Exceed Amount of $3,788,732; and Approval of Budget Amendments in the Wastewater Collection Fund 7.Approval and Authorization for the City Manager or Their Designee to Execute the Following Three Utilities Public Benefits Program Contract Amendments: 1) Amendment Number 3 to Eagle Systems International, Inc. DBA Synergy Companies C15159126, Extending the Term for One Additional Year With no Increase in Compensation; 2) Amendment Number 4 to Eagle Systems International, Inc. DBA Synergy Companies C15159125, extending the Term for One Additional Year With no Increase in Compensation; 3) Amendment Number 3 to CLEAResult Consulting, Inc. C15159135 extending the Term for One Additional Year With no Increase in Compensation 8.Approval of a Professional Services Agreement With CLEAResult for Efficiency and Electrification Program Services for Small to Medium Business and Commercial Customers for a Total Not-to-Exceed Amount $2,571,714 for a Three-Year Term Through December 31, 2024 9.Approval of a resolution amending the City of Palo Alto's Employee Flexible Benefits Plan as a provision of the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021 (ARPA) as they relate to Employee Health Care and Dependent Care Flexible Spending Accounts 10.Approval of Amendment No. 3 to Contract C17166591 with Susan Zoccola, LLC to increase the contract amount by $35,000 for a total not to exceed amount of $135,000 and to extend the term through December 2023 to complete the artwork associated with the Charleston-Arastradero Corridor Project. 11.Approval of Contract S20178749 Amendment No. 2 with LCT SOFTWARE, LLC in the Amount of $70,800 for a New Not to Exceed Amount of $174,330 for Electronic Document Review Software related QA QA QA 4 Special Meeting December 13, 2021 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. to the city’s Land Use and Permitting System Through December 31, 2022. 12.Adoption of a Resolution Approving an Application and Making Required Findings for Proposition 68 Per Capita Grant Funds for Boulware Park Improvement Project in the Amount of $218,000 13.Request for Authorization to Amend the Existing Legal Service Agreement With the Law Firm of Colantuono, Highsmith & Whatley, PC (Contract S17167696) to Increase the Contract Amount by an Additional $70,000 for a new Not-to-Exceed Amount of $455,000 and to Extend the Term to October 1, 2024 14.Adoption of Revisions to Management and Professional Employees Compensation Plan 15.Approval of a Memorandum of Understanding Between the City of Palo Alto Police Department and the City of Campbell for the Santa Clara County Specialized Enforcement Team (SCCSET) for a Period of Ten Years at a Cost of $10,000 or $5,000 Annually Depending on PAPD Participation 16.Adoption of an Ordinance Restating Procedures For Expedited Permitting Processing For Electric Vehicle Charging Systems. 17.Approval of a License Agreement With New Cingular Wireless PCS, LLC, to Continue Operating the Communications Site on the City Owned Property Located at 1082 Colorado Avenue 18.Adoption of a Resolution Authorizing the City Manager to Execute Participation Agreements on behalf of Palo Alto to Enter Into the Settlement Agreements with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceuitca, Inc., Agree to the Terms of the MOU Allocating Settlement Proceeds, and Authorize Entry Into the MOU with the California Attorney General (Late Packet Report) CITY MANAGER COMMENTS (7:00 - 7:25 PM) ACTION ITEMS Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 5 Special Meeting December 13, 2021 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. 19.Progress Report on the Sustainability and Climate Action Plan Update and S/CAP Ad Hoc Committee Work, and Acceptance of the S/CAP Three-Year Work Plan 20A. Approval of Employee Appreciation Leave of Three Days (Not to Exceed 36 Hours) On A One-time Basis for City of Palo Alto Employees to be Used Between December 19, 2021 through January 8, 2022, and Authorize the City Manager or Their Designee to Execute Agreements With Designated Employee Representative Groups 20B. Approval of Amendments to the Employment Agreements Between the City of Palo Alto and Council Appointed Officers, Specifically the City Attorney and the City Manager *Note 20A and 20B will be discussed and voted as one item 21.Discussion and Possible Direction Regarding In-Person, Remote, or Hybrid City Council and Board and Commission Meetings (Title Change and Late Packet Report) COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS Members of the public may not speak to the item(s) ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda. 22.Property Leases Entered into by City Manager Under Palo Alto Municipal Code Section 2.30.210(h), and Reported Per Section Code 2.30.710 Fiscal Year 2021 23.Annual Status Report on the Developer Impact Fees Schedule as of June 30, 2021 OTHER INFORMATION Standing Committee Meetings Policy and Services Committee Meeting December 14, 2021 City Schools Liaison Committee December 16, 2021 Schedule Of Meetings Public Comment Letters to Council Public Comments Presentation Presentation 6 Special Meeting December 13, 2021 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. Memorandum of Understanding (MOU) Allocating Settlement Proceeds, and Authorize Entry Into the MOU with the California Attorney General (Late Packet Report) 21. Discussion and Possible Direction Regarding In-Person, Remote, or Hybrid City Council and Board and Commission Meetings (Title Change and Late Packet Report) AMENDED AGENDA ITEMS Items that have been added/modified from the original publication of the agenda are listed below. Any corresponding materials are appended to the end of the initial packet. If full items have been added to the Agenda, they will be denoted with a number staring with AA, meaning Amended Agenda item. 18. Adoption of a Resolution Authorizing the City Manager to Execute Participation Agreements on Behalf of the City of Palo Alto to Enter Into Settlement Agreements Regarding Manufacture and Distribution of Opioid Products with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceuitca, Inc., Agree to the Terms of the 7 Special Meeting December 13, 2021 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1. Written public comments may be submitted by email to city.council@cityofpaloalto.org. 2. Spoken public comments using a computer will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom-based meeting. Please read the following instructions carefully. A. You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers including Internet Explorer. B. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. C. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. D. When called, please limit your remarks to the time limit allotted. E. A timer will be shown on the computer to help keep track of your comments. 3. Spoken public comments using a smart phone will be accepted through the teleconference meeting. To address the Council, download the Zoom application onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID below. Please follow the instructions B-E above. 4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. >/<,ZdK:K/E Meeting ID: 362 027 238 Phone:1(669)900-6833 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϲϳͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ĚŽƉƚŝŽŶŽĨZĞƐŽůƵƚŝŽŶĨŽƌ<ĂƌĞŶDĐĚĂŵƐhƉŽŶ,ĞƌZĞƚŝƌĞŵĞŶƚ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗WŽůŝĐĞ ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϮ͘Ă͗Attachment A: Karen McAdams Resolution 2 Packet Pg. 7 Resolution EXPRESSING APPRECIATION TO KAREN MCADAMS UPON HER RETIREMENT WHEREAS, Karen McAdams served the City of Palo Alto and its citizens as a member of the Palo Alto Police Department for 21 years, first becoming a Court Liaison Officer in 2000, then a Police Services Supervisor in 2009, and ultimately a Public Safety Program Manager in 2013; and WHEREAS, McAdams started her law enforcement career in 1993 as a Reserve Deputy Sheriff with Alameda County Sheriff’s Department, then serving as a Community Service Officer with Millbrae Police Department in 1995, working as a Court Liaison for four years before coming to the Palo Alto Police Department; working a combined 28 years in law enforcement; and WHEREAS, in her role as the Police Department’s Court Liaison Officer, McAdams served as the primary point of contact and conduit of information between the Department and the Santa Clara County District Attorney’s Office, preparing criminal cases for review and working closely with deputy district attorneys to ensure that all necessary information and evidence was included in a case packet; and WHEREAS, as the Court Liaison Officer, McAdams worked closely with police officers and detectives to help them strengthen their report writing skills, coaching them when necessary on information the District Attorney’s Office would need in order to properly evaluate a criminal case; and WHEREAS, as the Court Liaison Officer and detectives were assigned to a major case, McAdams could always be counted upon as a valued member of the team by coming in early, staying late, or even working on her days off to ensure the successful filing of criminal charges could be accomplished by meeting critical statutory deadlines; and WHEREAS, in her roles as a Police Services Supervisor and Public Safety Program Manager, McAdams oversaw all aspects of the Police Department’s parking enforcement efforts, implementing the latest technologies and acquiring new equipment, writing contracts, working with vendors, completing initial reviews of parking citation appeals, serving as the Department’s liaison to the Department of Motor Vehicles, and doing journal entries; and WHEREAS, McAdams supported her coworkers with a high degree of professionalism and respect that is in alignment with the mission of the Department; and WHEREAS, McAdams deserves a long and happy retirement for all her years of dedicated service. NOW, THEREFORE, LET IT BE RESOLVED, that the City Council of the City of Palo Alto hereby commends the outstanding public service of Karen McAdams and records its appreciation, as well as the appreciation of the citizens of this community, upon her retirement. INTRODUCED AND PASSED: December 13, 2021 ATTEST: APPROVED: _____________________ ____________________ City Clerk Mayor APPROVED AS TO FORM: _____________________ ____________________ City Manager City Attorney 2.a Packet Pg. 8 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϱϲϳͿ KĨĨŝĐĞŽĨƚŚĞŝƚǇůĞƌŬ ŝƚǇŽƵŶĐŝůKZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ dŝƚůĞ͗ƉƉŽŝŶƚŵĞŶƚŽĨĂŶĚŝĚĂƚĞƐĨŽƌƚŚĞƌĐŚŝƚĞĐƚƵƌĂůZĞǀŝĞǁŽĂƌĚ͕ ,ŝƐƚŽƌŝĐZĞƐŽƵƌĐĞƐŽĂƌĚ͕WĂƌŬƐĂŶĚZĞĐƌĞĂƚŝŽŶŽŵŵŝƐƐŝŽŶ͕ĂŶĚWůĂŶŶŝŶŐĂŶĚ dƌĂŶƐƉŽƌƚĂƚŝŽŶŽŵŵŝƐƐŝŽŶ &ƌŽŵ͗>ĞƐůĞǇDŝůƚŽŶ͕ŝƚǇůĞƌŬ Recommendation Staff recommends City Council vote to appoint candidates to the following positions: Architectural Review Board Three (3) positions with three-year terms ending December 15, 2024 Historic Resources Board One (1) unexpired position with a term ending December 15, 2022 Parks and Recreation Commission Two (2) positions with three-year terms ending December 15, 2024 One (1) unexpired position with a term ending December 15, 2022 Planning and Transportation Commission Two (2) positions with four-year terms ending December 15, 2025 **A majority vote (4 yes’s) is required to appoint each applicant. Background The Fall 2021 Boards and Commission recruitment invited applications September 16, 2021 through October 26, 2021 through the new online application process. Palo Alto Municipal Code 2.16.060 requires public notification regarding vacancies of the Commissions as follows, “The City Clerk shall exercise their discretion in choosing the method of advertisement that will most effectively reach potential candidates.” Based on the September 14, 2021 Policy & Services Committee meeting report (available here) regarding Board and Commission Member demographics and community representation the City Clerk’s office expanded recruitment efforts through additional means to “most effectively reach potential candidates”. This recruitment was advertised through various methods including paid print advisements in The Palo Alto Weekly and the Daily Post; via the City’s website and 3 Packet Pg. 9 Page 2 social media channels; in physical locations of the Palo Alto Libraries and Community Centers; and distributed by e-mail and through established distribution lists to community based organizations, individuals and City subscription based notification lists. The City received a total of 36 qualified applicants by the end of the recruitment period. Interviews On November 8, 2021, the Council selected to interview all applicants for the open positions (report available here). Due to the large pool of applicants, Council held two separate interviews on November 16, 2021 and November 29, 2021. On November 16th, Council interviewed for open positions on the Planning and Transportation Commission, the Architectural Review Board, and the Historic Resources Board. On November 29th, Council interviewed for open positions on the Parks and Recreation Commission and one Planning and Transportation applicant. Video recordings of the interviews have been made available to the public and to Council Members who were unable to attend. During the recruitment process, five applicants withdrew their applications for consideration. Tim Persyn, Simran Sandhu, and Haejin Ahn Kang withdrew their applications for the Parks and Recreation Commission; Stepha nie Safdi withdrew her application for the Planning and Transportation Commission; and Alexander Lew withdrew his application from the Architectural Review Board. All the remaining listed applicants have been interviewed by the City Council. Membership Requirements Each Board or Commission has different requirements for appointment such as mandatory residency, specialized training, or professional service in a specified area. Only the Architectural Review Board requires for one of the three open positions to be either an architect, landscape architect, building designer or another design professional. The Historic Resources Board and the Parks and Recreation Commission require demonstrated interest in their scope of work. For Boards or Commissions requiring Palo Alto residency, applicants have been pre-screened to fulfill that requirement. All other specific requirements are fulfilled by current members. For each of the Board or Commission with current vacancies, the requirements are listed below as well as the applicants for each. Planning and Transportation Commission: Two positions Terms ending December 14, 2025 • Palo Alto Residency (PAMC 2.20.010) • APPLICANTS: 1. Bryna Chang (Incumbent) 2. Leonard Ely 3. Kathryn Jordan 4. Arthur Keller 3 Packet Pg. 10 Page 3 5.Chunming Niu 6.Keith Reckdahl 7.Stephanie Safdi (Withdrawn) 8.Nisar Shaikh 9.Brigham Wilson Architectural Review Board: Three positions Terms ending December 15, 2024 •At least three members must be architects, landscape architects, building designers or other design professionals. (Two positions fulfilled, one vacant) •No Palo Alto residency requirement (PAMC 2.21.010) •APPLICANTS: 1.Peter Baltay (Incumbent) 2.Valerie Driscoll 3.David L Hirsch (Incumbent) 4.Yujin Jeon 5.Kathryn Jordan 6.Alexander Lew (Incumbent) (Withdrawn) 7.Manix Patel 8.Brigham Wilson 9.Jim Xiao 10.Bin Zhou Historic Resources Board: One position (unexpired) terms ending December 15, 2022 •Demonstrated interest in and knowledge of history, architecture or historic preservation. •One member shall be an owner/occupant of a category 1 or 2 histo ric structure, or of a structure in a historic district; (Fulfilled) •Three members shall be architects, landscape architects, building designers or other design professionals (Fulfilled) •At least one member shall possess academic education or practical experience in history or a related field. (Fulfilled) (PAMC 2.27.010) •APPLICANTS: 1.Valerie Driscoll 2.Alisa Eagleston-Cieslewicz Parks and Recreation Commission: Three positions Terms ending December 15, 2024 and one unexpired term ending December 15, 2022 •Each member of the commission shall have a demonstrated interest in parks, open space and recreation matters. •Palo Alto Residency (PAMC 2.25.010) •APPLICANTS: 1.Annie Carl 3 Packet Pg. 11 Page 4 2. Anne Warner Cribbs (Incumbent) 3. Claire Elliott 4. Nellis L. Freeman, Jr. 5. Jeff Greenfield (Incumbent) 6. Haejin Ahn Kang (Withdrawn) 7. Eve Klein 8. Shani Kleinhaus 9. Joy Oche 10. Rich Pearson 11. Tim Persyn (Withdrawn) 12. Andie Reed 13. Thomas Rota 14. Simran Sandhu (Withdrawn) 15. Mark Bennett Weiss 3 Packet Pg. 12 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϲϭͿ KĨĨŝĐĞŽĨƚŚĞŝƚǇůĞƌŬ ŝƚǇŽƵŶĐŝůKZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ dŝƚůĞ͗ƉƉƌŽǀĂůŽĨDŝŶƵƚĞƐEŽǀĞŵďĞƌϮϵ͕ϮϬϮϭŝƚǇŽƵŶĐŝůDĞĞƚŝŶŐ &ƌŽŵ͗>ĞƐůĞǇDŝůƚŽŶ͕ŝƚǇůĞƌŬ Recommended Motion To approve the minutes for November 22, 2021 as presented. dd,DEd^͗ •ƚƚĂĐŚŵĞŶƚϰ͘Ă͗20211129amCCs (DOCX) 4 Packet Pg. 13 CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 7 Special Meeting November 29, 2021 The City Council of the City of Palo Alto met on this date in virtual teleconference at 5:00 P.M. Participating Remotely: Burt, Cormack, DuBois, Filseth, Kou, Stone, Tanaka Absent: None Closed Session 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (Ed Shikada, Kiely Nose, Rumi Portillo, Sandra Blanch, Nicholas Raisch, Molly Stump, and Terence Howzel l) Employee Organization: Service Employees International Union,(SEIU) Local 521, Utilities Management and Professional Association of Palo Alto (UMPAPA)Palo Alto Peace Officer’s Association (PAPOA), Palo Alto Police Management Association (PMA), International Association of Fire Fighters (IAFF) local 1319, Palo Alto Fire Chiefs Association (FCA), ; Authority: Government Code Section 54957.6 (a). MOTION: Council Member Cormack moved, seconded by Council Member Stone to go into Closed Session. MOTION PASSED: 5-0, Tanaka, Filseth absent Council went into Closed Session at 5:02 P.M. Council returned from Closed Session at 6:20 P.M. Mayor DuBois announced there were no reportable action. Special Orders of the Day 2. YMCA. NO ACTION TAKEN Study Session 3. Safe Routes to School Annual Report 2020-2021. 4.a Packet Pg. 14 DRAFT ACTION MINUTES Page 2 of 7 Sp. City Council Meeting Draft Action Minutes: 11/29/2021 NO ACTION TAKEN Agenda Changes, Additions and Deletions None Consent Calendar Council Member Tanaka registered a no vote on Agenda Item Numbers 5 and 9. MOTION: Council Member Cormack moved, seconded by Vice Mayor Burt to approve Agenda Item Numbers 4-9. 4. Approval of Minutes November 15, 2021 City Council Meeting. 5. Approval of Amended and Restated Purchase Order Number 4521000199 with Altec Industries, Inc., to Increase the Purchase Order Amount by $33,202 to a New Not-to-Exceed Amount of$667,068, for the Purchase of Two Peterbilt Crane Trucks through a Cooperative Contract, in the Scheduled Vehicle and Equipment Replacement -Fiscal Year 2020 Capital Improvement Project (VR - 20000). 6. Approval of Amendment Number 2 to Contract Number C19173514 With SP Plus to Add Two Years to the Term for the Valet Parking Program for University Avenue and California Avenue Parking Facilities. 7. Approval of the Office of the City Auditor's IT Risk Managem ent Assessment Report as Recommended by the Policy and Services Committee. 8. SECOND READING: Adoption of Ordinance 5536 Amending Existing Palo Alto Municipal Code Chapter 5.20, Collection, Removal and Disposal of Refuse, and Adding Chapter 5.40, Edible Food Recovery, to Comply with Senate Bill 1383 (Short-Lived Climate Pollutants Reduction Strategy) (FIRST READING: November 1, 2021 PASSED: 7- 0). 9. SECOND READING: Adopt Ordinance 5537 to Amend the FY 2022 Municipal Fee Schedule Increasing Parking Permit Fees (FIRST READING: November 1, 2021 PASSED: 6-1, Tanaka no). ITEMS 4, 6-8 OF MOTION PASSED: 7-0 ITEM 5, 9 OF MOTION PASSED: 6-1, Tanaka no 4.a Packet Pg. 15 DRAFT ACTION MINUTES Page 3 of 7 Sp. City Council Meeting Draft Action Minutes: 11/29/2021 Action Items 10. Review and Recommend Renter Protection Policies for Development and Implementation (Continued from the November 15, 2021 meeting). MOTION: Mayor DuBois moved, seconded by Council Member Kou to direct Staff to: A. Clarify that the goal is to focus on low-income, rent burdened households; B. Bring back to Council an amendment to expand our relocation ordinance for rental units being demolished or significantly remodeled for 10 units or More per property for cost burdened households below an annual income threshold; (2) C. Bring back to Council an ordinance amendment on eviction reduction/just cause program to include properties built within the last 15 years and units occupied less than a year; (3) D. Bring back to P&S proposal and discussion on expanding anti-gouging measure to address loopholes; (4) E. Staff to go to P&S with updated language in ordinance for a renter survey and estimates on effort to enforce it for P&S discussion; (1) F. Direct staff to draft a Security Deposit Limit ordinance capping security deposit to 1.5x the rent per the PTC and HRC recommendations; (5) G. Support County efforts for the Right to Counsel; and (7) H. Fair chance ordinance to be reviewed by P&S for analysis on consequences/unintended consequences. (6) AMENDMENT: Council Member Stone, seconded by Vice Mayor Burt to modify Item F to read: F. Direct Staff to draft a Security Deposit Limit ordinance capping security deposit to 1.5x the rent per the PTC and HRC recommendations on unfurnished units; (5) AMENDMENT PASSED: 6-1, Tanaka no 4.a Packet Pg. 16 DRAFT ACTION MINUTES Page 4 of 7 Sp. City Council Meeting Draft Action Minutes: 11/29/2021 AMENDMENT: Council Member Stone, seconded by Council Member Filseth to modify item E to read: E. Direct Staff to bring back to Council updated language in ordinance for a renter survey and estimates on effort to enforce it for discussion; (1) AMENDMENT FAILED: 3-4 Burt, DuBois, Cormack, Tanaka no AMENDMENT: Council Member Tanaka, seconded by Council Member Cormack to add Item I: I. Allow Staff adequate time for outreach to landlords and tenants, such as informational mailings, survey or public meetings for discussion, to apply to items B, C and E. MOTION FAILED: 2-5 DuBois, Kou, Stone, Filseth, Burt no MOTION AS AMENDED: Mayor DuBois moved, seconded by Council Member Kou to direct Staff to: A. Clarify that the goal is to focus on households who are low-income and rent burdened; B. Bring back to Council an amendment to expand our relocation ordinance to buildings of 10 units or more per property (high priority); (2) C. Bring back to Council an ordinance amendment on eviction reduction/just cause program to include properties built within the last 15 years and does not include units occupied less than a year or single family homes not owned by a corporation or renters who live in a duplex when one unit is owner occupied (priority); (3) D. Bring back to P&S proposal and discussion on expanding anti-gouging measure to address loopholes; (4) E. Refer to P&S the design and implementation of a rental survey including proposed fees, resources and a timeline (high priority); (1) F. Direct Staff to draft a Security Deposit Limit ordinance capping security deposit to 1.5x the rent per the PTC and HRC recommendations for unfurnished units only; (5) G. Support County efforts for the Right to Counsel; (7) 4.a Packet Pg. 17 DRAFT ACTION MINUTES Page 5 of 7 Sp. City Council Meeting Draft Action Minutes: 11/29/2021 H. Fair chance ordinance to be reviewed by P&S for analysis on consequences/unintended consequences; and (6) I. Refer to HRC to make recommendations to the Council to improve implementation of current City renter protections. MOTION SPLIT FOR THE PURPOSE OF VOTING PARTS A, B, E-H OF MOTION PASSED: 6-1 Tanaka no PARTS C, D OF MOTION PASSED: 4-3 Cormack, Tanaka, Filseth no 11. Review Three Grade Separation Design Alternatives for Churchill Avenue and Confirm Which Alternative(s) Continue Towards Selection of Preferred Alternative, and Direction to City Staff for Conducting Additional Studies for Consideration of Final/Preferred Alternative; and Authorize Staff to Negotiate with AECOM for Additional Scope of Work for Amendment to the Contract (Continued from November 15, 2021). MOTION: Council Member Filseth moved, seconded by Council Member Kou to: A. Eliminate the viaduct as a design alternative; B. Place the highest priority of addressing the Charleston/East Meadow crossing; C. Refer to the Rail Committee in early calendar year 2022: i. Review of the guiding principles and criteria; ii. Pursue with CalTrain the reduction in areas in Palo Alto being considered for four tracks; iii. Facilitate and engagement with Palo Alto Unified School District (PAUSD) and Stanford on all grade crossings; iv. Engage with CalTrain through the Local Policy Makers Group (LPMG) and staff to design alternatives and construction methods preferable to Palo Alto; D. Ensure that the Bicycle and Pedestrian Transportation Plan includes: v. Consideration of the merits of Seale vs Kellogg; vi. Consideration of bike improvements on the north side of Embarcadero; and vii. Evaluation of South Palo Alto bike/ped crossing in the vicinity in Adobe Creek consistent with the 2013 Rail Plan. 4.a Packet Pg. 18 DRAFT ACTION MINUTES Page 6 of 7 Sp. City Council Meeting Draft Action Minutes: 11/29/2021 AMENDMENT: Mayor DuBois moved, seconded by Council Member Cormack to modify Item A to read: A. Eliminate the viaduct design alternative and make the partial underpass as the preferred with closure with mitigations as a back up AMENDMENT PASSED: 6-1 Filseth, No MOTION AS AMENDED: Council Member Filseth moved, seconded by Council Member Kou to: A. Eliminate the viaduct design alternative and make the partial underpass as the preferred with closure with mitigations as a backup; B. Place the highest priority of addressing the Charleston/East Meadow crossing; C. Refer to the Rail Committee in early calendar year 2022: i. Review of the guiding principles and criteria; ii. Pursue with CalTrain the reduction in areas in Palo Alto being considered for four tracks; iii. Facilitate and engagement with Palo Alto Unified School District (PAUSD) and Stanford on all grade crossings; iv. Engage with CalTrain through the Local Policy Makers Group (LPMG) and staff to design alternatives and construction methods preferable to Palo Alto; D. Ensure that the Bicycle and Pedestrian Transportation Plan includes: i. Consideration of the merits of Seale vs Kellogg; ii. Consideration of bike improvements on the north side of Embarcadero; and iii. Evaluation of South Palo Alto bike/ped crossing in the vicinity in Adobe Creek consistent with the 2013 Rail Plan. MOTION PASSED: 7-0 Adjournment: The meeting was adjourned at 11:00 P.M. 4.a Packet Pg. 19 DRAFT ACTION MINUTES Page 7 of 7 Sp. City Council Meeting Draft Action Minutes: 11/29/2021 ATTEST: APPROVED: ____________________ ____________________ City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC) 2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section 2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website. 4.a Packet Pg. 20 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϱϱϳͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨŵĞŶĚŵĞŶƚEƵŵďĞƌϭƚŽŽŶƚƌĂĐƚEƵŵďĞƌϮϭϭϳϵϴϲϭ ǁŝƚŚŽǁŶƚŽǁŶ^ƚƌĞĞƚƐ͕/ŶĐ͕͘ĨŽƌŽǁŶƚŽǁŶůĞĂŶŝŶŐ^ĞƌǀŝĐĞƐ͕ŝŶKƌĚĞƌƚŽ ǆƚĞŶĚƚŚĞdĞƌŵďǇdǁŽzĞĂƌƐ;ƚŚƌŽƵŐŚ:ĂŶƵĂƌǇϭϭƚŚ͕ϮϬϮϰͿ͕/ŶĐƌĞĂƐĞƚŚĞ dŽƚĂůEŽƚƚŽǆĐĞĞĚŵŽƵŶƚƚŽΨϯϮϯ͕Ϯϰϰ͕ĂŶĚŽƌƌĞĐƚĂůĞƌŝĐĂůƌƌŽƌŝŶƚŚĞ ŽŶƚƌĂĐƚŽƌΖƐEĂŵĞ͘ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗WƵďůŝĐtŽƌŬƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that Council approve and authorize the City Manager or their designee to execute Amendment No. 1 to Contract No. C21179861 with Downtown Streets, Inc., for the provision of cleaning services and homeless case management services in the Downtown Business District, in order to extend the contract term by two years, through January 11, 2024, increase the total not-to-exceed amount to $323,244, and correct a clerical error in the name of the contractor. ĂĐŬŐƌŽƵŶĚ The Public Works Department’s Public Services Division is responsible for maintaining a safe and clean Downtown Business District. Downtown Streets, Inc. (DS I), was founded by the Palo Alto Business Improvement District (BID) to reduce panhandling, provide re-entry skills to the homeless, and provide cleaning services to downtown. DS I team members service the Downtown Business District by reducing trash from full garbage containers ; providing litter removal for sidewalks, alleyways, and garages; reporting vehicles and/or activities of concern to the proper authorities; and providing peer-to-peer outreach. On November 30, 2020, staff requested the approval of a three-year agreement with DSI (SR #11487). Due to concerns about DSI’s governance and internal practices, Council pulled the item from its consent calendar. On December 7, 2020, Council approved the agreement for one year rather than three years, and directed staff to work with DSI to supply the City with evidence of DSI’s efforts to address the Council’s concerns. The one-year agreement was approved to allow DSI the opportunity to respond to Council’s requests and expires on December 6, 2021. ŝƐĐƵƐƐŝŽŶ 5 Packet Pg. 21 City of Palo Alto Page 2 Staff recommends approval of Amendment No. 1 to the contract with DSI for cleaning and homeless case management services, in order to extend the contract term by two years, through January 11, 2024, increase the total not-to-exceed amount to $323,244, and correct a clerical error in the name of the contractor. The contractor’s correct legal name is “Downtown Streets, Inc.” rather than “Downtown Streets Team.” To address the concerns that Council had expressed in December 2020, staff has followed through with the actions directed by Council. In response, DSI has completed the following actions: • In January 2021, City Council received testimony from a DSI board member clarifying inaccuracies in testimony previously provided; • Council was also advised of organizational changes at DSI, including a change in their internal leadership and a new board chair; • In May 2021, DSI provided to the City’s Human Resources Office an “Organizational Response” which included revised board bylaws, employee handbook and managers manual. The materials were shared with Council and public. • In June 2021, DSI Director Eileen Richardson spoke to the Council at a public Council meeting to address the concerns and reinforced the organiz ational changes at DSI. This Amendment to extend the contract term by two years benefits the City in the following ways: 1. Services provided by DSI have helped to reduce trash from overflowing garbage receptacles, and reduced litter in the alleyways and five parking structures (S & L, R, J, Q and Civic Center). The litter control provided by DSI also assists the City in reducing storm water compliance related issues in the Downtown area. 2. DSI strives to reduce homelessness by encouraging participants to take an active role in their recovery, model positive behavior, and create long-term solutions for their peers. Participants can work with a case manager to obtain housing and other life support credits. Each participant is evaluated on his/her individual p erformance and recognized for their accomplishments. The skills learned through this program can be used to seek further employment. This contract is on the City’s general services template, which permits the City to terminate without cause/for convenience by providing written notice to the contractor. In the event the City finds itself facing a challenging budget situation, and it is determined that City resources need to be refocused elsewhere, the City can terminate for convenience. Other options include termination due to non-appropriation of funds or amending the contract to reduce the cost, for example, by reducing the scope of work. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ 5 Packet Pg. 22 City of Palo Alto Page 3 Funding for the continuation of this contract is available in the Fiscal Year 2022 University Avenue Parking District Fund Adopted Operating Budget and straddles fiscal years. The annual budget for all contract years is shown in the table below. Funding for FY 2023 and FY 2024 of this contract will be addressed as part of the annual budget process, subject to Council approval of the annual budget appropriation. Table1: Annual and Total Not-to-Exceed Contract Costs ŽŶƚƌĂĐƚzĞĂƌ dŽƚĂůEŽƚƚŽǆĐĞĞĚŵŽƵŶƚ University Avenue Parking Permit Fund – FY2021/FY2022 $107,748 University Avenue Parking Permit Fund – FY2022/FY2023 (FY 2022 appropriation approved/FY 2023 subject to annual appropriation of funds) $107,748 University Avenue Parking Permit Fund – FY2023/FY2024 (Subject to annual appropriation of funds) $107,748 dŽƚĂůĨŽƌƚŚƌĞĞǇĞĂƌƐ ΨϯϮϯ͕Ϯϰϰ ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ Staff typically discusses the Downtown Streets Team’s work during monthly Palo Alto Downtown Professional and Business Association meetings. Although these meetings have been on hold during the Covid-19 pandemic, the group has supported a continued partnership between the City and Downtown Streets Team. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ The recommended action is CEQA-exempt under the California Environmental Quality Act pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with ce rtainty that there is no possibility of a significant effect on the environment. 5 Packet Pg. 23 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϲϬϬͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨŽŶƚƌĂĐƚEƵŵďĞƌϮϬϭϴϮϮϬϬtŝƚŚƌĂƚƵƐ͕/ŶĐ͘ŝŶƚŚĞ ŵŽƵŶƚŽĨΨϯ͕ϰϰϰ͕ϯϬϮĨŽƌ^ĂŶŝƚĂƌǇ^ĞǁĞƌZĞƉůĂĐĞŵĞŶƚWƌŽũĞĐƚϯϬ;tͲ ϭϳϬϬϭͿŝŶƚŚĞsĞŶƚƵƌĂ͕ŚĂƌůĞƐƚŽŶDĞĂĚŽǁƐ͕&ĂŝƌŵĞĂĚŽǁ͕ĂŶĚWĂůŽsĞƌĚĞ EĞŝŐŚďŽƌŚŽŽĚƐ͖ƵƚŚŽƌŝǌĂƚŝŽŶĨŽƌƚŚĞŝƚǇDĂŶĂŐĞƌ ƚŽEĞŐŽƚŝĂƚĞĂŶĚǆĞĐƵƚĞ ZĞůĂƚĞĚŚĂŶŐĞKƌĚĞƌƐEŽƚͲƚŽͲǆĐĞĞĚΨϯϰϰ͕ϰϯϬ͕ĨŽƌĂdŽƚĂůEŽƚ ͲƚŽͲǆĐĞĞĚ ŵŽƵŶƚŽĨΨϯ͕ϳϴϴ͕ϳϯϮ͖ĂŶĚƉƉƌŽǀĂůŽĨƵĚŐĞƚŵĞŶĚŵĞŶƚƐŝŶƚŚĞ tĂƐƚĞǁĂƚĞƌŽůůĞĐƚŝŽŶ&ƵŶĚ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗hƚŝůŝƚŝĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that Council: 1. Approve and authorize the City Manager or their designee to execute the attached contract C22182200 (Linked Document) with Cratus, Inc. in an amount not-to-exceed $3,444,302 for the Sanitary Sewer Replacement Project 30 (WC-17001) capital improvement project in the Ventura, Charleston Meadows, Fairmeadow, and Palo Verde neighborhoods. 2. Approve and authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with Cratus, Inc. for related additional but unforeseen work, which may develop during the project, the total value of which shall not exceed $344,430 or 10% of the contract amount. The total not-to-exceed amount is $3,788,732, which includes contract amount of $3,444,302 and a 10% contingency of $344,430. 3. Amend the Fiscal Year 2022 Budget Appropriation Ordinance for the Wastewater Collection Fund (requires a 2/3 vote) by: a. Increasing the Sanitary Sewer Replacement Project 30 (WC-17001) CIP budget by $134,463; and b. Decreasing the Wastewater Collection Fund Capital Improvement Projects Reserve by $134,463. 6 Packet Pg. 24 City of Palo Alto Page 2 ĂĐŬŐƌŽƵŶĚ This project is part of the Council approved Capital Improvement Program designed to ensure reliable wastewater services for the City of Palo Alto residents and customers, implementing high-priority rehabilitation, augmentation, and lateral replacement work which reduces inflow of rainfall and groundwater into the collection system. Using the data from a past sewer main cleaning and video inspection project and on-going routine maintenance reports provided by Utility Operations, staff has identified sewer mains in the Ventura, Charleston Meadows, Fairmeadow, and Palo Verde neighborhoods as needing rehabilitation. The planned areas are prioritized based on system maintenance needs, the Public Works street paving program, and the goals of the Sanitary Sewer Management Plan. ŝƐĐƵƐƐŝŽŶ Project Description The scope of this contract includes replacement of approximately 10,119 linear feet of sanitary sewer mains of various sizes and replacement/rehabilitation of 38 sewer manholes in th e Ventura, Charleston Meadows, Fairmeadow, and Palo Verde neighborhoods. The scope for WC- 17001 includes a portion of the Sanitary Sewer Replacement Project 29 (WC-16001) scope that was removed from WC-16001 due to time constraints. The existing Vitrified Clay Pipe (VCP) mains will be replaced with High-Density Polyethylene (HDPE) pipe. In addition, 278 existing City-owned sewer service laterals and cleanouts will be replaced with new 4” and 6” HDPE service laterals and cleanouts. All new service laterals will be installed from the new sewer main (usually located in the street) to the new sewer cleanouts (located in the City’s right -of- way, usually in a planting strip or behind the sidewalk). Any landscaping that may be removed as part of the work will be restored in kind when construction is completed. In order to minimize disruption during construction, work will generally be performed from 8:00 AM to 5:00 PM, Monday through Friday. No construction work will be allowed during the two-week period between December 19, 2022 and January 2, 2023. The construction period for each location will vary depending on the extent of work to be done; residents can expect construction in their area to last a minimum of one month. Prequalification California Public Contract Code section 20101 and City Policy and Procedure 1-44 (Prequalification of Contractors) permit public agencies to pre-qualify prospective bidders on public works projects for a single project or for a one-year period, in order to determine whether bidders demonstrate the quality, financial fitness, capacity, and experience to perform work successfully and on time. Public agencies may use model questionnaires and rating guidelines created by the California Department of Industrial Relations, or th ey may customize them to suit their specific needs for each project. Staff worked with the City’s attorneys to modify the DIR’s questionnaire and rating system , using objective criteria applied uniformly to each prospective bidder. On August 25, 2021, staff posted a notice inviting general contractors to submit prequalification questionnaires through 6 Packet Pg. 25 City of Palo Alto Page 3 the City’s eProcurement system. The invitation was open for 15 calendar days. On September 9, 2021, ten (10) general contractors submitted prequalificati on questionnaires. Staff conducted reference checks based on the list of projects submitted by the contractors and scored each questionnaire according to set of objective criteria that was established prior to publishing the notice inviting prequalification. Eight (8) of the ten (10) contractors were deemed prequalified. Bid Process On August 26, 2021, the City posted a notice inviting formal bids (IFB) for the Sanitary Sewer Replacement Project 30 on the City’s electronic procurement system, PlanetBids. The bidding period was 36 calendar days. Three contractors submitted bids on October 18, 2021 as listed on the attached Bid Summary (Linked Document). /EDͬEhDZ ^E/dZz^tZZW>DEdWZK:d ϯϬ͕/WtͲϭϳϬϬϭ͕/&EhDZϭϴϮϮϬϬ Proposed Length of Project 155 working days Number of Bids Mailed to Contractors 0 (electronic documents were available in PlanetBids) Number of Bids Mailed to Builder’s Exchanges 0 Total Days to Respond to Bid 36 Pre-Bid Meeting? Yes (Mandatory) Number of Prequalified Company Attendees at Pre-Bid Meeting 5 Number of Bids Received: 3 Bid Price Range $3,444,302 to $3,578,000 *Bid summary provided in Linked Document. Staff has reviewed the submitted bids and recommends that the bid of $3,444,302 submitted by Cratus, Inc. be accepted and that Cratus, Inc. be declared the lowest responsible and responsive bidder. The bid is approximately 6.7 percent above the staff engineer's estimate of $3,227,257. The contingency amount of $344,430, which equals 10 percent of the total contract, is requested for additional unforeseen work that may develop during the project. Additional work is possible with construction projects because during construction there may be previously unknown obstructions or ground conditions that require changes in how construction will proceed, leading to change orders that may create additional costs. A contingency fund is necessary to prevent significant delays in the project to handle these unforeseen conditions, which could otherwise result in longer road closures and disruptions. Any unspent contingency funds are returned to reserves at the end of the project. Staff confirmed with the Contractor's State License Board that Cratus, Inc. has an active license on file. Staff checked references provided by Cratus, Inc. for previous work performed and received positive feedback from other agencies. Staff also confirmed that Cratus, Inc. is registered and in good standing with the Department of Industrial Relations (DIR). In addition, Cratus, Inc. has contracted with the City in the past on Utilities Department projects and has 6 Packet Pg. 26 City of Palo Alto Page 4 demonstrated the knowledge and ability needed to complete this project (SSR 30 ) on schedule and within budget. Critical Timeline for the 400 block of W. Charleston Road The sewer main in the 400 block of W. Charleston Road is of particular concern because sections of the sewer main pipe wall are missing. The timeline for completion of this project is critical due to the poor condition of the aging sewer mains and the risk that the sewer main on the 400 block of W. Charleston Road could collapse before it is replaced. In addition, delay in starting this project will delay work on the City’s Charleston/Arastradero Corridor Project (“Charleston Corridor Project”), which commenced in August 2021. The Charleston Corridor Project involves roadway improvements on a 2.3-mile heavily traveled east-west arterial connector for the southern portion of the City that serves 11 K-12 schools. One of the primary objectives of the Charleston Corridor Project is enhanced safety for K -12 students walking and biking to school. The Charleston Corridor Project includes the 400 block of W. Charleston Road, the locus of the severely compromised sewer main. The City’s Standard Drawings and Specifications, which apply to all such public infrastructure projects, apply a five -year moratorium on cutting into newly paved City streets “to maintain structural integrit y and minimize pavement degradation.” Therefore, the 400 block of W. Charleston Road cannot be re-paved until the sewer main work on that block is completed. Because the sewer main must be replaced before the block can be repaved, delay in awarding the con tract for the Sanitary Sewer Replacement Project 30 could delay completion of the Charleston Corridor Project, at additional cost to the taxpayers funding this work. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ Funds for the construction cost of $3,444,302 and the contingency amount of $344,430 are available in the FY 2022 Adopted Capital Budget for WC-17001, Wastewater Collection System Rehabilitation/Augmentation Project 30. However, an amendment in the Wastewater Fund is recommended to cover non-contract related costs associated with WC-17001. Staff recommends an appropriation of $134,463 in the FY 2022 Wastewater Collection CIP WC-17001 and offset by a reduction in the Wastewater Collection CIP reserve. The increased project need of $134,463 being requested is needed to account for economic fluctuations in construction costs, materials, staff cost increases over the past five years, and increased trench cut fees. ^ƵŵŵĂƌǇŽĨWƌŽũĞĐƚŽƐƚƐĨŽƌ^ĂŶŝƚĂƌǇ^ĞǁĞƌZĞƉůĂĐĞŵĞŶƚϯϬ;tͲϭϳϬϬϭͿ Actual to Date: Design and Pre-Construction Cost $277,883 Actual to Date: City Pre-Ordered Pipe (50% of sewer main pipe to avoid supply chain delay) $38,079 Actual to Date: Soil Compaction Testing $30,000 Remaining Pre-Construction Cost $28,487 Construction Costs $3,444,302 10% Contingency $344,430 Construction Management (Includes Engineering & Inspection staff Time) $346,573 Trench Cut Fees $147,024 6 Packet Pg. 27 City of Palo Alto Page 5 dŽƚĂůWƌŽũĞĐƚŽƐƚƐΨϰ͕ϲϱϲ͕ϳϳϴ Total Actuals to Date (design/pre-construction cost, pre-ordered pipe, and soil compaction testing) $345,962 WC-17001Current Remaining Budget Balance in FY 2022 $4,176,353 ĚĚŝƚŝŽŶĂů&ƵŶĚƐEĞĞĚĞĚΨϭϯϰ͕ϰϲϯ The size of this project significantly exceeds the City’s in -house construction resources making it necessary to contract out the work. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ The approval of this contract is consistent with existing City policies including the Council approved 2018 Utilities Strategic Plan-Strategic Objectives: Priority 4: Financial Efficiency and Resource Optimization Tactical Action Plan, which established a proactive infrastructure replacement program, based on planned replacement before failure to support reliability and resiliency. Facing an evolving utility business environment, aging infrastructure needs, and sustainability objectives, CPAU must maintain a competitive position in the market. Remaining financially sustainable and competitive in the market while optimizing resources is key to maintaining and enhancing value to customers. ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ The project is located in the Ventura, Charleston Meadows, Fairmeadow, and Palo Verde neighborhoods of the City. Project locations are shown on Attachment C (Linked Document). The City will provide written notification to all affected property occupants by mail prior to the start of construction. The Contractor will also provide two written notifications of the work to all abutting property occupants, one at least 7 days prior to the commencement of work at their specific locations, and a second 24 hours prior to mobilization. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ This project is categorically exempt from California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines 15301 (repair, maintenance of existing facilities) and 15302 (replacement or reconstruction of existing facilities). ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϲ͘Ă͗Attachment B: Bid Summary • Attachment6.b: Attachment C: Location Map 6 Packet Pg. 28 ATTACHMENT B - BID SUMMARY A. Base Bid Bid Description Bid Unit Unit Extended Unit Bid Unit Bid Unit Bid Item Qty Price Price Price Amount Price Amount Price Amount 1 Design, install and remove sheeting, shoring, bracing & other excavation supports.1 Lump sum $ 92,700.00 $ 92,700.00 140,000.00$ 140,000.00$ 98,000.00$ 98,000.00$ 30,000.00$ 30,000.00$ 2 Recycle asphalt, concrete and soil.1 Lump sum $ 45,000.00 $ 45,000.00 15,000.00$ 15,000.00$ 12,000.00$ 12,000.00$ 8,000.00$ 8,000.00$ 3 Replace existing 6-inch or 8-inch VCP with 8-inch HDPE pipe by pipe-bursting method.7,127 Linear Feet $ 160.00 $ 1,140,320.00 210.00$ 1,496,670.00$ 235.00$ 1,674,845.00$ 239.00$ 1,703,353.00$ 4 Replace existing 8-inch,10-inch, or 12-inch VCP with 10-inch HDPE pipe by pipe-bursting method.707 Linear Feet $ 170.00 $ 120,190.00 250.00$ 176,750.00$ 265.00$ 187,355.00$ 241.00$ 170,387.00$ 5 Replace existing 6-inch or 8-inch VCP with 8-inch HDPE pipe by open trench method.875 Linear Feet $ 540.00 $ 472,500.00 290.00$ 253,750.00$ 400.00$ 350,000.00$ 300.00$ 262,500.00$ 6 Replace existing 10-inch VCP with 12-inch HDPE pipe by open trench method.353 Linear Feet $ 630.00 $ 222,390.00 275.00$ 97,075.00$ 450.00$ 158,850.00$ 400.00$ 141,200.00$ 7 Replace existing 4-inch sewer lateral by pipe-bursting method. 82 Each $ 1,260.00 $ 103,320.00 1,600.00$ 131,200.00$ 900.00$ 73,800.00$ 2,500.00$ 205,000.00$ 8 Replace existing 4-inch sewer lateral by open trench method. 44 Each $ 3,870.00 $ 170,280.00 2,700.00$ 118,800.00$ 3,500.00$ 154,000.00$ 3,000.00$ 132,000.00$ 9 Replace existing 4-inch ACP sewer lateral by open trench method.14 Each $ 2,430.00 $ 34,020.00 2,900.00$ 40,600.00$ 3,600.00$ 50,400.00$ 3,200.00$ 44,800.00$ 10 Reconnect existing 4-inch lateral to new sewer main.115 Each $ 1,260.00 $ 144,900.00 800.00$ 92,000.00$ 500.00$ 57,500.00$ 1,500.00$ 172,500.00$ 11 Install new 48-inch manhole.7 Each $ 8,600.00 $ 60,200.00 8,000.00$ 56,000.00$ 8,000.00$ 56,000.00$ 7,000.00$ 49,000.00$ 12 Remove existing manhole and replace with new 48-inch manhole.21 Each $ 8,550.00 $ 179,550.00 8,500.00$ 178,500.00$ 8,500.00$ 178,500.00$ 7,000.00$ 147,000.00$ 13 Remove existing lamphole or flush inlet and replace with new 48- inch manhole. 1 Each $ 8,550.00 $ 8,550.00 8,500.00$ 8,500.00$ 8,000.00$ 8,000.00$ 7,000.00$ 7,000.00$ 14 Rehabilitate existing 48-inch manhole.4 Each $ 4,500.00 $ 18,000.00 4,000.00$ 16,000.00$ 6,000.00$ 24,000.00$ 2,000.00$ 8,000.00$ 15 Cleaning & video inspection of mains. 9,062 Linear Feet $ 5.00 $ 45,310.00 3.00$ 27,186.00$ 2.50$ 22,655.00$ 4.00$ 36,248.00$ 16 Sag Corrections. 5 Each $ 7,650.00 $ 38,250.00 4,000.00$ 20,000.00$ 5,000.00$ 25,000.00$ 8,000.00$ 40,000.00$ 17 ACP storage and disposal. 5 Cubic Yards $ 70.00 $ 350.00 500.00$ 2,500.00$ 800.00$ 4,000.00$ 200.00$ 1,000.00$ 18 Perform GPS survey. 1 Lump sum $ 20,702.00 $ 20,702.00 22,000.00$ 22,000.00$ 38,595.00$ 38,595.00$ 15,000.00$ 15,000.00$ TOTAL: $ 2,916,532.00 2,892,531.00$ 3,173,500.00$ 3,172,988.00$ B. Additive Alternate Bid Bid Description Bid Unit Unit Extended Unit Bid Unit Bid Unit Bid Item Qty Price Price Price Amount Price Amount Price Amount 19 Design, install and remove sheeting, shoring, bracing & other excavation supports. [LOMA VERDE AVE]1 Lump sum $ 10,260.00 $ 10,260.00 8,000.00$ 8,000.00$ 10,000.00$ 10,000.00$ 3,000.00$ 3,000.00$ 20 Recycle asphalt, concrete and soil. [LOMA VERDE AVE]1 Lump sum $ 630.00 $ 630.00 1,000.00$ 1,000.00$ 2,000.00$ 2,000.00$ 1,000.00$ 1,000.00$ 21 Replace existing 15-inch VCP with 18-inch HDPE pipe by pipe- bursting method. [LOMA VERDE AVE]698 Linear Feet $ 180.00 $ 125,640.00 500.00$ 349,000.00$ 300.00$ 209,400.00$ 300.00$ 209,400.00$ 22 Replace existing 4-inch sewer lateral by pipe-bursting method. [LOMA VERDE AVE]5 Each $ 1,260.00 $ 6,300.00 1,600.00$ 8,000.00$ 1,100.00$ 5,500.00$ 2,500.00$ 12,500.00$ 23 Replace existing 4-inch sewer lateral by open trench method. [LOMA VERDE AVE]2 Each $ 3,870.00 $ 7,740.00 2,700.00$ 5,400.00$ 2,800.00$ 5,600.00$ 3,000.00$ 6,000.00$ 24 Replace existing 4-inch ACP sewer lateral by open trench method. [LOMA VERDE AVE]7 Each $ 2,430.00 $ 17,010.00 2,900.00$ 20,300.00$ 3,000.00$ 21,000.00$ 3,200.00$ 22,400.00$ 25 Reconnect existing 4-inch lateral to new sewer main. [LOMA VERDE AVE]4 Each $ 1,260.00 $ 5,040.00 800.00$ 3,200.00$ 500.00$ 2,000.00$ 1,500.00$ 6,000.00$ 26 Replace existing 6-inch ACP sewer lateral by open trench method. [LOMA VERDE AVE]1 Each $ 3,870.00 $ 3,870.00 3,000.00$ 3,000.00$ 6,500.00$ 6,500.00$ 3,000.00$ 3,000.00$ 27 Remove existing manhole and replace with new 48-inch manhole. [LOMA VERDE AVE]4 Each $ 8,570.00 $ 34,280.00 8,500.00$ 34,000.00$ 8,000.00$ 32,000.00$ 7,000.00$ 28,000.00$ 28 Cleaning & video inspection of mains. [LOMA VERDE AVE] 698 Linear Feet $ 5.00 $ 3,490.00 3.00$ 2,094.00$ 2.00$ 1,396.00$ 4.00$ 2,792.00$ 29 ACP storage and disposal. [LOMA VERDE AVE]5 Cubic Yards $ 180.00 $ 900.00 500.00$ 2,500.00$ 800.00$ 4,000.00$ 200.00$ 1,000.00$ 30 Perform GPS survey. [LOMA VERDE AVE]1 Lump sum $ 4,050.00 $ 4,050.00 1,000.00$ 1,000.00$ 2,104.00$ 2,104.00$ 1,500.00$ 1,500.00$ 31 Disposal of excavated soils at Class 1 landfill. [LOMA VERDE AVE]10 Ton $ 90.00 $ 900.00 125.00$ 1,250.00$ 300.00$ 3,000.00$ 100.00$ 1,000.00$ 32 Disposal of excavated soils at Class 2 landfill. [LOMA VERDE AVE]10 Ton $ 50.00 $ 500.00 50.00$ 500.00$ 150.00$ 1,500.00$ 50.00$ 500.00$ TOTAL: 220,610.00$ 439,244.00$ 306,000.00$ 298,092.00$ C. Additive Alternate Bid Bid Description Bid Unit Unit Extended Unit Bid Unit Bid Unit Bid Item Qty Price Price Price Amount Price Amount Price Amount 33 Design, install and remove sheeting, shoring, bracing & other excavation supports. [WEST CHARLESTON]1 Lump sum $ 5,800.00 $ 5,800.00 12,500.00$ 12,500.00$ 5,000.00$ 5,000.00$ 1,000.00$ 1,000.00$ 34 Recycle asphalt, concrete and soil [WEST CHARLESTON] 1 Lump sum $ 350.00 $ 350.00 500.00$ 500.00$ 1,000.00$ 1,000.00$ 500.00$ 500.00$ 35 Replace 6"/8" VCP w/ 8" HDPE (pipe bursting) [WEST CHARLESTON]359 Linear Feet $ 160.00 $ 57,440.00 225.00$ 80,775.00$ 200.00$ 71,800.00$ 239.00$ 85,801.00$ 36 Replace 4" lateral (open trench) [WEST CHARLESTON]1 Each $ 4,320.00 $ 4,320.00 2,700.00$ 2,700.00$ 4,000.00$ 4,000.00$ 3,000.00$ 3,000.00$ 37 Reconnect 4" lateral to new main [WEST CHARLESTON]1 Each $ 1,350.00 $ 1,350.00 800.00$ 800.00$ 500.00$ 500.00$ 1,500.00$ 1,500.00$ 38 Replace 6" ACP lateral (open trench) [WEST CHARLESTON] 1 Each $ 4,320.00 $ 4,320.00 3,000.00$ 3,000.00$ 4,200.00$ 4,200.00$ 3,000.00$ 3,000.00$ 39 Reconnect 6” lateral to new main [WEST CHARLESTON] 1 Each $ 1,350.00 $ 1,350.00 1,000.00$ 1,000.00$ 500.00$ 500.00$ 1,500.00$ 1,500.00$ 40 Remove existing MH and replace w/ new 48" MH [WEST CHARLESTON]1 Each $ 8,570.00 $ 8,570.00 8,500.00$ 8,500.00$ 8,000.00$ 8,000.00$ 7,000.00$ 7,000.00$ 41 Cleaning and video inspection of mains [WEST CHARLESTON]359 Linear Feet $ 5.00 $ 1,795.00 3.00$ 1,077.00$ 2.00$ 718.00$ 4.00$ 1,436.00$ 42 ACP storage and disposal [WEST CHARLESTON]1 Cubic Yards $ 180.00 $ 180.00 500.00$ 500.00$ 800.00$ 800.00$ 200.00$ 200.00$ 43 Perform GPS survey. [WEST CHARLESTON]1 Lump sum $ 4,500.00 $ 4,500.00 1,000.00$ 1,000.00$ 1,532.00$ 1,532.00$ 500.00$ 500.00$ 44 Disposal of excavated soils at Class 1 landfill [WEST CHARLESTON]1 Ton $ 90.00 $ 90.00 125.00$ 125.00$ 300.00$ 300.00$ 100.00$ 100.00$ 45 Disposal of excavated soils at Class 2 landfill [WEST CHARLESTON]1 Ton $ 50.00 $ 50.00 50.00$ 50.00$ 150.00$ 150.00$ 50.00$ 50.00$ TOTAL: $ 90,115.00 112,527.00$ 98,500.00$ 105,587.00$ GRAND TOTAL (A+B+C): 3,227,257.00$ $3,444,302.00 $3,578,000.00 $3,576,667.00 Ranking 1 3 2 IFB182200 - Sanitary Sewer Replacement Project 30 (SSR 30) Ranger Pipelines, Inc.Cratus, Inc.K.J. Woods Construction, Inc.Engineer's Estimate Bid Due Date: October 18, 2021 BID SUMMARY RFQ162938 Bid Summary 6.a Packet Pg. 29 This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 0'300' AT T A C H M E N T C - L O C A T I O N M A P Sa n i t a r y S e w e r R e p l a c e m e n t P r o j e c t 3 0 CIT Y O F PALO A L T O I N C O R P O R A T E D C A LI FO R N I A P a l o A l t o T h e C i t y o f A P R I L 1 6 1 8 9 4 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto tnguyen6, 2021-10-19 11:48:07 (\\cc-maps\Encompass\Admin\Personal\tnguyen6.mdb) 8" SAN SEWER 6" SAN SEWER 6" VCP SAN SEWER 1900-Jan-01 6" VCP SAN SEWER 1900 6" SAN SEWER 6" SAN SEWER 6" SAN SEWER 6" VCP SAN SEWER 6" VCP SAN SEWER 6" SAN SEWER 6" VCP SAN SEWER 1900-Jan-01 6" VCP SAN SEWER 1944-Jul-01 6" VCP SAN SEWER 1944-Jul-01 6" SAN SEWER 6" SAN SEWER 6"VCPSAN SEWER1915-Jan-01 6" SAN SEWER 6" SAN SEWER 6" VCP SAN SEWER ABM# 1915-Jan-01 6" VCP SEWER ABM# 1900-Jan-01 6" SAN SEW ER 6" VCP SAN SEWER 6" VCP SEWER ABM# 6" VCP SAN SEWER 6" V C P SE W E R A BM# C urtn er A ven u e u e V R Al m a Stre et F ernan do A ve nue M ata dero A venue La m bert A venue M argarita A ve nue M ata d ero A ve n ue W ilton A venu e C hestn ut A ve nue o n Stre et P ark B o ule v ard O rin d a Stre et Birch St A sh Street M adeline C ourt Lane 66 L a ne 66 M argarita A ve nue La m b ert A ven ue M ata d ero A ve n u e W ilton A venu e El 1 5" VC P SAN SEWER 1947-Oct-01 15"VC 15" V CP SAN S EWER 1 947-Oct-01 P l F lo w e r s L a n e M a ck all W a y L o m a V e r d e A v e C o w p er S tre et W ells b ury W a L a M id dlefield R o a d St Claire D riv e S t S t M T o y o n Pla c e T orre y a A v alo n C o urt 10" SA N SE WE R 6" VC P SA N SEWE R Pena Ct ue E l C a m i n o R e a l C a m i n o W a y Ja m es R oad Thain W ay Interdale W ay (Pvt)W e st C h a rle sto T e n n e s s e e L a n e e W a y T e Driscoll Place M aybell Avenue 6"VC JUL51 8" VCP SAN SEWER 1951-Jul-01 E ast M eado w Drive C o u r t B r yan t St reet Roosevelt Circle S o u t h PALO VERDE CHARLESTON MEADOWSFAIRMEADOW VENTURA 6.b Packet Pg. 30 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϲϲϰͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůĂŶĚƵƚŚŽƌŝǌĂƚŝŽŶĨŽƌƚŚĞŝƚǇDĂŶĂŐĞƌŽƌdŚĞŝƌĞƐŝŐŶĞĞƚŽ ǆĞĐƵƚĞƚŚĞ&ŽůůŽǁŝŶŐdŚƌĞĞhƚŝůŝƚŝĞƐWƵďůŝĐĞŶĞĨŝƚƐWƌŽŐƌĂŵŽŶƚƌĂĐƚ ŵĞŶĚŵĞŶƚƐ͗ϭͿŵĞŶĚŵĞŶƚEƵŵďĞƌϯƚŽĂŐůĞ^ǇƐƚĞŵƐ/ŶƚĞƌŶĂƚŝŽŶĂů͕/ŶĐ͘ ^ǇŶĞƌŐǇŽŵƉĂŶŝĞƐϭϱϭϱϵϭϮϲ͕ǆƚĞŶ ĚŝŶŐƚŚĞdĞƌŵĨŽƌKŶĞĚĚŝƚŝŽŶĂů zĞĂƌtŝƚŚŶŽ/ŶĐƌĞĂƐĞŝŶŽŵƉĞŶƐĂƚŝŽŶ͖ϮͿŵĞŶĚŵĞŶƚEƵŵďĞƌϰƚŽĂŐůĞ ^ǇƐƚĞŵƐ/ŶƚĞƌŶĂƚŝŽŶĂů͕/ŶĐ͘^ǇŶĞƌŐǇŽŵƉĂŶŝĞƐϭϱϭϱϵϭϮϱ͕ĞǆƚĞŶĚŝŶŐ ƚŚĞdĞƌŵĨŽƌKŶĞĚĚŝƚŝŽŶĂůzĞĂƌtŝƚŚŶŽ/ŶĐƌĞĂƐĞŝŶŽŵƉĞŶƐĂƚŝŽŶ͖ϯͿ ŵĞŶĚŵĞŶƚEƵ ŵďĞƌϯƚŽ>ZĞƐƵůƚŽŶƐƵůƚŝŶŐ͕/ŶĐ͘ϭϱϭϱϵϭϯϱĞǆƚĞŶĚŝŶŐ ƚŚĞdĞƌŵĨŽƌKŶĞĚĚŝƚŝŽŶĂůzĞĂƌtŝƚŚŶŽ/ŶĐƌĞĂƐĞŝŶŽŵƉĞŶƐĂƚŝŽŶ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗hƚŝůŝƚŝĞƐ ǆĞĐƵƚŝǀĞ^ƵŵŵĂƌǇ Staff recommends one-year extensions of three residential contracts to ensure that current energy efficiency and building electrification related services continue uninterrupted and available to residential customers while the City’s competitive solicitation and contract negotiation processes are underway. The solicitation process for new residential program providers is in progress, and new contracts are expected to be in place by Spring 2022. Staff is requesting contract term extensions through December 31, 2022 to provide ample time for contract negotiations and to avoid any lapse in services to customers as new programs are launched. Due to 16 months of in-home services restrictions related to COVID-19, most residential program services were paused during 2020 and the first half of 2021 except for phone advising services and the new offering of a virtual assessment. Sufficient funds remain in the contracts for the existing residential programs – Home Efficiency Genie, Multifamily Plus and Residential Energy Assistance Program – so that these programs can continue without added compensation. All three programs help the City meet its goals of sustainability and customer satisfaction. ĂĐŬŐƌŽƵŶĚ The original contracts with CLEAResult and Eagle Systems International were approved by Council on May 18, 2015 (Staff Report #5707) to provide energy efficiency program services for 7 Packet Pg. 31 City of Palo Alto Page 2 residential customers, including customers in single-family and multifamily residences as well as customers with financial or medical needs. On September 26, 2016, Council approved Amendment One for Contract C15159125 (Multifamily Plus program) to add compensation because of better-than-anticipated uptake of the program’s services – primarily lighting and attic insulation upgrades to multifamily properties (Staff Report #7192). On June 25, 2018 Council approved Amendment Two for this same contract (C15159125, Multifamily Plus program) and Amendment One for Contracts C15159135 and C15159126 (Home Efficiency Genie and Residential Energy Assistance Program, respectively) to extend all three contracts through June 30, 2021 (Staff Report #9273). On May 25, 2021 the three contracts were administratively extended (as allowed by Municipal Code 2.30.290) by six months to December 31, 2021. Additional contract amendments to date include the following: 9/26/2016 - Amendment One to Eagle Systems International, Inc. DBA Synergy Companies Contract C15159125 for the Multifamily Plus program, increasing compensation by $500,000 through June 30, 2018. 6/25/2018 - Amendment One to CLEAResult Consulting, Inc. Contract C15159135 for the Home Efficiency Genie program, increasing compensation by $910,000 and extending the term for three additional years through June 30, 2021. 6/25/2018 - Amendment Two to Eagle Systems International, Inc. DBA Synergy Companies Contract C15159125 for the Multifamily Plus program, increasing compensation by $900 ,000 and extending the term for three additional years through June 30, 2021. 6/25/2018 - Amendment One to Eagle Systems International, Inc. DBA Synergy Companies Contract C15159126 for the Residential Energy Assistance Program (REAP), increasing compensation by $600,000 and extending the term for three additional years through June 30, 2021. Programs were running successfully until COVID -19 restrictions led to a 16-month pause in most activities. Following the City Manager’s approval in July 2021 to safely re-open many city services, residential programs with in-home services were restarted. Vendors must comply with CDC and Santa Clara County guidelines, including mask wearing, social distancing, screening customers for health conditions prior to entering homes and prioritizing health and safety with all in-home contact. ŝƐĐƵƐƐŝŽŶ The City relies on partnerships with third party contractors to deliver energy efficiency and sustainability programs for residential customers. Such targeted third -party programs have played an important role in meeting mandated state requirements to fund demand -side 7 Packet Pg. 32 City of Palo Alto Page 3 management and low-income ratepayer assistance programs using Public Benefits funds (AB 1890) as well as helping the City meet the sustainability objectives outlined in its Sustainability and Climate Action Plan (S/CAP). Collectively, the three programs affected by these contract amendments reach all residential customer segments, including the hard-to-reach sectors of income and medically qualified customers as well as residents of multifamily housing. The electric energy savings from these three residential programs combined accounted for about 5% of total kWh efficiency-program savings for the most recent pre-pandemic fiscal year, FY2019. The gas energy savings for FY2019 from these programs accounted for about 15% of total therms savings. A summary of the activities of the three programs is as follows: 1. CLEAResult Consulting, Inc. Contract C15159135 The Home Efficiency Genie program, managed by CLEAResult Consulting, serves both single and multifamily residential households. This program provides phone-based energy consulting services offering energy efficiency (EE) and electrification advice as well as technical assistance to customers, including help selecting contractors and reviewing contractor bids for home efficiency upgrades and electrification projects. The program offers various levels of in - home energy assessments with a customer copayment. Participating customers receive a Home Energy Assessment Report that identifies EE upgrade and electrification opportunities and guides the customer through the upgrade process. The program also offers a Home Electrification Readiness Assessment (HERA) which helps residents review their electrical panel capacity with guidance on switching to electric equipment, as well as curated lists of home performance and electrification specialist contractors. The Home Efficiency Genie program provides customer education and has a high customer satisfaction rating, with customer surveys showing a net prompter score co nsistently greater than 90 out of 100. This program also helps channel people to other Utilities programs, enhancing their savings and performance. In FY2019, the program had 68 participants and achieved 35,641 kWh and 19,656 therms of energy savings. 2. Eagle Systems International, Inc. DBA Synergy Companies Contract C15159125 The Multifamily Plus (MF+) program, managed by Eagle Systems International, Inc. DBA Synergy Companies, provides direct installation, no-cost EE services to multifamily buildings with four or more units, including apartments, hospices, and care centers. Compensation to the program administrator is based on a fixed, per-unit cost for each eligible measure installed or serviced, and administrative costs are included in these fixed costs. Eligible measures include common area upgrades such as attic insulation, efficient lighting upgrades and occupancy sensors. The MF+ program provides free -to- the-customer services for upgrades that save energy, lower energy bills and improve comfort. In the summer of 2016, the program was revamped and funds were added to accommodate additional LED lighting upgrades as the price of LEDs had decreased and the quality of the lights improved greatly. The addition of LED installation services drew interest from many property managers and building owners who were initially not 7 Packet Pg. 33 City of Palo Alto Page 4 interested in participating in the program. In FY2019, the program had 17 MF property owner participants and achieved 230,641 kWh and 57 therms of energy savings. 3. Eagle Systems International, Inc. DBA Synergy Companies Contract C15159126 The Residential Energy Assistance Program (REAP), managed by Eagle Systems International, Inc. DBA Synergy Companies, provides direct installation, no-cost EE services to qualified customers based on financial or medical needs. City staff provides a monthly list of eligible customers to the consultant. Compensation to the program administrator is based on a fixed, per-unit cost for each eligible measure installed or serviced, and administrative costs are included in these fixed costs. REAP’s free-to-the-customer services include water saving measure installation, building envelope improvements such as insulation and weatherization, upgrades to LED lighting, and equipment replacement, including replacing gas wall furnaces with electric ductless mini-split heat pumps. These services are all provided to the most vulnerable residents on rate assistance. In FY2019, the program had 22 participants and achieved 92,119 kWh and 5,666 therms of energy savings. These three CPAU flagship efficiency programs have direct positive impacts on residents and provide immediate and long-term energy and water savings. Staff began preparing an RFP to replace these contracts in late 2020. This RFP was expected to be completed by th e end of 2021. However, with the City’s S/CAP being updated, staff delayed the RFP to amend it and ensure it included offerings that would further support activities expected to be included in the S/CAP Implementation Plan. The RFP was then issued in summer of 2021 and proposals have been received. Staff is in negotiation with vendors. However, final contracts are not expected to be in place until after the end of 2021. These contract amendments will allow energy savings and sustainability activities to continue without interruption to customers while new program offerings are being designed and prepared for launch. While staff is expecting to have new contracts in place by spring of 2022, the extensions of the existing contracts to December 31, 2022 assure that existing programs can continue even if that timeline is delayed. The existing contracts will be terminated once new contracts have been established. Staff is in communication with vendors for these existing contracts and will provide adequate notice p rior to contract termination. dŝŵĞůŝŶĞ If these contract amendments were approved staff would continue to offer the three programs described above while continuing to negotiate replacement contracts with the goal of having new contracts in place (and terminating the three contracts described above) in spring of 2022. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ No resource impact is anticipated, since staff is only proposing extending the expiration date of these contracts without adding additional funds. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ 7 Packet Pg. 34 City of Palo Alto Page 5 The contracts whose terms would be extended through these Amendments support the Council-approved Sustainability Plan, the Council-approved Ten-year Energy Efficiency Targets and the Comprehensive Plan Goal N7.7.2 (explore the transition of existing buildings fr om gas to electric or solar water and space heating). The contracts also further the Utilities Strategic Plan Collaboration priority (Strategy 1, increasing communication with the community). ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ No stakeholder engagement was performed related to these contract amendments, though stakeholder engagement related to these programs is being performed as part of the S/CAP adoption process via the S/CAP Ad Hoc Subcommittee and the S/CAP outreach and engagement plan. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ Approval of these contract amendments does not meet the definition of a project pursuant to Section 21065 of the California Public Resources Code, thus no environmental review under CEQA is required. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϳ͘Ă͗Attachment A: Eagle Systems International, Inc. DBA Synergy Companies Contract, C15159126 Amendment 3 • Attachment7.b: Attachment B: Eagle Systems International, Inc. DBA Synergy Companies Contract, C15159125 Amendment 4 • Attachment7.c: Attachment C: CLEAResult Consulting, Inc. Contract, C15159135 Amendment 3 7 Packet Pg. 35 Professional Services Rev. Feb. 2014 DEDEdEK͘ϯdKKEdZdEK͘ϭϱϭϱϵϭϮϲ dtEd,/dzK&W>K>dKE '>^z^dD^/EdZEd/KE>͕/E͘ĚďĂ^zEZ'zKDWE/^ &KZWZK&^^/KE>^Zs/^ This Amendment No. 3 (this “Amendment”) to Contract No. C15159126 (the “Contract” as defined below) is entered into as of December 6, 2021, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and EAGLE SYSTEMS INTERNATIONAL, INC. dba SYNERGY COMPANIES, a California corporation, located at 28436 Satellite Street, Hayward, CA 94545 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. Z/d>^ A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of administration, management, and delivery of direct installation, no-cost energy efficiency services to qualified CITY residents based on financial or medical needs, as detailed therein. B. The Parties now wish to amend the Contract in order to extend the term by twelve months, from the prior contract end date of December 31, 2021 through December 31, 2022, with no change to the maximum compensation payable under the Contract for continuation of services per Exhibit “A” Scope of Services. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. ĞĨŝŶŝƚŝŽŶƐ. The following definitions shall apply to this Amendment: a. ŽŶƚƌĂĐƚ. The term “Contract” shall mean Contract No. C15159126 between CONSULTANT and CITY, dated June 1, 2015, as amended by: Amendment No.1, dated June 26, 2018 and Amendment No.2, dated May 25, 2021 b. KƚŚĞƌdĞƌŵƐ. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2. “TERM” of the Contract is hereby amended to read as follows: DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 36 Professional Services Rev. Feb. 2014 “The term of this Agreement shall be from the date of its full execution through December 31, 2022 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “C” entitled “COMPENSATION”, AMENDED, REPLACES PREVIOUS “REVISED EXHIBIT C”. SECTION 4. >ĞŐĂůĨĨĞĐƚ͘ Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. /ŶĐŽƌƉŽƌĂƚŝŽŶŽĨZĞĐŝƚĂůƐ. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 37 Professional Services Rev. Feb. 2014 ^/'EdhZ^K&d,WZd/^ IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. /dzK&W>K>dK City Manager APPROVED AS TO FORM: City Attorney or designee '>^z^dD^/EdZEd/KE͕/E͘ ďĂ^zEZ'zKDWE/^ KĨĨŝĐĞƌϭ By: Name: Title: ƚƚĂĐŚŵĞŶƚƐ: EXHIBIT “C”: COMPENSATION, AMENDMENT No. 3 (AMENDED, REPLACES PREVIOUS) DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 Matthew Clark VP - Business Development 7.a Packet Pg. 38 Professional Services Rev. Feb. 2014 EXHIBIT “C” COMPENSATION, AMENDMENT No. 3 (AMENDED, REPLACES PREVIOUS) 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 this Exhibit C. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) shall not exceed One Million One Hundred Forty Thousand Dollars ($1,140,000). CONSULTANT agrees to complete all Services 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. CITY will compensate CONSULTANT using a fixed-unit pricing structure. CITY will compensate CONSULTANT a fixed price (the Cost per Unit) per Eligible Measure installed and approved by CITY as set forth in Table C-1. The Cost per Unit for each Eligible Measure set forth in Table C-1 includes all of CONSULTANT’s Costs, including, without limitation, administrative costs, marketing/outreach costs, and direct implementation (materials and labor) costs. It is CITY’s expectation that approximately 85% of CONSULTANT’s costs be related to direct implementation costs (materials and labor) with approximately 15% reserved for marketing/outreach costs and administrative costs respectively. CITY’s compensation to CONSULTANT for Eligible Measures is also subject to the Maximum Quantity per Home limitation set forth in Table C-1. DĂǆŝŵƵŵdŽƚĂůŽŵƉĞŶƐĂƚŝŽŶEKddKyDKhEdĨŽƌdĞƌŵŽĨƚŚĞŐƌĞĞŵĞŶƚсΨϭ͕ϭϰϬ͕ϬϬϬ ŶĞƌŐǇ^ĂǀŝŶŐƐdĂƌŐĞƚƐĂŶĚEŽƚdŽǆĐĞĞĚŵŽƵŶƚƐĨŽƌKE^h>dEd EZ'z^s/E'^dZ'd^ KE^h>dEd WĞƌĨŽƌŵĂŶĐĞ WĂǇŵĞŶƚ ƵƐƚŽŵĞƌZĞďĂƚĞ WĂǇŵĞŶƚ DĂǆŝŵƵŵdŽƚĂů ŽŵƉĞŶƐĂƚŝŽŶEKd dKy ŬtŚ dŚĞƌŵƐ &zϭϲͲ&zϭϴ 166,180 25,722 $440,000 $0 $440,000 &zϭϵͲ&zϮϭ 200,000 25,000 $400,000 $0 $400,000 &zϮϮƚŚƌŽƵŐŚ ĞĐϯϭ͕ϮϬϮϭ 40,000 5,000 $100,000 $0 $100,000 :ĂŶƵĂƌǇϭ͕ ϮϬϮϮƚŚƌŽƵŐŚ ĞĐĞŵďĞƌ ϯϭ͕ϮϬϮϮ 80,000 10,000 $200,000 $0 $200,000 dKd> ϰϴϲ͕ϭϴϬϲϱ͕ϳϮϮΨϭ͕ϭϰϬ͕ϬϬϬΨϬΨϭ͕ϭϰϬ͕ϬϬϬ DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 39 Vers.: Aug. 5, 2019 Page 6 of 9 Table C-1: Eligible Measures – Estimated Savings and Compensation CITY, in its sole discretion by providing written notice to CONSULTANT, retains the right to add, delete, modify or limit the Eligible Measures, Cost per Unit or other characteristics set forth in this Table C-1, including imposing a limit on the maximum number of individual Eligible Measures, per customer or per year, installed by CONSULTANT. # Eligible Measure Description Unit of Measure Maximum Quantity per Home* Cost per Unit Annual kWh savings Annual Therm savings Source 1 AC Diagnostic & Tuneup w/verification Per System 1 $195.00 141.75 0.00 DEER 2014 2 Air Source Heat Pump 1- System (plus permits) Per Unit Permission Only $5,040.00 267.00 0.00 CMUA TRM 2014 Manual 3 Air Source Heat Pump 2- System (plus permits) Per Unit Permission Only $8,040.00 400.50 0.00 CMUA TRM 2014 Manual 4 Attic Access Weather Stripping Per Unit 2 $17.18 3.02 5.24 CMUA TRM 2014 Manual 5 Attic Insulation Batt Insulation - Existing Per Sq.Ft. N/A $1.98 0.03 0.01 CMUA TRM 2014 Manual 6 Attic Insulation Batt Insulation - R0 to R38 Per Sq.Ft. N/A $2.20 0.52 0.17 CMUA TRM 2014 Manual 7 Attic Insulation R-0 to Standard R-38 Per Sq.Ft. N/A $1.45 0.52 0.17 CMUA TRM 2014 Manual 8 Attic Insulation R-12 to Standard R-38 Per Sq.Ft. N/A $1.25 0.03 0.01 CMUA TRM 2014 Manual 9 Attic Venting Per Unit 2 $76.69 3.78 6.55 CMUA TRM 2014 Manual 10 CFL A-19 Bulb when LED not an option Per Unit Permission Only $10.00 28.00 0.00 CMUA TRM 2014 Manual 11 CFL Fixture with lamps Per Unit Permission Only $42.00 56.00 0.00 CMUA TRM 2014 Manual 12 CFL R30 Bulb when LED not an option Per Unit Permission Only $10.00 15.00 0.00 CMUA TRM 2014 Manual 13 Carbon Monoxide Alarm Per Unit Permission Only $39.33 0.00 0.00 CMUA TRM 2014 Manual 14 Door Replacement Per Unit 1 $100.00 5.29 9.17 CMUA TRM 2014 Manual DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 40 Vers.: Aug. 5, 2019 Page 7 of 9 # Eligible Measure Description Unit of Measure Maximum Quantity per Home* Cost per Unit Annual kWh savings Annual Therm savings Source 15 Door Sweep Per Unit 1 $29.95 3.02 5.24 CMUA TRM 2014 Manual 16 Door Weatherstripping Per Unit 4 $91.60 2.27 3.93 CMUA TRM 2014 Manual 17 Duct Test & Seal Per Unit 1 $450.00 73.00 19.90 CMUA TRM 2014 Manual 18 Energy Education Per Unit 1 $75.00 0.00 0.00 CMUA TRM 2014 Manual 19 Exterior LED Light Fixture with Sensor Per Unit 1 $67.00 39.00 0.00 CMUA TRM 2014 Manual 20 Faucet Aerators Per Unit 10 $5.90 0.00 4.00 CMUA TRM 2014 Manual 21 Furnace Filter Per Unit 1 $11.00 2.00 0.00 DEER 2014 22 Furnace Replacement (plus permits) Per Unit Permission Only $2,640.00 0.00 16.21 CMUA TRM 2014 Manual 23 Furnace Replacement Wall Furnace Double (plus permits) Per Unit Permission Only $3,050.00 0.00 16.21 CMUA TRM 2014 Manual 24 Furnace Replacement Wall Furnace Single (plus permits) Per Unit Permission Only $1,500.00 0.00 13.82 CMUA TRM 2014 Manual 25 Furnace Replacement with Duct Work (plus permits) Per Unit Permission Only $7,155.00 73.00 36.11 CMUA TRM 2014 Manual 26 Furnace Tune-up Per Unit 1 $155.00 33.60 9.77 DEER 2014 27 HVAC Efficient Fan Control Per Unit 1 $137.00 54.53 28.54 Workpaper 28 Intelligent Power Strip Per Unit 1 $37.00 24.00 0.00 CMUA TRM 2014 Manual 29 LED 10-13 W replacing 50 W or greater halogen downlight (Interior) Per Unit 5 $28.00 18.00 0.00 CMUA TRM 2014 Manual 30 LED 10-13 W replacing 50 W or greater halogen downlight (Exterior) Per Unit 5 $28.00 39.00 0.00 CMUA TRM 2014 Manual 31 LED 19-21 W replacing 90 W or greater halogen downlight (Interior) Per Unit 5 $36.00 28.00 0.00 CMUA TRM 2014 Manual 32 LED 19-21 W replacing 90 W or greater halogen downlight (Exterior) Per Unit 5 $36.00 62.00 0.00 CMUA TRM 2014 Manual DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 41 Vers.: Aug. 5, 2019 Page 8 of 9 # Eligible Measure Description Unit of Measure Maximum Quantity per Home* Cost per Unit Annual kWh savings Annual Therm savings Source 33 LED 7 W replacing 50 W MR16 (Exterior) Per Unit 5 $33.00 54.00 0.00 CMUA TRM 2014 Manual 34 LED A Type 10W replacing 60W Incandescent Per Unit 5 $16.50 18.00 0.00 CMUA TRM 2014 Manual 35 LED A Type 8W replacing 40W Incandescent Per Unit 5 $14.00 12.00 0.00 CMUA TRM 2014 Manual 36 LED R30 Bulb Per Unit 5 $28.00 18.00 0.00 CMUA TRM 2014 Manual 37 LED R40 Bulb Per Unit 5 $36.00 28.00 0.00 CMUA TRM 2014 Manual 38 Low-Flow Showerheads Per Unit 4 $39.00 0.00 7.60 CMUA TRM 2014 Manual 39 Max Hourly Rate for Additional Work Per Hour 3 $65.00 0.00 0.00 CMUA TRM 2014 Manual 40 Minor Home Repair - Walls + Materials Per Unit 1 $95.00 0.00 0.00 CMUA TRM 2014 Manual 41 NGAT Testing Per Unit 1 $85.00 0.00 0.00 CMUA TRM 2014 Manual 42 Occupancy Sensors Per Unit 3 $79.00 144.10 0.00 DEER 2014 43 Pipe Insulation Per Ln. Ft. 1 $9.50 0.00 2.20 CMUA TRM 2014 Manual 44 Program T-stats (with new HVAC install) Per Unit 1 $73.25 68.80 0.00 CMUA TRM 2014 Manual 45 Refrigerator replacement - 15CF, RHD, WHT, Westinghouse Per Unit 1 $783.00 106.00 0.00 CMUA TRM 2014 Manual 46 Refrigerator replacement - 18CF, RHD, WHT, Westinghouse Per Unit 1 $896.00 121.00 0.00 CMUA TRM 2014 Manual 47 Repair Furnace Per Unit 1 variable, NTE $500 0.00 9.73 CMUA TRM 2014 Manual 48 Repair Refrigerator Per Unit 1 variable, NTE $300 63.60 0.00 CMUA TRM 2014 Manual 49 Repair Water Heater Per Unit 1 variable, NTE $250 0.00 23.00 CMUA TRM 2014 Manual 50 Replace Water Heater (plus permits) Per Unit 1 $1,650.00 0.00 52.00 CMUA TRM 2014 DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 42 Vers.: Aug. 5, 2019 Page 9 of 9 # Eligible Measure Description Unit of Measure Maximum Quantity per Home* Cost per Unit Annual kWh savings Annual Therm savings Source Manual 51 Smoke Detector Alarm Per Unit 1 $39.00 0.00 0.00 CMUA TRM 2014 Manual 52 T8 28W 4F1L (Lamps and Ballast) Per Fixture 4 $52.69 245.00 0.00 CMUA TRM 2014 Manual 53 T8 28W 4F2L (Lamps and Ballast) Per Fixture 4 $61.76 183.00 0.00 CMUA TRM 2014 Manual 54 T8 28W 4F3L (Lamps and Ballast) Per Fixture 4 $80.67 122.00 0.00 CMUA TRM 2014 Manual 55 T8 28W 4F4L (Lamps and Ballast) Per Fixture 4 $83.46 61.00 0.00 CMUA TRM 2014 Manual 56 T8 28W 8F1L (Lamps and Ballast) Per Fixture 4 $75.05 156.00 0.00 CMUA TRM 2014 Manual 57 T8 28W 8F2L (Lamps and Ballast) Per Fixture 4 $84.55 108.00 0.00 CMUA TRM 2014 Manual 58 T8 Delamp - Kitchen, food preparation Per Bulb 4 $27.00 140.65 0.00 CMUA TRM 2014 Manual 59 VFD Pool Pump Retrofit (plus permits) Per Unit Permission Only $2,400.00 1,711.00 0.00 CMUA TRM 2014 Manual Source for Savings Assumptions: California Municipal Utilities Association (CMUA) Technical Reference Manual (TRM): CMUA TRM 2016 Database for Energy Efficient Resources (DEER): DEER 2014 DocuSign Envelope ID: 58E8A2DB-A534-4903-B7C1-A795E02A1F71 7.a Packet Pg. 43 Vers.: Aug. 5, 2019 Page 1 of 8 DEDEdEK͘ϰdKKEdZdEK͘ϭϱϭϱϵϭϮϱ dtEd,/dzK&W>K>dKE '>^z^dD^/EdZEd/KE>͕/E͘ĚďĂ^zEZ'zKDWE/^ &KZWZK&^^/KE>^Zs/^ This Amendment No. 4 (this “Amendment”) to Contract No. C15159125 (the “Contract” as defined below) is entered into as of December 6, 2021, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and EAGLE SYSTEMS INTERNATIONAL, INC. dba SYNERGY COMPANIES, a California corporation, located at 28436 Satellite Street, Hayward, CA 94545 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. Z/d>^ A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of administration, management and delivery of direct installation of energy efficiency (EE) measures at no-cost to CITY’s multifamily residences, with 4+ units that include apartments, hospices, care centers and rehab facilities, as detailed therein. B. The Parties now wish to amend the Contract in order to extend the term by twelve months, from the prior contract end date of December 31, 2021 through December 31, 2022, with no change to the maximum compensation payable under the Contract for continuation of services per Exhibit “A” Scope of Services. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. ĞĨŝŶŝƚŝŽŶƐ. The following definitions shall apply to this Amendment: a. ŽŶƚƌĂĐƚ. The term “Contract” shall mean Contract No. C15159125 between CONSULTANT and CITY, dated June 1, 2015, as amended by: Amendment No.1, dated September 26, 2016 Amendment No.2, dated June 26, 2018 Amendment No.3, dated May 25, 2021 b. KƚŚĞƌdĞƌŵƐ. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2. “TERM” of the Contract is hereby amended to read as follows: DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 44 Vers.: Aug. 5, 2019 Page 2 of 8 “The term of this Agreement shall be from the date of its full execution through December 31, 2022 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 3. The following exhibits to the Contract are hereby amended, as indicated below, to read as set forth in the attachments to this Amendment, which are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE”, AMENDED, REPLACES PREVIOUS “Revised Exhibit B”. b. Exhibit “C” entitled “COMPENSATION”, AMENDED, REPLACES PREVIOUS “Revised Exhibit C”. SECTION 4. >ĞŐĂůĨĨĞĐƚ͘Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. /ŶĐŽƌƉŽƌĂƚŝŽŶŽĨ ZĞĐŝƚĂůƐ. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 45 Vers.: Aug. 5, 2019 Page 3 of 8 ^/'EdhZ^K&d,WZd/^ IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. /dzK&W>K>dK City Manager APPROVED AS TO FORM: City Attorney or designee '>^z^dD^/EdZEd/KE>͕/E͘ ĚďĂ^zEZ'zKDWE/^ KĨĨŝĐĞƌϭ By: Name: Title: KĨĨŝĐĞƌϮ By: Name: Title: ƚƚĂĐŚŵĞŶƚƐ: EXHIBIT “B”: SCHEDULE OF PERFORMANCE, AMENDMENT No. 4 (AMENDED, REPLACES PREVIOUS) EXHIBIT “C”: COMPENSATION, AMENDMENT No. 4 (AMENDED, REPLACES PREVIOUS) DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 Steve Shallenberger President VP - Business Development Matthew Clark 7.b Packet Pg. 46 Vers.: Aug. 5, 2019 Page 4 of 8 EXHIBIT “B” SCHEDULE OF PERFORMANCE, AMENDMENT No. 4 (AMENDED, REPLACES PREVIOUS) 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. Task Timing (Due Date) Task 1 –PROGRAM RAMP-UP Task 1.1 Within 15 days of contract execution date Task 1.2 Within 15 days of contract execution date Task 1.3 Within 30 days of contract execution date Task 1.4 Within 30 days of contract execution date and Ongoing Task 1.5 Within 30 days of contract execution date and Ongoing Task 1.6 Within 30 days of contract execution date and Ongoing Task 2 –PROGRAM LAUNCH Task 2.1 Ongoing over Term of Agreement Task 3 – ENROLL CUSTOMERS (PRE-COMMITMENT STAGE) Task 3.0 Ongoing over Term of Agreement Task 3.1 Ongoing over Term of Agreement Task 3.2 Ongoing over Term of Agreement Task 4 – INSTALL EE MEASURES (COMMITMENT STAGE) Task 4.1 Ongoing over Term of Agreement Task 4.2 Ongoing over Term of Agreement Task 5 – INVOICING AND REPORTING Task 5.1 15th of each month Task 5.2 15th of each month Task Ongoing over Term of Agreement DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 47 Vers.: Aug. 5, 2019 Page 5 of 8 5.3 Task 5.4 Ongoing over Term of Agreement TASK 6 – CUSTOMER SERVICE Task 6.1 Ongoing over Term of Agreement Task 7 – RAMP-DOWN AND SHUTDOWN PROGRAM Task 7.1 Ongoing through end of contract Task 8 – SUBMIT FINAL PROGRAM REPORT Task 8.1 As requested by CITY Program manager Task 8.2. Prior to end of contract DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 48 Vers.: Aug. 5, 2019 Page 6 of 8 EXHIBIT “C” COMPENSATION AMENDMENT No.4 (AMENDED, REPLACES PREVIOUS) 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 this Exhibit C. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) shall not exceed One Million Eight Hundred Fifty Thousand dollars ($1,850,000) for the Term of the Agreement as set forth in Table 1 below. CONSULTANT agrees to complete all Services 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. CITY will compensate CONSULTANT using a fixed-unit pricing structure. CITY will compensate CONSULTANT a fixed price (the Cost per Unit) per Eligible Measure installed and approved by CITY as set forth in Table C-1. The Cost per Unit for each Eligible Measure set forth in Table C-1 includes all of CONSULTANT’s costs, including, without limitation, administrative costs, marketing/outreach costs, and direct implementation (materials and labor) costs. It is CITY’s expectation that approximately 85% of CONSULTANT’s costs be related to direct implementation costs (materials and labor) with approximately 15% reserved for marketing/outreach costs and administrative costs respectively. DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 49 Vers.: Aug. 5, 2019 Page 7 of 8 Maximum Total Compensation NOT TO EXCEED AMOUNT for Term of the Agreement = $1,850,000 Fiscal Year (FY) July 1st – June 30th PROGRAM (Multifamily Residence Plus+ Program) EV Charger Concierge Services** Budget Annual Gross #of Sites Budget kWh kW Therms Ac t u a l Year 1* FY16 $183,464 176,847 194.4 21,810 - - Year 2 FY17 $500,000 1,335,699 160.3 -1,171 - - Ta r g et Year 3 FY18 $266,536 250,000 200 20,000 - - Year 4 FY19 $275,000 250,000 200 20,000 24 $11,250 Year 5 FY20 $200,000 250,000 200 20,000 24 $9,000 Year 6 FY21 $50,000 125,000 100 10,000 24 $6,750 Year 6.5 Jul 1- Dec 31 2021 $175,000 250,000 200 20,000 - - Year 7 Jan. 1, 2022 to Dec. 31, 2022 $200,000 250,000 200 20,000 - - Total $1,850,000 2,887,546 1,454.7 130,639 72 NTE $27,000*** Note: *Year 1 includes one additional month from FY2015 (June 2015) preparing for the Agreement to launch **NTE 3% of annual budget ***Fee for performance based EVSE Concierge Service = $500/site, installed. Payment made from Low Carbon Fuel Standard (LCFS) funds. CITY, in its sole discretion by providing written notice to CONSULTANT retains the right to add, delete, modify or limit the Eligible Measures, Cost per Unit, maximum number of individual Eligible Measures per customer or per year or other characteristics set forth in this Table C-1, installed by CONSULTANT. CITY requests that savings numbers in this table, source EUL (Expected Useful Life) and any additional data requested by the CITY be updated annually. Sixty days before each fiscal year, or as requested by CITY, CONSULTANT will submit a proposed updated version of Table C-1 based on the CITY’s determined requirements, in CITY’s defined TEMPLAGE C-1 and method of submittal which will include new measures as well as measures ending, according to effective period. CITY will compensate CONSULTANT according to approved Table C-1 and with its corresponding effective date. Starting in FY2019, CONSULTANT will update measures list, using the following TEMPLATE C-1. DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 50 Vers.: Aug. 5, 2019 Page 8 of 8 dDW>dͲϭ͗ Table C-1 Multifamily Residence Plus+ Program Eligible Measure Cost Per Unit Summary ηĞƐĐƌŝƉƚŝŽŶŽĨDĞĂƐƵƌĞhŶŝƚ ŽĨ DĞĂƐƵƌĞ ŽƐƚ WĞƌ hŶŝƚ dZŶŶƵĂů^ĂǀŝŶŐƐWĞƌhŶŝƚ^ŽƵƌĐĞĨŽƌ^ĂǀŝŶŐƐ ƐƐƵŵƉƚŝŽŶƐ ;EĂŵĞĂŶĚzĞĂƌŽĨWƵďůŝĐĂƚŝŽŶͿ h>Ύ ;zĞĂƌƐͿ ĨĨĞĐƚŝǀĞWĞƌŝŽĚ ;zĞĂƌͿ ŬtŚŬtƚŚĞƌŵ 1 Attic Insulation R-12 to Standard R-38 Sq.Ft. $1.49 2.71 0.5 0.000 0.2 CMUA TRM 2016 20 7/01/21 - 12/31/22 2 Attic Insulation R-0 to Standard R-38 Sq.Ft. $1.69 2.28 0.5 0.000 0.2 CMUA TRM 2016 20 7/01/21 - 12/31/22 3 Occupancy Sensors Unit $79.00 1.31 144.1 0.045 0.0 DEER 2014 8 7/01/21 - 12/31/22 4 Tier 2 Advanced Power Strip (APS) Unit $118.00 1.79 212.0 0.002 0.0 CMUA TRM 2016 12 7/01/21 - 12/31/22 5 LED 10-13 W replacing 50 W halogen downlight (Exterior) Unit $28.00 2.02 48.0 0.000 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 6 LED 10-13 W replacing 50 W halogen downlight (Interior) Unit $28.00 0.93 22.0 0.002 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 7 LED 19-21 W replacing 90 W halogen downlight (Exterior) Unit $36.00 2.85 87.0 0.000 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 8 LED 19-21 W replacing 90 W halogen downlight (Interior) Unit $36.00 1.28 39.0 0.004 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 9 LED A Type 10W replacing 60W Incandescent Unit $16.50 4.57 64.0 0.010 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 10 LED A Type 8W replacing 40W Incandescent Unit $14.00 4.04 48.0 0.008 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 11 LED 7 W replacing 50 W MR16 (Exterior) Unit $33.00 1.93 54.0 0.000 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 12 Open Sign LED - Office Unit $265.00 3.92 843.0 0.225 0.0 CMUA TRM 2016 16 7/01/21 - 12/31/22 13 Open Sign LED - Retail Unit $265.00 4.14 889.0 0.214 0.0 CMUA TRM 2016 16 7/01/21 - 12/31/22 14 LED Exit Sign - One Sided Unit $57.00 3.94 191.8 0.028 -1.1 CMUA TRM 2016 16 7/01/21 - 12/31/22 15 LED Exit Sign - Two Sided Unit $57.00 6.42 313.0 0.045 -1.8 CMUA TRM 2016 16 7/01/21 - 12/31/22 16 Vending machine controller Unit $213.00 3.61 1612.0 0.000 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 17 T8 28W replacing T8 32W 4F4L Lamp $56.22 2.08 245.0 0.380 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 18 T8 28W replacing T8 32W 4F3L Lamp $46.02 1.90 183.0 0.285 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 19 T8 28W replacing T8 32W 4F2L Lamp $36.02 1.61 122.0 0.190 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 20 T8 28W replacing T8 32W 4F1L Lamp $28.72 1.01 61.0 0.095 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 21 T8 28W replacing T8 32W 8F2L Lamp $38.92 1.91 156.0 0.225 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 22 T8 28W replacing T8 32W 8F1L Lamp $32.15 1.60 108.0 0.120 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 23 T8 Delamp 1-lamp - Corridors, stairs, etc. Lamp $27.00 1.46 82.8 0.025 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 24 T8 Delamp 1-lamp - Kitchen, Food Prep Lamp $27.00 2.48 140.6 0.027 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 25 T8 Delamp 1-lamp - Office space <250 sf Lamp $27.00 1.40 79.1 0.024 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 26 T8 Delamp 1-lamp - Office space >250 sf Lamp $27.00 1.40 79.1 0.024 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 27 T8 Delamp 1-lamp - Office space < 1,000 sf Lamp $27.00 1.40 79.1 0.024 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 28 T8 Delamp 1-lamp - Tenant lease space Lamp $27.00 1.79 101.3 0.024 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 29 T8 Delamp 1-lamp - Waiting area Lamp $27.00 1.44 81.8 0.025 0.0 CMUA TRM 2016 5 7/01/21 - 12/31/22 30 Hot Water Sensor Circulation Pump Pump $1,650.00 7.15 1206.0 0.000 1458.0 SCG Workpaper 2014 10 7/01/21 - 12/31/22 31 VFD Pool Pump Retrofit (MF Complexes) Unit $2,400.00 2.01 5586.0 0.360 0.0 Cal TF Workpaper 2014 10 7/01/21 - 12/31/22 32 LED 30W Wall Pack replacing 150W fixture Unit $240.00 2.02 559.0 0.027 0.0 CMUA TRM 2016 10 7/01/21 - 12/31/22 DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 51 Vers.: Aug. 5, 2019 Page 9 of 8 dĂďůĞͲϭ;ŽŶƚŝŶƵĞĚĨƌŽŵWĂŐĞϴͿ ηĞƐĐƌŝƉƚŝŽŶŽĨDĞĂƐƵƌĞhŶŝƚ ŽĨ DĞĂƐƵƌ Ğ ŽƐƚƉĞƌ hŶŝƚ dZŶŶƵĂů^ĂǀŝŶŐƐWĞƌhŶŝƚ^ŽƵƌĐĞĨŽƌ^ĂǀŝŶŐƐ ƐƐƵŵƉƚŝŽŶƐ;EĂŵĞ ĂŶĚzĞĂƌŽĨWƵďůŝĐĂƚŝŽŶͿ h>Ύ ;zĞĂƌƐͿ ĨĨĞĐƚŝǀĞWĞƌŝŽĚ ;zĞĂƌͿ ŬtŚŬtƚŚĞƌ ŵ 33 LED 60W Wall Pack replacing 250W fixture Uni t $290.00 2.54 852.0 0.041 0.0 CMUA TRM 2016 10 7/01/21 - 12/31/22 34 7W LED replacing 23W CFL (1.5 hrs. per day) low usage Bul b $14.00 0.8 8.1 0.001 0.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 35 7W LED replacing 23W CFL (3.4 hrs. per day) med usage Bul b $14.00 1.8 19.8 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 36 7W LED replacing 23W CFL (11.4 hrs. per day) high usage Bul b $14.00 6.2 65.9 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 37 7W LED replacing 18W CFL (1.5 hrs. per day) low usage Bul b $14.00 0.5 5.6 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 38 7W LED replacing 18W CFL (3.4 hrs. per day) med usage Bul b $14.00 1.3 13.6 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 39 7W LED replacing 18W CFL (11.4 hrs. per day) high usage Bul b $14.00 4.2 45.3 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 40 9W LED replacing 23W CFL (1.5 hrs. per day) low usage Bul b $16.50 0.6 7.1 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 41 9W LED replacing 23W CFL (3.4 hrs. per day) med usage Bul b $16.50 1.4 17.3 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 42 9W LED replacing 23W CFL (11.4 hrs. per day) high usage Bul b $16.50 4.6 57.7 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 43 11W LED replacing 23W R30 CFL (11.4 hrs. per day) high usage Bul b $28.00 2.3 49.4 0.001 0 CMUA TRM 2016 15 7/01/21 - 12/31/22 44 T8 to LED 1- bulb (11.4 hrs. per day) high usage Fixture $58.00 1.43 74.0 0.004 -0.4 CMUA TRM 2016 15 7/01/21 - 12/31/22 45 T8 to LED 2- bulb (11.4 hrs. per day) high usage Fixture $74.00 2.25 148.5 0.007 -0.8 CMUA TRM 2016 15 7/01/21 - 12/31/22 46 T8 to LED 3- bulb (11.4 hrs. per day) high usage Fixture $92.00 2.71 222.0 0.012 -1.2 CMUA TRM 2016 15 7/01/21 - 12/31/22 47 T8 to LED 4 - bulb (11.4 hrs. per day) high usage Fixture $109.00 3.06 297.0 0.014 -1.6 CMUA TRM 2016 15 7/01/21 - 12/31/22 48 T8 to LED 1- bulb (5.2 hrs. per day) med usage Fixture $58.00 0.65 33.7 0.004 -0.2 CMUA TRM 2016 15 7/01/21 - 12/31/22 49 T8 to LED 2- bulb (5.2 hrs. per day) med usage Fixture $74.00 1.02 67.4 0.007 -0.4 CMUA TRM 2016 15 7/01/21 - 12/31/22 50 T8 to LED 3- bulb (5.2 hrs. per day) med usage Fixture $92.00 1.24 101.2 0.011 -0.5 CMUA TRM 2016 15 7/01/21 - 12/31/22 51 T8 to LED 4 - bulb (5.2 hrs. per day) med usage Fixture $109.00 1.39 134.9 0.014 -0.7 CMUA TRM 2016 15 7/01/21 - 12/31/22 52 T8 to LED 1- bulb with ballast switch out (11.4 hrs. per day) high usage Fixture $89.00 1.16 91.7 0.004 -0.5 CMUA TRM 2016 15 7/01/21 - 12/31/22 53 T8 to LED 2- bulb with ballast switch out (11.4 hrs. per day) high usage Fixture $99.00 2.08 183.5 0.009 -1.0 CMUA TRM 2016 15 7/01/21 - 12/31/22 54 T8 to LED 3- bulb with ballast switch out (11.4 hrs. per day) high usage Fixture $109.00 2.83 275.2 0.001 -1.5 CMUA TRM 2016 15 7/01/21 - 12/31/22 55 T8 to LED 4 - bulb with ballast switch out (11.4 hrs. per day) high usage Fixture $119.00 3.47 366.9 0.018 -1.9 CMUA TRM 2016 15 7/01/21 - 12/31/22 56 T8 to LED 1- bulb with ballast switch out (5.2 hrs. per day) med usage Fixture $89.00 0.53 41.7 0.004 -0.2 CMUA TRM 2016 15 7/01/21 - 12/31/22 57 T8 to LED 2- bulb with ballast switch out (5.2 hrs. per day) med usage Fixture $99.00 0.95 83.3 0.009 -0.4 CMUA TRM 2016 15 7/01/21 - 12/31/22 58 T8 to LED 3- bulb with ballast switch out (5.2 hrs. per day) med usage Fixture $109.00 1.29 125.0 0.013 -0.7 CMUA TRM 2016 15 7/01/21 - 12/31/22 59 T8 to LED 4 - bulb with ballast switch out (5.2 hrs. per day) med usage Fixture $119.00 1.57 166.6 0.018 -0.9 CMUA TRM 2016 15 7/01/21 - 12/31/22 60 T12 to LED 1- bulb with ballast (11.4 hrs. per day) high usage Fixture $89.00 1.05 83.0 0.004 -0.4 CMUA TRM 2016 15 7/01/21 - 12/31/22 61 T12 to LED 2- bulb with ballast (11.4 hrs. per day) high usage Fixture $99.00 1.88 166.0 0.008 -0.9 CMUA TRM 2016 15 7/01/21 - 12/31/22 62 T12 to LED 3- bulb with ballast (11.4 hrs. per day) high usage Fixture $109.00 2.57 249.0 0.012 -1.3 CMUA TRM 2016 15 7/01/21 - 12/31/22 63 LED 4- bulb with ballast (11.4 hrs. per day) high usage Fixture $119.00 3.13 332.0 0.016 -1.8 CMUA TRM 2016 15 7/01/21 - 12/31/22 64 T12 to LED 1- bulb with ballast (5.2 hrs. per day) med usage Fixture $89.00 0.48 37.7 0.004 -0.2 CMUA TRM 2016 15 7/01/21 - 12/31/22 65 T12 to LED 2- bulb with ballast (5.2 hrs. per day) med usage Fixture $99.00 0.86 75.4 0.008 -0.4 CMUA TRM 2016 15 7/01/21 - 12/31/22 66 T12 to LED 3- bulb with ballast (5.2 hrs. per day) med usage Fixture $109.00 1.17 113.1 0.012 -0.6 CMUA TRM 2016 15 7/01/21 - 12/31/22 67 T12 to LED 4- bulb with ballast (5.2 hrs. per day) med usage Fixture $119.00 1.42 150.7 0.016 -0.8 CMUA TRM 2016 15 7/01/21 - 12/31/22 DocuSign Envelope ID: D5710CE4-B476-4F4B-8D78-ED59F7AB5AF8 7.b Packet Pg. 52 Vers.: Aug. 5, 2019 Page 1 of 20 DEDEdEK͘ϯdKKEdZdEK͘ϭϱϭϱϵϭϯϱ dtEd,/dzK&W>K>dKE >Z^h>dKE^h>d/E'͕/E͘ &KZWZK&^^/KE>^Zs/^ This Amendment No. 3 (this “Amendment”) to Contract No. C15159135 (the “Contract” as defined below) is entered into as of December 13, 2021, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CLEARESULT CONSULTING, INC., a Texas corporation, located at 4301 Westbank Drive, Bldg. A, Suite 300, Austin, TX 78746 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. Z/d>^ A.The Contract (as defined below) was entered into by and between the Parties hereto for the provision of phone-based energy and water efficiency advice services, and on-site assessment services to CITY’s residential customers, as detailed therein. B.The Parties now wish to amend the Contract in order to extend the term by twelve months, from the prior contract end date of December 31, 2021 through December 31, 2022, with no change to the maximum compensation payable under the Contract for continuation of services per Exhibit “A” Scope of Services. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. ĞĨŝŶŝƚŝŽŶƐ. The following definitions shall apply to this Amendment: a.ŽŶƚƌĂĐƚ. The term “Contract” shall mean Contract No. C15159135 between CONSULTANT and CITY, dated June 1, 2015, as amended by: Amendment No.1, dated June 26, 2018 Amendment No.2, dated May 25, 2021 b.KƚŚĞƌdĞƌŵƐ. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2. “TERM” of the Contract is hereby amended to read as follows: Attachment C 7.c Packet Pg. 53 Vers.: Aug. 5, 2019 Page 2 of 20 “The term of this Agreement shall be from the date of its full execution through December 31, 2022 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “A” entitled “SCOPE OF SERVICES” AMENDMENT NO. 3, AMENDED, REPLACES PREVIOUS “REVISED EXHIBIT A”. b. Exhibit “C” entitled “COMPENSATION” AMENDMENT NO. 3, AMENDED, REPLACES PREVIOUS “REVISED EXHIBIT C”. SECTION 4. >ĞŐĂůĨĨĞĐƚ͘ Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. /ŶĐŽƌƉŽƌĂƚŝŽŶŽĨZĞĐŝƚĂůƐ. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) 7.c Packet Pg. 54 Vers.: Aug. 5, 2019 Page 3 of 20 ^/'EdhZ^K&d,WZd/^ IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. /dzK&W>K>dK City Manager APPROVED AS TO FORM: City Attorney or designee >Z^h>dKE^h>d/E'͕/E͘ KĨĨŝĐĞƌϭ By: Name: Title: KĨĨŝĐĞƌϮ By: Name: Title: ƚƚĂĐŚŵĞŶƚƐ: REVISED EXHIBIT “A”: SCOPE OF SERVICES, AMENDMENT No. 3 (AMENDED, REPLACES PREVIOUS) EXHIBIT “C”: COMPENSATION, AMENDMENT No. 3, (AMENDED, REPLACES PREVIOUS) 7.c Packet Pg. 55 Vers.: Aug. 5, 2019 Page 4 of 20 REVISED EXHIBIT A SCOPE OF SERVICES, AMENDMENT NO. 3 (AMENDED, REPLACES PREVIOUS) CONSULTANT agrees to leverage its residential demand side management program implementation expertise and experience to implement a home efficiency assessment and advisor program to deliver the Home Efficiency Genie Program (sometimes referred to as the “PROGRAM”) on behalf of the City of Palo Alto Utilities department (“CITY”). CONSULTANT will provide CITY with efficiency advisors that are residential efficiency experts with a strong command of building science technical knowledge, sales skills, and excellent customer service skills. CONSULTANT will provide both field-based, email and phone-based services to support customers as part of the PROGRAM. Along with offering a CITY residential programs, -concierge advisor service, CONSULTANT will deliver real-time insights for the CITY regarding key performance metrics via customized dashboards from the CONSULTANT’s data management system. The CONSULTANT will generate cost-effective electric, gas, and water savings through both direct install and customer or contractor installed measures, as well as advise customers about comfort and health in their homes. The CONSULTANT will continue to make improvements to the program to increase overall customer satisfaction while supporting participation goals through channel marketing with contractors that will generate leads while supporting market transformation and foster an ongoing relationship between the customer and the CITY that can support complementary sustainability programs. A. WZK'ZDKsZs/t EĂŵĞ͗Home Efficiency Genie Program dĂƌŐĞƚDĂƌŬĞƚ͗The PROGRAM will serve single-family and multi-family residential households within the CITY’s territory. ƌŝĞĨ WZK'ZD ĞƐĐƌŝƉƚŝŽŶ͗CONSULTANT will provide a single point of contact for CITY residential customers interested in energy and water efficiency as well as the full scope of all CITY residential programs and rebates. The PROGRAM’s overarching goal is to help CITY customers use less energy and water to reduce environmental impacts, improve safety and comfort and save money as well as improving overall customer satisfaction. Key services provided by the PROGRAM will be: 1. WŚŽŶĞͲďĂƐĞĚĂĚǀŝƐŝŶŐ- CONSULTANT will implement phone-based consulting services to act as a gateway for all CITY residential programs as well as topics such as the CITY’s sustainability goals, including, but not limited to: pilot programs, EV and PV programs, water efficiency and portal use. CONSULTANT also offers CITY customers efficiency advice and support in participating in CITY’s residential rebate program. 7.c Packet Pg. 56 Vers.: Aug. 5, 2019 Page 5 of 20 2. ,ŽŵĞ ĞĨĨŝĐŝĞŶĐǇ ĂƐƐĞƐƐŵĞŶƚƐ- CONSULTANT will offer CITY customers in-home efficiency assessments with a customer copayment, also known as a “Genie House Call”. Upon completion of an in-home assessment, CONSULTANT will offer participating customers a Home Efficiency Assessment Report that identifies efficiency upgrade opportunities. CONSULTANT will also offer CITY customers electrification assessments with a customer copayment. Upon completion of an electrification assessment, CONSULTANT will offer participating customers a report that identifies potential electrification opportunities. As with the phone-based services, CONSULTANT will guide the customer through the efficiency upgrade process following the Home Efficiency Assessment Report or Electrification Assessment Report. Customers have the option to select contractors, review bids and explore financing options for home and efficiency upgrade projects with the assistance and guidance of CONSULTANT. The PROGRAM will claim energy savings from all measures installed by the customer as a result of the recommendations from the efficiency assessments conducted by CONSULTANT as part of the PROGRAM. 3. ŽŶƚƌĂĐƚŽƌŽƌƚƌĂĚĞĂůůǇŵĂŶĂŐĞŵĞŶƚ– CONSULTANT vets qualified contractors or trade allies for services recommended through the PROGRAM. List of trade allies will include a disclosure note “Note: This list is provided as a courtesy resource only. The City does not require or endorse the use of any of these firms. This list is not to be construed as exclusive, comprehensive, or limiting in any way.” 4. DĂƌŬĞƚŝŶŐ ĂŶĚ ĞǀĞŶƚƐ- To generate leads for the PROGRAM, CONSULTANT will support marketing, education and outreach (ME&O) through a variety of channels, including tabling at various CITY locations such as libraries, City Hall and Community Centers, local retail establishments, organizing and hosting community workshops, participation in CITY sponsored events and workshops (e.g. PV, EV, HPWH, water conservation, Great Race for Saving Water, etc.) partnering with community groups (e.g. Cool Blocks, neighborhood associations, etc.) while also engaging with real estate professionals, contractor trade allies, and local employers among others. CONSULTANT will also work with CITY to leverage other CITY marketing activities (e.g. bill inserts, email communications, digital display boards, street banners, posters, etc.) as much as possible to drive leads to the PROGRAM. PROGRAM Energy & Water Savings Target CONSULTANT’s energy & water savings targets for the PROGRAM for the term of the Agreement are as provided in Table A.1. dĂďůĞ͘ϭWZK'ZDŶĞƌŐǇΘtĂƚĞƌ^ĂǀŝŶŐƐdĂƌŐĞƚ Fiscal Year (FY) July 1st – June 30th # Assessments Annual Savings Therms kWh CCF Actual Year 1* FY16 104 2,483 8,502 574 Year 2 FY17 92 4,274 22,741 332 Year 3 FY18 50 8,674 52,502 65 Year 4 FY19 73 19,656 35,641 12 I I I I I I I I 7.c Packet Pg. 57 Vers.: Aug. 5, 2019 Page 6 of 20 Year 5 FY20 62 4,645 25,129 0 Projections Year 6 FY21 120 12,000 90,000 334 Year 6.5 July 2021 – Dec 2021 60 6,000 45,000 167 Year 7 Jan 2022 – Dec 2022 120 12,000 90,000 334 Total 681 69,732 369,515 1,818 Note: *Year 1 includes one additional month from FY2015 (June 2015) preparing for the Agreement to launch Quality Assurance Plan CONSULTANT will supervise and manage relationships with contractors that CONSULTANT recommends to customers for completing efficiency upgrade projects. CONSULTANT will operate according to a quality assurance plan that emphasizes transparent and efficient procurement procedures, quality installation of direct install measures, quality of participating contractor installed measures, installation of high efficiency equipment, compliance with the CITY rebate program requirements, and high levels of customer satisfaction. CONSULTANT will obtain pre-approval from CITY for all energy and water efficiency devices that they intend to install at customer homes as part of the PROGRAM. All direct install measures will meet the minimum efficiency ratings required by CITY. CONSULTANT agrees to ensure that all manufacturer product warranties held either by CONSULTANT or contractors recommended by CONSULTANT will be transferred to the customer in connection with installation; and that CONSULTANT will be available to troubleshoot and or replace any defective direct installs for customers. Without limiting Section 16 (Indemnity) of this Agreement, CONSULTANT agrees and understands it is responsible for all costs and damages associated with any theft, vandalism, damage or criminal acts involving or committed by CONSULTANT staff, contractors or agents involving a customer or customer premises, including issues related to workmanship or damage caused by contractors recommended by CONSULTANT to customers. CONSULTANT will ensure high quality work is performed by contractors through vetting contractor credentials and licensing, monitoring customer feedback and reviewing rebate applications and associated contractor invoices and contacting customers to ensure measures were installed. CONSULTANT will develop and submit a Quality Assurance Plan to the CITY that includes complaint escalation procedures and send out Field Quality Control Inspections on an as needed basis. Evaluation CONSULTANT will interface with CITY’s contracted evaluation, measurement and verification 7.c Packet Pg. 58 Vers.: Aug. 5, 2019 Page 7 of 20 firms as necessary. CONSULTANT will evaluate PROGRAM efficacy for participating customers by comparing pre and post PROGRAM energy consumption, and shall include this information in each quarterly update. Staffing Plan CONSULTANT agrees to staff the PROGRAM in accordance with the Staffing Plan set forth below. CONSULTANT shall notify the CITY concerning proposed changes to the plan, and all such changes require prior written consent of the CITY. CITY reserves the right to (i) request CONSULTANT conduct criminal background checks to CITY’s satisfaction on all CONSULTANT’s staff, contractors or agents that may enter customer property, and (ii) require that any staff, contractor or agent of CONSULTANT that fails the background check shall not be permitted to enter any customer premises. KE^h>dEd͛ƐKƌŝŐŝŶĂůStaff Members Effective 6/1/2015 – 6/30/2018 EĂŵĞdŝƚůĞ David Siddiqui Director Jeff Strauss Program Manager Scott Mellberg Associate Program Manager/ Energy Advisor Tony Jung Energy Analyst / BPI Building Analyst/ Energy Advisor Renee Yama Director, Marketing Account Management KE^h>dEd͛ƐUpdated Staff Members Effective 1/1/2022 – 6/30/2022 :ŽĂŶŶĞK͛EĞŝůů Program Portfolio Manager (415) 965-3023 joanne.oneil@clearesult.com Ms. O’Neill is responsible for overseeing the portfolio of energy advising programs in California and will engage with the CITY and the CONSULTANT team to ensure the PROGRAM is delivered within budget to meet PROGRAM goals DĂƌĐŝŐďǇ Program Manager (925)297-5057 marc.bigby@clearesult.com Mr. Bigby will be the Program manager and primary point of contact for the CITY. Mr. Bigby is responsible for ensuring the PROGRAM is delivered within budget and for managing, training, and mentoring the implementation team in CONSULTANT’s San Bruno office. WĂƵů<ŽĞƉŬĞ Associate Program Manager (650) 713-3411 paul.koepke@clearesult.com Mr. Koepke will be the dedicated, full-time Efficiency Advisor responsible for providing phone-based efficiency advising services and ME&O support. Mr.Koepke will also serve as an associate program manager and will be responsible for managing, training, and mentoring the implementation team in CONSULTANT’s San Bruno office. Energy Analyst / BPI Building Analyst (650) 713-3411 advisor@efficiencygenie.com 7.c Packet Pg. 59 Vers.: Aug. 5, 2019 Page 8 of 20 dŽŶǇ:ƵŶŐ CONSULTANT will provide a part-time Energy Analyst / BPI Building Analyst to provide field-based efficiency assessment and field quality control services. The Energy Analyst / BPI Building Analyst will also provide outreach and contractor mentorship in support of the PROGRAM’s goals. d eCSR (650) 713-3411 advisor@efficiencygenie.com CONSULTANT will provide a junior Efficiency Advisor responsible for providing phone-based efficiency advising services and ME&O on an as-needed basis when Scott Mellberg is not available. CONSULTANT will get approval from the CITY when this staff member becomes available. The following outlines the PROGRAM design and implementation applicable to CONSULTANT: dĂƐŬϭͲWZK'ZD/DW>DEdd/KE Program Description CONSULTANT will provide phone-based efficiency concierge services and in-person assessments to CITY customers, offering efficiency advice and support with CITY’s residential rebate program, selection of contractors for installation of efficiency improvements, review of contractor bids, support with financing for home and efficiency upgrade projects, and support with other programs offered by the CITY as agreed upon by the CONSULTANT and CITY. CONSULTANT will also offer comprehensive in-home efficiency assessments, also known as a ‘Genie House Call’ with a customer copayment defined by CITY. CONSULTANT will submit customer co-pay amounts and/or discounts or promotions covered by the CONSULTANT, in a monthly report for tracking purposes. CONSULTANT will offer participating house call customers (as applicable) directly installed energy and water saving measures including: LED light bulbs, tier II advanced power strip, high efficiency shower heads, faucet aerators, and garden nozzles. CONSULTANT will also provide participating house call customers a Home Efficiency Assessment Report that identifies efficiency upgrade opportunities. CONSULTANT will also offer CITY customers electrification assessments with a customer copayment defined by CITY. CONSULTANT will submit customer co- pay amounts and/or discounts or promotions covered by the CONSULTANT, in a monthly report for tracking purposes. Upon completion of an electrification assessment, CONSULTANT will also provide participating electrification assessment customers an Electrification Assessment Report that identifies electrification opportunities. Through phone- based services, CONSULTANT will also guide the customer through the efficiency upgrade process or electrification upgrades, including, as noted, assistance with selection of contractors, reviewing bids and financing options. CONSULTANT will claim energy savings from all measures installed by the customer as a result of recommendations from the assessment conducted by CONSULTANT as part of the PROGRAM. Additionally, CONSULTANT will support all eligible residents with information and guidance for rebates and programs offered by the CITY including but not limited to Solar PV, Electric Vehicles 7.c Packet Pg. 60 Vers.: Aug. 5, 2019 Page 9 of 20 (EV), EV Charging and other electrification opportunities. CONSULTANT and CITY will define a process to ensure that there will be no double-counting of energy and water savings. dĂƐŬϭͲWZK'ZDZDWͲhW dĂƐŬϭ͘ϭDĂƌŬĞƚŝŶŐDĂƚĞƌŝĂůĞǀĞůŽƉŵĞŶƚ ● CONSULTANT will customize a Home Energy Action Plan for CITY. ● CONSULTANT will launch a Program website with program description and customer sign-up web-to-lead HTML form. ● CONSULTANT will develop draft marketing brochure for use by contractors and energy advisors to promote Program and other existing CITY residential rebate offerings to customers. ● CONSULTANT shall submit to CITY all marketing materials, including websites, press releases, brochures, and any content mentioning Program in any capacity for approval prior to publishing said Program materials. dĂƐŬϭ͘ϮWƌŽŐƌĂŵĞǀĞůŽƉŵĞŶƚ ● CONSULTANT will assign a Program Manager to manage the day-to-day operations of the Program to ensure its success and serve as the primary point of contact for the CITY. ● CONSULTANT will host Program kick-off meeting with CITY, work with CITY to finalize range of programs promoted by CONSULTANT and review/integrate existing marketing and rebate materials for these programs. ● CONSULTANT will finalize the schedule of activities that provides a monthly work plan and implementation timeline and submit such plan to City for review and approval. ● Define Marketing, Education & Outreach (ME&O) plan, including identification of outreach activities, locations and frequency for CITY’s review and approval. dĂƐŬϭ͘ϯƵƐƚŽŵĞƌZĞůĂƚŝŽŶƐŚŝƉDĂŶĂŐĞŵĞŶƚΘĂƚĂdƌĂĐŬŝŶŐ ● CONSULTANT will provide CITY with proposed performance metrics for monthly reporting, work with CITY to finalize performance metrics, customize its Customer Relationship Management (CRM) system to meet CITY requirements, and launch CRM system within two weeks of finalizing metrics. Customization of the CONSULTANT’s CRM system includes setting up existing rebates in the system and setting up fields for the specific Program metrics for detailed tracking, reporting and billing. 7.c Packet Pg. 61 Vers.: Aug. 5, 2019 Page 10 of 20 d^<ϮͲWZK'ZD>hE, dĂƐŬϮ͘ϭ/ŶŝƚŝĂůDĂƌŬĞƚŝŶŐ͕ĚƵĐĂƚŝŽŶ͕ĂŶĚKƵƚƌĞĂĐŚ͗CONSULTANT will begin with an initial ME&O campaign to all potential partner organizations to introduce them to the Program, establish the relationships, and discuss the goals and expectations of the Program. This campaign includes: ● Outreach to local contractors to establish a pool of participating home performance (HVAC, insulation, lighting etc.) contractors for the purposes of referring homeowner leads; ● Training qualified contractors to market the Program in CITY’s territory by referring clients to Program; ● Outreach to local real estate professionals to establish Program referral channels; ● Outreach to large local employers to promote Program participation; ● Assisting CITY to directly promote the Program through bill inserts or email communications; ● Media, case studies (through Palo Alto Patch, etc.); ● Conducting presentations at relevant events leveraging existing audiences; ● Upgrade success events at previously upgraded homes; and ● Launching a simple, clean, branded Program website with web-to-lead form for customer sign- ups (directly linked to CONSULTANT data management system). dĂƐŬϮ͘Ϯ Direct Residential Marketing: CONSULTANT will submit marketing materials to CITY for use in bill inserts, direct mail postcards and detach cards, magazine ads and related marketing channels. d^<ϯͲWZK'ZD/DW>DEdd/KE dĂƐŬ ϯ͘ϭ Program Enrollment: CONSULTANT will implement the marketing plan and enroll customers that have been screened and identified as qualified. CONSULTANT will focus on two areas of efficiency assistance: direct and indirect efficiency activities. While the Program will generate direct energy and water savings through direct installs, the remainder of the phone-based and field- based services will promote energy savings indirectly through educating and engaging customers and encouraging energy saving behaviors and the completion of additional energy upgrade measures in partnership with contractor trade allies. CONSULTANT has designed the Program such that customer copayments are used to cover some of the cost associated with the field-based services, as well as increase the customer’s engagement throughout the process. 7.c Packet Pg. 62 Vers.: Aug. 5, 2019 Page 11 of 20 dĂƐŬϯ͘Ϯ Phone Advisory Service: CONSULTANT shall maintain a dedicated phone line with the phone number (650)713-3411 for phone-based advising. CONSULTANT will gain customer’s verbal approval and liability release prior to participating in phone advising. Through phone- based services, CONSULTANT’s Efficiency Advisors will provide proactive, individualized, and ongoing assistance to homeowners with efficiency advice, and will provide registration assistance when requested by customers for the in-home efficiency assessments. The phone-based services will promote energy savings indirectly through further educating and engaging customers and encouraging energy saving behaviors and the completion of additional energy upgrade measures, ideally in partnership with contractor trade allies. CONSULTANT has designed the PROGRAM such that enrolled customer copayments are used to cover some of the cost associated with the field-based services, as well increase the customer’s engagement throughout the process. Table B.1 below further identifies CONSULTANT tasks by customer type. CONSULTANT will divide customers into two categories. Table B.1 below further identifies CONSULTANT tasks by customer type: • General Inquiry Customers - CONSULTANT will support General Inquiry customers that have been screened and identified as qualified through phone-based services with general CITY program questions, utility bill analysis, general efficiency consultations, contractor selection, complementary program awareness and referrals, and application and incentive processing. CONSULTANT will also provide ongoing follow-up to these customers as deemed necessary and as capacity allows. CONSULTANT will gain customer’s verbal approval and liability release prior to participating in phone advising. • Enrolled Customers - CONSULTANT will enroll customers that have been screened, identified as qualified, and schedule and complete an in-home PROGRAM audit. Customer enrollment occurs when CONSULTANT gains customer’s signature on the Program Participation Agreement between CONSULTANT and customer. Similar services will be provided, with the following additions: o Collect signed Program Participation Agreement and identify direct install eligibility o Provide scheduling and payment assistance o Educate customers on how to prepare for a Program Assessment o Generate direct energy and water savings through direct installs during the assessment process o Provide in-home education, demonstration, and consultative services 7.c Packet Pg. 63 Vers.: Aug. 5, 2019 Page 12 of 20 o Ongoing follow-up and engagement, efficiency assessment report review, etc. dĂďůĞͲϬ͘ϱWZK'ZDWŚŽŶĞĚǀŝƐŽƌǇ^ĞƌǀŝĐĞŚĂƌĂĐƚĞƌŝƐƚŝĐƐ (June 1, 2018 – December 1, 2022) dĂƐŬ WŚŽŶĞͲĂƐĞĚ 'ĞŶĞƌĂů/ŶƋƵŝƌǇ ĨĨŝĐŝĞŶĐǇŽƌ ůĞĐƚƌŝĨŝĐĂƚŝŽŶ ƐƐĞƐƐŵĞŶƚ ŶƌŽůůĞĚ Support with general CITY program questions, utility bill analysis, general efficiency consultation, and complementary program referrals X X Gain customers verbal approval and liability release X X Gain customer Program Participation Form X Scheduling and payment support X X Incentive application support X X Direct installation of energy and water saving devices as applicable X In-home efficiency assessment or electrification assessment by certified BPI technician and assessment report X In-home demonstration, education, and consultative support X Support with contractor bidding and selection as well as financing options X X Personalized customer experience and holding customers accountable to their efficiency plans X X In-depth customer profile development and data tracking X X dĂƐŬ ϯ͘ϯĨĨŝĐŝĞŶĐǇƐƐĞƐƐŵĞŶƚƐ͗Customer enrollment occurs when CONSULTANT gains customer’s signature on the Program Participation Agreement between CONSULTANT and customer. CONSULTANT will offer customers a range of field-based services, including in- home efficiency assessments. The free efficiency assessment (Level 0) will be a basic consultation at no charge to the customer and will not be advertised; it will be available upon request by CITY for customers with special circumstances (high bill, financial constraints, etc.). Renters in both single family homes and multi-family units will be eligible for the Level 0 assessment, on a case-by-case basis (due to the tenant’s lack of ability to participate in measures included in a comprehensive assessment) with pre-written approval by the CITY. All homeowners will be eligible for a 7.c Packet Pg. 64 Vers.: Aug. 5, 2019 Page 13 of 20 comprehensive in-home efficiency assessment. CONSULTANT agrees to offer Efficiency Assessments with the basic characteristics outlined below, including, but not limited to the measures listed. CITY, in its sole discretion by providing written notice to CONSULTANT retains the right to add, delete, modify or limit the Eligible Measures, maximum number of individual Eligible, maximum number of individual Eligible Measure per customer or per year or other characteristics set forth in REVISED Table B-1: dĂďůĞͲϭWZK'ZDĂƐŝĐŚĂƌĂĐƚĞƌŝƐƚŝĐƐ(June 1, 2015 – June 30, 2018) >ĞǀĞůϬ Free >ĞǀĞůϭ $99 >ĞǀĞůϮ Comprehe nsive $149 Installation of all applicable direct install measures to generate immediate energy savings (2 LED lamps, high efficiency showerheads, faucet aerators, toilet flappers, toilet dye tabs, hose nozzles, door weather-stripping) y y y Field-based advising on energy efficiency topics to encourage energy saving behaviors and the completion of additional energy upgrade measures y y y Field-based overview of historical consumption patterns for water, gas and electric services to drive high customer engagement on behalf of the CITY y y y Visual assessment of the efficiency of the HVAC system(s) yyy Visual assessment of the efficiency of the domestic hot water system(s) y y y Visual assessment of insulation (attic, floor, and walls) yyy Visual assessment of lighting efficiency yyy Visual assessment of windows yyy Visual assessment of the age and condition of major appliances yyy Identification of additional energy saving opportunities (e.g. plug loads) y y y Building envelope leakage (blower door) testing and demonstration y y Duct leakage testing and demonstration y Infrared camera (“IR”) scan and demonstration y Energy software modeling y Home Energy Assessment Report yyy 7.c Packet Pg. 65 Vers.: Aug. 5, 2019 Page 14 of 20 Zs/^dĂďůĞͲϭWZK'ZDĂƐŝĐŚĂƌĂĐƚĞƌŝƐƚŝĐƐ(June 1, 2015 – December 1, 2022) >ĞǀĞůϬ Free >ĞǀĞůϭ $99 >ĞǀĞůϮ Comprehen sive $149 Installation of all applicable direct install measures to generate immediate energy savings (2 LED lamps, high efficiency showerheads, faucet aerators, toilet flappers, toilet dye tabs, hose nozzles, door weather-stripping) y y y Field-based advising on energy efficiency topics to encourage energy saving behaviors and the completion of additional energy upgrade measures y y y Field-based overview of historical consumption patterns for water, gas and electric services to drive high customer engagement on behalf of the CITY y y y Visual assessment of the efficiency of the HVAC system(s) yyy Visual assessment of the efficiency of the domestic hot water system(s) y y y Visual assessment of insulation (attic, floor, and walls) yyy Visual assessment of lighting efficiency yyy Visual assessment of windows yyy Visual assessment of the age and condition of major appliances yyy Identification of additional energy saving opportunities (e.g. plug loads) y y y Building envelope leakage (blower door) testing and demonstration y y Duct leakage testing and demonstration y Infrared camera (“IR”) scan and demonstration y Energy software modeling y Home Energy Assessment Report yyy ů Ğ Đ ƚ ƌ ŝ Ĩ ŝ Đ Ă ƚ ŝ Ž Ŷ Ě Ƶ Đ Ă ƚ ŝ Ž Ŷ Θ Ɛ Ɛ Ğ Ɛ Ɛ ŵ Ğ Ŷ ƚ Electrical Panel Assessment y Electric Vehicle Readiness Assessment Rooftop Solar Readiness Assessment Heat Pump Water Heater Readiness Assessment Heat Pump Space Heating/Cooling Assessment Heat Pump Dryer Readiness Assessment Induction Cooktop Readiness Assessment Storage Assessment Electrification Assessment Report 7.c Packet Pg. 66 Vers.: Aug. 5, 2019 Page 15 of 20 dĂƐŬϯ͘ϰƐƐĞƐƐŵĞŶƚZĞƉŽƌƚƐ͗CONSULTANT will provide assessment customers with customized Home Efficiency Assessment Reports (which may vary in content depending on the type of home) and will include pictures of the customers’ home, findings of the home assessment, and recommendations that will serve as a “map” to help customers navigate the home upgrade process. dĂƐŬϯ͘ϱ&ŝĞůĚYƵĂůŝƚǇŽŶƚƌŽů;YͿ/ŶƐƉĞĐƚŝŽŶƐ͗CONSULTANT will perform in-field QC inspections to ensure quality of participating contractor installed measures and/or installation of high efficiency equipment. CONSULTANT staff will track, analyze, and report on QC results. dĂƐŬϯ͘ϲŽŶƚƌĂĐƚŽƌ DĂŶĂŐĞŵĞŶƚ: CONSULTANT will recruit, support, and provide quality assurance of participating contractors including contractor onboarding, quality assurance inspections, performance tracking, and complaint management. dĂƐŬϯ͘ϳWZK'ZDZĞĨĞƌƌĂůƐ͗CONSULTANT will provide referrals to relevant complementary CITY sustainability programs. CONSULTANT can drive participation in water conservation programs, waste reduction programs, community solar projects, EV programs, pilot programs, etc. CONSULTANT will systematically track customer referrals to complementary programs to quantify indirect benefits of the PROGRAM. dĂƐŬϯ͘ϴDĞĞƚŝŶŐƐ͗CONSULTANT’s Program Manager and/or Associate Program Manager will meet with the CITY team on a monthly basis and will also be available for a weekly check-in phone call with the CITY team. CONSULTANT will be available as necessary at any time to ensure effective PROGRAM implementation. dĂƐŬϰʹ/EsK//E'EZWKZd/E' dĂƐŬϰ͘ϭĂƚĂDĂŶĂŐĞŵĞŶƚ͗CONSULTANT will utilize its data management system to provide data tracking, analysis, and reporting as well as actionable insights regarding real-time PROGRAM performance. In addition to tracking PROGRAM impact, CONSULTANT Energy Advisors track detailed customer information such as barriers and motivations for each account, as well as energy upgrade project status and planned upgrades. CONSULTANT will share customer account records with CITY. dĂƐŬϰ͘ϮZĞƉŽƌƚŝŶŐ͗CONSULTANT will provide CITY reports on a monthly basis in order to complete invoicing. CONSULTANT will also report on the level of additional participation or “lift” that is attributable to its Energy Advisors. CONSULTANT will provide CITY with regular monthly and annual reports in the form of spreadsheets and/or dashboard summary charts as desired by CITY, and will also respond to ad-hoc data requests by CITY. dĂƐŬϰ͘ϯĂƚĂZĞƋƵĞƐƚƐ͗CONSULTANT agrees to work with CITY to respond to CPUC, CEC, or other Federal, State or local data requests or reporting requirements. dĂƐŬϰ͘ϰ/ŶǀŽŝĐŝŶŐ͗CONSULTANT will invoice CITY on a monthly basis consistent with Section 5 of the Agreement, and in accordance with the more specific guidelines set forth in Revised Exhibit “A” and in Revised Exhibit “C”. 7.c Packet Pg. 67 Vers.: Aug. 5, 2019 Page 16 of 20 dĂƐŬϱʹh^dKDZ&< dĂƐŬϱ͘ϭWĞƌĨŽƌŵ ƵƐƚŽŵĞƌ &ĞĞĚďĂĐŬ ^ƵƌǀĞǇƐ: CONSULTANT will address and resolve all customer issues discovered through either survey feedback or other means of customer contact. CONSULTANT will pursue continuous improvements to promote complete customer satisfaction. Customer feedback issues will be tracked by CONSULTANT using the monthly reports, as well as a completed complaint form. CITY retains the right to separately survey PROGRAM participants. dĂƐŬϱ͘ϮŽŵƉůĂŝŶƚEscalation: If any issues cannot be resolved to the satisfaction of the customer by CONSULTANT within five (5) business days, CONSULTANT shall immediately provide CITY with a detailed description of any such complaint, which will include the name and contact information of the customer and any other information requested by CITY. dĂƐŬϲʹWZK'ZDdZD/Ed/KE dĂƐŬϲ͘ϭtƌĂƉͲƵƉ͗The CONSULTANT will resolve all outstanding jobs in progress, as well as customer complaints. dĂƐŬϳʹ^hD/d&/E>WZK'ZDZWKZd dĂƐŬϳ͘ϭ&ŝŶĂůZĞƉŽƌƚ͗CONSULTANT will submit a final report which includes a narrative with an overview of the PROGRAM and a spreadsheet detailing the budget and actual PROGRAM cost. The final report will include PROGRAM Achievements, challenges, goals, and lessons learned. CONSULTANT agrees to deliver the final report within 30 days of the end of the Term as such date may be extended at the sole discretion of CITY. d^<ϴͲ>dZ/&/d/KEhd/KEE^^^^DEd dĂƐŬϴ͘ϭ WƌŽŐƌĂŵ <ŝĐŬͲŽĨĨ DĞĞƚŝŶŐ͗CITY will lead a PROGRAM kick-off meeting with CONSULTANT, as necessary in order to discuss electrification assessment logistics, education materials, marketing coordination, evaluation, monitoring and verification coordination, invoicing and reporting requirements, scope of work, and any contractual issues. dĂƐŬϴ͘ϮWƌŽŐƌĂŵĂƚĂ͕/ŶǀŽŝĐŝŶŐ͕ĂŶĚZĞƉŽƌƚŝŶŐdƌĂŝŶŝŶŐ͗CONSULTANT will train its team and personnel on reporting systems. CONSULTANT agrees to participate in training to learn how to submit monthly reports to CITY’s tracking system as needed. CITY will be invoiced monthly for completed electrification assessments. dĂƐŬϴ͘ϯ^ĐŚĞĚƵůĞŽĨĐƚŝǀŝƚŝĞƐ͗CONSULTANT will finalize the schedule of activities that provide a monthly work plan and implementation timeline and submit such plan to the CITY, for evaluation of the work plan and timeline. dĂƐŬϴ͘ϰWƌŽŐƌĂŵ/ŵƉůĞŵĞŶƚĂƚŝŽŶĂŶĚĞůŝǀĞƌĂďůĞƐ͗ Complete preliminary load calculation for customer to determine a baseline for electrification potential. 7.c Packet Pg. 68 Vers.: Aug. 5, 2019 Page 17 of 20 Educate homeowners about electrification opportunities, processes and related CITY programs and initiatives and provide an Electrification Assessment Report after a home visit. CONSULTANT will assist customer throughout desired electrification process. dĂƐŬϴ͘ϱ/ŶǀŽŝĐĞĂŶĚZĞƉŽƌƚŝŶŐdŽŽůƐ͗CONSULTANT will submit monthly and annual reports with data as requested by the CITY. dĂƐŬϴ͘ϲTasks 8.1 through 8.5 will be integrated into all other tasks congruent with Tasks 1 through 7, so that the Electrification Education and Assessment is integrated seamlessly into the Home Efficiency Genie program. 7.c Packet Pg. 69 Vers.: Aug. 5, 2019 Page 18 of 20 EXHIBIT C COMPENSATION, AMENDMENT NO. 3 (AMENDED, REPLACES PREVIOUS) 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 this Amended Exhibit “C”. The compensation to be paid to CONSULTANT under this Agreement for all services described in Revised Exhibit “A” with prior amendment, including both payment for professional services and reimbursable expenses, shall EKdyOne Million Eight Hundred Twenty Thousand Dollars ($1,820,000) over the Term of the Agreement, which includes the not to exceed amount for Basic Services ($1,609,000) and the not to exceed amount for Additional Services if authorized by CITY ($211,000). CONSULTANT agrees to complete all services 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. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the task budget categories listed in Amended Table C-1 below, provided the total compensation for the Services remains within the not to exceed compensation amount set forth in this Agreement. Total Basic Services: $1,609,000 Total Additional Services: $ 211,000 DĂǆŝŵƵŵdŽƚĂůŽŵƉĞŶƐĂƚŝŽŶ EKddKyDKhEd&ŽƌdĞƌŵŽĨƚŚĞŐƌĞĞŵĞŶƚ Ψϭ͕ϴϮϬ͕ϬϬϬ As set forth in Table C-1 and Amended Table C-1, CITY will compensate CONSULTANT on either a fixed price or time and materials basis based on the task completed by CONSULTANT and approved by CITY. Table C-1 and Amended Table C-1 set forth the NOT TO EXCEED price per task, and such not to exceed amounts include all of CONSULTANT’s costs, including, without limitation, administrative costs, marketing/outreach costs, and direct implementation (materials and labor) costs. It is the CITY’s expectation that approximately 95% of CONSULTANT’s costs be related to direct implementation, marketing and outreach costs (materials and labor) with only approximately 5% reserved for initial, one-time development and set up costs. /d/KE>^Zs/^ 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 either on the rates set forth in Table C-1 and Amended Table C-1, or, where not listed, rates mutually agreed upon by CITY and CONSULTANT. The Additional Services scope, 7.c Packet Pg. 70 Vers.: Aug. 5, 2019 Page 19 of 20 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 Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement, including the not to exceed amount specifically identified in this Amended Exhibit “C”. Refer to Amended Table C-1 for Program Budget for the June 2018 – December 2022 time frame. WzDEd^,h> As described in Section 5 of the Agreement, CONSULTANT will submit invoices, accompanied by complete and accurate reports on work performed, to CITY on a monthly basis. (CONTINUED ON THE NEXT PAGE.) 7.c Packet Pg. 71 Vers.: Aug. 5, 2019 Page 20 of 20 ZĞǀŝƐĞĚdĂďůĞͲϭ͗WZK'ZDƵĚŐĞƚ (July 1, 2021 – December 31, 2022) dĂƐŬ ZĂƚĞͬhŶŝƚ zĞĂƌϭ(1) zĞĂƌϮ zĞĂƌϯ zĞĂƌϰ zĞĂƌϱ zĞĂƌϲ zĞĂƌϲ͘ϱzĞĂƌϳ &zϭϱͲ&zϮϯ &zϭϲ z&zϭϳ &zϭϴ &zϭϵ &zϮϬ &zϮϭ Jul 1-Dec 31 2021 Jan 1 -Dec 31 2022 s>KWDEd Data management system setup and customization(2) Fixed Cost $4,000 $4,000 Energy assessment tool setup and customization(2) Fixed cost $7,500 $7,500 Program Development $100/hr. $6,000 $6,000 Initial Marketing $95/hr. $9,500 $9,500 Program Material Development - Webpage with web-to-lead form Fixed Cost $7,000 $7,000 Program Material Development - Program Collateral(3) By Approval $10,173 $4,000 $2,000 $6,869 $6,869 $6,868 $36,779 dKd>Ed ΨϳϬ͕ϳϳϵ EZ'zs/^KZEĞ^Z;dŝŵĞΘDĂƚĞƌŝĂůƐͿ FY15 Energy Advisor $65/hr. $ 29,731 $ 29,731 FY16 $67/hr. $ 122,610 $ 122,610 FY17 $68/hr. $124,440 $124,440 FY18 $68/hr. $124,440 $124,440 FY19 Energy Advisor $69/hr. $124,440 $124,440 eCSR(4) $48/hr. FY20 Energy Advisor $70/hr. $124,440 $124,440 eCSR(4) $49/hr. FY21-FY23 Energy Advisor $71/hr. $124,440 $60,000 $314,440 eCSR(4) $49/hr. $130,000 dKd>Ed Ψϵϲϰ͕ϱϰϭ ^^^^DEd “Free Assessment” (Level 0) By Approval $350/ Assessment $31,500 $25,200 $25,200 $35,030 $36,860 $38,690 $50,000 $593,680 Level 1 (Not available FY19-21) $450/ Assessment $54,000 $43,200 $43,200 “Comprehensive” (Level 2) $550/ Assessment $66,000 $52,800 $52,800 $20,000 Field QC Inspection By Approval $400 / Inspection $5,600 $6,400 $7,200 Promotional Opportunities/Genie Express (ϱͿ By Approval dKd>Ed Ψϱϵϯ͕ϲϴϬ /d/KE>^Zs/^ Additional Services/ New Measures(ϲͿ By Approval $15,168 $15,166 $5,260 $15,168 $15,166 $5,000 $10,166 $81,094 Tier 2 Advanced Powerstrips Approved Purchase (250 units) $9,906 $9,906 Electrification Assessment w/ $0 Customer co- pay $250/ Assessment $20,000 $20,000 $15,000 $25,000 $100,000 w/ $49 Customer co- pay $200/ Assessment $20,000 dKd>Ed Ψϭϵϭ͕ϬϬϬ ^ƵďƚŽƚĂůEd Ψϯϲϴ͕ϳϴϮ ΨϮϳϭ͕ϮϬϲ ΨϮϳϬ͕ϬϬϲ ΨϮϬϭ͕ϱϬϳ ΨϮϬϯ͕ϯϯϱ Ψϭϴϵ͕ϵϵϴ Ψϭϰϱ͕ϭϲϲΨϭϳϬ͕ϬϬϬΨϭ͕ϴϮϬ͕ϬϬϬ DĂǆŝŵƵŵdŽƚĂůŽŵƉĞŶƐĂƚŝŽŶEKddKyDKhEd&ŽƌdĞƌŵŽĨƚŚĞŐƌĞĞŵĞŶƚ Footnotes: (ϭͿYear 1 includes one additional month from FY15 (June 2015) preparing for the Agreement to launch (ϮͿFixed fee compensation to be paid by CITY to CONSULTANT upon completion of task. (ϯͿCONSULTANT will submit price quote(s) to CITY for PROGRAM collateral costs prior to incurring such costs. CITY shall approve all such costs in advance and will only compensate CONSULTANT for such PROGRAM collateral costs where CONSULTANT has secured approval of price quotes from CITY in advance. (ϰͿCONSULTANT will provide a junior Efficiency Advisor responsible for providing phone-based efficiency advising services and ME&O on an as- needed basis when Energy Advisor is not available. CONSULTANT will get approval from the CITY when this staff member becomes available. (5) Promotional Opportunities (Assessments with limited time discounts) and/or Genie Express (Assessments with bulk discount for direct installs) available only upon approval by City. (ϲͿCITY, in its sole discretion by providing written notice to CONSULTANT retains the right to add, delete, modify or limit the Eligible Measures, Cost per Unit, maximum number of individual Eligible Measures per customer or per year or other characteristics set forth in this column 7.c Packet Pg. 72 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϲϴϬͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨĂWƌŽĨĞƐƐŝŽŶĂů^ĞƌǀŝĐĞƐŐƌĞĞŵĞŶƚtŝƚŚ>ZĞƐƵůƚĨŽƌ ĨĨŝĐŝĞŶĐǇĂŶĚůĞĐƚƌŝĨŝĐĂƚŝŽŶWƌŽŐƌĂŵ^ĞƌǀŝĐĞƐĨŽƌ^ŵĂůůƚŽDĞĚŝƵŵƵƐŝŶĞƐƐ ĂŶĚŽŵŵĞƌĐŝĂůƵƐƚŽŵĞƌƐĨŽƌĂdŽƚĂůEŽƚ ͲƚŽͲǆĐĞĞĚŵŽƵŶƚΨϮ͕ϱϳϭ͕ϳϭϰĨŽƌ ĂdŚƌĞĞ ͲzĞĂƌdĞƌŵdŚƌŽƵŐŚĞĐĞŵďĞ ƌϯϭ͕ϮϬϮϰ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗hƚŝůŝƚŝĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends the City Council approve and authorize the City Manager or their designee to execute a professional services contract (C22177024A) with CLEAResult Consulting, Inc. (linked document) for the administration of the Small Business Energy Advisor Progr am to deliver energy and water efficiency services to small and medium business customers and the Commercial Electrification Assistance Program to provide technical assistance to support commercial building electrification in Palo Alto. The total not-to-exceed amount for the contract covering both programs is $2,571,714 over a three-year term through December 31, 2024. ĂĐŬŐƌŽƵŶĚ Council has adopted several policies which support funding programs that maximize the deployment of cost-effective, reliable and feasible energy efficiency (EE) within the City. Council adopted the City’s first 10-year electric and gas EE goals in 2007, with a cumulative reduction target of 3.5% electric and gas EE savings (35,000 MWh and 1,200,000 therms) between 2008 and 2017. Since then, Council adopted updates to the EE goals in 2010, 2013, 2017, and most recently, in May 2021 (Staff Report ID # 12068) for the 10-year period between 2022 and 2031. The cumulative electric savings target in the latest EE goals is 4.4% (or 37,940 MWh) of the City’s projected electric usage in 2031. In order to achieve the aggressive EE goals, the City has contracted with third-party EE service providers since 2006 to expand the reach of EE program services for its customers. On February 3, 2020, Council approved a contract with Lime Energy Services (“Lime Energy”) to provide EE services to small and medium business (“SMB) customers.1 However, with COVID-19 restrictions in place since March 17, 2020, many businesses allowed only essential workers 1 Staff Report on Approval of Contract with Lime Energy Services, February 3, 2020. 8 Packet Pg. 73 City of Palo Alto Page 2 onsite. Lime Energy was unable to launch its program as planned. The contract between the City and Lime Energy was amended on February 24, 2021 whereby the City will pay Lime Energy for the installation of a cloud-based HVAC energy management system (EMS) and MERV 13 air filters at small and medium businesses at no cost to the customer. The EMS ensures efficient operation of the customer’s HVAC system, while the MERV 13 filters improve indoor air quality through hourly air circulation. The HVAC program, currently marketed as the Business Advantage Program, was launched in March 2021, and has been well received. The Lime Energy contract will be amended to reflect a reduction in scope because they are unable to provide other EE services to SMB customers in Palo Alto2. This will leave a gap in helping the SMB customer segment achieve cost effective EE savings outside of HVAC control energy savings. Staff believes there is cost-effective energy and water efficiency potential in the SMB customer segment, and that it is important to provide comprehensive assistance to help small business owners with efficiency project implemen tation because they typically have no dedicated facility manager on their staff. Along with its EE goals, Council has adopted the ambitious goal of reducing the community’s GHG emissions to 80% below 1990 levels by 2030 (“80x30”)3. As of 2019, the community’s GHG emissions are 38% below 1990 levels. At the April 19, 2021 Council meeting, staff presented a set of draft goals and key actions as part of the Sustainability/Climate Action Plan Update to meet the 80x30 goal. At that meeting, Council directed st aff to develop a plan for earlier adoption of commercial electrification retrofits. ŝƐĐƵƐƐŝŽŶͬŝĚWƌŽĐĞƐƐ In order to achieve the City’s aggressive EE and GHG emissions reduction goals, CPAU issued a Request for Proposal (“RFP”) on November 25, 2020 for third-party program services through PlanetBids. Proposers could respond to one or more of the following three program categories . This item seeks authorization for approval of a contract to deliver program services outlined in Category 1. Category 1: Develop and administer performance-based energy efficiency, electrification, and/or water efficiency programs for commercial and industrial (C&I) customers Category 1 targets the nonresidential segment, with a focus on large C&I customers, to provide energy efficiency, electrification, and/or water efficiency program services to the customers. Historically, EE savings from large C&I customers represent the largest portion of EE savings compared to other customers and are also more cost effective than the savings from residential customers and hard-to-reach customers including small to medium businesses. Since this is a performance-based program, the 3rd party program administrator will be compensated solely based on achieved efficiency savings and/or electrification. Both equipment retrofit and new construction projects are eligible efficiency projects under this program category. 2 Lime Energy downsized their operations in Northern California during COVID and did not have the resources to deliver EE services in Palo Alto. 3 City of Palo Alto City Council Action Minutes, April 18, 2016. 8 Packet Pg. 74 City of Palo Alto Page 3 Category 2: Develop and administer a beneficial electrification technical assistance program for small and medium commercial customers Category 2 is an optional scope in the RFP and is intended to provide technical assistance to small and medium commercial customers to pursue electrification projects to reduce natural gas consumption in their buildings. Category 2 was modeled after the Building Electrification Technical Assistance Program offered by Peninsula Clean Energy and Silicon Valley Clean Energy, and was intended to support building owners with designing and implementing electrification projects. Technical advisory service from subject matter experts would be available on an as requested basis. The selected program administrator would be compensated on a time and materials basis for its advisory services. Category 3: Conduct Energy Studies for C&I customers Category 3 is a solicitation for consultants who can provide engineering studies at large C&I customer facilities. The consultant will work directly with the customer to determine the study scope and compensation; CPAU will provide the names of prequalified consultants to customers interested in undertaking energy studies. Examples of such studies may include whole or partial building electrification feasibility and cost assessment, power factor correction to the City’s 95% standard, energy storage assessment. The number of proposals that responded to the various program categories are summarized in Table 1. dĂďůĞϭ͗^ƵŵŵĂƌǇŽĨ^ŽůŝĐŝƚĂƚŝŽŶWƌŽĐĞƐƐ PROPOSAL DESCRIPTION/ NUMBER IMPLEMENTATION OF 3RD PARTY ENERGY AND WATER EFFICIENCY AND ELECTRIFICATION PROGRAMS FOR COMMERCIAL CUSTOMERS RFP #177024 Proposed Program Length 36 months, with two possible 12-month extensions Number of Notices Sent to Vendors via City’s Eprocurement System (Planetbids) 1,657 Number of Packages Downloaded by Vendors 46 Total Days to Respond to RFP 55 Number of Proposals Received for Category 1 4 Number of Proposals Received for Category 2 5 Number of Proposals Received for Category 3 5 8 Packet Pg. 75 City of Palo Alto Page 4 Staff received five proposals (though only four focused on Category 1). As a result of their proposals in Category 3, all five proposers are qualified to conduct energy studies to large C&I customers and will be provided to customers on an as-requested basis. In reviewing proposals for Category 1, staff noted that some proposers have more experience working primarily with large C&I customers, while other proposers have more direct experience in SMB customer programs. Staff selected Enovity as the finalist for Category 1 to focus on providing EE services to large C&I customers based on its competitive pricing and track record with implementing EE programs in this sector. On August 30, 2021, Council approved the 3-year Enovity contract for a not-to-exceed amount of $1,985,000 between FY 2022 and FY 20244, of which $1,713,000 is budgeted for the achievement of 49,660 MWh in lifetime electric savings and 416,000 therms in lifetime gas savings (Staff Report #13531). For Category 2, as noted above, this category of the RFP sought optional proposals to develop and administer a beneficial electrification technical assistance program for small and medium commercial customers that would be time and materials based. After reviewing submittals and upon further reflection, staff concluded that a better approach for this program would be to base compensation on achieved electrification savings rather than time and materials, in order to comply with the Council’s directive to accelerate commercial electrification retrofits. Additionally, the limited available services under the Lime Energy contract contributed to a gap in the CITY’s commitment to provide comprehensive EE services to SMB customers. Accordingly, staff issued a follow-up request on July 21, 2021 to two of the Category 1 finalists for: (i) a performance-based energy and water program serving SMB customers, and (ii) a performance-based building electrification program for nonresidential customers, with a focus on SMB customers. The proposers were asked to provide the proposed 3-year program goals and budget in their proposals. Based on this follow-up request, two proposals were received. One proposal was subsequently rescinded by the proposer and the other, from CLEAResult, was reviewed by Utilities staff. Staff conducted an interview and based on proposal content and criteria identified in the RFP, determined that CLEAResult provided a cost effective and high-quality proposal. Staff recommends the selection of CLEAResult based on their competitive pricing, comprehensive solution to the target customer segment, knowledge of EE in the industry, and experience in providing performance-based energy and water program services. For SMB customers, CLEAResult proposed a Small Business Efficiency Advisory Program (“SBEA”) that offers multi-measure, comprehensive water and energy efficiency advisory services that includes: • engaging SMB customers through marketing and direct outreach • setting up a dedicated phone line for phone-based advising service 4 Staff Report on Approval of Professional Services Agreement with Enovity, Inc ., August 30, 2021 8 Packet Pg. 76 City of Palo Alto Page 5 • performing a no-cost energy audit for interested customers to identify cost effective efficiency measures (both onsite and virtual assessment options are available) • providing an assessment report that highlights cost effective efficiency opportunities, CPAU rebates and financing options • supporting the customer with finding a contractor and advising throughout the project implementation process • processing the customer rebate application. SBEA has a proposed 3-year program savings goal of 2,400,00 kWh, 30,000 therms and 1,500 CCF. If fully implemented, the SBEA program including customer rebates will cost $1,117,328, with estimated savings of $1,336,650 based on the avoided electric, gas and water supply cost, and therefore is cost effective. For nonresidential electrification, CLEAResult proposed a Commercial Electrification Assistance Program (“CEAP”). CEAP is designed to assist nonresidential customers with converting gas equipment to efficient electric alternatives at their facilities. The program will target the replacement of rooftop mixed-fuel packaged units and gas water heaters in nonresidential buildings, and will also address gas equipment in commercial kitchens, pools and spas where applicable. The program will cover the following services: • engaging commercial building owners and property managers through marketing and direct outreach • performing an electrification assessment at customer site to inventory the physical condition, age, and remaining lifespans of gas burning assets; identify electrification opportunities; evaluate current electric capacity and potential upgrades to enable the proposed electrification measures; recommend locations for new electrical equipment; and summarize the available CPAU rebates and financing options. • Providing project implementation support to the customer, including contractor bid selection and permit application The metric for electrification savings is net kWh savings, as calculated base d the annual gas savings converted to kWh, minus the annual net increase in electric use of proposed equipment. CEAP has a proposed 3-year program savings goal of 5,423,350 net kWh, with an estimated GHG emissions reduction of 19,899 MT over the lifetime of the implemented electrification measures. If fully implemented, the CEAP program will cost up to $1,454,386. The proposed professional services contract with CLEAResult, which covers both programs, will have a total not-to-exceed amount of $2,571,714 over a three-year term, with the possibility to extend the term for two additional years. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ Spending authority to cover the first year of the CLEAResult contract, approximately $687,000, is available in the FY 2022 Adopted Operating Budget. Funding comes from three budget 8 Packet Pg. 77 City of Palo Alto Page 6 sources: Electric Public Benefits, Gas Efficiency, and Water Efficiency. Electric Public Benefit funds are collected via a state-mandated public benefit surcharge of 2.85% of the electric utility revenue to fund any of these four program areas: (i) cost effective energy efficiency and energy conservation programs, (ii) renewable energy resources and technologies, (iii) electricity - related research, development, and demonstration projects (iv) low -income customer assistance5. CPAU has spent an average of 1% of the natural gas utility’s revenues to fund gas public benefit programs 6. Specifically, the projected electric, gas and water efficiency savings for SBEA will be funded using the Electric Public Benefit, the Gas Efficiency, and the Water Efficiency funds. Commercial electrification is an emerging area and is therefore funded under the research, development, and demonstration area of the Electric Public Benefit funds. Contract year two and three are estimated to cost approximately $872,000 and $1.0 million, respectively. Funding for contract years two and three is contingent upon Council’s approval of the department’s budget through the annual budget process for each subsequent year. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ The proposed contract supports the Council-approved Sustainability Plan, the Council-approved Ten-year Energy Efficiency Targets, Comprehensive Plan Goals N4.2.1 (educate customers on efficient water use), N7.4.2 (implement cost effective energy efficiency programs for all customers) and N7.7.2 (explore the transition of existing buildings from gas to electric or solar water and space heating). The contract also further s the Utilities Strategic Plan Collaboration priority (Strategy 1, increasing communication and engagemen t with the community). ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ The City issued the Request for Proposal (RFP) on November 24, 2020 , for third-party energy and water efficiency and electrification program services for commercial and industrial customers. Proposal submission deadline was on January 18, 2021. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ Approval of the third-party agreement proposed in this staff report does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to the California Public Resources Code Section 21065, because it is not an activity that will cause a direct physical change in the environment. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϴ͘Ă͗Attachment A: CLEAResult Consulting, Inc. Contract, C22177024A 5 California Public Utilities Code Section 385 6 AB 1002 (2000) established a surcharge on all natural gas consumption to fund public purpose programs; however, this legislation exempts municipal gas utilities that offers in published tariffs home weatherization services, rate assistance for low-income customers or other public purpose programs from collecting a public benefit surcharge on gas consumption. This is codified in Section 898 of the Public Utilities Code. 8 Packet Pg. 78 Professional Services Rev. Dec.15, 2020 Page 1 of 57 CITY OF PALO ALTO CONTRACT NO. C22177024A AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND CLEARESULT CONSULTING, INC. This Agreement for Professional Services (this “Agreement”) is entered into as of the 15th day of November, 2021 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CLEAResult Consulting Inc., a Texas corporation, located at 6504 Bridge Point Pkwy, Suite 425, Austin, Texas 78730 (“CONSULTANT”). The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference: RECITALS A. CITY intends to provide energy and water efficiency advisory services to the CITY’s small to medium business customers and also to provide building electrification technical assistance to nonresidential customers (the “Project”) and desires to engage a consultant to develop and implement a Small Business Energy Advisor Program and Commercial Electrification Assistance Program in connection with the Project (the “Services”, as detailed more fully in Exhibit A). B. CONSULTANT represents that it, its employees and subconsultants, if any, possess 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, entitled “SCOPE OF SERVICES”. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows: 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. 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 Exhibit B, entitled “SCHEDULE OF PERFORMANCE”, but in no event later than December 31, 2024, unless terminated earlier pursuant to Section 19 (Termination) 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, entitled “SCHEDULE OF PERFORMANCE”. 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 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 79 Professional Services Rev. Dec.15, 2020 Page 2 of 57 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 shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Two Million Five Hundred Seventy One Thousand and Seven Hundred Fourteen Dollars ($2,571,714.00). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY. 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, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of 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 invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it, its employees and subcontractors, if any, possess 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 subcontractors, if any, 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 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, as amended from time to time. 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. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 80 Professional Services Rev. Dec.15, 2020 Page 3 of 57 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 the CITY’s stated construction budget by ten percent (10%) or more, 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. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement. CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT will be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT’s performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT’s provision of the Services only, and not as to the means by which such a result is obtained. 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 approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the parties. SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 (Assignment) above, CITY agrees that subcontractors may be used to complete the Services. Prior to utilizing any subcontractor to perform work associated with the Project, CONSULTANT shall provide the name of the subcontractor/s to CITY’s Project Manager for preapproval. CITY shall hold final approval authority over subcontractors. CITY reserves the right to (i) request CONSULTANT conduct criminal background checks to CITY’s satisfaction on all CONSULTANT’s staff, subcontractors, or agents that may enter customer property, and (ii) require that any staff, subcontractor, or agent of CONSULTANT that fails the background check shall not be permitted to enter any customer premises. CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with the prior written approval of the City Manager or designee. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 81 Professional Services Rev. Dec.15, 2020 Page 4 of 57 SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Cameron Guy as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day-to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager 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 CONSULTANT 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 Services or a threat to the safety of persons or property. CITY’s Project Manager is Christine Tam, City of Palo Alto Utilities Department, Resource Management Division, 250 Hamilton Avenue, Palo Alto, CA, 94301, Telephone: (650) 329-2289. CITY’s 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. All work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, 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 product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product 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 Services. SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall 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 attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 82 Professional Services Rev. Dec.15, 2020 Page 5 of 57 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 a Claim arising from the active 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. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 29.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy. 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, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage. CONSULTANT shall provide the Purchasing Manager written notice of any 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. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 83 Professional Services Rev. Dec.15, 2020 Page 6 of 57 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. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination, CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination. 19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials). 19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the 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 provided in material conformity with this Agreement as such determination is 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, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30. 19.4. 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, unless made in accordance with Section 17 (Waivers). 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: CLEAResult 100 SW Main Street, Suite 1500 Portland, OR 97204 Attn: Legal Department CONSULTANT shall provide written notice to CITY of any change of address. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 84 Professional Services Rev. Dec.15, 2020 Page 7 of 57 SECTION 21. CONFLICT OF INTEREST. 21.1. In executing 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 subcontractors or other persons or parties 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, as amended from time to time. CONSULTANT agrees to notify CITY if any conflict arises. 21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time. SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA. 22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. 22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement. 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, hereby incorporated by reference and as 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: DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 85 Professional Services Rev. Dec.15, 2020 Page 8 of 57 (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’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 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. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to time. 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. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract: (1) is not a public works contract; (2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j). SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 86 Professional Services Rev. Dec.15, 2020 Page 9 of 57 Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”. This Project is not a 9204 Public Works Project. SECTION 28. CONFIDENTIAL INFORMATION. 28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose. CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement. 28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY. 28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order. 28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time. 28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 87 Professional Services Rev. Dec.15, 2020 Page 10 of 57 and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT. 28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions. SECTION 29. MISCELLANEOUS PROVISIONS. 29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions. 29.2. 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. 29.3. 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. 29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time. 29.5. If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in full force and effect. 29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control. 29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement. 29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. 29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 88 Professional Services Rev. Dec.15, 2020 Page 11 of 57 SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein: EXHIBIT A: SCOPE OF SERVICES EXHIBIT B: SCHEDULE OF PERFORMANCE EXHIBIT C: COMPENSATION EXHIBIT C-1: SCHEDULE OF RATES EXHIBIT D: INSURANCE REQUIREMENTS EXHIBIT E: INFORMATION PRIVACY POLICY EXHIBIT F: CYBERSECURITY TERMS AND CONDITIONS THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 89 Professional Services Rev. Dec.15, 2020 Page 12 of 57 CONTRACT No. C22177024A SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written. CITY OF PALO ALTO ____________________________ City Manager Date: APPROVED AS TO FORM: __________________________ City Attorney or designee Date: CLEARESULT CONSULTING, INC. Officer 1 By: Name: Title: Date: Officer 2 (Required for Corp. or LLC) By: Name: Title: Date: DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF Senior Vice President Andrea White 11/8/2021 Chief Legal Officer 11/8/2021 Joe Mattoon 8.a Packet Pg. 90 Professional Services Rev. Dec.15, 2020 Page 13 of 57 EXHIBIT A SCOPE OF SERVICES CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. The City of Palo Alto (“CITY”) has adopted an aggressive greenhouse gas (“GHG”) emissions reduction goal of reducing emissions to 80% below 1990 levels by 2030; building electrification is a key strategy to meeting this goal. Natural gas use by nonresidential customers account for 55% of the City’s natural gas consumption, or around 18% of the City’s GHG emissions reductions as of 2019. To meet its sustainability goals, the City is encouraging business customers and nonresidential building owners to pursue cost-effective energy efficiency and electrify their buildings to reduce the use of natural gas. CONSULTANT will leverage its technical expertise and local experience to deliver the following programs within the City of Palo Alto: (i) Small Business Energy Advisor Program is a water and energy efficiency program targeting small to medium business customers, primarily in buildings under 50,000 sq.ft.(“SBEA”); (ii) Commercial Electrification Assistance Program is a nonresidential building electrification program that provides technical assistance to help building owners convert gas equipment to efficient electric alternatives (“CEAP”). Each a (“Program”) and together (“Programs”). City of Palo Alto Utilities (“CPAU”) will provide customer energy consumption data to CONSULTANT to analyze energy use and pre-screen eligible customers to receive services. A. OVERVIEW OF SBEA Brief Program Description This Program is designed to assist small and medium business (“SMB”) customers with achieving cost effective energy efficiency (“EE”) and water savings at their facilities by offering turnkey, multi-measure, comprehensive energy efficiency advising services. The Program will target water, gas, and electric energy efficiency of both existing and new energy-consuming equipment at the customer sites. CONSULTANT will engage SMB customers through marketing and direct outreach to perform a site assessment. The site assessment will identify energy efficiency measures (“EEM”) and estimated project cost. CONSULTANT will support the customer with finding a contractor, advising throughout the process of implementing the EEM(s), verifying quality installation, and submitting the rebate application. The Program’s target markets include private schools and nonprofits, retail/office spaces, convenience/grocery store, restaurants, institutions, hotels, motels, and other small and medium commercial establishments, excluding the CITY’s designated Key Account Customers. CITY buildings are not covered by this Program. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 91 Professional Services Rev. Dec.15, 2020 Page 14 of 57 SBEA Target The program targets for the term of the Agreement are provided in Table A.1 Table A.1 - SBEA Targets Term Year 1 Year 2 Year 3 Total Gross kWh savings 600,000 800,000 1,000,000 2,400,000 Gross therm savings 6,000 11,000 13,000 30,000 Water savings in centum cubic feet (“CCF”) 300 575 625 1,500 Eligible Measures All measures listed in the CPAU rebate catalog for business customers are eligible under this Program. Custom EE measures, new prescriptive measures, and other emerging technologies need to be pre-approved by City Project Manager in advance of installation or inclusion in the Program in order for CONSULTANT to receive compensation for such measures. CONSULTANT shall provide the projected energy and water savings and supporting documentation for the savings estimates to CITY for measures not covered by the CPAU rebate catalog for business customers. Projected energy and water savings must be based on credible sources such as the California Technical Forum (“CalTF”) electronic Technical Reference Manual (“eTRM”), California Public Utility Commission (“CPUC”) Database for Energy Efficiency Resources, approved workpapers, etc. Program Staffing CONSULTANT agrees to staff the Program in accordance with the Staffing Plan set forth below in Table A.2. CONSULTANT shall notify the CITY concerning proposed changes to the Staffing Plan; all such changes require prior written consent of the CITY. CITY reserves the right to (i) request CONSULTANT conduct criminal background checks to CITY’s satisfaction on all CONSULTANT’s staff, contractors or agents that may enter customer property, and (ii) require that any staff, contractor, or agent of CONSULTANT that fails the background check shall not be permitted to enter any customer premises. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 92 Professional Services Rev. Dec.15, 2020 Page 15 of 57 Table A.2. SBEA Staff Contacts Name Title Phone Email Joanne O’Neill Sr. Program Director 415-965-3023 Joanne.Oneill@clearesult.com Develops strategies and tactics to deliver effective program performance by directing the work of employees assigned to the program from technical, marketing, operations, analytics, and administrative areas. Ann Marie Mastrippolito Program Portfolio Manager 415-965-3004 AnnMarie.Mastrippolito@clear esult.com Responsible for overseeing the portfolio of non-residential programs in California and will instill best practices to enable the Program to be delivered within budget to meet Program goals. Cameron Guy Program Manager 415-963-9863 Cameron.Guy@clearesult.com Serves as Program Manager and primary point of contact for the CITY. Verifies the Program is delivered within budget and is responsible for managing, training, and mentoring the implementation team. Kelly Lewis Program Specialist Kelly.Lewis@clearesult.com Supports the delivery of projects and programs by leading data management, metrics and reporting, team facilitation and coordination, and process definition and improvement. To Be Hired Sr. Commercial Field Specialist Performs site assessments of customer facilities and generates reports detailing findings. Provides support for technical or measure specific questions. To Be Hired Account Manager Acts as consultative sales representative to customers’ organization to understand their business and energy objectives and guide them towards solutions. Supports custom project development, aiding the customer through the process. To Be Hired Energy Advisor Provide phone and email-based customer support and advising. This includes fielding customer inquiries, responding to requests and using behavioral science tactics to drive program adoption. King Lee Sr. Engineering Manager 415-965-3014 Verifies the Program achieves performance goals by developing strategies to improve our engineers’ services to consistently delivering high quality work on time and within budget. Manish Kumar Energy Engineer IV Leads the development and delivery of energy efficiency programs by providing engineering calculations, building energy simulations, measurement and verification, and utility program technical design and assistance. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 93 Professional Services Rev. Dec.15, 2020 Page 16 of 57 Erika Sheen Energy Engineer II Erika.sheen@clearesult.com Supports the development and delivery of energy efficiency programs by providing engineering calculations, building energy simulations, measurement and verification, and utility program technical design and assistance. Ashley Tackitt Marketing Account Manager 503-688-1557 Ashley.Tackitt@cleare sult.com Develops marketing material that may include brochures, flyers, displays, postcards, direct mail letters, bill inserts, and press releases. Program Implementation & Delivery Task A.1 PROGRAM KICK OFF Task A.1.1 Program Kick-Off Meeting CONSULTANT will develop agenda for Program Kick Off Meeting and organize the Kick-Off Meeting with CITY staff to review PROGRAM design and delivery, roles, timelines and priorities in the delivery of the PROGRAM. The meeting will also cover logistics, marketing, coordination, measurement and verification activities, establishing workflow systems, invoicing requirements, reports, and any remaining contractual questions. CONSULTANT and CITY will discuss new technologies as potential eligible measures, where appropriate, refine timelines and identify additional CITY needs for the PROGRAM. CONSULTANT will identify customer data needs from CPAU to inform customer segment analyses and outreach. Task A.1.1 Deliverable: Meeting agenda and meeting minutes Task A.1.2 Develop Program Plan In coordination with CPAU staff, CONSULTANT shall develop the following documents: (a) Policies and Procedures Manual CONSULTANT shall develop, adhere to, and document its compliance with the Policies and Procedures Manual in the Program’s implementation, including the terms and conditions for customers participating in the Program, the process for customers participating in the program and receiving incentive funds, customer complaint and resolution plan, the process for identifying, implementing, measuring and verifying energy efficiency measures, and the process for rebate application and processing. The Policies and Procedures Manual shall also include a Quality Assurance and Quality Control Plan. Task A.1.2.a Deliverable: Program Policies and Procedures Manual (b) Marketing Plan CONSULTANT shall develop a Marketing Plan that outlines marketing activities to reach the target customers. Marketing activities may include outbound call campaign, customer workshops, and webinars. The Marketing Plan will identify outreach activities, workshops, locations, and frequency. CONSULTANT may enlist the assistance of local affinity groups, including the Palo Alto Chamber of Commerce, the Palo Alto Merchant Association and various property management companies to better enable CONSULTANT to serve CPAU DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 94 Professional Services Rev. Dec.15, 2020 Page 17 of 57 customers. CONSULTANT shall track and capture data on how customers are finding out about the program. Task A.1.2.b Deliverable: Program Marketing Plan Task A.1.3 Develop Program Documents CONSULTANT shall develop documents necessary for Program implementation and submit such to CPAU for approval before any distribution, circulation, or publication. CONSULTANT shall revise and produce new documents as needed to implement and promote the Program. (a) Program Website Content In collaboration with CITY staff, CONSULTANT will design and produce informational web content related to the Program, which the CITY will publish. CITY shall provide input on web content as requested by CONSULTANT and CITY maintains final rights approval. The Program website will include a customer sign-up web-to-lead HTML form. Task A.1.3.a Deliverable: Program Website Content (b) Customer Site Assessment Report Template CONSULTANT shall create a Customer Site Assessment Report Template that includes the necessary information for a customer to understand their energy and water usages and efficiency opportunities. In addition, it will include information on available rebates and financing options available. Projected. energy and water savings must be based on credible sources such as the Cal TF eTRM, CPUC Database for Energy Efficiency Resources, approved workpapers. Task A.1.3.b Deliverable: Customer Site Assessment Report Template (c) Program Participation Agreement CONSULTANT shall create a Program Participation Agreement that collects basic information from the customer, including facility contact information . The Program Participation Agreement will also act as a Site Access Agreement for the Program. Task A.1.3.c Deliverable: Program Participation Agreement (d) Incentive Release and Customer Feedback CONSULTANT shall develop a Incentive Release template to facilitate the disbursement of the incentive to the customer or an assigned third-party, acknowledge receipt of the project, and obtain customer feedback including the Net Promotor Score value. The Incentive Release and Customer Feedback template shall be reviewed and approved by CPAU. Task A.1.3.d Deliverable: Incentive Release and Customer Feedback Template (e) Program Invoice and Reporting Template DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 95 Professional Services Rev. Dec.15, 2020 Page 18 of 57 CONSULTANT shall create a standard Program report template to meet CPAU’s reporting requirements, including monthly invoice, quarterly Program report, annual Program report. CONSULTANT shall work with CITY to finalize Program performance metric to include in the Program reports. These metrics may include: number of customers participating in the Program, energy savings, completed customer projects, customer satisfaction/net promoter score, customer contact information, summary of customer compliments and/or complaints, reasons for rejection of proposed installations by customer. CONSULTANT shall submit the Program invoice and reporting templates to CPAU for review and approval before use. Task A.1.3.e Deliverable: Program Invoice and Reporting Templates, and inputting of data into CPAU’s assigned database Task A.1.4 Establish SBEA customer incentive levels CONSULTANT shall propose SBEA customer incentives at the measure level, using the Business Customer Rebates as a starting point, and submit to CPAU for approval before program launch. CONSULTANT shall provide additional information such as incremental and total measure cost, and customer payback calculation as requested by CITY in order to review and approve the proposed incentives. TASK A.2 – PROGRAM IMPLEMENTATION Task A.2.1 Rebate Administration CONSULTANT will provide a portal for rebate application submission and administration. This portal will collect the necessary information from customers and/or contractors that have executed agreements to participate in the Program (“Trade Allies”) to verify customer and measure eligibility, the details of which will be described in the Policies and Procedures Manual. CITY will provide CONSULTANT with customer account data for the purposes of validating eligibility. This portal will track installations, rebate applications and other associated key metrics that will be included in reporting to the CITY. CONSULTANT will manage the rebate application process, including application verification and issuance of rebate payments to customers or their delegates. After verification of an application, CONSULTANT will submit an incentive invoice to the CITY. After payment is received from the CITY, CONSULTANT will issue rebate to participant. SBEA incentives will be set by the CONSULTANT with agreement from the CITY. They will be based on the CPAU rebate catalog for business customers with higher incentive levels to address the unique barriers of the SMB segment. These incentive levels will be determined and submitted to CPAU in advance of Program launch. Task A.2.1 Deliverable: Customer rebate application portal customized for SBEA Task A.2.2 Recruit, Train and Manage Trade Allies CONSULTANT will recruit, train, and manage a network of Trade Allies who provide DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 96 Professional Services Rev. Dec.15, 2020 Page 19 of 57 energy efficiency services to SMB customers in the City of Palo Alto. The goal of this network is to verify there are qualified and trained contractors available and to reduce the participation barrier for customers associated with identifying installers to perform the work. CONSULTANT shall provide in-person and/or online training on the Program process, eligibility requirements, incentives, and a high-level overview of typical measures and their applications to Trade Allies. A Program representative shall be available to assist Trade Allies on an on-going basis to answer any questions related to the Program. Task A.2.3 Implement Marketing and Outreach Plan CONSULANT will conduct marketing, education, and outreach (“ME&O”) through a variety of channels, targeting property owners, property management companies and local businesses among others to generate leads for the Program. (a) Marketing Materials In collaboration with CITY staff, CONSULTANT will develop marketing material that may include brochures, flyers, displays, postcards, direct mail letters, bill inserts, dynamic digital content such as videos and web content, and press releases. Determination of applicable materials will be made by the CONSULTANT as tools to deliver on Program goals. CITY shall have final decision-making authority about if and when to print and mail marketing material. CITY maintains the right to control all materials being distributed by CONSULTANT while considering potential impacts to program goals. Customer mailing lists for direct mail pieces shall be determined by CITY; however, CONSULTANT may provide input, suggested mailing lists and methodologies. If applicable, CONSULTANT and CITY shall design email marketing campaigns and email customer satisfaction surveys; CITY maintains final rights of approval. CITY shall be responsible for sending the email marketing information and tracking responses if they choose. CONSULTANT shall co-brand all marketing material with CPAU’s logo in a prominent location and follow all CITY style, color and branding guidelines. CONSULTANT shall not use CPAU’s logos or brand standards without the approval of CITY. CONSULTANT shall submit to CITY all marketing materials, including press releases, brochures, social media posts and any other content mentioning the Program in any capacity for approval prior to publishing said Program materials. (b) Marketing, Education and Outreach Implementation CONSULTANT will begin an initial ME&O campaign to SMBs to drive awareness of the Program, establish relationships and discuss the services offered through the Program. This campaign includes: • Outreach to SMBs through targeted direct marketing and phone campaigns. • Recommend content to CITY to directly promote the Program through bill inserts, email communications, direct mail postcards and other relevant marketing channels. • Assist CITY to launch Program webpages with web-to-lead forms for DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 97 Professional Services Rev. Dec.15, 2020 Page 20 of 57 customer sign- ups which are directly linked to CONSULTANT and CITY’s data management system. • Provide CITY Account Management team with Program training. CONSULTANT will develop Program talking points for use by Key Account Managers and other Program stakeholders. (c) Financing education and referrals CONSULTANT will provide customers with information about financing offerings that are available to help drive project adoption through Energy Advisor and Account Management team. Task A.2.4 Program Enrollment and Support CONSULTANT will field customer inquiries, enroll them in the assessment program, and support and encourage customers to complete energy and water efficiency improvements. • CONSULTANT will encourage and track progress of all interested participants. • Communicate Program details to customers and educate them on the process of obtaining an assessment and performing efficiency upgrades. • Schedule and conduct site visits to determine eligibility. Enroll sites that have been screened and identified as eligible. • Phone Advisory Service o The majority of customers participating in this Program do not have experience with energy efficiency. CITY expects that in most cases, multiple touch points will be necessary for a successful installation. o CONSULTANT will set up a dedicated phone line with a (650) area code for phone based advising. o Through phone-based services, CONSULTANT will provide proactive, individualized, and ongoing assistance with regards to energy and water efficiency installations and when appropriate, educate customers about potential other CITY programs and opportunities. Task A.2.5 Perform Energy & Water Efficiency Assessments and Measure Recommendations The Program provides no-cost energy audits of SMBs and assistance in planning energy- efficient upgrades. CONSULTANT will perform in-person or remote energy efficiency assessments. Customers will express their interest via the Energy Advisor, or other mutually agreed upon enrollment mechanisms, which will be transmitted to CONSULTANT for customer follow-up. Once scheduled, the CONSULTANT will verify the customer understands the assessment process and safety procedures that will be followed. Each assessment will include a site evaluation (in-person or virtual) and data collection along with energy education. CONSULTANT will provide an assessment report to the customer and the CITY. The CONSULTANT will review the plan with the customer, highlighting the top opportunities, rebates, and financing options. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 98 Professional Services Rev. Dec.15, 2020 Page 21 of 57 The audit report will include the following information: • The name, address and contact info of the customer served and the business type • The date of the energy audit • A mechanical equipment inventory of the customer’s facility. Such equipment shall include type and quantity of existing lighting fixtures; type, age and quantity of heating and cooling equipment; type, age and quantity of water heating equipment; and other energy consuming systems that have a potential for cost effective retrofit or replacement • The associated CFM, kWh, kW, and therms savings for the recommended measures • Any associated rebate offerings and information on other rebate programs Task A.2.6 Customer Project Implementation Support CONSULTANT will offer support to interested SMB customers after completion of the Site Assessment aimed at reducing barriers to implementation of eligible energy and water savings measures. • Energy Advisor and/or Account Manager will provide customer with a list of pre-screened Trade Allies capable of performing the services identified in the site assessment and requested by the customer to drive energy and water efficiency. • CONSULTANT staff will remain available through the implementation process to answer questions about project scope, review supplier-provided bids, confirm eligibility of specific equipment and provide resources on financing options. Task A.2.7 Provide Pre- and Post-installation Quality Control CONSULTANT will complete on-going quality control (“QC”) activities as needed to verify that each project has been installed properly and documented accurately. The QC process helps to verify that savings are accurately calculated to maintain high realization rates. This includes: • Pre- and post-installation field inspections as needed, based on sampling criteria defined in the Policies and Procedures Manual. • Review of project documentation to verify customer installed measures meet Program eligibility requirements. • For custom projects, where applicable, verification of the energy baseline created to define the savings available from the proposed measure(s). This is completed by confirmation of existing energy use patterns over a defined time period, facility hours of operation and any weather/temperature impacts. Task A.2.8 Customer Rebate Application Support and Rebate Processing CONSULTANT will provide support to customer with rebate application using the portal described in Task A.2.1. CONSULTANT will process the rebate application as defined in the Policies and Procedures Manual with a turnaround time of no more than ten (10) business days from when a complete application is received. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 99 Professional Services Rev. Dec.15, 2020 Page 22 of 57 Task A.2.9 Customer Feedback and Issue Resolution CONSULTANT shall request customer feedback as described in A.1.3.(e). This will evaluate the energy and water efficiency assessment, the on-going support and rebate process associated with the SBEA Program. CONSULTANT shall provide monthly customer feedback results to CITY in monthly invoicing and reporting. CONSULTANT will address and attempt to resolve all customer issues discovered through either survey feedback or other means of customer contact within five (5) business days. CONSULTANT will pursue continuous improvements to drive customer satisfaction. Customer feedback issues will be tracked by CONSULTANT using the monthly reports, as well as a completed complaint form. CITY retains the right to separately survey Program participants. If any issues cannot be resolved to the satisfaction of the customer by CONSULTANT within five business days, CONSULTANT shall immediately provide CITY with a detailed description of any such complaint which will include the name and contact information of the customer and any other information requested by CITY. TASK A.3 – INVOICING AND REPORTING Task A.3.1 Data Management CONSULTANT shall utilize its data management system to provide data tracking, analysis and reporting as well as actionable insights regarding real-time Program performance. In addition to tracking Program progress, CONSULTANT shall track detailed customer information such as barriers and motivations as well as planned future upgrades to support on-going Program operations. Task A.3.2 Reporting CONSULTANT shall provide Program reports to CPAU that are consistent with the reporting templates. Additionally, CONSULTANT shall upload reports into CITY’s reporting database on a monthly basis in order to complete invoicing. CONSULTANT shall respond to ad-hoc data requests by CITY to meet evaluation, measurement, and verification (“EM&V”) and other regulatory requirements. Task A.3.3 Invoicing CONSULTANT shall invoice CITY on a monthly basis consistent with Section 5 of the Agreement and in accordance to the more specific guidelines set forth in this Exhibit “A” and in Exhibit “C”, “Compensation” through the CITY designated submission approach or system. TASK A.4 – PROGRAM CLOSE-OUT Task A.4.1 Resolve Outstanding Jobs in Progress The CONSULTANT shall attempt to resolve all outstanding jobs in progress, as well as customer complaints. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 100 Professional Services Rev. Dec.15, 2020 Page 23 of 57 Task A.4.2 Final Program Report CONSULTANT will submit a final report which includes a narrative with an overview of the Program and spreadsheet detailing the budget and actual Program cost. The final report will include Program achievements, challenges, goals, and lessons learned. CONSULTANT agrees to deliver the final report within 30 calendar days of the end of the Term as such date may be extended at the sole discretion of CITY. CONSULTANT shall maintain electronic copies of invoices for two years as required by the CITY. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 101 Professional Services Rev. Dec.15, 2020 Page 24 of 57 B. OVERVIEW OF CEAP Brief Program Description This Program is designed to assist nonresidential customers, including City facilities and Palo Alto Unified School District, with converting gas equipment to efficient electric alternatives at their facilities. The Program services will cover education and marketing to building owners, property managers, facility managers, and other key personnel; technical assistance to support customers’ building electrification journey; and post-installation quality control. The Program will target the replacement of rooftop gas pack units and gas water heaters in nonresidential buildings and will also address other gas equipment in commercial kitchens, pools and spas where applicable. Program Target The Program targets for the term of the Agreement are provided in Table B.1 Electrification savings Calculations are detailed in section B.1.3.(c). Table B.1 - Commercial Electrification Assistance Program Targets Term Year 1 Year 2 Year 3 Total Net kWh savings 966,064 1,992,127 2,465,159 5,423,350 The estimated lifetime avoided GHG emissions reduction for the electrification measures for this Program is 19,899 metric tons (MT). Eligible Measures All measures listed in the CPAU rebate catalog for business customers are eligible under this program. Custom electrification measures, new prescriptive measures, and other emerging technologies need to be pre-approved by City Project Manager in advance of installation or inclusion in the Program in order for CONSULTANT to receive compensation for such measures. CONSULTANT shall provide the projected electrification savings and supporting documentation for the savings estimates to CITY for measures not covered by the CPAU rebate catalog for business customers. Projected electrification savings must be based on credible sources such as the CalTF eTRM, CPUC Database for Energy Efficiency Resources, approved workpapers, etc. CITY will ensure there are custom incentives and electrification measures rebates available to nonresidential customers during the term of the Program. Program Staffing CONSULTANT agrees to staff the Program in accordance with the Staffing Plan set forth below in Table B.2. CONSULTANT shall notify the CITY concerning proposed changes to the Staffing Plan; all such changes require prior written consent of the CITY. CITY reserves the right to (i) request CONSULTANT conduct criminal background checks to CITY’s satisfaction on all CONSULTANT’s staff, contractors or agents that may enter customer property, and (ii) require that any staff, contractor or agent of CONSULTANT that fails the background check shall not be permitted to enter any customer premises. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 102 Professional Services Rev. Dec.15, 2020 Page 25 of 57 Without limiting Section 16 (Indemnity) of the Agreement, CONSULTANT agrees and understands it is responsible for all costs and damages associated with any theft, vandalism, damage or criminal acts involving or committed by CONSULTANT staff, subconsultants or agents involving a customer or customer premises. Table B.2. Program Staff Contacts Name Title Phone Email Joanne O’Neill Sr. Program Director 415-965-3023 joanne.oneill@clearesult.com Develops strategies and tactics to deliver effective Program performance by directing the work of employees assigned to the Program from technical, marketing, operations, analytics, and administrative areas. Ann Marie Mastrippolito Program Portfolio Manager 415-965-3004 AnnMarie.Mastrippolito@cleare sult.com Responsible for overseeing the portfolio of non-residential programs in California and will instill best practices to enable the Program to be delivered within budget to meet Program goals. Cameron Guy Program Manager 415-963-9863 cameron.guy@clearesult.com Serves as Program Manager and primary point of contact for the CITY. Verifies the Program is delivered within budget and is responsible for managing, training, and mentoring the implementation team. Kelly Lewis Program Specialist Kelly.Lewis@clearesult.com Supports the delivery of projects and programs by leading data management, metrics and reporting, team facilitation and coordination, and process definition and improvement. Claudia Peck Account Manager 415-963-9860 Claudia.Peck@clearesult.com Acts as consultative sales representative to customers’ organization to understand their business and energy objectives and guide them towards solutions. Supports custom project development, aiding the customer through the process. To Be Hired Sr. Commercial Field Specialist Performs site assessments of customer facilities and generates reports detailing findings. Provides support for technical or measure specific questions. To Be Hired Energy Advisor Provide phone and email-based customer support and advising. This includes fielding customer inquiries, responding to requests and using behavioral science tactics to drive Program adoption. King Lee Sr. Engineering Manager 415-965-3014 King.Lee@clearesult.com Helps the Program achieves performance goals by developing strategies to improve our engineers’ services to consistently delivering high quality work on time and within budget. Wes Bennion Energy Engineer Wes.bennion@clearesult.com DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 103 Professional Services Rev. Dec.15, 2020 Page 26 of 57 IV Supports the development and delivery of electrification Programs by providing engineering calculations, measurement and verification, and utility program technical design and assistance. Jigar Bhatt Energy Engineer II Jigar.bhatt2@clearesult.com Supports the development and delivery of electrification Programs by providing engineering calculations, measurement and verification, and utility program technical design and assistance. Ashley Tackitt Marketing Account Manager 503-688-1557 Ashley.Tackitt@clearesult.com Develops marketing material that may include brochures, flyers, displays, postcards, direct mail letters, bill inserts, and press releases. Program Implementation & Delivery Task B.1 PROGRAM KICK OFF Task B.1.1 Program Kick-Off Meeting CONSULTANT will develop agenda for Program Kick Off Meeting and organize the Kick-Off Meeting with CITY staff to review PROGRAM design and delivery, roles, timelines and priorities in the delivery of the PROGRAM. The meeting will also cover logistics, marketing, coordination, measurement and verification activities, establishing workflow systems, invoicing requirements, reports, and any remaining contractual questions. CONSULTANT will identify customer data needs from CPAU to inform customer segment analyses and outreach. Task B.1.1 Deliverable: Meeting agenda and meeting minutes Task B.1.2 Develop Program Plan In coordination with CPAU staff, CONSULTANT shall develop the following documents: (a) Policies and Procedures Manual CONSULTANT shall develop, adhere to, and document its compliance with the Policies and Procedures Manual in the Program’s implementation, including the terms and conditions for customers participating in the Program, the process for customers participating in the Program, customer complaint and resolution plan, and the process for identifying, implementing, measuring and verifying energy efficiency measures. The Policies and Procedures Manual shall also include a Quality Assurance and Quality Control Plan. Task B.1.2.a Deliverable: Program Policies and Procedures Manual (b) Marketing Plan CONSULTANT shall develop a Marketing Plan that outlines marketing activities to reach the target customers. Marketing activities may include: outbound call campaign, customer DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 104 Professional Services Rev. Dec.15, 2020 Page 27 of 57 workshops, and webinars. The Marketing Plan will identify outreach activities, workshops, locations and frequency. CONSULTANT may enlist the assistance of local affinity groups, including the Palo Alto Chamber of Commerce, the Palo Alto Merchant Association and various property management companies to better enable CONSULTANT to serve CPAU customers. CONSULTANT shall track and capture data on how customers are finding out about the Program. Task B.1.2.b Deliverable: Program Marketing Plan Task B.1.3 Develop Program Documents CONSULTANT shall develop documents necessary for Program implementation and submit such documents to CPAU for approval before any distribution, circulation, or publication. CONSULTANT shall revise and produce new documents as needed to implement and promote the Program effectively. (a)Program Website Content In collaboration with CITY staff, CONSULTANT will design and produce informational web content related to Program which the CITY will publish. CITY shall provide input on web content as requested by CONSULTANT and CITY maintains final rights approval. The Program website will include a customer sign-up web-to-lead HTML form. Task B.1.3.a Deliverable: Program Website Content (b) Customer Site Assessment Report Template CONSULTANT shall create a Customer Site Assessment Report Template that includes the necessary information for a customer to understand their electrification opportunities and their current electric capacity. In addition, it will include information on available rebates and financing options. Electrification Assessments will include: • Inventory of physical conditions, effective age and estimated remaining lifespans of gas burning assets • Summary of annual natural gas consumption data provided by CITY, with identification of the largest natural gas equipment or end use loads •Identification of energy efficient electric equipment as replacement for current natural gas equipment (each a “measure”), with comparison of the cost (initial and operating) and energy consumption (natural gas and electric) of the electric vs gas equipment, and emissions reductions for the replacement of each existing gas equipment • Evaluation of the condition and capacity of the existing electrical systems and recommend upgrades that may be necessary to enable the proposed measures • Recommended locations for new electrical equipment, noting any observed space or structural constraints and possible remedies. •Estimate of CPAU electrification incentives available for identified measures Projected annual electrification savings shall be calculated for each measure based on the following formula: DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 105 Professional Services Rev. Dec.15, 2020 Page 28 of 57 ůĞĐƚƌŝĨŝĐĂƚŝŽŶƐĂǀŝŶŐƐ;ŶĞƚŬtŚͬǇƌͿсŶŶƵĂů'ĂƐƐĂǀŝŶŐƐ;ƚŚĞƌŵƐͬǇƌͿǆϮϵ͘ϯ ŵŝŶƵƐŶŶƵĂůŶĞƚŝŶĐƌĞĂƐĞŝŶĞůĞĐƚƌŝĐƵƐĞŽĨƉƌŽƉŽƐĞĚĞƋƵŝƉŵĞŶƚ;ŬtŚͬǇƌͿ ǁŚĞƌĞϮϵ͘ϯсĐŽŶǀĞƌƐŝŽŶĨĂĐƚŽƌĨƌŽŵƚŚĞƌŵƚŽŬtŚ Task B.1.3.b Deliverable: Customer Site Assessment Report Template (c) Program Participation Agreement CONSULTANT shall create a Program Participation Agreement that shall collect basic information from the customer, including facility contact information. The Program Participation Agreement will also act as a Site Access Agreement for the Program. Task B.1.3.c Deliverable: Program Participation Agreement (d) Customer Project Completion Sign-off and Customer Feedback CONSULTANT shall develop a Customer Project Completion sign-off document after the completed installation of the electrification measure and a template for customer feedback including how the customer heard about the program and the Net Promotor Score value. The Customer Project Completion Sign-Off document and Customer Feedback template shall both be reviewed and approved by CPAU. Task B.1.3.d Deliverable: Customer Project Completion Sign-off Form and Customer Feedback Template (e) Program Invoice and Reporting Template CONSULTANT shall create a standard programing report template to meet CPAU’s reporting requirements, including: monthly invoice, quarterly Program report, annual Program report. CONSULTANT will work with CITY to finalize Program performance metric to include in the Program reports. These metrics may include but are not limited to: number of customers participating in the Program, electrification savings, completed customer projects, customer satisfaction/net promoter score, customer contact information, summary of customer compliments and/or complaints, reasons for rejection of proposed installations by customer. CONSULTANT shall submit the Program invoice and reporting templates to CPAU for review and approval before use. Task B.1.3.e Deliverable: Program Invoice and Reporting Templates, and inputting of data into CPAU’s database TASK B.2 – PROGRAM IMPLEMENTATION Task B.2.1 Implement Marketing and Outreach Plan To generate leads for the Program, CONSULANT will conduct ME&O through a variety of channels, targeting property owners, property management companies and local businesses among others. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 106 Professional Services Rev. Dec.15, 2020 Page 29 of 57 (a)Key Account Coordination CITY will provide CONSULTANT with list of Key Accounts. CONSULTANT will use this data, combined with other CONSULTANT and CITY data sources, to create a targeted outreach list in coordination with CITY Key Account Managers. (b)Marketing, Education and Outreach Materials CONSULTANT and CITY will work together to develop up to 3 sector specific marketing brochure(s) for use by CITY and CONSULTANT to promote Program. CONSULTANT will submit to CITY all marketing materials; including website content, press releases, brochures, social media posts and any other content mentioning Program in any capacity for approval prior to publishing said Program materials. In all communications, the Program will be represented as a CITY program, including use of the CITY approved logo. CITY at its discretion may provide a Program name. In collaboration with CITY staff, CONSULTANT will develop marketing materials that may include brochures, flyers, displays, postcards, direct mail letters, bill inserts and press releases. Determination of applicable materials will be made by the CONSULTANT as tools to deliver on Program goals. CITY shall have final decision- making authority about if and when to print and mail marketing material. CITY maintains the right to control all materials being distributed by CONSULTANT while considering potential impacts to Program goals. Customer mailing lists for direct mail pieces shall be determined by CITY; however, CONSULTANT may provide input, suggested mailing lists and methodologies. If applicable, CONSULTANT and CITY shall design email marketing campaigns and email customer satisfaction surveys; CITY maintains final rights of approval. CITY shall be responsible for sending theemail marketing information and tracking responses if they choose. CONSULTANT shall co-brand all marketing material with CPAU’s logo in a prominent location. CONSULTANT shall not use CPAU’s logos or brand standards without the approval of CITY. Task B.1.3.a Deliverable: Program Marketing Materials (c)Marketing, Education and Outreach Implementation CONSULTANT will begin an initial ME&O campaign to potential organizations to introduce the Program, establish relationships and discuss the services offered through the Program. This campaign includes: •Outreach to contacts provided by the CITY. CITY Key Account Managers will lead introductions between Key Account and CONSULTANT including Public Works staff and Palo Alto Unified School District. •Outreach to local contractors to establish a pool of participating Trade Allies. •Recommend content to CITY to directly promote the Program through bill DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 107 Professional Services Rev. Dec.15, 2020 Page 30 of 57 inserts, email communications, direct mail postcards and other relevant marketing channels. •Assist CITY to launch Program webpages with web-to-lead forms for customer sign- ups which are directly linked to CONSULTANT and CITY’s data management system. •Provide CITY Account Management team with Program training. CONSULTANT will develop Program talking points for use by Key Account Managers and other Program stakeholders. (d)Financing education and referrals CONSULTANT will provide customers with information about financing offerings that are available to help drive project adoption through Energy Advisor and Account Management team. Task B.2.2 Perform Electrification Assessments & Provide Recommendations Customer enrollment occurs when CONSULTANT gains the customer’s signature on the Program Participation Agreement between CONSULTANT and customer. CONSULTANT will schedule and conduct site visits (or virtual visits if necessary or feasible) to perform the electrification assessment. In advance of the visit, the CITY will provide energy consumption data, distribution grid infrastructure capacity and other requested data sources to support CONSULTANT’s assessment. At this site visit, CONSULTANT will collect all data necessary to develop the Customer Site Assessment Report described in Task B.1.3.c. Post visit, CONSULTANT will identify measures; conduct cost, energy and emission calculations; and then create a customized Customer Site Assessment Report. CONSULTANT will endeavor to coordinate between CITY programs, such as the Electric Vehicle Technical Assistance Program, to maximize benefit to customers. Such coordination may result in referrals to other programs or joint delivery of services, such as an electric vehicle charging site assessment delivered simultaneous to the electrification assessment. CONSULTANT will deliver the complete Customer Site Assessment Report to CITY staff and then to the customer. CONSULTANT will also offer to all customers to review the report together in an online meeting to explain the findings, address any questions and begin planning implementation. Task B.2.3 On-going Technical Assistance Once a customer has decided to move forward with an electrification project, CONSULTANT will support the customer through project completion until project passes final inspection. The support provided will be: •Expert support for product selection and installation. •A list of qualified, pre-screened contractors for electrification installations. A trade ally/contractor list will be maintained by the CONSULTANT. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 108 Professional Services Rev. Dec.15, 2020 Page 31 of 57 •Assistance in reviewing and comparing bids from contractors. •Guidance to customer or contractor applying for permit with the CITY’s Development Center. •Application assistance for CITY’s Electrification Rebates CONSULTANT will provide post-installation guidance and support for customers; however, the customers are purchasing products, services, and warranties directly from vendors and installers, therefore customers will be guided to contact their service provider should there be maintenance, service, or warranty needs. Task B.2.4 Customer Sign-off on Project, Feedback and Issue Resolution CONSULTANT shall request customer complete the Customer Sign-off on Project Completion form upon the completed installation of the electrification measure. CONSULTANT will also request customer provide feedback using the Customer Feedback form. This will evaluate the electrification assessment and the project support aspects of the CEAP. CONSULTANT shall provide customer feedback to CITY in monthly invoicing and reporting. CONSULTANT will address and attempt to resolve all customer issues discovered through either survey feedback or other means of customer contact within five (5) business days. CONSULTANT will pursue continuous improvements to drive customer satisfaction. Customer feedback issues will be tracked by CONSULTANT using the monthly reports, as well as a completed complaint form. CITY retains the right to separately survey Program participants. If any issues cannot be resolved to the satisfaction of the customer by CONSULTANT within five business days, CONSULTANT shall immediately provide CITY with a detailed description of any such complaint which will include the name and contact information of the customer and any other information requested by CITY. TASK B.3 – INVOICING AND REPORTING Task B.3.1 Data Management CONSULTANT shall utilize its data management system to provide data tracking, analysis and reporting as well as actionable insights regarding real-time Program performance. In addition to tracking Program progress, CONSULTANT shall track detailed customer information such as barriers and motivations as well as planned future upgrades to support on-going Program operations. Task B.3.2 Reporting CONSULTANT shall provide Program reports to CPAU that are consistent with the reporting templates. Additionally, CONSULTANT shall upload reports into CITY’s reporting database on a monthly basis in order to complete invoicing. CONSULTANT shall respond to ad-hoc data requests by CITY to meet EM&V and other regulatory requirements. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 109 Professional Services Rev. Dec.15, 2020 Page 32 of 57 Task B.3.3 Invoicing CONSULTANT shall invoice CITY on a monthly basis consistent with Section 5 of the Agreement and in accordance to the more specific guidelines set forth in this Exhibit “A” and in Exhibit “C”, “Compensation”. TASK B.4 – PROGRAM CLOSE-OUT Task B.4.1 Resolve Outstanding Jobs in Progress The CONSULTANT shall attempt to resolve all outstanding jobs in progress, as well as customer complaints. Task B.4.2 Final Program Report CONSULTANT will submit a final report which includes a narrative with an overview of the Program and spreadsheet detailing the budget and actual Program cost. The final report will include Program Achievements, challenges, goals, and lessons learned. CONSULTANT agrees to deliver the final report within 30 calendar days of the end of the Term as such date may be extended at the sole discretion of CITY. CONSULTANT shall maintain electronic copies of invoices for two years as required by the CITY. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 110 Professional Services Rev. Dec.15, 2020 Page 33 of 57 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 via email 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 contract execution. Table B.1 – Schedule of Performance for Small Business Energy Advisor Program Task Timing (Due Date) Task A.1 PROGRAM KICK OFF Task A.1.1 Within 30 days after contract execution, and ongoing as needed Task A.1.2 Within 60 days after contract execution Task A.1.3 Within 90 days after contract execution Task A.1.4 Within 90 days after contract execution TASK A.2 – PROGRAM IMPLEMENTATION Task A.2.1 Within 30 days after contract execution and ongoing as needed Task A.2.2 Ongoing Task A.2.3 Ongoing Task A.2.4 Ongoing Task A.2.5 Ongoing Task A.2.6 Ongoing Task A.2.7 Ongoing Task A.2.8 Ongoing Task A.2.9 Ongoing TASK A.3 – INVOICING AND REPORTING Task A.3.1 Ongoing Task A.3.2 Ongoing Task A.3.3 Ongoing TASK A.4 – PROGRAM CLOSE-OUT Task A.4.1 Within 30 days after contract expiration Task A.4.2 Within 30 days after contract expiration DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 111 Professional Services Rev. Dec.15, 2020 Page 34 of 57 Table B.2 – Schedule of Performance for Commercial Electrification Assistance Program Task Timing (Due Date) Task B.1 PROGRAM KICK OFF Task B.1.1 Within 30 days after contract execution, and ongoing as needed Task B.1.2 Within 60 days after contract execution Task B.1.3 Within 90 days after contract execution TASK B.2 – PROGRAM IMPLEMENTATION Task B.2.1 Ongoing Task B.2.2 Ongoing Task B.2.3 Ongoing Task B.2.4 Ongoing TASK B.3 – INVOICING AND REPORTING Task B.3.1 Ongoing Task B.3.2 Ongoing Task B.3.3 Ongoing TASK B.4 – PROGRAM CLOSE-OUT Task B.4.1 Within 30 days after contract expiration Task B.4.2 Within 30 days after contract expiration DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 112 Professional Services Rev. Dec.15, 2020 Page 35 of 57 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 below, up to the not to exceed budget amount for each Program. For SBEA, the compensation is comprised of start-up fee, site assessment fees, performance payments and customer incentive payments based on the reported energy and water savings. The not-to-exceed consultant payments over the 3 years are given as follows: Program start-up fee $26,645 (2%) Site assessment fees $288,000 (26%) Performance payments $ 280,683 ( 25%) Customer incentive payments $522,000 (47%) Total not-to-exceed SBEA payment to CONSULTANT over 3 years = $1,117,328 CITY shall pay the SBEA start-up fee based on completion of Task A.1.2 (Develop program plan), Task A.1.3 (Develop program documents), and Task A.1.4 (Establish SBEA customer incentive levels). Site assessments are compensated at the rate of $1,000 for in-person assessment, and $600 for virtual assessment, payable upon the delivery of assessment report to CPAU Project Manager. Performance payments are compensated based on the rate schedule in Table C.1, payable upon the verification of installed measures. Table C.1 Performance payment rate for Small Business Energy Advisor Description of Compensation Performance payment rate Behavioral, Retrocommisioning, and Operational (BRO) electric savings $0.117/kWh for 1st year gross savings Below-code electric savings for early replacement projects $0.091/kWh for 1st year gross savings Above-code energy savings for all retrofit efficiency projects $0.1092/kWh for 1st year gross savings Behavioral, Retrocommisioning, and Operational (BRO) gas savings $0.65/therm for 1st year gross savings Below-code gas savings for early replacement projects $0.4355/therm for 1st year gross savings Above-code gas savings for all retrofit efficiency projects $0.5226/therm for 1st year gross savings Electric efficiency savings for new construction projects, minimum 5% savings above code requirements $0.091/kWh DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 113 Professional Services Rev. Dec.15, 2020 Page 36 of 57 Electric efficiency savings for new construction projects, minimum 15% savings above code requirements $0.1092/kWh Water efficiency savings (retrofit measures) $1.95/CCF for 1st year gross savings Electric savings tied to water efficiency measure $0.117/kWh for 1st year gross savings Gas savings tied to water efficiency measure $0.65/therm for 1st year gross savings Payments for SBEA Site Assessments: CPAU will cease making SBEA site assessment payments if the difference between the cumulative site assessment fees and the cumulative Performance Payments exceeds 50% of the Performance portion of the total SBEA budget. CONSULTANT may submit previously completed SBEA site assessments for payment if SBEA delivers additional savings while still maintaining the above ratio. CPAU may (but shall have no obligation to) modify this payment restriction to allow greater site assessment activity and fees relative to Performance Payments only upon the written approval by the CPAU Project Manager. CONSULTANT shall invoice CPAU for SBEA site assessment upon completion of the audit report at each customer site. CONSULTANT shall invoice CPAU for the performance payment and customer incentive payment upon completion of post-installation QC and submission of rebate application to CPAU. For CEAP, the compensation is comprised of start-up fee, site assessment fees, and performance payments based on the reported energy and water savings. The not-to-exceed consultant payments over the 3 years are given as follows: Program start-up fee $30,000 (2%) Site assessment fees $638,000 (44%) Performance payments $786,386 (54%) Total not-to-exceed payment for CEAP over 3 years = $1,454,386 CTIY shall pay the CEAP start-up fee based on completion of Task B.1.2 (Develop program plan) and Task B.1.3 (Develop program documents). CEAP site assessments are compensated at the rate of $2,000 per project site, payable upon the delivery of assessment report to CPAU Project Manager. Performance payments are compensated based on the rate schedule in Table C.2, payable upon the verification of installed measures. Table C.2 Performance payment rate for Commercial Electrification Assistance Program ĞƐĐƌŝƉƚŝŽŶŽĨŽŵƉĞŶƐĂƚŝŽŶWĞƌĨŽƌŵĂŶĐĞƉĂǇŵĞŶƚƌĂƚĞ Electrification savings $0.145/kWh DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 114 Professional Services Rev. Dec.15, 2020 Page 37 of 57 Payments for CEAP Site Assessments: CPAU will cease making CEAP site assessment payments if the difference between the cumulative site assessment fees and the cumulative Performance Payments exceeds 50% of the Performance portion of the total CEAP budget. CONSULTANT may submit previously completed CEAP site assessments for payment if CEAP delivers additional savings while still maintaining the above ratio. CPAU may (but shall have no obligation to) modify this payment restriction to allow greater site assessment activity and fees relative to Performance Payments only upon the written approval by the CPAU Project Manager. CONSULTANT shall invoice CPAU for CEAP site assessment upon completion of the assessment report at each customer site. CONSULTANT shall invoice CPAU for the performance payment upon the completion of Customer Project Completion Sign-off. 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. There are no reimbursable expenses authorized in this Agreement. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization via email 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 Table C.3. 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: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 115 Professional Services Rev. Dec.15, 2020 Page 38 of 57 EXHIBIT “C-1” SCHEDULE OF RATES Table C.3: Hourly Rates Position Hourly Rate Senior Program Director / Program Director $215 Program Portfolio Manager / Senior Program Manager $160 Program Manager $137 Senior Engineering Manager / Engineering Manager $172 Energy Engineer $160 Senior Marketing Account Manager / Marketing Account Manager $120 Senior Account Manager / Account Manager $119 Sr. Field Manager / Field Manager $172 Sr. Commercial Field Specialist / Commercial Field Specialist $134 Program Analyst / Operations Analyst $106 Operations Specialist / Operations Coordinator $93 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 116 Professional Services Rev. Dec.15, 2020 Page 39 of 57 EXHIBIT D INSURANCE REQUIREMENTS CONSULTANTS 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 HEREIN. REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY 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: CONSULTANT, 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 CONSULTANT 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 CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY. II.THE CONSULTANT 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: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 117 Professional Services Rev. Dec.15, 2020 Page 40 of 57 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. EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED 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: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 118 Professional Services Rev. Dec.15, 2020 Page 41 of 57 EXHIBIT E INFORMATION PRIVACY POLICY DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 119 Professional Services Rev. Dec.15, 2020 Page 42 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 120 Professional Services Rev. Dec.15, 2020 Page 43 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 121 Professional Services Rev. Dec.15, 2020 Page 44 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 122 Professional Services Rev. Dec.15, 2020 Page 45 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 123 Professional Services Rev. Dec.15, 2020 Page 46 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 124 Professional Services Rev. Dec.15, 2020 Page 47 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 125 Professional Services Rev. Dec.15, 2020 Page 48 of 57 DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 126 Professional Services Rev. Dec.15, 2020 Page 49 of 57 EXHIBIT F CYBERSECURITY TERMS AND CONDITIONS In order to assure the privacy and security of the personal information of the City's customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons, and other individuals and companies, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the "Consultant") and its subcontractors, if any, including, without limitation, any Information Technology ("IT") infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit B, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City's customers. The Consultant shall fulfill the data and information security requirements (the "Requirements") set forth in Part A below. A "secure IT environment" includes (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Consultant's operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. "IT infrastructure" refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. In the event that, after the Effective Date, the Consultant reasonably determines that it cannot fulfill the Requirements, the Consultant shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the "Alternate Requirements" as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the "ISM"). Part A. Requirements: The Consultant shall at all times during the term of any contract between the City and the Consultant: (a) Appoint or designate an employee, preferably an executive officer, as the security liaison to the City with respect to the Services to be performed under this Agreement. (b) Comply with the City's Information Privacy Policy: (c) Have adopted and implemented information security and privacy policies that are documented, are accessible to the City, and conform to ISO 27001/2 – Information Security Management Systems (ISMS) Standards. See the following: http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=42103 http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=5029 7 (d) Conduct routine data and information security compliance training of its personnel that is appropriate to their role. (e) Develop and maintain detailed documentation of the IT infrastructure, including software versions and patch levels. (f) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees' personal identity and employment status, and (2) would enable the immediate denial of access to the City's confidential data and information by DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 127 Professional Services Rev. Dec.15, 2020 Page 50 of 57 any of its employees who no longer would require access to that information or who are terminated. (g) Provide a list of IT infrastructure components in order to verify whether the Consultant has met or has failed to meet any objective terms and conditions. (h) Implement access accountability (identification and authentication) architecture and support role-based access control ("RBAC") and segregation of duties ("SoD") mechanisms for all personnel, systems, and Software used to provide the Services. "RBAC" refers to a computer systems security approach to restricting access only to authorized users. "SoD" is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors. (i) Assist the City in undertaking annually an assessment to assure that: (1) all elements of the Services' environment design and deployment are known to the City, and (2) it has implemented measures in accordance with industry best practices applicable to secure coding and secure IT architecture. (j) Provide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity, and availability of the City's information. (k) Deploy and maintain IT system upgrades, patches and configurations conforming to current patch and/or release levels by not later than one (1) week after its date of release. Emergency security patches must be installed within 24 hours after its date of release. (l) Provide for the timely detection of, response to, and the reporting of security incidents, including on-going incident monitoring with logging. (m) Notify the City within one (1) hour of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information. (n) Inform the City that any third party service provider(s) meet(s) all of the Requirements. (o) Perform security self-audits on a regular basis and not less frequently than on a quarterly basis, and provide the required summary reports of those self-audits to the ISM on the annual anniversary date or any other date agreed to by the Parties. (p) Accommodate, as practicable, and upon reasonable prior notice by the City, the City's performance of random site security audits at the Consultant's site(s), including the site(s) of a third-party service provider(s), as applicable. The scope of these audits will extend to the Consultant's and its third-party service provider(s)' awareness of security policies and practices, systems configurations, access authentication and authorization, and incident detection and response. (q) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, and the Confidential Information will be accessible only by the Consultant and any authorized third-party service provider's personnel. (r) Perform regular, reliable secured backups of all data needed to maximize the availability of the Services. Adequately encrypt the City of Palo Alto's data, during the operational process, hosted at rest, and the backup stage at the Vendors' environment (including Vendor's contracting organization's environment). (s) Maintain records relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination of this Agreement, all of those records relating to the performance of the Services shall be provided to the ISM. (t) Maintain the Confidential Information in accordance with applicable federal, state, and local data and information privacy laws, rules, and regulations. (u) Encrypt the Confidential Information before delivering the same by electronic mail to the City and or any authorized recipient. (v) Offer a robust disaster recovery and business continuity (DR-BCP) solutions to the City for the systems and services the Vendor provides to the City. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 128 Professional Services Rev. Dec.15, 2020 Page 51 of 57 (w) Provide and support Single Sign-on (SSO) and Multifactor Authentication (MFA) solutions for authentication and authorization services from the "City's environment to the Vendor's environment," and Vendor's environment to the Vendor's cloud services/hosted environment." The Vendor shall provide regular reporting through Excel or Power BI to access information required by the City. (x) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City's IT environment, including, without limitation, IT infrastructure communications. (y) The Vendor must provide evidence of valid cyber liability insurance policy per the City’s EXHIBIT “D” INSURANCE REQUIREMENTS. Part B. Alternate Requirements: DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 129 Professional Services Rev. Dec.15, 2020 Page 52 of 57 CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT THIS CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT (this “Agreement”) is entered into this 15th day of November, 2021, by and between the City of Palo Alto, a California charter city and municipal corporation with offices at 250 Hamilton Avenue, Palo Alto, California 94301 (“CITY”), and CLEAResult Consulting Inc., a Texas corporation with offices at 6504 Bridge Point Pkwy, Suite 425, Austin, Texas 78730 (“COMPANY”). COMPANY and CITY may also be referred to individually herein as a “Party,” and collectively herein as the “Parties.” Z/d>^ WHEREAS, COMPANY and CITY are engaged in a business transaction with each other (the “Transaction”); and WHEREAS, in connection with the Transaction, COMPANY may disclose to CITY certain Confidential Information (defined below) of the COMPANY, and CITY may disclose to the COMPANY certain Confidential Information of the CITY; and WHEREAS, each Party desires to protect the confidentiality of its Confidential Information; and WHEREAS, the Disclosing Party (defined below) would not disclose its Confidential Information to the Receiving Party (defined below) but for the legal protections against unauthorized disclosures intended to be afforded by California law and this Agreement, and is relying on the protections against such disclosures contained in this Agreement in disclosing such Confidential Information to the Receiving Party; NOW THEREFORE, in consideration of the foregoing and of the mutual covenants, opportunities and promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: ϭ͘ ŽŶĨŝĚĞŶƚŝĂů/ŶĨŽƌŵĂƚŝŽŶ͘ As used in this Agreement, “Confidential Information” means all data, information, document and other material of the Parties, in any form or media, that: A. Is not generally known to the public, whether of a technical, business or other nature including, without limitation any and all intellectual property rights either Party holds in and to its data, information, documents and other materials including without limitation any software, services and/or documentation, including patents, copyrights, and trademarks and trade secrets; B. is disclosed by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) or that is otherwise learned or accessed by the Receiving Party in the course of its communications, discussions or other dealings with, or due to its physical or electronic access to the premises, property or systems of, the Disclosing Party; and/or DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 130 Professional Services Rev. Dec.15, 2020 Page 53 of 57 C. has been identified as being proprietary and/or confidential, or that would reasonably be deemed to be proprietary and/or confidential based upon the nature of such information and/or the circumstances surrounding its disclosure or receipt. Ϯ͘ ǆĐĞƉƚŝŽŶƐ͘ “Confidential Information” does not include information which: A. becomes generally available to the public other than as a result of a disclosure by the Receiving Party; B. was available to the Receiving Party on a non-confidential basis prior to its receipt by the Receiving Party; C. becomes available to the Receiving Party on a non-confidential basis from a source other than the Disclosing Party, its employees or agents, provided that such source is not bound by a confidentiality agreement with the Disclosing Party, its employees or agents or otherwise is prohibited from transmitting the information to the Receiving Party by a contractual, legal or fiduciary obligation; or D. was independently developed by the Receiving Party without access to or the benefit of the Confidential Information. ϯ͘ EŽŶͲŝƐĐůŽƐƵƌĞ ŽĨ ŽŶĨŝĚĞŶƚŝĂů /ŶĨŽƌŵĂƚŝŽŶ͘ The Receiving Party, except as expressly provided in this Agreement, will keep all Confidential Information confidential and will not disclose any Confidential Information without the Disclosing Party's prior written consent, except as otherwise expressly provided for in this Agreement. In addition, the Receiving Party will not use, or permit others to use, the Disclosing Party’s Confidential Information for any purpose other than for the Receiving Party’s consideration of, and discussion with the Disclosing Party of, the Transaction being explored between the Parties pursuant to and in accordance with this Agreement. Such permitted use includes the disclosure of the Confidential Information to the Receiving Party’s employees and agents on a need-to-know basis only and solely for purposes of the Receiving Party’s consideration of, and discussion with the Disclosing Party of, the Transaction being explored between the Parties pursuant to and in accordance with this Agreement, provided that the Receiving Party informs such employees and agents of, and requires them to adhere to, the provisions of this Agreement. The Receiving Party is responsible for any use of Confidential Information by its employees and agents. ϰ͘ WƵďůŝĐ ZĞĐŽƌĚƐ Žƌ 'ŽǀĞƌŶŵĞŶƚĂů ZĞƋƵĞƐƚ͘ The Receiving Party shall comply with the confidentiality covenants contained herein to the fullest extent permitted by applicable law. Should the Receiving Party receive a public records request, or otherwise be directed by any governmental authority to disclose any or all of the Disclosing Party’s Confidential Information, the Receiving Party shall promptly provide notice to the Disclosing Party of such request to allow the Disclosing Party an opportunity to prevent such disclosure. Furthermore, in the event that a request for COMPANY’s Confidential Information is made under applicable public records law, the CITY agrees to cooperate with any reasonable request of COMPANY, at COMPANY’s expense, to maintain the confidentiality of the COMPANY’s Confidential Information. The Parties understand and agree that in the event that COMPANY’s Confidential Information is sought from CITY under such a public records request, and the CITY asserts to the requesting party that such records are not disclosable due to their DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 131 Professional Services Rev. Dec.15, 2020 Page 54 of 57 confidential and/or proprietary nature (or other basis under the law for non-disclosure), and such non-disclosure is challenged in court, it will be COMPANY’s responsibility to take action in court to defend the non-disclosure/oppose disclosure. Nothing herein shall require the CITY to take any action, or to refuse to disclose information, where to do so would violate applicable law. ϱ͘ KǁŶĞƌƐŚŝƉ ŽĨ ŽŶĨŝĚĞŶƚŝĂů /ŶĨŽƌŵĂƚŝŽŶ͘ All Confidential Information will remain the exclusive property of the Disclosing Party, and the Receiving Party will have no rights, by license or otherwise, to use the Confidential Information except as expressly provided herein or in a separate written agreement specifically granting such rights. ϲ͘ WƌŽƚĞĐƚŝŽŶ ŽĨ ŽŶĨŝĚĞŶƚŝĂů /ŶĨŽƌŵĂƚŝŽŶ͘ The Receiving Party will take commercially reasonable measures to protect and secure the Disclosing Party’s Confidential Information from unauthorized access, disclosure, dissemination or use, including, at a minimum, those measures it takes to protect and secure its own confidential information, and, in any event, no less than a reasonable standard of care. ϳ͘ EŽƚŝĐĞ ŽĨ hŶĂƵƚŚŽƌŝǌĞĚ ŝƐĐůŽƐƵƌĞ͘ The Receiving Party shall immediately notify the Disclosing Party upon the discovery of any loss or unauthorized disclosure or use of the Confidential Information of the Disclosing Party. ϴ͘ /ŶũƵŶĐƚŝǀĞZĞůŝĞĨ͘ Each Party acknowledges and agrees that a breach by it or one of its affiliates, employees or agents of any of the covenants set forth in this Agreement will cause irreparable injury to the other Party and its business for which damages, even if available, will not constitute an adequate remedy. Accordingly, each Party agrees that the other Party, in addition to any other remedy available at law or in equity, shall be entitled to the issuance of injunctive relief (including, without limitation, specific performance) by a court of competent jurisdiction in order to enforce the covenants and agreements contained herein. ϵ͘ ƚƚŽƌŶĞǇƐ͛ &ĞĞƐ ĂŶĚ ŽƐƚƐ͘ If attorneys’ fees or other costs are incurred to secure performance of any obligations under this Agreement, or to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way of prosecution or defense, the prevailing Party will be entitled to recover reasonable attorneys’ fees and costs incurred in connection therewith. ϭϬ͘ EŽŶͲǁĂŝǀĞƌ͘ Any failure by either Party to enforce performance of any provision of this Agreement will not constitute a waiver of its right to subsequently enforce such provision or any other provision of this Agreement. ϭϭ͘ ƐƐŝŐŶŵĞŶƚ͘ Neither Party may assign this Agreement or any rights or obligations hereof without the prior written consent of the other Party, and any attempted assignment without such consent shall be null, void, and of no effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the Parties. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 132 Professional Services Rev. Dec.15, 2020 Page 55 of 57 ϭϮ͘ ^ĞĐƚŝŽŶ,ĞĂĚŝŶŐƐ͘ The section headings contained in this Agreement are for convenience of reference only and are not intended to define the scope of any provision of this Agreement. ϭϯ͘ EŽƚŝĐĞƐ͘ All notices or communications required or permitted to be given under this Agreement shall be in writing and shall be delivered by: (a) certified mail, return receipt requested to a party’s principal place of business set forth below in this Notices section, (b) hand delivered, (c) e-mail, or (d) delivery by a reputable overnight carrier service. In the case of delivery by e-mail, the notice must be followed by a copy of the notice being delivered by a means provided in (a), (b) or (d). The notice will be deemed given on the day the notice is received. Notices to the Parties under this Agreement shall be provided as follows: NOTICE TO COMPANY: CLEAResult Consulting, Inc. 100 SW Main Street, Suite 1500 Portland, OR 97204 Attention: Legal Department NOTICE TO CITY: City of Palo Alto Utilities Department 250 Hamilton Avenue Palo Alto, CA 94301 Attention: Dean Batchelor Utilities Director ϭϰ͘ 'ŽǀĞƌŶŝŶŐ>Ăǁ͘ This Agreement will be governed by and construed in accordance with California law, without regard to its conflict-of-law provisions. ϭϱ͘ :ƵƌŝƐĚŝĐƚŝŽŶĂŶĚsĞŶƵĞ͘ Any judicial proceeding brought by or against the Parties arising out of this Agreement or any matter related hereto shall be brought exclusively in a California federal or state court of competent jurisdiction. The venue for any dispute shall be Santa Clara County, California. Each of the Parties consents to the exclusive jurisdiction and venue of the aforesaid courts. ϭϲ͘ ^ĞǀĞƌĂďŝůŝƚǇ͘ If any term or provision of this Agreement or the application thereof shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. ϭϳ͘ ŵĞŶĚŵĞŶƚ͘ This Agreement may only be modified by written amendment signed by authorized representatives of the Parties and approved as required under Palo Alto Municipal Code. DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 133 Professional Services Rev. Dec.15, 2020 Page 56 of 57 ϭϴ͘ /ŶĐŽƌƉŽƌĂƚŝŽŶŽĨZĞĐŝƚĂůƐ. The recitals set forth on page 1 of this Agreement are substantive terms of this Agreement and are hereby fully incorporated herein by this reference. ϭϵ͘ ŽƵŶƚĞƌƉĂƌƚƐ͘ This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which will constitute one and the same Agreement. ϮϬ͘ dĞƌŵ ĂŶĚ dĞƌŵŝŶĂƚŝŽŶ͖ ^ƵƌǀŝǀĂů͘ This Agreement is intended to cover Confidential Information disclosed or received by either Party prior or subsequent to the date of this Agreement. Unless otherwise earlier terminated, this Agreement will expire five (5) years from the date first written above; provided, however, that each Party's confidentiality and security obligations with respect to the other Party's Confidential Information disclosed or received prior to termination or expiration will survive until such Confidential Information ceases to be confidential hereunder or the Receiving Party is no longer in possession or control of such information in accordance with the provisions of this Agreement. Ϯϭ͘ ZĞƚƵƌŶŽĨŽŶĨŝĚĞŶƚŝĂů/ŶĨŽƌŵĂƚŝŽŶ͘ Upon termination or expiration of this Agreement, or upon receipt of written request from the Disclosing Party, the Receiving Party shall promptly and securely return to the Disclosing Party all Confidential Information of the Disclosing Party, including any copies made thereof, and/or shall promptly and securely destroy (so as to render such Confidential Information unreadable by any third party) all such Confidential Information of the Disclosing Party in the Receiving Party’s possession or control (including in the possession or control of any employee or agent of the Receiving Party) and shall, upon request of the Disclosing Party, certify such secure destruction in writing to the Disclosing Party within thirty (30) days of such request. ϮϮ͘ ^ĞĐƚŝŽŶ,ĞĂĚŝŶŐƐ͘ All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. Ϯϯ͘ ŶƚŝƌĞ ŐƌĞĞŵĞŶƚ͘ This Agreement represents the entire agreement of the CITY and COMPANY with respect to the subject matter hereof, and supersedes any prior agreements, understandings, and representations, whether written, oral, expressed, implied, or statutory. The CITY hereby acknowledges that in entering into this Agreement it did not rely on any information not explicitly set forth in this Agreement. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF 8.a Packet Pg. 134 Professional Services Rev. Dec.15, 2020 Page 57 of 57 WZdz^/'EdhZ^dKd,'ZDEd IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representative(s) as of the date first set forth above. KDWEz >Z^h>dKE^h>d/E'͕/E͘ APPROVED: By:_________________________________ Name:______________________________ Title:_______________________________ /dz /dzK&W>K>dK APPROVED: By:_________________________________ Ed Shikada City Manager RECOMMENDED: By:_________________________________ Dean Batchelor Utilities Director APPROVED AS TO FORM: By:_________________________________ Joan Borger City Attorney or Designee DocuSign Envelope ID: 7B254660-1795-4EF4-A9C6-713A9338D1FF Andrea White Senior Vice President 8.a Packet Pg. 135 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϯϯͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨĂƌĞƐŽůƵƚŝŽŶĂŵĞŶĚŝŶŐƚŚĞŝƚǇŽĨWĂůŽůƚŽΖƐŵƉůŽǇĞĞ &ůĞǆŝďůĞĞŶĞĨŝƚƐWůĂŶĂƐĂƉƌŽǀŝƐŝŽŶŽĨƚŚĞŽŶƐŽůŝĚĂƚĞĚƉƉƌŽƉƌŝĂƚŝŽŶƐĐƚ ŽĨϮϬϮϭĂŶĚƚŚĞŵĞƌŝĐĂŶZĞƐĐƵĞWůĂŶĐƚŽĨϮϬϮϭ;ZWͿĂƐƚŚĞǇƌĞůĂƚĞƚŽ ŵƉůŽǇĞĞ,ĞĂůƚŚĂƌĞĂŶĚĞƉĞŶĚ ĞŶƚĂƌĞ&ůĞǆŝďůĞ^ƉĞŶĚŝŶŐĐĐŽƵŶƚƐ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗,ƵŵĂŶZĞƐŽƵƌĐĞƐ ZKDDEd/KE Staff recommends the City Council adopt a Resolution (attachment A) amending the City of Palo Alto's employee Flexible Benefits Plan for Healthcare Flexible Spending Accounts and Dependent Care Flexible Spending Accounts. <'ZKhE A Flexible Spending Account allows employees to use pre -tax dollars to pay for eligible expenses. Health Care Flex Spending Accounts can be used for out-of-pocket health related expenses and Dependent Care Flex Spending Accounts can be used for out -of-pocket childcare and elder care expenses. To participate, employees need to enroll each year, and can contribute up to the annual IRS maximums. In response to the Pandemic, the President signed the Consolidated Appropriations Act (CAA) on December 27, 2020 which contained several Flexible Spending Account (FSA) related relief provisions for participants. In addition, on March 11, 2021, the federal government passed and signed into law the American Rescue Plan Act of 2021 (ARPA) in hopes to speed up the United States' recovery from the economic and health effects of the COVID -19 pandemic and the ongoing recession. While these relief provisions were optional, the City administratively implemented those provisions that provided maximum relief to FSA plan participants. Employers were given through the end of the plan year to finalize the administrative action as required by IRS rules to amend their FSA plans. The recommended Resolution ratifies this amendment. The new provisions pertaining to the City of Palo Alto benefit plans are further explained below. /^h^^/KE 9 Packet Pg. 136 City of Palo Alto Page 2 The Consolidated Appropriations Act and ARPA increased flexibility for FSA participants during the 2021 and 2022 calendar year. While many Americans continue to be affected by the ongoing pandemic, the IRS also provided additional options to help FSA participants save money and expand certain rules that allow more flexibility. As these provisions do not appear extraordinary or controversial, staff recommends Council approval on consent. ,ĞĂůƚŚĐĂƌĞ&ůĞǆŝďůĞ^ƉĞŶĚŝŶŐĐĐŽƵŶƚƐ;&^Ϳ Make changes to FSA without a qualifying status event (getting married, birth of a child, etc.) Employees were able to make a change in election amounts for plan years ending in 2021 without a change in status event. This meant they could change their FSA election amount or sign up for an FSA outside of the open enrollment period. Terminated employees can still access FSA funds Prior to the passing of the 2021 stimulus bill, employees would have lost access to their unused health FSA funds on the last day of employment. Employees are now able to claim their unused funds in their health FSA even if their employment status changes in 2020 or 202 1. They can continue to spend money on eligible healthcare items and get reimbursed from their health FSA up to the amount they contributed. 12 months to incur and claim expenses (extended grace period) Employees have 12 months after the plan year ended to incur medical costs and submit claims to their health FSA. This extension was valid for plan years ending in 2020 and 2021. This means any medical expenses incurred in 2021 could be applied to their 2020 FSA, and expenses incurred in 2022 can be applied to their 2021 FSA. It gives employees 12 months instead of the usual 2.5 months grace period to incur expenses and claim their FSA dollars. ĞƉĞŶĚĞŶƚĂƌĞ&ůĞǆŝďůĞ^ƉĞŶĚŝŶŐĐĐŽƵŶƚƐ;&^Ϳ Increase Dependent Care FSA contribution maximum amount to $10,500 for 2021.ARPA temporarily increased the Dependent Care FSA contribution maximum amount that can be excluded from income from $5,000 to $10,500 for the 2021 calendar year. Make changes to FSA without a qualifying status event (getting married, birth of a child, etc.) Employees were able to make a change in election amounts for plan years ending in 2021 without a change in status event. This meant they could change their FSA election amount or sign up for an FSA outside of the open enrollment period. 12 months to incur and claim expenses (extended grace period) Employees have 12 months after the plan year ended to incur medical costs and submit claims to their health FSA. This extension was valid for plan years ending in 2020 and 2021. This means any medical expenses incurred in 2021 could be applied to their 2020 FSA, and expenses 9 Packet Pg. 137 City of Palo Alto Page 3 incurred in 2022 can be applied to their 2021 FSA. It gives employees 12 months instead of the usual 2.5 months grace period to incur expenses and claim their FSA dollars. Z^KhZ/DWd Flexible Spending Accounts are funded through deductions from an employee’s paycheck. These changes have no impact to the City’s budget. ^d<,K>ZE''DEd City employees were notified of these changes in an all-staff email sent in February 2021 and April 2021. These notices included details about the changes and necessary forms needed to enroll. Es/ZKEDEd>Zs/t Approval of this resolution does not constitute a project under the California Environmental Quality Act (CEQA), therefore, an environmental assessment is not required. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϵ͘Ă͗Attachment A: Flexible Spending Account (FSA) Plan Amendment 9 Packet Pg. 138 Page 1 of 6 Attachment A CITY OF PALO ALTO FLEXIBLE BENEFITS PLAN AMENDMENT 1 ARTICLE I PREAMBLE 1.1 Adoption and effective date of amendment. The Employer adopts this Amendment to the City of Palo Alto’s Flexible Benefits Plan (the “Plan”). The sponsor intends this Amendment as good faith compliance with the requirements of these provisions. This Amendment shall be effective on or after the date the Employer elects in Section 2.1 below. 1.2 Supersession of inconsistent provisions. This Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment. 1.3 Construction. Except as otherwise provided in this Amendment, any reference to "Section" in this Amendment refers only to sections within this Amendment and is not a reference to the Plan. The Article and Section numbering in this Amendment is solely for purposes of this Amendment, and does not relate to any Plan article, section, or other numbering designations. ARTICLE II ELECTIONS 2.1 Effective Date. The provisions of this Amendment, unless otherwise indicated are effective as of January 1, 2021 (the “Effective date”). 2.2 American Rescue Plan Act of 2021 Amendment. The Employer hereby amends the Dependent Care Flexible Spending Plan within the 2021 calendar year as follows: Increase in Exclusion for Employer Provide Dependent Care Assistance Section 9632 of the American Rescue Plan Act (ARPA) amends Section 129(a)(2) of the internal Revenue code of 1986. In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022. The amount which may be excluded for dependent care assistance with respect to dependent care services provided during a taxable year shall not exceed $10,500 ($5,250 in the case of a separate return by a married individual). 2.3 H.R. 133 Consolidated Appropriations Act Amendment(s). The Employer hereby amends the Plan as follows: Post-Termination Reimbursements from Health FSAs On December 27, 2020, H.R. 133 Consolidated Appropriations Act was signed into law, impacting section 125 cafeteria plans. This guidance is designed to provide temporary flexibility for employers and employees and assist with the National response to the 2019 Novel Coronavirus outbreak (COVID- 19). Effective as of the effective date, the Employer amends their plan to allow for terminated participants to continue to receive reimbursements from their Health FSA unused funds thru the end of the plan year their participation ceased. This guidance only applies to the 2020 and 2021 plan year. 9.a Packet Pg. 139 Page 2 of 6 Attachment A A plan that includes a health flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows (under rules similar to the rules applicable to dependent care flexible spending arrangements) an employee who ceases participation in the plan during calendar year 2020 or 2021 to continue to receive reimbursements from unused benefits or contributions through the end of the plan year in which such participation ceased (including any grace period). The extension of the period for incurring claims under this guidance is an extension of coverage that is not HSA compatible, consequently any terminated employee with unused amounts remaining after termination, (including any grace period) will not be eligible to contribute to an HSA during the post- termination coverage period. Section 125 Change in Status under the Health or Dependent Care FSA Effective as of the effective date, the Employer amends their plan to allow for the below change in status flexibility. This is a temporary change effective only for the plan year ending in 2021. On December 27, 2020, H.R. 133 Consolidated Appropriations Act was signed into law, impacting section 125 cafeteria plans. This guidance is designed to provide temporary flexibility for employers and employees and assist with the National response to the 2019 Novel Coronavirus outbreak (COVID- 19). These changes permit, under certain circumstances, prospective changes to health and dependent care FSA elections as follows: a) employees may revoke a health FSA election, make a new election, or decrease or increase an existing election on a prospective basis; and b) employees may revoke a dependent care FSA election, make a new election, or decrease or increase an existing election on a prospective basis. Employers are not required to allow unlimited election changes but may determine the extent to which such changes are permitted and applied. Any change allowed shall not permit a revocation or decrease in election below the amount already disbursed. Extension of Grace Periods for Plan Years ending in 2020 and 2021 Effective as of the effective date, the Employer amends their plan to allow for the extension of the Grace Period for plan year ending in 2020 and 2021 to 12 months after the end of such plan year. In general a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement extends the grace period for a plan year ending in 2020 or 2021 to 12 months after the end of such plan year, with respect to unused benefits or contributions remaining in a health flexible spending arrangement or a dependent care flexible spending arrangement. The extension of the period for incurring claims under this guidance is an extension of coverage that is not HSA compatible, consequently any employee with unused amounts remaining at the end of a plan year or grace period ending in 2020 or 2021 will not be eligible to contribute to an HSA during the extend period (unless the FSA is a limited FSA). 9.a Packet Pg. 140 Page 3 of 6 Attachment A This amendment has been executed this _________________ day of ______________________________________, ________. Name of Employer: By: EMPLOYER 9.a Packet Pg. 141 Page 4 of 6 Attachment A CERTIFICATE OF ADOPTING RESOLUTION The undersigned authorized representative of the City of Palo Alto hereby certifies that the following resolutions were duly adopted on (date) and that such resolutions have not been modified or rescinded as of the date hereof; RESOLVED, that the Amendment to the Plan (the Amendment) is hereby approved and adopted, and that an authorized representative of the Employer is hereby authorized and directed to execute and deliver to the Administrator of the Plan one or more counterparts of the amendment. The undersigned further certifies that attached hereto is a copy of the Amendment approved and adopted in the foregoing resolution. Date: Signed: [print name/title] 9.a Packet Pg. 142 Page 5 of 6 Attachment A SUMMARY OF MATERIAL MODIFICATIONS for the City of Palo Alto Flexible Benefits Plan I INTRODUCTION This is a Summary of Material Modifications regarding the City of Palo Alto Flexible Benefits Plan (the “Plan”). This is merely a summary of the most important changes to the Plan and information contained in the Summary Plan Description (“SPD”) previously provided to you. It supplements and amends that SPD so you should retain a copy of this document with your copy of the SPD. If you have any questions, contact the Administrator. If there is any discrepancy between the terms of the Plan, as modified, and this Summary of Material Modifications, the provisions of the Plan will control. II SUMMARY OF CHANGES American Rescue Plan Act of 2021 Amendment. The Employer hereby amends the Health Care Flexible Spending Plan within the 2021 calendar year as follows: Increase in Exclusion for Employer Provide Dependent Care Assistance Section 9632 of the American Rescue Plan Act (ARPA) amends Section 129(a)(2) of the internal Revenue code of 1986. In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022. The amount which may be excluded for dependent care assistance with respect to dependent care services provided during a taxable year shall not exceed $10,500 ($5,250 in the case of a separate return by a married individual). H.R. 133 Consolidated Appropriations Act Amendment(s). The Employer hereby amends the Plan as follows: Post-Termination Reimbursements from Health FSAs On December 27, 2020, H.R. 133 Consolidated Appropriations Act was signed into law, impacting section 125 cafeteria plans. This guidance is designed to provide temporary flexibility for employers and employees and assist with the National response to the 2019 Novel Coronavirus outbreak (COVID-19). Effective as of the effective date, the Employer amends their plan to allow for terminated participants to continue to receive reimbursements from their Health FSA unused funds thru the end of the plan year their participation ceased. This guidance only applies to the 2020 and 2021 plan year. A plan that includes a health flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows (under rules similar to the rules applicable to dependent care flexible spending arrangements) an employee who ceases participation in the plan during calendar year 2020 or 2021 to continue to 9.a Packet Pg. 143 Page 6 of 6 receive reimbursements from unused benefits or contributions through the end of the plan year in which such participation ceased (including any grace period). The extension of the period for incurring claims under this guidance is an extension of coverage that is not HSA compatible, consequently any terminated employee with unused amounts remaining after termination, (including any grace period) will not be eligible to contribute to an HSA during the post-termination coverage period. Section 125 Change in Status under the Health or Dependent Care FSA Effective as of the effective date, the Employer amends their plan to allow for the below change in status flexibility. This is a temporary change effective only for the plan year ending in 2021. On December 27, 2020, H.R. 133 Consolidated Appropriations Act was signed into law, impacting section 125 cafeteria plans. This guidance is designed to provide temporary flexibility for employers and employees and assist with the National response to the 2019 Novel Coronavirus outbreak (COVID-19). These changes permit, under certain circumstances, prospective changes to health and dependent care FSA elections as follows: a)employees may revoke a health FSA election, make a new election, or decrease or increase an existing election on a prospective basis; and b)employees may revoke a dependent care FSA election, make a new election, or decrease or increase an existing election on a prospective basis. Employers are not required to allow unlimited election changes but may determine the extent to which such changes are permitted and applied. Any change allowed shall not permit a revocation or decrease in election below the amount already disbursed. Extension of Grace Periods for Plan Years ending in 2020 and 2021 Effective as of the effective date, the Employer amends their plan to allow for the extension of the Grace Period for plan year ending in 2020 and 2021 to 12 months after the end of such plan year. In general a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement extends the grace period for a plan year ending in 2020 or 2021 to 12 months after the end of such plan year, with respect to unused benefits or contributions remaining in a health flexible spending arrangement or a dependent care flexible spending arrangement. The extension of the period for incurring claims under this guidance is an extension of coverage that is not HSA compatible, consequently any employee with unused amounts remaining at the end of a plan year or grace period ending in 2020 or 2021 will not be eligible to contribute to an HSA during the extend period (unless the FSA is a limited FSA). 9.a Packet Pg. 144 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϲϰͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨŵĞŶĚŵĞŶƚEŽ͘ϯƚŽŽŶƚƌĂĐƚϭϳϭϲϲϱϵϭǁŝƚŚ^ƵƐĂŶ ŽĐĐŽůĂ͕>>ƚŽŝŶĐƌĞĂƐĞƚŚĞĐŽŶƚƌĂĐƚĂŵŽƵŶƚďǇΨϯϱ͕ϬϬϬĨŽƌĂƚŽƚĂůŶŽƚƚŽ ĞǆĐĞĞĚĂŵŽƵŶƚŽĨΨϭϯϱ͕ϬϬϬĂŶĚƚŽĞǆƚĞŶĚƚŚĞƚĞƌŵƚŚƌŽƵŐŚĞĐĞŵďĞƌϮϬϮϯ ƚŽĐŽŵƉůĞƚĞƚŚĞĂƌƚǁŽƌŬĂƐƐŽĐŝĂƚĞĚǁŝƚŚƚŚ ĞŚĂƌůĞƐƚŽŶͲƌĂƐƚƌĂĚĞƌŽŽƌƌŝĚŽƌ WƌŽũĞĐƚ͘ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗ŽŵŵƵŶŝƚǇ^ĞƌǀŝĐĞƐ ZĞĐŽŵŵĞŶĚĞĚDŽƚŝŽŶ Staff recommends that the City Council approve contract amendment number three to contract C17166591 with Susan Zoccola, LLC to increase funding by $35,000 for a not-to-exceed amount of $135,000 (including a $10,000 contingency) and extend the term of the contract through December 2023 to complete the fabrication and delivery of the artwork associated with the Charleston-Arastradero Corridor Project. ĂĐŬŐƌŽƵŶĚ The City of Palo Alto’s Public Art Program manages the public art in municipal project funds transferred annually as part of the budget cycle in accordance with Ordinance Number 5301, Municipal Code 2.26.070 (Public Art for Municipal Projects). The Charleston-Arastradero Corridor is a high volume, 2.3-mile roadway serving 11 schools, several parks, shopping centers, commercial uses, a library, day care centers, non-profit organizations, and two community centers. The corridor extends from East Charleston Road at Fabian Way to Arastradero Road at Gunn High School. Due to the high visibility of the Charleston-Arastradero Corridor Project, the opportunity to commission more art in south Palo Alto, and multiple opportunities to incorporat e artwork if the process was initiated during the project design phase, staff initiated the artist selection process in March of 2016. Artist Susan Zoccola was selected as the artist for the project and was approved by the Public Art Commission (PAC) on September 15, 2016. The contract with a budget amount of $100,000 (including $10,000 in contingency) was approved by City Council December 12, 2016. Zoccola traveled to Palo Alto in January 2017 to meet with the des ign team and initiate her design development. The conceptual design was reviewed and approved by the PAC in October 2017. 10 Packet Pg. 145 City of Palo Alto Page 2 Inspired by the water filtration systems in the landscaping and the heavily used bike corridor, the artist developed a series of five sculptures inspired by bike wheels and diatoms. Diatoms are single-celled algae that form a silica-based cell wall. Diatoms exist in all saltwater and freshwater environments, including moist soils, and they happen to be shaped like bike wheels. Informed by the intent of the project – a heavily trafficked corridor in which the streetscape project is intended to enhance bike and pedestrian safety, Zoccola set out to create colorful wheel-based compositions marking entrances and key places along the corridor that would be dynamic for drivers, pedestrians and cyclists alike. ŝƐĐƵƐƐŝŽŶ The initial contract was approved in 2016 with an expiration date of December 31, 2018. Due to construction delays, the original contract was amended twice. The contract was amended in December 2018 to extend the expiration date to June 30, 2019. The con struction of the corridor was delayed further, thus requiring a second amendment approved by Council June 24, 2019 to extend the term to November 2021. During the now-completed phases of the corridor construction, three of the five concrete footings for the sculptures were poured by the general contractor. The construction of the final phase of the corridor project was delayed with various changes to the original Phase 3 project plans. Currently, the estimated timeline for completing the Charleston-Arastradero Corridor project is July 2022. To avoid any damage from heavy equipment and construction activities, the artworks must be installed at the end of the construction project. Due to overall delays in the project, Zoccola has been waiting two years longer than expected to initiate fabrication. In this time, the cost of steel, like many building materials, and labor have risen. Shipping costs have also increased and moving Zoccola’s sculptures from Washington State to Palo Alto will cost nearly twice as much as originally estimated. The artist would like to have her fabricator purchase the materials as soon as possible to protect against future inflation of steel prices but cannot create and install the sculptures as designed with the original budget. On November 4, 2021 the Public Art Commission recommended the increase to Susan Zoccola’s budget for the Charleston-Arastradero Corridor project by $35,000 for a total contract amount up to $135,000 (including a $10,000 contingency) for any further possible cost increases for materials and fabrication. dŝŵĞůŝŶĞ͕ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ͕ĂŶĚWŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ The additional funds in the amount of $35,000 for the contract are available in the Fiscal Year (FY) 2022 Adopted Capital Budget via the pooled art funds in the Art in Public Spaces capital improvement project (CIP) (AC-86017). The Public Art for Municipal Projects Ordinance (Ordinance Number 5301, Municipal Code 2.26.070) requires that 1% of the capital budget for municipal projects is allocated for the commission of public art. The Charleston-Arastradero 10 Packet Pg. 146 City of Palo Alto Page 3 Corridor Project CIP (PE-13011) contributed 1% of the project’s funding in the amount of $120,800 to the Art in Public Spaces (AIPP) CIP in order to fund the public art component of this project recommended in this memorandum. Additional funds may come from funds derived from bike/pedestrian plan funds previously transferred to the Art in Public Spaces CIP. ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ The Public Art Commission discussed and recommended that Council approve the additional funds and extend the timeline for the contract with Susan Zoccola at a pub lic meeting November 4, 2021. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ The services in this contract as amended are categorically exempt pursuant to CEQA regulation 15301 (Existing Facilities). ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϬ͘Ă͗ATTACHMENT A: Zoccola Contract Amendment 10 Packet Pg. 147 Vers.: Aug. 5, 2019 Page 1 of 6 DEDEdEK͘ϯdKKEdZdEK͘C17166591 dtEd,/dzK&W>K>dKE ARTIST SUSAN ZOCCOLA, LLC This Amendment No. 3 (this “Amendment”) to Contract No.C17166591 (the “Contract” as defined below) is entered into as of December 1, 2021, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Susan Zoccola LLC, a Washington Limited Liability Company, located at 4136 Meridian Ave N, Seattle, WA 98103 (“ARTIST”). CITY and ARTIST are referred to collectively as the “Parties” in this Amendment. Z/d>^ a. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of creating original artworks for the Charleston-Arastradero Corridor, as detailed therein. b. The Parties now wish to amend the Contract in order to extend the term expiration date from November 30, 2021 to December, 2023 and to increase the compensation by $35,000 from a NTE $1000,000 including contingency expenses of $10,000 to revised total Not to Exceed compensation $135,000, to allow completion of the project due to delays in the Charleston-Arastradero Corridor construction project prior to installation of the artworks and the increase cost of steel and other raw materials for the artwork. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. ĞĨŝŶŝƚŝŽŶƐ. The following definitions shall apply to this Amendment: a. ŽŶƚƌĂĐƚ. The term “Contract” shall mean Contract No. c17166591 between CONSULTANT and CITY, dated November 16, 2021, as amended by: Amendment No.1, dated December 31, 2019 Amendment No.2, dated June 17, 2019 b. KƚŚĞƌdĞƌŵƐ. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2, “TERM”, of the Contract is hereby amended to read as follows: DocuSign Envelope ID: 53C1B28C-82A6-4583-9EDD-3C8DD7143489 10.a Packet Pg. 148 Vers.: Aug. 5, 2019 Page 2 of 6 The term of this Agreement shall be from the date of its full execution through December 30, 2023 unless terminated earlier pursuant to Section 23 of this Agreement.” SECTION 3. Section 4, NOT TO EXCEED COMPENSATION of the Contract is hereby amended to read as follows: The compensation to be paid to ARTIST for performance of the Services and provision of the Art Work described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed One Hundred Thirty Five Thousand Dollars ($135,000.00). The applicable rates and schedule of payment are set out in Exhibit “C”, entitled “COMPENSATION”, which is attached to and made a part of this Agreement. ARTIST acknowledges that CITY desires that the Art Work, including its conceptual design and content be unique. ARTIST agrees to not duplicate the Art Work without the express written consent of CITY. SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE”, AMENDED, REPLACES PREVIOUS. b. Exhibit “C” entitled “COMPENSATION”, AMENDED, REPLACES PREVIOUS. SECTION 5. >ĞŐĂůĨĨĞĐƚ͘ Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 6. /ŶĐŽƌƉŽƌĂƚŝŽŶŽĨZĞĐŝƚĂůƐ. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: 53C1B28C-82A6-4583-9EDD-3C8DD7143489 10.a Packet Pg. 149 Vers.: Aug. 5, 2019 Page 3 of 6 ^/'EdhZ^K&d,WZd/^ IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. /dzK&W>K>dK City Manager APPROVED AS TO FORM: City Attorney ^h^EKK>͕>> By: Name: Title: ƚƚĂĐŚŵĞŶƚƐ: EXHIBIT “B”: SCHEDULE OF PERFORMANCE, AMENDMENT NO. 3 (AMENDED, REPLACES PREVIOUS) EXHIBIT “C”: COMPENSATION, AMENDMENT NO. 3 (AMENDED, REPLACES PREVIOUS) DocuSign Envelope ID: 53C1B28C-82A6-4583-9EDD-3C8DD7143489 Susan Zoccola Artist 10.a Packet Pg. 150 Vers.: Aug. 5, 2019 Page 4 of 6 y,//d͟͞ ^,h>K&WZ&KZDE͕DEDEdEŽ͘ϯ ;DE͕ZW>^WZs/Kh^Ϳ ARTIST 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 ARTIST and CITY so long as all work is completed within the term of the Agreement. ARTIST shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. AMENDMENT No. 3 REVISED TIMELINE – TASK: EŽǀĞŵďĞƌ͕ϮϬϭϲ- Contract signed ĞĐĞŵďĞƌϮϬϭϲ– Contract goes to City Council for approval ĞĐĞŵďĞƌͲ:ĂŶƵĂƌǇϮϬϭϲ– Travel to Palo Alto to meet with the design team, tour the site, and gather input. ĞĐĞŵďĞƌϮϬϭϲͲDĂƌĐŚϮϬϭϳ– Concept development DĂƌĐŚʹƉƌŝůϮϬϭϳ- Concept approval through PAC EŽǀĞŵďĞƌϮϬϮϭͲ:ƵŶĞϮϬϮϮ - Purchase of raw materials and fabrication of artwork ^ƵŵŵĞƌϮϬϮϮͲ&ĂůůϮϬϮϯ – transportation of artwork to Palo Alto and installation of onsite (exact installation time is TBD and to be coordinated with the construction schedule). DocuSign Envelope ID: 53C1B28C-82A6-4583-9EDD-3C8DD7143489 10.a Packet Pg. 151 Vers.: Aug. 5, 2019 Page 5 of 6 y,//d͟͞ KDWE^d/KE͕DEDEdEŽ͘ϯ ;DE͕ZW>^WZs/Kh^Ϳ The compensation to be paid to ARTIST under this Agreement for all services described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed $125,000. ARTIST agrees to complete all Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall come out of contingency fund and not exceed $10,000. 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. WZs/Kh^h'd $90,000 inclusive of all artist fees, and exclusive of $10,000 contingency. AMENDMENT No. 3 REVISED BUDGET $125,000 inclusive of all artist fees, and exclusive of $10,000 contingency. KDWE^d/KE^,h>;hEZWZs/Kh^h'dͿ͗ 20% upon signing the contract by the ARTIST and CITY 30% upon final approval of artwork design and fabrication plans by the Public Art Commission 30% after fabrication and testing at artist’s studio is complete, artwork is scheduled to be installed 20% after completion of delivery, installation, and submission of documentation AMENDMENT No.3 REVISED COMPENSATION SCHEDULE $18,000 - upon signing the contract by the ARTIST and CITY (paid by CPA on 02/17/2017) $27,000 - upon final approval of artwork design and fabrication plans by the Public Art Commission (paid by CITY on 03/12/2018) $35,000 – upon the artist’s notice to proceed with purchasing of raw materials and fabrication of artwork (to be paid by CITY) $30,000 - after fabrication and testing at artist’s studio is complete, artwork is scheduled to be installed (to be paid by CITY) $15,000 - after completion of delivery, installation, and submission of documentation (to be paid by CITY) Z/DhZ^>yWE^^ DocuSign Envelope ID: 53C1B28C-82A6-4583-9EDD-3C8DD7143489 10.a Packet Pg. 152 Vers.: Aug. 5, 2019 Page 6 of 6 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 ARTIST for the following reimbursable expenses at cost. Expenses for which ARTIST shall be reimbursed are: N/A DocuSign Envelope ID: 53C1B28C-82A6-4583-9EDD-3C8DD7143489 10.a Packet Pg. 153 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϴϵͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨŽŶƚƌĂĐƚ^ϮϬϭϳϴϳϰϵŵĞŶĚŵĞŶƚEŽ͘ϮǁŝƚŚ>d ^K&dtZ͕>>ŝŶƚŚĞŵŽƵŶƚŽĨΨϳϬ͕ϴϬϬĨŽƌĂEĞǁEŽƚƚŽǆĐĞĞĚŵŽƵŶƚ ŽĨΨϭϳϰ͕ϯϯϬĨŽƌůĞĐƚƌŽŶŝĐŽĐƵŵĞŶƚZĞǀŝĞǁ^ŽĨƚǁĂƌĞƌĞůĂƚĞĚƚŽƚŚĞĐŝƚǇ͛Ɛ >ĂŶĚhƐĞĂŶĚWĞƌŵŝƚƚŝŶŐ^ǇƐƚĞŵdŚƌŽƵŐŚĞĐĞŵďĞƌϯ ϭ͕ϮϬϮϮ͘ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗WůĂŶŶŝŶŐĂŶĚĞǀĞůŽƉŵĞŶƚ^ĞƌǀŝĐĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ͗ Staff recommends that City Council approve and authorize the City Manager or their designee to execute Contract S20178749 Amendment No. 2 With LCT SOFTWARE, LLC in the amount of $70,800 for a new not to exceed amount of $174,330 for electronic document review software related to the city’s land use and permitting system through December 31, 2022. ŝƐĐƵƐƐŝŽŶ͗ On April 1, 2020, the Planning and Development Services Department (PDS) entered a one-year contract with LCT/DigEplan for not to exceed amount of $70,000, for technology related to Electronic Document Review (EDR) software. This was in response to the State of California and County of Santa Clara Shelter in Place (SIP) Health Orders. This technology allowed PDS to resume services to the community while operations transitioned to a remote status. Continuity of services would not have been possible without the implementation of this service; therefore, work and revenue would have been completely halted. EDR software in conjunction with the city’s Land Use and Permitting online citizen access provides architects, developers, construction contractors and residents the ability to submit, monitor and process their p lans and permits as it relates to their construction projects. On December 14, 2020, the City Manager approved a Request for Exemption from Competitive Solicitation for Amendment No. 1. The exemption was requested under Municipal Code Sections 2.30.210(f) and 2.30.160 Emergency Contracts, which authorize the City Manager authorized to expend city funds for emergency contracts, without limitation on the contract cost or amount and without following the contract solicitation and award procedures. This action increased the amount by $33,350 for a new not to exceed amount to $103,530 and extended the term to December 31, 2021. A request for proposals (RFP) for the services was posted on the PlanetBids, the City’s eProcurement platform, on August 18, 2021 and closed on 11 Packet Pg. 154 City of Palo Alto Page 2 September 23, 2021. The City received a protest against the intent to award on October 26, 2021 and made the determination to cancel the RFP. At this time, for continuity of city services, staff recommends Amendment No 2. to extend the current contract, which ends on December 31, 2021. Staff will issue a new RFP for these services with anticipated completion by June 30, 2022 and staff requests the amendment through December 31, 2022, to ensure adequate time for possible technology transition. EDR technology is critical for continuity of city services, city revenue and economic recovery through permit issuance. Additionally, the development stakeholder community is now accustomed to electronic submittal and review as it increases customer service, reduces paper costs/consumption, and reduces greenhouse gas emissions through less driving to the Development Center. If not approved, the Development Center would cease to provide electronic document review, this would require all transactions and customers to revert to pre-pandemic procedures and complete document review at the Development Center on Hamilton Avenue. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚƐ Funding for this contract amendment in FY 2022 is within budgeted levels adopted by the City Council, no additional funding is requested. Technology costs are cost recovered at the Development Center through a 2% technology fee that is assessed on private construction projects. Planning fees also capture technology costs for the intended purpose of technology maintenance and enhancements. Funding for future fiscal years is subject to City Council approval through the annual budget process. ŶǀŝƌŽŶŵĞŶƚĂů/ŵƉĂĐƚ The approval of this contract is exempt from review under the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15061(c)(3) because it can be seen that there is no possibility that the activity in question may have a significant effect on the environment. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϭ͘Ă͗Attachment A: LCT SOFTWARE, LLC Contract, S20178749 Amendment No. 2 11 Packet Pg. 155 City of Palo Alto Contract No. S20178749 Form Vers.: Aug. 5, 2019 Amendment No. 2 Page 1 of 2 DEDEdEK͘ϮdKKEdZdEK͘^ϮϬϭϳϴϳϰϵ dtEd,/dzK&W>K>dKE>d^K&dtZ>>͘;ŝŐƉůĂŶͿ This Amendment No. 2 (this “Amendment”) to Contract No. S20178749 (the “Contract” as defined below) is entered into as of December 13, 2021, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and LCT Software, LLC. Aka DigEplan, a California corporation, located at 4500 140th Avenue North, Suite 101, Clearwater, Florida, 33762 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. Z/d>^ A. The Contract (as defined below) was entered by and between the Parties hereto for the provision of subscription to software applications and platforms, as detailed therein. B. The Parties now wish to amend the Professional Service Agreement Contract in order to increase the total compensation by $70,800 from $103,530 to $174,330 and extend the term of the contract by one year to December 31, 2022. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. ĞĨŝŶŝƚŝŽŶƐ. The following definitions shall apply to this Amendment: a. ŽŶƚƌĂĐƚ. The term “Contract” shall mean Contract No. S20178749 between CONSULTANT and CITY, dated April 13, 2020, as amended by: Amendment No. 1, dated April 1, 2021 b. KƚŚĞƌdĞƌŵƐ. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section “Subscription Fees and Term” of the Contract is hereby amended to read as follows: 1. Subscription Fees Subscription Fees for the 1st year (April 1, 2020 to March 31, 2021) shall amount to a total of $59,160 for an enterprise license for unlimited users. The 2nd year Subscription Fees shall be $44,370 for a 9-month renewal (April 1, 2021 to December 31, 2021) for the DigiEPlan V4 Enterprise at a quantity of 9. The 3rd year Subscription Fee shall be $70,800 for a 12-month renewal (January 1, 2022 to December 31, 2022) for the DigEplan V4 Enterprise on 100 User Subscriptions. Additional subscriptions may be purchased for $59 per User Subscription per month. DocuSign Envelope ID: C60DF159-E831-4622-8286-0AF9614CD953 11.a Packet Pg. 156 City of Palo Alto Contract No. S20178749 Form Vers.: Aug. 5, 2019 Amendment No. 2 Page 2 of 2 2. Subscription Term: extended to December 31, 2022. 3. Contract not to exceed $174,330. SECTION 3. >ĞŐĂůĨĨĞĐƚ͘ Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 4. /ŶĐŽƌƉŽƌĂƚŝŽŶŽĨZĞĐŝƚĂůƐ. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. ^/'EdhZ^K&d,WZd/^ IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. /dzK&W>K>dK City Manager Approved as to Form City Attorney or Designee KE^h>dEd͗>d^K&dtZ͕>>͘ ;ĂŬĂŝŐƉůĂŶͿ By: Name: Title: By: Name: Title: DocuSign Envelope ID: C60DF159-E831-4622-8286-0AF9614CD953 Christy Hunt President - North American Markets Chief Executive Officer Jason Matthews 11.a Packet Pg. 157 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϵϭͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ĚŽƉƚŝŽŶŽĨĂZĞƐŽůƵƚŝŽŶƉƉƌŽǀŝŶŐĂŶƉƉůŝĐĂƚŝŽŶĂŶĚDĂŬŝŶŐ ZĞƋƵŝƌĞĚ&ŝŶĚŝŶŐƐĨŽƌWƌŽƉŽƐŝƚŝŽŶϲϴWĞƌĂƉŝƚĂ'ƌĂŶƚ&ƵŶĚƐĨŽƌŽƵůǁĂƌĞ WĂƌŬ/ŵƉƌŽǀĞŵĞŶƚWƌŽũĞĐƚŝŶƚŚĞŵŽƵŶƚŽĨΨϮϭϴ͕ϬϬϬ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗ŽŵŵƵŶŝƚǇ^ĞƌǀŝĐĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that the City Council adopt the attached resolution approving a grant application and making required findings for Proposition 68 Per Capita Grant Funds in the amount of $218,000 to supplement the Boulware Park Improvement Project (PE-17005). Adoption of this resolution is required to apply for the grant. ĂĐŬŐƌŽƵŶĚ In 2017, Council approved capital improvement funding to address Boulware Park maintenance needs as part of the FY 2018 Capital Budget. The renovation included infrastructure, accessibility, and maintenance improvements. The project was postponed to Fiscal Year 2019 due to budget constraints. During that period, the adjacent 3350 Birch Street property owned by AT&T became available. The City pursued the purchase of the parcel in order to add new parkland to the Ventura neighborhood, which is densely populated and has a limited amount of open space. Upon finalizing the purchase of the land in 2019, the City re-engaged the community-based design process to determine how the existing Boulware Park and the newly purchased property would be developed into one contiguous park. Council dedicated the new parcel as parkland on February 10, 2020 (CMR ID# 10990). A summary of the community-based design process can be found on the project ’s web page at www.cityofpaloalto.org/boulwarepark. ŝƐĐƵƐƐŝŽŶ California Proposition 68 (Parks, Environment, and Water Bond Act of 2018) provides funding to local governments for local park rehabilitation, creation, and improvement for recreational purposes on a per capita basis. Grant recipients are encouraged to utilize awards to rehabilitate existing infrastructure and to address deficiencies in neighborhoods lacking access to the outdoors (PRC §80061(a)). As an aspect of the Proposition each city of Santa Clara County was allocated $177,952 in grant funding with Palo Alto receiving an additional $41,027 based on 12 Packet Pg. 158 City of Palo Alto Page 2 population size, for a total award of $218,979. The grant resolution is required by Proposition 68 as part of the application to award these funds. A twenty percent match, $43,796, of the grant funds is also required. Staff recommends that the grant funding be used to support the Boulware Park Expansion and Improvement project (PE-17005). The project is currently under construction document development with an anticipated start of construction in the summer of 2023, which aligns with the grant time schedule. Several Park amenities supported by the community and Parks and Recreation Commission in the construction plans are called out as “Add Alternates.” Current funding for the project does not cover the cost for these Add Alternates, which could be funded by the grant. Refer to Attachment B for the renovation plan. The Add Alternates include: 'ZEd&hE^ϮϬй/dzDd,dKd> Group picnic area shade cover $135,000 $27,000 ΨϭϲϮ͕ϬϬϬ Playground slide mound $65,000 $13,000 Ψϳϴ͕ϬϬϬ Site furnishings (benches and tables) $18,000 $3,600 ΨϮϭ͕ϲϬϬ dŽƚĂůΎΨϮϭϴ͕ϬϬϬΨϰϯ͕ϲϬϬΨϮϲϭ͕ϲϬϬ *Figures have been rounded The Proposition 68 grant resolution certifies the City meets or has explored to the extent possible all the 12 sections listed in the resolution. Sections 1-6 and 9-12 are all achieved by the scope of the Boulware Park Improvement plan. Sections 7 and 8 aim to address diversity and inclusion in public lands and workforce training and employment opportunities for disadvantaged communities. The Parks, Trails, Natural Open Space and Recreation Master Plan identifies areas of Palo Alto where residents lack access to parks and natural open spaces within ¼ mile of their homes, called Park Search Areas. Boulware Park is in the Ventura neighborhood of Palo Alto and is located between two Park Search Areas that are also identified as neighborhoods with the highest population and highest population density. Acceptance of this grant will provide more recreation opportunities for the residents of the Ventura neighborhood. The City strives to promote diversity and inclusion in public lands. Most recently, the City Council opened Foothills Nature Preserve to all, after being a resident -only preserve for decades. The City has a long-standing partnership with the Magical Bridge Foundation who created and developed Palo Alto’s Magical Bridge Playground, the first all - inclusive playground in the County and also supports Youth Community Service, who provides opportunities for youth to participate in service projects in the community. This project will engage local nonprofits supporting special needs families, such as Magical Bridge Foundation in the design details of the playground. 12 Packet Pg. 159 City of Palo Alto Page 3 dŝŵĞůŝŶĞ • Proposition 68 application due December 28, 2021 • Boulware Park Construction Summer of 2022 (6-month construction) • Boulware Park Opening Winter 2023 ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ Capital improvement funding of $495,000 was approved to address park maintenance needs in the Fiscal Year 2018 and 2019 Adopted Capital Budgets in the Boulware Park Improvements capital project (PE-17005). To cover the costs of developing the new parkland and renovation of the existing park, including incorporating a segment of Ash Street into the park area, Council approved consolidating funding for the previously approved Birch Street Improvements project (PE-19003) into PE-17005 as part of the Fiscal Year 2022 Adopted Capital Budget. Total capital improvement funding for the project in FY 2022 is $3.8 million. The ongoing maintenance costs for this project are estimated to be approximately $45,000 annually for landscaping and custodial expenses, in addition to major renovations every 20 years after completion of this project to replace equipment and park amenities. If the application for Proposition 68 Per Capita Grant Fund is awarded, then approximately $218,000 will be added as revenues and expenses to the Boulware Park Expansion and Improvement project (PE-17005), per the ‘Add Alternatives’ table above. The 20% matching funds, approximately $44,000, are available in the FY 2022 Adopted Capital Budget in project PE-17005. ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ Extensive stakeholder engagement has been completed in developing the proposed project improvement plan. Engagement materials can be located on the project's web page at www.cityofpaloalto.org/boulwarepark. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ The proposed recommendations are consistent with Policy C-26 of the Community Services element of the Comprehensive Plan that encourages maintaining park facilities as safe and healthy community assets; and Policy C-22 that encourages new community facilities to have flexible functions to ensure adaptability to the changing needs of t he community. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ The proposed Boulware Park and Birch Street Property Renovation Project is categorically exempt from the California Environmental Quality Act (CEQA) under Title 14 California Code of Regulations Section 15301 (Existing Facilities), Section 15302 (Replacement or Reconstruction), Section 15303 (New Construction of Small Facilities or Structures), and Section 15311 (Accessory Structures) because it consists of the redevelopment of an existing park. Although the new park area will also include the Birch Street property, the proposed amenities would largely replace existing amenities at the site (e.g., playgrounds, picnic areas, basketball court) or would otherwise provide local-serving amenities. Therefore, the expansion in use would be 12 Packet Pg. 160 City of Palo Alto Page 4 negligible. In addition, although a small new parking area is proposed, it would replace existing street parking along Ash Street that would be removed as part of the project. Therefore, these alterations to an existing public facility and addition of small new structures would be consistent with the Class 1 (Section 15301) and Class 3 (Section 15303) exemptions. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϮ͘Ă͗Attachment A: Resolution Approving Application for State Per Capita Grant Funds • Attachment12.b: Attachment B: Boulware Park Rendering 12 Packet Pg. 161 *NOT YET APPROVED* 1 244_20211118_ts24 Resolution No. _____ Resolution of the Council of the City of Palo Alto Approving Application for Per Capita Grant Funds (Proposition 68) R E C I T A L S A. WHEREAS, the State Department of Parks and Recreation has been delegated the responsibility by the Legislature of the State of California for the administration of the Per Capita Grant Program, setting up necessary procedures governing application(s); and B. WHEREAS, said procedures established by the State Department of Parks and Recreation require the grantee’s Governing Body to certify by resolution the approval of project application(s) before submission of said applications to the State; and C. WHEREAS, the grantee will enter into a contract(s) with the State of California to complete project(s). NOW THEREFORE THE CITY COUNCIL OF THE CITY OF PALO ALTO RESOLVES AS FOLLOWS: 1. Approves the filing of project application(s) for Per Capita program grant project(s); and 2. Certifies that said grantee has or will have available, prior to commencement of project work utilizing Per Capita funding, sufficient funds to complete the project(s); and 3. Certifies that the grantee has or will have sufficient funds to operate and maintain the project(s), and 4. Certifies that all projects proposed will be consistent with the park and recreation element of the City’s general or recreation plan (PRC §80063(a)), and 5. Certifies that these funds will be used to supplement, not supplant, local revenues in existence as of June 5, 2018 (PRC §80062(d)), and 6. Certifies that it will comply with the provisions of §1771.5 of the State Labor Code, and 7. (PRC §80001(b)(8)(A-G)) To the extent practicable, as identified in the “Presidential Memorandum--Promoting Diversity and Inclusion in Our National Parks, National Forests, and Other Public Lands and Waters,” dated January 12, 2017, the City will consider a range of actions that include, but are not limited to, the following: (A) Conducting active outreach to diverse populations, particularly minority, low- income, and disabled populations and tribal communities, to increase awareness within those communities and the public generally about specific programs and opportunities. (B) Mentoring new environmental, outdoor recreation, and conservation leaders to increase diverse representation across these areas. (C) Creating new partnerships with state, local, tribal, private, and nonprofit 12.a Packet Pg. 162 *NOT YET APPROVED* 2 244_20211118_ts24 organizations to expand access for diverse populations. (D) Identifying and implementing improvements to existing programs to increase visitation and access by diverse populations, particularly minority, low- income, and disabled populations and tribal communities. (E) Expanding the use of multilingual and culturally appropriate materials in public communications and educational strategies, including through social media strategies, as appropriate, that target diverse populations. (F) Developing or expanding coordinated efforts to promote youth engagement and empowerment, including fostering new partnerships with diversity-serving and youth- serving organizations, urban areas, and programs. (G) Identifying possible staff liaisons to diverse populations. 8. Agrees that to the extent practicable, the project(s) will provide workforce education and training, contractor and job opportunities for disadvantaged communities (PRC §80001(b)(5)). 9. Certifies that the grantee shall not reduce the amount of funding otherwise available to be spent on parks or other projects eligible for funds under this division in its jurisdiction. A one- time allocation of other funding that has been expended for parks or other projects, but which is not available on an ongoing basis, shall not be considered when calculating a recipient’s annual expenditures. (PRC §80062(d)). 10. Certifies that the grantee has reviewed, understands, and agrees to the General Provisions contained in the contract shown in the Procedural Guide; and 11. Delegates the authority to the City Manager, or designee to conduct all negotiations, sign and submit all documents, including, but not limited to applications, agreements, amendments, and payment requests, which may be necessary for the completion of the grant scope(s); and // // // // // // // // // 12.a Packet Pg. 163 *NOT YET APPROVED* 3 244_20211118_ts24 12. Agrees to comply with all applicable federal, state and local laws, ordinances, rules, regulations and guidelines. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Deputy City Attorney City Manager _____________________________ Director of Community Services _____________________________ Director of Administrative Services 12.a Packet Pg. 164 Exhibit ‘A’12.b Packet Pg. 165 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϬϰͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ City of Palo Alto Page 1 DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ dŝƚůĞ͗ZĞƋƵĞƐƚĨŽƌƵƚŚŽƌŝǌĂƚŝŽŶƚŽŵĞŶĚƚŚĞǆŝƐƚŝŶŐ>ĞŐĂů^ĞƌǀŝĐĞ ŐƌĞĞŵĞŶƚtŝƚŚƚŚĞ>Ăǁ&ŝƌŵŽĨŽůĂŶƚƵŽŶŽ͕,ŝŐŚƐŵŝƚŚΘtŚĂƚůĞǇ͕W ;ŽŶƚƌĂĐƚ^ϭϳϭϲϳϲϵϲͿƚŽ/ŶĐƌĞĂƐĞƚŚĞŽŶƚƌĂĐƚŵŽƵŶƚďǇĂŶĚĚŝƚŝŽŶĂů ΨϳϬ͕ϬϬϬĨŽƌĂŶĞǁEŽƚͲƚŽͲǆĐĞĞĚŵŽƵŶƚŽĨΨϰϱϱ͕ϬϬϬĂŶĚƚŽǆƚĞŶĚƚŚĞ dĞƌŵƚŽKĐƚŽďĞƌϭ͕ϮϬϮϰ &ƌŽŵ͗ŝƚǇƚƚŽƌŶĞǇ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that the City Council approve and authorize an increase in the contract amount of the legal services agreement with the law firm of Colantuono, Highsmith & Whatley, PC for litigation defense in the case of Green v. City of Palo Alto, et al., Court of Appeal of the State of California, Sixth Appellate District, Case No.: H049436, (Contract S17167696), by an additional $70,000 for a total not to exceed amount of $455,000 and an extension of the contract term to October 1, 2024. ŝƐĐƵƐƐŝŽŶ In October 2016, the City retained Colantuono, Highsmith & Whatley, PC (Contract S17167696) to represent the City in the case of Miriam Green v. City of Palo Alto, et al., Court of Appeal of the State of California, Sixth Appellate District, Case No.: H049436. The lawsuit was filed on October 6, 2016, decided by the Superior Court on June 24, 2021, and the City filed a notice of appeal on September 21 , 2021 and Plaintiffs filed a notice of cross- appeal on October 21, 2021. Additional funds are needed for briefing and oral argument at the Court of Appeal. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ No budget amendment is required for this action. The City Attorney’s existing bud get includes sufficient amounts to fund the additional cost of the $70,000 for litigation defense from Colantuono, Highsmith & Whatley, PC in the Green litigation. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ 13 Packet Pg. 166 City of Palo Alto Page 2 Amendment of legal services contracts is not a project requiring environmental review under the California Environmental Quality Act (CEQA) 13 Packet Pg. 167 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϬϴͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ĚŽƉƚŝŽŶŽĨZĞǀŝƐŝŽŶƐƚŽDĂŶĂŐĞŵĞŶƚĂŶĚWƌŽĨĞƐƐŝŽŶĂůŵƉůŽǇĞĞƐ ŽŵƉĞŶƐĂƚŝŽŶWůĂŶ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗,ƵŵĂŶZĞƐŽƵƌĐĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that Council adopt a Revision to the Management and Professional Compensation Plan (Management Comp Plan) for employee at the top of their salary range to be eligible for additional leave hours. ĂĐŬŐƌŽƵŶĚ The Management and Professional Compensation Plan “Management Comp Plan” specifies the terms and conditions of employment for unrepresented managers on a Citywide basis. The Management Comp Plan was initially established and adopted under a Council resolution and is amended from time-to-time by a vote by the Council. The Management Comp Plan is also incorporated by reference in certain Employment Agreements with individual managers and referenced in the agreement with represented Utilities Management. It is necessary to amend the plan at this time to allow additional Management Leave hours for merit, recruitment or retention purposes. ŝƐĐƵƐƐŝŽŶ The Management Compensation Plan specifies that Managers are to receive performance evaluations and to be eligible for adjustments to base compensation (often referred to as merit awards). Here is an excerpt of specific language from the Management Compensation Plan: “…Management/professional employees who have received an overall rating of "Meets", “Higher” or "Exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year will be eligible for an adjustment to base compensation.” This provision, unfortunately, does not provide a method for managers at the top of their salary range to receive a merit adjustment. As a result, highly productive and experienced managers at the top of the range are unable to receive a merit award in the same manner as their peers. 14 Packet Pg. 168 City of Palo Alto Page 2 To correct this misalignment in the merit adjustment process, it is recommended that the Management Comp Plan be revised to provide managers at the top of the ran ge who are rated as meeting meets expectations or higher, to receive the equivalent merit adjustment in the form of a one-time allocation of additional management leave hours. This change would allow appointing authorities to recognize productive and exp erienced managers at the top of the range with a form of recognition based on performance and support the City’s recruitment and retention goals. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ Awarding managers at the top of the range with an equivalent amount of leave hours will not incur an additional cost if the manager is not backfilled when taking the additional leave. However, in some instances, managers will require a backfill or may alternatively cash out the leave if they are unable to take the time, such as when staffing does not permit the absence of the manager. For the 2021 merit cycle, managers are eligible for a 3% merit award for performance that meets expectations or higher. Under this 3% scenario, it is anticipated that the general fund impact will range from $370,000 to $435,000 above the adopted budget for FY 2021, of which an estimated $50,000 would be related to the adoption of this revision. Staff are working to absorb these costs within existing funds due to vacancy savings. Currently 23 vacancies in this employee group exist, and the salary savings may serve as an offset. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϰ͘Ă͗Attachment A: Management Comp Plan, Mgnt Annual Leave Update 14 Packet Pg. 169 /dzK&W>K>dK KDWE^d/KEW>E DĂŶĂŐĞŵĞŶƚĂŶĚWƌŽĨĞƐƐŝŽŶĂůWĞƌƐŽŶŶĞů ŶĚŽƵŶĐŝůƉƉŽŝŶƚĞĞƐ Effective July 1, 2019 through June 30, 2022, except where specifically noted. 14.a Packet Pg. 170 2 SECTION I. COMPENSATION ....................................................................................................... 1 A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY ........................................... 1 B. BASIC PLAN ELEMENTS ........................................................................................................ 1 C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION ... 3 SECTION II. SPECIAL COMPENSATION ...................................................................................... 4 A. OVERTIME ............................................................................................................................ 4 B. IN LIEU HOLIDAY PAY ........................................................................................................... 4 C. WORKING ABOVE CLASSIFICATION PAY .............................................................................. 4 D. STAND-BY PAY .................................................................................................................. 5 E. CALL OUT PAY ...................................................................................................................... 5 F. NIGHT SHIFT PREMIUM ........................................................................................................ 5 G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE PERSONNEL ................................................................................................................................. 5 H. GROUP INSURANCE .......................................................................................................... 5 I. EMPLOYEE ASSISTANCE PLAN ............................................................................................ 10 J. SAFETY DIFFERENTIALS ...................................................................................................... 10 K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM .................................................. 11 L. LEAVES................................................................................................................................ 13 M. RETIREMENT PENSION ................................................................................................... 17 N. COMMUTE INCENTIVES and PARKING ........................................................................... 19 O. AT-WILL STATUS ............................................................................................................. 20 P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR ........................................ 21 Q. REIMBURSEMENT FOR RELOCATION EXPENSE .............................................................. 21 R. MEAL ALLOWANCE ............................................................................................................ 22 S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS .............................................. 22 T. MERIT RULES ...................................................................................................................... 22 14.a Packet Pg. 171 1 KDWE^d/KEW>E&KZd,/dzK&W>K>dK DĂŶĂŐĞŵĞŶƚĂŶĚWƌŽĨĞƐƐŝŽŶĂůWĞƌƐŽŶŶĞů As used in this Plan, the term “Management and Professional” refers to all employees, including Confidential employees, previously classified as “Management and Confidential” by the City. This group will hereafter be identified as “Management and Professional” personnel. ^d/KE/͘KDWE^d/KE This section applies to all management and professional employees and does not include Council Members or Council-appointed officers. Each Council-appointed officer shall be the responsible decision-maker under this Plan for those employees in departments under his/her control. ͘ DE'DEdEWZK&^^/KE>KDWE^d/KEWK>/z The City's policy for management and professional compensation is to establish and maintain a general structure based on marketplace norms and internal job alignment with broad compensation grades and ranges. Structures and ranges will be reviewed and updated as necessary based on marketplace survey data, internal relationships, and City financial conditions. Individual compensation adjustments will be considered by the Council-appointed officer based on (1) performance factors including achievement of predetermined objectives; (2) pay structure adjustments; and (3) City financial conditions. ͘ ^/W>E>DEd^ 1. Structure. The compensation plan includes separate multi-grade structures for both management and professional employees. Each grade will have a salary range with a mid -point which is 20% above the minimum, and 20% below the maximum of the range. All manag ement and professional positions will be assigned an appropriate pay grade based on salary survey data and internal relationships. Actual salary within the range is determined by experience and performance. Competitive marketplace studies will be conducted as needed by surveying a maximum of 14 organizations similar to Palo Alto in number of employees, funding mechanisms, population and services provided. These studies will focus on total compensation for management positions such as first line supervisors, administrative, confidential, professional and top management. Periodically, studies will include position-by-position comparisons using market research and internal equity data. The results of these studies may indicate that the entire pay grade structure be adjusted, that individual positions be reassigned to different pay grades, or that no change 14.a Packet Pg. 172 2 takes place. Such adjustments will only affect the salary administration framework. No individual salaries will be automatically changed because of structural adjustments. A department director may request that HR reevaluate a job or jobs in his or her department based on significant and permanent changes in job content. In doing so the director will supply needed information and will provide a position description questionnaire as requested. The Chief People Officer will respond to such requests within his or her discretion. 2. Compensation Adjustment Authorization. The City Manager may propose as part of the budget process for Council approval of a compensation adjustment based on (1) competitive market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a recommendation received from the Chief People Officer. Effective the first pay period following Council adoption of this plan all classifications will receive a three percent (3%) salary increase. a)Base Compensation. Compensation for management and professional employees includes bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi -weekly base salary must fall within pay grade limits of no less than 20% below the mid-point and no more than 20% above the mid-point. Base salary increases are earned and authorized in accordance with administrative guidelines based upon growth within the position and performance, which must meet or exceed position standards defined through the performance planning and appraisal process described in subsection b below, the salary structure and the City’s ability to pay. Management/professional employees who have received an overall rating of "Meets", “Higher” or "Exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year will be eligible for an adjustment to base compensation. Nothing herein shall preclude an employee's manager from awarding a mid -point adjustment increase to an employee on a performance plan at a later date should employ ee's performance improve. b)Performance Planning and Appraisal. Performance appraisals will be conducted at the end of each fiscal year during the months of July through September 30 each year prior to determining individual employee fixed compensation. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives 14.a Packet Pg. 173 5 shall be monitored periodically. The performance appraisals should be implemented in a manner that will achieve the following objectives: •Define the employee’s job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee’s role and responsibilities; •Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; •Facilitate two-way communication and understanding between the employee and his or her supervisor; •Counsel and encourage employees to work toward a learning development plan and realize their full potential; •Establish future work plan objectives. Work plans should include job related projects or special goals related to regular job duties when applicable. At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department hea ds and to the Chief People Officer or appropriate Council appointed officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. Each department will ensure that metrics tie to the performance appraisal . The performance planning and appraisal process should be completed by September 30. ͘DE'DEdEWZK&^^/KE>KDWE^d/KE:h^dDEd hd,KZ/d/KE 1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non- Council-appointed management and professional employees in an amount not to exceed the aggregate of approved management and professional positions in the Table of Organization for the applicable fiscal year. 2. Individual management and professional compensation authorized by a Council-appointed officer under the Management and Professional Compensation Plan may not be less than 20% below nor more than 20% above the mid-point for the individual position grades authorized in Salary Schedule attached. 3. The Council-appointed officers are authorized to establish such administrative rules as are necessary to implement the Management and Professional Salary Plan subject to the limitations of the approved compensation adjustment authorization and the approved grade and mid-point structure. 4. Notwithstanding any other provision of this Compensation Plan, in the event a downward adjustment of a position grade assignment indicates a reduction in the established salary of 14.a Packet Pg. 174 6 an individual employee, the Council-appointed officer may, if circumstances warrant, continue the salary for such employee in an amount in excess of the revised grade limit for a reasonable period of time. Such interim salary rates shall be defined as "Y-rates." Employees in “Y-rated” positions shall not be eligible for any increase to base salary unless and until the amount of the “Y-rated” salary is equal to or less than the published pay rates. Employees assigned to work above class duties shall not be eligible for “Y -rated” pay on conclusion of a work above class assignment. ^d/KE//͘^W/>KDWE^d/KE This section applies to all eligible regular management and professional positions including Council Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be in conformance with the Merit Rules and Regulations and Administrative Directives issued by the City Manager for the purposes of clarification and interpretation. ͘ KsZd/D Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. ͘ /E>/h,K>/zWz Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non -workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. ͘ tKZ</E'Ks>^^/&/d/KEWz Where management and professional employees, on a temporary basis, are assigned to perform all significant duties of a higher classification for a period of one month or more, the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working above classification will not exceed six months, unless renewed at the discretion of the City Manager. On expiration of that timeframe, working above classification pay will cease and the employee will return to his or her former pay level. Working above classification pay is not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties in the higher classification to be performed and an end date. 14.a Packet Pg. 175 7 ͘ ^dEͲzWz Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on a case by case basis, in extreme circumstances involving unavailability of non-management staff. Compensation is as follows: Monday through Friday $40 per day Saturday, Sunday, Holidays $58 per day ͘ >>KhdWz Effective pay period beginning February 26, 2011, Exempt management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City premises, (2) is called back to the work location outside of regularly scheduled working hours, and (3) the Call Back is for an emergency arising out of situations involving re al or potential loss of service, property or personal danger. Employees called back will be expected to respond directly to the location of the problem. Compensation is per Call Out as reported on timecard and will be paid as follows: Monday through Friday: $140 per day Saturday and Sunday: $200 per day &͘ E/',d^,/&dWZD/hD Night shift differential shall be paid at the rate of five percent (5%) to regular full -time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. '͘ hE/&KZDWhZ,^W>EͲ^tKZEWK>/͕&/ZWZ^KEE>͕ĂŶĚKWE^W WZ^KEE> Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in conformance with department policy. ,͘ 'ZKhW/E^hZE 1. Effective Date of Coverage for New Employees For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. 14.a Packet Pg. 176 8 2. Dual coverage. When a City employee is married to or has a registered domestic partner with the California Secretary of State with another City employee, each shall be covered only once (as an individual or as a spouse of the other City employee, but not both) and dependent children, if any, shall be covered by only one spouse. 3. Active Employee Health Plan a) During the term of this compensation plan, the maximum City contribution towards medical premiums for eligible full-time employees per category shall be up to a maximum of the following for any plan: Medical Premium Category (Coverage Level) Maximum City Contribution Effective January 1, 2020 Single (EE only) $840 2- Party (EE +1) $1680 Family (EE + 2 or more) $2180 *The PEMHCA minimum changes per statutory determination. Any increases to the PEMHCA minimum during the term of this plan will result in a corresponding decrease to the amount of the additional City contribution, so that the total maximum City contribution never exceeds the amount listed in the “Total Maximum City Contribution” columns above. The City’s total maximum contribution towards medical premiums for eligible part time employees shall be prorated based on the number of hours per week the part-time employee is assigned to work. b) Coverage For Domestic Partners 1) Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State and will be eligible for the Alternative Medical Benefit Program in paragraph 3 below. 2) Domestic Partnership Not Registered with the California Secretary of State: Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the People Strategy and Operations Department, will be eligible for a stipend of two hundred and eighty four dollars ($284.00) per month toward the cost of an individual health plan. Evidence of premium payment will be required with request for reimbursement. 4. Alternative Medical Benefit Program 14.a Packet Pg. 177 9 If a regular employee and/or the employee’s dependent(s) are eligible for and elect to receive medical insurance through another non-City of Palo Alto employer-sponsored or association medical plan, the employee may choose to waive his/her right to the City of Palo Alto’s medical insurance and receive cash payments in the amount of $284.00. Examples of waivers eligible for this payment are: • Employee waives all applicable City medical coverage; or • Employee is eligible to enroll his or her spouse or register his or her domestic partner with the California Secretary of State and waives medical coverage for the spouse or domestic partner; or • Employee has additional eligible dependents and waives family-level medical coverage. Participation must result in a health insurance cost savings to the City and payments per employee shall not exceed a total of two hundred eighty four dollars ($284.00) per month. To participate in the program the employee and dependents must be eligible for coverage under PEMHCA medical plans, complete a waiver of medical coverage form, and provide proof of eligible alternative medical coverage. When a City employee is married to or has a registered domestic partner with the California Secretary of State with another City employee, each shall only be eligible once (as an individual or as a spouse of the other City employee, but not both) and not eligible for a waiver. Payments will be made in the employee’s paycheck beginning the first month following the employee’s completion of the waiver form. Payments are subject to state and federal taxes and are not considered earnings under PERS law. Employees are responsible for notifying the City of any change in status affecting eligibility for this program (for example, life changes affecting dependent’s eligibility for medical coverage through the employee) and will be responsible for repayment of amounts paid by the City contrary to the terms of this program due to the employee’s failure to notify the City of a change in status. 5. Retiree Health Plan a) Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees” Medical and Hospital Care Act. The City’s monthly employer contribution for each employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the amount necessary to pay for the cost of his or her enrollment in a health benefits plan up to the monthly premium for the second most expensive plan offered to management and professional personnel during the contract term (among the existing array of plans.) The City’s contribution for an employee hired before January 1, 2004 who retires on or after March 30, 2011 shall be the same contribution amount it makes from time to time for active City employees. b) Post – 1/1/04 Hires For those Management and professional employees hired after January 1, 2004, the PERS 14.a Packet Pg. 178 10 law vesting schedule set forth in Government Code section 22893 will apply. Under that law, an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five (5) of those years were performed at the City of Palo Alto. After ten (10) years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at 20 years’ service credit, the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section 22893 based on a weighted average of available health plan premiums. c) Effective upon ratification and adoption of this compensation plan, the City shall provide active Management employees who were hired before January 1, 2004 with a one-time opportunity to opt-in to retiree health benefits provided under California Government Code section 22893. Eligible employees who wish to exercise this option shall inform the Human Resources department of their election in writing no later than 90 days following the ratification and adoption of this compensation plan. 6. Dental Plan a) The City shall pay covered plan charges on behalf of all eligible employees and dependents. (Domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department are considered dependents under the plan.) Benefits for regular part-time employees hired or assigned to a part- time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) The City’s Dental Plan provides the following: • Maximum Benefits per Calendar Year- $2,000 per person • Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) • Major Dental Services 50% UCR* • Orthodontics 50% UCR* • Basic Benefits (All other covered services) First Calendar Year of Eligibility 70% UCR* Subsequent Calendar Years 70%-100% *Usual, Customary, and Reasonable • Composite (tooth covered) fillings for posterior teeth For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not utilize the plan during the current year, the percentage 14.a Packet Pg. 179 11 of coverage for the next calendar year shall remain unchanged from the current year. If a dental plan member ever loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan would include: • Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. • Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non - City of Palo Alto dental plan. 7. Basic Life Insurance The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no -cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,00 0). 8. Supplemental Life And AD&D Insurance An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one- or two-times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amount of AD&D coverage available is up to $325,000. 9. Long Term Disability Insurance a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium for the first $6,000 of base monthly salary. For employees whose base monthly salary exceeds $6,000, the employee shall pay the cost of the required premium based upon their monthly salary between $6,000 and $15,000. b) For employees whose base monthly salary exceeds $6,000 and who have no eligible dependents covered under the City’s medical, dental or vision plans, the City will pay up to $17.50 per month towards the employee’s cost for LTD coverage. 10. Vision Care a) The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan provides an exam every 12 months; lenses every 24 months; frames every 24 months, all subject to a $20 co-payment as defined in the Vision Services Benefits Plan A schedule. Benefits for regular part -time employees will be prorated as follows: 14.a Packet Pg. 180 12 Employees hired after January 1, 2004, who will work less than full time, will receive prorated premium costs for vision benefits in accordance with his/her percentage of a full-time work schedule. Vision benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. Effective July 1, 1996, dependents include eligible domestic partners who are either registered with the Secretary of State. ͘ DW>Kz^^/^dEW>E The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll- free phone line 24 hours a day, seven days a week. Guidance is also available online. ͘ ^&dz/&&ZEd/>^ 1. Police Department - Personnel Development Program Pursuant to administrative rules governing eligibility and qualification, one of the following differentials, whichever is higher, may be granted to sworn police personnel: A. P.O.S.T. Intermediate Certificate: five percent (5%) above base salary B. P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary 2. Fire Department - EMT Differential Pursuant to administrative rules governing eligibility and qualification, the following differential may be granted to sworn Fire personnel: A. EMT Differential: three percent (3%) above base salary &͘ DE'DEdĂŶĚWZK&^^/KE>E&/dWZK'ZD Management and professional employees are eligible for Sections 1, 2, and 3of the Management Benefit Program below. City Council Members are not eligible for benefits under Section 1 and 2 below. 1. Professional Development - Reimbursement 14.a Packet Pg. 181 13 The purpose of this program is to provide employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self- improvement activities may be granted each management and professional employee up to a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: a)Civic and professional association memberships b)Conference participation and travel expenses, which must occur within the compensation plan period. c)Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City’s mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City’s travel expense report from the Policy & Procedures Manual Section 1-02 ASD. 14.a Packet Pg. 182 14 d)Professional and trade journal subscriptions not to exceed 12 months. e)Approval will be at discretion of department head and signature is required on reimbursement form. Amounts under this professional development program will be pro -rated in the first year of employment or promotion into a position covered by this Compensation Plan 2. Excess Benefit This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code, with exception of Gym or Health Club Membership. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options, subject to caps pursuant to IRS regulations: a)Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. b)Dependent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of annual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. 1)The annual amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 2)The expenses must be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3)The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 14.a Packet Pg. 183 15 4) If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals (other than a resident of the facility). 5) Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP will be reduced by any amount reimbursed under the Excess Benefit Plan. c) Non-taxable Professional Development Spending Account. Provides reimbursement for Non-Taxable professional development expenses (e.g., job-related training and education, seminars, training manuals, etc.) to the extent they are not paid or reimbursed under any other plan of the City. d) Gym or Health Club memberships. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement of this expense is taxable to the employee. e) Deferred Compensation. Provides a one-time contribution to the employee’s City- sponsored 457 Deferred Compensation plan with either ICMA-RC or Mass Mutual. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a “use–it-or-lose-it” basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Specified amounts under this benefit will be applied on a pro-rated basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. City will explore options including a deferred compensation match up to $4000 through a pre -tax retirement savings account as a replacement for Professional Development in Section 1 and Excess Benefit as provided under Section 2. '͘ >s^ 1. Sick Leave a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a 40-hour duty schedule. Those assigned work schedules which are greater or lesser than 40 hours will accrue sick leave at the ratio of their work schedule to 40 hours. 14.a Packet Pg. 184 16 b)Employees may use up to 20 hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. c)Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. d)Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have 15 or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent (2½%) of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. e)Up to nine (9) days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f)Management and Professional employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. g)In accordance with the City Merit Rules and Regulations, a new employee may, if necessary, use up to 48 hours or shift equivalent of sick leave at any time during the first six (6) months of employment. 2. Management Annual Leave a)Exempt Employees Regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half (½) shift off for each 8 hours charged. 14.a Packet Pg. 185 17 In 2012, the City transitioned this benefit from a fiscal to calendar year basis for administrative purposes. Beginning in 2013 and each calendar year thereafter, employees will be credited with 80 hours of management annual leave. Entitlement under this provision will be reduced on a prorated basis for part -time status, or according to the number of months in paid status during the year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the year will be paid in cash unless a different option as indicated above is elected by the employee. Council appointed Officers can, at their discretion, award additional management annual leave to employees. Award of additional leave is intended to acknowledge and recognize excellent performance and/or longevity in alignment with the annual merit cycle. b)Non-Exempt Employees Based on an audit recommendation to eliminate payment of overtime as well as management leave for non-exempt employees in the management group, the City is transitioning away from providing management leave to non -exempt employees. As part of the transition, and in order to minimize impacts to current employees, the City will phase-out elimination of the 80 hours of management leave for all current non-exempt Management and Professional employees (those eligible to earn overtime). Beginning on July 1, 2014 all employees in non-exempt positions will receive overtime pay for hours actually worked, but will no longer receive management leave. Employees hired into non-exempt management positions on or after February 26, 2011 will receive overtime only and will not be eligible for management leave. 3. Vacation Vacation will be accrued when an employee is in pay status and will be credited on a bi- weekly basis. Total vacation accrual at any one time may not exceed three (3) times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a)Less than nine (9) years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year; provided that: i.The City Manager is authorized to adjust department head annual vacation accrual to provide for a maximum of 160 hours for those hired between July 1, 1996 and June 30, 2001; and 14.a Packet Pg. 186 18 ii. The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. 14.a Packet Pg. 187 19 b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; 160 hours vacation per year. c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; 180 hours vacation leave per year. d) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section. Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation year, employees will make their election for vacation hours to cash out no later than November 1, 2012. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designates on the election form. Employees who do not elect a cash-out amount by November 1 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre -designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash -out the elected amount in a paycheck issued on or after the payroll date including November 1. 4. Bereavement Leave of absence with pay of three (3) days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family, which is 14.a Packet Pg. 188 20 defined for purposes of this section as wife, husband, son, son -in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control. 5. Use of accrued leave credits during leaves of absence. During unpaid leaves of absence for disability or other reasons, the employee may elect and the City may require the employee to use accrued paid vacation and sick leave in a manner consistent with state and federal law. Requests for leaves without pay shall not be unreasonably denied. In order to avoid misunderstandings, all leaves without pay must be in writing to be effective. ,͘ Zd/ZDEdWE^/KE 1. Miscellaneous Pension Formulas: a. Miscellaneous Pension Group A: 2.7% at 55. The City provides retirement benefits under the California Public Employees Retirement System at the level of 2.7% at age 55 for employees hired before July 17, 2010, with a one year final compensation period. b. Miscellaneous Pension Group B: 2% at 60:For miscellaneous employees hired on or after July 17, 2010, and before January 1, 2013, and employees hired on or after January 1, 2013 who are not “new members” of CalPERS as defined in the Public Employees’ Pension Reform Act (often referred to as “Classic” CalPERS members)the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60), with a one (1) year final compensation period. c. Miscellaneous Pension Group C: 2% at 62. Employees hired on or after January 1, 2013 meeting the definition of “new member” under the Public Employees’ Pension Reform Act (Gov’t. Code s. 7522 et seq.) shall be subject to all of the provisions of that law, including but not limited to the two percent at age 62 (2%@62) retirement formula with a three (3) year final compensation period. 2. Safety Pension Formulas: a. Safety Pension Group A: 3% at 50. For Safety members, the City currently offers the CalPERS "3% at 50" full formula (Section 21362.2) benefit, with a one (1) year final compensation period. b. Safety Pension Group B: 3% at 55. Local Fire Safety members newly hired after 6/08/12 14.a Packet Pg. 189 21 will be placed in the 3%@55 formula. As soon as administratively possible, the City intends to modify the Local Police Safety formula for new hires to 3%@55 formula. c. Safety Pension Group C: New employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute, with a three (3) year final compensation period. 3. Employee PERS Share. a. Miscellaneous Employee Shares: Employees in Miscellaneous Pension Group A shall pay the full eight percent (8%) employee contribution. Employees in Miscellaneous Pension Group B shall pay the full seven percent (7%) employee contribution. Employees in Miscellaneous Pension Group C shall pay the employee contribution required by the Public Employees Pension Reform Act, calculated at fifty percent (50%) of the normal cost. b. Safety Employee Shares. Employees in Safety Pension Group A shall pay the full nine percent (9%) PERS employee contribution. Employees in Safety Pension Group B shall pay the full eight percent (9%) PERS employee contribution. Employees in Safety Pension Group C shall pay the employee contribution required by the Public Employees Pension Reform Act, calculated at fifty percent (50%) of the normal cost. Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 4. Employer Share a. Miscellaneous (Non-Safety) Management and Professional: As soon as administratively possible, but no sooner than pay period including July 1, 2017 each Miscellaneous (non-Safety) Management and Professional employee shall pay one- half percent (0.5%) of their salary toward the employer cost of retirement in accordance with Section 20516 of the California Government Code. Effective the first full pay period including July 1, 2018, each Miscellaneous (non -Safety) Management and Professional employee shall pay an additional one-half percent (0.5%) of their salary toward the employer cost of retirement in accordance with Section 20516 of the California Government Code. This will result in Miscellaneous (non-Safety) Management and Professional employees paying a total of one (1) percent of the employer share in addition to their employee contribution. b. Safety Management: 14.a Packet Pg. 190 22 As soon as administratively possible, but no sooner than pay period including July 1, 2017 each Safety Management employee shall pay one and one-half percent (1.5%) of their salary toward the employer cost of retirement in accordance with Section 20516 of the California Government Code. Effective the first full pay period including July 1, 2018, each Safety Management employee shall pay an additional one and one-half percent (1.5%) of their salary toward the employer cost of retirement in accordance with Section 20516 of the California Government Code. This will result in Safety Management employees paying a total of three (3) percent of the employer share in addition to their employee contribution. 5. Final Compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit, except as may otherwise be required by PEPRA. 6. Employee PERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. 7. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest con secutive years and a cap on pensionable compensation based on IRS limits for employers that do not participate in social security. /͘ KDDhd/EEd/s^ĂŶĚWZ</E' 1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The City will provide a Civic Center Garage parking permit. Employees hired after June 30, 1994 may initially receive a parking permit for another downtown lot, subject to the availability of space at the Civic Center Garage. 2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one commute incentives, including but not limited to the following options, for those using an eligible commute alternative on 60% or more of their scheduled work days per month: a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the current IRS limit, as may be amended from time to time, (currently $125/month) are available through the Commuter Check Direct (CCD) website for employees using Bay Area public transportation or riding in a registered vanpool at least 60% of their scheduled work days. Administration of the Commuter Check benefit shall be subject to the rules and regulations of the third- party administrator. 14.a Packet Pg. 191 23 b) Go Pass. The Go Pass program will offer civic center and other downtown-based employees a Caltrans Go Pass that allows unlimited rides on Caltrain in all zones seven days per week, to any City of Palo Alto employee. c) Bicycle. The City will provide employees with a tax-free incentive of $20 per month to eligible employees who ride a bicycle to work. d) Carpool. The City will provide with a taxable incentive of $30 per month to each eligible employee in a carpool with two or more licensed drivers. e) Walk. The City will provide employees with a taxable incentive of $20 per month to eligible employees who walk to work. :͘ dͲt/>>^ddh^ Certain Management and Professional Positions are designated as having “at -will” employment status. Employees hired into “at-will” positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. 1. At-will Management & Professional positions. Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were hired as at-will employees whose terms of employment are specified by an employment contract that includes a severance package. Effective on the date of adoption of this plan, new employees hired or promoted to department head, assistant department director, and all other positions listed on Attachment B shall be at-will employees. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and management leave as are generally provided to management employees and described in this compensation plan, as amended from time to time. 2. Provisional employees. The City has created a program for Provisional employment when funding is available. The program’s purpose is to create limited duration senior management level work for the City 14.a Packet Pg. 192 24 Manager’s Office or as designated by the City Manager. A Provisional Employee will be an “at will” employee whose term of employment shall be no more than two (2) years. A Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional Employee will receive limited benefits as specified in an Employment Agreement. Sections I and II of this Compensation Plan shall not apply to Provisional Employees, except as specified by the City Manager. 3. Management and Legal Fellows. The City has created programs for Management Fellows and Legal Fellows when funding is available. The programs’ purpose is to create limited duration entry level positions for management graduates and lawyers. Fellows will be “at will” employees whose term of employment shall be no more than two (2) years. Fellows shall be PERS exempt to the extent allowed by law, but may receive vacation, sick leave, health care benefits and other limited benefits, as determined by the City Manager or City Attorney. Sections I and II of this Plan shall not apply to Management and Legal Fellows, except as specified by the City Manager or City Attorney. <͘/d/KE>KDWE^d/KE&KZDzKZEs/DzKZ The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional expenses of these offices. >͘Z/DhZ^DEd&KZZ>Kd/KEyWE^ Policy Statement The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new management and professional employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits” or portions thereof, may be 14.a Packet Pg. 193 25 extended for exceptional circumstances and only the approval of the City Manager or designee, or for Council-appointed officers, the City Council. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy and all relocation reimbursements shall be subject to the provisions of that policy. D͘ D>>>KtE Management and professional employees assigned to attend night meetings are eligible to receive reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually taken and submitted for reimbursement. E͘ 'Z/sE^Z'Z/E'KhE/>WWK/EdK&&/Z^ Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit System Rules and Regulations, any Management and Professional employee who is supervised by a Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance pursuant to Step One (informal discussion), summarize the grievance regarding the Council Appointed Officer in writing and submit it to the Director of Human Resources for review and resolution using the methods he/she considers appropriate. K͘ DZ/dZh>^ The City will include members of the Management/Professional Compensation Committee in discussions regarding revision of the Merit Rules and Regulations. 14.a Packet Pg. 194 26 ƚƚĂĐŚŵĞŶƚ ƚͲtŝůůWŽƐŝƚŝŽŶƐ DĂŶĂŐĞŵĞŶƚĂŶĚWƌŽĨĞƐƐŝŽŶĂůhŶŝƚ The intent of this provision under the Management/Professional Compensation Plan is to designate classifications at the department head, assistant director, deputy director, division manager and senior professional levels as at-will. The applicable Council Appointed Officer may designate newly created positions at those levels not included on this list as at -will. Existing classifications that shall be at-will include but are not limited to: Department Heads- All departments Assistant Directors- All departments Deputy Directors- All departments Division Managers Administrative Services Director, Administrative Services/Chief Financial Officer Director, Office of Management & Budget Assistant Director, Administrative Services Chief Budget Officer Manager, Accounting Chief Procurement Officer Manager, Real Property City Attorney Senior Assistant City Attorney Assistant City Attorney Sr. Deputy City Attorney Deputy City Attorney Legal Fellow City Auditor Deputy City Auditor Sr. Performance Auditor City Clerk Assistant City Clerk Deputy City Clerk City Manager Assistant City Manager/Chief Operating Officer Assistant to City Manager 14.a Packet Pg. 195 27 Chief Communications Officer Chief Sustainability Officer Communications Manager Manager Economic Development Management Fellow Community Services Director, Community Services Assistant Director, Community Services Manager, Community Services Manager, Community Services Program Senior Human Resources Director of Human Resources/Chief People Officer Assistant Director, Human Resources Human Resources Manager Senior Administrator Human Resources IT Director, IT/Chief Information Officer Manager, Information Technology Library Director, Libraries Assistant Director, Library Services Division Head, Collection & Technical Services Manager, Library Services Planning & Community Environment Director, Planning & Community Environment Assistant Director, Planning & Community Environment Planning Manager Division Manager, Chief Planning Official Division Manager, Chief Transportation Official Development Services Department Development Services Director Chief Building Official Assistant Building Official Planning Manager Public Safety Chief of Police/Director of Public Safety Fire Chief /Assistant Public Safety Director Assistant Police Chief 14.a Packet Pg. 196 28 Emergency Services Director Deputy Director – Technical Services Division (police department) Deputy Fire Chief Public Works Director, Public Works/City Engineer Assistant Director, Public Works – Environmental Services Assistant Director, Public Works – Public Services Assistant Director, Public Works – Engineering Manager, Airport Manager, Fleet Water Quality Control Plant Manager Utilities Director, Utilities 14.a Packet Pg. 197 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϭϴͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨĂDĞŵŽƌĂŶĚƵŵŽĨhŶĚĞƌƐƚĂŶĚŝŶŐĞƚǁĞĞŶƚŚĞŝƚǇŽĨWĂůŽ ůƚŽWŽůŝĐĞĞƉĂƌƚŵĞŶƚĂŶĚƚŚĞŝƚǇŽĨĂŵƉďĞůůĨŽƌƚŚĞ^ĂŶƚĂůĂƌĂŽƵŶƚǇ ^ƉĞĐŝĂůŝǌĞĚŶĨŽƌĐĞŵĞŶƚdĞĂŵ;^^dͿĨŽƌĂWĞƌŝŽĚŽĨdĞŶzĞĂƌƐĂƚĂŽƐƚŽĨ ΨϭϬ͕ϬϬϬŽƌΨϱ͕ϬϬϬŶŶƵĂůůǇĞƉ ĞŶĚŝŶŐŽŶWWWĂƌƚŝĐŝƉĂƚŝŽŶ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗WŽůŝĐĞ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends the City Council approve the attached Memorandum of Understanding between the City of Palo Alto Police Department (PAPD), the City of Campbell, and the other participating law enforcement agencies in the County to participate in the Santa Clara County Specialized Enforcement Team (SCCSET) for a period of ten years, at a cost of $10,000 or $5,000 annually depending on if PAPD is able to assign a member to the team. ĂĐŬŐƌŽƵŶĚ SCCSET is a county-wide law enforcement task force whose mission is to prevent, suppress, and combat the impact of violent and career criminals, offenders on supervised release, major narcotic offenders, human trafficking offenders, criminal organizations, gangs, firearms traffickers, and other significant crimes to increase public safety in Santa Clara County. SCCSET is administered by the Campbell Police Department and staffed by sworn law enforcement officers from police agencies throughout the county. Individual law enforcement agencies in Santa Clara County can choose to contribute one or more members (sworn police officers, probation officers, parole officers, and supervisors) full -time to SCCSET; typically, these assignments occur in one-year increments at the discretion of the participating agency. SCCSET has been in existence since the 1980s. In the past 25 years, PAPD has contributed an employee full-time only occasionally as staffing allowed. Part-time allocations of staff to a SCCSET assignment are not permitted. The assignment of a PAPD employee to SCCSET is an operational decision made on an annual basis by the Police Chief; in light of current continued staffing challenges and other Department priorities, it is unlikely that PAPD will be able to contribute an employee to the task force for the immediate future. Historically, SCCSET has not had a dedicated funding source to sustain operations. On March 11, 2021, the Santa Clara County Police Chiefs’ Association (SCCPCA), of which PAPD is a member, voted in favor of creating a funding source for SCCSET. SCCPCA ratified that agencies who participate in SCCSET by assigning a minimum of one employee will contribute $5,000 annually, 15 Packet Pg. 198 City of Palo Alto Page 2 and those agencies who do not will contribute $10,000 annually. These funds, paid by the participating agencies to the City of Campbell, are used to offset the administrative costs of SCCSET incurred. With every law enforcement agency in the county contributing at the same rate (depending on if agencies assign a member or members to the task force), it spreads the cost of SCCSET operational expenses between the participating agencies. The attached Memorandum of Understanding formally memorializes the agreement between PAPD and the member agencies of SCCSET and commits the Police Department to contribute $10,000 or $5,000 annually depending on if PAPD is able to assign a member to the team. Staff are seeking Council approval for a ten-year agreement as all other participating agencies have already done so. ŝƐĐƵƐƐŝŽŶ SCCSET task force members typically operate in plainclothes and can immediately provide a team of experienced undercover personnel that most individual law enforcement agencies (PAPD included) lack. As such, having the ability to summon SCCSET to Palo Alto to work on particular crime trends or major cases is of real and substantial benefit to PAPD. It will allow us to quickly supplement our staffing to address an immediate problem. For example, in August 2019 PAPD summoned SCCSET to assist with a 29-hour standoff with an armed domestic violence suspect. PAPD has also used the task force to conduct undercover operations by surveilling criminal suspects or attempting to locate wanted criminal suspects associated with Palo Alto crimes. In the Department’s experience, when PAPD employees assigned to SCCSET return to our agency after the completion of their assignment, they bring a wealth and diversity of training and experience back with them. Former SCCSET task force members return to PAPD with a network of regional law enforcement contacts, enhanced skillsets, and exposure to crimes and larger investigations that are not routinely seen in Palo Alto. They are then able to share their training and experiences with PAPD partners and serve as a resource for other officers and detectives during the course of investigations. SCCSET has proven to be a valuable resource for the City. The City’s portion of financial support of SCCSET, along with the signed memorandum of understanding, is necessary for the task force’s continued success and operation. Should the Police Chief assign an employee to SCCSET, that employee would be assigned to the task force on a full-time basis for installments one fiscal year at a time. If the Police Department does not send an employee to help staff the task force, the Department is still able to request the task force’s assistance when necessary. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ If approved, the agreement between PAPD and SCCSET become effective through 2031. The cost of $10,000 (or $5,000 annually depending on if PAPD is able to assign a member to the team) will be paid from the Department’s Investigative Services Division operating budget. Should the Department assign staff to SCCSET, the customary costs for training, equipment and vehicle, and compensation will be borne by the Department budget, as is currently the case for detectives assigned to PAPD investigations. In the event the City contributes an employee to 15 Packet Pg. 199 City of Palo Alto Page 3 the task force, the staff member would remain a City employee and continue to be governed by all City policies and procedures. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ This agreement will maintain the status quo in regard to the Department’s historic annual participation. The City would be joining all other law enforcement agencies in Santa Clara County in agreeing to this Memorandum of Understanding, and would be continuing its support of this valuable task force to combat crime in our communities. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ This is not a project under the California Environmental Quality Act (CEQA). ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϱ͘Ă͗Attachment A: Santa Clara County Specialized Enforcement Team Memorandum of Understanding 15 Packet Pg. 200 1 ^ĂŶƚĂůĂƌĂŽƵŶƚǇ^ƉĞĐŝĂůŝǌĞĚŶĨŽƌĐĞŵĞŶƚdĞĂŵ DDKZEhDK&hEZ^dE/E' July 1, 2021 /͘ hd,KZ/d/^ The Santa Clara County Specialized Enforcement Team (SCCSET) Task Force (hereinafter referred to as the “Task Force”) is administered and managed by the Campbell Police Department. II. WZd/^ This MOU is a formal task force agreement between the City of Campbell and the Participating Agencies of SCCSET listed below (hereinafter referred to individually as the “Participating Agency” or collectively as the “Participating Agencies”). This MOU is effective on July 1, 2021. The individual Participating Agencies listed below agree to abide by the tenets and provisions of this MOU throughout the duration of SCCSET’s existence. City of Campbell City of Santa Clara City of San Jose City of Mountain View City of Sunnyvale City of Milpitas City of Gilroy Town of Los Gatos City of Palo Alto City of Los Altos City of Morgan Hill Santa Clara County Sheriff Santa Clara County District Attorney Santa Clara County Probation California State Parole – Division of Adult Parole Operations (DAPO) California Highway Patrol San Jose State University Police California Department of Alcoholic Beverage Control ///͘ WhZWK^ The purpose of this MOU is to describe the responsibilities and commitments of the Participating Agencies in SCCSET. The MOU also outlines the mission and objectives for SCCSET. Nothing in this MOU is intended to create a local public agency or a joint powers agreement. SCCSET acts only through voluntary participation by the individual Participating Agencies and is not authorized to hold property or exercise independent powers. SCCSET funds are held and disbursed solely by the City of Campbell. This MOU supersedes all previous SCCSET MOUs. /s͘ D/^^/KE The mission of SCCSET is to promote interagency collaboration to prevent, suppress, and combat the impact of violent and career criminals, PRCS/AB109 offenders, major narcotic offenders, human trafficking offenders, criminal organizations, gangs, firearms traffickers, and other significant crimes to increase public safety in Santa Clara County. 15.a Packet Pg. 201 2 s͘D/E/^dZd/sZ^WKE^//>/d/^ ͘ĂŵƉďĞůůWŽůŝĐĞŚŝĞĨ The Campbell Police Chief, with the input from Participating Agency Department Heads (or their designee), shall be responsible for the development of Task Force policies and operating procedures and shall periodically review and evaluate the Task Force operations, mission, policies, and procedures. ͘dĂƐŬ&ŽƌĐĞŽŵŵĂŶĚĞƌ The Task Force Commander shall be a peace officer of the rank of lieutenant or higher from one of the Participating Agencies. The Task Force Commander will be responsible for managing SCCSET and will report to the Campbell Police Chief or his designated representative. The Task Force Commander will provide monthly and annual reports of SCCSET’s activities to the Campbell Police Chief and to Participating Agency Department Heads. Any personnel assigned to SCCSET shall work under the immediate supervision of the Task Force Commander and shall adhere to the published policies and procedures of SCCSET. The Task Force Commander and Task Force Supervisor(s) (as defined in Section (V)(c) below) should be involved in the interview and selection of Investigators and support personnel assigned to the Task Force. ͘dĂƐŬ&ŽƌĐĞ^ƵƉĞƌǀŝƐŽƌ The Task Force Supervisor(s) shall be a peace, probation, or parole officer of supervisory rank from one of the Participating Agencies. The Campbell Police Chief shall have final approval for the Task Force Supervisor(s). The Task Force Supervisor(s) will report to the Task Force Commander. The Task Force Supervisor(s) will be a working member of the team who is responsible for the direct supervision of Task Force related operations and personnel. The Task Force Supervisor(s) shall perform administrative and operational assignments as assigned by the Task Force Commander. ͘/ŶǀĞƐƚŝŐĂƚŽƌƐ SCCSET shall be staffed by qualified investigators recommended for the assignment by the Participating Agencies (the “SCCSET Investigators”). Assignment to SCCSET should be for a minimum of two years. Prospective investigators for SCCSET will be selected by each Participating Agency. Consideration for placement in SCCSET will be based on past job performance, investigative experience, and the ability to work with others in a close team relationship. Any SCCSET Investigators not meeting acceptable standards of performance or refusing to comply with SCCSET policies and procedures may be removed from SCCSET by the Task Force Commander, with approval from the Campbell Police Chief. If the Task Force Commander has cause to replace an officer, they shall discuss the issue with the Investigator’s employing agency. If the Participating Agency does not concur with the 15.a Packet Pg. 202 3 decision of the Task Force Commander to remove and replace the officer, the issue shall be forwarded to the Campbell Police Chief for final resolution. It is agreed, however, that it is in the best interest of SCCSET to resolve the operational problems at the lowest possible level. ͘ ůĞƌŝĐĂů The appropriate staff will be assigned to SCCSET to assist members to achieve their mission. The number and placement of such staff will be determined by the Task Force Commander in consideration of the needs of SCCSET. s/͘ WZ^KEE> A. Membership:The SCCSET Task Force consists of Police Officers, Parole Officers, and Probation Officers from the Participating Agencies. B. Assignment to the SCCSET Task Force: Personnel selections for SCCSET are at the discretion of the Task Force Commander and each Participating Agency with the approval of the Campbell Police Chief. Assignment to SCCSET will be continued based on performance and the needs of SCCSET. C. Personnel Management: Each member of SCCSET will be subject to the personnel rules, regulations, policies, and terms and conditions of employment of his or her employing agency. If any SCCSET member’s outside employment poses a potential for conflict of interest, as determined by the Task Force Commander, said member may be excluded from SCCSET. D. No Employment by the SCCSET Task Force of Law Enforcement Personnel:SCCSET does not directly or indirectly employ any of the Task Force personnel assigned to it by Participating Agencies. SCCSET is established for the effective coordination of investigations and enforcement action and does not establish employer-employee relationships with the personnel assigned to SCCSET. All personnel assigned to SCCSET by their employing agencies shall remain employees only of their respective employing agencies and shall not have any claim or right to employment, civil service protection, salary, or benefits or claims of any kind from SCCSET, the Campbell Police Department, or from fellow Participating Agencies. E. Use of Contract Personnel: Participating Agencies may employ contract personnel to assist with analytical and administrative tasks deemed necessary by the Task Force Commander. These individuals may be non-law enforcement personnel including but not limited to, secretaries, financial analysts, computer specialists, linguists, etc. These individuals may be required to pass a background investigation and complete a non-disclosure agreement, as determined by the Task Force Commander. F. Responsibility of Participating Agency: Participating Agencies shall retain responsibility for the employment, salary, benefits, and terms and conditions of all employees assigned to the 15.a Packet Pg. 203 4 SCCSET. All SCCSET members remain subject to the direction and control of their respective agency head or designee in all applicable professional and personal matters. The agency head or designee shall be responsible for the conduct and actions of their respective employees. s//͘ /E&KZDd/KEDE'DEd A. Records and Reports: All SCCSET investigative records and reports will be maintained at the SCCSET Task Force location or in the appropriate law enforcement agency offices. The investigative records and reports shall be kept in a manner that is consistent with applicable state and/or federal laws and regulations. The Santa Clara County Sheriff’s Office will provide to the SCCSET report writing software, custodian of record management, IT support, and evidence storage. B. Non-Disclosure Agreement:SCCSET information is confidential and may not be disclosed in any manner to any third party, or in any social media or other communication format for any reason, and may only be disseminated as required by applicable state and/or federal laws and regulations or with the prior authorization from the Task Force Commander. C. Media: No SCCSET member will discuss or otherwise reveal information relating to SCCSET investigations to any media representatives, unless expressly authorized by the Task Force Commander. All media releases on SCCSET matters will be mutually agreed upon and coordinated jointly by the Task Force Commander and a Campbell Police Captain. s///͘ &/>/d/^EYh/WDEd A. Responsibility: The Task Force Commander will be responsible for the equipment acquired for use by SCCSET. He/she will establish procedures for accounting for and safeguarding those fixed assets. B. Task Force Office Space: Appropriate and sufficient office space for SCCSET use shall be identified and procured by the Task Force Commander, with the assistance of a Campbell Police Captain, and the Task Force Supervisor(s). C. Vehicles: Each agency shall supply its assigned investigator(s) to SCCSET with a suitably equipped unmarked emergency vehicle. Said agency will provide fuel, maintenance and insurance coverage for that vehicle. Each agency, whether providing a vehicle or not, will be responsible for any claims arising out of or in any way related to the operation of any vehicle used by SCCSET member. This will include both liability and collision. Vehicles supplied by a Participating Agency will only be driven by that agency’s SCCSET Investigator(s), unless extenuating circumstances arise. D. Other Equipment: Participating Agencies will provide SCCSET Investigators with computers and most other needed electrical equipment to support SCCSET investigations. 15.a Packet Pg. 204 5 Any equipment purchased with Task Force or seized funds that is damaged, broken, misplaced, lost, or stolen through the gross negligence, or wrongful act or omission of an SCCSET Investigator, shall be repaired or replaced by the employing agency of the responsible employee at the determination of the Task Force Commander. E. Termination of Task Force: In the event the Task Force is dissolved, any and all property, including equipment, furniture, and furnishings of whatever kind or description purchased or acquired with Task Force asset forfeiture funds shall be disposed of at the discretion of the Campbell Police Chief with input from Participating Agency Department Heads (or their designee). Any and all property purchased or acquired with Task Force federal asset forfeiture funds will become the sole property of the City of Campbell based on federal requirements. /y͘ ^>Z/^E&hE/E' A. Salary and Compensation: Each Participating Agency is responsible for providing its respective personnel with salaries, benefits, and overtime in accordance with FLSA regulations B. Commander/Supervisor Offset Reimbursement: Participating Agencies that provide supervisory personnel for the management and supervision of the Task Force shall receive an annual reimbursement to offset the salaries of the Task Force Commander position and up to two Task Force Supervisor positions as follows: • Task Force Commander: $75,000 annual reimbursement C. Operational Cost Off-set Contribution: SCCSET operates within the entirety of Santa Clara County and conducts investigations and enforcement action in every jurisdiction. As such, every law enforcement agency in Santa Clara County is encouraged to participate in the Task Force by assigning an officer/deputy/probation or parole officer or their respective supervisor to work on the Task Force. At times this may not be possible, but SCCSET will remain available to assist any Participating Agency regardless of active participation in the Task Force. SCCSET does not have a dedicated funding source to sustain operations. The Santa Clara County Police Chiefs’ Association (SCCPCA) at the March 11, 2021 SCCPCA Meeting and voted in favor of creating a funding source for SCCSET. The County Chiefs approved that Participating Agencies who participate in the Task Force by assigning a minimum of one personnel will contribute $5,000 annually, and those Participating Agencies who do not assign a minimum of one personnel to the Task Force will contribute $10,000 annually. These funds paid by the Participating Agencies to the City of Campbell will be used to offset the cost of SCCSET operational expenses. In consideration of their ongoing partnership with the Task Force and providing SCCSET with report writing software, custodian of record management, IT support, and evidence storage, the Santa Clara County Sheriff’s Office is exempt from this contribution. 15.a Packet Pg. 205 6 Based on the structure of this MOU and the oversite necessary to the operation of SCCSET, the Campbell Police Department is also exempt from this contribution. Any Participating Agency which is a state or federal law enforcement agency is also exempt from making a financial contribution. D. Budget: The Task Force Commander will prepare a proposed budget each year for the ensuing fiscal year for approval by the Campbell Police Chief. A monthly report of expenditures shall accompany the monthly statistics report. City of Campbell will prepare and transmit to the other Parties monthly invoices for their respective shares of the SCCSET costs, except to those Parties who are exempt from making a financial contribution. The invoiced Parties agree to pay promptly, within 30 days of the date of the invoice, to the City of Campbell. If a Participating Agency chooses to terminate its participation under the terms of this Agreement, said Party shall remain financially responsible for its individual share of the allocated cost for that fiscal year only. E. All expenditures using SCCSET funds must follow the City of Campbell purchasing rules. y͘ dZ/E/E' Any trainings required by the Commission on Peace Officer Standards and Training (POST) shall be handled by the Participating Agencies according to their individual budget. Additional training may be provided through the Task Force based on the funds designated for training in the Task Force budget. A yearly training plan for all Task Force personnel, sworn and non-sworn, shall be prepared by the Task Force Commander upon their assignment to the Task Force. In addition, a yearly group training plan shall be prepared and submitted with the Task Force yearly budget proposal. y/͘ EEh>ZWKZd The Task Force Commander will create an annual report of activity no later than March 15th of each year that will be shared with all Participating Agencies. This report will summarize the preceding calendar year’s operation and shall include a section for statistical data broken down in a similar fashion to that of the monthly reports. The report shall contain sufficient information regarding controlled substance abuse and trafficking trends to enable the Participating Agency Department Heads (or their designee) to reassess the Task Force mission related to narcotics trafficking. y//͘ ^^d&KZ&/dhZ The City of Campbell shall retain all monies and assets seized by means of state asset forfeiture for the operation of the Task Force. These funds shall be deposited into City of Campbell bank accounts and shall be utilized for investigative purposes, equipment, rent, and other needs as necessary for operation of the Task Force. 15.a Packet Pg. 206 7 Based on federal requirements, all monies received through federal asset forfeiture belong solely to the City of Campbell. These funds will be used in accordance with federal guidelines and used for SCCSET related expenses. y///͘ ^^d&KZ&/dhZYh/d>^,Z/E'&KZDh> In the event of the dissolution of SCCSET, any funds remaining shall be disbursed to Participating Agencies according to the following formula: • 5% to each Participating Agency with a part-time investigator assigned to and working in the unit. • The remaining balance shall be equally divided between the remaining Participating Agencies with a full-time investigator assigned to and working in the unit. Based on federal requirements and restrictions, any remaining federal asset forfeiture balance will belong solely to the City of Campbell. In the event of the dissolution of SCCSET, the aforementioned disbursements will be made after each Participating Agency’s cost obligations related to the operation of the Task Force are paid in full. y/s͘ D/E/^dZd/KEEh/d Any and all records pertaining to expenditures related to SCCSET operations shall be readily available for examination and audit by any Participating Agency. In addition, all such records and reports shall be maintained until audits and examinations are completed and resolved, or for a period of three (3) years after the termination of this MOU, whichever is sooner. At the change of command of a Task Force Commander, an audit of the undercover funds and specialized equipment shall be performed. ys͘ >//>/dz For the purpose of indemnification, each Participating Agency of SCCSET shall be responsible for the acts or omissions of its respective participating personnel and shall incur any liabilities arising out of the acts or omissions of its respective personnel while participating in SCCSET. Personnel assigned to SCCSET shall be deemed to be continuing under the employment of their respective jurisdiction and shall have the same powers, duties, privileges, responsibilities and immunities as are conferred upon them as an employee in their own jurisdiction. Each party (“Indemnitor”) to this MOU agrees to defend, indemnify, and hold harmless the other parties to this MOU but only in proportion to and to the extent that any liability is imposed on the other parties due to the acts or omissions of the Indemnitor party’s employee(s). In addition, any Participating Agency shall be liable for any workers compensation or similar benefit extended to its respective employees. 15.a Packet Pg. 207 8 ys/͘ /E^hZE Each party to this MOU shall be responsible for obtaining and maintaining its own separate insurance coverage at least as broad as: a. Commercial General Liability Insurance: $1,000,000 per occurrence. Proof of coverage for $1 Million per occurrence including products and completed operations, property damage, bodily injury, personal and advertising injury will be provided on Insurance Services Office (ISO) Form CG 00 01 covering CGL. b. Automobile Liability Insurance: Proof of coverage for $1,000,000 provided on ISO Form Number CA 00 01 covering any auto (Code 1), or if MBOSC has no owned autos, hired, (Code 8) and non-owned autos (Code 9), per accident for bodily injury and property damage c. Worker’s Compensation Insurance, as required by the State of California, with statutory limits, and employer’s liability insurance: $1,000,000 per accident for bodily injury or disease. Must include a waiver of subrogation. The coverage requirements can be satisfied by self-insurance or pooled risk plans that provide comparable coverage. ys//͘ hZd/KE͕DK/&/d/KE͕EdZD/Ed/KEK&DKh The Effective Date of this MOU shall be the date first written above. Unless modified or terminated, the initial term of this MOU shall be for a period of ten (10) years from the Effective Date, and shall automatically renew as to each Participating Agency on the anniversary of the Effective Date for an additional ten (10) year period unless that Agency provides notice of its intention to withdraw from the MOU in writing at least 30-days prior to the anniversary of the Effective Date, as provided in the paragraph below. This MOU may be modified or terminated upon (1) the termination of the Task Force, or (2) the execution of a new, superseding MOU to comply with statutory requirements. Each Participating Agency retains the right to terminate its participation by giving a 30-day written notice to the City of Campbell, Attention to the Campbell Police Chief, of its intent to terminate. Similarly, the City of Campbell may terminate its oversite of SCCSET by giving a 30- day notice to the Santa Clara County Police Chiefs’ Association. A Participating Agency that wishes to terminate its participation with SCCSET must return all equipment not owned by that Agency to the Participating Agency that owns the equipment; and any equipment supplied by the withdrawing agency will return to the withdrawing agency. Termination of a Party from this MOU shall not terminate this MOU. No portion of the terminating Party’s financial contribution provided under this MOU shall be refunded to the terminating Party. If the staff of the terminating Party was providing a service to the other Parties under the terms of this MOU that was not completed as of the effective date of the Party’s termination, it shall be the responsibilities of the remaining Parties to assume the terminating Party’s role or roles. This MOU can be modified only by a writing signed by all of the Participating Agencies. 15.a Packet Pg. 208 9 ys///͘ hd,KZ/dzdKyhd The undersigned parties state that they represent and have the authority to execute this MOU on behalf of their respective agencies/departments and, in signing this MOU, concur with and support SCCSET as set forth in this MOU and for the period and purpose stated herein. y/y͘ EKd,/ZͲWZdzZ/',d^ This MOU is not intended, and shall not be construed, to create any right, benefit, or enforceable law, substantive or procedural, for any third party against any parties to this MOU, the State of California, the United States, or the officers, employees, agents, or other associated personnel thereof. yy͘ 'KsZE/E'>t This MOU shall be governed, construed, and enforced in accordance with the laws of the State of California. yy/͘ ^sZ/>/dz The unenforceability, invalidity or illegality of any provision(s) of this MOU shall not render the other provisions unenforceable, invalid or illegal. yy//͘ KhEdZWZd^ The parties may execute this MOU in two or more counterparts, which shall, in the aggregate, be deemed an original but all of which, together, shall constitute one and the same instrument. A scanned, electronic, facsimile or other copy of a party’s signature shall be accepted and valid as an original. [SIGNATURES ON FOLLOWING PAGE] 15.a Packet Pg. 209 10 By their signatures below, the parties herein acknowledge that they have read the terms of this MOU, understand the terms thereof and are fully agreed thereto, and are authorized to execute this MOU on their respective entity’s behalf on the date indicated above. City of Campbell Approved as to Form: By: ______________________________ By: ____________________________________ BRIAN LOVENTHAL WILLIAM R. SELIGMANN City Manager City Attorney 70 N. First Street Campbell, California 95008 Telephone: (408) 866-2125 Fax: (408) 374-6889 City of Santa Clara Approved as to Form: By: __________________________________ By: ____________________________________ DEANNA J. SANTANA BRIAN DOYLE City Manager City Attorney 1500 Warburton Avenue Santa Clara, CA 95050 Telephone: (408) 615-2210 Fax: (408) 241-6771 City of San Jose Approved as to Form: By: __________________________________ By: ____________________________________ SARAH ZARATE CARL B. MITCHELL Director Senior Deputy City Attorney 200 E. Santa Clara St. San Jose, Ca 95113 Telephone: (408) 535-3500 City of Mountain View Approved as to Form: By: __________________________________ By: ____________________________________ KIMBRA MCCARTHY For KRISHAN CHOPRA City Manager City Attorney 500 Castro St., 3rd Floor Mountain View, CA 94041 Telephone: (650) 903-6301 15.a Packet Pg. 210 11 City of Sunnyvale Approved as to Form: By: __________________________________ By: ____________________________________ KENT STEFFENS JOHN A. NAGEL City Manager City Attorney 456 W. Olive Ave. Sunnyvale, CA 94086 Telephone: (408) 730-7911 City of Milpitas Approved as to Form: By: __________________________________ By: ____________________________________ STEVEN G. MCHARRIS CHRISTOPHER J. DIAZ City Manager City Attorney 455 East Calaveras Blvd. Milpitas, CA 95035 Telephone: (408) 586-3059 City of Gilroy Approved as to Form: By: __________________________________ By: ____________________________________ JIMMY FORBIS ANDY FABER City Administrator City Attorney 7351 Rosanna St. Gilroy, CA 95020 Telephone: (408) 846-0202 Fax: (408) 846-0500 Town of Los Gatos Approved as to Form: By: __________________________________ By: ____________________________________ LAUREL PREVETTI ROBERT SCHULTZ Town Manager Town Attorney 110 E. Main St. Los Gatos, CA 95030 Telephone: (408) 354-6832 15.a Packet Pg. 211 12 City of Palo Alto Approved as to Form: By: __________________________________ By: ____________________________________ ED SHIKADA TIM SHIMIZU FOR MOLLY STUMP City Manager City Attorney Palo Alto City Hall, 7th Floor 250 Hamilton Avenue Palo Alto, CA 94301 Telephone: (650) 329-2280 City of Los Altos Approved as to Form: By: __________________________________ By: ____________________________________ BRAD KILGER JOLIE HOUSTON Interim City Manager City Attorney Los Altos City Hall 1 N. San Antonio Road Los Altos, CA 94022 Telephone: (650) 947-2740 Fax: (650) 947-2731 City of Morgan Hill Approved as to Form: By: __________________________________ By: ____________________________________ CHRISTINA TURNER DONALD LARKIN City Manager City Attorney 17575 Peak Avenue Morgan Hill, CA 95037 Telephone: (408) 776-7382 Fax: (408) 779-1592 Santa Clara County Sheriff Approved as to Form: By: __________________________________ By:____________________________________ LAURIE SMITH, Sheriff JAMES R. WILLIAMS Office of the Sheriff County Counsel 55 West Younger Avenue San Jose, CA CA 95110-1721 Telephone: (408) 808-4400 Fax: (408) 294-2467 15.a Packet Pg. 212 13 Santa Clara County District Attorney By: __________________________________ JEFF ROSEN, District Attorney Santa Clara County District Attorney's Office 70 West Hedding Street, West Wing San Jose, CA 95110 Telephone: (408) 299-7400 Santa Clara County Probation Department By: __________________________________ LAURA GARNETTE, Chief Probation Officer Probation Administration Santa Clara County 2314 N. First St. San Jose, CA 95131 Telephone: (408) 435-2000 Fax: (408) 456-0527 California State Parole – Division of Adult Parole Operations (DAPO) By: __________________________________ GUILLERMO VIERA ROSA, Director Division of Adult Parole Operations __________________________________ (Address) __________________________________ (City, State, Zip Code) Telephone: (916) 445-6200 California Highway Patrol By: __________________________________ JASON REARDON, Captain __________________________________ (Address) __________________________________ (City, State, Zip Code) Telephone: (___) ____ -______ 15.a Packet Pg. 213 14 San Jose State University Police By: __________________________________ __________________________________(Type/Print Name & Title) __________________________________ (Address) __________________________________ (City, State, Zip Code) Telephone: (___) ____-______ California Department of Alcoholic Beverage Control By: __________________________________ __________________________________(Type/Print Name & Title) __________________________________ (Address) __________________________________ (City, State, Zip Code) Telephone: (___) ____-______ 15.a Packet Pg. 214 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϲϮͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ĚŽƉƚŝŽŶŽĨĂŶKƌĚŝŶĂŶĐĞZĞƐƚĂƚŝŶŐWƌŽĐĞĚƵƌĞƐ&ŽƌǆƉĞĚŝƚĞĚ WĞƌŵŝƚƚŝŶŐWƌŽĐĞƐƐŝŶŐ&ŽƌůĞĐƚƌŝĐsĞŚŝĐůĞŚĂƌŐŝŶŐ^ǇƐƚĞŵƐ͘ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗WůĂŶŶŝŶŐĂŶĚĞǀĞůŽƉŵĞŶƚ^ĞƌǀŝĐĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ͗ Staff recommends that Council Adopt the Attached Ordinance (attachment A) Restating Procedures for Expedited Permitting Processing For Electric Vehicle Charging Systems. ĂĐŬŐƌŽƵŶĚ͗ On October 8, 2015, the State of California adopted Assembly Bill 12361, which requires local agencies to adopt an ordinance that creates an expedited and streamlined permitting process for electric vehicle charging systems. Creation of an expedited, streamlined permitting process for electric vehicle charging stations would facilitate convenient charging of electric vehicles and help reduce the City’s reliance on environmentally damaging fossil fuels. This will further achievement of the City’s Sustainability and Climate Action Plan goals. In response to the state law, on June 27, 2017, the City Council adopted Ordinance 5415, creating an expedited permitting process for Electric Vehicle Charging Stations as Section 16.14.440 of the Palo Alto Municipal Code. In March 2020, Council adopted a fully amended Chapter 16.14 and replaced the code section in its entirety. The provisions adopted by Ordinance 5415 were inadvertently omitted from this subsequent ordinance. Through this action the Council can add these provisions back into the municipal code. ŝƐĐƵƐƐŝŽŶ͗ The state law and ordinance require the development of an expedited and streamlined process for electric vehicle charging stations including a checklist of all the requirements that a EV charging station must comply with. A permit application that satisfies the information requirements in the City’s adopted checklist shall be deemed complete and be promptly processed. This governance was inadvertent deleted from the P alo Alto Municipal Code (PAMC) 1 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160AB1236 16 Packet Pg. 215 City of Palo Alto Page 2 and this action corrects for this administrative error. The City has remained in compliance with governing requirements despite this administrative error. The ordinance retains the ability of the Chief Building Official to determine that an application is incomplete. The law requires that such determination be made in writing and shall include the information needed to complete the application. It is not the ordinance’s intention to supersede the Chief Building Official’s authority to address higher priority life-safety situations, including should such a situation arise related to an EV charging station installation. If the CBO finds there are specific adverse impacts on public health or safety, the City may require the applicant to apply for a use permit. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ͗ Even though provisions of Ordinance 5415 were inadvertently removed from the Municipal Code, the state law still applies in Palo Alto and staff have continued to process EV applications on an expedited basis. This action brings the City into technical compliance with state law and facilitates easier use and understanding by staff, applicants, and the public. dŝŵĞůŝŶĞ͗ The City continues to comply with the state law even in absence of a local implementing ordinance. Passage of this ordinance will be followed by a second reading. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ͗ This Ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it can be seen with certainty that there is no possibility it will have a significant negative effect on the environment. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϲ͘Ă͗Attachment A: Ordinance Reinstating 16.14.440 Procedures for Expedited Permitting Processing for Electric Vehicle Charging Systems 16 Packet Pg. 216 Not Yet Approved 0160059_20211130_ay16 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Restating Procedures For Expedited Permitting Processing For Electric Vehicle Charging Systems The City Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. A. The State of California and the City of Palo Alto have consistently promoted and encouraged the use of fuel-efficient electric vehicles. B. The State of California recently adopted Assembly Bill 1236, which requires local agencies to adopt an ordinance that creates an expedited and streamlined permitting process for electric vehicle charging systems. C. Creation of an expedited, streamlined permitting process for electric vehicle charging stations would facilitate convenient charging of electric vehicles and help reduce the City’s reliance on environmentally damaging fossil fuels. D. On June 27, 2017, the City Council adopted Ordinance 5415, creating an expedited permitting process for Electric Vehicle Charging Stations as Section 16.14.440 of the Palo Alto Municipal Code. E. The provisions adopted by Ordinance 5415 were inadvertently omitted from subsequent ordinances amending Chapter 16.14 of the Palo Alto Municipal Code. The City Council now wishes to correct this omission. SECTION 2. Section 16.14.440 of Chapter 16.14 (California Green Building Standards Code) of the Palo Alto Municipal Code is hereby added to read: ϭϲ͘ϭϰ͘ϰϰϬ͘ǆƉĞĚŝƚĞĚWĞƌŵŝƚƚŝŶŐWƌŽĐĞƐƐĨŽƌůĞĐƚƌŝĐsĞŚŝĐůĞŚĂƌŐŝŶŐ^ƚĂƚŝŽŶƐ (a) Definitions (1) “Electric vehicle charging station” or “charging station” means any level of electric vehicle supply equipment station that is designed and built in compliance with Article 625 of the California Electrical Code, as it reads on the effective date of this Chapter, and delivers electricity from a source outside an electric vehicle into a plug-in electric vehicle. (2) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, and written public health 16.a Packet Pg. 217 Not Yet Approved 0160059_20211130_ay16 or safety standards, policies, or conditions as they existed on the date the application was deemed complete. (3) “Electronic submittal” means the utilization of one or more of the following: i. Electronic mail or email. ii. The internet. iii. Facsimile. (b) Expedited Permitting Process. Consistent with Government Code Section 65850.7, the Chief Building Official shall implement an expedited, streamlined permitting process for electric vehicle charging stations, and adopt a checklist of all requirements with which electric vehicle charging stations shall comply with in order to be eligible for expedited review. The expedited, streamlined permitting process and checklist may refer to the recommendations contained in the most current version of the “Plug-In Electric Vehicle Infrastructure Permitting Checklist” of the “Zero-Emission Vehicles in California: Community Readiness Guidebook” as published by the Governor’s Office of Planning and Research. The City’s adopted checklist shall be published on the City’s website. (c) Permit Application Processing (1) Prior to submitting an application for processing, the applicant shall verify that the installation of an electric vehicle charging station will not have specific, adverse impact to public health and safety and building occupants. Verification by the applicant includes but is not limited to: electrical system capacity and loads; electrical system wiring, bonding and overcurrent protection; building infrastructure affected by charging station equipment and associated conduits; areas of charging station equipment and vehicle parking. (2) A permit application that satisfies the information requirements in the City’s adopted checklist shall be deemed complete and be promptly processed. Upon confirmation by the Chief Building Official that the permit application and supporting documents meets the requirements of the City adopted checklist, and is consistent with all applicable laws and health and safety standards, the Chief Building Official shall, consistent with Government Code Section 65850.7, approve the application and issue all necessary permits. Such approval does not authorize an applicant to energize or utilize the electric vehicle charging station until approval is granted by the City. If the Chief Building Official determines that the permit application is incomplete, he or she shall issue a written correction notice to the applicant, detailing all deficiencies in the application and any additional information required to be eligible for expedited permit issuance. 16.a Packet Pg. 218 Not Yet Approved 0160059_20211130_ay16 (3) The Chief Building Official shall not condition the approval for any electric vehicle charging station permit on the approval of such a system by an association, as that term is defined by Civil Code Section 4080. (4) Permit applications under this section may be submitted electronically, including electronic signatures on all forms, applications, and other documentation. (d) Technical Review. It is the intent of this section to encourage the installation of electric vehicle charging stations by removing obstacles to permitting for charging stations so long as the action does not supersede the Chief Building Official’s authority to address higher priority life-safety situations. If the Chief Building Official makes a finding based on substantial evidence that the electric vehicle charging station could have a specific adverse impact upon the public health or safety, as defined in this section, the City may require the applicant to apply for a use permit. SECTION 3. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 4. CEQA. The City Council finds that this Ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it can be seen with certainty that there is no possibility it will have a significant negative effect on the environment. // // // // // // // // 16.a Packet Pg. 219 Not Yet Approved 0160059_20211130_ay16 SECTION 5. Effective Date. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Planning and Development Services 16.a Packet Pg. 220 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϰϱͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨĂ>ŝĐĞŶƐĞŐƌĞĞŵĞŶƚtŝƚŚEĞǁŝŶŐƵůĂƌtŝƌĞůĞƐƐW^͕>>͕ ƚŽŽŶƚŝŶƵĞKƉĞƌĂƚŝŶŐƚŚĞŽŵŵƵŶŝĐĂƚŝŽŶƐ^ŝƚĞŽŶƚŚĞŝƚǇKǁŶĞĚWƌŽƉĞƌƚǇ >ŽĐĂƚĞĚĂƚϭϬϴϮŽůŽƌĂĚŽǀĞŶƵĞ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗ĚŵŝŶŝƐƚƌĂƚŝǀĞ^ĞƌǀŝĐĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that Council approve and authorize the City Manager to execute the attached license agreement between the City of Palo Alto and New Cingular Wireless PCS, LLC, to permit New Cingular Wireless PCS to continue operating the communications s ite at the City owned property located at 1082 Colorado Avenue. ĂĐŬŐƌŽƵŶĚ The City is the owner of the real property located at 1082 Colorado Avenue (Assessor Parcel Number 127-36-039). On December 28, 2000, New Cingular Wireless PCS’ predecessor entered into a license agreement with the City for the development and operation of a telecommunication facility on a portion of the property (CMR 450:00). Verizon and T -Mobile also operate a communication site on the property. The New Cingular Wireless PCS prem ises are within an approximate 160 square foot ground space located beneath the legs of a Pacific Gas & Electric (PG&E) transmission tower. The premises are improved with an equipment shelter with base station equipment and coaxial cables connected to the cellular telephone antennas placed on the tower. The term of the existing agreement expired on January 19, 2021 and New Cingular Wireless PCS has been in a month-to-month tenancy since January 20, 2021. The parties desire to enter into a new license agreement to permit New Cingular Wireless PCS to continue operating the communications site at the premises. ŝƐĐƵƐƐŝŽŶ Staff has negotiated a license agreement to grant New Cingular Wireless PCS the right to continue using the premises as a communications site for a five-year initial term that will be extended automatically for an additional five-year term, unless either party provides the other party with written notice of intent not to extend the then -current term. New Cingular Wireless PCS has agreed to pay $67,000 as a license fee in consideration for use of the premises during the first year with 3% annual increases. If New Cingular Wireless PCS wants to add another carrier to the premises, New Cingular Wireless PCS shall pay the City 50% of the revenue fro m 17 Packet Pg. 221 City of Palo Alto Page 2 their new agreement with the co-locating carrier if revenues exceed the license fee due from New Cingular Wireless PCS to the City. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ The proposed license will generate $67,000 in rental income to the City for the first year which will be collected in the General Fund, and this amount is scheduled to increase 3% annually. New Cingular Wireless PSC will also pay a one-time license preparation fee of $1,600, due to the City within 45 days of the effective date of the license. These estimated revenues are accounted for annually as part of the budget process. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ The proposed license is consistent with Policy #4 of the Telecommunications Policy Statements approved by Council on November 17, 1997 and with City Policies and Proce dures 1-11, Leased Use of City Land/Facilities. dŝŵĞůŝŶĞ The initial term shall commence upon full execution of the license and end on the date that is five years thereafter. The initial term will be extended automatically for an additional five-year term for a projected total term of ten years. ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ The Utilities Department manages the adjacent Colorado Substation and has approved the new agreement. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ The project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA guidelines. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϳ͘Ă͗Attachment A: License Agreement 17 Packet Pg. 222 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 1 LICENSE AGREEMENT This license agreement (this “Agreement”), is entered into as of the last date signed by all Parties below (the “Effective Date”), by the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”), and NEW CINGULAR WIRELESS PCS, LLC, a Delaware limited liability company, (the “Licensee”) (individually, a “Party”; collectively, the “Parties”), in reference to the following: RECITALS: A. The City owns real property located at 1082 Colorado Avenue and West Bayshore Road, Palo Alto, California 94303, commonly referred to as the Colorado Substation or Assessor Parcel Number 127-36-039 (the “Property”), as more particularly described in Exhibit B, attached hereto and made a part hereof. B. The Property is not located in the public right-of-way and the City is licensing the Property in its proprietary capacity; thus neither 47 U.S.C. Sections 253, 332(c)(7) or 1455(a), the FCC rules promulgated thereunder, nor California Government Code Section 65964.1 applies to this License Agreement or the City’s decision to license the Property to Licensee. C. Pacific Gas and Electric Company (“PG&E”), by an easement agreement with the City, has installed and operates a transmission tower (the “Tower”) and electric transmission lines on or about the Property. D. The City and Licensee’s predecessor entered into that certain License Agreement (the “2000 License”), dated as of December 28, 2000, to permit operation of a communications site (“WCFs”) within an approximate 160 square foot ground space located beneath the legs of the Tower (“Premises”), shown and described more particularly in Exhibit C attached hereto and made a part hereof. E. The Premises are improved with an equipment shelter with base station equipment and coaxial cables connected to the cellular telephone antennas placed on the Tower, shown and described more particularly in Exhibit D attached hereto and made a part hereof. F. WHEREAS, the term of the 2000 License expired on January 19, 2021. Licensee has been in a month-to-month tenancy since January 20, 2021 and the City has accepted rent during such period; G. As of the Effective Date, the Parties desire to terminate the month-to-month tenancy under the 2000 License. The Parties mutually desire to enter into this new Agreement to permit Licensee to continue operating the WCFs at the Premises after the 2000 License expired on January 19, 2021, under the covenants, terms and conditions (the “Provisions”) set forth below. 17.a Packet Pg. 223 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 2 AGREEMENT: In consideration of Recitals A through G, which are made a substantive part of this Agreement, and the following Provisions, the Parties agree, as follows: Section 1.0 PREMISES 1.1 Subject to the Provisions hereof, the City grants to the Licensee a right to continue to use the Premises, together with the right to ingress and egress from the nearest public right of way to the Premises 24 hours per day, seven days per week, for purposes of operating the WCFs. 1.2 City hereby consents to Licensee’s continued use of the Tower for placement of Licensee’s antennas and related equipment on the Tower pursuant to the pursuant to a separate license agreement with PG&E. Section 2.0 PURPOSE 2.1 The purpose of this Agreement is to provide for the continuation of the uninterrupted service, installation, replacement, maintenance, modification, upgrade and operation of the WCFs at the Premises at the Licensee’s sole cost and expense. Section 3.0 ALLOWABLE SERVICES AND USES 3.1 Permitted Uses. The Licensee may use the Premises to provide the following: A. During the Term, the Licensee shall use the Premises for the purpose of installing, removing, replacing, repairing, maintaining, modifying, upgrading and operating, at its sole cost and expense, the WCFs. The WCFs consist of radio, telephone and communications equipment and antennas installed and used to transmit and receive communications signals. B. The Licensee’s uses of the Property and the Premises shall be subject to the following terms and conditions: 1. The Licensee’s use of the Property is non-exclusive, and its use of the Premises is exclusive. 2. The Licensee’s operations at the Premises shall comply at all times with all applicable laws, rules and regulations regarding electromagnetic emissions. The Licensee shall conduct reasonably necessary tests after its WCFs are constructed at the Premises to ensure that its WCFs are in 17.a Packet Pg. 224 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 3 compliance with all applicable laws, rules and regulations regarding electromagnetic emissions. The tests shall be conducted by a licensed professional engineer, and the written results of such tests shall be delivered to the City’s Real Property Manager consistent with section 16.2 of this Agreement. 3. The City agrees that Licensee’s ability to use the Premises is contingent upon the suitability of the Premises and Property for the permitted use and Licensee’s ability to obtain and maintain all government approvals. The City authorizes Licensee to prepare, execute and file all required applications to obtain government approvals for its permitted use and agrees to reasonably assist Licensee with such applications and with obtaining and maintaining the government approvals. 4. In constructing and operating its WCFs, the Licensee shall comply with and include the following items in its plans and operating procedures for its facilities: a. The Licensee shall not permit any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, nor take any action which would constitute a nuisance or would disturb, obstruct or endanger any other occupants or use of the site or interfere with their use of their respective premises. b. The Licensee shall operate the Premises in a manner that will not cause interference to the City as of the Effective Date, including, but not limited to, any irrigation system and landscaping installed by the City. Prior to any construction at the Premises, the Licensee shall coordinate its placement of its WCFs to ensure that placement does not conflict with the City’s irrigation systems and landscaping. The Licensee shall repair any damage to the City’s property to the extent caused by the construction of its WCFs, including, but not limited to, any damage caused to the City’s irrigation system and landscaping. c. The Licensee’s operations shall at all times be conducted in compliance with all applicable federal, state and local laws, rules and regulations, including, but not limited to, laws and regulations regarding environmental and occupational safety and all Federal Communications Commission (“FCC”) requirements. The Licensee shall submit all required hazardous materials filings (if required) and obtain all required approvals prior to installing its batteries or any other hazardous materials. d. Prior to engaging in any new construction at the Premises, the Licensee shall provide the City with evidence that all permits required from any 17.a Packet Pg. 225 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 4 agencies having pre-construction jurisdiction over the proposed development, including but not limited to building permits and street opening permits, have been authorized and are available. e. The Licensee shall post a visible, prominent notice on the Premises listing its emergency procedures, warnings, and emergency contacts. f. The Licensee shall maintain all improvements that it places at the Premises. g. CITY will not grant a lease, license or other rights to use the Property to any party if such new use would unreasonably interfere with Licensee’s operation of the Premises during the Term and in accordance with this Agreement. Any future lease, license or other grant of rights to use the Property which permits the installation of communications equipment shall be conditioned upon not unreasonably interfering with Licensee’s operation of its WCFs during the Term and in accordance with this Agreement. 3.2 Restricted Uses. The above-referenced services and uses shall be the only services and uses permitted at, on, or from the Premises. The Licensee shall not use the Premises for any other purpose, or to engage in, or permit, any other business activity within or from the Premises. Section 4.0 TERM; EXTENSION OF TERM 4.1 This Agreement shall be effective and binding on the Parties as of the Effective Date. The initial term (“Initial Term”) of this Agreement shall commence on the Effective Date (the “Commencement Date”), and end on the date that is five (5) years thereafter (the “Expiration Date”). 4.2 The Initial Term will be extended automatically for an additional five (5) year term ( “Extension Term”), unless either Party provides the other Party with written notice of intent not to extend the then-current term. In order to be effective, such notice must be delivered, consistent with Section 16 of this Agreement, no later than three (3) months prior to the expiration of the then-current term. The Initial Term and Extension Term shall collectively be referred to as “the Term.” Section 5.0 LICENSE FEE; PAYMENT PROCEDURE; LATE PAYMENT FEE 5.1 Fees. A. License Fees. Licensee shall pay the City a license fee (the “License Fee”) of 17.a Packet Pg. 226 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 5 Sixty Seven Thousand and 00/100 Dollars ($67,000.00) per year (adjusted annually as provided herein) as consideration for Licensee’s use of the Premises, which shall become due and payable in accordance with the payment procedures set forth in section 5.2 below. The License Fee will increase by three percent (3.0%) each anniversary of the Commencement Date. B. License Preparation Fee. The Licensee shall pay a one-time fee of One Thousand Six Hundred Dollars ($1,600.00) (the “Preparation Fee”) to the City. The Preparation Fee shall be due within forty-five (45) days of the Effective Date of this Agreement. C. Failure to pay. The Licensee shall be deemed in default and subject to Termination provisions of section 14 of this Agreement and/or Late Payment Fee provisions of section 5.3 if the License Fee or any other payment hereunder is not paid when due; provided, however, that City will give Licensee notice by calling AT&T’s TAG-LA Department at (877) 231-5447, and an opportunity to cure any failure to pay the License Fee within thirty (30) days of any such notice and Licensee agrees that such notice shall be in lieu of and not in addition to any notice required by law. D. All rent paid by Licensee to the City during the month-to-month tenancy pursuant to the 2000 License shall be credited to such months of the month-to-month tenancy, as applicable, and any excess rent paid or shortfall of rent to be paid shall be applied to future payments of rent due under this Agreement. The obligation to make rent payments in the amount required under the 2000 License shall terminate effective as of the Commencement Date of this Agreement. 5.2 Payment Procedures A. License Fee Payment Schedule. 1. First Year. The License Fee for the first year shall be paid to the City within forty-five (45) days of the Effective Date of this Agreement. 2. Subsequent Years. For all subsequent contract years, the License Fee shall be due and payable on the anniversary of the Commencement Date. In the event this Agreement expires or is otherwise terminated, the City will not return any portion of the License Fee. B. Payment Delivery. The License Fee shall be made payable by check or other negotiable instrument to “CITY OF PALO ALTO” and delivered to or at City of Palo Alto, Attn.: Revenue Collections Division, 250 Hamilton Avenue, Palo Alto, 17.a Packet Pg. 227 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 6 CA 94301. The designated place of payment may be changed at any time by the City upon thirty (30) days’ prior written notice to the Licensee. C. No Waiver. The Licensee agrees that the City’s acceptance of any applicable ‘late paid’ or ‘incorrect amount’ License Fee shall not constitute a waiver by the City of any default or breach and shall not bar the City from enforcing its right to collect the Late Payment Fee or exercising any other remedy provided in this Agreement or by applicable law. D. Rental Documentation. The City hereby agrees to provide to Licensee a complete and fully executed Internal Revenue Service Form W-9 upon execution of this Agreement, and from time to time during the Term of this Agreement upon Licensee’s written request. 5.3 Late Payment Fee. If the City does not receive payment of the License Fee or the Application Fee within thirty (30) days of the applicable fee’s date due, or payment of any other sum then due and payable by the Licensee as specified in this Agreement, then the Licensee shall pay a fee equal to ten percent (10%) per annum or the maximum rate permitted under California or federal law, if the aforesaid rate exceeds such maximum, of the applicable fee then due and payable yet remaining unpaid (the “Late Payment Fee”) plus an administrative fee of forty-five dollars ($45.00) or any fee established by the Municipal Fee Schedule, whichever fee is higher (the “Administrative Fee”). The total sum of all outstanding fees (as applicable, the License Fee, the Application Fee, the Late Payment Fee, the Administrative Fee or the Overhead Fee) then due and owning shall become immediately due and payable to the City. A. The City’s acceptance of any fee or fees due and payable by the Licensee that is or are paid late shall in no event constitute a waiver of the Licensee’s default with respect to such overdue payment, nor shall the Licensee’s failure to pay bar the City from exercising any other rights and remedies granted hereunder or by any provision of law. Section 6.0 MAINTENANCE AND REPAIR 6.1 WCF Maintenance and Repairs. The Licensee, at its sole cost and expense, shall perform its WCF’s maintenance and repairs, including, without limitation, all painting and all maintenance of landscaped areas necessary to keep the Premises and all improvements thereto in first-class order, repair and condition, and shall keep the Premises in a safe, clean, wholesome, and sanitary condition to the satisfaction of the City, and in compliance with all applicable laws, during the Term. 6.2 Other Maintenance and Repairs. 17.a Packet Pg. 228 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 7 A. The Licensee shall maintain, at its expense, all equipment, trade fixtures and any other improvements it installs at the Premises that are required for the maintenance and operation of the Premises. The Licensee waives the right to make repairs at the expense of the City and the benefit of the provisions of Sections 1941 and 1942 of the California Civil Code relating thereto; and further agrees that if and when any repairs, alterations, additions or betterments shall be made by the Licensee as required by this Agreement, the Licensee shall promptly pay for all labor done or materials furnished and shall keep the Premises free and clear of any lien or encumbrance of any kind whatsoever. B. If the Licensee fails to commence any repairs or perform any maintenance work, for which it is responsible hereunder, within thirty (30) days of receipt of written notice from the City, the City shall have the option to make the repairs and invoice the Licensee for those costs, and the Licensee shall within thirty (30) days of receipt of a bill therefor from the City’s Real Property Manager, reimburse the City for the cost of such repairs, which payment shall include a fifteen percent (15%) administrative overhead fee (the “Overhead Fee”). The City’s performance of such repairs or performance of maintenance shall in no event be construed as a waiver of the duty of the Licensee to make repairs or perform maintenance as required by this Agreement. Section 7.0 CONSTRUCTION AND/OR ALTERATION BY THE LICENSEE 7.1 City’s Consent. A. A WCF currently exists on the Premises in approximately the configuration shown on the plans attached at Exhibit D. No other WCFs or other facilities shall be constructed, nor shall the existing WCF be modified without the prior written consent of the City (which may act in either or both its proprietary capacity as Licensor or its regulatory capacity in enforcing City ordinances, resolutions, policies, rules or regulations). The Parties acknowledge that, to the extent the City acts in its proprietary capacity, neither 47 U.S.C. Sections 253, 332(c)(7) or 1455(a), the FCC rules promulgated thereunder, nor California Government Code Section 65964.1 applies to the City’s decision to approve modifications to the existing WCF. B. Notwithstanding paragraph A, the Licensee may replace, substitute or modify any part of the WCFs without the City’s consent provided that such replacements, substitutions and modifications are contained within the Licensee’s equipment enclosure or do not materially alter the size or weight of the Licensee’s improvements at the Premises and provided that the Licensee complies with applicable City ordinances, resolutions, policies, rules and regulations relating to zoning approvals and building permits applicable to the WCFs. 17.a Packet Pg. 229 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 8 7.2 Trade Fixtures. The Licensee may, at any time and at its sole cost and expense and without the City’s consent, install and place business fixtures and equipment within any structure at the Premises, provided that written notice of such fixtures and their installation have been provided to the City’s Real Property Manager. 7.3 Building Permit Final Inspection. Upon completion of construction of any building, structure, or facility, the Licensee shall submit to the City’s Real Property Manager, a copy of the building permit issued to the Licensee, which shows the final inspection has been completed and approved, in writing, by the City. Section 8.0 OWNERSHIP OF IMPROVEMENTS 8.1 Improvements to Real Property. All improvements constructed, erected or installed at the Premises must be free and clear of all liens, claims, or liability for labor or material. Upon the expiration or earlier termination of this Agreement, the City at its option may require the Licensee to remove its improvements including, but not limited to, the foundations, and may further require the Licensee to repair to the satisfaction of the City any damage to the Premises caused by such removal within one hundred twenty (120) days after the Licensee’s receipt of the City’s request that the Licensee shall remove such improvements; provided, that the Licensee may be required to remove up to a depth of one (1) foot below grade underground conduit installed by Licensee during the Term and provided that the Licensee receives the City’s request to remove such improvements within thirty (30) days from the expiration or earlier termination of this Agreement. 8.2 Personal Property. Title to all equipment, furniture, furnishings and trade fixtures placed by the Licensee at the Premises shall remain the property of the Licensee, and replacements, substitutions and modifications thereof may be made by the Licensee during the Term. The Licensee will remove all of its equipment, fixtures and furnishings within ninety (90) days after the expiration or earlier termination of this Agreement (the “Removal Period”), provided that the Licensee shall repair to the reasonable satisfaction of the Real Property Manager any damage to the Premises and improvements caused by such removal. A. The City acknowledges the Licensee may enter into financing arrangements, including issuance of promissory notes and financial and security agreements for the financing of the Licensee’s equipment (the “Collateral”) with a third party financing entity and may in the future enter into additional financing arrangements with other financing entities. In connection therewith, City consents to the assignment of rights in the Collateral, disclaims any interest in the Collateral, as fixtures or otherwise, and agrees the Collateral shall be exempt from execution, foreclosure, sale, levy, attachment, or distress for any license fee or any other fee due or to become due and payable to the City, and such Collateral 17.a Packet Pg. 230 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 9 may be removed at any time without recourse to legal proceedings. Section 9.0 “AS BUILT” PLANS 9.1 Upon completion of any major Licensee-constructed improvements, the Licensee shall provide the City’s Real Property Manager with a complete set of reproducible "as built plans," reflecting the actual construction at the Premises. Section 10.0 DAMAGE TO OR DESTRUCTION OF PREMSES 10.1 If the Premises are, in whole or in part, damaged or destroyed, then: A. If wholly damaged or destroyed so that the Premises are rendered permanently unusable for reconstruction of a WCF site, this Agreement shall terminate and the Licensee shall be liable for the License Fee up to the time of such damage or destruction and any License Fee pre-paid by the Licensee shall be returned on a pro-rata basis; or B. If only partially damaged or destroyed and still usable for construction or use as a WCF, the Licensee shall, within a reasonable time, not to exceed thirty (30) days from the date of the Licensee’s receipt of notice of the damage or destruction, notify the City, in writing, of its intent to either: 1. terminate this Agreement, in which case Licensee shall be liable for the License Fee only up to the time of City’s receipt of Licensee’s notice and any License Fee prepaid by the Licensee applicable to the period after receipt of such notice shall be returned to the Licensee, or 2. continue operating under this Agreement, in which case, the Licensee within a reasonable time shall repair the Premises and the WCFs, with a proportional and reasonable reduction of the License Fee from the date notice is received from the City until the date the Premises and the WCFs are usable Section 11.0 UTILITIES CHARGES 11.1 Payment Required. The Licensee shall pay, prior to delinquency, all charges for utilities goods and services delivered or supplied to the Premises for Licensee’s use by the City at the rate charged by the City’s Department of Utilities and/or Department of Public Works or any other City department. Section 12.0 INSURANCE 12.1 General. Unless the City’s insurance risk manager agrees, in writing, to accept the 17.a Packet Pg. 231 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 10 Licensee’s self-insurance in fulfillment of these insurance requirements, the Licensee shall carry and maintain at all times during the Initial Term and the Extension Term, if any, commercial general liability insurance, as per ISO form CG 00 01 or equivalent, commercial automotive liability insurance protecting the Licensee in an amount of two million dollars ($2,000,000) per occurrence (combined single limit), including death, bodily injury and property damage, and two million dollars ($2,000,000) aggregate, for each personal injury or death liability, products-completed operations, and each accident, and pollution legal liability self-insurance in the amount of $2,000,000 per claim and in the aggregate covering third party claims for bodily injury, property damage or cleanup costs as required by law, where the pollution is caused during and by Licensee’s operations under this Agreement. Such insurance, with the exception of Licensee’s pollution self-insurance, pursuant to ISO Form No. CG2010 or CG 2037 or equivalent, shall include the City, its council members, officers, employees, and agents as an additional insured by endorsement as respects liability caused, in whole or in part, by the Licensee’s negligent performance of any work that it performs or may be authorized to perform under this Agreement. Coverage shall be provided in accordance with the limits specified and the Provisions indicated herein. Claims-made policies are not acceptable. Such limits may be satisfied by a combination of primary and umbrella/excess policies. Licensee will provide at least 30 days written notice to the City of cancellation or non- renewal of any required coverage that is not replaced. 12.2 Certificates. The Licensee shall file the required original certificate(s) of insurance and/or letter of self-insurance with blanket additional insured endorsements with the City’s insurance risk manager, with a copy to the City’s Real Property Manager. The certificate(s) shall clearly state or provide: A. Policy number; name of insurance company; name, address and telephone number of the agent or authorized representative; name and address of insured; project name and address; policy expiration date; and specific required coverage amounts; and B. That the Licensee’s required insurance is primary as respects any other valid or collectible insurance that the City may possess, including any self-insured retentions the City may have. 12.3 Notice. The certificate(s) of insurance with blanket additional insured endorsements and/or letter of self-insurance and notices shall be mailed to: (a) City of Palo Alto, Attn.: Real Property Manager, P.O. Box 10250, Palo Alto, CA 94303; and (b) City of Palo Alto, Attn: Risk Manager, P.O. Box 10250, Palo Alto, CA 94303. 12.4 Other Coverage. Unless the City permits the Licensee to self-insure, the Licensee shall carry and maintain at all times during the Initial Term and the Extension Term, if any, statutory workers’ compensation and employer’s liability insurance or qualify as a self- 17.a Packet Pg. 232 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 11 insurer in an amount of one hundred thousand dollars ($100,000) per accident/ per disease, per employee/ per disease, policy limits or such other amounts as required by Law, and furnish the City with a certificate showing proof of such coverage. 12.5 Insurance Rating. Any insurance provider of the Licensee shall be authorized to do business in California and shall be rated at least A-:VII in Best’s Key Rating Guide. 12.6 Section 13.0 ASSIGNING, SUBLICENSING, AND ENCUMBRANCES 13.1 Transfers. This Agreement conveys no property rights in the Property or the Premises except as specifically provided herein to the Licensee. Licensee shall not, without the prior written consent of City, mortgage, pledge, hypothecate, encumber, assign, or permit any lien to attach to, or otherwise transfer, this License or any interest hereunder, permit any assignment, or other transfer of Licensee’s interest in this License or any interest hereunder by operation of law, or enter into any license agreement or otherwise permit the occupancy or use of the Premises or any part thereof by any person other than Licensee (all of the foregoing are hereinafter sometimes referred to collectively as “Transfers” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Transferee”). Any Transfer requiring City’s consent which is made without City’s prior written consent shall be null, void, and of no effect. City hereby acknowledges that, in accordance with FCC regulations, Licensee’s wireless network supports and permits the roaming of subscribers from competing carriers, and such roaming is hereby specifically allowed to occur at the WCF and will not be deemed a Transfer or Sublicense. If Licensee desires City’s consent to any new Transfer, Licensee shall notify City in writing, which notice (the “Transfer Notice”) shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one (1) year after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the “Subject Space”), and (iii) the name and address of the proposed Transferee and documentation pertaining to the proposed Transfer, including all existing operative documents to be executed to evidence such Transfer or the agreements incidental or related to such Transfer. Whether or not City consents to any proposed Transfer, Licensee shall pay City’s reasonable review and processing fees, as well as any reasonable professional fees (including, without limitation, attorneys’, accountants’, architects’, engineers’ and consultants’ fees) incurred by City (collectively, the “Review Fees”) within thirty (30) days after Licensee’s receipt of the itemized invoice for such Review Fees by City. This Agreement is personal to the Licensee; any unrelated third party Transferee shall apply for a new agreement with the City upon the expiration or earlier termination of this 17.a Packet Pg. 233 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 12 Agreement. 13.2 Sublicenses. Licensee shall not, without the prior written consent of City, sublicense the Premises or any part thereof, or enter into any license agreement or otherwise permit the occupancy or use of the Premises or any part thereof by any person other than Licensee (all of the foregoing are hereinafter sometimes referred to collectively as “Sublicense” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Sublicensee”). Any Sublicense requiring City’s consent which is made without City’s prior written consent shall be null, void, and of no effect. 13.3 Sublicense Revenue. If City consents to a Sublicense, as a condition thereto which the parties hereby agree is reasonable, Licensee shall pay to City fifty percent (50%) of “Sublicense Revenue,” when due by Sublicensee from such Sublicense (“Sublicense Premium”). “Sublicense Revenue” shall mean all rent or additional rent payable by a Sublicensee. 13.4 Effect of Sublicense. If City consents or had previously consented to a Sublicense, (i) the terms and conditions of this License shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any future Sublicense by either Licensee or a Sublicensee, (iii) Licensee shall deliver to City, promptly after execution, an original executed copy of all documentation pertaining to the Sublicense, including amendments, in form reasonably acceptable to City, (iv) Licensee shall furnish a complete statement, certified by an independent certified public accountant, or Licensee’s chief financial officer, setting forth in detail the computation of any Sublicense Revenue Licensee has derived and shall derive from such Sublicense, and (v) no Sublicense relating to this License or agreement entered into with respect thereto, whether with or without City’s consent, shall relieve Sublicensee from any liability under this License, including, without limitation, in connection with the Subject Space. City or its authorized representatives shall have the right to audit the books, records, and papers of Licensee relating to any Sublicense, and shall have the right to make copies thereof. If the Sublicense Revenue respecting any Transfer shall be found understated, Licensee shall, within thirty (30) days after demand, pay the deficiency, and if understated by more than two percent (2%), Licensee shall pay City’s reasonable costs of such audit. 13.5 Occurrence of Default. Any Sublicense hereunder shall be subordinate and subject to the provisions of this Agreement, and if this Agreement shall be terminated during the term of any Sublicense, City shall have the right to: (i) treat such Sublicense as cancelled and repossess the Subject Space by any lawful means upon the expiration of the Removal Period, or (ii) require that such Sublicensee attorn to and recognize City as its landlord under any such Sublicense. If Licensee shall be in default, City is hereby irrevocably authorized to direct any Transferee to make all payments under or in connection with the Sublicense directly to City (which City shall apply towards Licensee’s obligations under this License) until such default is cured. Such Sublicensee shall rely on any 17.a Packet Pg. 234 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 13 representation by City that Licensee is in default hereunder, without any need for confirmation thereof by Licensee. No collection or acceptance of rent by City from any Sublicensee shall be deemed a waiver of any provision of this Section 13 or the approval of any Sublicensee or a release of Licensee from any obligation under this License, whether theretofore or thereafter accruing. In no event shall City’s enforcement of any provision of this License against any Sublicensee be deemed a waiver of City’s right to enforce any term of this Agreement against Licensee or any other person. 13.6 Transfer to an Affiliate. Notwithstanding anything to the contrary in this Agreement, including without limitations Sections 13.1, 13.2, 13.3, and 13.4, Licensee shall have the right to assign its rights under this Agreement without the City’s consent, in whole or in part, to any of its parent companies, subsidiaries, affiliates, or successor legal entities, or to any entity acquiring substantially all the assets of the Licensee in the market defined by the Federal Communications Commission in which the Property is located, or as otherwise permitted by applicable law (each, a “Permitted Assignment”). As used herein, “affiliates” means an entity which is controlled by, controls, or is under common control with, Licensee. Licensee shall deliver written notification of any such assignment within thirty (30) days following the assignment and shall further provide City written documentation showing that any such assignee has affirmatively assumed all the relevant obligations under this Agreement, arising from and after the date of such assignment with respect to the portion of the rights assigned. Section 14.0 TERMINATION OF AGREEMENT 14.1 Termination by the City. A. The City may terminate this Agreement upon the occurrence of any of the following events: 1. Upon a breach by the Licensee regarding any provision of this Agreement, other than late payment of License Fee, which the Licensee has not commenced to cure within thirty (30) days of receipt of written notice of default from the City. 2. If the Licensee files a petition under any chapter of the U.S. Bankruptcy Code, (or any similar petition under any insolvency law of any jurisdiction), or has filed against it any such petition which is not dismissed within sixty (60) days of the date filed, or if the Licensee proposes any dissolution, liquidation or composition, with creditors, makes an assignment for the benefit of its creditors, or if a receiver, trustee, custodian or similar agent is appointed with respect to or takes possession of any material portion of the property or business of the Licensee. 17.a Packet Pg. 235 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 14 3. If the City determines, in its sole and reasonable discretion, that it requires the Property or Premises or any portion thereof for security reasons due to federal, state or local law or regulation related to the design, maintenance or protection of critical infrastructure, or as otherwise may be necessary to protect the safety of City’s critical infrastructure facilities. City agrees to provide Licensee with twelve (12) months advanced written notice of any such need for property, except in cases where federal, state or local law or regulation require the City to act sooner. City will make a good faith effort to work with Licensee to identify an alternative location reasonably acceptable to the Parties and Licensee shall be allowed, if necessary, in Licensee’s reasonable determination, to place a temporary installation on the Property in a mutually agreeable location until the earlier to occur of (a) Licensee’s WCF on such alternative location is operational, or (b) the expiration of twenty-four (24) months after the date Licensee first installed such temporary installation. B. Upon the occurrence of any of the events described in this section, the City may: 1. In the event of a Licensee default after any applicable cure or grace period has expired, at the City’s sole option, cure any such default by performance of any act, including payment of money, and the cost thereof, plus reasonable administrative cost actually incurred by the City, shall become due and payable by the Licensee within thirty (30) days of Licensee’s receipt of notice; 2. Seek an action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the City; 3. Seek a mandamus or other suit, action or proceeding at law or in equity to enforce its rights against the Licensee and any of its officers, agents, and employees and its assigns, and to compel it to perform and carry out its duties and obligations under the law and its covenants and agreements with the City, as provided herein; or 4. Pursue any other remedy available by law or specifically provided in this Agreement. C. Notwithstanding anything to the contrary contained herein however, in the event of a Licensee default or breach which cannot reasonably be cured within the specified period of thirty (30) days, the Licensee shall have such additional period of time as Licensee reasonably to cure any default or breach of this Agreement provided Licensee has commenced curing within such period and pursues the cure 17.a Packet Pg. 236 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 15 with reasonable diligence. Each and all of the remedies given to the City hereunder or by any law now or hereafter enacted, are cumulative and the exercise of one right or remedy shall not impair the right to the City to exercise any or all other remedies. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, then, and in every such case, the Parties shall be restored to its and their former position and rights and remedies as if no such suit, action or proceedings had been brought or taken. 14.2 Termination of this Agreement by the Licensee. A. Licensee may terminate this License at any time upon 180 days prior written notice to the City, provided that in the event of such early termination, no portion of the then current year's License Fee shall be refunded to the Licensee. B. If the Licensee and PG&E do not enter into the PG&E License or the PG&E License expires or terminates, the Licensee may terminate this Agreement, which termination shall be effective upon the receipt of notice of termination delivered to City. C. Upon a breach by the City regarding any provision of this Agreement, which the City has not commenced to cure within thirty (30) days of receipt of written notice of default from Licensee. Section 15.0 RESERVED Section 16.0 NOTICES 16.1 All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder to be given by either Party to the other, shall be in writing and shall be sufficiently given and served upon the other Party if (1) sent by United States Postal Service certified mail, postage, prepaid, or (2) sent by express delivery service, or (3) by e-mail. Delivery of notices properly addressed shall be deemed complete when the notice is physically delivered or upon refusal of delivery by the City’s Real Property Manager or the City Clerk or by the Licensee. 16.2 All notices issued pursuant to this Agreement shall be addressed as set forth below or as either Party may subsequently designate by thirty (30) days prior written notice. TO: CITY City of Palo Alto Attn.: Real Property Manager 17.a Packet Pg. 237 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 16 250 Hamilton Avenue Palo Alto, CA 94301 real.property@cityofpaloalto.org With copies to: City of Palo Alto Attn.: City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 City.clerk@cityofpaloalto.org and City of Palo Alto Attn.: City Attorney 250 Hamilton Avenue Palo Alto CA 94301 City.attorney@cityofpaloalto.org TO: LICENSEE Email: releaseadmin@att.com New Cingular Wireless PCS, LLC Attn.: TAG - LA Re: Cell Site #: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA); Fixed Asset No.: 10097075 1025 Lenox Park Blvd. NE 3rd Floor Atlanta, GA 30319 With a required copy to: New Cingular Wireless PCS, LLC Attn.: Legal Department Re: Cell Site #: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA); Fixed Asset No.: 10097075 208 S. Akard Street Dallas, Texas, 75202-4206 Section 17.0 ATTACHMENTS TO AGREEMENT 17.a Packet Pg. 238 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 17 17.1 This Agreement includes the following exhibits, which are attached hereto and by this reference incorporated into this Agreement: Exhibit A – General Conditions Exhibit B – Legal Description of the Property Exhibit C – Site Survey and Plan Exhibit D – Existing Antenna Configurations 17.2 Exhibit A (GENERAL CONDITIONS) contains standard City general conditions applicable to this Agreement; in the event of a conflict between the foregoing clauses in this Agreement and the provisions of Exhibit A, the foregoing clauses shall take precedence. [Signatures Appear on the Following Page] 17.a Packet Pg. 239 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 18 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. CITY: City of Palo Alto, a California chartered municipal corporation By: ______________________________ Name: ____________________________ Title: _____________________________ Date: _____________________________ APPROVED AS TO FORM: By: ______________________________ Name: ____________________________ Title: _____________________________ Date: _____________________________ ATTEST: By: ______________________________ Name: ____________________________ Title: _____________________________ Date: _____________________________ LICENSEE: New Cingular Wireless PCS, LLC, a Delaware limited liability company By: AT&T Mobility Corporation Its: Manager By: ______________________________ Name: ____________________________ Title: _____________________________ Date: _____________________________ 17.a Packet Pg. 240 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 19 EXHIBIT A GENERAL CONDITIONS 1. GENERAL: “City” also shall mean the Council of the City of Palo Alto. Clauses in this Agreement refer to specific officers or employees of the City. Should these positions be eliminated or the title changes, it is understood and agreed that such references shall be considered to be to the new title for renamed positions or to the replacement official designated with the responsibilities of any eliminated position. Any reference to a City officer or employee includes a reference to the officer's or employee's designated representative. 2. PARTNERSHIP/CORPORATE AUTHORITY & LIABILITY If the Licensee is a partnership, each general or limited partner: A. represents and warrants that the partnership is a duly qualified partnership authorized to do business in Santa Clara County; and B. shall be jointly and severally liable for performance of the terms and provisions of this Agreement. If the Licensee is a corporation, each individual signing this Agreement on behalf of the Licensee represents and warrants that; A. he is duly authorized to do so in accordance with an adopted Resolution of the Licensee's Board of Directors or in accordance with the Bylaws of the corporation; and B. The Licensee is a duly qualified corporation authorized to do business in State of California. 3. TIME Time is of the essence of this Agreement. 4. SIGNS The Licensee agrees not to construct, maintain, or allow any sign to be placed upon the Premises except as may be approved by the City. Unapproved signs, banners, etc., may be removed by the City. 17.a Packet Pg. 241 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 20 5. PERMITS AND LICENSES The Licensee shall be required to obtain any and all permits and/or licenses which may be required in connection with the operation of, and any approved Licensee construction upon, the Premises set forth in this Agreement. The City authorizes Licensee to prepare, execute and file all required applications to obtain such permits and/or licenses and agrees to reasonably assist Licensee with such applications and with obtaining and maintaining the permits and/or licenses. 6. MECHANICS LIENS The Licensee shall at all times indemnify and save the City harmless from all claims for labor or materials supplied to the extent arising from the Licensee’s construction, repair, alteration, or installation of structures, improvements, equipment, or facilities within the Premises, and from the cost of defending against such claims, including reasonable attorney feesThe Licensee shall provide the City with at least ten (10) days written notice prior to commencement of any work which could give rise to a mechanics lien or stop notice. Upon at least forty-eight (48) hours’ notice to the Licensee, the City reserves the right to enter upon the Premises for the purposes of posting Notices of Non-Responsibility; the Licensee may accompany the City’s representative during any such entry. In the event a lien is imposed upon the Premises as a result of such construction, repair, alteration, or installation by the Licensee, the Licensee shall either: A. Record a valid release of lien; or B. Deposit sufficient cash with the City to cover the amount of the claim on the lien in question and authorize payment to the extent of said deposit to any subsequent judgment holder that may arise as a matter of public record from litigation with regard to lienholder claim; or C. Procure and record a bond in accordance with Section 8424 of the Civil Code, which releases the Premises from the claim of the lien from any action brought to foreclose the lien. Should the Licensee fail to accomplish one of the three optional actions within s after the filing of such a lien, Licensee shall be deemed in breach of this Agreement and the City may terminate this Agreement according to the provisions of Section 14 of the Agreement. 7. ORGANIZATION AND RULES OF CONSTRUCTION Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons 17.a Packet Pg. 242 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 21 shall include corporations and associations, including public bodies, as well as natural persons. The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement. All the terms and provisions hereof shall be construed to effectuate the purposes set forth herein, and to sustain the validity hereof. The titles and headings of the sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall not in any way modify or restrict any of the terms of provisions hereof or be considered or given any effect in construing this Agreement or any provision hereof in ascertaining intent, if any question of intent shall arise. 8. AMENDMENTS This Agreement sets forth all of the agreements and understandings of the Parties and any modifications must be written and properly executed by both Parties. 9. UNLAWFUL USE The Licensee agrees that no improvements shall be erected, placed upon, operated, nor maintained within the Premises, nor any business conducted or carried on therein or therefrom, in violation of the terms of this Agreement, or of any regulation, order of law, statute, or ordinance of a governmental agency having jurisdiction over the Licensee’s use of the Premises. 10. NONDISCRIMINATION The Licensee and its employees shall not discriminate against any person because of race, color, religion, ancestry, age, sex, national origin, disability, sexual preference, housing status, marital status, familial status, weight or height of such person. The Licensee shall not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex, age, national origin, disability, sexual preference, housing status, marital status, familial status, weight or height of such person. The Licensee covenants that in all of the activities the licensee conducts or allows to be conducted on the Premises, the Licensee shall accept and enforce the statements of policy set forth in Palo Alto Municipal Code Section 9.73.010 regarding human rights and nondiscrimination. If the Licensee is found in violation of the provisions of Palo Alto Municipal Code Section 9.73.010 by a court or administrative body of competent jurisdiction or in violation of the nondiscrimination provision of the State of California Fair Employment Practices Act or similar provisions of federal law or executive order in the conduct of its activities under this Agreement by the State of California Fair Employment Practices Commission or the equivalent federal agency or officer, it shall thereby be found in default under this Agreement, and such default shall constitute a material breach of this Agreement. The City shall then have the power to cancel or suspend this Agreement in whole or part. 17.a Packet Pg. 243 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 22 11.INSPECTION The City’s employees and agents shall have the right at all reasonable times to inspect the Premises to determine if the provisions of this Agreement are being complied with provided that (i)reasonable prior written notice has been provided to the Licensee in accordance with this subsection and Section 16 of the Agreement, to allow the Licensee to accompany any such inspection and (ii) Licensee’s equipment is highly sensitive and is subject to federal requirements such that any entry onto the Premises be restricted. Accordingly, City’s employee’s and/or agents shall not enter the Premises (other than in an emergency) unless it has given Licensee twenty-four (24) hours’ actual notice. Notwithstanding the foregoing, the City shall not, and shall not have the right to, touch or otherwise interfere with any of the Licensee’s equipment, fixtures, or improvements located within the Premises. 12.HOLD HARMLESS The Licensee agrees to indemnify, hold harmless and defend the City, its officers, agents and employees against any and all claims, liability, demands, damages and costs (including reasonable attorneys' fees) (collectively, the “Claims”) to the extent arising out of the negligence, recklessness or willful misconduct of the Licensee, except to the extent such Claims are caused by the negligence, recklessness or willful misconduct of the City, its officers, agents, contractors and/or employees. 13.TAXES AND ASSESSMENTS This Agreement may create a possessory interest which is subject to the payment of taxes levied on such interest. It is understood and agreed that all taxes and assessments (including but not limited to the possessory interest tax) which become due and payable upon the Premises or upon the Licensee’s fixtures, equipment, or other property installed or constructed thereon by the Licensee, shall be the full responsibility of the Licensee and the Licensee shall pay the taxes and assessments prior to delinquency. For any tax amount for which Licensee is responsible under this Agreement, Licensee shall have the right to contest, in good faith, the validity or the amount thereof using such administrative, appellate or other proceedings as may be appropriate in the jurisdiction, and may pay the tax under protest, or take such other steps as permitted by law. 14.SUCCESSORS IN INTEREST Unless otherwise provided in this Agreement, the terms, covenants, and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the Parties hereto. 15.CIRCUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE MAJEURE) 17.a Packet Pg. 244 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 23 If either Party hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause without fault and beyond the control of the Party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. 16. PARTIAL INVALIDITY If any term, covenant, condition, or provision of this Agreement is determined to be invalid, void, or unenforceable, by a court of competent jurisdiction, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby. 17. WAIVER OF RIGHTS The failure of the City or the Licensee to insist upon strict performance of any of the terms, covenants, or conditions of this Agreement shall not be deemed a waiver of any right or remedy that either Party may have, and shall not be deemed a waiver of the right to require strict performance of all the terms, covenants, and conditions of the Agreement thereafter, nor a waiver of any remedy for the subsequent breach or default of any term, covenant, or condition of this Agreement. 18. COSTS OF SUSTAINING AN ACTION FOR BREACH OR DEFAULT In the event either Party commences legal action against the other Party claiming a breach or default of this Agreement, the prevailing Party in such litigation shall be entitled to recover from the other cost of sustaining such action, including reasonable attorney fees, as may be fixed by the court. 19. RESERVATIONS TO CITY The Premises are accepted "as is" and "where is" by the Licensee subject to any and all existing easements, and encumbrances. The City reserves the right to install, lay, construct, maintain, repair, and operate such sanitary sewers, drains, storm water sewers, pipelines, manholes, and connections; water, oil, and gas pipelines; telephone and telegraph power lines; and the applications and appurtenances necessary or convenient for connection therewith, in, over, upon, though, across and along the Premises. Notwithstanding anything to the contrary contained here, no right reserved by the City in this clause shall be so exercised as to interfere unreasonably with the Licensee’s operation hereunder. The City agrees that rights granted to third parties by reason of this clause shall contain provisions that the surface of the land shall be restored as nearly as practicable to the original condition upon the completion of any construction. 17.a Packet Pg. 245 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 24 20. HOLDING OVER In the event the Licensee shall continue in possession of the Premises after the expiration or earlier termination of this Agreement, such possession shall not be considered a renewal of this Agreement but a tenancy from month to month and shall be governed by the conditions, and covenants contained in this Agreement. 21. CONDITION OF PREMISES UPON TERMINATION Upon termination of this Agreement or within one hundred twenty (120) days thereof in accordance with the terms of this Agreement, except as otherwise agreed to herein, the Licensee shall redeliver possession of the Premises to the City in substantially the same condition that existed immediately prior to the Licensee’s occupancy, reasonable wear and tear, flood, earthquake, war, and any act of war or other casualty beyond the control of the Licensee excepted. 22. DISPOSITION OF ABANDONED PERSONAL PROPERTY If the Licensee abandons the Premises, as defined by applicable law, or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to the Licensee and left on the Premises for at least ninety (90) days after such abandonment or dispossession shall be deemed to have been transferred to the City. The City shall have the right to remove and to dispose of such property without liability therefor to the Licensee or to any person claiming under the Licensee, and shall have no need to account therefor. 23. RELINQUISMENT OF THE LICENSEE'S INTEREST UPON TERMINATION Upon termination of this Agreement for any reason, including but not limited to termination because of default by the Licensee, the Licensee shall, at the City’s request execute, acknowledge and deliver to the City within thirty (30) days after receipt of written demand thereof, a written document, signed by an official recognized under Section 313 of the California Corporations Code, certifying the Licensee’s relinquishment of the Premises. Should the Licensee fail or refuse to deliver the required certification to the City, and the Parties are not then in any dispute or in disagreement regarding termination of this Agreement or an event of breach or default hereunder, the City may prepare and record a notice reciting the failure of the Licensee to execute, acknowledge and deliver such certification and the notice shall be conclusive evidence of the termination of this Agreement, and of all right of the Licensee or those claiming under the Licensee in and to the Premises. 24. CITY'S RIGHT TO RE-ENTER The Licensee agrees to yield and peaceably deliver possession of the Premises to the City after 17.a Packet Pg. 246 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 25 the removal period described in Section 8.1. Upon giving written notice of termination to the Licensee in accordance with the terms of this Agreement, the City shall have the right to re-enter and take possession of the Premises after the removal period described in Section 8.1. Termination of the Agreement and re-entry of the Premises by the City shall in no way alter or diminish any obligation of the Licensee under the Agreement terms and shall not constitute an acceptance or surrender. The Licensee waives any and all rights of redemption under any existing or future law or statute in the event of eviction from or dispossession of the Premises for any reason or in the event the City re-enters and lawfully re-takes possession of the Premises. 25. CONFLICT OF INTEREST The Licensee warrants and covenants, to the best of its knowledge, that no official or employee of the City nor any business entity in which any official or employee of the City is interested: (1) has been employed to solicit or aid in the procuring of this Agreement to Licensee’s reasonable knowledge; or (2) will be employed in the performance of this Agreement without the divulgence of such fact to the City. In the event that the City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of the City, the Licensee upon request of the City shall immediately terminate such employment. Violation of this provision constitutes a serious breach of this Agreement and the City may terminate this Agreement as a result of such violation. 26. EMINENT DOMAIN In the event the whole or any part of the Premises is condemned by a public entity in the lawful exercise of its power of eminent domain, this Agreement shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the Premises by the condemning public entity. The City shall be entitled to and shall receive all compensation related to the condemnation of all or part of the Premises by the exercise of eminent domain. Licensee will each be entitled to pursue its own separate awards in the condemnation proceeds, which may include, where applicable, the value of its WCFs, moving expenses, prepaid License Fees, and business dislocation expenses. 27. [Intentionally deleted.] 28. Intentionally deleted. 29. HAZARDOUS SUBSTANCES A. Definition. As used herein, the term "Hazardous Materials" means any 17.a Packet Pg. 247 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 26 substance or material which has been determined by any state, federal or local governmental authority to be capable of posing risk of injury to health, safety, and property, including petroleum and petroleum products and all of those materials and substances designated as hazardous or toxic by the U.S. Environmental Protection Agency, the California Water Quality Control Board, the U.S. Department of Labor, the California Department of Industrial Relations, the California Department of Health Services, the California Health and Welfare Agency in connection with the Safe Water and Toxic Enforcement Act of 1986, the U.S. Department of Transportation, the U.S. Department of Agriculture, the U.S. Consumer Product Safety Commission, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration or any other governmental agency now or hereafter authorized to regulate materials and substances in the environment. Without limiting the generality of the foregoing, the term "Hazardous Materials" shall include all of those materials and substances defined as "toxic materials" in Sections 66680 through 66685 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time. B. USE OF PREMISES. During the Term, the Licensee shall abide and be bound by all of the following requirements: 1. The Licensee shall comply with all laws now or hereafter in effect relating to the use of Hazardous Materials on, under or about the Premises, and the Licensee shall not contaminate the Premises, or its subsurfaces, with any Hazardous Materials in violation of applicable law. 2. The Licensee shall restrict its use of Hazardous Materials at the Premises to those kinds of materials that are normally used in constructing and operating communications facilities. Disposal of any Hazardous Materials at the Premises are strictly prohibited. Storage of such permissible Hazardous Materials is allowed only in accordance with all applicable laws now or hereafter in effect. All safety and monitoring features of any storage facilities shall be approved by the City’s Fire Chief in accordance with all laws. 3. The Licensee shall be solely and fully responsible for the reporting of all Hazardous Materials releases to the appropriate public agencies, when such releases are caused by or result from the Licensee’s activities at the Premises. The Licensee shall immediately inform the City of any release of Hazardous Materials by Licensee, whether or not the release is in quantities that would otherwise be reportable to a public agency. 4. The Licensee shall be solely and fully responsible and liable for any such 17.a Packet Pg. 248 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 27 releases which are caused by the Licensee at the Premises, or placed into the City’s sewage or storm drainage systems by Licensee. The Licensee shall take all necessary precautions to prevent any of its Hazardous Materials from entering into any storm or sewage drain system or from being released on the Premises. The Licensee shall remove releases of its Hazardous Materials in accordance with all laws. In addition to all other rights and remedies of the City hereunder, if the release of Hazardous Materials caused by the Licensee is not removed by the Licensee or the Licensee has not commenced removal within ninety (90) days after the Licensee’s receipt of written notice from the City or any other third party, the City may pay to have the same removed and the Licensee shall reimburse the City for such costs actually incurred within thirty (30) days of the City’s demand for payment. 5. The City represents that it has no knowledge of any Hazardous Materials on or under the Premises or the Property. The City will not introduce or use any such substance at the Premises or the Property in violation of any applicable law. The City shall indemnify and hold the Licensee harmless from and against all claims, actions, damages, fines, liabilities, costs and expenses (including reasonable attorneys’ and expert fees) arising, directly or indirectly, from the deposit of any Hazardous Materials on or under the Property or the Premises during the Term, unless said materials were actually deposited on the Property or the Premises by the Licensee. This obligation to indemnify the Licensee shall include damages, costs and expenses incurred in connection with any investigation, cleanup, remediation, monitoring, removal or restoration related to the presence of any substance. This indemnity shall survive the expiration or termination this Agreement. The Licensee shall indemnify and hold harmless the City from and against all claims, actions, damage, fines, liabilities, costs and expenses (including reasonable attorneys’ and expert fees) arising, directly or indirectly, from the deposit by the Licensee of any Hazardous Materials on or under the Property or the Premises during the Term, unless said materials were actually deposited onto the Property or the Premises by the City; provided however, that this indemnity shall not apply to claims, actions, damages, fines, liabilities, costs and expenses, (including attorneys’ and expert fees) arising from vandalism to the Premises by third parties. This obligation to indemnify by either Party shall include damage, costs and expenses incurred in connection with any investigation, cleanup, remediation, monitoring, removal or restoration related to the presence of any substance. This indemnity shall survive the expiration or termination of this Agreement. 6. Each Party’s obligations under this clause shall survive the expiration or 17.a Packet Pg. 249 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 28 earlier termination of this Agreement. 30. ALL COVENANTS ARE CONDITIONS All provisions of the Agreement are expressly made conditions. 31. PARTIES OF INTEREST Nothing in this Agreement, expressed or implied, is intended to, or shall be construed to, confer upon or to give to any person or party other than the City and the Licensee the covenants, condition or stipulations hereof. All covenants, stipulations, promises and agreements in this Agreement shall be for the sole and exclusive benefit of the City and the Licensee. 32. INTERFERENCE The Licensee agrees to install equipment of the type and frequency which will not cause harmful interference which is measurable in accordance with then-existing industry standards to any equipment of the City or other licensees of the Property which existed on the Property prior to the date this Agreement is executed by the Parties, provided such party (the City or an existing licensee) operate within their permitted frequencies and in accordance with all applicable laws and regulations. In the event any after-installed the Licensee’s equipment causes such interference, and after the City has notified the Licensee in writing of such interference, the Licensee will take all commercially reasonable steps necessary to correct and eliminate the interference, including but not limited to, at the Licensee’s option, powering down such equipment and later powering up such equipment for intermittent testing. In no event will the City be entitled to terminate this Agreement or relocate the equipment as long as the Licensee is making a good faith effort to remedy the interference issue. The City agrees that the City and/or any other licensees or tenants of the Property who in the future take an interest in the Property will be permitted to install only such equipment that is of the type and frequency which will not cause harmful interference which is measurable in accordance with then-existing industry standards to the then-existing equipment of the Licensee and such future lease or agreement shall contain a similar interference obligation as is included in this Agreement. The Parties acknowledge that there will not be an adequate remedy at law for noncompliance with the provisions of this Section and therefore, either Party shall have the right to equitable remedies, such as, without limitation, injunctive relief and specific performance. 17.a Packet Pg. 250 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 29 EXHIBIT B LEGAL DESCRIPTION OF THE PROPERTY 17.a Packet Pg. 251 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 30 EXHIBIT C SITE SURVEY AND PLAN (Attached hereto) 17.a Packet Pg. 252 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 31 17.a Packet Pg. 253 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 32 17.a Packet Pg. 254 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 33 17.a Packet Pg. 255 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 34 EXHIBIT D EXISTING ANTENNA CONFIGURATIONS (Attached hereto) 17.a Packet Pg. 256 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 35 17.a Packet Pg. 257 Market: San Francisco/Sacramento/Reno Cell Site Number: CNU1822 Cell Site Name: Hwy 101 Palo Alto (CA) Fixed Asset Number: 10097075 Page 36 17.a Packet Pg. 258 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϱϵͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ĚŽƉƚŝŽŶŽĨĂZĞƐŽůƵƚŝŽŶƵƚŚŽƌŝǌŝŶŐƚŚĞŝƚǇDĂŶĂŐĞƌƚŽǆĞĐƵƚĞ WĂƌƚŝĐŝƉĂƚŝŽŶŐƌĞĞŵĞŶƚƐŽŶďĞŚĂůĨŽĨWĂůŽůƚŽƚŽŶƚĞƌ/ŶƚŽƚŚĞ^ĞƚƚůĞŵĞŶƚ ŐƌĞĞŵĞŶƚƐǁŝƚŚDĐ<ĞƐƐŽŶŽƌƉŽƌĂƚŝŽŶ͕ĂƌĚŝŶĂů,ĞĂůƚŚ͕/ŶĐ͕͘ ŵĞƌŝƐŽƵƌĐĞĞƌŐĞŶŽƌƉŽƌĂƚŝŽŶ͕:ŽŚŶƐŽŶΘ:ŽŚŶƐ ŽŶ͕:ĂŶƐƐĞŶ WŚĂƌŵĂĐĞƵƚŝĐĂůƐ͕/ŶĐ͕͘KƌƚŚŽ ͲDĐEĞŝů Ͳ:ĂŶƐƐĞŶWŚĂƌŵĂĐĞƵƚŝĐĂůƐ͕/ŶĐ͕͘ĂŶĚ :ĂŶƐƐĞŶWŚĂƌŵĂĐĞƵŝƚĐĂ͕/ŶĐ͕͘ŐƌĞĞƚŽƚŚĞdĞƌŵƐŽĨƚŚĞDKhůůŽĐĂƚŝŶŐ ^ĞƚƚůĞŵĞŶƚWƌŽĐĞĞĚƐ͕ĂŶĚƵƚŚŽƌŝǌĞŶƚƌǇ/ŶƚŽƚŚĞDKhǁŝƚŚƚŚĞĂůŝĨŽƌŶŝĂ ƚƚŽƌŶĞǇ'ĞŶĞƌĂů &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ This report will be a special late packet release on Thursday, December 9th, 2021. 18 Packet Pg. 259 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϳϲϱͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 ŽƵŶĐŝůWƌŝŽƌŝƚǇ͗ůŝŵĂƚĞͬ^ƵƐƚĂŝŶĂďŝůŝƚǇĂŶĚůŝŵĂƚĞĐƚŝŽŶWůĂŶ dŝƚůĞ͗WƌŽŐƌĞƐƐZĞƉŽƌƚŽŶƚŚĞ^ƵƐƚĂŝŶĂďŝůŝƚǇĂŶĚůŝŵĂƚĞĐƚŝŽŶWůĂŶhƉĚĂƚĞ ĂŶĚ^ͬWĚ,ŽĐŽŵŵŝƚƚĞĞtŽƌŬ͕ĂŶĚĐĐĞƉƚĂŶĐĞŽĨƚŚĞ^ͬWdŚƌĞĞ ͲzĞĂƌ tŽƌŬWůĂŶ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶ ƚ͗WƵďůŝĐtŽƌŬƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ The Sustainability/Climate Action Plan (S/CAP) Ad Hoc Committee recommends that Council: 1. Review the progress report and feedback from the S/CAP Ad Hoc Committee’s work to date; 2. Accept the draft S/CAP 3-Year Work Plan that incorporates the Council directives from April 2021 (Attachment A); and 3. Direct staff to propose necessary staffing in the Electric Fund and the General Fund during the mid-year budget update, in order to implement the near-term activities in the draft S/CAP 3-Year Work Plan. ǆĞĐƵƚŝǀĞ^ƵŵŵĂƌǇ On April 19, 2021, following its review of progress on the S/CAP Update Report, Council directed the Mayor to form an S/CAP Ad Hoc Committee, and directed staff to pursue near - term actions in parallel to the S/CAP Update while further developing a number of existing and new elements. This report describes the work completed to date by the S/CAP Ad Hoc Committee and some of the key community feedback received during the Ad Hoc meetings and other engagement efforts. The report also includes a message from the Ad Hoc Committee members, Vice Mayor Burt and Councilmember Cormack, describing what has been achieved and learned so far, and providing their immediate recommendations to the Council. ĂĐŬŐƌŽƵŶĚ In April 2016, City Council adopted the ambitious goal of reducing GHG emissions to 80 percent below 1990 levels by 20301 (the “80 x 30” goal) - 20 years ahead of the State of California 80 x 50 target, and an interim step towards California’s new aspirational statewide goal of achieving 1 https://www.cityofpaloalto.org/news/displaynews.asp?NewsID=3534&TargetID=268 19 Packet Pg. 260 City of Palo Alto Page 2 carbon neutrality by 20452. In November 2016, the Council adopted the S/CAP Framework3, which has served as the road map for achieving Palo Alto’s sustainability goals. In December 2017, Council accepted the 2018-2020 Sustainability Implementation Plan “Key Actions” as a summary of the City’s work program4. In early 2020, the City launched an S/CAP Update to determine the goals and key actions needed to meet its sustainability goals, including the 80 x 30 goal. While GHG emissions reduction is not the only goal of the S/CAP, it is the major one. Over the next nine years, if the City only implements City Council approved plans, policies, and ordinances that were approved on or before 2019, and considering demographic changes, Palo Alto’s emissions are projected to be 47.4 percent below 1990 levels in 2030 (410,435 MTCO2e) – a “business-as-usual” (BAU) scenario. To achieve the 80 x 30 goal, Palo Alto must meet a GHG emissions target of 156,024 MT CO2e. Palo Alto will need to reduce total emissions by about 326,303 MT CO2e, or an additional 254,411 MT CO2e beyond “Business-as-usual” projections, at a rate of 3.8 percent per year, significantly increasing the scale and speed of reductions. &ŝŐƵƌĞϭ͘ƵƐŝŶĞƐƐĂƐhƐƵĂůŵŝƐƐŝŽŶƐ&ŽƌĞĐĂƐƚ 2 In September 2018, Governor Brown signed California Executive Order B-55-18, setting the goal of achieving carbon neutrality as soon as possible, and no later than 2045. The state is to maintain net negative net emissions after 2045, meaning that GHG sinks must exceed GHG sources. The Executive Order explains that the carbon neutrality goal is layered on top of the state’s existing commitments to reduce greenhouse gas emissions 40% below 1990 levels by 2030 (as codified in SB 32), and 80% below 1990 levels by 2050. 3 https://www.cityofpaloalto.org/civicax/filebank/documents/60858 4 https://www.cityofpaloalto.org/civicax/filebank/documents/63141 19 Packet Pg. 261 City of Palo Alto Page 3 As a result of various City-led initiatives, programs, and activities focused on climate change and sustainability, by the end of 2019 Palo Alto reduced GHG emissions by an estimated 38.2 percent from the 1990 baseline, despite a pop ulation increase of 23.6 percent during that same time period. This equates to 7 metric tons of carbon dioxide equivalent (MT CO2e) per Palo Alto resident in 2019 compared to 14 MT CO2e per Palo Alto resident in 1990. The California Air Resources Board 2017 Scoping Plan Update recommends local government goals of 6 MT C02e per capita by 2030, which Palo Alto is on track to meet well before 2030. On April 19, 2021, Council reviewed the S/CAP Update Report, provided feedback on policy tools, directed the Mayor to form an S/CAP Ad Hoc Committee, and directed staff to pursue near-term actions in parallel to the S/CAP Update and further develop various elements of the S/CAP (CMR 12009)5. The purpose of the S/CAP Ad Hoc Committee is to engage with community stakeholders, domain experts, and activists to complement existing efforts on this important priority. The new Ad Hoc committee, which meets monthly on the second Thursday at 9 a.m., helps guide the development, implementation, communication, and future community engagement of the S/CAP process. This work supports finalizing the development of the S/CAP Update, which is slated for Council adoption in early 2022. Other Council actions related to the S/CAP Update at the April 19 Council meeting included supporting the policy framework6 as presented and asking staff to pursue the actions that are listed from 2021–2024. Council direction also included further developing other related changes as noted in the specific motion7. ŝƐĐƵƐƐŝŽŶ When Palo Alto City Council adopted the 80 x 30 goal in 2016, many considered i t aspirational. However, 80 x 30 has been confirmed by ICLEI (The Local Governments for Sustainability) to be our science-based target - the level of emissions Palo Alto must reduce to achieve our fair share of the 2015 Paris Climate Accord goal of 50% global GHG emissions reductions by 2030. It is more important than ever that we commit to achieving our 80 x 30 goal and ensure that S/CAP Implementation is successful. April 19, 2021 Council Action and S/CAP Ad Hoc Committee Formation In April, City Council unanimously passed the following motion: 5 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/reports/city-manager-reports- cmrs/2021/id-12009.pdf 6 https://www.cityofpaloalto.org/files/assets/public/sustainability/earth-day-reports/id-12009-scap-report-with- attachment-d.pdf 7 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/city-council- agendas-minutes/2021/04-19-21-ccm-action-minutes.pdf 19 Packet Pg. 262 City of Palo Alto Page 4 A. Direct the Mayor to appoint two or more Council Members to an ad hoc climate action committee that would engage with community stakeholders, domain experts, and community activists; and that the committee would periodically report back to Council; B. Support the policy framework in Attachment A and ask Staff to pursue the actions that are listed from 2021-2024 and further develop and return to Council as needed with the following changes: i. A plan for an earlier adoption of commercial electrification retrofits ii. Evaluation of the sale of gasoline within the city limits as a key metric iii. Evaluation of a best practice standard for low carbon construction materials iv. A proposal for a Palo Alto Green equivalent voluntary surcharge program on power utilities to help fund electrification initiatives v. An evaluation of public health and public safety risk and benefits from climate protection vi. Move forward with an on-bill financing program for residential building electrification vii. Evaluate a supplemental carbon neutrality goal viii. Return with recommended electric utility capital and personnel investments required to enhance reliability and staffing resources necessary for the Climate Action Plan ix. Evaluate income qualified incentives to support low-income households x. Evaluate land use, zoning, and development changes that would reduce greenhouse gas emissions xi. Integrate urban forestry into the S/CAP policy framework. Mayor DuBois appointed Vice Mayor Burt and Councilmember Cormack to the S/CAP A d Hoc Committee, with Mayor DuBois serving as an Alternate. The S/CAP Ad Hoc Committee meets on the second Thursday of every month and dives deeply into various issues of the S/CAP Update. The full S/CAP Ad Hoc proposed schedule and topics can be found here8. Staff Efforts Related to Council’s April 2021 Direction Staff updated the Draft S/CAP Goals and Key Actions9 to incorporate elements from Council Motion B i, ii, iii, iv, vi, ix, x, and xi. Staff created a Draft S/CAP Three-Year Work Plan10 to address the 4/19/21 Council motion to begin implementation of near-term programs before the S/CAP Update is finalized. The Draft S/CAP Three-Year Work Plan incorporates elements from Council Motion B i, iii, iv, vi, vii, viii, ix, x, and xi. The current draft of the Three-Year Work Plan envisions one potential way to implement the S/CAP that involves two phases: 8 https://www.cityofpaloalto.org/files/assets/public/sustainability/reports/proposed -scap-ad-hoc-committee- meeting-schedule.pdf 9 https://www.cityofpaloalto.org/files/assets/public/sustainability/policies-and-plans/2021-scap-goals-and-key- actions-draft.pdf 10 https://www.cityofpaloalto.org/files/assets/public/sustainability/policies -and-plans/draft-scap-3-year-work- plan.pdf 19 Packet Pg. 263 City of Palo Alto Page 5 • Phase 1 (2-3 years): Raise awareness, launch voluntary programs that can be scaled up later and that can generate some successes, pass some mandates (e.g. end of life replacement and all-electric construction updates to the Energy Code), plan for full-scale implementation, including identifying funding. • Phase 2 (full scale implementation): Funding available for any needed incentives is now available for the entire community (may require ballot measure), new business processes and programs established to minimize impacts to City operations, general awareness of the need to electrify has been established. The Draft S/CAP Three-Year Work Plan is provided in Attachment A. The Work Plan will be discussed in further detail at the January 2022 S/CAP Ad Hoc Committee meeting, and may undergo further revision. In planning topics for discussion at the S/CAP Ad Hoc Committee meetings, staff included elements from the Council Motion B i, iii, iv, v, vi, vii, viii, ix, and x. The S/CAP Ad Hoc Committee has worked in partnership with staff on securi ng speakers, developing content, and coordinating the S/CAP Ad Hoc Committee meetings. The S/CAP Ad Hoc Committee formed a S/CAP Ad Hoc Committee Working Group to draw upon the expertise of community members. Working Group members are individuals who commit to attending multiple S/CAP Ad Hoc Committee meetings and to working on discrete projects outside the meetings. The role of the working group is not to make policies or request tasks, but to provide feedback and discussion on proposed policies. Currently, the Working Group members are: • Diane Bailey, Executive Director, Menlo Spark • Lincoln Bleavens, Stanford, Executive Director of Sustainability and Energy Management • Justine Burt, Sustainability Consultant • Debbie Mytels, 350 Silicon Valley Palo Alto • Julia Zeitlin, Silicon Valley Sunrise Hub The S/CAP Ad Hoc Committee has also recruited several members of the community as Domain Advisors. More than twenty community members have volunteered as Domain Advisors in a variety of topics and will be engaged in the near future. In addition, staff have updated multiple pages of the City’s website to better reflect the on - going work on the S/CAP Update. Staff have also created an S/CAP Ad Hoc Committee Webpage11, launched a monthly Climate Action Blog Series, published a monthly Sustainability Newsletter, launched an on-line survey12 to help inform climate and sustainability conversations taking place with the S/CAP Ad Hoc Committee and City Council, and participated in an S/CAP Residential Building Electrification Workshop. Staff work continues and in cludes the 11 https://www.cityofpaloalto.org/Departments/City-Clerk/City-Council-Committees/Sustainability-and-Climate- Action-Plan-Ad-Hoc-Committee 12 https://www.opentownhall.com/portals/5/Issue_11175 19 Packet Pg. 264 City of Palo Alto Page 6 efforts of city employees from four divisions of three City departments who meet and collaborate regularly on the S/CAP Update. S/CAP Ad Hoc Committee Meetings to Date On August 12, 2021, 86 participants (including 9 high school students) join ed the inaugural meeting of the S/CAP Ad Hoc Committee meeting, which includes members Vice Mayor Burt and Councilmember Cormack. During the public comment period, 40 participants discussed various themes to help further the sustainability planning work th at is underway including: - The importance of taking action on climate change without delay - The need to devote resources and develop a financing plan for implementation - The need to work on S/CAP implementation in parallel to S/CAP Update completion - The need to prioritize issues such as renewable energy, resilience, electrification, sea level rise, and housing - The possibility of forgoing CEQA review of the S/CAP Update A summary of the public comments can be found here13. A more in-depth summary of the meeting can be found in Attachment B: Climate Action Blog Series: New Ad Hoc Committee Advances Council’s Sustainability & Climate Action Planning Blog14. On September 9, 2021, 73 participants joined the S/CAP Ad Hoc Committee meeting, which covered the following topics: residential building electrification options15, impact analysis study16, revised S/CAP goals and key actions17, and the draft Three-Year Work Plan18. During the public comment period, 11 participants discussed issues related to residential building electrification, and 31 participants asked questions. Some of the barriers to residential building electrification identified by meeting participants and community members include: - Cost of conversion (this came up several times and was the number one barrier) - Belief that technology will get a lot better in just a few years - Unwillingness to toss out a perfectly good appliance 13 https://www.cityofpaloalto.org/files/assets/public/sustainability/questions -and-answers/2021.08.12-scap-ad- hoc-committee-public-comment-summary.pdf 14 https://medium.com/paloaltoconnect/climate-action-blog-series-new-ad-hoc-committee-advances-councils- sustainability-climate-action-81ab1ff2c3f8 15 https://www.cityofpaloalto.org/files/assets/public/sustainability/reports/residential-building-electrification- overview.pdf 16 https://www.cityofpaloalto.org/files/assets/public/sustainability/reports/aecom-palo-alto-action-impact- memo_final_rev-210607.pdf 17 https://www.cityofpaloalto.org/files/assets/public/sustainability/policies-and-plans/2021-scap-goals-and-key- actions-draft.pdf 18 https://www.cityofpaloalto.org/files/assets/public/sustainability/policies-and-plans/draft-scap-3-year-work- plan.pdf 19 Packet Pg. 265 City of Palo Alto Page 7 - Unfamiliarity of what residential electrification conversion means - Lack of time to research electrical appliance options - The need to upgrade a home’s electrical panel Themes for additional feedback include: - More outreach is necessary - Group-Buy program for electric appliances is needed A summary of the Questions and Answers can be found here19. A more in-depth summary of the meeting can be found in Attachment C: Climate Action Blog Series: How Electric Appliances Can Help us Meet our Climate Goals20. On October 14, 2021, 64 participants joined the S/CAP Ad Hoc Committee meeting, which covered the following topics: non-residential building electrification, multi-family building electrification, an electrification assessment of City facilities, building electrification permitting, and a summary of near-term funding and resources for the S/CAP effort. Six participants provided public comments, 14 participants asked questions, and 10 participants provided suggestions. Community members and meeting participants shared input on the following topics: - The need for a community microgrid - Making sure equity issues are addressed when electrification scales up - Establishing a carbon pricing program - Regional collaboration and sharing of resources - Investing in carbon offsets to achieve our 80 x 30 goal - The need to consider waste management as electrification scales up A summary of the Questions and Answers can be found here21. A more in-depth summary of the meeting can be found in Attachment D: Climate Action Blog Series: The Role of Non-Residential Building Electrification22. On November 4, 2021, 74 participants joined the S/CAP Ad Hoc Committee meeting, which covered the following topics: electrifying vehicle travel, building out EV charging infrastructure, municipal fleet electrification, and a brief history of PaloAltoGreen. Six participants provided 19 https://www.cityofpaloalto.org/files/assets/public/sustainability/questions-and-answers/2021.09.09-scap-ad- hoc-committee-questions-and-answers.pdf 20 https://medium.com/paloaltoconnect/climate-action-plan-blog-series-how-electric-appliances-can-help-us- meet-our-climate-goals-e60f6cdca1bf 21 https://www.cityofpaloalto.org/files/assets/public/sustainability/questions -and-answers/2021.10.14-scap-ad- hoc-committee-questions-and-answers.pdf 22 https://medium.com/paloaltoconnect/climate-action-plan-blog-series-the-role-of-non-residential-building- electrification-efd572f4e64a 19 Packet Pg. 266 City of Palo Alto Page 8 public comments, 27 participants asked questions, and 13 participants provided suggestions. Community members and meeting participants shared input on the following topics: - Education on electric vehicles - Ensuring access to EV charging for multi-family buildings and renters - Pollution from gas-powered gardening equipment - Embracing all zero emissions vehicles solutions - Encouraging commuters to take public transit A more in-depth summary of the meeting can be found in Attachment E: Climate Action Blog Series: Electric Vehicles Move Forward Climate Goals23. The tentative schedule for the remaining S/CAP Ad Hoc Committee Meetings is as follows: • December 9, 2021 – dƌĂŶƐƉŽƌƚĂƚŝŽŶ: Mobility and Land Use • January 13, 2022 - ůŝŵĂƚĞ/ŵƉĂĐƚƐ: Health Impacts of Wildfires, Wildfire Protection, and Sea Level Rise; ^ͬW: Finalize Draft Goals and Key Actions, Three-Year Work Plan • February 10, 2022 – &ƵŶĚŝŶŐĂŶĚZĞƐŽƵƌĐĞƐ͗Long-term Funding and Financing Options; ^ͬW͗Finalize S/CAP Report • March 10, 2022 – &ƵŶĚŝŶŐĂŶĚZĞƐŽƵƌĐĞƐ͗ Costs and Resources Needed to Achieve 80 x 30 • April 14, 2022 – ĂƌďŽŶ ZĞĚƵĐƚŝŽŶ ͬ ĂƉƚƵƌĞ: Carbon Neutrality, Low-Carbon Construction materials, New Climate Goal for after 80 x 30 On November 19, 2021, the S/CAP Ad Hoc Committee, along with the S/CAP Ad Hoc Committee Working Group and City Staff, participated in a Residential Building Electrification Design Thinking Workshop. The group discussed concrete steps for ramping up and scaling up our residential building electrification efforts for the Sustainability and Climate Action Plan. Multiple teams identified innovative roadmaps for reaching the S/CAP’s residential electrification goals, and an upcoming step will be additional discussion of these ideas and how they may lead to updates to the Goals and Key Actions and 3 -Year Work Plan items related to residential electrification. Work Can Begin Quickly Staff has heard from community members that Palo Alto cannot delay action on climate change. Fortunately, we do not have to wait until the S/CAP is adopted by Council and CEQA review is completed before and work can start on the S/CAP goals. There are five broad areas of effort that the City needs to focus on right away: building consensus among advocates and policy makers, engaging stakeholders for S/CAP input, partnering with the community to raise awareness and promoting services, building compelling services and tools and recruiting users, and creating an electrification road map. 23 https://medium.com/paloaltoconnect/climate-action-plan-blog-series-electric-vehicles-move-forward-climate- goals-d991f697a372 19 Packet Pg. 267 City of Palo Alto Page 9 External Collaboration Already Underway Addressing climate change is also not an issue that is confined to Palo Alto’s geographic borders. Staff has been working closely with other agencies, local governments, counties, non - profits, and regional efforts to discuss issues and share resources around climate action. For example, for issues such as building electrification, reducing vehicles miles traveled, increasing electric vehicle adoption and EV charging infrastructure, water conservation, climate adaptation, and zero waste, staff has worked with groups such as the Urban Sustainability Directors Network, Green Cities California, ICLEI, CALeVIP, GreenWaste, Valley Transportation Authority (VTA), Valley Water, the Bay Area Water Supply and Conservat ion Agency (BAWSCA), Santa Clara County Office of Sustainability, San Mateo County Office of Sustainability, the Regionally Integrated Climate Action Planning Suite (RICAPS), Public Sector Climate Task Force, Joint Venture Silicon Valley, Silicon Valley Green Team Network, Climate Mayors, Valley Water, and Stanford University. Discussions Needed on Resources Required to Meet 80 x 30 What still needs more discussion is how Palo Alto will fund S/CAP implementation and what staffing and resources are needed to meet the 80 x 30 goal. 2030 is only 9 years away. Under a BAU scenario, Palo Alto’s emissions are projected to be 47.4 percent below 1990 levels in 2030. To achieve the 80 x 30 goal, Palo Alto will need to reduce total emissions by about 326,303 MT CO2e, or an additional 254,411 MT CO2e beyond “Business-as-usual” projections, at a rate of 3.8 percent per year, significantly increasing the scale and speed of reductions. Our near -term S/CAP implementation work relies heavily on education and voluntary adopt ion of S/CAP strategies. However, in order to scale-up emission reductions to achieve 80 x 30, we will need to consider higher levels of intervention and the resources required to achieve those levels. Message From the Ad Hoc Committee on What has Been A chieved and Learned So Far First, we have created a format that allows members of the public to engage with staff and Councilmembers informally and in detail. The conversations are in depth and back and forth, which is improving understanding on all sides. The newly formed Working Group of five strategic advisors has added another dimension to our process as we leverage outside resources to build, implement, and share our programs with other jurisdictions and utilities. Second, senior staff believes that our 80 by 30 goal is achievable, although challenging, and they see a path to implementation. We sincerely appreciate the effort that staff is putting into this crucial plan and their willingness to think through how the community will use energy in the future and what it will take to achieve our goals. Third, the sense of urgency to address climate change is rising. We also anticipate rapid cost reductions and technology advancements over the next few years in the green energy and building electrification fields. With initial costs being the biggest barrier to change today (e.g., buying an electric car or heat pump water heater or using battery storage for resiliency), 19 Packet Pg. 268 City of Palo Alto Page 10 experts project that the costs of our transitions will decline significantly during the S/CAP time horizon. Fourth, we have three challenges to work on simultaneously -- building community momentum to switch to electricity, building reliable and resilient capacity to meet additional needs of electric appliances and cars, and building a fundin g strategy for these changes. Actions the Ad Hoc committee recommends to Council ● Accept the draft S/CAP 3-Year Work Plan that incorporates the Council directives from April (Attachment A) ● Direct staff to propose necessary staffing in the Electric Fund and the General Fund during the mid-year budget update, in order to implement the near-term activities in the S/CAP 3-Year Work Plan Outstanding needs We need to reassure people and businesses that there will be sufficient, low cost energy and that our electric utility will be able to provide the high levels of reliability and resilience we need and expect. Describe costs incorporating life cycle expenses, adjusted for any future declining cost curves, and compare our costs to PG&E’s projected costs. The assumptions in the current SCAP plan are based on the current state of technology, which we expect will increase in efficacy and decrease in cost (e.g., cost of solar kWh, battery storage for resiliency), so how can we factor these changes in capacity and technical improvements in over the next nine years? What will be the best way to fund the residential electrification work required? Some options include, and are not mutually exclusive: ● We could include programs in our electric rates to cover some of these costs while still being significantly less expensive than PG&E ● A climate bond or climate parcel tax or climate Utility Users Tax ● General funds used for part of the effort ● On bill financing ● A new voluntary program for residential customers like the former Palo Alto Green ● Philanthropic contributions and/or venture investments 19 Packet Pg. 269 City of Palo Alto Page 11 Finally, the Ad Hoc committee wishes to thank the core staff team, the new Ad Hoc working group, and all of the members of the public who have participated in our workshops to date. We look forward to continuing this important work with you. ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ Stakeholder engagement on the S/CAP Update is wide-reaching and was not deterred by the COVID-19 pandemic. Efforts include direct engagement, webinars, social media outreach, website updates, Ad Hoc meeting participation, leveraging the City Manager’s communication platforms, and more. Staff developed, and is implementing, a 2021 S/CAP Engagement Plan which identifies relevant stakeholders, proposed materials, and desired meeting milestones and outcomes. Stakeholder engagement is an integral part of the S/CAP Ad Hoc Committee’s mission, and is described above in the Discussion section. On October 8, 2021, the City launched an on-line survey to help inform the S/CAP Update conversations currently underway. To date, the survey has had 78 visitors, and 35 responses. The following are some examples of the responses received to-date: • The City’s top three priorities for Climate Action should be: accelerate GHG reductions through mandates or price signals, provide building and transportation emissions consultations for residents, and develop major employer custom emissions reduction plans. • The City’s top three priorities for building electrification should be: launch residential programs and incentives for voluntary electrification, launch non -residential programs and incentives for electrification, and develop electric rate options that support electrification. • The top three barriers to electrifying a home are all related to cost: upfront cost of conversion, the need to upgrade a home’s electrical panel, and the cost of electricity is more expensive than the cost of gas. • The City’s top three priorities for advancing residential building electrification should be: reduce upfront costs or otherwise provide meaningful financial incentives, ensure that everyone, regardless of income, can electrify their homes, and a strong price signal for carbon e.g., a carbon tax on natural gas usage. • The City’s top three priorities for mobility should be: expand bicycle and pedestrian infrastructure, expand transport options, and disincentivize sole occupant vehicle trips • The City’s top three priorities for water should be: maximize water conservation and efficiency, implement green stormwater infrastructure, and provide rebates and incentives for home and landscape water conservation • The City’s top three priorities for Climate Adaptation should be: implement a Sea Level Rise Adaptation Plan, conduct a Sea Level Rise Vulnerability Assessment, and implement the Foothills Fire Management Plan 19 Packet Pg. 270 City of Palo Alto Page 12 • The City’s top three priorities for natural environment should be: maximize biodiversity and soil health, reduce pesticide use in parks and open space preserves, and enhance pollinator habitats. Other Key steps to date have been a March 31 – April 14, 2020 Community Engagement Virtual Workshop; Council Study Sessions on April 13, 2020 and June 16, 2020; a Utilities Advisory Commission Study Session on May 20, 2020; June 2020 Study sessions with the Utilities Advisory Commission, Planning and Transportation Commission, and Parks and Recreation Commission; and a Fall 2020 S/CAP Webinar series to highlight various topics addressed in the 2021 S/CAP. Topics covered in the Fall 2020 S/CAP Webinar series included: an overview of the Sustainability and Climate Action Plan, Sea Level Rise, All -Electric Homes, Transportation, and the Natural Environment. The webinar recordings, PowerPoint presentations, an d questions and answers can be found on the S/CAP Website24. The webinars were generally well received, with an average of 90 participants at each webinar. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ Initiatives are across departments and funds. Some are funded in current budgets, others will be recommended as part of the FY 2022 Mid-year Budget Update or FY 2023 Proposed Budget, while most will need to be prioritized in consideration of competing priorities. Funding and resources will be discussed in greater detail at the February and March 2022 S/CAP Ad Hoc Committee Meetings. WŽůŝĐǇ/ŵƉůŝĐĂƚŝŽŶƐ The Sustainability and Climate Action Plan Update aligns with one of the top four Council Priorities for CY 2021: “Climate Change – Protection and Adaptation” dŝŵĞůŝŶĞ • August 2021 – April 2022: S/CAP Ad Hoc Committee Meetings • January 2022: Finalize draft S/CAP Goals and Key Actions, Three-Year Work Plan • February 2022: California Environmental Quality Act (CEQA) evaluation commences • March / April 2022: draft S/CAP presented to Council • September 2022: CEQA evaluation completed • By December 2022: S/CAP with CEQA Review presented to Council for approval ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ Council’s review of this progress report is not a project under Section 21065 for purposes of the California Environmental Quality Act (CEQA). The final S/CAP Report will be evaluated consistent with CEQA prior to approval by the City. ƚƚĂĐŚŵĞŶƚƐ͗ • ƚƚĂĐŚŵĞŶƚϭϵ͘Ă͗Attachment A - DRAFT SCAP Three-Year Work Plan 24 https://www.cityofpaloalto.org/services/sustainability/sustainability_and_climate_action_plan/community_engag ement/default.asp 19 Packet Pg. 271 City of Palo Alto Page 13 • Attachment19.b: Attachment B - Climate Action Blog Series - New Ad Hoc Committee Advances Council’s Sustainability & Climate Action Planning Blog • Attachment19.c: Attachment C - Climate Action Blog Series - How Electric Appliances Can Help us Meet our Climate Goals • Attachment19.d: Attachment D - Climate Action Blog Series - The Role of Non- Residential Building Electrification • Attachment19.e: Attachment E - Climate Action Blog Series - Electric Vehicles Move Forward Climate Goals 19 Packet Pg. 272 Draft S/CAP Three-Year Work Plan Page ϭ of ϲ ƌĂĨƚ^ͬWdŚƌĞĞͲzĞĂƌtŽƌŬWůĂŶ Work Item / Key Action Funding ΨсůŽǁĞƐƚĐŽƐƚ ΨΨΨΨс ŚŝŐŚĞƐƚĐŽƐƚ Staffing @ = Existing staffing @@@@ = need many addtl contract/perm/temp staff Carbon Impact ( low CO2 impact) (high impact) S/CAP Adoption A1 Build consensus among advocates and policy makers about what needs to be done to fight climate change. Work items include: Coordinate on-going S/CAP development, implementation and collaboration with the S/CAP Ad Hoc Committee, City Department, advocates, and experts; Coordinate S/CAP Plan Development and Adoption; Coordinate 3-Year Work Plan Development and Council Approval; Review the S/CAP Impact Analysis and Co-Benefits Analysis Funding: $ Staffing: @ n/a A1 Finalize models and technical memos to make them usable by the community and for future staff work Funding: $ Staffing: @ n/a A2 Engage stakeholders throughout the community to receive and incorporate feedback on the S/CAP Funding: $ Staffing: @ n/a A3 Build community awareness of the need to fight climate change and what services and tools are available, partner with the community to build awareness & promote services. Work items include: Develop a major community engagement and communications plan to raise awareness of the S/CAP Adoption Process and planned programs, Launch a public outreach campaign Funding: $$ Staffing: @@ A4 Coordinate CEQA Review of the S/CAP Funding: $ Staffing: @ n/a 19.a Packet Pg. 273 Draft S/CAP Three-Year Work Plan Page Ϯ of ϲ Work Item / Key Action Funding ΨсůŽǁĞƐƚĐŽƐƚ ΨΨΨΨс ŚŝŐŚĞƐƚĐŽƐƚ Staffing @ = Existing staffing @@@@ = need many addtl contract/perm/temp staff Carbon Impact ( low CO2 impact) (high impact) Climate Action Programs and Other Emissions Reduction Actions and Outreach C1 Enable any resident or business to receive guidance on reducing their building and transportation emissions via phone consultations, interactive web applications, or other communications platforms. They may receive a consultation and/or sign up for City programs and services (also see Energy Key Actions E1 and E2, EV Key Action EV1, and Mobility action M1) Funding: $$$ Staffing: @@ C2 Work with major employers to develop custom emissions reduction plans that address commute, building and other emissions on an employer by employer basis Funding: $ Staffing: @@@ E1 Launch comprehensive residential program services and incentives to promote voluntary electrification of water heating, space heating, cooking, clothes drying, and other appliances that use natural gas, as well as single- family residence panel upgrades and EV charger installation (also see Key Action EV2, Multi-family EV Charging program). Services may include technical assistance, vetted contractor lists, on-bill financing, and/or direct install services. Funding: $$$$ Staffing: @@@ E2 Launch non-residential program services and incentives for electrification of non-residential mixed-fuel rooftop packaged HVAC units, cooking equipment, and small non-residential gas appliances (as well as workplace EV charging). Services may include technical assistance, vetted contractor lists, on-bill financing, and/or direct install services. Funding: $$$$ Staffing: @ E4 Develop electric rate options for electrified homes, EV charging, and solar + storage microgrid customers Funding: $ Staffing: @ n/a E5A Adopt an All-Electric Reach Code for non-residential new construction projects, if feasible, through the established process for Energy Code updates Funding: $$ Staffing: @@ E5B Adopt an All-Electric Reach Code or gas ban for new detached ADUs, if feasible, through the established process for Energy Code updates Funding: $$ Staffing: @@ E5C Adopt a definition for substantial remodel project that triggers all-electric reach code requirements, if feasible, through the established process for Energy Code updates Funding: $$ Staffing: @@ E8 Evaluate City ordinance to require energy benchmarking for commercial and multifamily buildings over 25,000 sf Funding: $$ Staffing: @@ 19.a Packet Pg. 274 Draft S/CAP Three-Year Work Plan Page ϯ of ϲ Work Item / Key Action Funding ΨсůŽǁĞƐƚĐŽƐƚ ΨΨΨΨс ŚŝŐŚĞƐƚĐŽƐƚ Staffing @ = Existing staffing @@@@ = need many addtl contract/perm/temp staff Carbon Impact ( low CO2 impact) (high impact) EV1 Raise awareness of emission savings of alternative transportation modes, micromobility (such as e-bikes and e-scooters), EVs, the economics of these transportation modes compared to gasoline vehicles, and available incentives. Collaborate with regional partners, other agencies, and local nonprofit partners in promotional efforts. Provide information and access to City and partner programs via phone consultations, interactive web applications, or other communications platforms. Funding: $$$ Staffing: @@ EV2 Enhance multi-family and workplace EV charging program as needed to create high levels of participation and expand it to include bike facility evaluation and alternative commute promotion. Evaluate financing and direct installation program features. Funding: $ Staffing: @ EV7 Convert all compact sedan Palo Alto municipal vehicles to EVs when an e-bike is not an operationally acceptable replacement Funding: $$ Staffing: @@ M1A Launch bike/scooter shared micro-mobility service to provide last-mile connection Funding: $$ Staffing: @@ (rating represents combined impact of all Mobility actions) M1B Launch on-demand transit service pilot Funding: $ (grant funded pilot) Staffing: @ M1C Pilot Neighborhood Mobility Hubs at activity centers, based on Mobility Needs Assessment in M4 Funding: $$ Staffing: @@ M1D Bundle Mobility options into one program/platform (Maas, Mobility Wallet) if technology allows Funding: $$$ Staffing: @@ M2A Allocate funding for TMA and expand scope to entire City to help scale up TDM programming Funding: $$$ Staffing: @@ M2B Adopt telecommuting policy for local employers to align with regional targets. Funding: $$ Staffing: @@ M2C Adopt a TDM Ordinance Funding: $$ Staffing: @@ M2D Establish a Safe Routes for Older Adults/Aging in Place program based on M4 Funding: $$ Staffing: @@ M3A Implement proposals for Council to price parking in business districts Funding: $$$ Staffing: @ M3B Implement smart parking infrastructure in public garages Funding: $$$$ Staffing: @ 19.a Packet Pg. 275 Draft S/CAP Three-Year Work Plan Page ϰ of ϲ Work Item / Key Action Funding ΨсůŽǁĞƐƚĐŽƐƚ ΨΨΨΨс ŚŝŐŚĞƐƚĐŽƐƚ Staffing @ = Existing staffing @@@@ = need many addtl contract/perm/temp staff Carbon Impact ( low CO2 impact) (high impact) M3C Review and recommend adjustments to development parking requirements. Use recommendations from M4. Funding: $$ Staffing: @@ M4B Develop proposals for Council for policies to discourage vehicle use and encourage alternative modes for all trip types. Alternatives to evaluate include vehicle-free streets and other recommendations Funding: $$ Staffing: @ M5B Implement Bicycle and Pedestrian Transportation Plan (also see M5, below, under Climate Action Studies, for Bicycle and Pedestrian Plan and Vision Zero Update) Funding: $$$$ Staffing: @@ Climate Action Studies and Supporting Efforts C3 Complete study to identify any additional Energy, EV, or Mobility key actions needed to achieve 80% reduction in greenhouse gas emissions from 1990 levels by 2030 Funding: $$ Staffing: @@ (rating represents potential effect of actions to be identified) C4 Complete a study, including legal analysis, of the staffing and funding needed to operate programs, services, and related City processes at a high enough capacity to accommodate all necessary emissions reduction activities through 2030 Funding: $$ Staffing: @@ C5 Present options for Council consideration to accelerate EV, Mobility, and Energy emissions reduction activities identified in this Plan through mandates or price signals, such as buildings emissions performance standard, carbon pricing, on-sale or replace-on-burnout ordinances, parking rules in public and private spaces, and withdrawal of gas by a date certain Funding: $$ Staffing: @@ C6 Complete a technical and legal study of alternatives available to fund post- 2025 key actions, such as a carbon tax, parcel taxes, or other community funding mechanisms Funding: $ Staffing: @ C7 E3 Complete an affordability study to identify vulnerable populations and businesses who may need help with electrification Funding: $ Staffing: @ n/a C8 Complete a study of carbon neutrality options with completion planned for year-end 2022. Consider the contribution of the Palo Alto urban canopy in achieving carbon neutrality goals Funding: $$ Staffing: @@ (rating represents potential effect of actions to be identified) 19.a Packet Pg. 276 Draft S/CAP Three-Year Work Plan Page ϱ of ϲ Work Item / Key Action Funding ΨсůŽǁĞƐƚĐŽƐƚ ΨΨΨΨс ŚŝŐŚĞƐƚĐŽƐƚ Staffing @ = Existing staffing @@@@ = need many addtl contract/perm/temp staff Carbon Impact ( low CO2 impact) (high impact) E6 Conduct an Electrification and Planning Assessment of City Facilities, which will be used to develop a plan for electrification that results in an 80% reduction in natural gas usage at City facilities by 2030 Funding: $$ Staffing: @@ (rating represents potential effect of actions to be identified) E7 Complete a study of reliability and resiliency needs in an electrified community Funding: $$ Staffing: @@ n/a E7 Develop a plan to preserve and enhance community electric system emergency reliability and resiliency, including evaluating the role of solar, storage, and other flexible energy technologies. Funding: $$ Staffing: @@ n/a EV3 Study incentives available for small EVs like e-bikes and e-scooters and develop incentive recommendations if needed. Promote new and existing incentives. Funding: $ Staffing: @@ EV4 E3 Study EV affordability and other barriers for low-income residents and develop plan for EV and charger promotion to this group Funding: $$ Staffing: @ EV5 Evaluate a residential EV credit or rate mechanism that creates an electric bill discount for registered EVs Funding: $ Staffing: @ EV6 Evaluate mandates or other mechanisms to ensure EV charging capacity needed to support EV growth Funding: $$ Staffing: @ (rating represents potential effect of actions to be identified) M4A Conduct a land use and transportation study to identify scenarios, changes, services, and programs that would reduce greenhouse gas emissions and accommodate projected housing growth without increasing transportation sector emissions Funding: $$ Staffing: @@ (rating represents combined impact of all Mobility actions) M5A Update Bicycle and Pedestrian Transportation Plan Funding: $ (grant funded) Staffing: @ (rating represents combined impact of all Mobility actions) M5C Establish a Vision Zero data collection and analysis program based on M4 Funding: $$ Staffing: @@@ (rating represents combined impact of all Mobility actions) 19.a Packet Pg. 277 Draft S/CAP Three-Year Work Plan Page ϲ of ϲ Work Item / Key Action Funding ΨсůŽǁĞƐƚĐŽƐƚ ΨΨΨΨс ŚŝŐŚĞƐƚĐŽƐƚ Staffing @ = Existing staffing @@@@ = need many addtl contract/perm/temp staff Carbon Impact ( low CO2 impact) (high impact) Sustainability S1 Complete the Sea Level Rise Vulnerability Assessment Funding: $$ Staffing: @@ n/a S2 Complete the Sea Level Rise Adaptation Plan Funding: $$Staffing: @@ n/a S4 Implement Foothills Fire Management Plan Funding: $ Staffing: @ W5 Develop a "One Water" Portfolio for Palo Alto1 Funding: $$ Staffing: @ n/a N1 N10 Develop programs to plant trees to increase Palo Alto’s tree canopy and establish a baseline and Key Performance Indicator for carbon storage of tree canopy Funding: $$ Staffing: @ n/a ZW2 Eliminate single-use disposable cups and containers by expanding the Disposable Foodware Ordinance Funding: $ Staffing: @ ZW3 Require edible food recovery for human consumption from commercial food generators Funding: $ Staffing: @ ZW4 Create a new campaign to promote residential food waste reduction Funding: $ Staffing: @ n/a ZW5 Provide waste prevention technical assistance to the commercial sector Funding: $ Staffing: @ ZW7 Evaluate a best practice standard for low carbon construction materials, beginning with concrete (including review of the Marin County Low Carbon Concrete Ordinance) Funding: $ Staffing: @ n/a W6 N5 By 2023, establish a baseline and Key Performance Indicator for treatment of impacts from impervious surfaces to support the Green Stormwater Infrastructure Plan Funding: $ Staffing: @ n/a 1 A “One Water” approach envisions managing all water in an integrated, inclusive, and sustainable manner that is more resilien t to the impacts of climate change. The One Water approach recognizes that water must be managed in ways that respect and respond to the natural flows of watersheds and the natural ecosystem, geology, and hydrology of an area. projects and programs focus on achieving multiple benefits—economic, environmental, and social. 19.a Packet Pg. 278 Climate Action Blog Series: New Ad Hoc Committee Advances Council’s Sustainability & Climate Action Planning City of Palo Alto Follow Aug 19 · 8 min read Learn more about the City’s plans to enhance community engagement on proposed sustainability goals and actions and ways to join the conversation In early 2020, the City of Palo Alto launched an update to the Sustainability and Climate Action Plan (S/CAP) to develop the strategies needed to meet our goal to reduce greenhouse gas emissions 80% by 2030 and other community-wide sustainability goals. On April 19, 2021, a Sustainability and Climate Action Plan Ad Hoc Committee was formed by the City Council to engage with community stakeholders, domain experts, and activists and complement existing efforts on this important priority. The new ad hoc committee, which meets monthly on the second Thursday at 9 a.m., will help guide the development, implementation, communication, and future community engagement of the S/CAP process. This work will support finalizing the development of the S/CAP update, which is slated for Council adoption in early 2022. Read on to learn more about the Ad Hoc kickoff meeting, their workplan over the next several months, and ways to share input on this important community priority. INAUGURAL AD HOC MEETING 19.b Packet Pg. 279 The City Council established the Ad Hoc in April to engage with community stakeholders, domain experts, and community activists. Other Council actions at the same meeting that related to the S/CAP update included supporting the policy framework as presented (go here) and asking staff to pursue the actions that are listed from 2021–2024. Council direction also included further developing other related changes as noted in the specific motion here. On August 12, 2021, 86 participants joined the inaugural meeting of the S/CAP Ad Hoc Committee meeting, which includes members Vice Mayor Burt and Council Member Cormack. During the public comment period, 40 participants discussed various themes to help further the sustainability planning work that is underway including: • taking action on climate change without delay • devoting resources and developing a financing plan for S/CAP implementation • focusing on key issues such as renewable energy, resilience, electrification, sea level rise, and housing • having a California Environmental Quality Act (CEQA) review of the S/CAP update • increasing outreach, partnerships, and collaboration Two main themes discussed by community members attending the meeting include the S/CAP adoption timeline and the necessary environmental review. Both of these topics are expanded on below. S/CAP Timeline: Several community members commented on the need to expedite the S/CAP adoption. The S/CAP update seeks to provide a roadmap to meet the City’s aggressive sustainability goals, including reducing GHG emissions 80 percent below 1990 levels by 2030 (the “80 x 30” goal). It’s important to note that while development of the S/CAP update is underway, implementation and financing planning have begun on certain items already approved by the City Council. In addition, several items are in development or about to be launched, such as: residential program services and incentives to promote voluntary electrification of water heating; space heating; cooking; clothes drying and other appliances that use natural gas; expanding bicycle and pedestrian infrastructure; promoting incentives for electric vehicles (EVs) and EV chargers; developing a “One Water” portfolio for Palo Alto; completing a Sea Level Rise Vulnerability Assessment; developing programs to increase Palo Alto’s tree canopy; and expanding the Disposable Foodware Ordinance to eliminate single-use disposable cups and containers. California Environmental Quality Act (CEQA) Review Requirements: Several community members provided input about the required California Environmental Quality Act process. CEQA is a California statute that requires state and local agencies to analyze the potential environmental impacts of their actions, determine and disclose if those impacts are significant, and avoid or minimize impacts, as applicable and feasible. CEQA review of the S/CAP will establish it as a CEQA-reviewed 19.b Packet Pg. 280 GHG emissions reduction plan, on which future priority projects considered by the City can rely. This will help streamline the environmental analysis and ensure cost savings and more rapid implementation of future S/CAP-related projects. It should be noted that the CEQA review of the S/CAP update does not necessarily delay early S/CAP implementation. There are several S/CAP update-related programs, projects and initiatives that were planned as part of the 2018–2020 Sustainability Implementation Plan, and as such have components already in progress, with Council approval. Those select early implementation steps can proceed in parallel with CEQA review. The recording of the meeting can be found here and the PowerPoint presentation can be found here. All Ad Hoc meeting materials will be posted here. HARNESSING THE POWER OF THE COMMUNITY TO REACH SUSTAINABILITY GOALS The City recognizes the urgency and importance of strong action on climate change and is committed to reaching our goal of reducing GHG emissions 80 percent below 1990 levels by 2030 (the “80 x 30” goal). To do that, we need the community’s help from stakeholders, domain experts and activists. The City is seeking community members to participate actively in the S/CAP update process. Read more in this section and sign-up for a topic you are passionate about. Volunteering with the City An important aspect of the work underway is engaging the community and offering ways for them to volunteer to help move the plan forward. Areas of volunteer focus include: Emissions Reductions • Buildings (Commercial and Residential): focus areas include Energy Efficiency, Natural Gas Reduction and Electrification, and Sustainable Buildings. 19.b Packet Pg. 281 • Transportation: focus areas include Electrification of Vehicles, Transit/Trip Reduction and Micro Mobility • Land Use (including Urban Design) Climate Adaptation • Sea level rise • Wildland fires mitigation and response • Resilient electric utility, including microgrids, local generation, and storage Policy Collaborations (local, state, federal and international levels) Advocacy and Implementation Metrics and dashboards, other partners, etc. If you are interested in volunteering to be an S/CAP Domain Advisor e-mail City staff at sustainability@cityofpaloalto.org and note your area of interest from the list above. Making An Impact At Home While the S/CAP update is underway, there are several things you can do to act to further the community’s sustainability goals. SWITCH TO ELECTRIC APPLIANCES: Do you want to learn more about how to switch to electric appliances in your home? Are you ready to take the next step in efficiency and electrification upgrades in your home? The Home Efficiency Genie can help. To learn more about the Home Efficiency Genie and get information about efficiency and electrification upgrades and programs, visit here. BIKE AND WALK MORE: Road transportation represents the largest percentage of Palo Alto’s existing carbon footprint — and a congestion headache. Reducing emissions from the transportation sector requires addressing three things: reducing the carbon intensity of fuels, increasing vehicle efficiency, and reducing the number of miles travelled in a vehicle. To learn more about reducing the number of miles you drive by switching to bicycling and walking in Palo Alto, visit here. OPT FOR AN ELECTRIC VEHICLE: President Biden recently announced a target of 50% of new vehicles sold in the US to be electric by 2030. Our city ranks as one of the top in the nation to embrace this clean technology. Electric Vehicles (EVs) now account for more than 30% of new 19.b Packet Pg. 282 car sales in Palo Alto — the highest adoption rate in the country. Driving and charging an EV in Palo Alto especially makes sense given the City’s carbon neutral electricity supply and low electric retail rates. To learn more about EVs, EV Chargers, and available rebates, visit here. SAVE WATER YEAR-ROUND: As of late April 2021, parts of the Bay Area, including Palo Alto, are considered to have entered an extreme drought phase. Fragile local water supplies are stressed by decreased precipitation associated with climate change in some areas of the state. To learn more about actions you can take to save water year-round, visit here. PREPARE FOR WILDFIRES: Whether you live in the Foothills of Palo Alto or the flatlands closer to the Bay, preparing for wildfires makes a lot of sense. The City of Palo Alto works every year to minimize the risk; we have a multi-functional team that works on our wildfire risk reduction programs. To learn more about steps you can take to prepare for wildfires, visit here. CARE FOR OUR URBAN FOREST: Sustainability is not only about mitigation, adaptation, and resilience, but also regeneration — identifying opportunities for renewal, restoration, carbon sequestration, and growth of our natural environment. To learn more about Palo Alto’s Urban Forest and available tree care resources, visit here. REDUCE WASTE: Zero Waste is sustainable materials management — seeking to eliminate waste wherever possible first and foremost, and then managing the discards we do have through reuse and recycling/composting. To learn more about upcoming Zero Waste Events and how you can reduce waste, visit here. For the City’s sustainability website to learn more, go here. JOIN THE CONVERSATION AT THE NEXT AD HOC MEETING The Ad Hoc meetings are open to the public and are ways to hear from the community on specific sustainability related goals and actions. The next Ad Hoc meeting is set for September 9, with a focus on residential building electrification. Join the discussion by registering below and logging in from 9:00–11:30 a.m. 19.b Packet Pg. 283 The September meeting topics include: •Residential building electrification, including electrification retrofits, low-income programs, and financing programs. •An overview of the third draft of the S/CAP Goals and Key Actions •A review of the draft 3-Year Implementation Plan •A summary of the AECOM Impact Analysis Memo Registration is required in advance of the meeting. Register here. MORE ONLINE RESOURCES •For the April 19, 2021 staff report on sustainability, go here and here for the meeting minutes and meeting recording. •For details on the City’s Sustainability and Climate Action Plan process go here: www.cityofpaloalto.org/climateaction •For the City’s Sea Level Rise Website: www.cityofpaloalto.org/sealevelrise •For more on the City’s Electrification programs, go here: www.cityofpaloalto.org/electrification •For more on programs focused on Electric Vehicles and Chargers: www.cityofpaloalto.org/electricvehicle •For details related to Home Composting, go here. •For more on Zero Waste programs, including tools to avoid food waste, go here. •For more on the City’s Green Building Program including Trainings, go here. •For the City’s Safe Routes to School programs, go here. 19.b Packet Pg. 284 Climate Action Plan Blog Series: How Electric Appliances Can Help us Meet our Climate Goals City of Palo Alto Follow Sep 16 · 9 min read Learn more about the City’s proposals to encourage electrification of appliances in single-family homes and the opportunities for residential building electrification to help us meet sustainability goals and actions Each month, the Sustainability and Climate Action Plan (S/CAP) Ad Hoc Committee will delve into various topics related to the S/CAP update — the City’s roadmap of strategies needed to meet the City’s goals to reduce greenhouse gas (GHG) emissions 80% by 2030 and other community-wide sustainability goals. Read on to learn more about the September Ad Hoc meeting, focusing on residential building electrification and ways to share input on this important community priority. Read the first blog in this series to learn more about the S/CAP Ad Hoc Committee, City sustainability programs and more. SEPTEMBER 2021 AD HOC MEETING RECAP On September 9, 2021, 73 participants joined the S/CAP Ad Hoc Committee meeting, which included Vice Mayor Burt and Council Member Cormack. The meeting covered several topics including residential building electrification options, impact analysis study, revised S/CAP goals and key actions, and the draft Three-Year Work Plan. The recording of the meeting can be found here, and the PowerPoint presentation can be found here. All Ad Hoc meeting materials are posted here. Residential Building Electrification Overview 19.c Packet Pg. 285 Single-family residential building electrification represents one of the largest and most cost-effective opportunities to reduce emissions available to the Palo Alto community. Palo Alto’s electricity is sourced from renewable and hydroelectric resources, but natural gas is a fossil fuel that will always produce greenhouse gas emissions. Technologies exist to electrify virtually all appliances in single-family homes. By far the most cost-effective retrofits for existing homes are heat pumps to replace gas furnaces in homes with central heating with or without air conditioning and heat pump water heaters to replace gas tank water heaters. Despite benefits of converting homes to all-electric, there are barriers to conversion. Some of the barriers to residential building electrification identified by meeting participants and community members include: • Cost of conversion (this came up several times and was the number one barrier) • Belief that technology will get a lot better in just a few years • Unwillingness to toss out a perfectly good appliance • Unfamiliarity of what residential electrification conversion means • Lack of time to research electrical appliance options • The need to upgrade a home’s electrical panel Learn more about residential building electrification benefits, barriers, and available services/resources here. Impact Analysis Memo Summary Prepared by AECOM The City and AECOM, the City’s consultant, collaborated to model key action impact results in three categories of GHG reduction actions: Energy, Mobility, and Electric Vehicles. The AECOM Impact Analysis Memo describes the modeling approach to estimate emissions reductions from various policies; lists the package of S/CAP key actions that can reduce emissions to 71% below 1990 levels by 2030 through local action; and shows that the vast majority of the proposed S/CAP key actions have somewhat positive or very positive co-benefits, with three proposed S/CAP key actions having negative impacts on cost of living, and one key action having a negative impact on equity. The memo concludes with recommendations for how to achieve the remaining 9% emissions reductions needed to meet the 80 x 30 goal. Read the memo, with recommendations starting on page 15, here. 19.c Packet Pg. 286 Revised S/CAP Goals and Key Actions Overview Upon completion of the impact analysis, staff updated the S/CAP Goals and Key Actions to better reflect the outcomes needed to achieve the 80 x 30 goal. The updated S/CAP Goals and Key Actions includes a new Climate Action area with 8 Key Actions. The goals and key actions in Energy, Mobility, and Electric Vehicles were reworked, but the outcomes are the same. Minor changes were made to the goals and key actions in Water, Climate Adaptation and Sea Level Rise, Natural Environment, and Zero Waste, with one significant change in the addition of goals and key actions addressing wildfire protection. Draft Three-Year Work Plan Review The draft Three-Year Work Plan details the actions reflected in the Policy Framework from the April 19, 2021 Council Meeting (see Attachment A here), and includes estimates of staff and funding needs for implementation and potential greenhouse gas reductions. These are actions that can be implemented concurrently while the S/CAP Update is in progress. For the most part, meeting participants agreed that the draft Three-Year Work Plan addresses the barriers to electrification, but noted that more outreach is necessary and a group-buy program for electric appliances is needed. September meeting participants identified the following priorities the City needs to explore: • Reduce upfront costs (this came up several times) • A strong price signal for carbon • Foster neighbor-to-neighbor conversations • Pilot programs • Make the process smoother • Ensure that everyone, regardless of income, can electrify their homes • Reduce the incentives for non-electric appliances • On-bill financing • Plan for recycling appliances as they are replaced • Pursue multi-family building electrification • Stop this effort and redirect time and money towards actually solving problems • Let the market dictate a move towards (or away) from electrification • Invest your efforts in programs to reduce vehicular traffic where the climate impact can be much larger • The process should be voluntary • Provide back-up power to residents 19.c Packet Pg. 287 Read the draft Three-Year Work Plan here. Electric Panel Upgrade and Heat Pump Water Heater To meet the goals of the Sustainability and Climate Action Plan (S/CAP), the City is taking actions to support driving electric and shifting away from natural gas use. For many City of Palo Alto Utilities customers, this may require an electric panel upgrade. The Electric Panel Upgrade page provides information to help you understand how to determine whether or not your project will require an electric panel upgrade and the best way to proceed. Redwood Energy has a resource that may help residents with a “Watt Diet” to possibly avoid an electric panel upgrade. That Watt Diet section starts on page 19 of this Pocket Guide. Heat pump technologies can be used to improve efficiency, safety and performance by replacing their gas fueled counterparts. The core of heat pump technology is quite simple and commonly used throughout your home. It is the same technology that is in your kitchen refrigerator but in reverse. Essentially, heat pumps move heat from one place to another. This process is extremely efficient, typically yielding about 300% efficiency, so for every unit of energy used, the heat pump will move three unit of heat energy. For climates with moderate heating and cooling needs, heat pumps offer an energy-efficient alternative to furnaces and air conditioners. Heat pump space heating and cooling can be very similar in application to your typical forced air furnace with an air conditioner. 19.c Packet Pg. 288 A heat pump water heater (HWPH) closely resembles a gas tank water heater, but uses the heat pump to move heat from the air around it to heat the water. More information about heat pump water heaters and available rebates can be found here. MAKING AN IMPACT AT HOME While the S/CAP update is underway, there are several things community members can do now to further the community’s sustainability goals. Switch to Electric Appliances 19.c Packet Pg. 289 Do you want to learn more about how to switch to electric appliances in your home? Are you ready to take the next step in efficiency and electrification upgrades in your home? The Home Efficiency Genie can help. City of Palo Alto’s Utility Department offers a Home Efficiency Genie program to residents providing help over the phone to understand their energy and water bills, evaluate new energy technology, and electrify their homes. Residents can then follow up with a virtual home assessment via video call or in-person house call. The Genie can provide efficiency and electrification recommendations and help with contractor selection. To learn more about the Home Efficiency Genie and get information about efficiency and electrification upgrades and programs, go here. Induction Cooktop Loaner Program Are you curious about induction cooktops, but not quite sure if they are right for you? The City partners with Acterra on an Induction Cooktop Loaner Program, which allows people to borrow a counter- top induction cooktop for up to three weeks. Learn more about induction cooktops and how to sign up for the induction cooktop loaner program here. OTHER PROGRAMS TO FURTHER SUSTAINABILITY EFFORTS Join us for Coastal Cleanup Day 2021 Are you interested in helping keep trash out of our local creeks and the San Francisco Bay? Join us on Saturday, September 18, 2021 from 9 a.m. to noon for Coastal Cleanup Day 2021. The City is hosting in-person cleanup sites at Matadero and Adobe Creeks. Choose to pick up trash at our in-person event or independently in your own neighborhood. To learn more about how to sign up, or to get assistance with cleanup supplies, go here. Participate in National Drive Electric Week Are you considering purchasing an electric vehicle? Is the idea of charging an electric vehicle (EV) mysterious or confusing? On Tuesday, September 28 from 7 to 8 p.m., the City is sponsoring a free EV Charging Workshop presented by Acterra. This event is part of National Drive Electric Week (NDEW), Sept. 25 — Oct. 3, 2021, a nationwide celebration to raise awareness of the many benefits of all-electric and plug-in hybrid cars, trucks, motorcycles, and more. To register for the free Charging Workshop, go here. To learn more about other online and in- person events happening during NDEW, go here. 19.c Packet Pg. 290 Save Water Year-Round You can save water year-round by following some basic tips like water your landscapes in early morning (before 10 a.m.) or evening (after 6 p.m.) and only as needed; turn off the water when brushing your teeth or shaving; and, add mulch to your landscaped areas to conserve water outside. To learn more actions you can take to save water year-round, go here. For the City’s sustainability website, go here. PARTICIPATE IN THE NEXT S/CAP AD HOC MEETING The Ad Hoc meetings are open to the public and a good way for staff to hear from the community on specific sustainability related goals and actions. The next Ad Hoc meeting is scheduled for October 14 with a focus on permitting related to building electrification and commercial building electrification. Provide your input by submitting comments or questions to sustainability@cityofpaloalto.org. Register here and log in from 9–11:30 a.m. October meeting topics include: •Permitting for building electrification •Commercial building electrification •An overview of near-term funding and financing options Registration is required in advance of the meeting. Register here. MORE ONLINE RESOURCES •A summary of the public comments received at the August S/CAP Ad Hoc Committee Meeting can be found here. •For details on the City’s Sustainability and Climate Action Plan process, go here. •For the City’s Sea Level Rise Website, go here. •For more on the City’s Electrification programs, go here. •For more on the City’s Green Building Program including Trainings, go here. •For more on programs focused on Electric Vehicles and Chargers, go here. •For the City’s Safe Routes to School programs, go here. •For more on water resources, go here. •For details related to Home Composting, go here. •For more on Zero Waste programs, including tools to avoid food waste, go here. •For Frequently Asked Questions, go here. 19.c Packet Pg. 291 Climate Action Plan Blog Series: The Role of Non-Residential Building Electrification Learn more about non-residential building electrification, City proposals to encourage electrification and the opportunities it can provide. City of Palo Alto Follow Oct 21 · 9 min read Each month, the Sustainability and Climate Action Plan (S/CAP) Ad Hoc Committee will delve into various topics related to the S/CAP update — the City’s roadmap of strategies needed to reduce greenhouse gas (GHG) emissions 80% by 2030 and other community- wide sustainability goals. Read on in this third blog to learn more about the October 14 S/CAP Ad Hoc meeting, which focused on non-residential building electrification and ways to share input. Read the second blog in the series to learn more about electrifying appliances in single-family residential buildings, and read the first blog to learn more about the S/CAP Ad Hoc Committee and other sustainability programs available to the community today. OCTOBER S/CAP AD HOC MEETING On October 14, 2021, members of the community joined the S/CAP Ad Hoc Committee meeting, which included Vice Mayor Burt and Council Member Cormack. The meeting covered the following topics: non-residential building electrification, multi-family building electrification, an electrification assessment of City facilities, building 19.d Packet Pg. 292 electrification permitting, and a summary of near-term funding and resources for the S/CAP effort. Details on all of these items are summarized below. NON-RESIDENTIAL BUILDING ELECTRIFICATION Non-residential buildings electrification encompasses commercial buildings, school buildings, restaurants, hotels, and City of Palo Alto facilities switching away from utilizing natural gas to electricity. There are significant decarbonization opportunities for the non-residential building sector, especially in buildings with mixed-fuel rooftop packaged units (RTUs). The most cost-effective way to reduce GHG emissions in non- residential buildings is through the adoption of a reach code to mandate all-electric new construction projects. However, each year new construction projects represent less than 1% of the total commercial floor area. To mitigate this, the City will launch new initiatives to facilitate voluntary electrification efforts in existing buildings and address electrification challenges over the next six months. In addition, the Utilities Department will launch a Commercial Electrification Assistance Program to provide technical assistance to building owners and facility managers conducting electrification projects. Staff will also engage key account customers to receive their input on the City’s S/CAP Update. The City will also explore policy options that can effectively curb GHG emissions; such policies will serve as a backstop to ensure that the City will meet its aggressive GHG emissions reduction goals. For more information and the full Non-Residential Building Electrification white paper, go here. Multi-Family Building Electrification There are 11,000 households in Palo Alto that live in multi-family buildings. The challenges for electrifying appliances and space heating in multi-family buildings are similar to those for single-family homes: high upfront cost, challenges related to permitting, and challenges related to electrical upgrades. As a way to learn more and better address these challenges, the City applied for and received funding from the Bay Area Air Quality Management District to implement a pilot project that will replace gas furnaces with heat pump systems at Page Mill Court Apartments, a 24-unit apartment building. The pilot project is scheduled to be complete at the end of 2021. The objectives of the pilot are to document the costs and challenges, use lessons learned to streamline the City’s permitting process, and develop a multi-family electrification program. 19.d Packet Pg. 293 Electrification Assessment of City Facilities The City is preparing to perform a Citywide facility and electrification assessment that will be used to develop a plan to reduce natural gas use in City facilities 80% by 2030. The City began making progress to reduce municipal energy consumption through actions such as the sewage sludge incinerators at the Regional Water Quality Control Plant, the facility that was the largest user of natural gas, were replaced with the more environmentally friendly Sludge Dewatering and Truck Loadout Facility. The updated treatment process reduces GHG emissions by approximately 15,000 metric tons of carbon dioxide equivalent per year — equivalent to carbon dioxide emissions for 3,000 passenger cars. The City facilities that now have the largest natural gas use are the Municipal Service Center, City Hall Civic Center Office Building and Parking Garage, Cubberley Community Center, and the Rinconada buildings. The plan developed as part of the citywide electrification assessment, which is expected to be presented to the City Council in November 2022, will include specific ways these buildings can reduce natural gas usage. Permitting for Building Electrification There are many variables that influence electrification policy, including but not limited to: state mandates (e.g. Energy Reach Codes), cost effectiveness studies, incentive programs and local mandates, infrastructure capacity, building readiness, and permit processing. In Palo Alto, electrification permits currently account for 7% of all permit activity, and those permits have been steadily increasing. The City has completed or started many initiatives to streamline the permitting process, such as prioritizing electrification reviews, comparing Palo Alto requirements to other jurisdictions, updating checklists, meeting with trade professionals, and exploring technological solutions. As staff prepare for scaling up building electrification, exploring a wide variety of strategies needs to happen; this includes: • A technical assistance program to support preparation and submission of permits • Direct installation (working with a single contractor for new installations) • A vetted contractor’s list • Contractor training • “Plug and Play” permit options and/or appliances • A flat fee for panel upgrades • Ongoing studies of how to ensure our distribution grid can handle increased electrification as gas appliances are switched out 19.d Packet Pg. 294 • Work ahead, or as capacity allows, upgrading transformers (using City funds) • Enhanced online permitting options For more information and to find building permit forms, go here. Near-Term (2021–2022) Funding and Resources for the entire S/CAP effort As work continues on the S/CAP Update, several programs are already underway using existing resources, while other programs proceed slowly due to limited staff capacity. Impacts to City operations are a critical limiting factor in achieving near-term S/CAP goals. Staff identified several potential funding sources to apply toward the S/CAP work such as grants, Low Carbon Fuel Standard revenues, Electric Special Projects reserve, and a Palo Alto Green equivalent voluntary surcharge. Staff is exploring potential sources, reviewing limitations and evaluating if they can be applied to the S/CAP efforts. The Ad Hoc Committee will discuss funding and resources at their Febraury and March 2022 meetings. Register to join here. Other Meeting Input In addition to hearing presentations from non-residential building electrification experts, community members and meeting participants at the October Ad Hoc meeting also shared input on the following topics: • The need for a community microgrid • Making sure equity issues are addressed when electrification scales up • Establishing a carbon pricing program • Regional collaboration and sharing of resources • Investing in carbon offsets to achieve our 80 x 30 goal • The need to consider waste management as electrification scales up The recording of the October 14 meeting can be found here, and the presentation can be found here. All Ad Hoc meeting materials are posted here. NEW SUSTAINABILITY AND CLIMATE ACTION SURVEY 19.d Packet Pg. 295 An online survey was recently launched to help inform climate and sustainability conversations taking place with the S/CAP Ad Hoc Committee and City Council. We welcome your input through the Sustainability and Climate Action Plan Update Survey. The survey should take about 5 minutes to complete, and we invite you to return to the survey as you learn more through the Ad Hoc Committee meetings. The survey is open through April 2022. Take the survey today! PARTICIPATE IN THE NEXT S/CAP AD HOC MEETING ON NOVEMBER 4 The Ad Hoc meetings are open to the public and a good way for staff to hear from the community on specific sustainability related goals and actions. The next Ad Hoc meeting is scheduled for November 4 from 9–11:30 a.m. and will focus on electric vehicles and charging infrastructure. Provide your input by taking the S/CAP survey or submitting comments/questions to sustainability@cityofpaloalto.org. Registration is required in advance of the meeting. Register here. View past meetings and materials by visiting www.cityofpaloalto.org/climateaction. MAKE AN IMPACT AT HOME While the S/CAP update is underway, there are several things community members can do now to further the community’s sustainability goals. This section provides some tools to make a local impact now! Chat with your neighbors and community networks about what they are considering or have recently accomplished to further climate action and sustainability efforts at home. 19.d Packet Pg. 296 Help Find a Contractor for Your Home Upgrade & Resources to Switch to Electric: An all-electric lifestyle is cleaner and healthier than using fossil fuels and can also be more affordable. Through the Switch is On campaign, you can connect directly with trusted contractors and compare quotes to pick the right professional for your electrification project. Ready to make the switch? Apply online for a rebate of up to $1,500 to switch your existing water heater with an efficient, electric heat pump water heater. The Utilities Department offers a Home Efficiency Genie program to residents providing help over the phone to understand their energy and water bills, evaluate new energy technology, and electrify their homes. Learn more about the Switch is On campaign here. Learn more about the Home Efficiency Genie and get information about efficiency and electrification upgrades and programs here. Power Up Your Savings with Limited-Time Discounts: Energy efficiency and solar go together like peanut butter and jelly. Investing in energy efficiency before installing solar will allow you to have a smaller, less expensive solar system. If you’re ready to go solar, sign up for the SunShares discount program by November 30 to receive a 15% discount on solar and 10% discount on battery storage installations. Attend the upcoming CPAU-hosted webinar on October 26 from 6:30–7:30 p.m. to learn how to register for the discount and more. Learn more about the SunShares discount program here. Hot Water, Cool Rebates & Savings: If your water heater is more than 12 years old, don’t wait for it to leak or stop working. Replace it with a highly efficient heat pump water heater (HPWH). HPWHs are 300% more efficient than a typical gas water heater. Plus, you can receive up to $1,500 with a HPWH rebate for replacing your existing water heater. Learn more about heat pump water heater rebates here. Save Water Year-Round: You can save water year-round by following some basic tips like water your landscapes in early morning (before 10 a.m.) or evening (after 6 p.m.) and only as needed; turn off the water when brushing your teeth or shaving; and, add mulch to your landscaped areas to conserve water outside. Learn more actions you can take to save water year-round here. Read a recent blog post about tools to conserving water that are available to community members here. Refrigerator recycling: Back by popular demand! Contact City of Palo Alto Utilities to recycle an old refrigerator or freezer and receive a $50 rebate. 19.d Packet Pg. 297 To learn more about refrigerator recycling, go here. For the City’s sustainability website, go here. MORE ONLINE RESOURCES • A summary of the questions and answers from the September S/CAP Ad Hoc Committee Meeting can be found here. • For details on the City’s Sustainability and Climate Action Plan process go to: www.cityofpaloalto.org/climateaction • The City’s Sea Level Rise Website can be found here: www.cityofpaloalto.org/sealevelrise • For more on the City’s Electrification programs, go here: www.cityofpaloalto.org/electrification • For more on the City’s Green Building Program including Trainings, go here. • For more on programs focused on Electric Vehicles and Chargers: www.cityofpaloalto.org/electricvehicle • For the City’s Safe Routes to School programs, go here. • For more on water resources, go here. • For details related to Home Composting, go here. • For more on Zero Waste programs, including tools to avoid food waste, go here. 19.d Packet Pg. 298 Climate Action Plan Blog Series: Electric Vehicles Move Forward Climate Goals City of Palo Alto Follow Nov 10 · 9 min read Learn about electric vehicles (EVs), building EV charging infrastructure, and potential opportunities to encourage transportation electrification Electric Vehicles Move Forward Climate Goals Each month, the Sustainability and Climate Action Plan (S/CAP) Ad Hoc Committee will do a deep dive into various topics related to the S/CAP Update — the City’s roadmap of strategies to address climate change and specifically to reduce greenhouse gas (GHG) emissions 80% by 2030 and other community-wide sustainability goals. Read on in this blog series to learn more about transportation electrification opportunities, and ways to make an impact and share input. NOVEMBER S/CAP AD HOC COMMITTEE MEETING At the November 4 Ad Hoc meeting, Committee members, staff and the public discussed electrifying vehicle travel, building out EV charging infrastructure, municipal fleet electrification, and heard a brief history of PaloAltoGreen. Brief updates on each of these areas are listed below. ELECTRIFYING VEHICLE TRAVEL Electric Vehicles & Benefits in Addressing Climate Change Road transportation is Palo Alto’s largest remaining source of GHG emissions. Roughly 65% of our remaining emissions come from transportation — people driving their cars into, out of, and around Palo Alto. There are three ways to reduce vehicle emissions: 1. Reduce vehicle miles traveled. Travel demand can be reduced by encouraging telework, transit-oriented development, and encouraging non- vehicle travel like walking, biking, taking public transit, and carpooling. 2. Electrify vehicle travel. If driving is necessary, do so in an electric vehicle! In Palo Alto, electricity is carbon-neutral and is sourced mostly from renewable electricity, so switching to an EV reduces emissions drastically. To 19.e Packet Pg. 299 reach our goals, the estimated number of registered EVs in Palo Alto needs to increase from 5,000 in 2020 to 25,000 in 2030. 3. Improve Internal Combustion Engine (ICE) vehicle efficiency. Improving an ICE vehicle’s miles per gallon reduces the amount of GHG per mile. Ultimately, a vehicle’s fuel efficiency is determined by the car manufacturer, but there are several things you can consistently do to help improve your fuel efficiency, including clear out extra clutter in your car or trunk, limit idling, keep a steady speed and stay within the speed limit, make sure your tire pressure is at the right level, and perform regular maintenance. Since the City of Palo Alto has little control over ICE vehicle efficiency, current programs focus on reducing vehicle miles traveled and electrifying vehicle travel. At the December S/CAP Ad Hoc Meeting, mobility and how to reduce vehicle miles traveled will be discussed more in depth. As we look at the overall cost of emissions reductions needed to meet our 80 x 30 goal, transitioning to EVs is one of the more cost-effective strategies available. In Palo Alto, 1 in 6 households drive an EV — the highest adoption rate in the country. There are more models to choose from than ever before with improved range and at various price points. With lower maintenance and fueling costs, in the long run EVs are cheaper to own than a fossil fuel vehicle. By 2030, the goal is that EVs constitute 44% of all registered vehicles in Palo Alto and 85% of all new vehicle sales. In order to accelerate the transition to EVs, we need to raise awareness, build more EV charging infrastructure, and provide incentives for the community — not only for vehicles, but e-Bikes and e- Scooters as well. For more information about EVs, a cost calculator and current incentives, visit www.cityofpaloalto.org/ev. Building EV Charging Infrastructure To support the growing number of EVs registered in Palo Alto, we will need to build more EV charging infrastructure. Focus needs to be on multi-family buildings and non-profit properties. There are 11,000 households in Palo Alto that live in multi-family buildings, and there are many challenges to installing EV infrastructure in these buildings. To address the challenge, the City has several incentive opportunities that include an EV Charging Rebate Program, EV Charging Technical Assistance Program, and Transformer Upgrade program. The City is also piloting a curbside EV charging program and has installed 120 City- owned charging ports available to the public, where residents can charge their EVs overnight in public garages. Find a map of all EV charging stations in the City by visiting www.cityofpaloalto.org/ev and navigating to the accordion titled “No Charging at Home? No Problem!” With California Clean Fuel Reward incentive, the City provides funding to this State-run program to provide point of sale EV incentives at local 19.e Packet Pg. 300 dealerships. The California Energy Commission’s California Electric Vehicle Infrastructure Project (CALeVIP) is a partnership among regional energy providers to offer a workplace and public charging incentive program for San Mateo and Santa Clara Counties. Fleet Electrification The City is assessing the potential to electrify the City Fleet through a Fleet Electrification Study. To date, a total of 352 vehicles were assessed, including 240 light duty vehicles, 66 medium duty vehicles, and 46 heavy duty vehicles. The initial data from the study estimates that approximately half of the City’s fleet can be replaced with equivalent electric vehicles that are commercially available and likely to be cost-effective. With equivalent EV’s in the market today, and following current replacement schedules, Palo Alto could electrify 40% of its light-duty vehicles by 2030, and 74% by 2040. While not a part of the City’s Fleet, Palo Alto is electrifying its refuse collection trucks. In 2016, Palo Alto purchased the first fully automated all-electric side loader refuse vehicle for residential refuse collection in the United States through its refuse collection contract with GreenWaste of Palo Alto. This particular vehicle saves approximately 6,000 gallons of diesel per year and reduces emissions by about 78 metric tons of carbon dioxide equivalents per year. The City is planning to systematically electrify the refuse collection fleet, which currently includes four all-electric vehicles, shown below. There are plans to obtain three additional EVs in the next few years. 19.e Packet Pg. 301 For more information on Electric Vehicles and EV Chargers, visit www.cityofpaloalto.org/EV. PaloAltoGreen As work continues on the S/CAP Update, the City Council asked that staff look into a PaloAltoGreen equivalent program to fund the City’s programs. staff identified several potential funding sources such as grants, Low Carbon Fuel Standard revenues, Electric Special Projects reserve, and a PaloAltoGreen equivalent voluntary surcharge. PaloAltoGreen Electric was a voluntary program established in 2003 that allowed electricity customers to purchase 100% renewable electricity for an additional surcharge. It ended in 2013 and was replaced with the Carbon Neutral Electricity program. The PaloAltoGreen Electric program accrued a net revenue of about $706,000 in 2012 and cost just over $400,000 to administer. PaloAltoGreen Gas was a voluntary program established in 2014 that allowed natural gas customers to purchase carbon offsets to mitigate carbon impacts. It ended in 2017 and was replaced with the Carbon Neutral Natural Gas Program. Staff identified several potential funding sources such as grants, Low Carbon Fuel Standard revenues, Electric Special Projects reserve, and a PaloAltoGreen equivalent voluntary surcharge. Staff continue to explore potential funding sources for S/CAP Implementation. Watch the full November 4 meeting on YouTube here; the presentation can be found here. All Ad Hoc Committee meeting materials are posted here. SUSTAINABILITY AND CLIMATE ACTION PLAN UPDATE SURVEY An online survey was recently launched to help inform climate and sustainability conversations taking place with the S/CAP Ad Hoc Committee and City Council. We welcome your input through the Sustainability and Climate Action Plan Update Survey. 19.e Packet Pg. 302 The survey should take about 5 minutes to complete, and the City invites the community toshare additional thoughts as e survey as you learn more through the Ad Hoc Committee meetings. The survey is open through April 2022. Take the survey today! PARTICIPATE IN THE NEXT S/CAP AD HOC MEETING ON DECEMBER 9 The Ad Hoc meetings are open to the public and a good way for staff to hear from the community on specific sustainability related goals, City programs and actions. The next Ad Hoc meeting is scheduled for December 9 from 9–11:30 a.m. and will continue the discussion on transportation, this time focusing on how the City can help reduce transportation emissions through mobility programs and land use decisions. In the short term, we hope to reduce transportation emissions by reducing vehicle miles traveled through mobility programs that encourage and incentivize reducing solo trips in vehicles and increasing other modes of transportation, like carpooling, bicycling, walking, and taking public transit. In the long term, we will need to examine how land use decisions could potentially reduce vehicle miles traveled even more. Provide your input by taking the S/CAP survey or submitting comments/questions to sustainability@cityofpaloalto.org. Learn more about mobility ahead of the coming meeting here. Registration is required in advance of the meeting. Register here. View past meetings and materials by visiting www.cityofpaloalto.org/climateaction. MAKE AN IMPACT AT HOME While the S/CAP update is underway, there are several things community members can do now to further the community’s sustainability goals. This section provides tools to make a local impact now! Chat with your neighbors and community networks about what they are considering or have recently accomplished to further climate action and sustainability efforts at home. Opt for an Electric Vehicle President Biden recently announced a target of 50% of new vehicles sold in the US to be electric by 2030. Our city ranks as one of the top in the nation to embrace this clean technology. Electric vehicles now account for more than 30% of new car sales in Palo Alto 19.e Packet Pg. 303 — the highest adoption rate in the country. Driving and charging an EV in Palo Alto especially makes sense given the City’s carbon neutral electricity supply and low electric retail rates. To learn more about EVs, EV Chargers, and available rebates, go here. Bike and Walk More Road transportation represents the largest percentage of Palo Alto’s existing carbon footprint — and a congestion headache. Reducing emissions from the transportation sector requires addressing three things: reducing the carbon intensity of fuels, increasing vehicle efficiency, and reducing the number of miles travelled in a vehicle. To learn more about reducing the number of miles you drive by switching to bicycling and walking in Palo Alto, go here. For the City’s sustainability website to learn more, visit www.cityofpaloalto.org/sustainablity. MORE ONLINE RESOURCES •Read the first blog to learn more about the S/CAP Ad Hoc Committee and other sustainability programs available to the community today •Read the second blog in the series to learn about electrifying appliances in single- family residential buildings •Read the third blog in the series to learn about non-residential building electrification •A summary of the questions and answers from the October S/CAP Ad Hoc Committee Meeting can be found here •For details on the City’s Sustainability and Climate Action Plan process go to: www.cityofpaloalto.org/climateaction •The City’s Sea Level Rise Website can be found here: www.cityofpaloalto.org/sealevelrise •For more on the City’s Electrification programs, go here: www.cityofpaloalto.org/electrification •For more on the City’s Green Building Program including Trainings, go here. •For more on programs focused on Electric Vehicles and Chargers: www.cityofpaloalto.org/electricvehicle •For the City’s Safe Routes to School programs, go here. •For more on Zero Waste programs, including tools to avoid food waste, go here. 19.e Packet Pg. 304 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϱϭͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ƉƉƌŽǀĂůŽĨŵƉůŽǇĞĞƉƉƌĞĐŝĂƚŝŽŶ>ĞĂǀĞŽĨdŚƌĞĞĂǇƐ;EŽƚƚŽǆĐĞĞĚ ϯϲ,ŽƵƌƐͿKŶKŶĞ ͲƚŝŵĞĂƐŝƐĨŽƌŝƚǇŽĨWĂůŽůƚŽŵƉůŽǇĞĞƐƚŽďĞhƐĞĚ ĞƚǁĞĞŶĞĐĞŵďĞƌϭϵ͕ϮϬϮϭƚŚƌŽƵŐŚ:ĂŶƵĂƌǇϴ͕ϮϬϮϮ͕ĂŶĚƵƚŚŽƌŝǌĞƚŚĞŝƚǇ DĂŶĂŐĞƌŽƌdŚĞŝƌĞƐŝŐŶĞĞƚŽǆĞĐ ƵƚĞŐƌĞĞŵĞŶƚƐtŝƚŚĞƐŝŐŶĂƚĞĚ ŵƉůŽǇĞĞZĞƉƌĞƐĞŶƚĂƚŝǀĞ'ƌŽƵƉƐ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗,ƵŵĂŶZĞƐŽƵƌĐĞƐ ZKDDEd/KE At the direction of Council, staff recommends that the City Council approve Employee Appreciation Leave of three days (not to exceed 36 hours) on a one-time basis for all City of Palo Alto employees to be used between December 19, 2021 through January 8, 2022, and authorize the City Manager or their designee to execute agreements with designated employee representative groups as needed for implementation. yhd/s^hDDZz The proposed Appreciation Leave is in recognition of the evolving and challenging times , and appreciation for the invaluable continuing service provided by City employees. Over the past year and a half, the City has evolved through rapidly changing health and safety operational mandates, fiscal challenges, and much more. City staff have adapted and worked as individual contributors and in teams to modify service delivery models, protect the safety of the community, and successfully accomplish a number of significant milestones. Among numerous achievements, the phased adaptation of public spaces in our local business districts, financial support for residents and businesses, race and equity community conversations, and the openings of Foothills Nature Preserve, Highway 101 Pedestrian/Bike Bridge and Palo Alto Junior Museum & Zoo are generational milestones in their scope and impact. These accomplishments have been achieved while also maintaining a focus on the safety of employees and the community. The Appreciation Leave will encourage employees to celebrate their contributions to the Palo Alto community, and to focus on employee wellness and wellbeing by using this personal time. /^h^^/KE 20A Packet Pg. 305 City of Palo Alto Page 2 The pandemic has reinforced the importance of focusing on wellness, wellbeing and personal and professional connections. This leave is intended to encourage City employees to take personal time to rejuvenate, as they prepare for a new year of serving the Palo Alto community . To recognize and appreciate the City workforce, employees will be provided paid leave of three days (appropriate to work schedules, not to exceed 36 hours) to use between December 19, 2021 through January 8, 2022. Employees providing essential services and emergency response who are unable to take time off during the closure will be afforded an equivalent one -time compensation in early 2022. Part-time and hourly employees will receive a pro-rated amount of Appreciation Leave via a one-time compensation payment. Packet Pg. 306 20A City of Palo Alto Page 3 Throughout the year, the City workforce provides exceptional services to the Palo Alto community. Employees have worked through evolving and challenging times over the last 18 months. City employees work 24/7 providing a variety of city services such as public safety, community and library services, services focused on the City’s infrastructure and environment, and other essential services such as water, gas, electric and wastewater utilities, supporting all Palo Alto residents and community members. Employees with expertise in support services such as finance, human resources and information technology provide critical work behind the scenes and in support of the frontline workers and ensuring the City’s ability to meet legal and fiscal responsibilities. The uncertainties and evolving pandemic realities have caused the City to pivot and change service delivery, reduce staff while mitigating impacts to service levels, offer virtual programming, and work together as a workforce and with the community in different ways. It is important to recognize and appreciate the many accomplishments and milestones reached through the diligent work of the City workforce. The City of Palo Alto participates in a year-end shutdown between the Christmas and New Years’ holidays. For 2021, City operations will close December 24, 2021 and return on January 3, 2022, with the exception of essential and emergency services. During the year-end closure, employees receive paid holidays and are required to also use vacation, compensatory time, personal leave, or take the time without pay. The typical employee schedule requires 24 to 36 hours of paid leave to maintain full compensation, based on varying schedules. ^d<,K>ZE''DEd Human Resources staff have advised the appropriate employee representatives of the one-time Appreciation Leave described in this report, and the representatives are aware this item is subject to Council approval. Staff are working closely among internal departments including Human Resources, Administrative Services, City Attorney, and City Manager’s offices on the implementation details, including the execution of formal documents should this item be approved. Z^KhZ/DWd Staff estimates the financial value of this leave in totality is estimated at $1.5 million for all funds, of which $915,000 is General Fund. The actualmonetary impact will depend on the election of time off versus compensation in lieu of leave if employees are unable to take time off due to the nature of their work. Based on HR staff’s review of salaries and estimated number of staff required to provide essential services and emergency response and unable to take leave, it is estimated that the monetary impact is approximately $844,000, of which approximately $600,000 is a General Fund impact. Packet Pg. 307 20A City of Palo Alto Page 4 For full-time employees using the Appreciation Leave during December 19, 2021 through January 8, 2021 (year-end closure; last pay period of the calendar year and first pay period of 2022), there is no additional impact to the current year budget if taken as leave; salaries are fully funded in the adopted budget. If an employee is unable to take time off during this period as they are providing essential services and emergency response, they will be afforded an equivalent one-time compensation in early 2022. This one-time payment and increase in leave balances is not specifically budgeted and will be adjusted for as part of the FY 2022 Mid-Year Budget Review through the recommended appropriation of funding ultimately impacting the FY 2 021 one-time surplus funding ($4.6 million) above the Council Budget Stabilization Reserve target of 18.5% as necessary. Packet Pg. 308 20A ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϭϬͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ City of Palo Alto Page 1 DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ dŝƚůĞ͗ƉƉƌŽǀĂůŽĨŵĞŶĚŵĞŶƚƐƚŽƚŚĞŵƉůŽǇŵĞŶƚŐƌĞĞŵĞŶƚƐĞƚǁĞĞŶ ƚŚĞŝƚǇŽĨWĂůŽůƚŽĂŶĚŽƵŶĐŝůƉƉŽŝŶƚĞĚKĨĨŝĐĞƌƐ͕^ƉĞĐŝĨŝĐĂůůǇƚŚĞŝƚǇ ƚƚŽƌŶĞǇĂŶĚƚŚĞŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗,ƵŵĂŶZĞƐŽƵƌĐĞƐ ZĞĐŽŵŵĞŶĚĞĚDŽƚŝŽŶ 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. 9 to Employment Agreement between the City of Palo Alto and Molly S. Stump; 2.Amendment No. 3 to Employment Agreement between the City of Palo Alto and Ed Shikada. ZĞĐŽŵŵĞŶĚĂƚŝŽŶ The City Council has completed annual merit reviews for Council Appointed Officers (CAOs) for the prior fiscal year’s performance (FY20 20/21). 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, 2021, as follows: City Attorney Molly S. Stump, merit increase of 3% from $313,414 to $322,837 (Attachment A); and City Manager Ed Shikada, merit increase of 3% from $356,000 to $366,704 (Attachment B). ŝƐĐƵƐƐŝŽŶ As appointed officers of the Council, the City Manager and City Attorney are employed under employment agreements specifying that performance and salary are evaluated annually. The following paragraph is the specific provision in the City Manager’s employment agreement that addresses salary adjustments, and similar language exists in the City Attorney’s employment agreement: 20B Packet Pg. 309 City of Palo Alto Page 2 Salary Adjustments. Not less than once each year, the City Council shall meet for the express purpose of evaluating the performance of Shikada and determining whether to grant him an increase in annual base salary based on performance. The City Council will act in good faith in determining whether to provide an increase based on performance, but the ultimate decision in this regard is within the sole discretion of the City Council. The Council may also adjust Shikada’s annual base salary due to labor market and/or internal equity conditions. Performance evaluations have been conducted annually; however, the City Attorney salary has not been adjusted since 2019, and the City Manager’s salary has not been adjusted since the City Manager was appointed in 2018. In FY21, in recognition of the financial hardships resulting from the pandemic, the City’s unrepresented managers took 13 unpaid furloughs, equal to a 5% reduction in pay. City Manager Shikada and City Attorney Molly Stump voluntarily accepted 26 furlough days, equal to a 10% reduction in pay. Although City Manager Shikada and City Attorney Stump were to take 26 furlough days off, they worked on most (if not all) of the unpaid furlough days, thereby donating their time. City Manager Shikada and City Attorney Stump also r educed their management supplemental benefit by $1,250, in alignment with other managers. City Manager Shikada additionally donated 5% of his salary in leave hours to an employee leave sharing program. This year’s evaluation cycle has just concluded for managers citywide, for the performance period covering July 1, 2020 through June 30, 2021. FY 2021, with COVID-19 conditions, was an extraordinary year that challenged managers with many difficulties, including navigating new and complex issues, adapting to continually changing priorities, and managing with fewer staff and resources. For successfully rising to the challenges and remaining resilient during these difficult times, managers were rewarded a 3% for merit increase for meeting or exceeding expectations. The increases are effective as of July 1, 2021 and will be paid in a December paycheck. In parallel to the citywide management merit cycle, Council completed evaluations for the positions of City Manager and City Attorney. Council completed the ev aluations with the assistance of an outside consultant. The consultant, a principal with the firm MRG, is an expert in Council-Appointee relations and facilitates CAO evaluations with many agencies throughout California. The process includes surveys, 1-1 interviews, and facilitated closed session discussions as appropriate under the Brown Act. At the conclusion of the CAO evaluation process, Council directed staff to prepare amendments reflecting a 3% increase to the salaries of the City Manager and City Attorney. The amendments are attached to this staff report as exhibits. The 3% increase to the salary for City Manager and City Attorney are the only changes to the agreements and all other terms and conditions remain the same. Packet Pg. 310 20B City of Palo Alto Page 3 ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ Sufficient funding is available for the additional salary of approximately $20,114 for the CAO positions in their respective departmental FY2022 Adopted Budgets. ƚƚĂĐŚŵĞŶƚƐ͗ •ƚƚĂĐŚŵĞŶƚϮϭ͘Ă͗Attachment A - Amendment No Nine to Stump Employment Agt •Attachment21.b:Attachment B - Amendment No Three to Shikada Employment Agt •Attachment21.c:Attachment C - Amendments #1 - #8 to Molly Stump Employment •Attachment21.d:Attachment D - Ammendments #1 - #2 Shikada Agreement Packet Pg. 311 20B 1 AMENDMENT NO. NINE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP This AMENDMENT NO. NINE to the EMPLOYMENT AGREEMENT(“Agreement”) is entered into on December 13, 2021 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, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein as Exhibit “F” was entered into between the parties on or about November 6, 2017. 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 17, 2018. WHEREAS, AMMENDMENT NO. SEVEN to the Agreement, attached hereto and incorporated herein as exhibit “H” was entered into between the parties on or about December 17, 2019. WHEREAS, AMMENDMENT NO. EIGHT to the Agreement, attached hereto and incorporated herein as exhibit “I” was entered into between the parties on or about June 22, 2020. Packet Pg. 312 20B 2 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: Stump’s annual base salary shall remain at Three Hundred Thirteen Thousand Four Hundred and Fourteen and No/100 Dollars ($313,414), 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). At the recommendation of the CAO committee and consistent with annual merit practices, effective the first full pay period following July 1, 2021 Stump will receive a base annual salary of Three Hundred Twenty-Two Thousand Eight hundred and Seventeen dollars ($322,837), paid on City’s normal paydays. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. Attest: City of Palo Alto Approved as to form: Molly S. Stump Attachments: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP AMMENDMENTS NO. ONE THROUGH NO. EIGHT. Packet Pg. 313 20B 1 DEDEdEK͘d,ZdKDW>KzDEd'ZDEd dtE d,/dzK&W>K>dK E ĚǁĂƌĚ^ŚŝŬĂĚĂ This AMENDMENT NO. Three to the EMPLOYMENT AGREEMENT(“Agreement”) is entered into on December 13, 2021 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and Edward Shikada (“Shikada”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. Z/d>^͗ WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Edward Shikada., attached hereto and incorporated herein as Exhibit “A” was entered between the parties for the services of City Manager on or about September 18, 2018; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered between the parties on or about December 16, 2019; and WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein as Exhibit “C” was entered between the parties on or about June 22, 2020; 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 4.1 of the Agreement, Initial Compensation, is hereby amended to read as follows: 4.1. Compensation. Commencing on and continuing from the Employment Start Date, Shikada will receive an initial base annual salary of Three Hundred Fifty -Six Thousand Dollars ($356,000), prorated and paid on City's normal paydays. At the recommendation of the CAO committee and consistent with annual merit practices, e ffective the first full pay period following July 1, 2021 Shikada will receive a base annual salary of Three Hundred Sixty-Six thousand Six hundred and Eighty dollars ($366,704), paid on City’s normal paydays. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. Packet Pg. 314 20B 2 Attest: City of Palo Alto Approved as to form: Edward Shikada Attachments: EXHIBITA:EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND EDWARD SHIKADA EXHIBITB:AMENDMENT NO. ONE THROUGH NO. TWO TO SHIKADA EMPLOYMENT AGREEMENT Packet Pg. 315 20B 1 AMENDMENT NO. SIX TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP This AMENDMENT NO. SIX to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on December 17, 2018 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, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein as Exhibit “F” was entered into between the parties on or about November 6, 2017. 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, 2018, Stump’s annual base salary shall be increased to Two Hundred Ninety Eight ThousandFour Hundred Eighty and No/100 Dollars ($298,480.00), prorated and paid on City’s regular paydays. Stump shall be an exempt employee under DocuSign Envelope ID: 167F0E13-2137-40D5-8396-923F82BD46BF Packet Pg. 316 20B 2 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). 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: _____________________________ Chief Assistant 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 F: AMENDMENT NO. FIVE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP DocuSign Envelope ID: 167F0E13-2137-40D5-8396-923F82BD46BF 2/6/2019 2/11/2019 2/11/2019 2/11/2019 Packet Pg. 317 20B DocuSign Envelope ID:78B45C02-78E8-4EB3-B520-14DF578DEB5D 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 6,2016 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. RECITALS: I WHEREAS,the original EMPLOYMENT AGRE1MENT 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,temis,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 1,2017, Stump’s annual base salary shall be increased to Two Hundred Eighty Four Thousand Two Hundred Fifty Three and No/100 Dollars ($284,253.00),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 permanent decrease that is consistent with the Fair 1 20 Packet Pg. 318 DocuSign Envelope ID:78B45C02-78E8-4EB3-B520-14DF578DEB5D 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. ll’1 WITNESS WHEREOF,the parties have by their duly authorized representatives executed this Amendment on the date first above written. ATTEST:CITY OF PALO ALTO (—DocuSigned by:—DocuSigned by: Lat1424 11/29/2017 _________________________ t33levko4D7...6JF3765F09D34EA... Dated:__11/28/2017 APPROVED AS TO FORM: —DocuSigned by:MOLLY S.STUMP 14U/21/2017 ,.—DocuSigned by:Lt tp 39A473B653574A9... Dated:11/21/2017 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 2 20B Packet Pg. 319 DocuSign Envelope ID:555B7A99-5BA6-4F5E-8CFD-6EAI 80EAF461 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 December 12,2016,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. RE C ITALS: 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,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). Packet Pg. 320 20B DocuSign Envelope ID:555B7A99-5BA6-4F5E-8CFD-6EA1 80EAF461 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 representatives executed this Amendment on the date first above written. ATTEST:CITY OF PALO ALTO DocuSigned by: City C1er—45F95502DB71492.. APPROVED AS TO FORM: DocuSigned by: Principal’C±t,°k9y DocuSigned by: 1VIayor EDFFFE3FE1 024BA... Dated:5/24/2017 MOLLY S.STUMP DocuSigned by: Attachments: “—39A473B653574A9... Dated:5/24/2017 EXHIBIT A: EXHIBIT B: EXHIBIT C: EXHIBIT D: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP AMENDMENT NO.ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP AMENDMENT NO.THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP authorized 2 20B Packet Pg. 321 DocuSign Envelope ID:DA00D396-A5CD-4527-AF85-3D6BB97C74CB AMENDMENT NO.THREE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP This AMENDMENT NO.THREE 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 MOLLY S.STUMP (“Stump”),an individual,located at 250 Hamilton Avenue 8th Floor,Palo Alto,CA. RECITALS: WHEREAS,thc original EMPLOYMENT AGREEMENT between the ity 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,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, Stump’s annual base salary shall be increased to Two Hundred fifty Eight Thousand Four Hundred Nineteen and No/100 Dollars 258,419.00),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). I /I 1 20 Packet Pg. 322 DocuSign Envelope ID:DA00D396-A5CD-4527-AF85-3D6BB97C74CB 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: Docusigned by:(Lr ‘45Focn,nr7yo) City CITY OF PALO ALTO DocuSigned by: OD5A2ttEC5M Patrick BurtClerk APPROVED AS TO FORM: DocuSigned by: U’tf q 15B6C4522O1-4DC.. Deputy City Attorney 3/2/2016 Dated: MOLLY S.STUMP ,..—DocuSigned by:L 47nc74Ag Dated:3/2/2016 2 Packet Pg. 323 20B AMENDMENT NO.TWO TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP This AMENDMENT NO.TWO to the EMPLOYMENT AGREEMENT (“Agreement”)is entered into on December 8,2014,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. RECITALS: WHEREA$,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,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: Stump shall receive an initial base annual salary of Two Hundred Eight Thousand Three Hundred Seventy Five and No/lOOth Dollars ($208,375.00)commencing on the Employment Start Date,subject-to authorized or required deductions,prorated and paid on City’s regular paydays.Commencing on and continuing from the pay period including July 1,2013,Stump’s annual base salary shall be increased to Two Hundred Thirty Four Thousand Nine Hundred Thirty Six and No/100 Dollars ($234.936.00),prorated and paid on City’s regular paydays.Commencing on and continuing from the pay period including July 1,2014,Stump’s annual base salary shall be increased to Two Hundred Forty Six Thousand Six Hundred Eighty Two and No/100 Dollars ($246,688.00).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). 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. 1 Packet Pg. 324 20B 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: cPtAL Nancy Shepherd Mayor Dated:_________ MOLLY S.STUMP Attachments: Dated:t///1s j Exhibit A: Exhibit B: EMPLOYMENT AGREEMENT between the City of Palo Alto and Molly S. Stump AMENDMENT NO.ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.STUMP 7’— 2 Packet Pg. 325 20B ) AMENDMENT NO.ONE TO EMPLOYMENT AGREEMENT BETWEEN TUE CITY OF PALO ALTO AND MOLLY S.STUMP This AMENDMENT NO.ONE to the EMPLOYMENT AGREEMENT (“Agreement”)is entered into on March 2014,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. RECITALS: 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,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: Stump shall receive an initial base annual salary of Two Hundred Eight Thousand Three Hundred Seventy Five and No/lOOth Dollars ($208,375.00)commencing on the Employment Start Date,subject to authorized or required deductions,prorated and paid on City’s regular paydays.Commencing on and continuing from the pay period including July 1,2013, Stump’s annual base salary shall be increased to Two Hundred Thirty Four Thousand Nine Hundred Thirty Six and No/100 Dollars ($234.936.00),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). SECTION 2:Section 3.2.3 of the Agreement,Salary Adjustments,is hereby amended to read as follows: Stump ha1l receive the same general cost of living adjustment (“COLA”),if any, provided to Management and Professional Personnel without the need to amend this Agreement.In its sole discretion and where warranted,the City Council may award labor market or internal adjustments to base salary.In connection with the standard annual review,as provided above,the City Council shall annually consider incentive pay based on performance,but the ultimate decision in this Packet Pg. 326 20B )) regard is within the sole discretion of the City Council. SECTION 3.Except as herein modified,all other provisions of the Contract, including any exhibits and subsequent amendments thereto,shall remain in full force and effect. iN WITNESS WHEREOF,the parties have by their representatives executed this Amendment on the date first above written. ATTEST: Q7L4cL k% __ City Clerk duly authorized Attachments: Exhibit A:EMPLOYMENT AGREEMENT between the City of Palo Alto and Molly S. Stump CITY OF PALO ALTO APPROVED AS TO FORM: Deputy City Aftorney Nany hepl&d Mayor Dated: MOLLY S.STUMP%%/7 Dated:_________ 2 Packet Pg. 327 20B )) EXHIBIT A 20B Packet Pg. 328 ) EMPLOYMENT AGREEMENT THIS AGREEMENT is between the City of Palo Alto,a municipal corpoTation and chartered city (“City”)and Molly S.Stump (“Stump”).It is effective on the latest date next to the signatures on the last page. This Agreement is entered into on the basis of the following facts,among others: A.City,acting by and through its duly elected City Council,desires to employ Stump as its City Attorney subject to the terms and conditions set forth in this Agreement,the Palo Alto Municipal Code and in the Charter of the City of Palo Alto (the “1Chartcr”). B.The Charter provides,among other things,that the City Attorney shall be appointed by,and serve at the pleasure of the City Council. C.Stump desires to be employed by the City as its City Attorney,subject to the terms and conditions set forth hi this Agreement,the Palo Alto Municipal Code,the Chrter,the Palo Alto Merit System Rules and Regulations as they are applicable to Council-appointed officers,and all other applicable laws,resolutions and policies. 1).City and Stump desire to establish specific terms and conditions relating to compensationand benefits,peifonuance evaluations,and related matters. E;The City Attorney serves on an at-will basis,with no expectation of continued employment. F.Stump desires a predictable amount of severance pay should her employment be terminated with or without cause. BASED UPON THE FOREGOING,CITY AND STUMP AGREE AS FOLLOWS: 1.Employment.City will appoint and employ Stump as City Attorney with the City of Palo Alto and Stump will accept the appointment and employment for the City for an indefinite term to begin on April 1$,2011 (“Employment Start Date”).In the event $tump does not actually report for or commence work on April 1$,2011,the Employment Start Date will be the date,if any,as otherwise mutually agreed by the parties. 2.Duties of the City Attorney.Stump shall perform the duties established for the City Attorney by the Charter,Pp Alto Municipal Code and direction of the City Council and as otherwise provided by law,orçil)ance or regulation.Stump agrees to comply with all federal, state and local laws,ordinances,rules and regulations applicable to or associated with these duties. 2.1.Full Enerv and Skill.Stump shall devote her full energy;skill, ability,and productive time to the performance of her duties under this Agreement. —1— 8261042 1LIA-0)1 20B Packet Pg. 329 )) 2.2.No Conflict. Stump shall not engage in any employment,activity, consulting service,or other enterprise,for compensation or otherwise,which is actually or potentially in conflict with,inimical to,or which interferes with the performance of her duties under this Agreement1 Stump acknowledges that she is subject to the various conflict of interest requirements found in the California Government Code and state and local policies and regulations. 2.3.Permission Reauired For Outside Activities.Stump shall not engage in any employment,activity,consulting service,or other enterprise,for compensation or otherwise,without the express,written permission of theCity Couiicil. 3.Compensation.While performing the duties of City Attorney,Stump shall be compensated as provided in this Section 3. 3.1.Compensation.Stump shall receive an initial base annual salary of Two Hundred Eight Thousand Three Hundred Seventy Five and No/lOOth Dollars ($208,375.00) commencing on the Employment Start Date,subject to authorized or required deductions, 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 0 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), 3,2 Performance Reviews and Salary Adjustments. 3.2.1.Initial Performance Reviews.The City Council will meet with Stump within approximately 90 days of reporting to work to provide an initial performance review.The 90-day review will be followed by a mid-year review. 3.2.2.Standard Annual Reviews,Not less than once each year commencing on or after the first anniversary of reporting to work,the City Council shall meet with $tump.for the express purpose of evaluating her performance as City Attorney. 3.2.3.Salary Adiusttnent.Stump shall receive the same general cost of living adjustment (“COLA”),if any,provided to Management and Professional Personnel without the need to amend this Agreement.In its sole discretion wid where warranted,the City Council may award labor market or internal adjustments to base salary.In connection with the standard annual review,as provided above,the City Council shall annually consider incentive pay based on performance,but the ultimate decision in this regard is within the sole discretion of the City Council. 4.Regular Benefits and Allowances.Except as otherwise provided in this Agreement,Stump will be eligible for,and shall receive,all regular benefits (i.e.,health insurance,PERS contribution paid by City,etc.)and vacation,sick leave,and management leave as are generally provided to management employees pursuant to the City Council-approved -2- 20B Packet Pg. 330 ))I )\ Compensation Plan for Management and Professional Personnel and Council Appointees,as it currently exists and may be changed from time to time. 5.Additional Benefit Terms and Allowances.In addition to the benefit terms specified in section 4,the following additional benefit terms and allowances shall apply to Stump: 5.1.Standard New-Tier Pension.Stump shall be enrolled in and shaft be a member of the California Public Employees’Retirement System (“PER$”),with benefits as provided under the City’s contract with PER$,including the 2%@60 miscellaneous formula applicable to new employees.Employec contributions shall be paid as provided in the Compensation Plan for Management and Profeasional Personnel and Council Appointees,as it currently exists and may be changed from time to time. 5.2.401(a Defined Contribution Retirement fhai.The City shall pay $1,250 per month to a 40 1(a)retirement plan account established for Stump.Stump may make additional contributions to the legal maximum. 5.3.457 Retirement Plan.Stump shall be eligible,at her discretion,to make voluntary contributions to the City’s 457 plan,to the maximum extent allowed under the plan documents or by law. 5.4.Standard Auto Allowance,and Parichig.Stump shall receive the standard automobile allowance provided in the Compensation Plan for Management and Professional Personnel and Council Appointees,as it currently exists and maybe changed from time to time.Such allowance is currently $325.00 per month.The City will provide parking at the Civic Center without charge to Stump. 5,5.Vacation Leave upon Start of Emplovrncu.In recognition of her prior public service,Stump will be credited with vacation leave at a rate of 180 hours annually, prorated and credited according to City’s normal procedures.Effective at the start of Stump’s second year of service and thereafter,Stump will be credited with vacation leave at the rate -applicable to an employee with nineteen or more years of continuous service,currently a rate of 200 hours per year,prorated and credited according to City’s normal procedures.On the Employment Start Date,Stump will be credited with 80 hours of vacation leave,in addition to the accruals noted in this paragraph. 5.6.Sick Leave upon $tart of Employment.On the Employment Start Date,Stump will be credited with 96 hours of sick leave,in addlition to the standard accruals provided in the Compensation Plan for Management and Professional Personnel and Council Appointees,as it currently exists and may be changed from time to time. 6.Additional Expenses of Employment.City shall pay or reimburse (at City’s option)for the following usual and customary employment expenses: 6.1.The cost of any fidelity or other bonds required by law for Stump. -3- 20B Packet Pg. 331 )) I) 250 Hamilton Avenue Palo Alto,CA 95901 Phone:(650)329-2571 FAX:(650)328-3631 $TUMP: Molly S.Stump 250 Hamilton Avenue Palo Alto,CA 94301 Phone:(650)329-2171 .fAX:(650) 329-2646 9.2.Entire Agreement/Amendment.This Agreement constitutes the entire understanding and agreement between the parties as to those matters contained in it,and supersedes any.and all prior or contemporaneous agreements,representations and understandings of the parties.This Agreement may be amended at any time by mutual agreement of the parties, but any such amendment must be in writing,dated and signed by the parties,and attached hereto. 9.3.Applicable Law and Venue,This Agreement shall be interpreted according to the laws of the State of California.Venue of any action regarding this Agreement shall be in the proper court in $anta Clara County. 9.4.Severability.In the event any portion of this Agreement is declared void,such portion shall be severed from this Agreement and the remaining provisions shall remain in effect unless the result of such severance would be to substantially’alter this Agreement or the obligations of the parties,in which case this Agreement shall be immediately tenninated. 9.5.Waiver.My failure of a party to insist upon strict compliance with any term,undertaking, or condition of this Agreement shall not be deemed to be a waiver of such term,undertaking,or condition.To be effective,a waiver must be in writing,signed and dated by the parties. 9.6.Representation by Counsel.Stump and City acknowledge that they each did,or had the opportunity to,consult with legal counsel of their respective choices with respect to the matters that are the subject of this Agreementprior to executing it. 9.7.Section Headings.The headings on each of the sections and subsections of this Agreement are for the convenience of the parties only and do not limit or expand the contents of any such section or subsection. Dated:‘fig ?Oft CITY OF PALO ALTO Mayor -5- 20B Packet Pg. 332 ))) I )) -Datc&______ Mu 4C1erk% Approved as to form: -7- Packet Pg. 333 20B 1 AMENDMENT NO. SIX SEVEN TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP This AMENDMENT NO. SEVEN SIX to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on December 917, 2019 17, 2018 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, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein as Exhibit “F” was entered into between the parties on or about November 6, 2017. 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 17, 2018. 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, 20182019, 20B Packet Pg. 334 2 Stump’s annual base salary shall be increased to Three Hundred Thirteen Thousand Four Hundred and FourteenTwo Hundred Ninety Eight Thousand Four Hundred Eighty and No/100 Dollars ($298,480.00$313,414), 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). 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: _____________________________ Chief Assistant 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 20B Packet Pg. 335 3 EXHIBIT E: AMENDMENT NO. FOUR TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT F: AMENDMENT NO. FIVE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT G: AMENDMENT NO. SIX TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP 20B Packet Pg. 336 1 AMENDMENT NO. EIGHT TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP This AMENDMENT NO. Eight to the EMPLOYMENT AGREEMENT(“Agreement”) is entered into on June 22, 2020 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, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein as Exhibit “F” was entered into between the parties on or about November 6, 2017. 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 17, 2018. WHEREAS, AMMENDMENT NO. SEVEN to the Agreement, attached hereto and incorporated herein as exhibit “H” was entered into between the parties on or about December 17, 2019. 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: 20B Packet Pg. 337 2 Commencing on and continuing from the pay period including July 1, 2019, Stump’s annual base salary shall remain atbe increased to Three Hundred Thirteen Thousand Four Hundred and Fourteen and No/100 Dollars ($$313,414), 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). For the purposes of addressing the City’s financial hardships related to the global pandemic of COVID-19, Stump is authorized to take up to a 10% salary reduction in the form of unpaid furlough days (up to 26 furlough days, 208 hours) between July 1, 2020 and June 30, 2021. Up to 5% of the salary reduction (up to 13 furlough days, 104 hours) may be offset using paid leave such as vacation or management annual leave. 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 Approved as to form: Molly S Stump 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 2B Packet Pg. 338 3 EXHIBIT F: AMENDMENT NO. FIVE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT G: AMENDMENT NO. SIX TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP EXHIBIT H: AMENDMENT NO. SEVEN TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S. STUMP 20B Packet Pg. 339 1 DEDEdKEdKDW>KzDEd'ZDEd dtEd,/dzK&W>K>dKE tZ^,/< This AMENDMENT ONE to the EMPLOYMENT AGREEMENT (“Agreement”) between the CITY OF PALO ALTO, a California municipal corporation and chartered city (“City”) and EDWARD SHIKADA, an individual (“Shikada”) (together “the parties”) is entered into and shall be effective on the latest date next to the signatures on the last page. This AMENDMENT ONE is entered into on the basis of the following facts, among others: A.City and Shikada entered into the original Agreement, dated September 18, 2018, and attached hereto and incorporated herein as Exhibit “A,” to provide for Shikada’s employment as City Manager; B.Shikada agreed to and has made his primary residence within the corporate limits of City; C.In the Agreement, the parties contemplated that Shikada initially would obtain rental housing, and at a later date would obtain long term housing; D.With respect to a purchase of housing, the parties committed to engage in good faith negotiations regarding contributions from each party, the method of financing, and other elements of a purchase transaction, and agreed to document those arrangements in an amendment to the Agreement; E.City and Shikada now desire and have mutually agreed to enter into this Amendment One to provide for contribution amounts, methods of financing and other terms to support purchase of a home in Palo Alto to serve as Shikada’s primary long-term residence; BASED ON THE FOREGOING, CITY AND SHIKADA AGREE AS FOLLOWS: SECTION 1: Section 7.2 of the Agreement, Long Term Housing, is hereby amended to read as follows: 7.2 Long Term Housing: Home Purchase and Method of Financing Within a reasonable period of time as agreed to by the parties, Shikada agrees to make his primary residence within the corporate limits of the City. The amount of the City contribution and any contribution from Shikada, the method of financing, and other elements of a purchase transaction will be determined through good faith negotiations and mutual agreement, and documented in an amendment to this Agreement. 7.2.1 Time of Purchase. Shikada shall purchase a home to serve as his 20B Packet Pg. 340 2 primary residence within the corporate limits of City within a reasonable time after the approval of this Amendment One (the "Property"). The parties anticipate this will occur within one year but acknowledge that market conditions or other circumstances may make a longer period reasonable. 7.2.2 Purchase Price. For the purpose of this Agreement, the purchase price of the Property shall include the price of the Property plus any real estate broker's fees payable by buyer, closing costs, title insurance and related fees normally attributable to a buyer in Santa Clara County (“Purchase Price”). 7.2.3 Termination of Temporary Rental Assistance. Temporary rental assistance shall terminate no later than 60 days after close of escrow for the Property. 7.2.4 Manager’s Contribution Toward Purchase Price. Shikada shall make a contribution toward the purchase price of the Property ("Manager's Contribution") constituting no less than 25% of the Purchase Price. Shikada may contribute his personal funds toward part or all of the Manager’s Contribution. 7.2.4.1 City Loan. The City will provide to Shikada a loan (the “City Loan”), secured by a note and first deed of trust on Shikada’s Equity Ownership Interest in the Property, in an amount as determined by Shikada but not to exceed One Million Dollars ($1,000,000). All proceeds from the City Loan must be used to fund the Purchase Price of the Property, either as the Manager’s Contribution or the Excess Contribution to the Purchase Price. Proceeds from the City Loan may not be used for any other purpose. The City Loan will be fully amortized over a maximum term of 30 years, but the term may be shorter at Shikada's request, and may be paid in advance of the loan schedule without penalty. The City Loan will be immediately due on sale. The interest on the City Loan will be adjusted annually on July 1 as follows: From the date of execution of the note, the rate will be equal to the lower of 4.5% or the sum of City's portfolio rate, which is defined as the annual rate of return on investment funds of City during the most recent fiscal year, plus one quarter percent (1/4% or 0.25%) as calculated annually by City's Director of Administrative Services. 7.2.5 City Contribution Toward Purchase Price. In addition to the Manager's Contribution (consisting of Shikada’s personal funds, if any, and the City Loan provided to Shikada), City will contribute an additional amount, not to exceed Three Million Dollars ($3,000,000), toward the Purchase Price of the Property (“City Contribution”). Up to a maximum Purchase Price of Four Million Dollars ($4,000,000), the City Contribution will be made in a ratio of not more than three (3) to one (1), as compared to the Manager's Contribution. Stated differently, the City Contribution will be not more than 75% and the Manager's Contribution (including the sum of Shikada’s personal funds and the City Loan) will be not less than 25% of the purchase price. 20B Packet Pg. 341 3 The sum of the City Contribution and the City Loan will not exceed Four Million Dollars ($4,000,000). 7.2.6 Purchase Price Over Four Million ($4,000,000). All costs above Four Million Dollars ($4,000,000) (the “Excess Contribution”) will be paid by Shikada, either using Shikada’s personal funds or the City Loan, provided that the City Loan shall not exceed One Million Dollars ($1,000,000). 7.2.7 Equity Ownership Interests. If City participates in the purchase of the Property, the City and Shikada’s proportional ownership interests will be shown on the deed as the ratio of (a) the Manager’s Contribution plus the Excess Contribution, if any, to the Purchase Price, and (b) the City Contribution to the Purchase Price. For example: a.If the purchase price is Three Million Dollars ($3,000,000) and Shikada elects to contribute the minimum 25% of the Purchase Price, the Manager’s Contribution will be Seven Hundred Fifty Thousand Dollars ($750,000), all or part of which Shikada may pay with personal funds with the balance paid through the City Loan; and the City’s Contribution will be Two Million Two Hundred Fifty Thousand Dollars ($2,250,000). Under this scenario, the equity ownership in the Property will be 25% for Shikada ($750,000/$3,000,000 = 25%) and 75% for City ($2,250,000/$3,000,000 = 75%). b.If the purchase price is Four Million Five Hundred Thousand ($4,500,000), the Manager’s Contribution will be One Million Dollars ($1,000,000), all or part of which Shikada may pay with personal funds with the balance paid through the City Loan; the Excess Contribution will be Five Hundred Thousand Dollars ($500,000), all of which will be paid by Shikada using personal funds; and the City Contribution will be Three Million Dollars ($3,000,000). Under this scenario, the equity ownership in the Property will be 33.3% for Shikada ([$500,000+$1,000,000]/$4,500,000 = 33.3%) and 66.7% for City ($3,000,000/$4,500,000 = 66.7%). 7.2.8 Equity Ownership Interests Not A Partnership. City and Shikada agree to share the equity interest in the Property in order to consummate transactions contemplated in this Agreement related to assisting Shikada with purchasing a home within Palo Alto corporate limits. Nothing herein shall be construed as creating a partnership or other joint venture between Shikada and the City. The parties agree that they are not partners and did not intend by entering into this Agreement to form a partnership, or otherwise to have the relationship of partners to one another. 7.2.9 Title Held As Tenants-In-Common. The Property will be held by Shikada and City as tenants-in-common, with Shikada and City owning proportional undivided 20B Packet Pg. 342 4 interests, as determined under subsection 7.2.7, above. Shikada will have the exclusive right to occupy the Property and will not rent, lease or transfer any interest to a third party without the written consent of City, which may be withheld in City's sole discretion. Neither party may sell its interest in the Property separate from the other and agrees to cooperate in the sale of its interest in the Property, as provided in section 7.2.15, below. 7.2.10 Execution of Documents. City and Shikada will cooperate in the preparation and execution of all title documents, notes, deeds of trust, escrow instructions, agreements and other documents reasonably necessary to conform the purchase of the Property to the provisions of this subsection 7.2, in a form mutually agreed to by Shikada and the City Attorney. The deed will reflect the terms and conditions of this subsection 7.2. At the option of City, the documents may also include a tenancy in common agreement supplementing the terms of this subsection 7.2 and a recorded power of attorney in favor of City to facilitate the sale of Shikada's interest under the circumstances provided in section 7.2.15 in the event Shikada is unable or unwilling to cooperate in the sale. 7.2.11 No additional mortgages or liens. Except for the first deed of trust referred to above, Shikada shall not cause any lien or mortgage to be recorded against the Property except as expressly authorized in writing by the City Council. The City Council shall not unreasonably withhold permission for refinancing or equity loans that do not in any way impair City's security interest or Equity Ownership Interest in the Property. 7.2.12 Property Taxes, Insurance, and other Charges and Fees. 7.2.12.1 Property Taxes. Shikada and City will pay the property taxes assessed on that party’s Equity Ownership Interest, as determined by subsection 7.2.7 above. If the Property is only assessed taxes on Shikada’s Equity Ownership Interest, Shikada will pay those taxes in full without reimbursement from City. 7.2.12.2 Insurance. If City participates in the purchase of the Property and for as long as City has a security interest or Equity Ownership Interest in the Property, Shikada shall obtain and maintain in force at all times comprehensive homeowner's insurance (HO-3) coverage, including earthquake and, if applicable due to location, flood coverage. All such insurance will state the respective interests of the parties as determined by subsection 7.2.7 above and provide that the proceeds of any such insurance shall be paid to the parties according to their respective interests. Shikada will pay for all insurance on the Property without reimbursement from City, except that City shall pay the cost of comprehensive homeowner’s insurance coverage including earthquake and flood insurance proportionate to the City’s Equity Ownership Interest in the Property, as determined by subsection 7.2.7 above. 7.2.12.3 Other Charges or Fees. If City participates in the purchase of the Property and there are charges or fees, such as Homeowner Association (HOA) fees, for the management and upkeep of the purchased Property and central amenities, Shikada will ensure all charges and fees are paid timely and shall remain in good standing with the HOA or 20B Packet Pg. 343 5 other entity assessing charges or fees. The City shall pay, directly to the HOA or other entity assessing charges or fees, the cost of charges and fees proportionate to the City’s Equity Ownership Interest in the Property, as determined by subsection 7.2.7 above, provided however that Shikada will be solely responsible for any charges or fees that are specific to the unit, such as trash and utilities.. 7.2.13 Occupancy and Maintenance. Shikada will reside at the Property from the time of purchase and initial occupancy and will continue to occupy the Property at all times as his principal residence during the term of the Agreement. Shikada will maintain the Property in good condition and in compliance with all applicable codes. Shikada shall be solely responsible for all maintenance and repair costs, including deductibles and repair and restoration of uninsured losses. 7.2.14 Capital Improvements. Shikada may, at his sole expense, make such improvements to the Property as he deems beneficial, provided such improvements do not cause the value of the Property to decline. For purposes of this Agreement, a capital improvement is the addition of a permanent structural improvement or restoration of some aspect of the Property that either increases the Property's resale value or increases its useful life. With the advance written approval of City, the actual documented cost of each capital improvement with a cost in excess of Fifteen Thousand Dollars ($15,000) may be treated as an addition to the Manager's Contribution and used to reallocate Equity Ownership Interests at the time of sale, as provided in subsections 7.2.7 and 7.2.15, below, in such amount(s) as the parties may mutually agree. City's approval, when sought for a capital improvement that will result in the reallocation of Equity Ownership Interests, must be obtained in writing prior to the initiation of the capital improvement and may be withheld in City's sole and absolute discretion. 7.2.15 Sale. The sale of the Property will occur on the happening of one of the following: a.At the option of Shikada, subject to the provisions of subsections 7.2.17; b.The passing of 18 months following the termination of the employment of Shikada as City Manager, for any reason, whether voluntary or involuntary; c.At the option of City, upon the occurrence of any default by Shikada with respect to any of the terms of any transaction document related to purchase, financing or holding of the Property, including this Agreement; d. Should Shikada permanently move out of the Property or cease to use the Property as his primary residence; and e.Upon mutual agreement of the parties. The sale of the Property shall be brokered by a qualified licensed real estate agent with at least 20B Packet Pg. 344 6 two years of fulltime experience in the sale of residential real estate in Santa Clara County. Shikada shall select the agent from a list of three agents provided by City. Notwithstanding the above, one party may purchase the Property by purchasing all of the interests of the other as provided in subsection 7.2.17. 7.2.16 Proceeds On Sale. Upon sale of the Property, the proceeds of sale shall be divided between the parties as follows: a.The costs of sale, including, but not limited to escrow fees, real estate broker's fees, and related expenses shall first be deducted from the gross sales price to reach a net sales price ("Net Sales Price"); b.Shikada's share will be equal to his Equity Ownership Interest, determined by subsection 7.2.7 and, if applicable, subsection 7.2.14, above, multiplied by the Net Sales Price. City's share will be equal to City’s Equity Ownership Interest, determined by subsection 7.2.7 and, if applicable, subsection 7.2.14, above, multiplied by the Net Sales Price; c.The outstanding balance of the City Loan, together with any accrued, but unpaid, interest and all other amounts shall be deducted from Shikada's share and paid to City under the terms of the City Loan, and Shikada shall receive the remainder; and d.City shall be paid the City's share, calculated as set forth in clause (b) above, plus the outstanding balance of the City Loan as provided in clause (c) above. Funds received from Shikada according to the terms of the City Loan are independent of City's share and shall not be credited toward or deducted from the City's share. 7.2.17 One Party's Right to Purchase the Interest of the Other Party. If one party determines to purchase the other party’s Equity Ownership Interest, the value of the Property will be determined by an appraisal. Except as otherwise provided in this subsection, City shall pay for the appraisal. Appraisal shall be conducted by a qualified real estate appraiser acceptable to both parties. If the parties are unable to agree on an appraiser, each party may hire and pay for its own appraiser. The value of the Property will be the average of the two appraisals. 7.2.17.1 City Right. If Shikada determines to put the Property up for sale, either while he is still employed or after his employment is terminated, City shall have the right to purchase Shikada's Equity Ownership Interest rather than have the Property sold and the proceeds divided as provided in subsection 7.2.16, above. After the value of the Property is determined by appraisal as provided in this subsection 7.2.17, City may purchase Shikada's Equity Ownership Interest in the Property, the value of which shall be calculated using the formula set forth in subsection 7.2.16. As provided in subsection 7.2.16(c), the outstanding balance of the City Loan, together with any accrued, but unpaid, interest and all other amounts shall be deducted from Shikada’s share and paid to City under the terms of 20B Packet Pg. 345 7 the City Loan, and Shikada shall receive the remainder. 7.2.17.2 Shikada's Right to Purchase the City’s Entire Interest in the Property. At any time while still employed by the City in good standing, Shikada may purchase the Property by paying to City its Equity Ownership Interest as calculated under subsection 7.2.16 and paying any other amounts outstanding, as provided in subsection 7.2.16(c) (including the outstanding balance on the loan, interest and other amounts). The value of the Property shall be determined by appraisal as provided in subsection 7.2.17 above. 7.2.17.3 Shikada’s One-Time Right to Purchase a Portion of City’s Interest in the Property. Shikada has a one-time option to purchase a portion of the City’s Equity Ownership Interest in the Property. Shikada may determine the percentage of the City’s Equity Ownership Interest that he will purchase. Shikada need not repay the City Loan in order to exercise his option to purchase a portion of the City’s Equity Ownership Interest under this subsection. If payment is received by the City on or before 365 days from the date of close of escrow of the original purchase of the Property, the purchase of equity will be executed at the original sale price; no appraisal will be conducted. If payment is received by the City more than 365 days after the close of escrow of the original purchase of the Property, the purchase of the City’s Equity Ownership Interest shall be valued at the current Property value as determined by appraisal as provided in subsection 7.2.17, above, except that the appraisal shall be at Shikada’s expense, using an appraiser acceptable to both parties. If the parties are unable to agree on an appraiser, each party may hire and pay for its own appraiser. The value of the Property will be the average of the two appraisals. SECTION 2. Except as herein modified, all other provisions of the Agreement, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment One on the date shown below. 20B Packet Pg. 346 8 ATTEST: _____________________________ APPROVED AS TO FORM: _____________________________ City Attorney CITY OF PALO ALTO ___________________________ Mayor Dated:_____________________ EDWARD SHIKADA __________________________ Dated:____________________ Attachments: EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND EDWARD SHIKADA, dated September 18, 2018 20B Packet Pg. 347 • DocuSign Envelope ID: 2135C668-BF61-44A9-8165-29594899838A y EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND EDWARD SHIKADA THIS AGREEMENT is between the City of Palo Alto, a California municipal corporation and chartered city ("City") and Edward Shikada, an individual ("Shikada"). It is effective on the latest date next to the signatures on the last page. This Agreement is entered into on the basis of the following facts, among others: A. City hired Shikada in April 2015 to be City's Assistant City Manager. Since then, Shikada has also served as City's Utilities General Manager while continuing to serve as Assistant City Manager; B. City, acting by and through its duly elected City Council, now desires to employ Shikada as its City Manager, effective December 20, 2018 or on the date of retirement of current City Manager James R. Keene, Jr., whichever is sooner, subject to the terms and conditions set forth in this Agreement and in the provisions of the Charter of the City of Palo Alto (the "Charter"); C. The Charter provides, among other things, that the City Manager shall be appointed for an indefinite term by a majority vote of the City Council and that he or she may be removed at the pleasure of the City Council by a two-thirds vote on a resolution passed for that purpose; D. Shikada desires to be employed by the City of Palo Alto as its City Manager, subject to the terms and conditions set forth in this Agreement and in the Charter; E. City and Shikada desire to establish specific terms and conditions relating to compensation and benefits, housing assistance, performance evaluations, and related matters; BASED UPON THE FOREGOING, CITY AND SHIKADA AGREE AS FOLLOWS: 1. Employment Start Date. City hereby appoints and employs Shikada as City Manager, and Shikada hereby accepts the appointment and employment, for an indefinite term that begins on December 20, 2018 or on the date of retirement of current City Manager James R. Keene, Jr., whichever is earlier (the "Employment Start Date"), provided Shikada actually reports for and starts work on that date. If Shikada does not actually report for and start work on or before December 20, 2018, the Employment Start Date will be the date, if any, as otherwise mutually agreed by the parties. 2. Termination of Prior Agreement. Effective on the Employment Start Date, the Employment Agreement between City of Palo Alto and Edward Shikada, initially entered into on October 5, 2015, for the purpose of employing Shikada as Assistant City Manager, as amended in October 2016 for the purpose of employing Shikada as Utilities General Manager (Utilities Director)/ Assistant City Manager, is terminated and shall be of no further force or effect. 3. Duties of Manager. Shikada shall perform the duties established for the City Manager by the Charter, Palo Alto Municipal Code, direction of the City Council, or as otherwise provided by law, ordinance, or regulation. 3.1. Full Energy and Skill. Shikada shall devote his full energy, skill, ability, and productive time to the performance of the City Manager's duties. Shikada understands that the Charter requires that the City Manager devote his entire work time to the discharge of the duties of the office. Page 1 Edward Shikada I Employment Agreement 20B Packet Pg. 348 DocuSign Envelope ID : 2135C66B-BF61-44A9-8165-29594B99B38A 3.2. No Conflict. Shikada shall not engage in any activity which is actually or potentially in conflict with, inimical to, or which interferes with the performance of Shikada's duties. 3.3. Uncompensated Professional Activities. Shikada may attend and/or participate in uncompensated professional activities, including but not limited to the activities described in subsections 9.3 and 9.4, provided that Shikada's ability to perform the duties described in this Section 3 is not unreasonably compromised or impaired. Shikada shall inform the City Council in writing in advance of absences of more than one day related to such activities. 4. Compensation. Shikada shall be compensated as provided in this Section 4. 4.1. In itial Compensation. Commencing on and continuing from the Employment Start Date, Shikada will receive an initial base annual salary of Three Hundred Fifty-Six Thousand Dollars ($356,000), prorated and paid on City's normal paydays . 4.2. Salary Adjustments. Not less than once each year, the City Council shall meet for the express purpose of evaluating the performance of Shikada and determining whether to grant him an increase in annual base salary based on performance. The City Council will act in good faith in determining whether to provide an increase based on performance, but the ultimate decision in this regard is within the sole discretion of the City Council. The Council may also adjust Shikada's annual base salary due to labor market and/or interna l equity conditions. 5. Regular Benefits and Allowances. Except as otherwise provided in this Agreement, Shikada will be eligible for, and shall receive, all regular benefits (e.g., health insurance, CalPERS contributions paid by City) and vacation, sick leave, and management leave as are generally set forth in the Compensation Plan for Management and Professional Personnel and Council Appointees, as it may be amended or updated from time-to -time by the City Council. Shikada shall comply with all rules and procedures, and shall make any and all employee contributions (such as employee contributions towards the City's CalPERS contribution) set forth in the Compensation Plan for Management and Professional Personnel and Council Appointees. 6. Additional Benefits and Allowances. In addition to the benefits specified in section 5, Shikada will receive the following additional benefits and allowances. 6.1. 401(a) Defined Contribution Retirement Plan. City will contribute Eighteen Thousand Five Hundred Dollars ($18,500) annually, prorated and contributed on the City's normal paydays, to a 401(a) retirement plan account established for Shikada. 6.1.1 Shikada will make any additional contributions required under the plan, if any, and may make additional voluntary contributions, if permitted. 6.2. Parking. City shall provide parking at the Civic Center at no cost to Shikada. 6.3. Vacation Accrual Rate. Shikada's vacation accrual rate will be based on the maximum accrual rate as specified in the Compensation Plan for Management and Professional Personnel and Council Appo i ntees, which is currently two hundred (200) hours per year. Page 2 Edward Sh ikada / Employment Agreement 2B0 Packet Pg. 349 ,.. ; DocuSign Envelope ID : 2135C66B-BF61-44A9-8165-29594899838A 7. Housing Assistance. On or about the Employment Start Date, Shikada agrees to reside within the corporate limits of the City. 7.1. Initial Temporary Housing. The parties contemplate that initially, and continuing until a residence is purchased as described in Section 7.2 below, the City will provide assistance for housing in Palo Alto through a monthly cash payment. The City will bear the actual and reasonable monthly rental or lease cost, not to exceed Four Thousand Dollars ($4,000) per month, for rental housing located within the corporate limits of the City . 7.1.1 Shikada will keep an accurate record of all such expenses and present such records with his request for payment or reimbursement. City will advance any refundable deposits and will be reimbursed for such deposits by Shikada (including interest, if any, paid by the deposit holder) at the time the refund is paid or if the refund is refused by holder, at the time it would otherwise be due. 7.2. Long Term Housing. Within a reasonable period of time as agreed to by the parties, Shikada agrees to make his primary residence within the corporate limits of the City. The amount of the City contribution and any contribution from Shikada, the method of financing, and other elements of a purchase transaction will be determined through good faith negotiations and mutual agreement, and documented in an amendment to this Agreement. 8. Duration of Employment. Shikada understands and agrees that he has no constitutionally protected property or other interest in his employment as City Manager. He understands and agrees that he works at the will and pleasure of the City Council and that he may be terminated or asked to resign at any time, with or without cause, subject only to the requirements of Section 3 of Article IV of the Charter, a copy of which has been provided to Shikada . Shikada understands and agrees that the public hearing accorded to the City Manager upon termination as provided in Section 3 of Article IV of the Charter is not a hearing in which witnesses will be called and examined nor in which the City Manager may formally contest the reasons for termination. The hearing is solely for the purpose of affording the City Manager an opportunity to publicly respond to any reasons given for his termination by the City Council. 8.1. Severance Pay. If Shikada is terminated or asked to resign in lieu of termination, he shall receive a cash payment, or payments (without interest) at intervals specified by Shikada, equivalent to the sum of his then-current monthly salary multiplied by twelve (12) and the cash value, as reasonably determined by City, of his monthly non-salary benefits multiplied by twelve (12). The monthly non-salary benefits shall be those specified in sections 5 and 6. All normal withholdings as required by law shall be made with respect to any amounts paid under this section. 8.2. Non-Payment of Severance Under Certain Conditions. If Shikada were to be terminated after conviction of a felony, he would not be eligible for severance pay. 9. Payment of Expenses of Employment. City shall pay the following usual and customary employment expenses: 9.1. The cost of any fidelity or other bonds required by law for the City Manager. 9.2. The cost to defend and indemnify Shikada to the full extent of the law as provided by the California Government Claims Act (Government Code § 810 et seq.). Page3 Edward Shikada I Employment Agreement 20B Packet Pg. 350 DocuSign Envelope ID : 2135C66B-BF61-44A9-8165-29594899838A 9.3. Reasonable dues for Shikada's membership in professional organizations associated with the office of City Manager. City will allow Shikada reasonable time away from the City to attend the meetings and annual conferences of such organizations and will pay the cost of such attendance in accord with applicable City policies and procedures. The organizations and activities include but are not limited to the International City/County Management Association, League of California Cities, Alliance for Innovation and California City Management Foundation. 9.4. The cost of attending other conferences or events (i.e. retirement dinners, out of town meetings, etc.) necessary to the proper discharge of his duties. 10. Miscellaneous. 10.1. Notices. Notices given under this Agreement shall be in writing and shall be either: a. Served personally; or b. Delivered by first-class United States mail, certified, with postage prepaid and a return receipt requested; or c. Sent by Federal Express, or some equivalent private mail delivery service. Notices shall be deemed received at the earlier of actual receipt or three (3) days following deposit in the United States mail, postage prepaid. Notices shall be directed to the addresses shown below, provided that a party may change such party's address for notice by giving written notice to the other party in accordance with this subsection. CITY: Attn: Mayor City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Phone: (650) 329-2226 SHIKADA: Edward Shikada c/o 250 Hamilton Avenue Palo Alto, CA 94301 Phone: (650) 329-2563 10.2. Entire Agreement/Amendment. This Agreement constitutes the entire understanding and agreement between the parties as to those matters contained in it, and supersedes any and all prior or contemporaneous agreements, representations and understandings of the parties. Th is Agreement may be amended at any time by mutual agreement of the parties. Any such amendment must be in writing, dated, approved in the same manner as the original Agreement, and signed by the parties and attached hereto. 10.3. Attorney's Fees. If any legal action or proceeding is brought to enforce or interpret this Agreement, the prevailing party as determined by the court shall be entitled to recover from the other party all reasonable costs and attorney's fees, including such fees and costs as may be incurred in enforcing any judgment or order entered in any such action. 10.3.1 Alternate Dispute Resolution. Nothing in this subsection shall be read to prevent the parties from agreeing to some alternative method of dispute resolution. Page4 Edward Shikada I Employment Agreement 20B Packet Pg. 351 1 DocuSign Envelope ID : 2135C668-BF61-44A9-8165-29594899838A 10.4. Severability. In the event any portion of this Agreement is declared void or unenforceable, such portion shall be severed from this Agreement and the remaining provisions shall remain in effect, unless the result of such severance would be to substantially alter this Agreement or the obligations of the parties, in which case this Agreement shall be immediately terminated. 10.5. Waiver. Any failure of a party to insist upon strict compliance with any term, undertaking, or condition of this Agreement shall not be deemed to be a waiver of such term, undertaking, or condition. To be effective, a waiver must be in writing, signed and dated by the parties. 10.6. Employee's Independent Review. Employee acknowledges that he has had the opportunity and has conducted an independent review of the financial, tax and legal effect of this Agreement. Employee acknowledges that he has made an independent judgment upon the financial, tax and legal effects of this Agreement and has not relied upon any representation of City, its officers, agents or employees other than those expressly set forth in this Agreement. 10.7 . Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Shikada and City agree that venue for any dispute shall be in Santa Clara County, California. 10.8. Section Headings. The headings on each of the sections and subsections of this Agreement are for the convenience of the parties only and do not limit or expand the contents of any such section or subsection. Dated: City Clerk Dated: Approved as to Form: c~~··s;.., Page 5 CITY OF PALO ALTO Edward Shikada Edward Shikada Dated: 9/11/2018 Edward Shikada I Employment Agreement 20B Packet Pg. 352 1 DEDEdEK͘dtKdKDW>KzDEd'ZDEd dtE d,/dzK&W>K>dK E ĚǁĂƌĚ^ŚŝŬĂĚĂ This AMENDMENT NO. TWO to the EMPLOYMENT AGREEMENT(“Agreement”) is entered into on June 22, 2020 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and Edward Shikada (“Shikada”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA. Z/d>^͗ WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Edward Shikada., attached hereto and incorporated herein as Exhibit “A” was entered between the parties for the services of City Manager on or about September 18, 2018; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein as Exhibit “B” was entered between the parties on or about December 16, 2019; 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 4.1 of the Agreement, Initial Compensation, is hereby amended to read as follows: 4.1. Initial Compensation. Commencing on and continuing from the Employment Start Date, Shikada will receive an initial base annual salary of Three Hundred Fifty-Six Thousand Dollars ($356,000), prorated and paid on City's normal paydays. For the purposes of addressing the City’s financial hardships related to the global pandemic of COVID-19, the City Manager has agreed to take a 10% salary reduction in the form of unpaid furlough days (26 days, 208 hours) between July 1, 2020 and June 30, 2021. Up to 5% of the salary reduction (up to 13 furlough days, 104 hours) may be offset using paid leave such as vacation or management annual leave. Shikada has also agreed not to seek nor accept any performance or cost of living increase through June 30, 2021. The City Manager is further authorized to establish and administer a leave sharing program, within which Shikada shall donate up to 5% of his salary (100 hours) to the extent usable to lessen the burden of compensation reductions on the City’s lowest paid employees. SECTION 2. Section 5 of the agreement, Regular Benefits and Allowances is hereby amended to 20B Packet Pg. 353 2 read as follows: 5. Regular Benefits and Allowances. Except as otherwise provided in this Agreement, Shikada will be eligible for, and shall receive, all regular benefits (e.g., health insurance, CalPERS contributions paid by City) and vacation, sick leave, and management leave as are generally set forth in the Compensation Plan for Management and Professional Personnel and Council Appointees, as it may be amended or updated from time-to-time by the City Council. Shikada shall comply with all rules and procedures and shall make any and all employee contributions (such as employee contributions towards the City's CalPERS contribution) set forth in the Compensation Plan for Management and Professional Personnel and Council Appointees. For the purposes of addressing the City’s financial hardships related to the global pandemic of COVID-19, the City Manager has agreed to reduce his excess management benefit of $2,500 as outlined in the Management and Professional compensation plan to $1,250 for the 2021 calendar year. SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. Attest: City of Palo Alto Approved as to form: Edward Shikada Attachments: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND EDWARD SHIKADA AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND EDWARD SHIKADA 20B Packet Pg. 354 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϲϬͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ŝƐĐƵƐƐŝŽŶĂŶĚWŽƐƐŝďůĞŝƌĞĐƚŝŽŶƚŽĞůĂǇ/ŶŝƚŝĂƚŝŽŶŽĨŽĂƌĚĂŶĚ ŽŵŵŝƐƐŝŽŶ/Ŷ Ͳ WĞƌƐŽŶDĞĞƚŝŶŐƐ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ This item will be a verbal discussion at the meeting. If any materials are made available prior to the meeting, they will be distributed as a special late packet release on Thursday, December 2, 2021. 21 Packet Pg. 355 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϰϰϯͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗WƌŽƉĞƌƚǇ>ĞĂƐĞƐŶƚĞƌĞĚŝŶƚŽďǇŝƚǇDĂŶĂŐĞƌhŶĚĞƌWĂůŽůƚŽ DƵŶŝĐŝƉĂůŽĚĞ^ĞĐƚŝŽŶϮ͘ϯϬ͘ϮϭϬ;ŚͿ͕ĂŶĚZĞƉŽƌƚĞĚWĞƌ^ĞĐƚŝŽŶŽĚĞ Ϯ͘ϯϬ͘ϳϭϬ&ŝƐĐĂůzĞĂƌϮϬϮϭ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗ĚŵŝŶŝƐƚƌĂƚŝǀĞ^ĞƌǀŝĐĞƐ This is an informational report and no Council action is required. /^h^^/KE Palo Alto Municipal Code (PAMC) Section 2.30.710 requires an annual report to the Council of all leases and rentals of city property with third parties approved by the City Manager. This list excludes leases specifically approved by the City Council. The attached reports transmit the information (Attachment A) for fiscal year (FY) 2021 as required by the PAMC. PAMC Section 2.30.210 (h) authorizes the City Manager to award and sign contracts to rent, lease, or license city property to other parties regardless of the price for a te rm not exceeding three years. The City Manager may enter into and sign contracts to rent, lease, or license property at the Cubberley site for terms up to five years. Total Rental revenues for the leases authorized by the City Manager for FY 2021 totaled $401,867. The total rent revenues for FY 2021 is nearly 50% less in comparison to FY 2020 (CMR 11748). Due to the COVID-19 pandemic and the resulting shelter in place order issued by the County of Santa Clara, the City offered certain tenants the ability to defer up to three months of rent. Total Rent deferred for the leases authorized by the City Manager for FY 2021 totaled $17,638. Rental agreements require deferred rent to be repaid in 12 equal monthly installments beginning January 1, 2021 through December 1, 2021. In addition to the rent deferral, City Council approved a rent forgiveness program (CMR 12234) for qualified tenants. ƚƚĂĐŚŵĞŶƚƐ͗ •ƚƚĂĐŚŵĞŶƚϮϯ͘Ă͗Attachment B: FY 2021 List of Rent Deferrals •Attachment23.b:Attachment A: FY 2021 List of Lease Agreements 22 Packet Pg. 356 /dzK&W>K>dK D/E/^dZd/s^Zs/^WZdDEdͬZ>^dd/s/^/KE &zϮϬϮϭŶŶƵĂůZĞƉŽƌƚʹ>ĞĂƐĞĞĨĞƌƌĞĚŐƌĞĞŵĞŶƚƐŶƚĞƌĞĚ/ŶƚŽ ǇŝƚǇDĂŶĂŐĞƌhŶĚĞƌWD^ĞĐƚŝŽŶϮ͘ϯϬ͘ϮϭϬ;ŚͿ;ŽƌŐĂŶŝǌĞĚďǇŐƌĞĞŵĞŶƚĂƚĞͿ EƵŵďĞƌWƌŽƉĞƌƚǇ ĚĚƌĞƐƐ WƌŽƉĞƌƚǇͬ^ƉĂĐĞ dǇƉĞ ^ƋƵĂƌĞ &ŽŽƚĂŐĞ dĞŶĂŶƚDŽŶƚŚƐ ĞĨĞƌƌĞĚ dŽƚĂů ĞĨĞƌƌĞĚ ZĞŶƚ ŐƌĞĞŵĞŶƚ ĂƚĞ ϭ4000 Middlefield Rd Cubberley Community Center 720 Jennifer Gonsalves April, May, June $2,052 7/22/2020 Ϯ4000 Middlefield Rd Cubberley Community Center 720 BrainVyne April, May, June $4,051 8/17/2020 ϯ4000 Middlefield Rd Cubberley Community Center 1,700 Silicon Valley Karate April, May, June $11,535 8/24/2020 ^hDDZzʹ>^&ZZ'ZDEd^hEZWDϮ͘ϯϬ͘ϮϭϬ;ŚͿ Number of Transactions FY 2021 Total Deferred Revenue Total 3 $17,638 22.a Packet Pg. 357 dd,DEd Attachment A - 1 /dzK&W>K>dK D/E/^dZd/s^Zs/^WZdDEdͬZ>^dd/s/^/KE &zϮϬϮϭŶŶƵĂůZĞƉŽƌƚʹ>ĞĂƐĞŐƌĞĞŵĞŶƚƐŶƚĞƌĞĚ/ŶƚŽ ǇŝƚǇDĂŶĂŐĞƌhŶĚĞƌWD^ĞĐƚŝŽŶϮ͘ϯϬ͘ϮϭϬ;ŚͿ EƵŵďĞƌWƌŽƉĞƌƚǇ ĚĚƌĞƐƐ WƌŽƉĞƌƚǇͬ^ƉĂĐĞ dǇƉĞ ^ƋƵĂƌĞ &ŽŽƚĂŐĞdĞŶĂŶƚdĞƌŵDŽŶƚŚůǇdŽƚĂů&z ZĞŶƚΎ ŐƌĞĞŵĞŶƚ ĂƚĞ ϭ 4000 Middlefield Road - Room H5 Cubberley Community Center 1,395 Avenidas Month to Month $1,827 $21,929 7/7/2020 Ϯ4000 Middlefield Road - Room D1 Cubberley Community Center 400 Palo Alto Humane Society Month to Month $438 $5,259 7/15/2020 ϯ 1925 Embarcadero Road Airport Land 13,250 Swickard Palo Alto Corporation 3 years $10,600 $106,000 8/18/2020 ϰ 1903 Embarcadero Road Airport Land 15,977 and 3 tie- downs Rossi Aircraft, Inc. 2 years $14,306 $143,063 8/18/2020 ϱ 474 Embarcadero Road Lawn Bowl 70,000 Palo Alto Lawn Bowls Club 3 years $1,165 $11,647 8/31/2020 ϲ 1237 San Antonio Road Old Los Altos Treatment Plant (LATP) Land 4,000 Precision Engineering 7 months $3,000 $21,000 9/28/2020 ϳ 1237 San Antonio Road Old Los Altos Treatment Plant (LATP) Land 5,000 TW Powerline 2 months $4,000 $8,000 9/29/2020 ϴ4000 Middlefield Road - Room T5 Cubberley Community Center 469 Project Safety Net Month to Month $1/year $1 10/26/2020 ϵ4000 Middlefield Road - Room U4A Cubberley Community Center 360 Chandrika Marla 2 years $396 $2,772 11/2/2020 ϭϬ4000 Middlefield Road - Room U4 Cubberley Artist Studio 360 Malte Renz 2 years $396 $2,772 11/5/2020 22.b Packet Pg. 358 dd,DEd Attachment A - 2 EƵŵďĞƌWƌŽƉĞƌƚǇ ĚĚƌĞƐƐ WƌŽƉĞƌƚǇͬ^ƉĂĐĞ dǇƉĞ ^ƋƵĂƌĞ &ŽŽƚĂŐĞdĞŶĂŶƚdĞƌŵDŽŶƚŚůǇdŽƚĂů&z ZĞŶƚΎ ŐƌĞĞŵĞŶƚ ĂƚĞ ϭϭ4000 Middlefield Road - Room F2 Cubberley Artist Studio 480** Barbara Boissevain 2 years $470 $2,822 11/18/2020 ϭϮ Extended Day Care Spaces Extended Day Care Spaces 15,240 Palo Alto Community Childcare 2 years $10,034 $60,206 12/7/2020 ϭϯ 1711 Stanford Avenue Nixon School Day Care 1,440 Kids Choice 1.5 years $925 $4,627 12/18/2020 ϭϰ1901 Embarcadero Road Airport Land 462 and 5 tie-downs JATO Aviation LLC 1.5 years $2,135 $10,673 12/23/2020 ϭϱ250 Hamilton Avenue City Hall 9 Oh My Green, Inc. 6 months $100 $600 4/13/2021 ϭϲ 1237 San Antonio Road Old Los Altos Treatment Plant (LATP) Land 6.64 acres Santa Clara Valley Water District 1 year $0 $0 5/3/2021 ϭϳ 1237 San Antonio Road Old Los Altos Treatment Plant (LATP) Land 9,000 Graham Contractors 13 days $896 $896 6/14/2021 22.b Packet Pg. 359 dd,DEd Attachment A - 3 ^hDDZzʹWD^d/KEϮ͘ϯϬ͘ϮϭϬ;ŚͿ'ZDEd^ Number of Transactions FY 2021 Total FY2021 Revenue Resulting from New Lease Agreements Total 17 $401,867 *Please note that tenancy terms range from 13 days to eighty-four months for the tenants. **Tenant changed suites, square footage, and rent payment changed. 22.b Packet Pg. 360 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϰϰϰͿ ŝƚǇŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ City of Palo Alto Page 1 dŝƚůĞ͗ŶŶƵĂů^ƚĂƚƵƐZĞƉŽƌƚŽŶƚŚĞĞǀĞůŽƉĞƌ/ŵƉĂĐƚ&ĞĞƐ^ĐŚĞĚƵůĞĂƐŽĨ:ƵŶĞ ϯϬ͕ϮϬϮϭ &ƌŽŵ͗ŝƚǇDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗ĚŵŝŶŝƐƚƌĂƚŝǀĞ^ĞƌǀŝĐĞƐ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ This is an information report; no action is required. ŝƐĐƵƐƐŝŽŶ The Annual Status Report on Development Impact Fees provides specific information about development impact fees imposed by the City. The schedule prepared in accordance with Government Code Section 66006 (AB1600) must be made available to the public at least 15 days before the Council meeting at which it is considered and within 180 days of the close of the fiscal year. Since the report is scheduled on the City Council Agenda of January 24, 2022, it is being included as an information report this December to allow time for public no tice in excess of the minimum 15-day advanced posting requirement. Additional information will be available in the January 24, 2022 report. ^ƚĂŬĞŚŽůĚĞƌŶŐĂŐĞŵĞŶƚ This report has been prepared by the Accounting Division in Administrative Services and reviewed by partner departments including the City Attorney’s Office, and the Planning and Development Services Department. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ This is an Informational Report, so no actions or adjustments are needed at this time. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ This is not a project for purposes of the California Environmental Quality Act (CEQA). . ƚƚĂĐŚŵĞŶƚƐ͗ •ƚƚĂĐŚŵĞŶƚϮϰ͘Ă͗Attachment A: Annual Report on Development Impact Fees FY 2021 23 Packet Pg. 361 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Stanford Research Park/San Antonio/West FUND El Camino Fund Bayshore Fund Purpose and Authority Traffic impact fees imposed on new Traffic impact fees imposed on new for Collection nonresidential development in the nonresidential development in the Stanford Research Park/El Camino San Antonio/West Bayshore Areas Real CS zone to fund improvements to fund capacity improvements at at eight identified intersections.four identified intersections. PAMC Ch. 16.45, PAMC Ch. 16.46 Amount of the Fee City ceased collecting effective FY 2020 City ceased collecting effective FY 2020 Fund Balance July 1, 2020 $3,497,771 $443,857 Activity in 2020-21 Revenues Interest Earnings 60,066 7,579 Unrealized Gain/(Loss) Investments (38,098)(16,440) -------------------------------------------------------- ----------------------------------------------------------- Total Revenues $21,968 ($8,861) Expenditures - - -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures - - ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2021 $3,519,739 $434,996 Other Commitments/Appropriations Reserve for Unrealized Gain on Investments (51,917) (6,551) Net Funds Available $3,467,822 $428,445 USE OF FEES:USE OF FEES: No expenditures have been made for this fund in Fiscal Year 2021. In FY 2020, City ceased collecting the Stanford Research / El Camino Real CS Zone fee established in 1989. FUTURE USE OF FEES: $2.2M programmed in FY 2022 to fund Sharing Agreement between the County of Santa Clara and the City for improvements of Mill Road intersections at both Hanover Street and El Camino Real (CMR 13439). No expenditures have been made for this fund in Fiscal Year 2021. In FY 2020, City ceased collecting the San Antonio/West Bayshore area fee established in 1986. Page 1 of 10 23.a Packet Pg. 362 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Commercial Housing University Avenue Parking FUND Impact Fee Fund In-Lieu Fund Purpose and Authority Fees imposed on commercial and industrial Fees collected from non-residential for Collection development to offset the demand that development within the University Ave. new jobs create for low and moderate-Parking Assessment District in lieu of income housing in the City providing the required number of parking spaces. PAMC Ch.16.65 PAMC Ch 16.57 Amount of the Fee Hotel / Retail / Other Non Residential: $22.40 per sq. ft. Office/R&D: $38.48 per sq. ft. $111,861.77 per space Fund Balance July 1, 2020 $25,428,649 $6,384,494 Activity in 2020-21 Revenues Fees Collected 606,996 - Interest Earnings 159,746 109,638 Unrealized Gain/(Loss) Investments (206,429)(69,521) -------------------------------------------------------- ----------------------------------------------------------- Total Revenues 560,313 40,117 Expenditures Salaries and Benefit (21,122) Liability Insurance (621) -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures (21,743) - -------------------------------------------------------- ----------------------------------------------------------- Ending Balance June 30, 2021 $25,967,219 $6,424,611 Other Commitments/Appropriations Reserve for Notes Receivable include:$1,290,000 for 2811 Alma, and $4,137,254 for 801 Alma, $7,700,000 for Bueva Vista Mobile Home Park. $10,502,309 Wilton Court (23,629,563) Reserve for Reappropriations (1,167,061) Reserve for unrealized gain on investments (108,891)(94,763) -------------------------------------------------------- ----------------------------------------------------------- Net Funds Available $1,061,704 $6,329,848 USE OF FEES:USE OF FEES: Expenditures in Fiscal Year 2021 are $21K for salaries and benefits. Reserve for Reappropriaton is for Affordable Housing Loan Agreement: 3705 El Camino Real (Wilton Court). No expenditures have been made from this fund in Fiscal Year 2021. FUTURE USE OF FEES: $5.5M programmed in FY 2023 for New Downtown Parking Garage Project (PE- 15007) as part of the 2022-2026 Capital Improvement Plan (CIP). Page 2 of 10 23a Packet Pg. 363 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Residential & Non-Residential Residential & Non-Residential Community Facilities Community Facilities FUND Parks Community Centers Purpose and Authority Fees imposed on new residential and Fees imposed on new residential and for Collection non-residential development approved non-residential development approved after Jan 28, 2002 for Parks. after Jan 28, 2002 for Community Centers. PAMC Ch. 16.58 PAMC Ch. 16.58 Amount of the Fee Residential: Single family $13,103 per residence (or $19,565 per residence larger than 3,000 sq ft); Multi-family $8,577 per unit (or $4337 per unit smaller than or equal to 900 sq ft) Residential: Single family $3,499 per residence (or $5,086 per residence larger than 3,000 sq ft); Multi-family $2,235 per unit (or $1,128 per unit smaller than or equal to 900 sq ft) Nonresidential: Commercial/Industrial $5,564 per 1,000 sq ft or fraction thereof; Hotel/Motel $2,516 per 1,000 sq ft or fraction thereof. Nonresidential: Commercial/industrial $314 per 1,000 sq ft or fraction thereof; Hotel/Motel $142 per 1,000 sq ft or fraction thereof. Fund Balance July 1, 2020 $3,552,791 $2,877,794 Activity in 2020-21 Revenues Fees Collected 219,423 70,000 Interest Earnings 59,690 29,693 Transfer Development Rights (TDR) - 40,000 Unrealized Gain/(Loss) Investments (65,423)(67,000) -------------------------------------------------------- ----------------------------------------------------------- Total Revenues $213,690 $72,693 Operating Transfer to Capital Projects Fund - (2,199,344) -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures - (2,199,344) -------------------------------------------------------- ----------------------------------------------------------- Ending Balance June 30, 2021 $3,766,481 $751,143 Other Commitments/Appropriations Reserve for unrealized gain on investments (54,256)(27,045)------------------------------------------------------------------------------------------------------------------- Net Funds Available $3,712,225 $724,098 USE OF FEES:USE OF FEES: No expenditures have been made from this fund in Fiscal Year 2021. USE OF FEES: $400K Programmed in FY2022 for Boulware Park Improvements (PE-17005); $500K programmed in FY 2022-2026 for Dog Park Installation and Renovation (PG- 18001); and $1.1M programmed in FY 2022-2026 for Park Restroom Installation (PG-19000) as part of the 2022-2026 CIP. $350K has been recommended to fund a restroom rennovation at the Roth Building (CMR 12307). Budget transfers of $125K made to Capital Improvement Fund Project for JMZ Renovation (AC-18001) and $2.1M made to Capital Improvement Fund Project Rinconada Park Improvements (PE-08001) in Fiscal Year 2021. Page 3 of 10 23.a Packet Pg. 364 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Residential & Non-Residential Residential Housing Community Facilities In-Lieu Fund FUND Libraries Purpose and Authority for Collection Fees imposed on new residential and non- residentual development approved after January 28, 2002 for Libraries. Fees collected from ownership residential developments of three or more units (including mixed used with ownership in housing) in-lieu of providing the required below-market rate units(s) to low and moderate income households. PAMC Ch. 16.58 PAMC Chapter 16.65 Amount of the Fee Residential: Single family $1,187 per residence (or $1,766 per residence larger than 3,000 sq ft); Multi-family $710 per unit (or $390 per unit smaller than or equal to 900 sq ft) Single family $82.46 per sq. ft. Single family detached; $54.97 per sq. ft. single family attached. Multi Family $54.97 per sq. ft. condos. Nonresidential: Commercial/industrial $299 per 1,000 sq ft or fraction thereof; Hotel/Motel $126 per 1,000 sq ft or fraction thereof. Fund Balance July 1, 2020 $1,248,514 $24,981,378 Activity in 2020-21 Revenues Fees Collected 29,138 4,939,497 Interest Earnings 18,746 147,730 Unrealized Gain/(Loss) Investments (15,095)(130,549) -------------------------------------------------------- ----------------------------------------------------------- Total Revenues $32,789 $4,956,678 Expenditures Salaries and Benefits (21,122) Contract Services (177,888) Liability Insurance (621) Operating Transfer to Capital Projects Fund (310,000) -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures (310,000)(199,631) -------------------------------------------------------- ----------------------------------------------------------- Ending Balance June 30, 2021 $971,303 $29,738,425 Other Commitments/Appropriations Reserve for Encumbrances (21,973) Reserve for unrealized gain on investments (16,435)(113,952) Reserve for Notes Receivable include $375,000 for 3053 Emerson, $3,504,850 for Tree House Apts, $747,734 for Sheridan Apts., $2,285,026 for 801 Alma, $901,201 for Palo Alto Housing Project, $600,000 for 2811-2825 Alma St., $203,561 for Colorado Park Housing, $149,968 for El Dorado Palace, and $6,800,000 for Buena Vista Mobile Home Park, $8,249,601 for Wilton Ct. (23,816,941) -------------------------------------------------------- ----------------------------------------------------------- Net Funds Available $954,868 $5,785,559 Page 4 of 10 23.a Packet Pg. 365 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Residential & Non-Residential Residential Housing Community Facilities In-Lieu Fund FUND Libraries USE OF FEES:USE OF FEES: Budget transfer $310K in FY 2021 was made to Capital Improvement Fund Project for Library Auto Material Handling (LB-21000). FUTURE USE OF FEES: $540K is programmed in FY 2022-2023 for LB-21000 as part of the 2022-2026 CIP. $300K has been recommended to fund the City archives at the Roth Building (CMR 12307). Expenditures in Fiscal Year 2021 were $21K for salaries and benefit, $178K for Palo Alto Housing Corp for BMR admin fees and for consultancy fees. Page 5 of 10 23.a Packet Pg. 366 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Charleston-Arastradero Corridor Citywide Transportation Pedestrian and Bicyclist Safety FUND Purpose and Authority Fees collected from new development and Transportation impact fees imposed for Collection re-development within the Charleston-on new development in all parts of the Arastradero Corridor to provide for pedest-City to fund congestion reduction rian and bicyclist safety improvements.projects. PAMC Ch. 16.60 PAMC Ch. 16.59 Amount of the Fee Residential: $1,435 per residential unit; Commercial: $0.42 per sq ft $8,309 per net new PM peak hour trip Fund Balance July 1, 2020 $19,507 $2,258,385 Activity in 2020-21 Revenues Fees Collected 17,274 412,167 Interest Earnings 427 38,432 Unrealized Gain/(Loss) Investments (84)(27,114) -------------------------------------------------------- ----------------------------------------------------------- Total Revenues $17,617 $423,485 Expenditures Operating Transfer to Capital Projects Fund - (400,000) -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures - (400,000) -------------------------------------------------------- ----------------------------------------------------------- Ending Balance June 30, 2021 $37,124 $2,281,870 Other Commitments/Reappropriations Reserve for unrealized gain on investments (418)(33,600) -------------------------------------------------------- ----------------------------------------------------------- Net Funds Available $36,706 $2,248,270 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2021. Budget transfer $400K to Capital Project Fund in Fiscal Year 2021 was made for Traffic Signal and Intelligent Transporation (PL-05030). FUTURE USE OF FEES: $2.0M programmed for PL-05030 as part of the 2022-2026 CIP. Page 6 of 10 23a Packet Pg. 367 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 New Public Safety Facilities General Government Facilities FUND Purpose and Authority Fees imposed on residential and Fees imposed on residential and non- for Collection non-residential development to fund residential development to fund facilities police and fire facilities (including fire associated with municipal administration. apparatus and vehicles)PAMH Ch. 16.58 PAMC Ch. 16.58 Amount of the Fee Residential: Single family $1,139 per unit; Multi-family $912 per unit Residential: Single family $1,435 per unit; Multi-family $1,147 per unit Nonresidential: Commercial $636 per 1,000 sq ft. or fraction thereof; Industrial $213 per 1,000 sq. ft. or fraction thereof; Office/Institutional $849 per 1,000 sq ft or fraction thereof. Nonresidential: Commercial $801 per 1,000 sq ft. or fraction thereof; Industrial $267 per 1,000 sq. ft. or fraction thereof; Hotel/Motel $1,070 per 1,000 sq ft or fraction thereof. Fund Balance July 1, 2020 $455,912 $574,118 Activity in 2020-21 Revenues Fees Collected 46,199 58,210 Interest Earnings 4,769 7,452 Unrealized Gain/(Loss) Investments (6,845)(8,609) -------------------------------------------------------- ----------------------------------------------------------- Total Revenues $44,123 $57,053 Expenditures Operating Transfer to Capital Projects Fund (455,912)(574,118) -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures (455,912)(574,118) -------------------------------------------------------- ----------------------------------------------------------- Ending Balance June 30, 2021 $44,123 $57,053 Reserve for unrealized gain on investments (3,717)(4,691) -------------------------------------------------------- ----------------------------------------------------------- Net Funds Available $40,406 $52,362 USE OF FEES:USE OF FEES: Budget transfer $456K to Capital Project Fund in Fiscal Year 2021 was made for Public Safety Bldg Project (PE-15001). Budget transfers are $217K to Capital Project Fund for the JMZ Renovation (AC- 18001) and $357K to Capital Project Fund for the Civic Ctr Fire Life Safety (PE-18016) in Fiscal Year 2021. Page 7 of 10 23.a Packet Pg. 368 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 Residential Housing Impact Fee Fund FUND Purpose and Authority for Collection Fees imposed on all rental residential developments (including mixed use with rental housing) to offset the demand that the new market-rate rental housing creates for low income and moderate- income housing in the City. PAMC Ch. 16.65 Amount of the Fee Single and Multi-Family: $21.99 per sq. ft. apartment (rentals) Fund Balance July 1, 2020 $619,803 Activity in 2020-21Revenues Fees Collected 257,954 Interest Earnings 14,015 Unrealized Gain/(Loss) Investments 2,984 -------------------------------------------------------- Total Revenues $274,953 Expenditures - --------------------------------------------------------Total Expenditures - -------------------------------------------------------- Ending Balance June 30, 2021 $894,756 Other Commitments/Reappropriations Reserve for Reappropriations (600,040) Reserve for unrealized gain on investments (11,158) -------------------------------------------------------- Net Funds Available $283,558 USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2021. Reseve for Reappropriations is for Affordable Housing Loan Agreement: 3705 El Camino Real (Wilton Court) Page 8 of 10 23.a Packet Pg. 369 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 (INFORMATION ONLY) Public Art Fund Parkland Dedication FUND Purpose and Authority for collection Fees imposed on new commercial develoments (including mixed use projects), including new construction, remodels, additions and reconstruction that (i) have a floor area of 10,000 sq. ft. or more, and (ii) have a construction value of $200,000, or more, exclusive of costs for architecture, design, engineering, and required studies; and all new residential projects of five or more units to fund public art for private developments. Fees on parkland dedication imposed on new residential and non-residential development. Govt Code Sec. 66477 (Quimby Act) PAMC Ch. 16.61 Amount of the Fee 1% of first $120.25 million construction valuation and 0.9% of construction valuation for valuation in excess of $120.25 million Single Family: $66486.51 per unit; Multi- Family: $45,819.54 per unit. This applies only to residential projects that require a subdivision or pacel map. Land dedication is required for subdivisions resulting in more than 50 parcels. Parkland Dedication Fee - Land: Single Family: 531 sq. ft, per unit; Multi-Family: 366 sq. ft. per unit. When parkland dedication applies, park impact fees do not apply. Fund Balance July 1, 2020 $1,732,560 $5,014,090 Activity in 2020-21 Revenues Fees Collected 291,934 862,942 Interest Earnings 30,944 76,192 Unrealized Gain/(Loss) Investments (12,572)(37,476) Operating Transfer from General Fund 170,000 -------------------------------------------------------- ----------------------------------------------------------- Total Revenues $480,306 $901,658 Expenditures Salaries and benefits (201,529) Liability Insurance (2,047) -------------------------------------------------------- ----------------------------------------------------------- Total Expenditures (203,576)0 -------------------------------------------------------- ----------------------------------------------------------- Ending Balance June 30, 2021 $2,009,290 $5,915,748 Other Commitments/Reappropriations Reserve for unrealized gain on investments (27,702)(80,769) -------------------------------------------------------- ----------------------------------------------------------- Net Funds Available $1,981,588 $5,834,979 This fund is not subject to AB1600 requirements and is listed only for information purposes. This fund is not subject to AB1600 requirements and is listed only for information purposes. FUTURE USE OF FEES: In FY 2022, $1.1M programmed to fund Boulware Park Improvements (PE-17005) and $2.4M programmed to fund Byxbee Park Completion (PE-18006). Page 9 of 10 23a Packet Pg. 370 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2021 (INFORMATION ONLY) FUND Water and Wastewater Collection Purpose and Authority Capacity fees charged to developers that for Collection are adding load to the water and sewer systems effective July 1, 2005. California Government Code Sect 66000 Amount of the Fee Water Capacity Fees: 5/8 in., 3/4 in E- Meter. $3,750, 1 in. E-Meter $6,250, 1 1/2 in. E-Meter $18,850, 2 in. E-Meter $31,250, 4 in. Compound Meter by est. $125/FU (min. 5,000 FU) , 6 in. Compound Meter by est. $125/FU (min. 7,000 FU) Fire Service Capacity Fees: 2 in. $750, 4 in. $8,425, 6 in. $18,250, 8 in. $30,950, 10in. $48,110 Sewer Capacity Charges: 4 in. connection with 5/8 in Water Meter (WM) $5,250, 4 in connection. with 1-in WM $10,500, 4 or 6 in. connection with 1-1/2 in WM $31,668, 6 in. connection with 2 in. WM $52,500, 6 in. and larger connection with 4 in. or larger WM by est. at $210/FU Activity in 2020-21 Capacity Fees Collected Water $532,805 Wastewater Collection 238,854 Total USE OF FEES: The fees are used exclusively for water and sewer system improvements Page 10 of 10 23.a Packet Pg. 371 ŝƚǇŽĨWĂůŽůƚŽ;/ηϭϯϴϲϳͿ KĨĨŝĐĞŽĨƚŚĞŝƚǇƚƚŽƌŶĞǇ ŝƚǇŽƵŶĐŝůKZĞƉŽƌƚ DĞĞƚŝŶŐĂƚĞ͗ϭϮͬϭϯͬϮϬϮϭ dŝƚůĞ͗ĚŽƉƚŝŽŶŽĨĂZĞƐŽůƵƚŝŽŶƵƚŚŽƌŝǌŝŶŐƚŚĞŝƚǇDĂŶĂŐĞƌƚŽǆĞĐƵƚĞ WĂƌƚŝĐŝƉĂƚŝŽŶŐƌĞĞŵĞŶƚƐŽŶĞŚĂůĨŽĨƚŚĞŝƚǇŽĨWĂůŽůƚŽƚŽŶƚĞƌ/ŶƚŽ ^ĞƚƚůĞŵĞŶƚŐƌĞĞŵĞŶƚƐZĞŐĂƌĚŝŶŐDĂŶƵĨĂĐƚƵƌĞĂŶĚŝƐƚƌŝďƵƚŝŽŶŽĨKƉŝŽŝĚ WƌŽĚƵĐƚƐǁŝƚŚDĐ<ĞƐƐŽŶŽƌƉŽƌĂƚŝŽŶ͕ĂƌĚŝŶĂů,ĞĂůƚŚ͕/ŶĐ͕͘ŵĞƌŝƐŽƵƌĐĞĞƌŐĞŶ ŽƌƉŽƌĂƚŝŽŶ͕:ŽŚŶƐŽŶΘ:ŽŚŶƐŽŶ͕:ĂŶƐƐĞŶWŚĂƌŵĂĐĞƵƚŝĐĂůƐ͕/ŶĐ͕͘KƌƚŚŽͲDĐEĞŝůͲ :ĂŶƐƐĞŶWŚĂƌŵĂĐĞƵƚŝĐĂůƐ͕/ŶĐ͕͘ĂŶĚ:ĂŶƐƐĞŶWŚĂƌŵĂĐĞƵŝƚĐĂ͕/ŶĐ͕͘ŐƌĞĞƚŽƚŚĞ dĞƌŵƐŽĨƚŚĞDĞŵŽƌĂŶĚƵŵŽĨhŶĚĞƌƐƚĂŶĚŝŶŐ;DKhͿůůŽĐĂƚŝŶŐ^ĞƚƚůĞŵĞŶƚ WƌŽĐĞĞĚƐ͕ĂŶĚƵƚŚŽƌŝǌĞŶƚƌǇ/ŶƚŽƚŚĞDKhǁŝƚŚƚŚĞĂůŝĨŽƌŶŝĂƚƚŽƌŶĞǇ 'ĞŶĞƌĂů &ƌŽŵ͗DŽůůǇ^ƚƵŵƉ͕ŝƚǇƚƚŽƌŶĞǇ ZĞĐŽŵŵĞŶĚĂƚŝŽŶ Staff recommends that the City Council adopt a resolution authorizing the City to participate in two settlements that have been negotiated by certain litigating public entities to resolve lawsuits that seek to hold certain opioid pharmaceutical supply chain participants accountable for the damage caused by their misfeasance, nonfeasance, and malfeasance. Staff recommends that the City Council adopt the Resolution at Attachment E, authorizing the City Manager to complete and execute the Settlement Participation Forms (Attachments C and D) to authorize the City of Palo Alto’s participation in the Distributors and Janssen Settlements, and to take such further actions as necessary to ensure that the City receives settlement proceeds allocated to it under the Distributors and Janssen Allocation Agreements. ŝƐĐƵƐƐŝŽŶ Nationwide Settlement More than 400 state and local government entities have filed lawsuits against opioids distributors and manufacturers seeking to recover costs incurred due to opioids-related substance abuse disorder. A coalition of state attorneys general entered into negotiations in an attempt to reach a global resolution of litigation with certain defendants. On July 21, 2021, the attorneys general announced final agreements with Janssen/Johnson & Johnson, a manufacturer of prescription opioids (“Janssen Settlement” (Exhibit A)), and the three major pharmaceutical distributors, Amerisource Bergen, Cardinal Health, and McKesson Packet Pg. 374 18 Page 2 (“Distributors Settlement” (Exhibit B)). The agreements include releases to resolve legal claims against these companies stemming from actions that fueled the opioid addiction epidemic in return for their payment of up to $26 billion, and also include injunctive relief provisions intended to change the defendants’ business practices. The proposed settlements include the following provisions: 1.The three distributors collectively will pay up to $21 billion over 18 years. 2.Janssen will pay up to $5 billion over nine years with up to $3.7 billion paid during the first three years. 3.Janssen will be prohibited from selling opioids for 10 years. 4.Both Janssen and the distributors will be required to make changes to market and distribution practices and take other steps to prevent opioids abuse. California’s Allocation Under the national agreements, California will receive up to approximately $2.26 billion in combined settlement payments. The total payment will depend on the extent of participation by cities and counties in the State. Nearly 100% of the 431 eligible counties and cities in California must participate to reach the maximum settlement amount. As participation decreases, so does the total amount. This sliding scale of participation and payment, along with other information, can be found at www.nationalopioidsettlement.com. The minimum amount a participating county or city may receive is roughly 53% of the potential maximum amount. In California, eligible entities include counties and cities with a population of at least 10,000 at the time of the 2019 U.S. Census count, and counties and cities that filed a lawsuit regardle ss of population. The national settlement agreements provide that each state must negotiate intrastate allocation agreements that allocate funds among the state government and litigating and non - litigating local entities, or otherwise be subject to a default allocation formula specified in the national agreements. Following extensive negotiations, the California Attorney General and local government representatives reached an agreement regarding intrastate allocation agreements for California on October 27, 2021. The separate allocation agreements for the Distributors and Janssen/Johnson & Johnson settlements are substantially identical in their material terms. The Intrastate Allocation Agreements Under the intrastate agreements – CA Allocation Agreement for Janssen Settlement (Attachment A) and CA Allocation Agreement for Distributors Settlement (Attachment B)) – 70% of the settlement proceeds are allocated to local government entities, including non - litigating entities like the City of Palo Alto. The remaining 30% of the funds are split equally between the State and litigating entities, including 51 of California’s 58 counties. Each county’s share of the settlement proceeds is based on measures of the severity of the opioid epidemic: (1) prevalence of opioids abuse disorder; (2) opioids deaths; and (3) estimate Packet Pg. 375 18 Page 3 opioids dosage. Within each county, the share allocated to each jurisdiction is based on ten factors that reflect spending on opioids treatment and prevention. The national settlements allow state and local governments to spend the settlement proceeds on a wide range of opioids remediation uses. (See Exhibit A, pp. E-1 – E-15 for allowed uses; see Exhibit B, pp. 63-77 for allowed uses.) Under the intrastate agreement, 50% of funds allocated to local governments must be spent on five State priorities: 1.the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; 2.creating new or expanded substance use disorder treatment infrastructure; 3.addressing the needs of communities of color and vulnerable populations that are disproportionately impacted substance use disorder; 4.diversion of people with substance use disorder from the justice system into treatment; and 5.interventions to prevent drug addiction in vulnerable youth. Palo Alto’s Allocation Under the intrastate allocation agreements, Palo Alto will receive up to $34,539.72 per year for eighteen years for a total of $621,715 over a period of 18 years. The actual payment will depend on the degree of participation by litigating and non-litigating entities. The deadline for the City to elect to participate in the settlement agreements is January 2, 2022 (See Attachments C and D – Participation Agreements.) If the City declines to participate in the settlement agreements, the City’s allocated settlement funds will default to the State and the City will maintain its right to pursue litigation against the Distributors and Janssen. If the City elects to participate in the settlement agreements, the City has the option of accepting the payments and must spend the funds on qualified programs. (See Exhibit A, pp. E- 1 – E-15 for allowed uses; see Exhibit B, pp. 63-77 for allowed uses.) Staff has been reviewing City services and needs to identify appropriate expenditures. Staff believes appropr iate use can be made of settlement funds, such as funding purchase and training in the use of Narcan emergency treatment products by EMT first responders. Alternatively, the City may allocate its payment to the County to fund County opioids remediation programs. The City may opt in or out of a direct payment at any time, and may also elect direct payment of only a portion of its share, with the remainder going to the County, by providing notice to the settlement fund administrators at least sixty days prio r to a payment date. ZĞĐŽŵŵĞŶĚĞĚĐƚŝŽŶ Staff recommends that the City Council adopt the Resolution at Attachment E, authorizing the City Manager to complete and execute the Settlement Participation Forms (Attachments C and D) to authorize the City of Palo Alto’s participation in the Distributors and Janssen Settlements, Packet Pg. 376 18 Page 4 and to take such further actions as necessary to ensure that the City receives settlement proceeds allocated to it under the Distributors and Janssen Allocation Agreements. ZĞƐŽƵƌĐĞ/ŵƉĂĐƚ The settlement funds will provide modest support for existing City services rel ated to opioids treatment and remediation. If the City elects to receive funds directly, it will be required to report annually to the State Department of Health and Community Services regarding the use of the funds. This task can be absorbed by existing staff. ŶǀŝƌŽŶŵĞŶƚĂůZĞǀŝĞǁ The proposed Council action is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”). dd,DEd^͗ •ƚƚĂĐŚŵĞŶƚĂ͗Attachment A: CA Allocation Agreement for Janssen Settlement (PDF) •Attachmentb:Attachment B: CA Allocation Agreement for Distributors Settlement (PDF) •Attachmentc:Attachment C: Janssen Settlement Participation Form (PDF) •Attachmentd:Attachment D: Distributor Settlement Participation Form (PDF) •Attachmente:Attachment E: Resolution for City of Palo Alto to Enter into Settlement Agreements regarding Manufacture and Distribution of Opioid Products (PDF) Packet Pg. 377 18 1 Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Janssen Settlement 1. Introduction Pursuant to the Janssen Settlement Agreement, dated as of July 21, 2021, and any revision thereto (the “Janssen Settlement Agreement”), including Section VI and Exhibit O, the State of California proposes this agreement (the “CA Janssen Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections V and VI of the Janssen Settlement Agreement.1 For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections X or XI of the Janssen Settlement Agreement. Pursuant to Exhibit O, Paragraph 4, of the Janssen Settlement Agreement, acceptance of this CA Janssen Allocation Agreement is a requirement to be an Initial Participating Subdivision. 2. Definitions a)CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Janssen Settlement Agreement. b)Distributor Settlement Agreement means the Distributor Settlement Agreement dated July 21, 2021, and any revision thereto. c)CA Litigating Special District means a Litigating Special District located in California. CA Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, and LA Care Health Plan. d)Plaintiff Subdivision means a Subdivision located in California, other than a CA Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020. e)Opioid Defendant means any defendant (including but not limited to Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., 1 A parallel but separate agreement (the “CA Distributor Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Distributor Settlement Agreement. An eligible Subdivision may elect to participate in either the Distributor Settlement or the Janssen Settlement, or in both. 18.a Packet Pg. 378 2 AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020. 3. General Terms This agreement is subject to the requirements of the Janssen Settlement Agreement, as well as applicable law, and the Janssen Settlement Agreement governs over any inconsistent provision of this CA Janssen Allocation Agreement. Terms used in this CA Janssen Allocation Agreement have the same meaning as in the Janssen Settlement Agreement unless otherwise defined herein. Pursuant to Section VI(D)(1) of the Janssen Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section VI(B)(2) of the Janssen Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation. 4. State Allocation The Settlement Fund payments to California,2 pursuant to the Janssen Settlement Agreement, shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Janssen Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”). A. State of California Allocation Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation. B. CA Abatement Accounts Fund i. Allocation of CA Abatement Accounts Funds a)Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA 2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. a Packet Pg. 379 18.a 3 Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds. b)A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Janssen Settlement Agreement. c)A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight). d)A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Janssen Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions. e)The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. f)Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2. a Packet Pg. 380 18.a 4 ii. Use of CA Abatement Accounts Funds a)The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Janssen Settlement Agreement. b)In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities: (1)the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2)creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3)addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD; (4)diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or (5) interventions to prevent drug addiction in vulnerable youth. c)The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d)For the avoidance of doubt, and subject to the requirements of the Janssen Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated. 18.a Packet Pg. 381 5 iii. CA Abatement Accounts Fund Oversight a)Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement. b)If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Janssen Settlement Agreement or this CA Janssen Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c)If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame. d)If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Janssen Settlement Agreement or this CA Janssen Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement. e)Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions. C. CA Subdivision Fund i.Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Janssen Settlement Agreement and this CA Janssen Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid- related expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2. a Packet Pg. 382 18.a 6 The CA Subdivision Funds will be allocated as follows: a)First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document; b)Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c)Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant. D. Provision for State Back-Stop Agreement On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Janssen Settlement Agreement and, if applicable, the Distributor Settlement Agreement. A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(R), of the Janssen Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Janssen Settlement, and if applicable, the Distributor Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Janssen Settlement Agreement and, if applicable, the Distributor Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments. To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney 18.a Packet Pg. 383 7 General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms. For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General. 5. State and Subdivision Reporting a)DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site. b)Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions. c)The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision. d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Janssen Settlement Agreement and this CA Janssen Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section VI(B)(2) of the Janssen Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and Janssen. e)In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions. 18.a Packet Pg. 384 8 6. Miscellaneous a)The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Janssen Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa. b)Except as provided in the Janssen Settlement Agreement, this CA Janssen Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party. c)Except as provided in the CA Janssen Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d)Except as provided in the Janssen Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. 18.a Packet Pg. 385 APPENDIX 1 DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Janssen Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one- hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage. 18.a Packet Pg. 386 APPENDIX 1 100.000% 100.000% 100.000% Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Alameda County Alameda 2.332% 2.853%2.4237952% City Alameda Alameda 0.069%0.0570162% City Albany Alameda 0.013%0.0107768% City Berkeley Alameda 0.152%0.1249656% City Dublin Alameda 0.033% 0.040%0.0338810% City Emeryville Alameda 0.023%0.0185765% City Fremont Alameda 0.108%0.0888576% City Hayward Alameda 0.117%0.0966218% City Livermore Alameda 0.054%0.0446740% City Newark Alameda 0.026%0.0217626% City Oakland Alameda 0.486% 0.595%0.5055601% City Piedmont Alameda 0.014%0.0114064% City Pleasanton Alameda 0.067%0.0554547% City San Leandro Alameda 0.039%0.0321267% City Union City Alameda 0.043%0.0352484% County Amador County Amador 0.226% 0.277%0.2349885% County Butte County Butte 1.615% 1.975%1.6783178% City Chico Butte 0.216% 0.264%0.2246499% City Oroville Butte 0.079%0.0646595% County Calaveras County Calaveras 0.226% 0.277%0.2351644% County Colusa County Colusa 0.059%0.0489221% County Contra Costa County Contra Costa 2.102% 2.571%2.1844585% City Antioch Contra Costa 0.037%0.0301879% City Brentwood Contra Costa 0.026%0.0215339% City Clayton Contra Costa 0.002%0.0018060% City Concord Contra Costa 0.055%0.0456676% City Danville Contra Costa 0.010%0.0082255% City El Cerrito Contra Costa 0.023%0.0189024% City Hercules Contra Costa 0.010%0.0078273% 1 of 15 18.a Packet Pg. 387 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Lafayette Contra Costa 0.006%0.0046030% City Martinez Contra Costa 0.012%0.0098593% City Moraga Contra Costa 0.004%0.0031007% City Oakley Contra Costa 0.010%0.0079416% City Orinda Contra Costa 0.005%0.0038157% City Pinole Contra Costa 0.013%0.0110909% City Pittsburg Contra Costa 0.053%0.0436369% City Pleasant Hill Contra Costa 0.013%0.0106309% City Richmond Contra Costa 0.146%0.1201444% City San Pablo Contra Costa 0.018%0.0148843% City San Ramon Contra Costa 0.021%0.0176459% City Walnut Creek Contra Costa 0.026%0.0212132% County Del Norte County Del Norte 0.114% 0.140%0.1189608% County El Dorado County El Dorado 0.768% 0.939%0.7980034% City Placerville El Dorado 0.015%0.0127642% City South Lake Tahoe El Dorado 0.081%0.0665456% County Fresno County Fresno 1.895% 2.318%1.9693410% City Clovis Fresno 0.065%0.0536211% City Coalinga Fresno 0.012%0.0098554% City Fresno Fresno 0.397%0.3270605% City Kerman Fresno 0.005%0.0042534% City Kingsburg Fresno 0.008%0.0066167% City Mendota Fresno 0.002%0.0019387% City Orange Cove Fresno 0.004%0.0035607% City Parlier Fresno 0.008%0.0069755% City Reedley Fresno 0.012%0.0098804% City Sanger Fresno 0.018%0.0146135% City Selma Fresno 0.015%0.0127537% County Glenn County Glenn 0.107% 0.131%0.1116978% County Humboldt County Humboldt 1.030% 1.260%1.0703185% 2 of 15 18.a Packet Pg. 388 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Arcata Humboldt 0.054%0.0447660% City Eureka Humboldt 0.117% 0.143%0.1216284% City Fortuna Humboldt 0.032%0.0266837% County Imperial County Imperial 0.258% 0.315%0.2679006% City Brawley Imperial 0.011%0.0087986% City Calexico Imperial 0.019%0.0152799% City El Centro Imperial 0.158%0.1302522% City Imperial Imperial 0.006%0.0048791% County Inyo County Inyo 0.073% 0.089%0.0754413% County Kern County Kern 2.517% 3.079%2.6159145% City Arvin Kern 0.006%0.0046425% City Bakersfield Kern 0.212%0.1747198% City California City Kern 0.009%0.0070820% City Delano Kern 0.030%0.0249316% City McFarland Kern 0.003%0.0025644% City Ridgecrest Kern 0.015%0.0120938% City Shafter Kern 0.013%0.0103417% City Tehachapi Kern 0.009%0.0073580% City Wasco Kern 0.008%0.0069861% County Kings County Kings 0.293%0.2413469% City Avenal Kings 0.007%0.0056335% City Corcoran Kings 0.013%0.0107032% City Hanford Kings 0.027%0.0226038% City Lemoore Kings 0.016%0.0131900% County Lake County Lake 0.795%0.6545389% City Clearlake Lake 0.041% 0.050%0.0426253% City Lakeport Lake 0.021% 0.026%0.0222964% County Lassen County Lassen 0.319% 0.391%0.3320610% City Susanville Lassen 0.027%0.0219295% County Los Angeles County Los Angeles 13.896% 16.999%14.4437559% 3 of 15 18.a Packet Pg. 389 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Agoura Hills Los Angeles 0.005%0.0040024% City Alhambra Los Angeles 0.042%0.0343309% City Arcadia Los Angeles 0.033%0.0267718% City Artesia Los Angeles 0.001%0.0005100% City Azusa Los Angeles 0.026%0.0210857% City Baldwin Park Los Angeles 0.027%0.0218520% City Bell Los Angeles 0.008%0.0068783% City Bellflower Los Angeles 0.002%0.0014485% City Bell Gardens Los Angeles 0.014%0.0114301% City Beverly Hills Los Angeles 0.065%0.0534897% City Burbank Los Angeles 0.100%0.0823132% City Calabasas Los Angeles 0.006%0.0048948% City Carson Los Angeles 0.019%0.0159805% City Cerritos Los Angeles 0.005%0.0039682% City Claremont Los Angeles 0.010%0.0082584% City Commerce Los Angeles 0.000%0.0002971% City Compton Los Angeles 0.044%0.0361882% City Covina Los Angeles 0.028%0.0229127% City Cudahy Los Angeles 0.001%0.0006020% City Culver City Los Angeles 0.055%0.0449894% City Diamond Bar Los Angeles 0.001%0.0006993% City Downey Los Angeles 0.052%0.0429994% City Duarte Los Angeles 0.003%0.0027261% City El Monte Los Angeles 0.031% 0.038%0.0318985% City El Segundo Los Angeles 0.033%0.0268020% City Gardena Los Angeles 0.034%0.0278088% City Glendale Los Angeles 0.166%0.1366586% City Glendora Los Angeles 0.016%0.0134411% City Hawaiian Gardens Los Angeles 0.005%0.0040549% City Hawthorne Los Angeles 0.050%0.0407833% 4 of 15 18.a Packet Pg. 390 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Hermosa Beach Los Angeles 0.018%0.0145307% City Huntington Park Los Angeles 0.023%0.0190667% City Inglewood Los Angeles 0.059%0.0489195% City La Cañada Flintridge Los Angeles 0.003%0.0025565% City Lakewood Los Angeles 0.005%0.0039971% City La Mirada Los Angeles 0.010%0.0081572% City Lancaster Los Angeles 0.045%0.0369689% City La Puente Los Angeles 0.002%0.0012999% City La Verne Los Angeles 0.024%0.0194190% City Lawndale Los Angeles 0.002%0.0017731% City Lomita Los Angeles 0.004%0.0031940% City Long Beach Los Angeles 0.439%0.3614151% City Los Angeles Los Angeles 2.715% 3.321%2.8218811% City Lynwood Los Angeles 0.016%0.0134345% City Malibu Los Angeles 0.002%0.0019269% City Manhattan Beach Los Angeles 0.032%0.0260686% City Maywood Los Angeles 0.004%0.0035528% City Monrovia Los Angeles 0.031%0.0254455% City Montebello Los Angeles 0.030%0.0250670% City Monterey Park Los Angeles 0.031%0.0256677% City Norwalk Los Angeles 0.031%0.0258228% City Palmdale Los Angeles 0.046%0.0375827% City Palos Verdes Estates Los Angeles 0.006%0.0053102% City Paramount Los Angeles 0.011%0.0091483% City Pasadena Los Angeles 0.146%0.1200524% City Pico Rivera Los Angeles 0.022%0.0183333% City Pomona Los Angeles 0.111%0.0911933% City Rancho Palos Verdes Los Angeles 0.002%0.0012645% City Redondo Beach Los Angeles 0.062%0.0506992% City Rosemead Los Angeles 0.003%0.0028260% 5 of 15 18.a Packet Pg. 391 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City San Dimas Los Angeles 0.003%0.0022016% City San Fernando Los Angeles 0.013%0.0104837% City San Gabriel Los Angeles 0.018%0.0147726% City San Marino Los Angeles 0.009%0.0073791% City Santa Clarita Los Angeles 0.022%0.0178167% City Santa Fe Springs Los Angeles 0.031%0.0257531% City Santa Monica Los Angeles 0.158%0.1298513% City Sierra Madre Los Angeles 0.006%0.0048646% City Signal Hill Los Angeles 0.010%0.0084884% City South El Monte Los Angeles 0.005%0.0039603% City South Gate Los Angeles 0.020%0.0166272% City South Pasadena Los Angeles 0.012%0.0095334% City Temple City Los Angeles 0.005%0.0039498% City Torrance Los Angeles 0.112%0.0919820% City Walnut Los Angeles 0.006%0.0047305% City West Covina Los Angeles 0.049%0.0404521% City West Hollywood Los Angeles 0.013%0.0108517% City Whittier Los Angeles 0.032%0.0260581% County Madera County Madera 0.349% 0.427%0.3630669% City Chowchilla Madera 0.012%0.0097332% City Madera Madera 0.039%0.0318441% County Marin County Marin 0.564% 0.690%0.5861325% City Larkspur Marin 0.015%0.0124697% City Mill Valley Marin 0.020%0.0168401% City Novato Marin 0.028%0.0229824% City San Anselmo Marin 0.009%0.0078062% City San Rafael Marin 0.089%0.0729823% County Mariposa County Mariposa 0.084% 0.103%0.0876131% County Mendocino County Mendocino 0.439% 0.536%0.4558394% City Ukiah Mendocino 0.039%0.0317153% 6 of 15 18.a Packet Pg. 392 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Merced County Merced 0.551% 0.674%0.5724262% City Atwater Merced 0.024%0.0195846% City Livingston Merced 0.006%0.0045873% City Los Banos Merced 0.020%0.0165142% City Merced Merced 0.061%0.0500762% County Modoc County Modoc 0.065% 0.080%0.0678250% County Mono County Mono 0.023% 0.029%0.0242606% County Monterey County Monterey 0.908% 1.111%0.9437083% City Greenfield Monterey 0.006%0.0050552% City King City Monterey 0.005%0.0037355% City Marina Monterey 0.017%0.0144098% City Monterey Monterey 0.041%0.0336540% City Pacific Grove Monterey 0.009%0.0074842% City Salinas Monterey 0.094%0.0776576% City Seaside Monterey 0.023%0.0191772% City Soledad Monterey 0.007%0.0060870% County Napa County Napa 0.288% 0.352%0.2994325% City American Canyon Napa 0.017%0.0136869% City Napa Napa 0.078%0.0642783% County Nevada County Nevada 0.441% 0.539%0.4579827% City Grass Valley Nevada 0.024%0.0197805% City Truckee Nevada 0.003%0.0023843% County Orange County Orange 4.364% 5.339%4.5363576% City Aliso Viejo Orange 0.014%0.0113841% City Anaheim Orange 0.554% 0.678%0.5759282% City Brea Orange 0.086%0.0708897% City Buena Park Orange 0.087%0.0714352% City Costa Mesa Orange 0.124% 0.152%0.1288366% City Cypress Orange 0.033%0.0271937% City Dana Point Orange 0.001%0.0005560% 7 of 15 18.a Packet Pg. 393 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Fountain Valley Orange 0.055%0.0455980% City Fullerton Orange 0.137% 0.168%0.1425744% City Garden Grove Orange 0.213%0.1752482% City Huntington Beach Orange 0.247% 0.302%0.2568420% City Irvine Orange 0.139% 0.170%0.1442350% City Laguna Beach Orange 0.047% 0.058%0.0493043% City Laguna Hills Orange 0.014%0.0115457% City Laguna Niguel Orange 0.001%0.0007071% City Laguna Woods Orange 0.001%0.0006546% City La Habra Orange 0.060% 0.073%0.0621049% City Lake Forest Orange 0.012%0.0101249% City La Palma Orange 0.012%0.0095439% City Los Alamitos Orange 0.008%0.0069190% City Mission Viejo Orange 0.014%0.0117560% City Newport Beach Orange 0.179%0.1470134% City Orange Orange 0.150%0.1231320% City Placentia Orange 0.029% 0.035%0.0298912% City Rancho Santa Margarita Orange 0.001%0.0006296% City San Clemente Orange 0.008% 0.010%0.0086083% City San Juan Capistrano Orange 0.008%0.0065510% City Santa Ana Orange 0.502% 0.614%0.5213866% City Seal Beach Orange 0.020%0.0165891% City Stanton Orange 0.035%0.0291955% City Tustin Orange 0.073%0.0600341% City Westminster Orange 0.104% 0.127%0.1082721% City Yorba Linda Orange 0.044%0.0362223% County Placer County Placer 1.045% 1.278%1.0861002% City Auburn Placer 0.017%0.0141114% City Lincoln Placer 0.031%0.0255599% City Rocklin Placer 0.076%0.0625485% 8 of 15 18.a Packet Pg. 394 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Roseville Placer 0.196%0.1616559% County Plumas County Plumas 0.205% 0.251%0.2128729% County Riverside County Riverside 4.534% 5.547%4.7128296% City Banning Riverside 0.017%0.0143848% City Beaumont Riverside 0.021%0.0171135% City Blythe Riverside 0.012%0.0096714% City Canyon Lake Riverside 0.000%0.0001761% City Cathedral City Riverside 0.067%0.0553614% City Coachella Riverside 0.021%0.0173054% City Corona Riverside 0.147%0.1207083% City Desert Hot Springs Riverside 0.024%0.0200433% City Eastvale Riverside 0.000%0.0002747% City Hemet Riverside 0.051%0.0421792% City Indio Riverside 0.056%0.0457794% City Jurupa Valley Riverside 0.001%0.0008991% City Lake Elsinore Riverside 0.021%0.0172949% City La Quinta Riverside 0.063%0.0516732% City Menifee Riverside 0.032%0.0260909% City Moreno Valley Riverside 0.137%0.1130348% City Murrieta Riverside 0.048% 0.059%0.0497423% City Norco Riverside 0.016%0.0134542% City Palm Desert Riverside 0.083%0.0682465% City Palm Springs Riverside 0.076%0.0629862% City Perris Riverside 0.009%0.0076774% City Rancho Mirage Riverside 0.052%0.0431098% City Riverside Riverside 0.268%0.2206279% City San Jacinto Riverside 0.010%0.0085936% City Temecula Riverside 0.022%0.0180086% City Wildomar Riverside 0.008%0.0062500% County Sacramento County Sacramento 3.797% 4.645%3.9465887% 9 of 15 18.a Packet Pg. 395 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Citrus Heights Sacramento 0.057%0.0465312% City Elk Grove Sacramento 0.130%0.1066994% City Folsom Sacramento 0.108%0.0890850% City Galt Sacramento 0.017%0.0143704% City Rancho Cordova Sacramento 0.008%0.0067679% City Sacramento Sacramento 0.721% 0.882%0.7496530% County San Benito County San Benito 0.106% 0.130%0.1101417% City Hollister San Benito 0.027%0.0225355% County San Bernardino County San Bernardino 3.259% 3.987%3.3878124% City Adelanto San Bernardino 0.008%0.0066640% City Apple Valley San Bernardino 0.025%0.0207360% City Barstow San Bernardino 0.015%0.0122056% City Chino San Bernardino 0.064%0.0525893% City Chino Hills San Bernardino 0.001%0.0006388% City Colton San Bernardino 0.031%0.0253443% City Fontana San Bernardino 0.112%0.0920543% City Grand Terrace San Bernardino 0.006%0.0051051% City Hesperia San Bernardino 0.035%0.0291522% City Highland San Bernardino 0.004%0.0029061% City Loma Linda San Bernardino 0.009%0.0071188% City Montclair San Bernardino 0.039%0.0322108% City Ontario San Bernardino 0.179%0.1472934% City Rancho Cucamonga San Bernardino 0.084%0.0689431% City Redlands San Bernardino 0.057%0.0469150% City Rialto San Bernardino 0.073%0.0603206% City San Bernardino San Bernardino 0.178%0.1461880% City Twentynine Palms San Bernardino 0.002%0.0012605% City Upland San Bernardino 0.052%0.0424460% City Victorville San Bernardino 0.033%0.0269400% City Yucaipa San Bernardino 0.016%0.0128772% 10 of 15 18.a Packet Pg. 396 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Yucca Valley San Bernardino 0.003%0.0021228% County San Diego County San Diego 5.706% 6.980%5.9309748% City Carlsbad San Diego 0.128%0.1050485% City Chula Vista San Diego 0.189% 0.231%0.1961456% City Coronado San Diego 0.044%0.0359095% City El Cajon San Diego 0.113%0.0933582% City Encinitas San Diego 0.061% 0.074%0.0630289% City Escondido San Diego 0.145%0.1192204% City Imperial Beach San Diego 0.014%0.0118283% City La Mesa San Diego 0.055% 0.068%0.0575593% City Lemon Grove San Diego 0.022%0.0183911% City National City San Diego 0.080%0.0656808% City Oceanside San Diego 0.213%0.1753428% City Poway San Diego 0.062%0.0511040% City San Diego San Diego 1.975% 2.416%2.0531169% City San Marcos San Diego 0.089%0.0733897% City Santee San Diego 0.033%0.0268401% City Solana Beach San Diego 0.017%0.0138564% City Vista San Diego 0.052%0.0425144% Consolidated San Francisco San Francisco 3.026% 3.702%3.1457169% County San Joaquin County San Joaquin 1.680% 2.055%1.7460399% City Lathrop San Joaquin 0.009%0.0075394% City Lodi San Joaquin 0.053%0.0439484% City Manteca San Joaquin 0.054%0.0443454% City Ripon San Joaquin 0.013%0.0104219% City Stockton San Joaquin 0.313% 0.383%0.3256176% City Tracy San Joaquin 0.084%0.0692047% County San Luis Obispo County San Luis Obispo 0.816% 0.999%0.8484126% City Arroyo Grande San Luis Obispo 0.024%0.0199053% City Atascadero San Luis Obispo 0.029%0.0240680% 11 of 15Packet Pg. 397 18.a APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City El Paso de Robles (Paso Robles) San Luis Obispo 0.043%0.0353456% City Grover Beach San Luis Obispo 0.017%0.0137881% City Morro Bay San Luis Obispo 0.020%0.0160922% City San Luis Obispo San Luis Obispo 0.077%0.0637841% County San Mateo County San Mateo 1.074% 1.313%1.1159599% City Belmont San Mateo 0.021%0.0169860% City Burlingame San Mateo 0.019%0.0152537% City Daly City San Mateo 0.044%0.0363880% City East Palo Alto San Mateo 0.013%0.0103982% City Foster City San Mateo 0.020%0.0166101% City Half Moon Bay San Mateo 0.004%0.0031638% City Hillsborough San Mateo 0.013%0.0110029% City Menlo Park San Mateo 0.015%0.0126209% City Millbrae San Mateo 0.013%0.0105836% City Pacifica San Mateo 0.016%0.0130625% City Redwood City San Mateo 0.056%0.0463511% City San Bruno San Mateo 0.021%0.0172161% City San Carlos San Mateo 0.013%0.0108885% City San Mateo San Mateo 0.052%0.0425841% City South San Francisco San Mateo 0.043%0.0353943% County Santa Barbara County Santa Barbara 1.132% 1.385%1.1768968% City Carpinteria Santa Barbara 0.001%0.0008938% City Goleta Santa Barbara 0.004%0.0028969% City Lompoc Santa Barbara 0.047%0.0389379% City Santa Barbara Santa Barbara 0.122%0.1004559% City Santa Maria Santa Barbara 0.058%0.0479179% County Santa Clara County Santa Clara 2.404% 2.941%2.4987553% City Campbell Santa Clara 0.014%0.0112566% City Cupertino Santa Clara 0.008%0.0066824% City Gilroy Santa Clara 0.025%0.0202891% 12 of 15 18.a Packet Pg. 398 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Los Altos Santa Clara 0.013%0.0103338% City Los Gatos Santa Clara 0.013%0.0103220% City Milpitas Santa Clara 0.036%0.0298120% City Morgan Hill Santa Clara 0.015%0.0124619% City Mountain View Santa Clara 0.041%0.0334608% City Palo Alto Santa Clara 0.039%0.0323080% City San Jose Santa Clara 0.294% 0.360%0.3054960% City Santa Clara Santa Clara 0.067%0.0549723% City Saratoga Santa Clara 0.004%0.0034161% City Sunnyvale Santa Clara 0.053%0.0434069% County Santa Cruz County Santa Cruz 0.783% 0.957%0.8135396% City Capitola Santa Cruz 0.020%0.0168191% City Santa Cruz Santa Cruz 0.143%0.1180348% City Scotts Valley Santa Cruz 0.015%0.0126525% City Watsonville Santa Cruz 0.063%0.0520136% County Shasta County Shasta 1.095% 1.339%1.1380191% City Anderson Shasta 0.024%0.0198896% City Redding Shasta 0.284%0.2334841% City Shasta Lake Shasta 0.004%0.0031993% County Siskiyou County Siskiyou 0.228% 0.279%0.2373393% County Solano County Solano 0.760%0.6260795% City Benicia Solano 0.031%0.0253903% City Dixon Solano 0.016%0.0130849% City Fairfield Solano 0.109%0.0897317% City Suisun City Solano 0.021%0.0176183% City Vacaville Solano 0.119%0.0976497% City Vallejo Solano 0.167%0.1373644% County Sonoma County Sonoma 1.218% 1.490%1.2661290% City Healdsburg Sonoma 0.032%0.0266929% City Petaluma Sonoma 0.081%0.0667507% 13 of 15 18.a Packet Pg. 399 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Rohnert Park Sonoma 0.041%0.0340759% City Santa Rosa Sonoma 0.184%0.1519070% City Sonoma Sonoma 0.022%0.0183438% City Windsor Sonoma 0.016%0.0129298% County Stanislaus County Stanislaus 1.722%1.4182273% City Ceres Stanislaus 0.041%0.0340260% City Modesto Stanislaus 0.217%0.1788759% City Newman Stanislaus 0.006%0.0046964% City Oakdale Stanislaus 0.018%0.0145531% City Patterson Stanislaus 0.015%0.0126590% City Riverbank Stanislaus 0.010%0.0085699% City Turlock Stanislaus 0.065%0.0531966% County Sutter County Sutter 0.306% 0.374%0.3179548% City Yuba City Sutter 0.074%0.0606242% County Tehama County Tehama 0.213% 0.261%0.2216654% City Red Bluff Tehama 0.014%0.0117771% County Trinity County Trinity 0.082% 0.101%0.0855476% County Tulare County Tulare 0.809% 0.990%0.8410949% City Dinuba Tulare 0.014%0.0116929% City Exeter Tulare 0.004%0.0032479% City Farmersville Tulare 0.003%0.0027879% City Lindsay Tulare 0.007%0.0057111% City Porterville Tulare 0.021%0.0171845% City Tulare Tulare 0.037%0.0302273% City Visalia Tulare 0.066%0.0545872% County Tuolumne County Tuolumne 0.486% 0.594%0.5047621% County Ventura County Ventura 2.192% 2.681%2.2781201% City Camarillo Ventura 0.002%0.0012815% City Fillmore Ventura 0.002%0.0020294% City Moorpark Ventura 0.008%0.0067337% 14 of 15 18.a Packet Pg. 400 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Oxnard Ventura 0.156% 0.190%0.1617338% City Port Hueneme Ventura 0.021%0.0174145% City San Buenaventura (Ventura) Ventura 0.085%0.0702181% City Santa Paula Ventura 0.014%0.0119072% City Simi Valley Ventura 0.065%0.0533043% City Thousand Oaks Ventura 0.022%0.0179902% County Yolo County Yolo 0.357% 0.437%0.3713319% City Davis Yolo 0.055%0.0451747% City West Sacramento Yolo 0.066%0.0544321% City Woodland Yolo 0.058%0.0477904% County Yuba County Yuba 0.214% 0.262%0.2225679% City Marysville Yuba 0.014%0.0112079% 15 of 15 18.a Packet Pg. 401 1 APPENDIX 2 Cost Reimbursement Procedure 1. Additional defined terms: a)Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were paid or incurred (i) prior to July 21, 2021 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting this CA Janssen Allocation Agreement. Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs. b)First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section X and Exhibit R of the Distributor Settlement Agreement or Section XI and Exhibit R of the Janssen Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c)Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d)Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses. 2. Cost Reimbursement to Plaintiff Subdivision a)Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating a National Opioid Settlement with Distributors, Johnson & Johnson, and others. b)Claims Procedure. i.If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section X or Exhibit R of the Distributor Settlement Agreement or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for 18.a Packet Pg. 402 2 Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii.A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act. iii.The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs. iv.The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v.Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. vi.The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section VI.B.2 of the Janssen Agreement. vii.A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and Janssen a report 18.a Packet Pg. 403 3 of the fees and expenses incurred by the Special Master pursuant to Section VI.B.2 of the Janssen Agreement. c)Claims Priority and Limitation. i.The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii.Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices. iii.Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv.Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full. v.In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi.In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Distributor Settlement Agreement and the Janssen Settlement Agreement be used to pay Costs. d)Collateral Source Payments and Third-Party Settlement. i.In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. 18.a Packet Pg. 404 4 ii.In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above. 18.a Packet Pg. 405 1 APPENDIX 3 CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Janssen Settlement and their counsel. In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement). [SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State Back- Stop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Costs, and Expenses) of the Janssen Settlement Agreement. Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Janssen Settlement Agreement and CA Janssen Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Janssen Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Distributors Settlement. [COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Janssen Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments. The Attorney General is executing this agreement solely because the definition of “State Back- Stop Agreement” in Exhibit R of the Janssen Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party. [DATE] [SUBDIVISION SIGNATURE BLOCK] [DATE] [COUNSEL SIGNATURE BLOCK] [DATE] [ATTORNEY GENERAL SIGNATURE BLOCK] 18.a Packet Pg. 406 1 Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributor Settlement 1. Introduction Pursuant to the Distributor Settlement Agreement, dated as of July 21, 2021, and any revision thereto (the “Distributor Settlement Agreement”), including Section V and Exhibit O, the State of California proposes this agreement (the “CA Distributor Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections IV and V of the Distributor Settlement Agreement.1 For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections IX or X of the Distributor Settlement Agreement. Pursuant to Exhibit O, Paragraph 4, of the Distributor Settlement Agreement, acceptance of this CA Distributor Allocation Agreement is a requirement to be an Initial Participating Subdivision. 2. Definitions a)CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Distributor Settlement Agreement. b)Janssen Settlement Agreement means the Janssen Settlement Agreement dated July 21, 2021, and any revision thereto. c)Litigating Special District means a school district, fire protection district, health authority, health plan, or other special district that has filed a lawsuit against an Opioid Defendant. Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, and LA Care Health Plan. d)Plaintiff Subdivision means a Subdivision located in California, other than a Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020. 1 A parallel but separate agreement (the “CA Janssen Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Janssen Settlement Agreement. An eligible Subdivision may elect to participate in either the Distributor Settlement or the Janssen Settlement, or in both. 18.b Packet Pg. 407 2 e)Opioid Defendant means any defendant (including but not limited to Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020. 3. General Terms This agreement is subject to the requirements of the Distributor Settlement Agreement, as well as applicable law, and the Distributor Settlement Agreement governs over any inconsistent provision of this CA Distributor Allocation Agreement. Terms used in this CA Distributor Allocation Agreement have the same meaning as in the Distributor Settlement Agreement unless otherwise defined herein. Pursuant to Section V(D)(1) of the Distributor Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the Distributor Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation. 4. State Allocation The Settlement Fund payments to California,2 pursuant to the Distributor Settlement Agreement, shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Distributor Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”). A. State of California Allocation Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation. B. CA Abatement Accounts Fund i. Allocation of CA Abatement Accounts Funds a)Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be 2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. 18.b Packet Pg. 408 3 allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds. b)A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Distributor Settlement Agreement. c)A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight). d)A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Distributor Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions. e)The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. f)Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2. 18.b Packet Pg. 409 4 ii. Use of CA Abatement Accounts Funds a)The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Distributor Settlement Agreement. b)In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities: (1)the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2)creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3)addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD; (4)diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or (5) interventions to prevent drug addiction in vulnerable youth. c)The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d)For the avoidance of doubt, and subject to the requirements of the Distributor Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated. 18.b Packet Pg. 410 5 iii. CA Abatement Accounts Fund Oversight a)Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. b)If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Distributor Settlement Agreement or this CA Distributor Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c)If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame. d)If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Distributor Settlement Agreement or this CA Distributor Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement. e)Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions. C. CA Subdivision Fund i.Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid-related expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2. 18.b Packet Pg. 411 6 The CA Subdivision Funds will be allocated as follows: a)First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document; b)Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c)Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant. D. Provision for State Back-Stop Agreement On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(R), of the Distributor Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Distributor Settlement, and if applicable, the Janssen Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments. To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney 18.b Packet Pg. 412 7 General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms. For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General. 5. State and Subdivision Reporting a)DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site. b)Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions. c)The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision. d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section V(B)(2) of the Distributor Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and the Distributors. e)In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions. 18.b Packet Pg. 413 8 6. Miscellaneous a)The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Distributor Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa. b)Except as provided in the Distributor Settlement Agreement, this CA Distributor Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party. c)Except as provided in the CA Distributor Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d)Except as provided in the Distributor Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. 18.b Packet Pg. 414 APPENDIX 1 DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Distributor Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one- hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage. 18.b Packet Pg. 415 APPENDIX 1 100.000% 100.000% 100.000% Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Alameda County Alameda 2.332% 2.853%2.4237952% City Alameda Alameda 0.069%0.0570162% City Albany Alameda 0.013%0.0107768% City Berkeley Alameda 0.152%0.1249656% City Dublin Alameda 0.033% 0.040%0.0338810% City Emeryville Alameda 0.023%0.0185765% City Fremont Alameda 0.108%0.0888576% City Hayward Alameda 0.117%0.0966218% City Livermore Alameda 0.054%0.0446740% City Newark Alameda 0.026%0.0217626% City Oakland Alameda 0.486% 0.595%0.5055601% City Piedmont Alameda 0.014%0.0114064% City Pleasanton Alameda 0.067%0.0554547% City San Leandro Alameda 0.039%0.0321267% City Union City Alameda 0.043%0.0352484% County Amador County Amador 0.226% 0.277%0.2349885% County Butte County Butte 1.615% 1.975%1.6783178% City Chico Butte 0.216% 0.264%0.2246499% City Oroville Butte 0.079%0.0646595% County Calaveras County Calaveras 0.226% 0.277%0.2351644% County Colusa County Colusa 0.059%0.0489221% County Contra Costa County Contra Costa 2.102% 2.571%2.1844585% City Antioch Contra Costa 0.037%0.0301879% City Brentwood Contra Costa 0.026%0.0215339% City Clayton Contra Costa 0.002%0.0018060% City Concord Contra Costa 0.055%0.0456676% City Danville Contra Costa 0.010%0.0082255% City El Cerrito Contra Costa 0.023%0.0189024% City Hercules Contra Costa 0.010%0.0078273% 1 of 15 18.b Packet Pg. 416 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Lafayette Contra Costa 0.006%0.0046030% City Martinez Contra Costa 0.012%0.0098593% City Moraga Contra Costa 0.004%0.0031007% City Oakley Contra Costa 0.010%0.0079416% City Orinda Contra Costa 0.005%0.0038157% City Pinole Contra Costa 0.013%0.0110909% City Pittsburg Contra Costa 0.053%0.0436369% City Pleasant Hill Contra Costa 0.013%0.0106309% City Richmond Contra Costa 0.146%0.1201444% City San Pablo Contra Costa 0.018%0.0148843% City San Ramon Contra Costa 0.021%0.0176459% City Walnut Creek Contra Costa 0.026%0.0212132% County Del Norte County Del Norte 0.114% 0.140%0.1189608% County El Dorado County El Dorado 0.768% 0.939%0.7980034% City Placerville El Dorado 0.015%0.0127642% City South Lake Tahoe El Dorado 0.081%0.0665456% County Fresno County Fresno 1.895% 2.318%1.9693410% City Clovis Fresno 0.065%0.0536211% City Coalinga Fresno 0.012%0.0098554% City Fresno Fresno 0.397%0.3270605% City Kerman Fresno 0.005%0.0042534% City Kingsburg Fresno 0.008%0.0066167% City Mendota Fresno 0.002%0.0019387% City Orange Cove Fresno 0.004%0.0035607% City Parlier Fresno 0.008%0.0069755% City Reedley Fresno 0.012%0.0098804% City Sanger Fresno 0.018%0.0146135% City Selma Fresno 0.015%0.0127537% County Glenn County Glenn 0.107% 0.131%0.1116978% County Humboldt County Humboldt 1.030% 1.260%1.0703185% 2 of 15 18.b Packet Pg. 417 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Arcata Humboldt 0.054%0.0447660% City Eureka Humboldt 0.117% 0.143%0.1216284% City Fortuna Humboldt 0.032%0.0266837% County Imperial County Imperial 0.258% 0.315%0.2679006% City Brawley Imperial 0.011%0.0087986% City Calexico Imperial 0.019%0.0152799% City El Centro Imperial 0.158%0.1302522% City Imperial Imperial 0.006%0.0048791% County Inyo County Inyo 0.073% 0.089%0.0754413% County Kern County Kern 2.517% 3.079%2.6159145% City Arvin Kern 0.006%0.0046425% City Bakersfield Kern 0.212%0.1747198% City California City Kern 0.009%0.0070820% City Delano Kern 0.030%0.0249316% City McFarland Kern 0.003%0.0025644% City Ridgecrest Kern 0.015%0.0120938% City Shafter Kern 0.013%0.0103417% City Tehachapi Kern 0.009%0.0073580% City Wasco Kern 0.008%0.0069861% County Kings County Kings 0.293%0.2413469% City Avenal Kings 0.007%0.0056335% City Corcoran Kings 0.013%0.0107032% City Hanford Kings 0.027%0.0226038% City Lemoore Kings 0.016%0.0131900% County Lake County Lake 0.795%0.6545389% City Clearlake Lake 0.041% 0.050%0.0426253% City Lakeport Lake 0.021% 0.026%0.0222964% County Lassen County Lassen 0.319% 0.391%0.3320610% City Susanville Lassen 0.027%0.0219295% County Los Angeles County Los Angeles 13.896% 16.999%14.4437559% 3 of 15 18.b Packet Pg. 418 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Agoura Hills Los Angeles 0.005%0.0040024% City Alhambra Los Angeles 0.042%0.0343309% City Arcadia Los Angeles 0.033%0.0267718% City Artesia Los Angeles 0.001%0.0005100% City Azusa Los Angeles 0.026%0.0210857% City Baldwin Park Los Angeles 0.027%0.0218520% City Bell Los Angeles 0.008%0.0068783% City Bellflower Los Angeles 0.002%0.0014485% City Bell Gardens Los Angeles 0.014%0.0114301% City Beverly Hills Los Angeles 0.065%0.0534897% City Burbank Los Angeles 0.100%0.0823132% City Calabasas Los Angeles 0.006%0.0048948% City Carson Los Angeles 0.019%0.0159805% City Cerritos Los Angeles 0.005%0.0039682% City Claremont Los Angeles 0.010%0.0082584% City Commerce Los Angeles 0.000%0.0002971% City Compton Los Angeles 0.044%0.0361882% City Covina Los Angeles 0.028%0.0229127% City Cudahy Los Angeles 0.001%0.0006020% City Culver City Los Angeles 0.055%0.0449894% City Diamond Bar Los Angeles 0.001%0.0006993% City Downey Los Angeles 0.052%0.0429994% City Duarte Los Angeles 0.003%0.0027261% City El Monte Los Angeles 0.031% 0.038%0.0318985% City El Segundo Los Angeles 0.033%0.0268020% City Gardena Los Angeles 0.034%0.0278088% City Glendale Los Angeles 0.166%0.1366586% City Glendora Los Angeles 0.016%0.0134411% City Hawaiian Gardens Los Angeles 0.005%0.0040549% City Hawthorne Los Angeles 0.050%0.0407833% 4 of 15 18.b Packet Pg. 419 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Hermosa Beach Los Angeles 0.018%0.0145307% City Huntington Park Los Angeles 0.023%0.0190667% City Inglewood Los Angeles 0.059%0.0489195% City La Cañada Flintridge Los Angeles 0.003%0.0025565% City Lakewood Los Angeles 0.005%0.0039971% City La Mirada Los Angeles 0.010%0.0081572% City Lancaster Los Angeles 0.045%0.0369689% City La Puente Los Angeles 0.002%0.0012999% City La Verne Los Angeles 0.024%0.0194190% City Lawndale Los Angeles 0.002%0.0017731% City Lomita Los Angeles 0.004%0.0031940% City Long Beach Los Angeles 0.439%0.3614151% City Los Angeles Los Angeles 2.715% 3.321%2.8218811% City Lynwood Los Angeles 0.016%0.0134345% City Malibu Los Angeles 0.002%0.0019269% City Manhattan Beach Los Angeles 0.032%0.0260686% City Maywood Los Angeles 0.004%0.0035528% City Monrovia Los Angeles 0.031%0.0254455% City Montebello Los Angeles 0.030%0.0250670% City Monterey Park Los Angeles 0.031%0.0256677% City Norwalk Los Angeles 0.031%0.0258228% City Palmdale Los Angeles 0.046%0.0375827% City Palos Verdes Estates Los Angeles 0.006%0.0053102% City Paramount Los Angeles 0.011%0.0091483% City Pasadena Los Angeles 0.146%0.1200524% City Pico Rivera Los Angeles 0.022%0.0183333% City Pomona Los Angeles 0.111%0.0911933% City Rancho Palos Verdes Los Angeles 0.002%0.0012645% City Redondo Beach Los Angeles 0.062%0.0506992% City Rosemead Los Angeles 0.003%0.0028260% 5 of 15 18.b Packet Pg. 420 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City San Dimas Los Angeles 0.003%0.0022016% City San Fernando Los Angeles 0.013%0.0104837% City San Gabriel Los Angeles 0.018%0.0147726% City San Marino Los Angeles 0.009%0.0073791% City Santa Clarita Los Angeles 0.022%0.0178167% City Santa Fe Springs Los Angeles 0.031%0.0257531% City Santa Monica Los Angeles 0.158%0.1298513% City Sierra Madre Los Angeles 0.006%0.0048646% City Signal Hill Los Angeles 0.010%0.0084884% City South El Monte Los Angeles 0.005%0.0039603% City South Gate Los Angeles 0.020%0.0166272% City South Pasadena Los Angeles 0.012%0.0095334% City Temple City Los Angeles 0.005%0.0039498% City Torrance Los Angeles 0.112%0.0919820% City Walnut Los Angeles 0.006%0.0047305% City West Covina Los Angeles 0.049%0.0404521% City West Hollywood Los Angeles 0.013%0.0108517% City Whittier Los Angeles 0.032%0.0260581% County Madera County Madera 0.349% 0.427%0.3630669% City Chowchilla Madera 0.012%0.0097332% City Madera Madera 0.039%0.0318441% County Marin County Marin 0.564% 0.690%0.5861325% City Larkspur Marin 0.015%0.0124697% City Mill Valley Marin 0.020%0.0168401% City Novato Marin 0.028%0.0229824% City San Anselmo Marin 0.009%0.0078062% City San Rafael Marin 0.089%0.0729823% County Mariposa County Mariposa 0.084% 0.103%0.0876131% County Mendocino County Mendocino 0.439% 0.536%0.4558394% City Ukiah Mendocino 0.039%0.0317153% 6 of 15 18.b Packet Pg. 421 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Merced County Merced 0.551% 0.674%0.5724262% City Atwater Merced 0.024%0.0195846% City Livingston Merced 0.006%0.0045873% City Los Banos Merced 0.020%0.0165142% City Merced Merced 0.061%0.0500762% County Modoc County Modoc 0.065% 0.080%0.0678250% County Mono County Mono 0.023% 0.029%0.0242606% County Monterey County Monterey 0.908% 1.111%0.9437083% City Greenfield Monterey 0.006%0.0050552% City King City Monterey 0.005%0.0037355% City Marina Monterey 0.017%0.0144098% City Monterey Monterey 0.041%0.0336540% City Pacific Grove Monterey 0.009%0.0074842% City Salinas Monterey 0.094%0.0776576% City Seaside Monterey 0.023%0.0191772% City Soledad Monterey 0.007%0.0060870% County Napa County Napa 0.288% 0.352%0.2994325% City American Canyon Napa 0.017%0.0136869% City Napa Napa 0.078%0.0642783% County Nevada County Nevada 0.441% 0.539%0.4579827% City Grass Valley Nevada 0.024%0.0197805% City Truckee Nevada 0.003%0.0023843% County Orange County Orange 4.364% 5.339%4.5363576% City Aliso Viejo Orange 0.014%0.0113841% City Anaheim Orange 0.554% 0.678%0.5759282% City Brea Orange 0.086%0.0708897% City Buena Park Orange 0.087%0.0714352% City Costa Mesa Orange 0.124% 0.152%0.1288366% City Cypress Orange 0.033%0.0271937% City Dana Point Orange 0.001%0.0005560% 7 of 15 18.b Packet Pg. 422 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Fountain Valley Orange 0.055%0.0455980% City Fullerton Orange 0.137% 0.168%0.1425744% City Garden Grove Orange 0.213%0.1752482% City Huntington Beach Orange 0.247% 0.302%0.2568420% City Irvine Orange 0.139% 0.170%0.1442350% City Laguna Beach Orange 0.047% 0.058%0.0493043% City Laguna Hills Orange 0.014%0.0115457% City Laguna Niguel Orange 0.001%0.0007071% City Laguna Woods Orange 0.001%0.0006546% City La Habra Orange 0.060% 0.073%0.0621049% City Lake Forest Orange 0.012%0.0101249% City La Palma Orange 0.012%0.0095439% City Los Alamitos Orange 0.008%0.0069190% City Mission Viejo Orange 0.014%0.0117560% City Newport Beach Orange 0.179%0.1470134% City Orange Orange 0.150%0.1231320% City Placentia Orange 0.029% 0.035%0.0298912% City Rancho Santa Margarita Orange 0.001%0.0006296% City San Clemente Orange 0.008% 0.010%0.0086083% City San Juan Capistrano Orange 0.008%0.0065510% City Santa Ana Orange 0.502% 0.614%0.5213866% City Seal Beach Orange 0.020%0.0165891% City Stanton Orange 0.035%0.0291955% City Tustin Orange 0.073%0.0600341% City Westminster Orange 0.104% 0.127%0.1082721% City Yorba Linda Orange 0.044%0.0362223% County Placer County Placer 1.045% 1.278%1.0861002% City Auburn Placer 0.017%0.0141114% City Lincoln Placer 0.031%0.0255599% City Rocklin Placer 0.076%0.0625485% 8 of 15 18.b Packet Pg. 423 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Roseville Placer 0.196%0.1616559% County Plumas County Plumas 0.205% 0.251%0.2128729% County Riverside County Riverside 4.534% 5.547%4.7128296% City Banning Riverside 0.017%0.0143848% City Beaumont Riverside 0.021%0.0171135% City Blythe Riverside 0.012%0.0096714% City Canyon Lake Riverside 0.000%0.0001761% City Cathedral City Riverside 0.067%0.0553614% City Coachella Riverside 0.021%0.0173054% City Corona Riverside 0.147%0.1207083% City Desert Hot Springs Riverside 0.024%0.0200433% City Eastvale Riverside 0.000%0.0002747% City Hemet Riverside 0.051%0.0421792% City Indio Riverside 0.056%0.0457794% City Jurupa Valley Riverside 0.001%0.0008991% City Lake Elsinore Riverside 0.021%0.0172949% City La Quinta Riverside 0.063%0.0516732% City Menifee Riverside 0.032%0.0260909% City Moreno Valley Riverside 0.137%0.1130348% City Murrieta Riverside 0.048% 0.059%0.0497423% City Norco Riverside 0.016%0.0134542% City Palm Desert Riverside 0.083%0.0682465% City Palm Springs Riverside 0.076%0.0629862% City Perris Riverside 0.009%0.0076774% City Rancho Mirage Riverside 0.052%0.0431098% City Riverside Riverside 0.268%0.2206279% City San Jacinto Riverside 0.010%0.0085936% City Temecula Riverside 0.022%0.0180086% City Wildomar Riverside 0.008%0.0062500% County Sacramento County Sacramento 3.797% 4.645%3.9465887% 9 of 15 18.b Packet Pg. 424 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Citrus Heights Sacramento 0.057%0.0465312% City Elk Grove Sacramento 0.130%0.1066994% City Folsom Sacramento 0.108%0.0890850% City Galt Sacramento 0.017%0.0143704% City Rancho Cordova Sacramento 0.008%0.0067679% City Sacramento Sacramento 0.721% 0.882%0.7496530% County San Benito County San Benito 0.106% 0.130%0.1101417% City Hollister San Benito 0.027%0.0225355% County San Bernardino County San Bernardino 3.259% 3.987%3.3878124% City Adelanto San Bernardino 0.008%0.0066640% City Apple Valley San Bernardino 0.025%0.0207360% City Barstow San Bernardino 0.015%0.0122056% City Chino San Bernardino 0.064%0.0525893% City Chino Hills San Bernardino 0.001%0.0006388% City Colton San Bernardino 0.031%0.0253443% City Fontana San Bernardino 0.112%0.0920543% City Grand Terrace San Bernardino 0.006%0.0051051% City Hesperia San Bernardino 0.035%0.0291522% City Highland San Bernardino 0.004%0.0029061% City Loma Linda San Bernardino 0.009%0.0071188% City Montclair San Bernardino 0.039%0.0322108% City Ontario San Bernardino 0.179%0.1472934% City Rancho Cucamonga San Bernardino 0.084%0.0689431% City Redlands San Bernardino 0.057%0.0469150% City Rialto San Bernardino 0.073%0.0603206% City San Bernardino San Bernardino 0.178%0.1461880% City Twentynine Palms San Bernardino 0.002%0.0012605% City Upland San Bernardino 0.052%0.0424460% City Victorville San Bernardino 0.033%0.0269400% City Yucaipa San Bernardino 0.016%0.0128772% 10 of 15 18.b Packet Pg. 425 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Yucca Valley San Bernardino 0.003%0.0021228% County San Diego County San Diego 5.706% 6.980%5.9309748% City Carlsbad San Diego 0.128%0.1050485% City Chula Vista San Diego 0.189% 0.231%0.1961456% City Coronado San Diego 0.044%0.0359095% City El Cajon San Diego 0.113%0.0933582% City Encinitas San Diego 0.061% 0.074%0.0630289% City Escondido San Diego 0.145%0.1192204% City Imperial Beach San Diego 0.014%0.0118283% City La Mesa San Diego 0.055% 0.068%0.0575593% City Lemon Grove San Diego 0.022%0.0183911% City National City San Diego 0.080%0.0656808% City Oceanside San Diego 0.213%0.1753428% City Poway San Diego 0.062%0.0511040% City San Diego San Diego 1.975% 2.416%2.0531169% City San Marcos San Diego 0.089%0.0733897% City Santee San Diego 0.033%0.0268401% City Solana Beach San Diego 0.017%0.0138564% City Vista San Diego 0.052%0.0425144% Consolidated San Francisco San Francisco 3.026% 3.702%3.1457169% County San Joaquin County San Joaquin 1.680% 2.055%1.7460399% City Lathrop San Joaquin 0.009%0.0075394% City Lodi San Joaquin 0.053%0.0439484% City Manteca San Joaquin 0.054%0.0443454% City Ripon San Joaquin 0.013%0.0104219% City Stockton San Joaquin 0.313% 0.383%0.3256176% City Tracy San Joaquin 0.084%0.0692047% County San Luis Obispo County San Luis Obispo 0.816% 0.999%0.8484126% City Arroyo Grande San Luis Obispo 0.024%0.0199053% City Atascadero San Luis Obispo 0.029%0.0240680% 11 of 15 18.b Packet Pg. 426 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City El Paso de Robles (Paso Robles) San Luis Obispo 0.043%0.0353456% City Grover Beach San Luis Obispo 0.017%0.0137881% City Morro Bay San Luis Obispo 0.020%0.0160922% City San Luis Obispo San Luis Obispo 0.077%0.0637841% County San Mateo County San Mateo 1.074% 1.313%1.1159599% City Belmont San Mateo 0.021%0.0169860% City Burlingame San Mateo 0.019%0.0152537% City Daly City San Mateo 0.044%0.0363880% City East Palo Alto San Mateo 0.013%0.0103982% City Foster City San Mateo 0.020%0.0166101% City Half Moon Bay San Mateo 0.004%0.0031638% City Hillsborough San Mateo 0.013%0.0110029% City Menlo Park San Mateo 0.015%0.0126209% City Millbrae San Mateo 0.013%0.0105836% City Pacifica San Mateo 0.016%0.0130625% City Redwood City San Mateo 0.056%0.0463511% City San Bruno San Mateo 0.021%0.0172161% City San Carlos San Mateo 0.013%0.0108885% City San Mateo San Mateo 0.052%0.0425841% City South San Francisco San Mateo 0.043%0.0353943% County Santa Barbara County Santa Barbara 1.132% 1.385%1.1768968% City Carpinteria Santa Barbara 0.001%0.0008938% City Goleta Santa Barbara 0.004%0.0028969% City Lompoc Santa Barbara 0.047%0.0389379% City Santa Barbara Santa Barbara 0.122%0.1004559% City Santa Maria Santa Barbara 0.058%0.0479179% County Santa Clara County Santa Clara 2.404% 2.941%2.4987553% City Campbell Santa Clara 0.014%0.0112566% City Cupertino Santa Clara 0.008%0.0066824% City Gilroy Santa Clara 0.025%0.0202891% 12 of 15 18.b Packet Pg. 427 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Los Altos Santa Clara 0.013%0.0103338% City Los Gatos Santa Clara 0.013%0.0103220% City Milpitas Santa Clara 0.036%0.0298120% City Morgan Hill Santa Clara 0.015%0.0124619% City Mountain View Santa Clara 0.041%0.0334608% City Palo Alto Santa Clara 0.039%0.0323080% City San Jose Santa Clara 0.294% 0.360%0.3054960% City Santa Clara Santa Clara 0.067%0.0549723% City Saratoga Santa Clara 0.004%0.0034161% City Sunnyvale Santa Clara 0.053%0.0434069% County Santa Cruz County Santa Cruz 0.783% 0.957%0.8135396% City Capitola Santa Cruz 0.020%0.0168191% City Santa Cruz Santa Cruz 0.143%0.1180348% City Scotts Valley Santa Cruz 0.015%0.0126525% City Watsonville Santa Cruz 0.063%0.0520136% County Shasta County Shasta 1.095% 1.339%1.1380191% City Anderson Shasta 0.024%0.0198896% City Redding Shasta 0.284%0.2334841% City Shasta Lake Shasta 0.004%0.0031993% County Siskiyou County Siskiyou 0.228% 0.279%0.2373393% County Solano County Solano 0.760%0.6260795% City Benicia Solano 0.031%0.0253903% City Dixon Solano 0.016%0.0130849% City Fairfield Solano 0.109%0.0897317% City Suisun City Solano 0.021%0.0176183% City Vacaville Solano 0.119%0.0976497% City Vallejo Solano 0.167%0.1373644% County Sonoma County Sonoma 1.218% 1.490%1.2661290% City Healdsburg Sonoma 0.032%0.0266929% City Petaluma Sonoma 0.081%0.0667507% 13 of 15 18.b Packet Pg. 428 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Rohnert Park Sonoma 0.041%0.0340759% City Santa Rosa Sonoma 0.184%0.1519070% City Sonoma Sonoma 0.022%0.0183438% City Windsor Sonoma 0.016%0.0129298% County Stanislaus County Stanislaus 1.722%1.4182273% City Ceres Stanislaus 0.041%0.0340260% City Modesto Stanislaus 0.217%0.1788759% City Newman Stanislaus 0.006%0.0046964% City Oakdale Stanislaus 0.018%0.0145531% City Patterson Stanislaus 0.015%0.0126590% City Riverbank Stanislaus 0.010%0.0085699% City Turlock Stanislaus 0.065%0.0531966% County Sutter County Sutter 0.306% 0.374%0.3179548% City Yuba City Sutter 0.074%0.0606242% County Tehama County Tehama 0.213% 0.261%0.2216654% City Red Bluff Tehama 0.014%0.0117771% County Trinity County Trinity 0.082% 0.101%0.0855476% County Tulare County Tulare 0.809% 0.990%0.8410949% City Dinuba Tulare 0.014%0.0116929% City Exeter Tulare 0.004%0.0032479% City Farmersville Tulare 0.003%0.0027879% City Lindsay Tulare 0.007%0.0057111% City Porterville Tulare 0.021%0.0171845% City Tulare Tulare 0.037%0.0302273% City Visalia Tulare 0.066%0.0545872% County Tuolumne County Tuolumne 0.486% 0.594%0.5047621% County Ventura County Ventura 2.192% 2.681%2.2781201% City Camarillo Ventura 0.002%0.0012815% City Fillmore Ventura 0.002%0.0020294% City Moorpark Ventura 0.008%0.0067337% 14 of 15 18.b Packet Pg. 429 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Oxnard Ventura 0.156% 0.190%0.1617338% City Port Hueneme Ventura 0.021%0.0174145% City San Buenaventura (Ventura) Ventura 0.085%0.0702181% City Santa Paula Ventura 0.014%0.0119072% City Simi Valley Ventura 0.065%0.0533043% City Thousand Oaks Ventura 0.022%0.0179902% County Yolo County Yolo 0.357% 0.437%0.3713319% City Davis Yolo 0.055%0.0451747% City West Sacramento Yolo 0.066%0.0544321% City Woodland Yolo 0.058%0.0477904% County Yuba County Yuba 0.214% 0.262%0.2225679% City Marysville Yuba 0.014%0.0112079% 15 of 15 18.b Packet Pg. 430 1 APPENDIX 2 Cost Reimbursement Procedure 1. Additional defined terms: a)Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were paid or incurred (i) prior to July 21, 2021 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting this CA Distributor Allocation Agreement. Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs. b)First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section X and Exhibit R of the Distributor Settlement Agreement or Section XI and Exhibit R of the Janssen Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c)Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d)Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses. 2. Cost Reimbursement to Plaintiff Subdivision a)Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating a National Opioid Settlement with Distributors, Johnson & Johnson, and others. b)Claims Procedure. i.If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section X or Exhibit R of the Distributor Settlement Agreement or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for 18.b Packet Pg. 431 2 Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii.A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act. iii.The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs. iv.The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v.Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. vi.The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section V.B.2 of the Distributor Agreement. vii.A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and the Distributors a 18.b Packet Pg. 432 3 report of the fees and expenses incurred by the Special Master pursuant to Section V.B.2 of the Distributor Agreement. c)Claims Priority and Limitation. i.The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii.Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices. iii.Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv.Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full. v.In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi.In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Distributor Settlement Agreement and the Janssen Settlement Agreement be used to pay Costs. d)Collateral Source Payments and Third-Party Settlement. i.In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. 18.b Packet Pg. 433 4 ii.In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above. 18.b Packet Pg. 434 APPENDIX 3 CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Distributors Settlement and their counsel. In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement). [SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State Back- Stop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Expenses and Costs) of the Distributor Settlement Agreement. Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Distributor Settlement Agreement and CA Distributor Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Distributor Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Distributors Settlement. [COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Distributor Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments. The Attorney General is executing this agreement solely because the definition of “State Back- Stop Agreement” in Exhibit R of the Distributor Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party. [DATE] [SUBDIVISION SIGNATURE BLOCK] [DATE] [COUNSEL SIGNATURE BLOCK] [DATE] [ATTORNEY GENERAL SIGNATURE BLOCK] 18.b Packet Pg. 435 Thank you for registering your subdivision on the national settlement website and for considering participating in the proposed Settlement Agreement with Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutica, Inc. (collectively “Janssen”). This virtual envelope contains a Participation Form for the settlement including a release of claims and a separate Signature Page for California’s Proposed State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds. Both documents in this envelope must be executed, without alteration, and submitted in order for your subdivision to be considered potentially “participating.” The sign-on period for subdivisions ends on January 2, 2022. On or after that date, the states (in consultation with the subdivisions) and Janssen will determine whether the subdivision participation rate is sufficient for the settlement to move forward. If the deal moves forward, your release will become effective. If it does not, it will not. As a reminder, if you have not already started your review of the settlement documentation, detailed information about the Settlements may be found at: https://nationalopioidsettlement.com/. This national settlement website also includes links to information about how the Settlements are being implemented in your state and how settlement funds will be allocated within your state, including information about, and links to, any applicable allocation agreement or legislation. This website will be supplemented as additional documents are created. California has also created a state-specific website which may be accessed here: https://oag.ca.gov/opioids. If you have questions, please contact OpioidSettlement-LocalGovernment@doj.ca.gov. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 436 1 Settlement Participation Form Governmental Entity: Palo Alto city State: CA Authorized Signatory: /officialname/ Address 1: /address1/ Address 2: /address2/ City, State, Zip: /cit//state//zi/ Phone: /Phone/ Email: /email/ The governmental entity identified above (“Governmental Entity”), in order to obtain and in consideration for the benefits provided to the Governmental Entity pursuant to the Settlement Agreement dated July 21, 2021 (“Janssen Settlement”), and acting through the undersigned authorized official, hereby elects to participate in the Janssen Settlement, release all Released Claims against all Released Entities, and agrees as follows. 1. The Governmental Entity is aware of and has reviewed the Janssen Settlement, understands that all terms in this Election and Release have the meanings defined therein, and agrees that by this Election, the Governmental Entity elects to participate in the Janssen Settlement and become a Participating Subdivision as provided therein. 2. The Governmental Entity shall, within 14 days of the Reference Date and prior to the filing of the Consent Judgment, dismiss with prejudice any Released Claims that it has filed. 3. The Governmental Entity agrees to the terms of the Janssen Settlement pertaining to Subdivisions as defined therein. 4. By agreeing to the terms of the Janssen Settlement and becoming a Releasor, the Governmental Entity is entitled to the benefits provided therein, including, if applicable, monetary payments beginning after the Effective Date. 5. The Governmental Entity agrees to use any monies it receives through the Janssen Settlement solely for the purposes provided therein. 6. The Governmental Entity submits to the jurisdiction of the court in the Governmental Entity’s state where the Consent Judgment is filed for purposes limited to that court’s role as provided in, and for resolving disputes to the extent provided in, the Janssen Settlement. 7. The Governmental Entity has the right to enforce the Janssen Settlement as provided therein. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 437 2 8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for all purposes in the Janssen Settlement, including but not limited to all provisions of Section IV (Release), and along with all departments, agencies, divisions, boards, commissions, districts, instrumentalities of any kind and attorneys, and any person in their official capacity elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, and any other entity identified in the definition of Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Janssen Settlement are intended by the Parties to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of the Governmental Entity to release claims. The Janssen Settlement shall be a complete bar to any Released Claim. 9. In connection with the releases provided for in the Janssen Settlement, each Governmental Entity expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads: General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her, would have materially affected his or her settlement with the debtor or released party. A Releasor may hereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Governmental Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Governmental Entities’ decision to participate in the Janssen Settlement. 10. Nothing herein is intended to modify in any way the terms of the Janssen Settlement, to which Governmental Entity hereby agrees. To the extent this Election and Release is interpreted differently from the Janssen Settlement in any respect, the Janssen Settlement controls. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 438 3 I swear under penalty of perjury that I have all necessary power and authorization to execute this Election and Release on behalf of the Governmental Entity. Signature:/signer_1/ Name:/name_1/ Title:/title_1/ Date:/date_1/ DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 439 1 Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Janssen Settlement 1. Introduction Pursuant to the Janssen Settlement Agreement, dated as of July 21, 2021, and any revision thereto (the “Janssen Settlement Agreement”), including Section VI and Exhibit O, the State of California proposes this agreement (the “CA Janssen Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections V and VI of the Janssen Settlement Agreement.1 For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections X or XI of the Janssen Settlement Agreement. Pursuant to Exhibit O, Paragraph 4, of the Janssen Settlement Agreement, acceptance of this CA Janssen Allocation Agreement is a requirement to be an Initial Participating Subdivision. 2. Definitions a)CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Janssen Settlement Agreement. b)Distributor Settlement Agreement means the Distributor Settlement Agreement dated July 21, 2021, and any revision thereto. c)CA Litigating Special District means a Litigating Special District located in California. CA Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, and LA Care Health Plan. d)Plaintiff Subdivision means a Subdivision located in California, other than a CA Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020. e)Opioid Defendant means any defendant (including but not limited to Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., 1 A parallel but separate agreement (the “CA Distributor Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Distributor Settlement Agreement. An eligible Subdivision may elect to participate in either the Distributor Settlement or the Janssen Settlement, or in both. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 440 2 AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020. 3. General Terms This agreement is subject to the requirements of the Janssen Settlement Agreement, as well as applicable law, and the Janssen Settlement Agreement governs over any inconsistent provision of this CA Janssen Allocation Agreement. Terms used in this CA Janssen Allocation Agreement have the same meaning as in the Janssen Settlement Agreement unless otherwise defined herein. Pursuant to Section VI(D)(1) of the Janssen Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section VI(B)(2) of the Janssen Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation. 4. State Allocation The Settlement Fund payments to California,2 pursuant to the Janssen Settlement Agreement, shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Janssen Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”). A.State of California Allocation Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation. B.CA Abatement Accounts Fund i. Allocation of CA Abatement Accounts Funds a)Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA 2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 441 3 Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds. b)A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Janssen Settlement Agreement. c)A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight). d) A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Janssen Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions. e)The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. f) Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 442 4 ii. Use of CA Abatement Accounts Funds a)The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Janssen Settlement Agreement. b) In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities: (1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD; (4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or (5) interventions to prevent drug addiction in vulnerable youth. c)The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d) For the avoidance of doubt, and subject to the requirements of the Janssen Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 443 5 iii.CA Abatement Accounts Fund Oversight a)Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement. b) If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Janssen Settlement Agreement or this CA Janssen Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c)If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame. d) If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Janssen Settlement Agreement or this CA Janssen Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement. e)Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions. C. CA Subdivision Fund i.Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Janssen Settlement Agreement and this CA Janssen Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid- related expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 444 6 The CA Subdivision Funds will be allocated as follows: a)First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document; b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c)Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant. D. Provision for State Back-Stop Agreement On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Janssen Settlement Agreement and, if applicable, the Distributor Settlement Agreement. A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(R), of the Janssen Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Janssen Settlement, and if applicable, the Distributor Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Janssen Settlement Agreement and, if applicable, the Distributor Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments. To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 445 7 General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms. For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General. 5. State and Subdivision Reporting a)DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site. b) Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Janssen Settlement Agreement and this CA Janssen Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions. c)The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision. d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Janssen Settlement Agreement and this CA Janssen Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section VI(B)(2) of the Janssen Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and Janssen. e)In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 446 8 6. Miscellaneous a)The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Janssen Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa. b) Except as provided in the Janssen Settlement Agreement, this CA Janssen Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party. c)Except as provided in the CA Janssen Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d) Except as provided in the Janssen Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 447 The undersigned, Palo Alto city, ACKNOWLEDGES acceptance of this Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds - Janssen Settlement is a requirement to be an Initial Participating Subdivision in the Janssen Settlement and ACCEPTS this Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds - Janssen Settlement. I swear under penalty of perjury that I have all necessary power and authorization to execute this Election and Release on behalf of the Governmental Entity. Signature:/signer_1/ Name:/name_1/ Title:/title_1/ Date:/date_1/ DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 448 APPENDIX 1 DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Janssen Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one- hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 449 APPENDIX 1 100.000% 100.000% 100.000% Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Alameda County Alameda 2.332% 2.853%2.4237952% City Alameda Alameda 0.069%0.0570162% City Albany Alameda 0.013%0.0107768% City Berkeley Alameda 0.152%0.1249656% City Dublin Alameda 0.033% 0.040%0.0338810% City Emeryville Alameda 0.023%0.0185765% City Fremont Alameda 0.108%0.0888576% City Hayward Alameda 0.117%0.0966218% City Livermore Alameda 0.054%0.0446740% City Newark Alameda 0.026%0.0217626% City Oakland Alameda 0.486% 0.595%0.5055601% City Piedmont Alameda 0.014%0.0114064% City Pleasanton Alameda 0.067%0.0554547% City San Leandro Alameda 0.039%0.0321267% City Union City Alameda 0.043%0.0352484% County Amador County Amador 0.226% 0.277%0.2349885% County Butte County Butte 1.615% 1.975%1.6783178% City Chico Butte 0.216% 0.264%0.2246499% City Oroville Butte 0.079%0.0646595% County Calaveras County Calaveras 0.226% 0.277%0.2351644% County Colusa County Colusa 0.059%0.0489221% County Contra Costa County Contra Costa 2.102% 2.571%2.1844585% City Antioch Contra Costa 0.037%0.0301879% City Brentwood Contra Costa 0.026%0.0215339% City Clayton Contra Costa 0.002%0.0018060% City Concord Contra Costa 0.055%0.0456676% City Danville Contra Costa 0.010%0.0082255% City El Cerrito Contra Costa 0.023%0.0189024% City Hercules Contra Costa 0.010%0.0078273% 1 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 450 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Lafayette Contra Costa 0.006%0.0046030% City Martinez Contra Costa 0.012%0.0098593% City Moraga Contra Costa 0.004%0.0031007% City Oakley Contra Costa 0.010%0.0079416% City Orinda Contra Costa 0.005%0.0038157% City Pinole Contra Costa 0.013%0.0110909% City Pittsburg Contra Costa 0.053%0.0436369% City Pleasant Hill Contra Costa 0.013%0.0106309% City Richmond Contra Costa 0.146%0.1201444% City San Pablo Contra Costa 0.018%0.0148843% City San Ramon Contra Costa 0.021%0.0176459% City Walnut Creek Contra Costa 0.026%0.0212132% County Del Norte County Del Norte 0.114% 0.140%0.1189608% County El Dorado County El Dorado 0.768% 0.939%0.7980034% City Placerville El Dorado 0.015%0.0127642% City South Lake Tahoe El Dorado 0.081%0.0665456% County Fresno County Fresno 1.895% 2.318%1.9693410% City Clovis Fresno 0.065%0.0536211% City Coalinga Fresno 0.012%0.0098554% City Fresno Fresno 0.397%0.3270605% City Kerman Fresno 0.005%0.0042534% City Kingsburg Fresno 0.008%0.0066167% City Mendota Fresno 0.002%0.0019387% City Orange Cove Fresno 0.004%0.0035607% City Parlier Fresno 0.008%0.0069755% City Reedley Fresno 0.012%0.0098804% City Sanger Fresno 0.018%0.0146135% City Selma Fresno 0.015%0.0127537% County Glenn County Glenn 0.107% 0.131%0.1116978% County Humboldt County Humboldt 1.030% 1.260%1.0703185% 2 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 451 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Arcata Humboldt 0.054%0.0447660% City Eureka Humboldt 0.117% 0.143%0.1216284% City Fortuna Humboldt 0.032%0.0266837% County Imperial County Imperial 0.258% 0.315%0.2679006% City Brawley Imperial 0.011%0.0087986% City Calexico Imperial 0.019%0.0152799% City El Centro Imperial 0.158%0.1302522% City Imperial Imperial 0.006%0.0048791% County Inyo County Inyo 0.073% 0.089%0.0754413% County Kern County Kern 2.517% 3.079%2.6159145% City Arvin Kern 0.006%0.0046425% City Bakersfield Kern 0.212%0.1747198% City California City Kern 0.009%0.0070820% City Delano Kern 0.030%0.0249316% City McFarland Kern 0.003%0.0025644% City Ridgecrest Kern 0.015%0.0120938% City Shafter Kern 0.013%0.0103417% City Tehachapi Kern 0.009%0.0073580% City Wasco Kern 0.008%0.0069861% County Kings County Kings 0.293%0.2413469% City Avenal Kings 0.007%0.0056335% City Corcoran Kings 0.013%0.0107032% City Hanford Kings 0.027%0.0226038% City Lemoore Kings 0.016%0.0131900% County Lake County Lake 0.795%0.6545389% City Clearlake Lake 0.041% 0.050%0.0426253% City Lakeport Lake 0.021% 0.026%0.0222964% County Lassen County Lassen 0.319% 0.391%0.3320610% City Susanville Lassen 0.027%0.0219295% County Los Angeles County Los Angeles 13.896% 16.999%14.4437559% 3 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 452 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Agoura Hills Los Angeles 0.005%0.0040024% City Alhambra Los Angeles 0.042%0.0343309% City Arcadia Los Angeles 0.033%0.0267718% City Artesia Los Angeles 0.001%0.0005100% City Azusa Los Angeles 0.026%0.0210857% City Baldwin Park Los Angeles 0.027%0.0218520% City Bell Los Angeles 0.008%0.0068783% City Bellflower Los Angeles 0.002%0.0014485% City Bell Gardens Los Angeles 0.014%0.0114301% City Beverly Hills Los Angeles 0.065%0.0534897% City Burbank Los Angeles 0.100%0.0823132% City Calabasas Los Angeles 0.006%0.0048948% City Carson Los Angeles 0.019%0.0159805% City Cerritos Los Angeles 0.005%0.0039682% City Claremont Los Angeles 0.010%0.0082584% City Commerce Los Angeles 0.000%0.0002971% City Compton Los Angeles 0.044%0.0361882% City Covina Los Angeles 0.028%0.0229127% City Cudahy Los Angeles 0.001%0.0006020% City Culver City Los Angeles 0.055%0.0449894% City Diamond Bar Los Angeles 0.001%0.0006993% City Downey Los Angeles 0.052%0.0429994% City Duarte Los Angeles 0.003%0.0027261% City El Monte Los Angeles 0.031% 0.038%0.0318985% City El Segundo Los Angeles 0.033%0.0268020% City Gardena Los Angeles 0.034%0.0278088% City Glendale Los Angeles 0.166%0.1366586% City Glendora Los Angeles 0.016%0.0134411% City Hawaiian Gardens Los Angeles 0.005%0.0040549% City Hawthorne Los Angeles 0.050%0.0407833% 4 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 453 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Hermosa Beach Los Angeles 0.018%0.0145307% City Huntington Park Los Angeles 0.023%0.0190667% City Inglewood Los Angeles 0.059%0.0489195% City La Cañada Flintridge Los Angeles 0.003%0.0025565% City Lakewood Los Angeles 0.005%0.0039971% City La Mirada Los Angeles 0.010%0.0081572% City Lancaster Los Angeles 0.045%0.0369689% City La Puente Los Angeles 0.002%0.0012999% City La Verne Los Angeles 0.024%0.0194190% City Lawndale Los Angeles 0.002%0.0017731% City Lomita Los Angeles 0.004%0.0031940% City Long Beach Los Angeles 0.439%0.3614151% City Los Angeles Los Angeles 2.715% 3.321%2.8218811% City Lynwood Los Angeles 0.016%0.0134345% City Malibu Los Angeles 0.002%0.0019269% City Manhattan Beach Los Angeles 0.032%0.0260686% City Maywood Los Angeles 0.004%0.0035528% City Monrovia Los Angeles 0.031%0.0254455% City Montebello Los Angeles 0.030%0.0250670% City Monterey Park Los Angeles 0.031%0.0256677% City Norwalk Los Angeles 0.031%0.0258228% City Palmdale Los Angeles 0.046%0.0375827% City Palos Verdes Estates Los Angeles 0.006%0.0053102% City Paramount Los Angeles 0.011%0.0091483% City Pasadena Los Angeles 0.146%0.1200524% City Pico Rivera Los Angeles 0.022%0.0183333% City Pomona Los Angeles 0.111%0.0911933% City Rancho Palos Verdes Los Angeles 0.002%0.0012645% City Redondo Beach Los Angeles 0.062%0.0506992% City Rosemead Los Angeles 0.003%0.0028260% 5 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 454 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City San Dimas Los Angeles 0.003%0.0022016% City San Fernando Los Angeles 0.013%0.0104837% City San Gabriel Los Angeles 0.018%0.0147726% City San Marino Los Angeles 0.009%0.0073791% City Santa Clarita Los Angeles 0.022%0.0178167% City Santa Fe Springs Los Angeles 0.031%0.0257531% City Santa Monica Los Angeles 0.158%0.1298513% City Sierra Madre Los Angeles 0.006%0.0048646% City Signal Hill Los Angeles 0.010%0.0084884% City South El Monte Los Angeles 0.005%0.0039603% City South Gate Los Angeles 0.020%0.0166272% City South Pasadena Los Angeles 0.012%0.0095334% City Temple City Los Angeles 0.005%0.0039498% City Torrance Los Angeles 0.112%0.0919820% City Walnut Los Angeles 0.006%0.0047305% City West Covina Los Angeles 0.049%0.0404521% City West Hollywood Los Angeles 0.013%0.0108517% City Whittier Los Angeles 0.032%0.0260581% County Madera County Madera 0.349% 0.427%0.3630669% City Chowchilla Madera 0.012%0.0097332% City Madera Madera 0.039%0.0318441% County Marin County Marin 0.564% 0.690%0.5861325% City Larkspur Marin 0.015%0.0124697% City Mill Valley Marin 0.020%0.0168401% City Novato Marin 0.028%0.0229824% City San Anselmo Marin 0.009%0.0078062% City San Rafael Marin 0.089%0.0729823% County Mariposa County Mariposa 0.084% 0.103%0.0876131% County Mendocino County Mendocino 0.439% 0.536%0.4558394% City Ukiah Mendocino 0.039%0.0317153% 6 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 455 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Merced County Merced 0.551% 0.674%0.5724262% City Atwater Merced 0.024%0.0195846% City Livingston Merced 0.006%0.0045873% City Los Banos Merced 0.020%0.0165142% City Merced Merced 0.061%0.0500762% County Modoc County Modoc 0.065% 0.080%0.0678250% County Mono County Mono 0.023% 0.029%0.0242606% County Monterey County Monterey 0.908% 1.111%0.9437083% City Greenfield Monterey 0.006%0.0050552% City King City Monterey 0.005%0.0037355% City Marina Monterey 0.017%0.0144098% City Monterey Monterey 0.041%0.0336540% City Pacific Grove Monterey 0.009%0.0074842% City Salinas Monterey 0.094%0.0776576% City Seaside Monterey 0.023%0.0191772% City Soledad Monterey 0.007%0.0060870% County Napa County Napa 0.288% 0.352%0.2994325% City American Canyon Napa 0.017%0.0136869% City Napa Napa 0.078%0.0642783% County Nevada County Nevada 0.441% 0.539%0.4579827% City Grass Valley Nevada 0.024%0.0197805% City Truckee Nevada 0.003%0.0023843% County Orange County Orange 4.364% 5.339%4.5363576% City Aliso Viejo Orange 0.014%0.0113841% City Anaheim Orange 0.554% 0.678%0.5759282% City Brea Orange 0.086%0.0708897% City Buena Park Orange 0.087%0.0714352% City Costa Mesa Orange 0.124% 0.152%0.1288366% City Cypress Orange 0.033%0.0271937% City Dana Point Orange 0.001%0.0005560% 7 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 456 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Fountain Valley Orange 0.055%0.0455980% City Fullerton Orange 0.137% 0.168%0.1425744% City Garden Grove Orange 0.213%0.1752482% City Huntington Beach Orange 0.247% 0.302%0.2568420% City Irvine Orange 0.139% 0.170%0.1442350% City Laguna Beach Orange 0.047% 0.058%0.0493043% City Laguna Hills Orange 0.014%0.0115457% City Laguna Niguel Orange 0.001%0.0007071% City Laguna Woods Orange 0.001%0.0006546% City La Habra Orange 0.060% 0.073%0.0621049% City Lake Forest Orange 0.012%0.0101249% City La Palma Orange 0.012%0.0095439% City Los Alamitos Orange 0.008%0.0069190% City Mission Viejo Orange 0.014%0.0117560% City Newport Beach Orange 0.179%0.1470134% City Orange Orange 0.150%0.1231320% City Placentia Orange 0.029% 0.035%0.0298912% City Rancho Santa Margarita Orange 0.001%0.0006296% City San Clemente Orange 0.008% 0.010%0.0086083% City San Juan Capistrano Orange 0.008%0.0065510% City Santa Ana Orange 0.502% 0.614%0.5213866% City Seal Beach Orange 0.020%0.0165891% City Stanton Orange 0.035%0.0291955% City Tustin Orange 0.073%0.0600341% City Westminster Orange 0.104% 0.127%0.1082721% City Yorba Linda Orange 0.044%0.0362223% County Placer County Placer 1.045% 1.278%1.0861002% City Auburn Placer 0.017%0.0141114% City Lincoln Placer 0.031%0.0255599% City Rocklin Placer 0.076%0.0625485% 8 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 457 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Roseville Placer 0.196%0.1616559% County Plumas County Plumas 0.205% 0.251%0.2128729% County Riverside County Riverside 4.534% 5.547%4.7128296% City Banning Riverside 0.017%0.0143848% City Beaumont Riverside 0.021%0.0171135% City Blythe Riverside 0.012%0.0096714% City Canyon Lake Riverside 0.000%0.0001761% City Cathedral City Riverside 0.067%0.0553614% City Coachella Riverside 0.021%0.0173054% City Corona Riverside 0.147%0.1207083% City Desert Hot Springs Riverside 0.024%0.0200433% City Eastvale Riverside 0.000%0.0002747% City Hemet Riverside 0.051%0.0421792% City Indio Riverside 0.056%0.0457794% City Jurupa Valley Riverside 0.001%0.0008991% City Lake Elsinore Riverside 0.021%0.0172949% City La Quinta Riverside 0.063%0.0516732% City Menifee Riverside 0.032%0.0260909% City Moreno Valley Riverside 0.137%0.1130348% City Murrieta Riverside 0.048% 0.059%0.0497423% City Norco Riverside 0.016%0.0134542% City Palm Desert Riverside 0.083%0.0682465% City Palm Springs Riverside 0.076%0.0629862% City Perris Riverside 0.009%0.0076774% City Rancho Mirage Riverside 0.052%0.0431098% City Riverside Riverside 0.268%0.2206279% City San Jacinto Riverside 0.010%0.0085936% City Temecula Riverside 0.022%0.0180086% City Wildomar Riverside 0.008%0.0062500% County Sacramento County Sacramento 3.797% 4.645%3.9465887% 9 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 458 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Citrus Heights Sacramento 0.057%0.0465312% City Elk Grove Sacramento 0.130%0.1066994% City Folsom Sacramento 0.108%0.0890850% City Galt Sacramento 0.017%0.0143704% City Rancho Cordova Sacramento 0.008%0.0067679% City Sacramento Sacramento 0.721% 0.882%0.7496530% County San Benito County San Benito 0.106% 0.130%0.1101417% City Hollister San Benito 0.027%0.0225355% County San Bernardino County San Bernardino 3.259% 3.987%3.3878124% City Adelanto San Bernardino 0.008%0.0066640% City Apple Valley San Bernardino 0.025%0.0207360% City Barstow San Bernardino 0.015%0.0122056% City Chino San Bernardino 0.064%0.0525893% City Chino Hills San Bernardino 0.001%0.0006388% City Colton San Bernardino 0.031%0.0253443% City Fontana San Bernardino 0.112%0.0920543% City Grand Terrace San Bernardino 0.006%0.0051051% City Hesperia San Bernardino 0.035%0.0291522% City Highland San Bernardino 0.004%0.0029061% City Loma Linda San Bernardino 0.009%0.0071188% City Montclair San Bernardino 0.039%0.0322108% City Ontario San Bernardino 0.179%0.1472934% City Rancho Cucamonga San Bernardino 0.084%0.0689431% City Redlands San Bernardino 0.057%0.0469150% City Rialto San Bernardino 0.073%0.0603206% City San Bernardino San Bernardino 0.178%0.1461880% City Twentynine Palms San Bernardino 0.002%0.0012605% City Upland San Bernardino 0.052%0.0424460% City Victorville San Bernardino 0.033%0.0269400% City Yucaipa San Bernardino 0.016%0.0128772% 10 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 459 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Yucca Valley San Bernardino 0.003%0.0021228% County San Diego County San Diego 5.706% 6.980%5.9309748% City Carlsbad San Diego 0.128%0.1050485% City Chula Vista San Diego 0.189% 0.231%0.1961456% City Coronado San Diego 0.044%0.0359095% City El Cajon San Diego 0.113%0.0933582% City Encinitas San Diego 0.061% 0.074%0.0630289% City Escondido San Diego 0.145%0.1192204% City Imperial Beach San Diego 0.014%0.0118283% City La Mesa San Diego 0.055% 0.068%0.0575593% City Lemon Grove San Diego 0.022%0.0183911% City National City San Diego 0.080%0.0656808% City Oceanside San Diego 0.213%0.1753428% City Poway San Diego 0.062%0.0511040% City San Diego San Diego 1.975% 2.416%2.0531169% City San Marcos San Diego 0.089%0.0733897% City Santee San Diego 0.033%0.0268401% City Solana Beach San Diego 0.017%0.0138564% City Vista San Diego 0.052%0.0425144% Consolidated San Francisco San Francisco 3.026% 3.702%3.1457169% County San Joaquin County San Joaquin 1.680% 2.055%1.7460399% City Lathrop San Joaquin 0.009%0.0075394% City Lodi San Joaquin 0.053%0.0439484% City Manteca San Joaquin 0.054%0.0443454% City Ripon San Joaquin 0.013%0.0104219% City Stockton San Joaquin 0.313% 0.383%0.3256176% City Tracy San Joaquin 0.084%0.0692047% County San Luis Obispo County San Luis Obispo 0.816% 0.999%0.8484126% City Arroyo Grande San Luis Obispo 0.024%0.0199053% City Atascadero San Luis Obispo 0.029%0.0240680% 11 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 460 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City El Paso de Robles (Paso Robles) San Luis Obispo 0.043%0.0353456% City Grover Beach San Luis Obispo 0.017%0.0137881% City Morro Bay San Luis Obispo 0.020%0.0160922% City San Luis Obispo San Luis Obispo 0.077%0.0637841% County San Mateo County San Mateo 1.074% 1.313%1.1159599% City Belmont San Mateo 0.021%0.0169860% City Burlingame San Mateo 0.019%0.0152537% City Daly City San Mateo 0.044%0.0363880% City East Palo Alto San Mateo 0.013%0.0103982% City Foster City San Mateo 0.020%0.0166101% City Half Moon Bay San Mateo 0.004%0.0031638% City Hillsborough San Mateo 0.013%0.0110029% City Menlo Park San Mateo 0.015%0.0126209% City Millbrae San Mateo 0.013%0.0105836% City Pacifica San Mateo 0.016%0.0130625% City Redwood City San Mateo 0.056%0.0463511% City San Bruno San Mateo 0.021%0.0172161% City San Carlos San Mateo 0.013%0.0108885% City San Mateo San Mateo 0.052%0.0425841% City South San Francisco San Mateo 0.043%0.0353943% County Santa Barbara County Santa Barbara 1.132% 1.385%1.1768968% City Carpinteria Santa Barbara 0.001%0.0008938% City Goleta Santa Barbara 0.004%0.0028969% City Lompoc Santa Barbara 0.047%0.0389379% City Santa Barbara Santa Barbara 0.122%0.1004559% City Santa Maria Santa Barbara 0.058%0.0479179% County Santa Clara County Santa Clara 2.404% 2.941%2.4987553% City Campbell Santa Clara 0.014%0.0112566% City Cupertino Santa Clara 0.008%0.0066824% City Gilroy Santa Clara 0.025%0.0202891% 12 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 461 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Los Altos Santa Clara 0.013%0.0103338% City Los Gatos Santa Clara 0.013%0.0103220% City Milpitas Santa Clara 0.036%0.0298120% City Morgan Hill Santa Clara 0.015%0.0124619% City Mountain View Santa Clara 0.041%0.0334608% City Palo Alto Santa Clara 0.039%0.0323080% City San Jose Santa Clara 0.294% 0.360%0.3054960% City Santa Clara Santa Clara 0.067%0.0549723% City Saratoga Santa Clara 0.004%0.0034161% City Sunnyvale Santa Clara 0.053%0.0434069% County Santa Cruz County Santa Cruz 0.783% 0.957%0.8135396% City Capitola Santa Cruz 0.020%0.0168191% City Santa Cruz Santa Cruz 0.143%0.1180348% City Scotts Valley Santa Cruz 0.015%0.0126525% City Watsonville Santa Cruz 0.063%0.0520136% County Shasta County Shasta 1.095% 1.339%1.1380191% City Anderson Shasta 0.024%0.0198896% City Redding Shasta 0.284%0.2334841% City Shasta Lake Shasta 0.004%0.0031993% County Siskiyou County Siskiyou 0.228% 0.279%0.2373393% County Solano County Solano 0.760%0.6260795% City Benicia Solano 0.031%0.0253903% City Dixon Solano 0.016%0.0130849% City Fairfield Solano 0.109%0.0897317% City Suisun City Solano 0.021%0.0176183% City Vacaville Solano 0.119%0.0976497% City Vallejo Solano 0.167%0.1373644% County Sonoma County Sonoma 1.218% 1.490%1.2661290% City Healdsburg Sonoma 0.032%0.0266929% City Petaluma Sonoma 0.081%0.0667507% 13 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 462 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Rohnert Park Sonoma 0.041%0.0340759% City Santa Rosa Sonoma 0.184%0.1519070% City Sonoma Sonoma 0.022%0.0183438% City Windsor Sonoma 0.016%0.0129298% County Stanislaus County Stanislaus 1.722%1.4182273% City Ceres Stanislaus 0.041%0.0340260% City Modesto Stanislaus 0.217%0.1788759% City Newman Stanislaus 0.006%0.0046964% City Oakdale Stanislaus 0.018%0.0145531% City Patterson Stanislaus 0.015%0.0126590% City Riverbank Stanislaus 0.010%0.0085699% City Turlock Stanislaus 0.065%0.0531966% County Sutter County Sutter 0.306% 0.374%0.3179548% City Yuba City Sutter 0.074%0.0606242% County Tehama County Tehama 0.213% 0.261%0.2216654% City Red Bluff Tehama 0.014%0.0117771% County Trinity County Trinity 0.082% 0.101%0.0855476% County Tulare County Tulare 0.809% 0.990%0.8410949% City Dinuba Tulare 0.014%0.0116929% City Exeter Tulare 0.004%0.0032479% City Farmersville Tulare 0.003%0.0027879% City Lindsay Tulare 0.007%0.0057111% City Porterville Tulare 0.021%0.0171845% City Tulare Tulare 0.037%0.0302273% City Visalia Tulare 0.066%0.0545872% County Tuolumne County Tuolumne 0.486% 0.594%0.5047621% County Ventura County Ventura 2.192% 2.681%2.2781201% City Camarillo Ventura 0.002%0.0012815% City Fillmore Ventura 0.002%0.0020294% City Moorpark Ventura 0.008%0.0067337% 14 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 463 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Oxnard Ventura 0.156% 0.190%0.1617338% City Port Hueneme Ventura 0.021%0.0174145% City San Buenaventura (Ventura) Ventura 0.085%0.0702181% City Santa Paula Ventura 0.014%0.0119072% City Simi Valley Ventura 0.065%0.0533043% City Thousand Oaks Ventura 0.022%0.0179902% County Yolo County Yolo 0.357% 0.437%0.3713319% City Davis Yolo 0.055%0.0451747% City West Sacramento Yolo 0.066%0.0544321% City Woodland Yolo 0.058%0.0477904% County Yuba County Yuba 0.214% 0.262%0.2225679% City Marysville Yuba 0.014%0.0112079% 15 of 15 DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 464 1 APPENDIX 2 Cost Reimbursement Procedure 1. Additional defined terms: a)Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were paid or incurred (i) prior to July 21, 2021 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting this CA Janssen Allocation Agreement. Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs. b)First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section X and Exhibit R of the Distributor Settlement Agreement or Section XI and Exhibit R of the Janssen Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c)Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d)Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses. 2. Cost Reimbursement to Plaintiff Subdivision a)Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating a National Opioid Settlement with Distributors, Johnson & Johnson, and others. b)Claims Procedure. i.If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section X or Exhibit R of the Distributor Settlement Agreement or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 465 2 Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii.A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act. iii.The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs. iv.The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v.Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. vi.The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section VI.B.2 of the Janssen Agreement. vii.A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and Janssen a report DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 466 3 of the fees and expenses incurred by the Special Master pursuant to Section VI.B.2 of the Janssen Agreement. c)Claims Priority and Limitation. i.The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii.Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices. iii.Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv.Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full. v.In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi.In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Distributor Settlement Agreement and the Janssen Settlement Agreement be used to pay Costs. d)Collateral Source Payments and Third-Party Settlement. i.In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 467 4 ii.In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above. DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 468 1 APPENDIX 3 CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Janssen Settlement and their counsel. In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement). [SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State Back- Stop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Costs, and Expenses) of the Janssen Settlement Agreement. Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Janssen Settlement Agreement and CA Janssen Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Janssen Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Distributors Settlement. [COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Janssen Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments. The Attorney General is executing this agreement solely because the definition of “State Back- Stop Agreement” in Exhibit R of the Janssen Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party. [DATE] [SUBDIVISION SIGNATURE BLOCK] [DATE] [COUNSEL SIGNATURE BLOCK] [DATE] [ATTORNEY GENERAL SIGNATURE BLOCK] DocuSign Envelope ID: BEE355CB-0CCA-496C-8C95-3731B01A4B33 18.c Packet Pg. 469 Thank you for registering your subdivision on the national settlement website and for considering participating in the proposed Settlement Agreement with McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation (collectively “Settling Distributors”). This virtual envelope contains a Participation Form for the settlement including a release of claims and a separate Signature Page for California’s Proposed State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds. Both documents in this envelope must be executed, without alteration, and submitted in order for your subdivision to be considered potentially “participating.” The sign-on period for subdivisions ends on January 2, 2022. On or after that date, the states (in consultation with the subdivisions) and the Settling Distributors will determine whether the subdivision participation rate is sufficient for the settlement to move forward. If the deal moves forward, your release will become effective. If it does not, it will not. As a reminder, if you have not already started your review of the settlement documentation, detailed information about the Settlements may be found at: https://nationalopioidsettlement.com/. This national settlement website also includes links to information about how the Settlements are being implemented in your state and how settlement funds will be allocated within your state, including information about, and links to, any applicable allocation agreement or legislation. This website will be supplemented as additional documents are created. California has also created a state-specific website which may be accessed here: https://oag.ca.gov/opioids. If you have questions, please contact OpioidSettlement-LocalGovernment@doj.ca.gov. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 470 1 Settlement Participation Form Governmental Entity: Palo Alto city State: CA Authorized Signatory: /officialname/ Address 1: /address1/ Address 2: /address2/ City, State, Zip: /cit//state//zi/ Phone: /Phone/ Email: /email/ The governmental entity identified above (“Governmental Entity”), in order to obtain and in consideration for the benefits provided to the Governmental Entity pursuant to the Settlement Agreement dated July 21, 2021 (“Distributor Settlement”), and acting through the undersigned authorized official, hereby elects to participate in the Distributor Settlement, release all Released Claims against all Released Entities, and agrees as follows. 1. The Governmental Entity is aware of and has reviewed the Distributor Settlement, understands that all terms in this Election and Release have the meanings defined therein, and agrees that by this Election, the Governmental Entity elects to participate in the Distributor Settlement and become a Participating Subdivision as provided therein. 2. The Governmental Entity shall, within 14 days of the Reference Date and prior to the filing of the Consent Judgment, dismiss with prejudice any Released Claims that it has filed. 3. The Governmental Entity agrees to the terms of the Distributor Settlement pertaining to Subdivisions as defined therein. 4. By agreeing to the terms of the Distributor Settlement and becoming a Releasor, the Governmental Entity is entitled to the benefits provided therein, including, if applicable, monetary payments beginning after the Effective Date. 5. The Governmental Entity agrees to use any monies it receives through the Distributor Settlement solely for the purposes provided therein. 6. The Governmental Entity submits to the jurisdiction of the court in the Governmental Entity’s state where the Consent Judgment is filed for purposes limited to that court’s role as provided in, and for resolving disputes to the extent provided in, the Distributor Settlement. 7. The Governmental Entity has the right to enforce the Distributor Settlement as provided therein. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 471 2 8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for all purposes in the Distributor Settlement, including but not limited to all provisions of Part XI, and along with all departments, agencies, divisions, boards, commissions, districts, instrumentalities of any kind and attorneys, and any person in their official capacity elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, and any other entity identified in the definition of Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Distributor Settlement are intended by the Parties to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of the Governmental Entity to release claims. The Distributor Settlement shall be a complete bar to any Released Claim. 9. The Governmental Entity hereby takes on all rights and obligations of a Participating Subdivision as set forth in the Distributor Settlement. 10. In connection with the releases provided for in the Distributor Settlement, each Governmental Entity expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads: General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her, would have materially affected his or her settlement with the debtor or released party. A Releasor may hereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Governmental Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Governmental Entities’ decision to participate in the Distributor Settlement. 11. Nothing herein is intended to modify in any way the terms of the Distributor Settlement, to which Governmental Entity hereby agrees. To the extent this Election and Release is interpreted differently from the Distributor Settlement in any respect, the Distributor Settlement controls. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 472 3 I swear under penalty of perjury that I have all necessary power and authorization to execute this Election and Release on behalf of the Governmental Entity. Signature:/signer_1/ Name:/name_1/ Title:/title_1/ Date:/date_1/ DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 473 1 Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributor Settlement 1. Introduction Pursuant to the Distributor Settlement Agreement, dated as of July 21, 2021, and any revision thereto (the “Distributor Settlement Agreement”), including Section V and Exhibit O, the State of California proposes this agreement (the “CA Distributor Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections IV and V of the Distributor Settlement Agreement.1 For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections IX or X of the Distributor Settlement Agreement. Pursuant to Exhibit O, Paragraph 4, of the Distributor Settlement Agreement, acceptance of this CA Distributor Allocation Agreement is a requirement to be an Initial Participating Subdivision. 2. Definitions a)CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Distributor Settlement Agreement. b)Janssen Settlement Agreement means the Janssen Settlement Agreement dated July 21, 2021, and any revision thereto. c)Litigating Special District means a school district, fire protection district, health authority, health plan, or other special district that has filed a lawsuit against an Opioid Defendant. Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, and LA Care Health Plan. d)Plaintiff Subdivision means a Subdivision located in California, other than a Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020. 1 A parallel but separate agreement (the “CA Janssen Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Janssen Settlement Agreement. An eligible Subdivision may elect to participate in either the Distributor Settlement or the Janssen Settlement, or in both. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 474 2 e)Opioid Defendant means any defendant (including but not limited to Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020. 3. General Terms This agreement is subject to the requirements of the Distributor Settlement Agreement, as well as applicable law, and the Distributor Settlement Agreement governs over any inconsistent provision of this CA Distributor Allocation Agreement. Terms used in this CA Distributor Allocation Agreement have the same meaning as in the Distributor Settlement Agreement unless otherwise defined herein. Pursuant to Section V(D)(1) of the Distributor Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the Distributor Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation. 4. State Allocation The Settlement Fund payments to California,2 pursuant to the Distributor Settlement Agreement, shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Distributor Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”). A.State of California Allocation Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation. B.CA Abatement Accounts Fund i. Allocation of CA Abatement Accounts Funds a)Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be 2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 475 3 allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds. b)A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Distributor Settlement Agreement. c)A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight). d) A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Distributor Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions. e)The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. f) Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 476 4 ii. Use of CA Abatement Accounts Funds a)The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Distributor Settlement Agreement. b) In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities: (1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD; (4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or (5) interventions to prevent drug addiction in vulnerable youth. c)The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d) For the avoidance of doubt, and subject to the requirements of the Distributor Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA Packet Pg. 477 18.d 5 iii.CA Abatement Accounts Fund Oversight a)Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. b) If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Distributor Settlement Agreement or this CA Distributor Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c)If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame. d) If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Distributor Settlement Agreement or this CA Distributor Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement. e)Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions. C. CA Subdivision Fund i.Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid-related expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 478 6 The CA Subdivision Funds will be allocated as follows: a)First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document; b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c)Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant. D. Provision for State Back-Stop Agreement On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(R), of the Distributor Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Distributor Settlement, and if applicable, the Janssen Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments. To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 479 7 General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms. For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General. 5. State and Subdivision Reporting a)DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site. b) Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions. c)The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision. d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section V(B)(2) of the Distributor Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and the Distributors. e)In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 480 8 6. Miscellaneous a)The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Distributor Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa. b) Except as provided in the Distributor Settlement Agreement, this CA Distributor Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party. c)Except as provided in the CA Distributor Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d) Except as provided in the Distributor Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 481 The undersigned, Palo Alto city, ACKNOWLEDGES acceptance of this Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds - Distributor Settlement is a requirement to be an Initial Participating Subdivision in the Distributor Settlement and ACCEPTS this Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds - Distributor Settlement. I swear under penalty of perjury that I have all necessary power and authorization to execute this Election and Release on behalf of the Governmental Entity. Signature:/signer_1/ Name:/name_1/ Title:/title_1/ Date:/date_1/ DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 482 APPENDIX 1 DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Distributor Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one- hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 483 APPENDIX 1 100.000% 100.000% 100.000% Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Alameda County Alameda 2.332% 2.853%2.4237952% City Alameda Alameda 0.069%0.0570162% City Albany Alameda 0.013%0.0107768% City Berkeley Alameda 0.152%0.1249656% City Dublin Alameda 0.033% 0.040%0.0338810% City Emeryville Alameda 0.023%0.0185765% City Fremont Alameda 0.108%0.0888576% City Hayward Alameda 0.117%0.0966218% City Livermore Alameda 0.054%0.0446740% City Newark Alameda 0.026%0.0217626% City Oakland Alameda 0.486% 0.595%0.5055601% City Piedmont Alameda 0.014%0.0114064% City Pleasanton Alameda 0.067%0.0554547% City San Leandro Alameda 0.039%0.0321267% City Union City Alameda 0.043%0.0352484% County Amador County Amador 0.226% 0.277%0.2349885% County Butte County Butte 1.615% 1.975%1.6783178% City Chico Butte 0.216% 0.264%0.2246499% City Oroville Butte 0.079%0.0646595% County Calaveras County Calaveras 0.226% 0.277%0.2351644% County Colusa County Colusa 0.059%0.0489221% County Contra Costa County Contra Costa 2.102% 2.571%2.1844585% City Antioch Contra Costa 0.037%0.0301879% City Brentwood Contra Costa 0.026%0.0215339% City Clayton Contra Costa 0.002%0.0018060% City Concord Contra Costa 0.055%0.0456676% City Danville Contra Costa 0.010%0.0082255% City El Cerrito Contra Costa 0.023%0.0189024% City Hercules Contra Costa 0.010%0.0078273% 1 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 484 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Lafayette Contra Costa 0.006%0.0046030% City Martinez Contra Costa 0.012%0.0098593% City Moraga Contra Costa 0.004%0.0031007% City Oakley Contra Costa 0.010%0.0079416% City Orinda Contra Costa 0.005%0.0038157% City Pinole Contra Costa 0.013%0.0110909% City Pittsburg Contra Costa 0.053%0.0436369% City Pleasant Hill Contra Costa 0.013%0.0106309% City Richmond Contra Costa 0.146%0.1201444% City San Pablo Contra Costa 0.018%0.0148843% City San Ramon Contra Costa 0.021%0.0176459% City Walnut Creek Contra Costa 0.026%0.0212132% County Del Norte County Del Norte 0.114% 0.140%0.1189608% County El Dorado County El Dorado 0.768% 0.939%0.7980034% City Placerville El Dorado 0.015%0.0127642% City South Lake Tahoe El Dorado 0.081%0.0665456% County Fresno County Fresno 1.895% 2.318%1.9693410% City Clovis Fresno 0.065%0.0536211% City Coalinga Fresno 0.012%0.0098554% City Fresno Fresno 0.397%0.3270605% City Kerman Fresno 0.005%0.0042534% City Kingsburg Fresno 0.008%0.0066167% City Mendota Fresno 0.002%0.0019387% City Orange Cove Fresno 0.004%0.0035607% City Parlier Fresno 0.008%0.0069755% City Reedley Fresno 0.012%0.0098804% City Sanger Fresno 0.018%0.0146135% City Selma Fresno 0.015%0.0127537% County Glenn County Glenn 0.107% 0.131%0.1116978% County Humboldt County Humboldt 1.030% 1.260%1.0703185% 2 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 485 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Arcata Humboldt 0.054%0.0447660% City Eureka Humboldt 0.117% 0.143%0.1216284% City Fortuna Humboldt 0.032%0.0266837% County Imperial County Imperial 0.258% 0.315%0.2679006% City Brawley Imperial 0.011%0.0087986% City Calexico Imperial 0.019%0.0152799% City El Centro Imperial 0.158%0.1302522% City Imperial Imperial 0.006%0.0048791% County Inyo County Inyo 0.073% 0.089%0.0754413% County Kern County Kern 2.517% 3.079%2.6159145% City Arvin Kern 0.006%0.0046425% City Bakersfield Kern 0.212%0.1747198% City California City Kern 0.009%0.0070820% City Delano Kern 0.030%0.0249316% City McFarland Kern 0.003%0.0025644% City Ridgecrest Kern 0.015%0.0120938% City Shafter Kern 0.013%0.0103417% City Tehachapi Kern 0.009%0.0073580% City Wasco Kern 0.008%0.0069861% County Kings County Kings 0.293%0.2413469% City Avenal Kings 0.007%0.0056335% City Corcoran Kings 0.013%0.0107032% City Hanford Kings 0.027%0.0226038% City Lemoore Kings 0.016%0.0131900% County Lake County Lake 0.795%0.6545389% City Clearlake Lake 0.041% 0.050%0.0426253% City Lakeport Lake 0.021% 0.026%0.0222964% County Lassen County Lassen 0.319% 0.391%0.3320610% City Susanville Lassen 0.027%0.0219295% County Los Angeles County Los Angeles 13.896% 16.999%14.4437559% 3 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 486 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Agoura Hills Los Angeles 0.005%0.0040024% City Alhambra Los Angeles 0.042%0.0343309% City Arcadia Los Angeles 0.033%0.0267718% City Artesia Los Angeles 0.001%0.0005100% City Azusa Los Angeles 0.026%0.0210857% City Baldwin Park Los Angeles 0.027%0.0218520% City Bell Los Angeles 0.008%0.0068783% City Bellflower Los Angeles 0.002%0.0014485% City Bell Gardens Los Angeles 0.014%0.0114301% City Beverly Hills Los Angeles 0.065%0.0534897% City Burbank Los Angeles 0.100%0.0823132% City Calabasas Los Angeles 0.006%0.0048948% City Carson Los Angeles 0.019%0.0159805% City Cerritos Los Angeles 0.005%0.0039682% City Claremont Los Angeles 0.010%0.0082584% City Commerce Los Angeles 0.000%0.0002971% City Compton Los Angeles 0.044%0.0361882% City Covina Los Angeles 0.028%0.0229127% City Cudahy Los Angeles 0.001%0.0006020% City Culver City Los Angeles 0.055%0.0449894% City Diamond Bar Los Angeles 0.001%0.0006993% City Downey Los Angeles 0.052%0.0429994% City Duarte Los Angeles 0.003%0.0027261% City El Monte Los Angeles 0.031% 0.038%0.0318985% City El Segundo Los Angeles 0.033%0.0268020% City Gardena Los Angeles 0.034%0.0278088% City Glendale Los Angeles 0.166%0.1366586% City Glendora Los Angeles 0.016%0.0134411% City Hawaiian Gardens Los Angeles 0.005%0.0040549% City Hawthorne Los Angeles 0.050%0.0407833% 4 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 487 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Hermosa Beach Los Angeles 0.018%0.0145307% City Huntington Park Los Angeles 0.023%0.0190667% City Inglewood Los Angeles 0.059%0.0489195% City La Cañada Flintridge Los Angeles 0.003%0.0025565% City Lakewood Los Angeles 0.005%0.0039971% City La Mirada Los Angeles 0.010%0.0081572% City Lancaster Los Angeles 0.045%0.0369689% City La Puente Los Angeles 0.002%0.0012999% City La Verne Los Angeles 0.024%0.0194190% City Lawndale Los Angeles 0.002%0.0017731% City Lomita Los Angeles 0.004%0.0031940% City Long Beach Los Angeles 0.439%0.3614151% City Los Angeles Los Angeles 2.715% 3.321%2.8218811% City Lynwood Los Angeles 0.016%0.0134345% City Malibu Los Angeles 0.002%0.0019269% City Manhattan Beach Los Angeles 0.032%0.0260686% City Maywood Los Angeles 0.004%0.0035528% City Monrovia Los Angeles 0.031%0.0254455% City Montebello Los Angeles 0.030%0.0250670% City Monterey Park Los Angeles 0.031%0.0256677% City Norwalk Los Angeles 0.031%0.0258228% City Palmdale Los Angeles 0.046%0.0375827% City Palos Verdes Estates Los Angeles 0.006%0.0053102% City Paramount Los Angeles 0.011%0.0091483% City Pasadena Los Angeles 0.146%0.1200524% City Pico Rivera Los Angeles 0.022%0.0183333% City Pomona Los Angeles 0.111%0.0911933% City Rancho Palos Verdes Los Angeles 0.002%0.0012645% City Redondo Beach Los Angeles 0.062%0.0506992% City Rosemead Los Angeles 0.003%0.0028260% 5 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 488 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City San Dimas Los Angeles 0.003%0.0022016% City San Fernando Los Angeles 0.013%0.0104837% City San Gabriel Los Angeles 0.018%0.0147726% City San Marino Los Angeles 0.009%0.0073791% City Santa Clarita Los Angeles 0.022%0.0178167% City Santa Fe Springs Los Angeles 0.031%0.0257531% City Santa Monica Los Angeles 0.158%0.1298513% City Sierra Madre Los Angeles 0.006%0.0048646% City Signal Hill Los Angeles 0.010%0.0084884% City South El Monte Los Angeles 0.005%0.0039603% City South Gate Los Angeles 0.020%0.0166272% City South Pasadena Los Angeles 0.012%0.0095334% City Temple City Los Angeles 0.005%0.0039498% City Torrance Los Angeles 0.112%0.0919820% City Walnut Los Angeles 0.006%0.0047305% City West Covina Los Angeles 0.049%0.0404521% City West Hollywood Los Angeles 0.013%0.0108517% City Whittier Los Angeles 0.032%0.0260581% County Madera County Madera 0.349% 0.427%0.3630669% City Chowchilla Madera 0.012%0.0097332% City Madera Madera 0.039%0.0318441% County Marin County Marin 0.564% 0.690%0.5861325% City Larkspur Marin 0.015%0.0124697% City Mill Valley Marin 0.020%0.0168401% City Novato Marin 0.028%0.0229824% City San Anselmo Marin 0.009%0.0078062% City San Rafael Marin 0.089%0.0729823% County Mariposa County Mariposa 0.084% 0.103%0.0876131% County Mendocino County Mendocino 0.439% 0.536%0.4558394% City Ukiah Mendocino 0.039%0.0317153% 6 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 489 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Merced County Merced 0.551% 0.674%0.5724262% City Atwater Merced 0.024%0.0195846% City Livingston Merced 0.006%0.0045873% City Los Banos Merced 0.020%0.0165142% City Merced Merced 0.061%0.0500762% County Modoc County Modoc 0.065% 0.080%0.0678250% County Mono County Mono 0.023% 0.029%0.0242606% County Monterey County Monterey 0.908% 1.111%0.9437083% City Greenfield Monterey 0.006%0.0050552% City King City Monterey 0.005%0.0037355% City Marina Monterey 0.017%0.0144098% City Monterey Monterey 0.041%0.0336540% City Pacific Grove Monterey 0.009%0.0074842% City Salinas Monterey 0.094%0.0776576% City Seaside Monterey 0.023%0.0191772% City Soledad Monterey 0.007%0.0060870% County Napa County Napa 0.288% 0.352%0.2994325% City American Canyon Napa 0.017%0.0136869% City Napa Napa 0.078%0.0642783% County Nevada County Nevada 0.441% 0.539%0.4579827% City Grass Valley Nevada 0.024%0.0197805% City Truckee Nevada 0.003%0.0023843% County Orange County Orange 4.364% 5.339%4.5363576% City Aliso Viejo Orange 0.014%0.0113841% City Anaheim Orange 0.554% 0.678%0.5759282% City Brea Orange 0.086%0.0708897% City Buena Park Orange 0.087%0.0714352% City Costa Mesa Orange 0.124% 0.152%0.1288366% City Cypress Orange 0.033%0.0271937% City Dana Point Orange 0.001%0.0005560% 7 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 490 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Fountain Valley Orange 0.055%0.0455980% City Fullerton Orange 0.137% 0.168%0.1425744% City Garden Grove Orange 0.213%0.1752482% City Huntington Beach Orange 0.247% 0.302%0.2568420% City Irvine Orange 0.139% 0.170%0.1442350% City Laguna Beach Orange 0.047% 0.058%0.0493043% City Laguna Hills Orange 0.014%0.0115457% City Laguna Niguel Orange 0.001%0.0007071% City Laguna Woods Orange 0.001%0.0006546% City La Habra Orange 0.060% 0.073%0.0621049% City Lake Forest Orange 0.012%0.0101249% City La Palma Orange 0.012%0.0095439% City Los Alamitos Orange 0.008%0.0069190% City Mission Viejo Orange 0.014%0.0117560% City Newport Beach Orange 0.179%0.1470134% City Orange Orange 0.150%0.1231320% City Placentia Orange 0.029% 0.035%0.0298912% City Rancho Santa Margarita Orange 0.001%0.0006296% City San Clemente Orange 0.008% 0.010%0.0086083% City San Juan Capistrano Orange 0.008%0.0065510% City Santa Ana Orange 0.502% 0.614%0.5213866% City Seal Beach Orange 0.020%0.0165891% City Stanton Orange 0.035%0.0291955% City Tustin Orange 0.073%0.0600341% City Westminster Orange 0.104% 0.127%0.1082721% City Yorba Linda Orange 0.044%0.0362223% County Placer County Placer 1.045% 1.278%1.0861002% City Auburn Placer 0.017%0.0141114% City Lincoln Placer 0.031%0.0255599% City Rocklin Placer 0.076%0.0625485% 8 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 491 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Roseville Placer 0.196%0.1616559% County Plumas County Plumas 0.205% 0.251%0.2128729% County Riverside County Riverside 4.534% 5.547%4.7128296% City Banning Riverside 0.017%0.0143848% City Beaumont Riverside 0.021%0.0171135% City Blythe Riverside 0.012%0.0096714% City Canyon Lake Riverside 0.000%0.0001761% City Cathedral City Riverside 0.067%0.0553614% City Coachella Riverside 0.021%0.0173054% City Corona Riverside 0.147%0.1207083% City Desert Hot Springs Riverside 0.024%0.0200433% City Eastvale Riverside 0.000%0.0002747% City Hemet Riverside 0.051%0.0421792% City Indio Riverside 0.056%0.0457794% City Jurupa Valley Riverside 0.001%0.0008991% City Lake Elsinore Riverside 0.021%0.0172949% City La Quinta Riverside 0.063%0.0516732% City Menifee Riverside 0.032%0.0260909% City Moreno Valley Riverside 0.137%0.1130348% City Murrieta Riverside 0.048% 0.059%0.0497423% City Norco Riverside 0.016%0.0134542% City Palm Desert Riverside 0.083%0.0682465% City Palm Springs Riverside 0.076%0.0629862% City Perris Riverside 0.009%0.0076774% City Rancho Mirage Riverside 0.052%0.0431098% City Riverside Riverside 0.268%0.2206279% City San Jacinto Riverside 0.010%0.0085936% City Temecula Riverside 0.022%0.0180086% City Wildomar Riverside 0.008%0.0062500% County Sacramento County Sacramento 3.797% 4.645%3.9465887% 9 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 492 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Citrus Heights Sacramento 0.057%0.0465312% City Elk Grove Sacramento 0.130%0.1066994% City Folsom Sacramento 0.108%0.0890850% City Galt Sacramento 0.017%0.0143704% City Rancho Cordova Sacramento 0.008%0.0067679% City Sacramento Sacramento 0.721% 0.882%0.7496530% County San Benito County San Benito 0.106% 0.130%0.1101417% City Hollister San Benito 0.027%0.0225355% County San Bernardino County San Bernardino 3.259% 3.987%3.3878124% City Adelanto San Bernardino 0.008%0.0066640% City Apple Valley San Bernardino 0.025%0.0207360% City Barstow San Bernardino 0.015%0.0122056% City Chino San Bernardino 0.064%0.0525893% City Chino Hills San Bernardino 0.001%0.0006388% City Colton San Bernardino 0.031%0.0253443% City Fontana San Bernardino 0.112%0.0920543% City Grand Terrace San Bernardino 0.006%0.0051051% City Hesperia San Bernardino 0.035%0.0291522% City Highland San Bernardino 0.004%0.0029061% City Loma Linda San Bernardino 0.009%0.0071188% City Montclair San Bernardino 0.039%0.0322108% City Ontario San Bernardino 0.179%0.1472934% City Rancho Cucamonga San Bernardino 0.084%0.0689431% City Redlands San Bernardino 0.057%0.0469150% City Rialto San Bernardino 0.073%0.0603206% City San Bernardino San Bernardino 0.178%0.1461880% City Twentynine Palms San Bernardino 0.002%0.0012605% City Upland San Bernardino 0.052%0.0424460% City Victorville San Bernardino 0.033%0.0269400% City Yucaipa San Bernardino 0.016%0.0128772% 10 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 493 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Yucca Valley San Bernardino 0.003%0.0021228% County San Diego County San Diego 5.706% 6.980%5.9309748% City Carlsbad San Diego 0.128%0.1050485% City Chula Vista San Diego 0.189% 0.231%0.1961456% City Coronado San Diego 0.044%0.0359095% City El Cajon San Diego 0.113%0.0933582% City Encinitas San Diego 0.061% 0.074%0.0630289% City Escondido San Diego 0.145%0.1192204% City Imperial Beach San Diego 0.014%0.0118283% City La Mesa San Diego 0.055% 0.068%0.0575593% City Lemon Grove San Diego 0.022%0.0183911% City National City San Diego 0.080%0.0656808% City Oceanside San Diego 0.213%0.1753428% City Poway San Diego 0.062%0.0511040% City San Diego San Diego 1.975% 2.416%2.0531169% City San Marcos San Diego 0.089%0.0733897% City Santee San Diego 0.033%0.0268401% City Solana Beach San Diego 0.017%0.0138564% City Vista San Diego 0.052%0.0425144% Consolidated San Francisco San Francisco 3.026% 3.702%3.1457169% County San Joaquin County San Joaquin 1.680% 2.055%1.7460399% City Lathrop San Joaquin 0.009%0.0075394% City Lodi San Joaquin 0.053%0.0439484% City Manteca San Joaquin 0.054%0.0443454% City Ripon San Joaquin 0.013%0.0104219% City Stockton San Joaquin 0.313% 0.383%0.3256176% City Tracy San Joaquin 0.084%0.0692047% County San Luis Obispo County San Luis Obispo 0.816% 0.999%0.8484126% City Arroyo Grande San Luis Obispo 0.024%0.0199053% City Atascadero San Luis Obispo 0.029%0.0240680% 11 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 494 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City El Paso de Robles (Paso Robles) San Luis Obispo 0.043%0.0353456% City Grover Beach San Luis Obispo 0.017%0.0137881% City Morro Bay San Luis Obispo 0.020%0.0160922% City San Luis Obispo San Luis Obispo 0.077%0.0637841% County San Mateo County San Mateo 1.074% 1.313%1.1159599% City Belmont San Mateo 0.021%0.0169860% City Burlingame San Mateo 0.019%0.0152537% City Daly City San Mateo 0.044%0.0363880% City East Palo Alto San Mateo 0.013%0.0103982% City Foster City San Mateo 0.020%0.0166101% City Half Moon Bay San Mateo 0.004%0.0031638% City Hillsborough San Mateo 0.013%0.0110029% City Menlo Park San Mateo 0.015%0.0126209% City Millbrae San Mateo 0.013%0.0105836% City Pacifica San Mateo 0.016%0.0130625% City Redwood City San Mateo 0.056%0.0463511% City San Bruno San Mateo 0.021%0.0172161% City San Carlos San Mateo 0.013%0.0108885% City San Mateo San Mateo 0.052%0.0425841% City South San Francisco San Mateo 0.043%0.0353943% County Santa Barbara County Santa Barbara 1.132% 1.385%1.1768968% City Carpinteria Santa Barbara 0.001%0.0008938% City Goleta Santa Barbara 0.004%0.0028969% City Lompoc Santa Barbara 0.047%0.0389379% City Santa Barbara Santa Barbara 0.122%0.1004559% City Santa Maria Santa Barbara 0.058%0.0479179% County Santa Clara County Santa Clara 2.404% 2.941%2.4987553% City Campbell Santa Clara 0.014%0.0112566% City Cupertino Santa Clara 0.008%0.0066824% City Gilroy Santa Clara 0.025%0.0202891% 12 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 495 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Los Altos Santa Clara 0.013%0.0103338% City Los Gatos Santa Clara 0.013%0.0103220% City Milpitas Santa Clara 0.036%0.0298120% City Morgan Hill Santa Clara 0.015%0.0124619% City Mountain View Santa Clara 0.041%0.0334608% City Palo Alto Santa Clara 0.039%0.0323080% City San Jose Santa Clara 0.294% 0.360%0.3054960% City Santa Clara Santa Clara 0.067%0.0549723% City Saratoga Santa Clara 0.004%0.0034161% City Sunnyvale Santa Clara 0.053%0.0434069% County Santa Cruz County Santa Cruz 0.783% 0.957%0.8135396% City Capitola Santa Cruz 0.020%0.0168191% City Santa Cruz Santa Cruz 0.143%0.1180348% City Scotts Valley Santa Cruz 0.015%0.0126525% City Watsonville Santa Cruz 0.063%0.0520136% County Shasta County Shasta 1.095% 1.339%1.1380191% City Anderson Shasta 0.024%0.0198896% City Redding Shasta 0.284%0.2334841% City Shasta Lake Shasta 0.004%0.0031993% County Siskiyou County Siskiyou 0.228% 0.279%0.2373393% County Solano County Solano 0.760%0.6260795% City Benicia Solano 0.031%0.0253903% City Dixon Solano 0.016%0.0130849% City Fairfield Solano 0.109%0.0897317% City Suisun City Solano 0.021%0.0176183% City Vacaville Solano 0.119%0.0976497% City Vallejo Solano 0.167%0.1373644% County Sonoma County Sonoma 1.218% 1.490%1.2661290% City Healdsburg Sonoma 0.032%0.0266929% City Petaluma Sonoma 0.081%0.0667507% 13 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 496 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Rohnert Park Sonoma 0.041%0.0340759% City Santa Rosa Sonoma 0.184%0.1519070% City Sonoma Sonoma 0.022%0.0183438% City Windsor Sonoma 0.016%0.0129298% County Stanislaus County Stanislaus 1.722%1.4182273% City Ceres Stanislaus 0.041%0.0340260% City Modesto Stanislaus 0.217%0.1788759% City Newman Stanislaus 0.006%0.0046964% City Oakdale Stanislaus 0.018%0.0145531% City Patterson Stanislaus 0.015%0.0126590% City Riverbank Stanislaus 0.010%0.0085699% City Turlock Stanislaus 0.065%0.0531966% County Sutter County Sutter 0.306% 0.374%0.3179548% City Yuba City Sutter 0.074%0.0606242% County Tehama County Tehama 0.213% 0.261%0.2216654% City Red Bluff Tehama 0.014%0.0117771% County Trinity County Trinity 0.082% 0.101%0.0855476% County Tulare County Tulare 0.809% 0.990%0.8410949% City Dinuba Tulare 0.014%0.0116929% City Exeter Tulare 0.004%0.0032479% City Farmersville Tulare 0.003%0.0027879% City Lindsay Tulare 0.007%0.0057111% City Porterville Tulare 0.021%0.0171845% City Tulare Tulare 0.037%0.0302273% City Visalia Tulare 0.066%0.0545872% County Tuolumne County Tuolumne 0.486% 0.594%0.5047621% County Ventura County Ventura 2.192% 2.681%2.2781201% City Camarillo Ventura 0.002%0.0012815% City Fillmore Ventura 0.002%0.0020294% City Moorpark Ventura 0.008%0.0067337% 14 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 497 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Oxnard Ventura 0.156% 0.190%0.1617338% City Port Hueneme Ventura 0.021%0.0174145% City San Buenaventura (Ventura) Ventura 0.085%0.0702181% City Santa Paula Ventura 0.014%0.0119072% City Simi Valley Ventura 0.065%0.0533043% City Thousand Oaks Ventura 0.022%0.0179902% County Yolo County Yolo 0.357% 0.437%0.3713319% City Davis Yolo 0.055%0.0451747% City West Sacramento Yolo 0.066%0.0544321% City Woodland Yolo 0.058%0.0477904% County Yuba County Yuba 0.214% 0.262%0.2225679% City Marysville Yuba 0.014%0.0112079% 15 of 15 DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 498 1 APPENDIX 2 Cost Reimbursement Procedure 1. Additional defined terms: a)Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were paid or incurred (i) prior to July 21, 2021 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting this CA Distributor Allocation Agreement. Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs. b)First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section X and Exhibit R of the Distributor Settlement Agreement or Section XI and Exhibit R of the Janssen Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c)Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d)Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses. 2. Cost Reimbursement to Plaintiff Subdivision a)Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating a National Opioid Settlement with Distributors, Johnson & Johnson, and others. b)Claims Procedure. i.If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section X or Exhibit R of the Distributor Settlement Agreement or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 499 2 Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii.A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act. iii.The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs. iv.The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v.Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. vi.The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section V.B.2 of the Distributor Agreement. vii.A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and the Distributors a DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 500 3 report of the fees and expenses incurred by the Special Master pursuant to Section V.B.2 of the Distributor Agreement. c)Claims Priority and Limitation. i.The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii.Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices. iii.Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv.Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full. v.In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi.In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Distributor Settlement Agreement and the Janssen Settlement Agreement be used to pay Costs. d)Collateral Source Payments and Third-Party Settlement. i.In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA Packet Pg. 501 18.d 4 ii.In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above. DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 502 APPENDIX 3 CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Distributors Settlement and their counsel. In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement). [SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State Back- Stop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Expenses and Costs) of the Distributor Settlement Agreement. Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Distributor Settlement Agreement and CA Distributor Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Distributor Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Distributors Settlement. [COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Distributor Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments. The Attorney General is executing this agreement solely because the definition of “State Back- Stop Agreement” in Exhibit R of the Distributor Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party. [DATE] [SUBDIVISION SIGNATURE BLOCK] [DATE] [COUNSEL SIGNATURE BLOCK] [DATE] [ATTORNEY GENERAL SIGNATURE BLOCK] DocuSign Envelope ID: 0485A73D-5761-43BC-BA48-82E05497C9AA 18.d Packet Pg. 503 *NOT YET APPROVED* 1 1001_20211208_th20 Resolution No. ___ Resolution Authorizing the City Manager to Execute Participation Agreements on Behalf of the City of Palo Alto to Enter Into Settlement Agreements Regarding Manufacture and Distribution of Opioid Products with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceuitca, Inc., Agree to the Terms of the Memorandum of Understanding (MOU) Allocating Settlement Proceeds, and Authorize Entry Into the MOU with the California Attorney General R E C I T A L S A.WHEREAS, the State of California, through its Attorney General and certain cities and counties governments, is engaged in litigation seeking to hold certain opioid pharmaceutical supply chain participants accountable for the damage caused by their misfeasance, nonfeasance, and malfeasance; and B.WHEREAS, the State of California and the cities and counties therein share a common desire to abate and alleviate the impacts of that misfeasance, nonfeasance, and malfeasance through the State of California; and C.WHEREAS, on July 21, 2021, the California Attorney General, along with representatives from 55 other states, commonwealths, and U.S. territories, finalized the terms of a proposed settlement with three pharmaceutical distributors, McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation, to address the impacts of opioid- related substance use disorder on state and local governments (“the Distributors Settlement”), available at https://nationalopioidsettlement.com/wp-content/uploads/2021/11/Final- Distributor-Settlement-Agreement-10.22.2021-Exhibit-Updates_.pdf ; and D.WHEREAS, on July 21, 2021, the California Attorney General and other state, commonwealth, and territorial representatives finalized the terms of a separate proposed settlement with means Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc. arising to address the impacts of opioids manufactured by the defendants (“the Janssen Settlement), available at https://nationalopioidsettlement.com/wp-content/uploads/2021/11/Janssen-agreement- 20211105.pdf ; and E.WHEREAS, the Distributors and Janssen Settlements provide that the settling states, commonwealths, and territories shall receive a combined total of up to $26 billion to alleviate the impacts of opioids-related substance use disorder; and 18.e Packet Pg. 504 *NOT YET APPROVED* 2 1001_20211208_th20 F.WHEREAS, each of the Distributors and Janssen Settlements provide that there may be an intrastate allocation of settlement proceeds in each settling state, commonwealth, and territory to allocate the proceeds among state and local jurisdictions; and G.WHEREAS, following negotiations between state and local government representatives, the California Attorney General and the local government representatives agreed to a Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributors Settlement (“Distribution Allocation Agreement”), attached hereto as Exhibit A, which allocates proceeds of the proposed Distributors Settlement to cities and counties; and H.WHEREAS, the California Attorney General and the local government representatives further agreed to a Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Janssen Settlement (“Janssen Allocation Agreement”), attached hereto as Exhibit B, which allocates proceeds of the proposed Janssen Settlement to cities and counties; and I.WHEREAS, the City of Palo Alto must affirmatively elect to participate in Distributors and Janssen Settlements to receive the allocation of settlement proceeds set forth in the Distributors and Janssen Allocation Agreements, and in doing so thereby releases its claims against the settling defendants. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby authorizes the City Manager to complete and execute the Settlement Participation Forms to authorize the City of Palo Alto’s participation in the Distributors and Janssen Settlements, and to take such further actions as necessary to ensure that the City receives settlement proceeds allocated to it under the Distributors and Janssen Allocation Agreements. // // // // // // // 18.e Packet Pg. 505 *NOT YET APPROVED* 3 1001_20211208_th20 SECTION 2. BE IT FURTHER RESOLVED that this Resolution is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Chief Assistant City Attorney City Manager 18.e Packet Pg. 506 City of Palo Alto (ID # 13868) City Council Staff Report Meeting Date: 12/13/2021 City of Palo Alto Page 1 Title: Discussion and Possible Direction Regarding In -Person, Remote, or Hybrid City Council and Board and Commission Meetings From: City Manager Lead Department: City Manager Recommendation Staff recommends that Council discuss and provide any supplemental direction regarding the timing of resuming in-person City Council, Board, and Commission meetings, or using remote or hybrid formats. Background On September 27, 2021, the City Council approved the following direction regarding the initiation of in-person Council, board, and commission meetings: A. Begin hybrid City Council meetings on November 1, 2021, and not requiring Standing Committees, Ad-Hoc Committees, Boards and Commissions to physically convene until January 2022; B. Require the public, Staff and City Council Members to provide proof of vaccination or a negative COVID-19 test within 48 hours prior to the meeting; C. Provide an option for City Council to attend in -person or virtually as long as the Santa Clara County maintains mandatory indoor masking for public meetings; D. Upon the end of mandatory indoor masking, modify the City Council protocols to increase City Council’s teleconference participation to 5 meetings per year; E. Request Staff to allow virtual attendees to participate by video, barring technical barriers in doing so; and F. Upon relevant changes in Santa Clara County’s or the CDC’s guidelines, for City Council to revisit the guidelines, consider a default standard for in -person meetings if provided by the Santa Clara County, and discuss other in-person meeting requirements. On October 7, 2021 the Santa Clara County Health Officer along with other Bay Area health officers identified criteria for the lifting of indoor masking requirements: Packet Pg. 507 21 City of Palo Alto Page 2 •The jurisdiction reaches the moderate (yellow) COVID-19 transmission tier, as defined by the Centers for Disease Control & Prevention (CDC), and remains there for at least three weeks; AND •COVID-19 hospitalizations in the jurisdiction are low and stable, in the judgment of the health officer; AND •80% of the jurisdiction’s total population is fully vaccinated with two doses of Pfizer or Moderna or one dose of Johnson & Johnson (booster doses not considered) OR Eight weeks have passed since a COVID-19 vaccine has been authorized for emergency use by federal and state authorities for 5- to 11-year-olds Based on the Council’s September motion, the Council Chambers in City Hall reopened in November and December for members of the public who wish to attend City Council meetings in person, with an alternative option for the public to participate via Zoom. Council Members also had the option to attend in person or via Zoom in order to promote social distancing in light of the continuing pandemic. Some supporting staff attended in person, while others participated via Zoom. In-person attendance has been low. During November and December, Council committees and Boards and Commissions continued to meet entirely via Zoom. Based on Council’s September direction, Council committees, Boards, and Commissions are directed to return to in-person meetings for meetings after January 3, 2022. Staff is currently working through the logistics of supporting hybrid participation (in-person and remote) by commissioners and the public. Discussion Controlling the potential exposures to Covid-19 continues to be the fundamental method of protecting the public, Council and City staff. While progress has been made toward the established metrics for lifting indoor masking requirements, the emergence of the omicron variant at a time of increased holiday travel and seasonal increases in cases have cast doubt on the likelihood that masking requirements will be lifted prior to January. Given the high level of public engagement that the City has experienced with remote meetings and the added administrative requirements to support hybrid meetings, staff recommends that Council consider delaying in-person meetings for Boards and Commissions until February 1 or later, and maintain Council meetings as primarily in-person with an option to Council Members to attend remotely in order to promote social distancing in light of the continuing pandemic. Stakeholder Engagement Staff contacted the chairs of City boards and commissions to solicit their feedback on the requirement to return to in-person meetings in January. Out of the Boards, Commissions and Committees that routinely meet, 4 of 8 articulated agreement with Packet Pg. 508 21 City of Palo Alto Page 3 deferral to February 1 or a later date, 2 desire to go in-person or hybrid. The remaining identified no preference. Staff supporting these groups have expressed a preference for deferring in-person meetings. Resource Impact The resources necessary to support a hybrid meeting at this time are more intensive than either an in-person or a virtual meeting. As the Boards and Commissions are supported by individual departments in collaboration with the City Clerk’s Office, an increase in administration resources to suport hybrid meetings will have an impact on administrative capacity across the organization as it requires additional resources for not only meeting management but also the necessary heath checks . The Clerk’s Office is providing training to assist department liaisons in the administration of hybrid meetings. Environmental Review Not a project for CEQA purposes. Packet Pg. 509 21 Schedule of Meetings Published December 2, 2021 This is a courtesy notice only. Meeting dates, times, and locations are subject to change. Almost all Palo Alto Council and some Standing Committee meetings are cablecast live on Channel 26. If there happens to be concurrent meetings, one meeting will be broadcast on Channel 29. Until further notice, all meetings except City Council Meetings will be held virtually. City Council Meetings will be held in-person and virtually. WEDNESDAY, DECEMBER 1 Sp. Utilities Advisory Commission Meeting, 5 p.m. THURSDAY, DECEMBER 2 Architectural Review Board Meeting, 8:30 a.m. MONDAY, DECEMBER 6 Sp. City Council Meeting, 5 p.m. TUESDAY, DECEMBER 7 Sp. Finance Committee Meeting, 6 p.m. WEDNESDAY, DECEMBER 8 Planning & Transportation Commission Meeting, 6 p.m. THURSDAY, DECEMBER 9 Historic Resources Board Meeting, 8:30 a.m. Architectural Review Board Meeting, 1 p.m. Human Relations Commission Meeting, 6 p.m. (CANCELLED) MONDAY, DECEMBER 13 Sp. City Council Meeting, 5 p.m. TUESDAY, DECEMBER 14 Sp. Policy and Services Committee Meeting, 7 p.m. Sp. Parks & Recreation Commission Meeting, 7 p.m. WEDNESDAY, DECEMBER 15 Sp. Planning & Transportation Commission Meeting, p.m. THURSDAY, DECEMBER 16 Architectural Review Board Meeting, 8:30 a.m. City/School Liaison Committee Meeting, 8:30 a.m. Public Art Commission Meeting, 7 p.m. MONDAY, JANUARY 3 Sp. City Council Reorganization Meeting, 5 p.m. WEDNESDAY, JANUARY 5 Sp. Utilities Advisory Commission Meeting, 5 p.m. THURSDAY, JANUARY 6 Architectural Review Board Meeting, 8:30 a.m. Persons with disabilities who require auxiliary aids or services in using City facilities or programs, or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact: ADA Coordinator, City of Palo Alto, 650-329-2550 (voice) or 329-1199 (TDD), ada@cityofpaloalto.org. Listening assistive devices are available in the Council Chambers. Sign language interpreters will be provided upon request with 72 hours advance notice. Please advise the City Clerk's Office (650-329-2571) of meetings or changes by 3:00 p.m. on Wednesdays for inclusion in the following week’s schedule. Packet Pg. 510