HomeMy WebLinkAbout2023-04-17 City Council Agenda PacketCITY COUNCIL
Special Meeting
Monday, April 17, 2023
Council Chambers & Hybrid
5:00 PM
Amended Agenda
Amended Agenda Items appear below in Red
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. Masks are strongly encouraged if
attending in person. The meeting will be broadcast on Cable TV Channel 26, live on
YouTube https://www.youtube.com/c/cityofpaloalto, a n d s t r e a m e d t o M i d p e n M e d i a
Center https://midpenmedia.org.
VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238)
Meeting ID: 362 027 238 Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an
amount of time determined by the Chair. All requests to speak will be taken until 5 minutes
after the staff’s presentation. Written public comments can be submitted in advance to
city.council@CityofPaloAlto.org and will be provided to the Council and available for inspection
on the City’s website. Please clearly indicate which agenda item you are referencing in your
subject line.
PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,
the Clerk will have them shared at public comment for the specified item. To uphold strong
cybersecurity management practices, USB’s or other physical electronic storage devices are not
accepted.
TIME ESTIMATES
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.
CALL TO ORDER
CLOSED SESSION 5:05 ‐ 7:30 PM
1.CONFERENCE WITH CITY ATTORNEY‐EXISTING LITIGATION
California Court of Appeal, Sixth Appellate District, Case No. H049425
Subject: Hamilton and High LLC, et al., Appellants v. City of Palo Alto, et al., Respondents
Authority: Government Code Section 54956.9(d)(1)
2.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City
Manager and his Designees Pursuant to Merit System Rules and Regulations (Ed
Shikada, Kiely Nose, Sandra Blanch, Tori Anthony, Molly Stump, and Jennifer Fine)
Employee Organization: Service Employees International Union, (SEIU) Local 521, Utilities
Management and Professional Association of Palo Alto (UMPAPA), Palo Alto Peace
Officers’ 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)
STUDY SESSION 7:30 ‐ 8:30 PM
3.Study Session Regarding Proposed Electric, Gas, Water and Wastewater July 2023 Rate
Changes
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT 8:30‐8:50PM
CONSENT CALENDAR 8:50‐8:55 PM
4.Approval of Minutes from March 31, 2023 and April 3, 2023 City Council Meetings
5.Finance Committee and the Utilities Advisory Commission Recommend the City Council
Approve and Authorize the City Manager or Their Designee to Execute a Third Phase
Agreement With Northern California Power Agency for the Purchase of up to 87,600
Megawatt Hours per Year of Geothermal Energy From Calpine Corporation's Geysers
Power Company, LLC Over a Term of up to 12 Years for a Total not to Exceed Amount of
$76.2 Million; CEQA status: not a project under CEQA Guidelines sections 15378(a) and
(b)
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 – Supplemental Report Added
7.Approval of Amendment #3 with Professional Account Management LLC, dba Duncan
Solutions Contract (C17164727) in the Amount of $80,000 and to Extend the Contract
Term to April 28, 2024 for Parking Citation Management; CEQA Status – Not a Project.
8.Resolution to Oppose the Taxpayer Protection and Government Accountability Act
(Initiative 21‐0042A1)
9.Approve Substantial Amendments to the Community Development Block Grant (CDBG)
FY2021‐22 and FY2022‐23 Annual Action Plans and the Associated Budget Amendment
and Resolution Q&A
10.Staff Recommends that Council Approve Bringing the Water and Wastewater Rate
Proposals to Council on June 19, 2023, Pending Proposition 218 Notifications, for a
Public Hearing to Consider Two Resolutions: 1) Approving the Fiscal Year 2024
Wastewater Collection Utility Financial Plan, Proposed Reserve Transfers, and
Increasing Wastewater Collection Utility Rates by Amending Wastewater Collection
Rate Schedules S‐1, S‐2, S‐6 and S‐7; 2) Approving the Fiscal Year 2024 Water Utility
Financial Plan, Proposed Reserve Transfers, and Increasing Water Rates by Amending
Water Rate Schedules W‐1, W‐2, W‐3, W‐4, and W‐7; CEQA Status: Not a project under
Public Resources Code 15378(b)(5) Q&A
11.Adoption of a Memorandum of Agreement with the Palo Alto Police Officers'
Association and the Police Management Association; Adopt an Amendment to correct
the Fire Chiefs‘ Association salary schedules; and, Adopt revised Management and
Professional salary schedules CEQA Status ‐ Not a project
12.Approval of a Funding Agreement with the Santa Clara Valley Water District for
Reimbursement Costs Incurred in Support of the Purified Water Project, and a Budget
Amendment in the Wastewater Treatment Fund Advanced Water Purification Facility
capital project (WQ‐19003)
13.Approval of Tenant Work Letter for Lease of 300 Homer Avenue Roth Building between
the City of Palo Alto and the Palo Alto Museum; CEQA Status‐‐Not a Project
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
CITY MANAGER COMMENTS 8:55‐9:10 PM
ACTION ITEMS Item 14: 9:10 ‐ 10:00 PM Item 15: 10:00‐ 11:00 PM
14.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Gas Utility
Financial Plan, Including Proposed Reserve and General Fund Transfers and Amending
the Gas Utility Reserve Management Practices, and Increasing Gas Rates by Amending
Rate Schedules G‐1 (Residential Gas Service), G‐2 (Residential Master‐Metered and
Commercial Gas Service), G‐3 (Large Commercial Gas Service), and G‐10 (Compressed
Natural Gas Service); CEQA status: exempt/not a project under Public Resources Code
section 21080(b)(8)
15.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Electric
Utility Financial Plan and Proposed Reserve Transfers, Deactivating Utility Rate
Schedule E‐HRA, and Amending Utility Rate Schedules E‐1, E‐2, E‐2‐G, E‐ 4, E‐4‐G, E‐4
TOU, E‐7, E‐7‐G, E‐7 TOU, E‐NSE, and E‐EEC; CEQA Status: Not a project under Public
Resources Code 15378(b)(5) and exempt under Public Resources Code 15273(a)
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
ADJOURNMENT
AMENDED AGENDA ITEMS
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 ‐ Supplemental Report
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to hybrid meetings via email, in person,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. In person public comments please complete a speaker request card located on the table at
the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the
item.
3. Spoken public comments using a computer or smart phone 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.
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. Or download the Zoom application onto your phone from the
Apple App Store or Google Play Store and enter the Meeting ID below
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.
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.
When called, please limit your remarks to the time limit allotted.
A timer will be shown on the computer to help keep track of your comments.
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.
Click to Join Zoom Meeting ID: 362‐027‐238 Phone: 1(669)900‐6833
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
Disabilities Act (ADA) of 1990, may contact (650) 329‐2550 (Voice) 48 hours or more in
advance.
1 Special Meeting April 17, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
CITY COUNCILSpecial MeetingMonday, April 17, 2023Council Chambers & Hybrid5:00 PMAmended AgendaAmended Agenda Items appear below in RedPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, a n d s t r e a m e d t o M i d p e n M e d i aCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATES
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.
CALL TO ORDER
CLOSED SESSION 5:05 ‐ 7:30 PM
1.CONFERENCE WITH CITY ATTORNEY‐EXISTING LITIGATION
California Court of Appeal, Sixth Appellate District, Case No. H049425
Subject: Hamilton and High LLC, et al., Appellants v. City of Palo Alto, et al., Respondents
Authority: Government Code Section 54956.9(d)(1)
2.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City
Manager and his Designees Pursuant to Merit System Rules and Regulations (Ed
Shikada, Kiely Nose, Sandra Blanch, Tori Anthony, Molly Stump, and Jennifer Fine)
Employee Organization: Service Employees International Union, (SEIU) Local 521, Utilities
Management and Professional Association of Palo Alto (UMPAPA), Palo Alto Peace
Officers’ 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)
STUDY SESSION 7:30 ‐ 8:30 PM
3.Study Session Regarding Proposed Electric, Gas, Water and Wastewater July 2023 Rate
Changes
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT 8:30‐8:50PM
CONSENT CALENDAR 8:50‐8:55 PM
4.Approval of Minutes from March 31, 2023 and April 3, 2023 City Council Meetings
5.Finance Committee and the Utilities Advisory Commission Recommend the City Council
Approve and Authorize the City Manager or Their Designee to Execute a Third Phase
Agreement With Northern California Power Agency for the Purchase of up to 87,600
Megawatt Hours per Year of Geothermal Energy From Calpine Corporation's Geysers
Power Company, LLC Over a Term of up to 12 Years for a Total not to Exceed Amount of
$76.2 Million; CEQA status: not a project under CEQA Guidelines sections 15378(a) and
(b)
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 – Supplemental Report Added
7.Approval of Amendment #3 with Professional Account Management LLC, dba Duncan
Solutions Contract (C17164727) in the Amount of $80,000 and to Extend the Contract
Term to April 28, 2024 for Parking Citation Management; CEQA Status – Not a Project.
8.Resolution to Oppose the Taxpayer Protection and Government Accountability Act
(Initiative 21‐0042A1)
9.Approve Substantial Amendments to the Community Development Block Grant (CDBG)
FY2021‐22 and FY2022‐23 Annual Action Plans and the Associated Budget Amendment
and Resolution Q&A
10.Staff Recommends that Council Approve Bringing the Water and Wastewater Rate
Proposals to Council on June 19, 2023, Pending Proposition 218 Notifications, for a
Public Hearing to Consider Two Resolutions: 1) Approving the Fiscal Year 2024
Wastewater Collection Utility Financial Plan, Proposed Reserve Transfers, and
Increasing Wastewater Collection Utility Rates by Amending Wastewater Collection
Rate Schedules S‐1, S‐2, S‐6 and S‐7; 2) Approving the Fiscal Year 2024 Water Utility
Financial Plan, Proposed Reserve Transfers, and Increasing Water Rates by Amending
Water Rate Schedules W‐1, W‐2, W‐3, W‐4, and W‐7; CEQA Status: Not a project under
Public Resources Code 15378(b)(5) Q&A
11.Adoption of a Memorandum of Agreement with the Palo Alto Police Officers'
Association and the Police Management Association; Adopt an Amendment to correct
the Fire Chiefs‘ Association salary schedules; and, Adopt revised Management and
Professional salary schedules CEQA Status ‐ Not a project
12.Approval of a Funding Agreement with the Santa Clara Valley Water District for
Reimbursement Costs Incurred in Support of the Purified Water Project, and a Budget
Amendment in the Wastewater Treatment Fund Advanced Water Purification Facility
capital project (WQ‐19003)
13.Approval of Tenant Work Letter for Lease of 300 Homer Avenue Roth Building between
the City of Palo Alto and the Palo Alto Museum; CEQA Status‐‐Not a Project
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
CITY MANAGER COMMENTS 8:55‐9:10 PM
ACTION ITEMS Item 14: 9:10 ‐ 10:00 PM Item 15: 10:00‐ 11:00 PM
14.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Gas Utility
Financial Plan, Including Proposed Reserve and General Fund Transfers and Amending
the Gas Utility Reserve Management Practices, and Increasing Gas Rates by Amending
Rate Schedules G‐1 (Residential Gas Service), G‐2 (Residential Master‐Metered and
Commercial Gas Service), G‐3 (Large Commercial Gas Service), and G‐10 (Compressed
Natural Gas Service); CEQA status: exempt/not a project under Public Resources Code
section 21080(b)(8)
15.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Electric
Utility Financial Plan and Proposed Reserve Transfers, Deactivating Utility Rate
Schedule E‐HRA, and Amending Utility Rate Schedules E‐1, E‐2, E‐2‐G, E‐ 4, E‐4‐G, E‐4
TOU, E‐7, E‐7‐G, E‐7 TOU, E‐NSE, and E‐EEC; CEQA Status: Not a project under Public
Resources Code 15378(b)(5) and exempt under Public Resources Code 15273(a)
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
ADJOURNMENT
AMENDED AGENDA ITEMS
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 ‐ Supplemental Report
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to hybrid meetings via email, in person,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. In person public comments please complete a speaker request card located on the table at
the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the
item.
3. Spoken public comments using a computer or smart phone 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.
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. Or download the Zoom application onto your phone from the
Apple App Store or Google Play Store and enter the Meeting ID below
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.
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.
When called, please limit your remarks to the time limit allotted.
A timer will be shown on the computer to help keep track of your comments.
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.
Click to Join Zoom Meeting ID: 362‐027‐238 Phone: 1(669)900‐6833
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
Disabilities Act (ADA) of 1990, may contact (650) 329‐2550 (Voice) 48 hours or more in
advance.
2 Special Meeting April 17, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
CITY COUNCILSpecial MeetingMonday, April 17, 2023Council Chambers & Hybrid5:00 PMAmended AgendaAmended Agenda Items appear below in RedPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, a n d s t r e a m e d t o M i d p e n M e d i aCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Council reserves the right to use more or less time on any item, tochange the order of items and/or to continue items to another meeting. Particular items may beheard before or after the time estimated on the agenda. This may occur in order to best managethe time at a meeting or to adapt to the participation of the public.CALL TO ORDERCLOSED SESSION 5:05 ‐ 7:30 PM1.CONFERENCE WITH CITY ATTORNEY‐EXISTING LITIGATIONCalifornia Court of Appeal, Sixth Appellate District, Case No. H049425Subject: Hamilton and High LLC, et al., Appellants v. City of Palo Alto, et al., RespondentsAuthority: Government Code Section 54956.9(d)(1)2.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: CityManager and his Designees Pursuant to Merit System Rules and Regulations (EdShikada, Kiely Nose, Sandra Blanch, Tori Anthony, Molly Stump, and Jennifer Fine)Employee Organization: Service Employees International Union, (SEIU) Local 521, UtilitiesManagement and Professional Association of Palo Alto (UMPAPA), Palo Alto PeaceOfficers’ 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)STUDY SESSION 7:30 ‐ 8:30 PM3.Study Session Regarding Proposed Electric, Gas, Water and Wastewater July 2023 RateChangesAGENDA CHANGES, ADDITIONS AND DELETIONSPUBLIC COMMENT 8:30‐8:50PMCONSENT CALENDAR 8:50‐8:55 PM4.Approval of Minutes from March 31, 2023 and April 3, 2023 City Council Meetings5.Finance Committee and the Utilities Advisory Commission Recommend the City CouncilApprove and Authorize the City Manager or Their Designee to Execute a Third PhaseAgreement With Northern California Power Agency for the Purchase of up to 87,600Megawatt Hours per Year of Geothermal Energy From Calpine Corporation's GeysersPower Company, LLC Over a Term of up to 12 Years for a Total not to Exceed Amount of$76.2 Million; CEQA status: not a project under CEQA Guidelines sections 15378(a) and(b)
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 – Supplemental Report Added
7.Approval of Amendment #3 with Professional Account Management LLC, dba Duncan
Solutions Contract (C17164727) in the Amount of $80,000 and to Extend the Contract
Term to April 28, 2024 for Parking Citation Management; CEQA Status – Not a Project.
8.Resolution to Oppose the Taxpayer Protection and Government Accountability Act
(Initiative 21‐0042A1)
9.Approve Substantial Amendments to the Community Development Block Grant (CDBG)
FY2021‐22 and FY2022‐23 Annual Action Plans and the Associated Budget Amendment
and Resolution Q&A
10.Staff Recommends that Council Approve Bringing the Water and Wastewater Rate
Proposals to Council on June 19, 2023, Pending Proposition 218 Notifications, for a
Public Hearing to Consider Two Resolutions: 1) Approving the Fiscal Year 2024
Wastewater Collection Utility Financial Plan, Proposed Reserve Transfers, and
Increasing Wastewater Collection Utility Rates by Amending Wastewater Collection
Rate Schedules S‐1, S‐2, S‐6 and S‐7; 2) Approving the Fiscal Year 2024 Water Utility
Financial Plan, Proposed Reserve Transfers, and Increasing Water Rates by Amending
Water Rate Schedules W‐1, W‐2, W‐3, W‐4, and W‐7; CEQA Status: Not a project under
Public Resources Code 15378(b)(5) Q&A
11.Adoption of a Memorandum of Agreement with the Palo Alto Police Officers'
Association and the Police Management Association; Adopt an Amendment to correct
the Fire Chiefs‘ Association salary schedules; and, Adopt revised Management and
Professional salary schedules CEQA Status ‐ Not a project
12.Approval of a Funding Agreement with the Santa Clara Valley Water District for
Reimbursement Costs Incurred in Support of the Purified Water Project, and a Budget
Amendment in the Wastewater Treatment Fund Advanced Water Purification Facility
capital project (WQ‐19003)
13.Approval of Tenant Work Letter for Lease of 300 Homer Avenue Roth Building between
the City of Palo Alto and the Palo Alto Museum; CEQA Status‐‐Not a Project
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
CITY MANAGER COMMENTS 8:55‐9:10 PM
ACTION ITEMS Item 14: 9:10 ‐ 10:00 PM Item 15: 10:00‐ 11:00 PM
14.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Gas Utility
Financial Plan, Including Proposed Reserve and General Fund Transfers and Amending
the Gas Utility Reserve Management Practices, and Increasing Gas Rates by Amending
Rate Schedules G‐1 (Residential Gas Service), G‐2 (Residential Master‐Metered and
Commercial Gas Service), G‐3 (Large Commercial Gas Service), and G‐10 (Compressed
Natural Gas Service); CEQA status: exempt/not a project under Public Resources Code
section 21080(b)(8)
15.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Electric
Utility Financial Plan and Proposed Reserve Transfers, Deactivating Utility Rate
Schedule E‐HRA, and Amending Utility Rate Schedules E‐1, E‐2, E‐2‐G, E‐ 4, E‐4‐G, E‐4
TOU, E‐7, E‐7‐G, E‐7 TOU, E‐NSE, and E‐EEC; CEQA Status: Not a project under Public
Resources Code 15378(b)(5) and exempt under Public Resources Code 15273(a)
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
ADJOURNMENT
AMENDED AGENDA ITEMS
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 ‐ Supplemental Report
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to hybrid meetings via email, in person,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. In person public comments please complete a speaker request card located on the table at
the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the
item.
3. Spoken public comments using a computer or smart phone 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.
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. Or download the Zoom application onto your phone from the
Apple App Store or Google Play Store and enter the Meeting ID below
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.
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.
When called, please limit your remarks to the time limit allotted.
A timer will be shown on the computer to help keep track of your comments.
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.
Click to Join Zoom Meeting ID: 362‐027‐238 Phone: 1(669)900‐6833
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
Disabilities Act (ADA) of 1990, may contact (650) 329‐2550 (Voice) 48 hours or more in
advance.
3 Special Meeting April 17, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
CITY COUNCILSpecial MeetingMonday, April 17, 2023Council Chambers & Hybrid5:00 PMAmended AgendaAmended Agenda Items appear below in RedPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, a n d s t r e a m e d t o M i d p e n M e d i aCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Council reserves the right to use more or less time on any item, tochange the order of items and/or to continue items to another meeting. Particular items may beheard before or after the time estimated on the agenda. This may occur in order to best managethe time at a meeting or to adapt to the participation of the public.CALL TO ORDERCLOSED SESSION 5:05 ‐ 7:30 PM1.CONFERENCE WITH CITY ATTORNEY‐EXISTING LITIGATIONCalifornia Court of Appeal, Sixth Appellate District, Case No. H049425Subject: Hamilton and High LLC, et al., Appellants v. City of Palo Alto, et al., RespondentsAuthority: Government Code Section 54956.9(d)(1)2.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: CityManager and his Designees Pursuant to Merit System Rules and Regulations (EdShikada, Kiely Nose, Sandra Blanch, Tori Anthony, Molly Stump, and Jennifer Fine)Employee Organization: Service Employees International Union, (SEIU) Local 521, UtilitiesManagement and Professional Association of Palo Alto (UMPAPA), Palo Alto PeaceOfficers’ 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)STUDY SESSION 7:30 ‐ 8:30 PM3.Study Session Regarding Proposed Electric, Gas, Water and Wastewater July 2023 RateChangesAGENDA CHANGES, ADDITIONS AND DELETIONSPUBLIC COMMENT 8:30‐8:50PMCONSENT CALENDAR 8:50‐8:55 PM4.Approval of Minutes from March 31, 2023 and April 3, 2023 City Council Meetings5.Finance Committee and the Utilities Advisory Commission Recommend the City CouncilApprove and Authorize the City Manager or Their Designee to Execute a Third PhaseAgreement With Northern California Power Agency for the Purchase of up to 87,600Megawatt Hours per Year of Geothermal Energy From Calpine Corporation's GeysersPower Company, LLC Over a Term of up to 12 Years for a Total not to Exceed Amount of$76.2 Million; CEQA status: not a project under CEQA Guidelines sections 15378(a) and(b)6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year2021‐2022 – Supplemental Report Added7.Approval of Amendment #3 with Professional Account Management LLC, dba DuncanSolutions Contract (C17164727) in the Amount of $80,000 and to Extend the ContractTerm to April 28, 2024 for Parking Citation Management; CEQA Status – Not a Project.8.Resolution to Oppose the Taxpayer Protection and Government Accountability Act(Initiative 21‐0042A1)9.Approve Substantial Amendments to the Community Development Block Grant (CDBG)FY2021‐22 and FY2022‐23 Annual Action Plans and the Associated Budget Amendmentand Resolution Q&A10.Staff Recommends that Council Approve Bringing the Water and Wastewater RateProposals to Council on June 19, 2023, Pending Proposition 218 Notifications, for aPublic Hearing to Consider Two Resolutions: 1) Approving the Fiscal Year 2024Wastewater Collection Utility Financial Plan, Proposed Reserve Transfers, andIncreasing Wastewater Collection Utility Rates by Amending Wastewater CollectionRate Schedules S‐1, S‐2, S‐6 and S‐7; 2) Approving the Fiscal Year 2024 Water UtilityFinancial Plan, Proposed Reserve Transfers, and Increasing Water Rates by AmendingWater Rate Schedules W‐1, W‐2, W‐3, W‐4, and W‐7; CEQA Status: Not a project underPublic Resources Code 15378(b)(5) Q&A11.Adoption of a Memorandum of Agreement with the Palo Alto Police Officers'Association and the Police Management Association; Adopt an Amendment to correctthe Fire Chiefs‘ Association salary schedules; and, Adopt revised Management andProfessional salary schedules CEQA Status ‐ Not a project12.Approval of a Funding Agreement with the Santa Clara Valley Water District forReimbursement Costs Incurred in Support of the Purified Water Project, and a BudgetAmendment in the Wastewater Treatment Fund Advanced Water Purification Facilitycapital project (WQ‐19003)13.Approval of Tenant Work Letter for Lease of 300 Homer Avenue Roth Building betweenthe City of Palo Alto and the Palo Alto Museum; CEQA Status‐‐Not a ProjectAA1.Adoption of a Resolution Authorizing the City Manager to Execute ParticipationAgreements on Behalf of the City of Palo Alto to Enter Into Settlement AgreementsRegarding Manufacture and Distribution of Opioid Products with Allergan Finance, LLCand related entities (Allergan), Teva Pharmaceutical Industries Ltd. and relatedentities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),and Walmart, 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.
CITY MANAGER COMMENTS 8:55‐9:10 PM
ACTION ITEMS Item 14: 9:10 ‐ 10:00 PM Item 15: 10:00‐ 11:00 PM
14.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Gas Utility
Financial Plan, Including Proposed Reserve and General Fund Transfers and Amending
the Gas Utility Reserve Management Practices, and Increasing Gas Rates by Amending
Rate Schedules G‐1 (Residential Gas Service), G‐2 (Residential Master‐Metered and
Commercial Gas Service), G‐3 (Large Commercial Gas Service), and G‐10 (Compressed
Natural Gas Service); CEQA status: exempt/not a project under Public Resources Code
section 21080(b)(8)
15.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Electric
Utility Financial Plan and Proposed Reserve Transfers, Deactivating Utility Rate
Schedule E‐HRA, and Amending Utility Rate Schedules E‐1, E‐2, E‐2‐G, E‐ 4, E‐4‐G, E‐4
TOU, E‐7, E‐7‐G, E‐7 TOU, E‐NSE, and E‐EEC; CEQA Status: Not a project under Public
Resources Code 15378(b)(5) and exempt under Public Resources Code 15273(a)
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
ADJOURNMENT
AMENDED AGENDA ITEMS
6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year
2021‐2022 ‐ Supplemental Report
AA1.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 Allergan Finance, LLC
and related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),
and Walmart, 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.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to hybrid meetings via email, in person,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. In person public comments please complete a speaker request card located on the table at
the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the
item.
3. Spoken public comments using a computer or smart phone 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.
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. Or download the Zoom application onto your phone from the
Apple App Store or Google Play Store and enter the Meeting ID below
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.
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.
When called, please limit your remarks to the time limit allotted.
A timer will be shown on the computer to help keep track of your comments.
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.
Click to Join Zoom Meeting ID: 362‐027‐238 Phone: 1(669)900‐6833
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
Disabilities Act (ADA) of 1990, may contact (650) 329‐2550 (Voice) 48 hours or more in
advance.
4 Special Meeting April 17, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
CITY COUNCILSpecial MeetingMonday, April 17, 2023Council Chambers & Hybrid5:00 PMAmended AgendaAmended Agenda Items appear below in RedPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, a n d s t r e a m e d t o M i d p e n M e d i aCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Council reserves the right to use more or less time on any item, tochange the order of items and/or to continue items to another meeting. Particular items may beheard before or after the time estimated on the agenda. This may occur in order to best managethe time at a meeting or to adapt to the participation of the public.CALL TO ORDERCLOSED SESSION 5:05 ‐ 7:30 PM1.CONFERENCE WITH CITY ATTORNEY‐EXISTING LITIGATIONCalifornia Court of Appeal, Sixth Appellate District, Case No. H049425Subject: Hamilton and High LLC, et al., Appellants v. City of Palo Alto, et al., RespondentsAuthority: Government Code Section 54956.9(d)(1)2.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: CityManager and his Designees Pursuant to Merit System Rules and Regulations (EdShikada, Kiely Nose, Sandra Blanch, Tori Anthony, Molly Stump, and Jennifer Fine)Employee Organization: Service Employees International Union, (SEIU) Local 521, UtilitiesManagement and Professional Association of Palo Alto (UMPAPA), Palo Alto PeaceOfficers’ 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)STUDY SESSION 7:30 ‐ 8:30 PM3.Study Session Regarding Proposed Electric, Gas, Water and Wastewater July 2023 RateChangesAGENDA CHANGES, ADDITIONS AND DELETIONSPUBLIC COMMENT 8:30‐8:50PMCONSENT CALENDAR 8:50‐8:55 PM4.Approval of Minutes from March 31, 2023 and April 3, 2023 City Council Meetings5.Finance Committee and the Utilities Advisory Commission Recommend the City CouncilApprove and Authorize the City Manager or Their Designee to Execute a Third PhaseAgreement With Northern California Power Agency for the Purchase of up to 87,600Megawatt Hours per Year of Geothermal Energy From Calpine Corporation's GeysersPower Company, LLC Over a Term of up to 12 Years for a Total not to Exceed Amount of$76.2 Million; CEQA status: not a project under CEQA Guidelines sections 15378(a) and(b)6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year2021‐2022 – Supplemental Report Added7.Approval of Amendment #3 with Professional Account Management LLC, dba DuncanSolutions Contract (C17164727) in the Amount of $80,000 and to Extend the ContractTerm to April 28, 2024 for Parking Citation Management; CEQA Status – Not a Project.8.Resolution to Oppose the Taxpayer Protection and Government Accountability Act(Initiative 21‐0042A1)9.Approve Substantial Amendments to the Community Development Block Grant (CDBG)FY2021‐22 and FY2022‐23 Annual Action Plans and the Associated Budget Amendmentand Resolution Q&A10.Staff Recommends that Council Approve Bringing the Water and Wastewater RateProposals to Council on June 19, 2023, Pending Proposition 218 Notifications, for aPublic Hearing to Consider Two Resolutions: 1) Approving the Fiscal Year 2024Wastewater Collection Utility Financial Plan, Proposed Reserve Transfers, andIncreasing Wastewater Collection Utility Rates by Amending Wastewater CollectionRate Schedules S‐1, S‐2, S‐6 and S‐7; 2) Approving the Fiscal Year 2024 Water UtilityFinancial Plan, Proposed Reserve Transfers, and Increasing Water Rates by AmendingWater Rate Schedules W‐1, W‐2, W‐3, W‐4, and W‐7; CEQA Status: Not a project underPublic Resources Code 15378(b)(5) Q&A11.Adoption of a Memorandum of Agreement with the Palo Alto Police Officers'Association and the Police Management Association; Adopt an Amendment to correctthe Fire Chiefs‘ Association salary schedules; and, Adopt revised Management andProfessional salary schedules CEQA Status ‐ Not a project12.Approval of a Funding Agreement with the Santa Clara Valley Water District forReimbursement Costs Incurred in Support of the Purified Water Project, and a BudgetAmendment in the Wastewater Treatment Fund Advanced Water Purification Facilitycapital project (WQ‐19003)13.Approval of Tenant Work Letter for Lease of 300 Homer Avenue Roth Building betweenthe City of Palo Alto and the Palo Alto Museum; CEQA Status‐‐Not a ProjectAA1.Adoption of a Resolution Authorizing the City Manager to Execute ParticipationAgreements on Behalf of the City of Palo Alto to Enter Into Settlement AgreementsRegarding Manufacture and Distribution of Opioid Products with Allergan Finance, LLCand related entities (Allergan), Teva Pharmaceutical Industries Ltd. and relatedentities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),and Walmart, Inc.; Agree to the Terms of the Memorandum of Understanding (MOU)Allocating Settlement Proceeds; and Authorize Entry Into the MOU with the CaliforniaAttorney General.CITY MANAGER COMMENTS 8:55‐9:10 PMACTION ITEMS Item 14: 9:10 ‐ 10:00 PM Item 15: 10:00‐ 11:00 PM14.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Gas UtilityFinancial Plan, Including Proposed Reserve and General Fund Transfers and Amendingthe Gas Utility Reserve Management Practices, and Increasing Gas Rates by AmendingRate Schedules G‐1 (Residential Gas Service), G‐2 (Residential Master‐Metered andCommercial Gas Service), G‐3 (Large Commercial Gas Service), and G‐10 (CompressedNatural Gas Service); CEQA status: exempt/not a project under Public Resources Codesection 21080(b)(8)15.PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 ElectricUtility Financial Plan and Proposed Reserve Transfers, Deactivating Utility RateSchedule E‐HRA, and Amending Utility Rate Schedules E‐1, E‐2, E‐2‐G, E‐ 4, E‐4‐G, E‐4TOU, E‐7, E‐7‐G, E‐7 TOU, E‐NSE, and E‐EEC; CEQA Status: Not a project under PublicResources Code 15378(b)(5) and exempt under Public Resources Code 15273(a)COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTSADJOURNMENTAMENDED AGENDA ITEMS6.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year2021‐2022 ‐ Supplemental ReportAA1.Adoption of a Resolution Authorizing the City Manager to Execute ParticipationAgreements on Behalf of the City of Palo Alto to Enter Into Settlement AgreementsRegarding Manufacture and Distribution of Opioid Products with Allergan Finance, LLCand related entities (Allergan), Teva Pharmaceutical Industries Ltd. and relatedentities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc. (CVS),and Walmart, 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.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to hybrid meetings via email, in person,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. In person public comments please complete a speaker request card located on the table at
the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the
item.
3. Spoken public comments using a computer or smart phone 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.
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. Or download the Zoom application onto your phone from the
Apple App Store or Google Play Store and enter the Meeting ID below
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.
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.
When called, please limit your remarks to the time limit allotted.
A timer will be shown on the computer to help keep track of your comments.
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.
Click to Join Zoom Meeting ID: 362‐027‐238 Phone: 1(669)900‐6833
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
Disabilities Act (ADA) of 1990, may contact (650) 329‐2550 (Voice) 48 hours or more in
advance.
5 Special Meeting April 17, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
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City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Utilities
Meeting Date: April 17, 2023
Staff Report:2304-1247
TITLE
Study Session Regarding Proposed Electric, Gas, Water and Wastewater July 2023 Rate Changes
RECOMMENDATION
This is an informational report to facilitate the Council study session on customer utility rates.
No action by Council will be taken.
EXECUTIVE SUMMARY
The overall system average proposed rate changes in FY 2024 are
- 5% decrease for electric,
- 8% increase for gas (excludes changes in gas market prices),
- 6% increase for water, and
- 9% increase for wastewater.
Across the Electric, Gas, Water and Wastewater utilities, costs continue to increase, including
construction cost inflation, commodity price increases and the rising cost to transport energy and
water. Additionally, infrastructure is aging and investment is needed to maintain the health of
utilities and protect reliability.
Gas market prices spiked this winter; it cost Palo Alto Utilities five times more to buy gas in the
markets this January compared to January 2022. Figure 1 summarizes the impact of the proposals
on a median residential customer’s utility bill and illustrates the magnitude of the gas market
price spike impacts on customer bills. With gas market price changes included, gas bills for FY
2024 are expected to be 13% lower than in FY 2023, though forecasts of gas market prices are
highly uncertain.
In addition to this study session there are three rates-related items on the agenda for Council’s
consideration tonight:
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 1 Packet Pg. 6 of 853
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•Public Hearing Action Item: FY 2024 Gas Utility Financial Plan & Rates Staff Report 2303-
1219 to adopt a resolution approving the FY 2024 Gas Utility financial plan, including
proposed reserve transfers and general fund transfer (recommended at 15.5% of gross
revenues), amend the Gas Utility Reserve Management Practices, and increase gas rates
by amending gas rate schedules G-1, G-2, G-3 and G-10. Included in this item is the Council
decision regarding whether to transfer up to 18% of the gross revenues of the gas utility
to the general fund or a lesser amount in FY 2024. The Finance Committee (2-1)
recommends a transfer at the 15.5% rate, though the staff report referenced above does
outline alternatives for consideration.
•Public Hearing Action Item: FY 2024 Electric Utility Financial Plan & Rates Staff Report
2303-1235 to adopt a resolution approving the FY 2024 Electric Utility financial plan,
including proposed reserve transfers, and modify electric rates by deactivating the
hydroelectric rate adjuster and amending electric rate schedules E-1, E-2, E-2-G, E- 4,
E-4-G, E-4 TOU, E-7, E-7-G, E-7 TOU, E-NSE, and E-EEC.
•Public Noticing Consent Item: Water and Wastewater FY 2024 Utility Financial Plan &
Rates Staff Report 2303-1218 is a public noticing on consent calendar regarding Water,
and Wastewater Collection rates, and recommends approval for a public hearing on June
19, 2023 for Water and Wastewater rates, pending Proposition 218 customer
notifications, as recommended by the Finance Committee on March 21, 2023. Finance
Committee Staff Report includes the financial plans and rate proposals for water and
wastewater utilities presented to the Finance Committee.
•The June 19, 2023 Council packet will include the rates and financial plans for water and
wastewater and the CPI increases for storm drain, and fiber rates. No rate changes are
recommended for refuse rates in FY 2024.
BACKGROUND
The City absorbed utility cost increases during the pandemic. Increased costs for construction,
operations, energy, and water were not fully passed through to customers in 2020, 2021, and
2022 and were instead absorbed from reserves. As a result, revenues are too low to maintain
normal operations in all utilities, except water. Reserves are lower than expected, because
although the City intended to phase in rate increases slowly using reserves, spiking energy prices,
inflation and other factors led to very low reserves in all utilities except water. As drought
conditions continued to impact the City’s hydroelectric supplies and as energy prices rose and
spiked this past winter, the Council took several actions.
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 2 Packet Pg. 7 of 853
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2022 Council Rate Actions Responding to Drought and Rising Energy Prices
-Effective April 1, 2022, the Electric Hydro Rate Adjuster went into effect for every CPAU
electric customer (see Staff Report 13905)1.
-On December 19, 2022 the Palo Alto City Council approved an increase to the Electric
Hydro Rate Adjuster, increasing the current Electric Hydro Rate from $0.013/kWh to
$0.048/kWh, effective January 1, 2023. See Staff Report 148742 for more details. This
increase was necessary to reflect hydrological conditions and market purchase costs
impacted by ongoing drought conditions at that time.
-On December 19, 2022, the Palo Alto City Council approved an increase to the gas
monthly market-based commodity rate cap from $2.00 per therm to $4.00 per therm. See
Staff Report 150473 for more details.
These actions protected the financial health of the electric and gas utilities. However, the
rapidly shifting market prices significantly impacted customer bills.
Bill Impacts
Natural gas prices were extreme this winter due to changes in market supply and demand.
However, gas prices are dropping. March customer gas bills were less than 50% of February and
April gas bill projections are expected to be even lower. Customer gas bills are expected to
continue to decline through June. Although it is not possible to precisely predict commodity rates,
staff monitors market prices monthly and automatically incorporates market prices into monthly
supply rate adjustments, which are passed directly to customers as a line item on their utility
bills. Staff projects commodity prices to decline in FY 2024. Beyond FY 2024 the forecast assumes
(consistent with current gas market forecasts from various sources, including forward gas
contracts on exchanges, forecasts from suppliers, and the Federal Energy Information
Administration) overall supply costs will increase gradually from FY 2025 through FY 2028,
remaining higher than historical gas prices.
Figure 1 shows monthly median residential bills and how they increased to unprecedented levels
as the natural gas market prices spiked. The figure also shows the projected bills for this summer
in June and then in July to illustrate the impacts of these proposed rate increases that are
proposed to be effective July 1, 2023. Next winter (January 2024), the forecast does not
anticipate another gas price spike; however, gas commodity prices are highly variable, and
weather or economic factors could shift this forecast rapidly, in which case any changes in
1 Council Staff Report 13905 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/city-council-agendas-minutes/2022/20220314/20220314pccsm-amended-final-revised-
ppt.pdf
2 Council Staff Report 14874 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=2275
3 Council Staff Report 15047 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/city-council-agendas-minutes/2022/20221219/20221219pccsm-amendedtime.pdf
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 3 Packet Pg. 8 of 853
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commodity costs would be passed through to customers via the monthly varying commodity rate
adjuster.
Figure 1: Total Monthly Median Residential Bill
4 in addition to
sharing public communication through OpEds and press releases for publication in the local
media, blog posts, social media, Nextdoor, bill inserts, fliers for community events, utilities and
other City newsletters, with neighborhood groups and key account customers, and providing
customer service or other public-facing staff and management groups with frequently asked
questions (FAQs).
4 City of Palo Alto Utilities Rates Overview webpage
https://www.cityofpaloalto.org/Departments/Utilities/Customer-Service/Utilities-Rates
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Efficiency Programs
•Free efficiency assessments. The City is providing free assessments from CPAU’s home
energy advisor, the Home Efficiency Genie5, to help people reduce consumption and save
money.
https://www.cityofpaloalto.org/Departments/Utilities/Residential/Home-Efficiency-
Genie
•Extended payment. The City is offering payment plan arrangements for those who need
extra time paying their winter gas bills. Payment can be extended for 6-8 months.
Customer may pay bills in installments, by contacting Utilities Customer Service at (650)
329–2161, or visit our Utilities Customer Service web6 page.
https://www.cityofpaloalto.org/Departments/Utilities/Customer-Service
•Rate assistance7 and free home energy upgrades for income-qualified customers.
Residents struggling to pay their utilities bills may qualify for CPAU’s Rate Assistance
Program, which provides a 25% discount on gas and electricity charges and a 20% discount
on storm drain service fees. https://www.cityofpaloalto.org/rap
•Residential Energy Assistance Program8. Customers may be able to reduce energy and
water costs by having CPAU help improve their home's efficiency through the Residential
Energy Assistance Program.
•ProjectPLEDGE9. CPAU's ProjectPLEDGE may be able to help customers in need with one-
time assistance. Please call Utilities Customer Service at (650) 329-2161 to determine
your eligibility.
•California Arrearage Payment Program (CAPP): This newly established California
Arrearage Payment Program (CAPP)10 will offer financial assistance for California energy
5 Home Efficiency Genie https://www.cityofpaloalto.org/Departments/Utilities/Residential/Home-Efficiency-Genie
6 City of Palo Alto Utilities Customer Service webpage
https://www.cityofpaloalto.org/Departments/Utilities/Customer-Service
7 Rate Assistance Program https://www.cityofpaloalto.org/Departments/Utilities/Residential/Utilities-
Assistance/Rate-Assistance-Program-RAP
8 Residential Energy Assistance Program
https://www.cityofpaloalto.org/Departments/Utilities/Residential/Utilities-Assistance/Residential-Energy-
Assistance-Program-REAP
9 ProjectPLEDGE https://www.cityofpaloalto.org/Departments/Utilities/Residential/Utilities-Assistance/Project-
Pledge
10 California Arrearage Payment Program https://www.cityofpaloalto.org/News-Articles/Utilities/California-
Arrearage-Payment-Program-CAPP
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utility customers to help reduce past due energy bill balances that increased during the
COVID-19 pandemic.
Gas & Electric Utility Rebates
Additionally, on March 27, 2023, Palo Alto City Council approved a one-time residential natural
gas rebate to mitigate the extraordinarily high January 2023 gas bills. On April 10, 2023, Palo Alto
City Council will consider final approval of both a gas and electric utility rebate totaling $2.5
million to be funded by the City’s General Fund. Below is a table of the combined gas and electric
rebates if a residential customer has both gas and electric utility services. City staff will calculate
the individual residential rebate amount based on the number of services, RAP enrollment, and
arrearage status. The rebates will be applied on customer’s April or May 2023 utility bill as
“Winter Rebate” depending on their billing schedule. Customers who apply for the Winter
Rebate hardship program will receive a subsequent rebate after their application is approved.
A customer with a low January bill (less than $400 gas bill and less than $300 electric bill) will
receive a rebate of $90; they may also qualify for an additional $400 rebate if they are enrolled
in RAP and have arrearages greater than 180 days. A customer with a high January bill (greater
than $800 gas bill and greater than $500 electric) will receive a rebate of $165, they may also
qualify for an additional $400 rebate if they are enrolled in RAP and have arrearages greater than
180 days.
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M 9 1 6$8$4$1$
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ANALYSIS
Overall, staff with the Utilities Advisory Commission and Finance Committee are recommending
the following rate changes:
1) 37% increase includes 4/1/22 hydro rate adjuster (HRA) activation (10%), 7/1/22 5% rate increase, and 1/1/23
HRA increase (19%)
2) -5% change includes a 21% increase to base electric rates and removal of the HRA
3) Gas utility rates shown exclude gas market price changes. FY 24 bill forecast w/ market price changes is (-13%).
Actual rates will vary.
4)Storm Drain fees increase by CPI index annually per approved 2017 ballot measure.
5)Analysis based on an FY 2023 average monthly bill of $369
This study session is seeking to inform the full Council and the public of rate discussions that have
occurred through March 2023 with the Utilities Advisory Commission and the Finance
Committee. It is intended to allow for a comprehensive understanding of the total customer bill
impact expected beginning July 1, 2023 should these plans be approved. The report specifically
is organized by utility as follows:
•Shared drivers of recommended rate changes
•Electric Utility
•Gas Utility
•Water Utility
•Wastewater Utility
Following these specific utility discussions is the expected schedule for approval including the
potential approval of gas and electric utility rates on this same April 17 Council agenda with the
remaining rates as well as fiber customer rates to be considered for adoption on June 19, 2023.
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Shared Drivers of the Rate Changes
The skyrocketing winter energy prices are just one of several trends that will affect people’s utility
bills in 2023, but they are one of the most impactful. However, as energy supply costs decline
from the extremely high winter 2022/2023 levels, the City will continue to pass those supply cost
declines through to customers through the monthly gas commodity rate adjuster and by
deactivating the electric utility’s hydroelectric rate adjuster in July.
There are several shared drivers of rate increases across the four utilities. Costs continue to
increase across the Electric, Gas, Water and Wastewater utilities. Construction inflation remains
a difficult challenge for all public agencies in the Bay Area, and other types of inflation has
affected all utility costs, including salary and benefit costs. The utilities are also recovering from
the pandemic. During the pandemic the City kept rate increases low to help customer suffering
from economic impacts, so in all utilities revenues are currently below costs.
The City of Palo Alto had hoped to phase in needed rate increases gradually after the pandemic
using reserves, but in most utilities that is no longer possible. For electric and gas, the winter
2022/2023 energy supply cost spikes were not passed through completely to customers, and the
difference was absorbed from reserves. Reserve levels in both utilities will be very low by the end
of FY 2023, making it impossible to phase in rate increases slowly without bringing reserves even
further below minimum guideline levels. The Wastewater Collection utility will have low reserves
by the end of FY 2023 as well.
Electric Utility
Staff and the Finance Committee is proposing a set of rate changes that will decrease bills by 5%.
Staff is proposing to deactivate the hydroelectric rate adjuster while increasing base electric rates
21%, for a net decrease in utility bills of 5%. This is in contrast to the original staff proposal
recommended for approval by the UAC in March of this year, which involved a 50% reduction in
the hydroelectric rate adjuster and a 14% increase in the base electric rates. The new proposal is
made possible by the expected receipt of a $24 million refund from the Bureau of Reclamation
of overcharges associated with the Central Valley Project, where the City gets most of its
hydroelectric power, as a result of a successful result in litigation the City participated in against
the Bureau.
The City uses a hydroelectric rate adjuster because of the year to year variability of output from
its hydroelectric resources. On average these have been low cost resources, but the costs are
largely fixed and the amount of electricity generated varies year to year. This can lead to higher
energy supply costs during dry years and lower energy supply costs during wet years. The City
manages this variability using the hydroelectric stabilization reserve, which accumulates reserves
during wet years and spends them down during dry years, and the hydroelectric rate adjuster,
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which is a surcharge on electric customer bills activated when the hydroelectric stabilization
reserve reaches low levels (less than $11 million) and dry conditions continue.
•First, without the hydroelectric rate adjuster, FY 2024 electric utility revenues are
projected to be approximately $32 million below costs. This is due to several factors:
o Rates were not increased during the pandemic while costs continued to increase.
o Hydroelectric output has been low and is forecasted to be lower on average going
forward than it was historically.
o Electricity supply costs increased greatly in late 2022 and early 2023 and are
expected to remain elevated in future years, though lower than winter of
2022/2023.
•By the end of FY 2023 the Electric Utility Supply and Distribution Operations Reserves,
which are the risk management reserves for the utility, are projected to be at $19.5
million at the end of FY 2023, which is $11.3 million (36%) below the minimum guidelines
of $31 million.
•In addition to being below the minimum guidelines the City has loaned $10 million from
its Electric Special Projects Reserve to the Operations Reserves, which is due to be repaid
over the next several fiscal years.
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to bring them closer to the minimum guidelines. Even with this addition and the rate increase,
the Operations Reserves are only expected to reach minimum levels in FY 2025.
•Transfer $8 million to the Hydroelectric Stabilization Reserve to help facilitate elimination
of the Hydroelectric Rate Adjuster.
•Repay $10 million in internal loans and avoid the need for additional internal loans, which
also allows rates to be slightly lower in FY 2024 since future loan repayments are no longer
needed.
•Add $6 million to the Operations Reserves to bring them closer to the minimum
guidelines.
11, March 21, 2023.
Gas Utility
11 Finance Committee Staff Report 2303-1109
https://cityofpaloalto.primegov.com/meeting/document/1854.pdf?name=Item%204%20Staff%20Report
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Figure 2: Monthly Median Residential Gas Bill
Staff is proposing to increase the distribution component of the gas rates in FY 2024 to ensure
the utility is recovering its costs of operations. Revenues were already below costs after keeping
rate increases low through the pandemic, but construction inflation and other factors have driven
costs up. The distribution rate increase is projected to increase overall customer bills
approximately 8%, though changes to gas supply costs mean that the actual impact to customer
bills may be higher or lower. This 8% increase in customer bills results from increasing the
distribution component of the rates 21% to fully recover distribution costs and avoid decreasing
reserves further.
Even with this distribution rate increase, based on current market forecasts staff expects average
annual customer gas bills to decline 13% in FY 2024 compared to FY 2023 because gas supply
costs were extremely high in FY 2023, particularly in the winter. FY 2024 annual gas supply costs
are forecasted to be about 36% lower than FY 2023. Gas market prices are uncertain, however,
and these forecasts can change.
The distribution rate increase is driven by two things: 1) the need to replenish reserves, which
were depleted by significant losses due to FY 2023 commodity costs that were not be fully passed
through to customers under the City’s commodity rate cap of $4 per therm, and 2) continuing
increases in capital and operating costs. Distribution rates did not keep up with these increased
costs as the City pursued a Council policy to minimize rate increases during the economic
downturn associated with the COVID-19 pandemic.
The gas utility's transfer to the City’s General Fund is another component of the City’s gas rates.
City voters first authorized the transfer in 1950, and in November 2022 voters approved Measure
L, affirming the continuation of this practice by adding section 2.28.185 to the Municipal Code.
Each year the City Council may transfer from the gas utility to the general fund an amount up to
18% of the gross revenues of the gas utility, though Council may choose to transfer a lesser
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amount. Staff is seeking a Council decision on the amount of the FY 2024 transfer as part of its
rate change proposal at tonight’s (April 17, 2023) Council meeting (Staff Report 2303-1219). All
rate and cost discussions in this staff report are based on Alternative 2, which involves
transferring up to 18% of gas utility gross revenues in FY 2023 and 15.5% in FY 2024. The UAC
recommended Alternative 2 for adoption (with one dissenting vote for reasons unrelated to the
transfer), as did the Finance Committee (with one dissenting vote specifically related to the
transfer).
Additional detail on the staff proposal is available in Staff Report 2302-094612, March 21, 2023
and Staff Report 2303-1219 on tonight’s (April 17, 2023) Council agenda.
Water Utility
The City’s water rate schedules consist of a volumetric charge for each CCF (100 Cubic Feet or
748 gallons) of water consumed during the billing period and a monthly service charge for each
customer, based on water meter size. The volumetric charge has two parts: a wholesale
commodity rate (or San Francisco Public Utilities Commission or SFPUC wholesale rate), and a
customer volumetric rate. Water rates are designed to recover the City’s costs of buying and
distributing water while maintaining adequate financial reserves. The customer volumetric rate
and the monthly service charge together are considered the distribution rates; revenue from
those rates pay for the upkeep of Palo Alto’s distribution system. Revenue from the wholesale
commodity rate pays for the City’s cost of buying water from the SFPUC.
Staff and the Finance Committee are proposing a 2% water distribution rate increase (Staff
Report 2303-1218, April 17, 2023). CPAU’s operational costs for the water utility have increased
by approximately 4.8% per year over the last five years and are projected to increase 3% per year
on average over the next five years. Primary reasons for the cost increases are allocated charges
(charges allocated to the water utility for administrative services provided by the General Fund)
and operations and maintenance costs (including engineering). Capital costs have fluctuated
from year to year.
The Water Utility’s healthy reserve levels allowed the Water Utility to hold rates flat for two years
(FY 2021 and FY 2022). In FY 2022 and FY 2023, drought conditions and voluntary water use
restrictions led to sales revenue declines and the Water Utility’s reserves had adequate funding
to manage these reductions together with a 4% distribution rate increase in July 2022. The
proposal for the Water Utility uses remaining reserves to mitigate distribution rate increases to
2% in FY 2024, 7% in FY 2025 and 6% annually from FY 2026 through FY 2028 while still funding
essential capital investments.
Customers have a separate commodity rate for purchased water from the San Francisco Public
Utilities Commission (SFPUC) relative to the rest of the distribution-related portion of the
volumetric rates. This commodity charge passes through SFPUC rate increases to customers The
12 Council Staff Report 2302-0946 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=2275
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pass-through commodity rate is currently $4.75 per hundred cubic feet (CCF) and will increase to
$5.30 per CCF on July 1, 2023, according to SFPUC’s February 2023 forecast. The SFPUC will not
determine its final wholesale customer rate for FY 2024 until May. If SFPUC’s final rate for FY
2024 does increase, Palo Alto will notify customers 30 days in advance of the pass-through rate
increase via their billing statements or by any other mailing by CPAU to the customer’s regular
billing address.
13.
Wastewater Utility
14 to the Finance Committee on March 7,
2023 contains detailed bill and rate impacts of the Wastewater Collection rate proposals. The
Financial Plan projects costs to rise over the forecast horizon due to increasing treatment costs
related to capital improvements and operational costs at the Regional Water Quality Control
Plant (RWQCP), as well as increasing collection system operational and Capital Improvement
Program (CIP) costs. Staff recommends accelerating the rate of main replacements, from 1 mile
to 2.5 miles per year beginning in FY 2026. This acceleration will allow the Wastewater Collection
Utility to replace the last main no more than approximately 8 years beyond its anticipated 100-
year life expectancy. Staff and the Finance Committee’s recommendation attempts to minimize
rate impacts while also prudently managing the City’s infrastructure and maintaining an
acceptable level of risk.
TIMELINE
13 Resolution 9844 https://www.cityofpaloalto.org/files/assets/public/city-clerk/resolutions/reso-
9844.pdf?t=69020.51
14 Finance Committee Staff Report
https://cityofpaloalto.primegov.com/meeting/document/1691.pdf?name=Staff%20Report
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For Electric rates, Council may vote on the electric item on the Council agenda tonight, the
Council would also approve the Electric Financial Plan and rate changes and the approved rates
would go into effect July 1, 2023.
FISCAL/RESOURCE IMPACT
•A $12 million increase or 6% compared to FY 2023 levels in the Electric Fund (excluding
expected monies to be received from the CVPIA payment).
•Sales revenues for the Gas Utility in FY 2024 are projected to increase by roughly $5.7
million or 8% compared to FY 2023 levels as a result of the proposed rate increases, not
including fluctuations in commodity revenue/cost.
•Staff projects estimated revenue for the Water Utility in FY 2024 to increase by $2.9
million or 6% compared to FY 2023 levels. This estimate includes the SFPUC wholesale
rate increase of 11.6% (projected by SFPUC in February 2023; staff expects the
Commission to approve a final wholesale water rate increase in May 2023).
•For Wastewater Collection, staff projects revenues in FY 2024 to increase by
approximately $1.8 million or 9% compared to FY 2023 levels because of the proposed
rate changes.
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between the City Council transferring 18% and 15.5% of the gross revenues of the gas utility to
the General Fund in FY 2024 is approximately $1.2 million (see Staff Report 2303-1219 on the
Council’s agenda tonight for more detail).
Table 1: General Fund Utility Expense Increases in FY 2024
Resulting from Proposed Rate Changes
Utility General Fund Utility Expense
Increase ($ millions)
Electric
Gas
Wastewater
Water
STAKEHOLDER ENGAGEMENT
•On June 13, 2022 the Palo Alto City Council reviewed and approved staff’s proposed utility
rate changes for fiscal year 2023, (see Staff Report 1366115 for more details). Systemwide
average rate increases included 5% for electric, 4% for gas, 8.9% for water, 3% for sewer, 4.2%
for stormwater and 4.2% for fiber.
•Wastewater Collection main replacement: on October 12, 2022, the Utilities Advisory
Commission reviewed three alternative approaches to accelerate the sanitary sewer main
replacement (Staff Report #14610)16 and on November 20, 2022, the Finance Committee
considered series of alternative rate trajectories to accelerate the sanitary sewer main
replacement (Staff Report #14611)17. The UAC and Finance Committee provided feedback on
additional scenarios they wanted to be reflected in the Financial Plan and staff incorporated
this feedback into the final Financial Plans presented to the UAC and Finance Committee.
15 Council Staff Report 13661 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/city-council-agendas-minutes/2022/20220613/20220613pccsm-final-amended-
linked.pdf#page=102
16 Council Staff Report 14610 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-
2022/10-12-2022/10-12-2022-uac-agenda.pdf
17 Finance Committee Staff Report 14611 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/finance-committee/2022/20221129/20221129pfcsm-linked.pdf
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•On March 1, 202318 the Utilities Advisory Commission (UAC) reviewed and approved the FY
2024 Electric, Gas, Water and Wastewater Collection Utility Financial Plans and Rate
Proposals.
•On March 7, 202319, the Finance Committee reviewed the FY 2024 Water and Wastewater
Collection Utility Financial Plans and Rate Proposals. The Finance Committee approved the
Water Utility proposals and asked staff to return with additional information for further
evaluation for the Wastewater Utility.
•On March 21, 202320, the Finance Committee reviewed the FY 2024 Electric, Gas, Water, and
Wastewater Collection Financial Plans and Rate Proposals and unanimously approved the
Electric, Water and Wastewater Collection Proposals; the Finance Committee approved the
Gas Utility Proposals 2-1 with Council Member Stone voting no.
ENVIRONMENTAL REVIEW
APPROVED BY:
18 Utilities Advisory Commission Staff Reports https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-
minutes-2023/03-mar-2023/03-01-2023-agenda-and-packet.pdf
19 Finance Committee Staff Report
https://cityofpaloalto.primegov.com/meeting/document/1704.pdf?name=Staff%20Report
20 Finance Committee Staff Report
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11228
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: April 17, 2023
Report #:2304-1246
TITLE
Approval of Minutes from March 31, 2023 and April 3, 2023 City Council Meetings
RECOMMENDATION
That the minutes be reviewed and approved as presented.
ATTACHMENTS
Attachment A: March 31, 2023 Draft Minutes
Attachment B: April 3, 2023 Draft Minutes
APPROVED BY:
Lesley Milton
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DRAFT ACTION MINUTES
Special Meeting
Friday, March 31, 2023
The City Council of the City of Palo Alto met on this date in the Council Chambers
and by virtual teleconference at 4:00 p.m.
Present In Person: Burt, Kou, Lauing, Lythcott-Haims, Stone arrived 4:39
p.m., Veenker
Present Remotely: None
Absent: Tanaka
None.
Committee, Planning and Transportation Commission and Historic
The Council interviewed the following candidates:
Planning & Transportation Commission
George Lu
Scott O’Neil
Allen Akin
Cari Templeton (Incumbent)
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ACTION MINUTES
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Sp. City Council Meeting
Action Minutes: 3/31/2023
Forest Olaf Peterson
Historic Resources Board
Samantha Joy Rodman
Christian Pease (Incumbent)
Alisa Eagleston-Cieslewicz (Incumbent)
Utilities Advisory Commission
Jason Titus
Max Rayner
Robert Phillips
Benjamin Piiru
Greg Hood
Chris Tucher
Meagan Mauter
Claude Ezran
Siyi Zhang
Greg Scharff (Incumbent)
Rachel Croft
Natalie Geise
Bob Wenzlau
ADJOURNMENT The meeting was adjourned at 8:15 p.m.
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.
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CITY COUNCIL
DRAFT ACTION MINUTES
Special Meeting
Monday, April 03, 2023
CALL TO ORDER
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual
teleconference at 5:00 P.M.
Present In Person: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker
Present Remotely: None
Absent: None
SPECIAL ORDERS OF THE DAY
1. Appointment of Applicants for Board and Commission Openings on the Utilities Advisory
Committee, the Planning and Transportation Commission and the Historic Resources Board
MOTION: Council Member Burt moved, seconded by Mayor Kou to proceed as presented to
vote first for full term, then a subsequent vote for unexpired terms.
SUBSTITUTE MOTION: Veenker/Lythcott-Haims to vote for all positions in the first round, with
the top vote getters getting the full terms, and the candidate with the next number of votes
getting the unexpired terms. If there are ties, then a second round of voting will commence.
MOTION FAILED: 3-4, Lauing, Kou, Burt, Stone no
ORIGINAL MOTION: Council Member Burt moved, seconded by Mayor Kou to proceed as
presented to vote first for full term, then a subsequent vote for unexpired terms.
MOTION PASSED: 5-2, Lythcott-Haims, Tanaka no
Historic Resources Board
First Round of Voting for Three (3) vacancies on the Historic Resources Board ending March 31,
2026
Samantha Joy Rodman: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker
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DRAFT ACTION MINUTES
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Sp. City Council Meeting
Draft Action Minutes: 4/3/2023
Christian Pease: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker
Alisa Eagleston-Cieslewic: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker
Candidate Samantha Joy Rodman receiving 7 votes is appointed to a full-term expiring March
31, 2026.
Candidate Christian Pease receiving 7 votes is appointed to a full-term expiring March 31,
2026.
Candidate Alisa Eagleston-Cieslewic receiving 7 votes is appointed to a full-term expiring
March 31, 2026.
Planning and Transportation Commission
First Round of Voting for Two (2) full terms ending March 31, 2027 on the Planning and
Transportation Commission
George Lu: Lythcott-Haims
Scott O’Neil: Tanaka
Allen Akin: Kou, Burt, Stone, Lauing
Cari Templeton: Burt, Lythcott-Haims, Stone, Lauing, Veenker
Arthur Keller: Kou
Alex Comsa: Tanaka
Forest Olaf Peterson: Veenker
Candidate Allen Akin receiving 4 votes is appointed to a full-term expiring March 31, 2027.
Candidate Cari Templeton receiving 5 votes is appointed to a full-term expiring March 31,
2027.
Utilities Advisory Commission
First Round of Voting for Three (3) full terms ending March 31, 2026 on the Utilities Advisory
Commission
Jason Titus: Burt, Veenker
Max Rayner: Tanaka
Robert Phillips: Burt, Kou, Lauing,
Benjamin Piiru:
Greg Hood:
Chris Tucher: Tanaka
Meagan Mauter: Burt, Kou, Lauing, Lythcott-Haims, Veenker
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DRAFT ACTION MINUTES
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Sp. City Council Meeting
Draft Action Minutes: 4/3/2023
Claude Ezran: Kou
Siyi Zhang: Lythcott-Haims, Stone
Greg Scharff: Lauing, Stone, Tanaka
Rachel Croft: Stone
Natalie Geise: Lythcott-Haims, Veenker
Bob Wenzlau:
Candidate Megan Mauter receiving 5 votes is appointed to a full-term expiring March 31,
2026.
No other Candidate received four votes required to be appointed to the full-term expiring
March 31, 2026. A second round of voting is required.
Planning and Transportation Commission
First Round of Voting for One (1) unexpired term ending March 31, 2025 on the Planning and
Transportation Commission
George Lu: Burt, Lythcott-Haims, Tanaka
Scott O’Neil:
Arthur Keller: Kou, Lauing, Stone
Alex Comsa:
Forest Olaf Peterson: Veenker
No Candidate received four votes required to be appointed to the un-expired term expiring
March 31, 2025. A second round of voting is required.
Utilities Advisory Commission
Second Round of Voting for two (2) full terms ending March 31, 2026 on the Utilities Advisory
Commission
Jason Titus: Burt, Veenker
Max Rayner: Tanaka
Robert Phillips: Stone, Burt, Kou, Lauing
Benjamin Piiru:
Greg Hood:
Chris Tucher:
Claude Ezran:
Siyi Zhang: Lythcott-Haims, Tanaka
Greg Scharff: Stone, Kou, Lauing
Rachel Croft:
Natalie Geise: Lythcott-Haims, Veenker
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Bob Wenzlau:
Candidate Robert Phillips receiving 4 votes is appointed to a full-term expiring March 31,
2026.
No other Candidate received four votes required to be appointed to the full-term expiring
March 31, 2026. A third round of voting is required.
Planning and Transportation Commission
Second Round of Voting for One (1) unexpired term ending March 31, 2025 on the Planning and
Transportation Commission
George Lu: Burt, Tanaka, Lythcott-Haims, Veenker
Scott O’Neil:
Arthur Keller: Stone, Lauing, Kou
Alex Comsa:
Forest Olaf Peterson:
Candidate George Lu receiving 4 votes is appointed to an unexpired term ending March 31,
2025.
Utilities Advisory Commission
Third Round of Voting for one final full-term ending March 31, 2026 on the Utilities Advisory
Commission
Jason Titus: Burt
Max Rayner:
Robert Phillips:
Benjamin Piiru:
Greg Hood:
Chris Tucher:
Claude Ezran: Kou
Siyi Zhang:
Greg Scharff: Stone, Tanaka, Lauing
Rachel Croft:
Natalie Geise: Lythcott-Haims, Veenker
Bob Wenzlau:
No Candidate received four votes required to be appointed to the full-term expiring March
31, 2026. A fourth round of voting is required.
The Council directed the elimination of candidates without votes.
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Utilities Advisory Commission
Fourth Round of Voting for one final full-term ending March 31, 2026 on the Utilities Advisory
Commission
Jason Titus: Burt
Claude Ezran:
Greg Scharff: Kou, Lauing, Stone, Tanaka,
Natalie Geise: Veenker, Lythcott Haims
Candidate Greg Scharff receiving 4 votes is appointed to a full-term expiring March 31, 2026.
Utilities Advisory Commission
First Round of Voting for One (1) unexpired term ending March 31, 2025 on the Utilities
Advisory Commission
Jason Titus: Lythcott-Haims, Burt
Max Rayner: Tanaka
Robert Phillips:
Benjamin Piiru:
Greg Hood:
Chris Tucher:
Meagan Mauter:
Claude Ezran: Kou
Siyi Zhang:
Greg Scharff:
Rachel Croft: Lauing, Stone
Natalie Geise: Veenker
Bob Wenzlau:
No Candidate received four votes required to be appointed to the un-expired term expiring
March 31, 2025. A second round of voting is required.
Utilities Advisory Commission
Second Round of Voting for One (1) unexpired term ending March 31, 2025 on the Utilities
Advisory Commission
Jason Titus:
Max Rayner: Tanaka
Claude Ezran: Kou
Rachel Croft: Veenker, Stone, Lythcott-Haims, Lauing, Burt
Natalie Geise:
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Candidate Rachael Croft receiving 5 votes is appointed to an unexpired term ending March
31, 2025.
2. Introduction of Representatives from the North County TRUST (Trusted Response Urgent
Support Team) alternative mental health response program
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT
CONSENT CALENDAR
Council Member Tanaka registered a no vote on Agenda Item Number 10.
MOTION: Mayor Kou moved, seconded by Council Member Burt to approve Consent Agenda
Item Numbers 3-10.
MOTION PASSED ITEMS 3-9: 7-0
MOTION PASSED ITEM 10: 6-1, Tanaka no
3. Approval of Minutes from March 20, 2023 Meeting
4. The Utilities Advisory Commission and Staff Recommend Council Adoption of Amended
Utilities Rules and Regulations, to Incorporate AMI Changes and Other Updates; CEQA review –
exempt (CEQA Guidelines section 15273) Adopted Resolution 10096
5. Approval of the Utilities Department‘s 2023 Legislative Guidelines
6. 2850 West Bayshore [22PLN-00364]: Approval of Final Map for a single-lot subdivision for
condominium purposes for 48 attached townhome condominiums. Environmental Assessment:
Exempt per CEQA Guidelines Section 15332. Zoning District: ROLM (Research, Office, and
Manufacturing).
7. Approval of Fourth Amendment to Santa Clara Valley Urban Runoff Pollution Prevention
Program Memorandum of Agreement
8. Adopt a Resolution 10097 Expressing Concern for Public Safety and Urging State and Federal
Action on Firearms in Sensitive Places.
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9. Acceptance of $2,000,000 from the Consolidated Appropriation Act, 2022, Awarded by the
Department of Health and Human Services Substance Abuse and Mental Health Services
Administration (SAMHSA) for Assistance Related to North County TRUST (Trusted Response
Urgent Support Team), an Alternative Response Pilot Program; Approval of a Contract with
Momentum for Health for Assistance Related to North County TRUST with a Total Contract
Amount Not to Exceed $1,931,706; and Approval of the Related Budget Amendment in the
General Fund. CEQA status – not a project. Public Comments
10. Approve Amendment of Seven On-call Consulting Contracts to Increase the Not to Exceed
to $3 Million Through June 2024 to Provide Expertise for Long Range Planning Projects,
Application Processing, Historic and Environmental Review in the Department of Planning &
Development Services, With all Work Subject to Assigned Task Order and Availability of Funds;
Environmental Assessment: Exempt in Accordance with CEQA Guidelines Section 15061(b)(3).
CITY MANAGER COMMENTS
ACTION ITEMS
11. Approval of the following: 1) Contract with Flock Safety (S23187316) for Automated
License Plate Recognition (ALPR) Implementation for a three-year term in an amount not to
exceed $174,400; 2) ALPR Surveillance Use Policy; and 3) Budget amendment in the
Supplemental Law Enforcement Services fund;
MOTION: Council Member Tanaka moved, seconded by Mayor Kou to:
A. Approve a 3 years contract with flock Safety to implement fixed ALPR technology, in an
amount not to exceed $174,400
B. Approve the use of Fixed ALPR technology to deter and investigate criminal activity
C. Approve the fixed ALPR Surveillance use policy
D. Amend the Fiscal Year 2023 Budget Appropriation for the Supplemental Law
Enforcement Services Fund (SLESF) by
a. Increasing SLESF Contract Services expense appropriation by $61,900, and
b. Decreasing the ending fund balance by $61,900.
E. Staff to return to Council one year after implementation for review and determination
for continuation
F. Refer to Policy and Services discussion if the program should also be reviewed by City
Auditor, IPA or other party
G. Limit the access to sworn officers, dispatchers and comparable positions
MOTION PASSED: 7-0
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12. Parks and Recreation Commission Recommend Adoption of a Park Dedication Ordinance
to Dedicate the 10-acre Measure E site as Parkland. CEQA status – not a project. Public
Comments
MOTION: Council Member Burt moved, seconded by Council Member Lythcott-Haims to City
Council to
A. Direct staff to return with analysis on scope and timeframe to evaluate other
environmental technology and facilities on a portion of the Measure E site and/or other
lands.
B. Direct staff to return to Council with a proposal to evaluate a minimum buffer size to
support a wildlife corridor connecting Renzel Marsh to the Baylands Harbor marsh
through the Measure E site.
MOTION PASSED 6-1, Kou no
13. Update, Discussion, and Potential Direction regarding State and Federal Legislation
ACTION: None taken
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
ADJOURNMENT The meeting was adjourned at 11:22 P.M.
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
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Action
Lead Department: Utilities
Meeting Date: April 17, 2023
Staff Report: 2301-0706
TITLE
Finance Committee and the Utilities Advisory Commission Recommend the City Council Approve
and Authorize the City Manager or Their Designee to Execute a Third Phase Agreement With
Northern California Power Agency for the Purchase of up to 87,600 Megawatt Hours per Year of
Geothermal Energy From Calpine Corporation's Geysers Power Company, LLC Over a Term of up
to 12 Years for a Total not to Exceed Amount of $76.2 Million; CEQA status: not a project under
CEQA Guidelines sections 15378(a) and (b)
RECOMMENDATION
The Finance Committee, the Utilities Advisory Commission (UAC), and Staff recommend the City
Council:
1. Authorize the City Manager, or their designee, to execute a Third Phase Agreement1 with
the Northern California Power Agency (NCPA) to purchase up to 87,600 MWh of
renewable energy/year from a portfolio of geothermal projects owned by Calpine
Corporation’s Geysers Power Company, LLC, over a period of 12 years, at a total cost not
to exceed $76.2 million;
2. Authorize the City Manager, or their designee, to execute on behalf of the City all related
documents or agreements necessary to administer the Third Phase Agreement that are
consistent with the Palo Alto Municipal Code and City Council approved policies,
including, but not limited to, collateral assignment agreements; and take any and all
actions as are necessary or advisable to implement and administer the Third Phase
Agreement;
3. Authorize the City Manager, or their designee, to approve and execute amendments to
the Third Phase Agreement1, as may be required from time to time, so long as the contract
price and length of the agreement remain unchanged; and
4. Waive the application of the anti-speculation requirement of Section D.1 of the City’s
Energy Risk Management Policy as it may apply to surplus electricity purchases resulting
1 Third Phase Agreement: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/attachments/03-07-2023-id-15051-ncpa-agreement.pdf
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from the City’s participation in the Calpine contract, due to the variability of the City’s
hydroelectric resources and uncertainty around the City’s long-term load forecast.
EXECUTIVE SUMMARY
Through a Request for Proposals (RFP) recently conducted by NCPA, the City has the opportunity
to enter into a 12-year agreement to purchase renewable power from a geothermal resource
owned by Calpine. NCPA has executed a power purchase agreement (PPA) with Calpine to
purchase the project output (which includes renewable energy and local resource adequacy
capacity), and the City and other NCPA members who have elected to participate would receive
shares of the output via Third Phase Agreements with NCPA. Palo Alto’s share of the 100 MW
project capacity would be 5 MW for the first two years of the agreement, and 10 MW for the
remaining ten years—the output of which would be equivalent to 10.6% of Palo Alto’s 2021 retail
energy sales.
The primary benefits of the Calpine project are: (1) the units are fully constructed and are already
in operation—hence there is no project development risk; (2) geothermal resources are baseload
generators, meaning they produce a nearly uniform level of energy on a 24-hour basis, which is
a good match for the City’s load; and (3) the units provide local resource adequacy (RA) capacity,
of which the City has a significant shortage. In addition, staff has determined that the contract
price and value are very competitive with other renewable energy offerings in the market, and
that this contract would provide a net value to the City (i.e., its total value would exceed the cost
of the contract) of at least $13/MWh, which would be equivalent to over $550k/year during the
first two years of the contract, and over $1.1 million/year during the remaining ten years.
BACKGROUND
SB 100 & Carbon Neutral Plan goals
As part of ongoing efforts to meet the City’s Carbon Neutral Plan requirements, as well as to
comply with the state Renewable Portfolio Standard (RPS) mandate of providing at least 60% of
sales from qualifying renewable resources by 2030, staff pursued a PPA opportunity presented
by Calpine to NCPA. Calpine is offering to sell power from a geothermal2 power plant, which
qualifies as an in-state “Bucket 1” renewable resource under the state’s RPS requirements.
Existing RPS portfolio
Over the past three years, the City has had an average RPS level of 63%3 and is projected to
maintain a high percentage of its power from renewable resources well into the future. Figure 1
below shows Palo Alto’s projected RPS requirements along with the City’s existing supply
2 Geothermal power plants have a small amount of carbon emissions associated with their operations from the
natural release of greenhouse gases from the geysers.
3 This value refers to the total renewable energy content of the City’s supply portfolio, including all of its in-state
(“Bucket 1”) renewable resources and its unbundled, out-of-state (“Bucket 3”) renewable energy credits (RECs).
For state RPS reporting purposes, the volume of Bucket 3 RECs that can be counted is limited; under this more
restrictive framework the City’s reported RPS level has averaged 31% over the last three years.
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resources. Starting in 2029, the City is projected to have a deficit relative to its RPS requirement
level (depending on the amount of large hydroelectric output the City receives4).
Figure 1: Palo Alto’s Existing RPS Supplies and RPS Requirement Levels
ANALYSIS
4 Under the state’s RPS law, utilities that receive significant amounts of generation from certain large hydroelectric
facilities are able to satisfy their RPS requirements with a lower RPS level than is required of other utilities. Such
utilities are only required to achieve an RPS level equal to the difference between their total retail sales volume
and the amount of generation they receive from qualifying large hydro facilities.
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While the downward trend in renewable energy pricing has reversed in the last couple of years,
staff expects the generous subsidies included in the Inflation Reduction Act (IRA), which was
signed into law August 16th, 2022, to eventually push renewable energy prices lower again. There
are many details in the IRA that are being outlined by the Treasury Department, and the initial
feedback from developers is that it is still too early to understand the net impact this law will
have on Palo Alto’s renewable resource options. Ultimately staff expects the IRA to reduce the
cost of renewables. However, the consensus view in the California market is that it will likely be
several years before these cost reductions materialize, given the extent of the current supply-
demand imbalance and the various development challenges.
While the market prices for intermittent renewable resources such as solar and wind, and energy
storage systems have fluctuated in recent years, the price for baseload firm renewable resources
such as geothermal energy has remained relatively steady. The price for energy from geothermal
resources is relatively high, reflecting its higher cost of development and its higher value to the
electrical grid.
Results of Palo Alto’s Renewable RFP (2022 RFP)
In May 2022, staff issued a Request for Proposals of new renewable and/or carbon-free
generating resources and energy-storage resources. Staff’s evaluation of the four conforming
project proposals (all of which were for solar resources) indicated that their “green premiums”
(i.e. their net cost to the City – their total value less their total cost) ranged from $3/MWh to -
$18 /MWh. In comparison, the Calpine geothermal project’s net cost is estimated at -$3/MWh
(see below for more detail on this analysis). But in the course of reviewing the four responsive
proposals, staff (1) became aware of efforts at the federal level to pass significant new clean
energy legislation (in what became the IRA), and (2) learned about the Calpine geothermal
project proposal. As a result of these two events, staff decided to reject the four conforming
proposals received through this RFP.
Calpine Geothermal Project Summary
In May 2020, Calpine submitted a proposal to NCPA’s5 Renewables RFP for the sale of energy and
associated attributes from Calpine’s6 existing portfolio of geothermal projects located in The
Geysers area of Northern California. At the time Calpine submitted its proposal, NCPA members
were evaluating other lower-cost project proposals. But shortly thereafter, the price of
renewable projects started to significantly increase, due to the confluence of factors noted
above. So in September 2021, NCPA requested proposal updates from Calpine and the other RFP
5 NCPA is a not-for-profit Joint Powers Agency whose membership includes municipalities, a rural electric
cooperative, and other publicly owned entities, including the City of Palo Alto. The mission of NCPA is to provide
members cost effective wholesale power, energy-related services, and advocacy on behalf of public power
consumers through joint action.
6 Calpine Corporation (Calpine) was founded in 1984 and, through its wholly-owned subsidiary GPC, is the largest
owner of geothermal plants in The Geysers area in Northern California, with 725 MW of green energy capacity
operating around the clock. The Geysers area is known as the world’s largest geothermal field spanning an area of
30 square miles in Sonoma, Lake, Mendocino, Marin, and Napa counties.
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respondents to see if their projects were still available and if there were any changes in price
and/or terms initially offered. Section 2.30.340(d) of the City’s Municipal Code permits the City
to procure wholesale utility commodities and services through public agencies, including NCPA.
After receiving the updated information, NCPA and member utility staff7 reviewed and analyzed
the projects again and determined the geothermal output from Calpine would best diversify their
renewable energy portfolios, aid them in achieving California RPS requirements, help meet their
sustainability goals, and meet the needs of their expected load growth.
7 The City of Alameda, City of Biggs, City of Gridley, City of Lodi, City of Lompoc, Port of Oakland, and City of Santa
Clara are all expected to sign onto the Third Phase Agreement to receive output from this project.
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provide local resource adequacy (RA) capacity, of which the City has a significant shortage. Unlike
many other new renewable energy projects, this project doesn’t carry any development risk.
8
8 Note that all energy prices in California have increased sharply over the past two years, not just those of
renewable energy projects: Two years ago, forward energy curves pegged the value of this product at $33/MWh,
and even three months ago its value was projected to be just $54/MWh.
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the clock. The geothermal project’s inability to reduce output during the sunshine hours will
expose it to some lower prices, but these downsides are expected to be offset by the other trends
mentioned. Staff conservatively estimates the geothermal project will provide a net benefit of at
least $3/MWh9, with the potential for significant upside if market prices stay high and there are
further challenges to bringing new resources onto the grid in the coming 5-10 years.
9 The conservative net value estimate of $3/MWh is based on the lower-end estimates of the value of the project’s
RPS and RA products ($12/MWh and $8/MWh, respectively) and an energy value of $62/MWh instead of
$71.80/MWh. The lower energy value estimate is equivalent to the energy value estimate of a few months ago,
before the recent run-up in power and gas market prices.
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energy during the spring/summer months. Furthermore, within any given day, the supply
portfolio is routinely short during off-peak (nighttime) and long during on-peak (daytime)
periods. This PPA would reduce the need for market purchases and increase the opportunity for
market sales in the spring and summer months, depending on the level of output from the City’s
hydroelectric resources.
10 is projected to have an overall surplus position from 2025 through
2028 even without entering an agreement for the geothermal project, as shown in Figure 2
below. The load forecast shown in Figure 2 is based on the mid-range scenario presented at the
December 2022 UAC meeting, which includes modest load growth from data centers, electric
vehicles, and building electrification. The hydro generation estimates are based on long term
historical averages, which have been significantly higher than actual generation in the last few
years during the drought. However, as noted in the December UAC meeting discussion, there is
significant uncertainty around both the load and hydro generation projections shown here. Staff
recently learned about commercial development plans that could result in significantly greater
data center load within the next few years; meanwhile, the impacts of climate change are likely
to significantly reduce the long-term level of hydro generation. Combined, these two factors
could flip the portfolio’s overall surplus positions of the next few years to deficit positions.—In
light of this uncertainty, staff recommends waiving the anti-speculation requirement of the City’s
Energy Risk Management Policy for this agreement.
10 All six of the City’s solar PPA extend to 2040 or later, while the landfill gas PPAs expire between 2026 and 2034.
The City has one remaining wind PPA which expires in June 2028. Furthermore, the City can renew the Western
Base Resource contract for a new 30-year term that would start in 2025, and for planning purposes it is currently
included in the supply portfolio baseline assumptions. Lastly, the City owns its share of the Calaveras project and it
is therefore expected to remain in the portfolio indefinitely.
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Figure 2: Projected Annual Load-Resource Balance, 2025-2045
While the supply portfolio, on average, has an overall surplus position in any given year, the
portfolio is short during the 1st and 4th quarters of the calendar year given the seasonal
generation from hydro and solar. Additionally, the portfolio is generally short during the non-
solar (off-peak) hours. Monthly and daily load resource balance charts are shown in Attachments
B and C. The geothermal project is a baseload power plant that produces electricity evenly across
the day and year. Given the portfolio is currently projected to have surplus positions during the
first few years of the geothermal PPA as shown above, staff is currently monitoring the City’s
actual load levels closely and will evaluate whether to sell solar energy during the 2nd and 3rd
quarters (an amount equal to the total purchase amount from the Calpine project) to hedge being
overly long on energy, while also improving the daily load-resource balance. Figure 3 below
shows a monthly load-resource balance for the City’s portfolio with both the Calpine purchase
and solar energy sales included. This would balance the portfolio supply and demand more evenly
across the seasons within any given year. While the City’s risk management policies don’t
prescribe a specific load-resource balance level, staff tries to minimize the portfolio’s overall
exposure to the market in either direction to mitigate large supply cost fluctuations from market
pricing volatility.
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Figure 3: Monthly Load-Resource Balance with Geothermal Energy Purchase and Q2/Q3 Solar
Energy Sale Included
Palo Alto’s Resource Adequacy Portfolio with Calpine Geo
Resource adequacy (RA) is another market that the City is required to participate in as a load
serving entity in the California Independent System Operator (CAISO) balancing authority. The
CAISO RA requirements dictate required levels of generating capacity the City must own or
procure to meet local, system, and flexible resource requirements on an annual and monthly
basis. Currently, staff manages the City’s RA requirements by utilizing its own resources,
participating in NCPA’s Capacity Pool Program, and through bilateral transactions with other
market participants.
The geothermal plant would qualify as local RA for the City, and it would also count towards the
City’s system RA requirements. As Figures 4 and 5 below indicate, the City has local RA deficits of
approximately 50-80 MW per month, but surpluses of system RA that average approximately 80
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MW. This PPA would reduce the city’s Local RA deficit by 10 MW and would increase the System
RA surplus by an equivalent amount.11
Figure 4: Annual Average Local RA Balance Forecast, 2025-2036
11 While the City would retain the geothermal capacity in its own portfolio to help satisfy its local RA requirements,
the addition of this contract would free up capacity from other resources (which do not qualify as local RA) that
the City could sell to generate additional revenue and reduce its system RA surplus positions.
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Figure 5: Annual Average System RA Balance Forecast, 2025-2036
Palo Alto’s RPS Portfolio with Calpine Geo
The PPA will also increase the City’s share of power being generated by renewable resources, as
required by the state’s RPS regulations. The City is already on track to meet state RPS targets
without the geothermal PPA, so this is not a driving factor for this deal, but it would further
increase the amount of Bucket 1 RECs the City is able to swap for lower-cost Bucket 3 RECs
through its REC Exchange Program. (The profits earned through the REC Exchange Program are
earmarked toward local decarbonization initiatives, so this contract would help the City’s overall
sustainability efforts.) In addition, increasing the City’s RPS level provides further flexibility in the
future if the City pursues a smaller share of the Western Base Resource contract.
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Figure 6: Palo Alto’s Existing RPS Supplies and RPS Requirement Levels, with the Calpine
Project
The NPCA Commission approved Purchase Agreements Between Geysers Power Company, LLC
and Northern California Power Agency, and the Third Phase Agreement for Purchase Agreements
with Geysers Power Company, LLC at its December 1, 2022 meeting. Since then, NCPA, with input
from attorneys representing participating members, completed PPA negotiations with Calpine.
Santa Clara has executed the Third Phase Agreement with NCPA, and as the initial project
participant has been allocated the full PPA output. Once Palo Alto and other participating
members obtain their governing board approvals and execute the Third Phase Agreement as well,
Santa Clara will assign shares of the PPA’s energy, RECs and RA capacity to participating members,
adding those members to the Third Phase Agreement between NCPA and Santa Clara. Santa Clara
has asked all participating members to execute the Third Phase Agreement by the end of April
2023.
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FISCAL/RESOURCE IMPACT
If Council approves the execution of this Third Phase Agreement with NCPA, the City will purchase
up to 87,600 MWh/year for a total not-to-exceed amount of $6.93 million/year during the 12-
year contract term (2025-2036), up to $76.2 million. Funding for the purchase of the renewable
energy will be included in the Electric Utility Fund budget beginning in FY 2025.
Approval of the proposed Third Phase Agreement is in conformance with the City’s Sustainability
and Climate Action Plan (S/CAP), Integrated Resource Plan, Carbon Neutral Plan, and RPS
Procurement Plan, specifically the City’s Renewable Portfolio Standard to meet at least 60% of
the City’s electric sales from renewable energy.
The UAC reviewed staff’s recommendation to recommend approval of the Third Phase
Agreement with NCPA at its meeting on February 1, 202312. At that meeting, staff provided
background on the Calpine geothermal project, the market for renewable energy in California,
and the impact that the Calpine contract would have on the City’s electric supply portfolio. The
UAC expressed strong approval for the Calpine contract, voting 7-0 to support staff’s
recommendation. The UAC also encouraged staff to seek out additional opportunities to contract
for new baseload renewable resources.
The Finance Committee reviewed the UAC’s and staff’s recommendation to approve the Third
Phase Agreement with NCPA at its meeting on March 21, 2023. At that meeting the Committee
asked several questions about the Calpine contract, the City’s RA requirements, and staff’s load
projections. Ultimately the Committee enthusiastically agreed with the UAC’s and staff’s
recommendation to support this contract and voted 3-0 to recommend that the City Council
approve the Third Phase Agreement with NCPA.
The Council’s approval of the Third Phase Agreement to purchase power generated by existing
geothermal generating facilities does not constitute a “project” within the meaning of the
California Environmental Quality Act (CEQA) under CEQA Guidelines sections 15378(a) and (b),
because there is no potential for approval of this agreement to result in a physical change in the
environment, and because this is an administrative governmental activity that will not result in a
physical change in the environment. These facilities already underwent CEQA review, and no
subsequent or supplemental environmental review will be required as (1) there are no
substantial changes to these facilities which will require major revisions of any applicable
environmental impact report; (2) there are no substantial changes that will occur with respect to
the circumstances under which the facilities are being undertaken which will require major
revisions in any applicable environmental impact report; and (3) no new information, which was
12 UAC Meeting Minutes, 2/1/2023: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/attachments/03-07-2023-id-15051-uac-excerpt.pdf
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not known and could not have been known at the time the applicable environmental impact
reports were certified as complete, has become available with respect to these facilities.
APPROVED BY:
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: April 17, 2023
Report #:2303-1129
TITLE
Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year 2021-2022
RECOMMENDATION
Staff recommends that the City Council:
1. Review the Stanford University Medical Center (SUMC) Annual Report for Fiscal Year
2021-2022, and find that Stanford Hospitals & Clinics, Lucile Packard Children’s Hospital,
and Stanford University (SUMC Parties) have complied in good faith with the terms and
conditions of the SUMC Development Agreement;
2. Find that the SUMC Parties are not in default with the terms and conditions of the
Agreement in all sections, with the exception of alternative mode share targets, for
which the SUMC Parties have claimed a permitted delay due to the effects of the COVID-
19 Pandemic; and
3. Accept the City of Palo Alto’s (City) Annual Report Supplements regarding the funds
received from the SUMC Parties, as required under Section 12(d) of the Development
Agreement (Attachment E).
EXECUTIVE SUMMARY
The City Council is required to review the SUMC Development Agreement (the “Agreement”) to
confirm compliance with the Agreement’s terms. The Agreement is between Stanford Hospital
and Clinics, Lucile Packard Children’s Hospital, Stanford University (SUMC Parties), and the City
of Palo Alto. The City also uses this Annual Report to Council to provide information on the City’s
compliance obligations, such as providing the required summary and description of how the City
expended funds provided by SUMC per the Agreement.
As documented in this Annual Report to Council, both SUMC and the City are in compliance with
the terms of the Agreement for the reporting period Fiscal Year 2021-2022, with the exception
of alternative mode share targets. In regard to the achievement of the alternative mode share
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milestone target, SUMC was not able to meet the specific target outlined in the Agreement. This
was due to the effect of the COVID-19 pandemic on SUMC employee use of alternative
transportation modes, such as Caltrain and other public transit systems. As received by the City
on June 14, 2022, the SUMC Parties asserted a permitted delay under the Force Majeure
provision of the Agreement. The SUMC Parties and City staff are actively engaged in discussing
an amendment to the Agreement to address this issue.
BACKGROUND
1 Previous annual reports and compliance
documentation can be found via the weblinks in Attachment B.
ANALYSIS
Health Care Benefits;
Fiscal Benefits;
Traffic Mitigation and Reduced Vehicle Trips;
Linkages (Pedestrian, Bicycle, and Transit);
Infrastructure, Sustainable Neighborhoods & Communities, Affordable Housing; and
1 City Council Report, 03/21/22 (SUMC Annual Report Fiscal Year 2020-2021):
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Climate Change.
Staff prepared a summary of the Section 5 obligations and the staff-confirmed compliance status
(Attachment C).
Agreement Section 12 also includes the requirement for demonstration of good faith compliance
with the Agreement. Toward this end, SUMC has timely submitted all the reports required of the
SUMC Parties for Fiscal Year 2021-2022.
Construction Activities and Net New Square Footage
SUMC discusses their construction activities for Fiscal Year 2021-2022 in their SUMC Annual
Report (Attachment A). A summary of construction activities and tracking of square footage
demolished and added can be found in Attachment D.
SUMC did not add any net new square footage in FY 2021-2022 but continued to remove
occupancy for portions of the 1959 Stone Complex by 18,472 square feet. This suspension of use
provides a temporary option to prevent exceedance of the total occupied square footage allowed
in their entitlements. While not triggered in the FY 2021-2022 monitoring period, there are
provisions in the SUMC entitlements to have a three-year period (or up to five years with Planning
Director approval) whereby SUMC is allowed to exceed the total occupied existing and net new
building square footage. This provision is important for ensuring that SUMC can maintain existing
operations while also efficiently transferring new uses, equipment, and operations over to the
new facilities.
City staff reviewed the information regarding SUMC net new square footage in the report and
determined this information is complete and correct.
Traffic Mitigation and Reduced Vehicle Trips
SUMC implemented all required transportation demand management (TDM) obligations in FY
2021-2022, such as purchasing of Caltrain Go Passes, funding for the AC Transit U-Line, and other
activities. Summaries of these activities can be found in Attachments A and C.
Alternative Mode Share Milestone Targets
SUMC achieved their 2021 alternative mode share milestone target of 33% for employee trips
early and every year between 2013 and 2019. The alternative mode share rate was 38.1% in FY
2018 and 33.8% in FY 2019. The SUMC Parties maintained all TDM requirements in FY 2020 until
Santa Clara County issued COVID-19 pandemic shelter-in-place orders in March 2020. On March
27, 2020, the City conditionally approved a one-year delay in the submittal of two reports; the FY
2020 Alternative Mode Share Report and Mitigation Measure TR 2.3 Enhanced Stanford
University TDM Program report. Conditional approval of this delay was consistent with the
procedures in Section 6(p) of the Agreement and no additional environmental review was
required.
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In Fiscal Year 2020-2021, the SUMC parties found that the alternative mode share milestone
target of 33% outlined in Agreement Section 5(c)(ix) was not met for 2021, nor was it above the
previous 2018 milestone target of 30%. The alternative mode share rate for SUMC decreased to
28.8% between use of alternative modes versus driving alone, largely due to ongoing pandemic
conditions. SUMC identified that the share of Caltrain riders dropped most significantly (-6.5%),
followed by the carpools (-2.6%), and other forms of transit (-3%). SUMC observed modest
increases in other alternative transportation modes, including in remote work and bicycling, but
these increases were not sufficient to offset the decrease in transit usage and carpools.
Construction Sales and Use Tax Monitoring Report
Supplement to the Annual Report
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balances, and a summary and description of expenditures from the funds for each Fiscal Year
(Attachment E). Section 12 mentions preparation of the Supplement within 45-days of the June
and July receipt of the annual reports by SUMC, but there is no penalty for not doing so; after the
close of the Fiscal Year, the City conducts an annual audit of the funds in Fall/Winter to
demonstrate good faith in implementing the Agreement.
$500,000 under “Expansion Cost Mitigation” for Rail Grade Separation (PL-17001);
$775,000 under “Infrastructure, Sustainable Neighborhoods and Communities, and
Affordable Housing” for $750,000 replacement of Fire Station Four (PE-18004) and
$25,000 University Avenue Streetscape Update (PE-21004); and
$1,250,000 under “Community Health and Safety” for $1.2 million
Charleston/Arastradero Corridor Project (PE-13011) and $50,000 to the General Fund
allocated to local non-profits through the Human Services Resource Allocation Process
(HSRAP).
Use of Development Agreement Funds
Fiscal Year 2022 Adopted Operating Budget document, Special Revenue Funds section;
Fiscal Year 2022 Adopted Capital Improvement Budget document;
City Council Report 13609 February 28, 2022 Design Services for the University Avenue
Streetscape Update Capital Improvement Project, including amendments to the FY 2022
Capital Improvement Plan;
Fiscal Year 2023 Adopted Operating Budget Document, Special Revenue Funds section;
and the
Fiscal Year 2023 Capital Improvement Budget document.2
2 Fiscal Year 2022 Adopted Operating Budget document, Special Revenue Funds section:
https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy-2022-city-
budget/adopted-budgets/operating-budget_web.pdf.
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The SUMC agreement Section 5(a)(iii) requires that a joint committee make annual
recommendations to the City Council regarding proposed disbursements from the Community
Health and Safety Program Fund, and the City Council may use reasonable discretion to accept,
reject, or modify these recommendations. The joint committee includes SUMC representatives
and City staff from the Office of Transportation, Administrative Services, and Public Works
departments. Projects using Community Health and Safety funds for the Fiscal Year 2021-2022
reporting period have gained mutual support from members of the joint committee and approval
from the City Council.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
Fiscal Year 2022 Adopted Capital Improvement Budget document:
https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy-2022-city-
budget/adopted-budgets/capital-budget-book-web.pdf.
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required for the annual compliance review. An environmental impact report for the entire SUMC
project was prepared and certified by the City Council prior to approval of the Agreement.
ATTACHMENTS
APPROVED BY:
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PREPARED FOR THE CITY OF PALO ALTO | JULY 6, 2022
2021-22 ANNUAL REPORT
Image Courtesy of Nearmap US Inc, June 2022
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CONTENTS
EXECUTIVE SUMMARY 1
BACKGROUND AND PURPOSE 2
2021-2022 SUMMARY OF PROGRESS 3
LUCILE PACKARD CHILDREN’S HOSPITAL 3
STANFORD HEALTH CARE 4
SCHOOL OF MEDICINE 5
BLAKE WILBUR DRIVE ROADWAY EXTENSION 6
NET NEW SQUARE FOOTAGE 6
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS 7
HEALTH CARE BENEFITS 7
SECTION 5(A)(II). FUND FOR HEALTHCARE SERVICES 7
SECTION 5(A)(III). FUND FOR COMMUNITY HEALTH AND SAFETY PROGRAMS 7
PALO ALTO FISCAL BENEFITS 7
SECTIONS 5(B)(I) AND 5(B)(II). PAYMENT OF SALES AND USE TAXES 8
SECTION 5(B)(III). FUNDING OF OPERATING DEFICIT 8
SECTION 5(B)(IV). PAYMENT OF UTILITY USER TAX 8
SECTION 5(B)(V). SCHOOL FEES 9
TRAFFIC MITIGATION AND REDUCED VEHICLE TRIPS 9
SECTION 5(C)(II). MENLO PARK TRAFFIC MITIGATION 9
SECTION 5(C)(III). EAST PALO ALTO VOLUNTARY MITIGATION 9
SECTION 5(C)(IV). CONTRIBUTIONS TO AC TRANSIT 9
SECTION 5(C)(V). OPTICOM PAYMENTS 10
SECTION 5(C)(VI). CALTRAIN GO PASSES 10
SECTION 5(C)(VII). MARGUERITE SHUTTLE SERVICE 10
SECTION 5(C)(VIII). TRANSPORTATION DEMAND MANAGEMENT COORDINATOR 11
SECTION 5(C)(IX). MONITORING OF TDM PROGRAMS 11
LINKAGES 12
SECTION 5(D)(I). INTERMODAL TRANSIT FUND 12
SECTION 5(D)(II). QUARRY ROAD FUND 13
SECTION 5(D)(III). STANFORD BARN CONNECTION 13
INFRASTRUCTURE, SUSTAINABLE NEIGHBORHOODS AND COMMUNITIES, AND AFFORDABLE HOUSING 13
SECTION 5(E). 13
CLIMATE CHANGE 14
SECTION 5(F). CLIMATE CHANGE FUND 14
SATISFACTION OF CONDITIONS OF APPROVAL 14
SECTION 5(H). SATISFACTION OF ALL CONDITIONS OF APPROVAL 14
CONCLUSION 15
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ANNUAL REPORT 2021-22 1
EXECUTIVE SUMMARY
On June 6, 2011, the Stanford University Medical Center parties (now Stanford Medicine)—comprised
of Stanford Hospital and Clinics (now Stanford Health Care), Lucile Packard Children’s Hospital, and
Stanford University—entered into a Development Agreement with the City of Palo Alto, committing to
provide a range of community benefits in exchange for vested development rights to develop and use the
Stanford Medicine Renewal and Replacement Project (“Renewal Project”) facilities in accordance with
the approvals granted by the City, and a streamlined process for obtaining subsequent project approvals.
The Renewal Project—driven by a growing demand for healthcare services, state-mandated seismic
safety requirements, and the need to replace outmoded facilities with modern, technologically advanced
spaces—is transforming the way that healthcare is delivered and research is conducted.
Today, eleven years after the execution of the Development Agreement, the Lucile Packard Children’s
Hospital Expansion and the new Stanford Hospital are now open for patient care, and the School of
Medicine has completed the first phase of development of its replacement facilities, with its BioMedical
Innovations building open for research. Interior renovations within the 1989 portion of the preexisting
Stanford Hospital facility have now commenced, and are expected to continue for the next several years,
bringing the facility up to modern healthcare standards.
Against this backdrop, Stanford Medicine submits its Annual Report in compliance with Section 12(c) of
the Development Agreement, and looks forward to continued collaboration with the City of Palo Alto in
advancing the goals of both Stanford Medicine and the broader community.
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2 ANNUAL REPORT 2021-22
BACKGROUND AND PURPOSE
The Palo Alto City Council’s unanimous approval of the entitlements for the Stanford Medicine
Renewal and Replacement Project in July 2011 has paved the way for a historic investment in new
and replacement facilities for Stanford Medicine. The project approvals—including new zoning for the
Renewal Project sites, a conditional use permit, architectural review approval, and the execution of a
Development Agreement—allow for the construction of approximately 1.3 million net new square feet of
hospital facilities, clinics, medical offices, and medical research spaces, and are enabling the Hospitals to
optimize the delivery of healthcare services to patients, and maintain their position as leading providers of
world-class healthcare.
In order to facilitate this important replacement and expansion work, the Stanford Medicine parties
entered into a Development Agreement with the City of Palo Alto, which includes a comprehensive
package of community benefits and additional development conditions. In exchange for these benefits,
the City has vested for a period of 30 years Stanford Medicine’s rights to develop and use the property
in accordance with the project approvals, and agreed to streamline the process for obtaining subsequent
approvals.
The terms of the Development Agreement (Section 12(c)) provide for a periodic review of compliance,
and require that Stanford Medicine submit an Annual Report to the City of Palo Alto’s Director of Planning
and Community Environment each year within 30 days of the anniversary of the agreement effective
date (June 6, 2011). The Annual Report is to summarize Stanford Medicine’s progress on the Renewal
Project, including a list of net new square footage for which a certificate of occupancy has been received,
and a description of the steps that Stanford Medicine has taken to comply with the obligations listed in
Section 5 of the Development Agreement. With this report, Stanford Medicine fulfills these requirements.
Within 45 days of receipt of this Annual Report, the City will prepare a Supplement to the Annual Report,
to provide an accounting of the City’s balances and expenditures from each of the City Funds and how
they were used.
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ANNUAL REPORT 2021-22 3
2021-2022 SUMMARY OF PROGRESS
The Renewal Project has reached key milestones in recent years, with the opening of the Lucile Packard
Children’s Hospital expansion in 2017 and the opening of the New Stanford Hospital in 2019, and most
recently the opening of the School of Medicine’s BioMedical Innovations building in 20201 . While the
COVID-19 pandemic changed the pace of progress on the Renewal Project, as Stanford Medicine
focused resources on pandemic response, including launching clinical trials for therapeutic treatments
for COVID-19 and establishing community testing and vaccination sites, it has also highlighted the
importance of modern, state-of-the-art facilities to support Stanford Medicine’s research and patient care.
The section to follow provides an overview of central goals for the project elements that presently are
under construction or nearing construction, a synopsis of progress to date, as well as a preview of near-
term upcoming activities.
LUCILE PACKARD CHILDREN’S HOSPITAL
In response to growing community needs for specialized pediatric and obstetric care, Lucile Packard
Children’s Hospital opened an expanded facility in late 2017. The new Main building, located adjacent
to the preexisting Lucile Packard Children’s Hospital (West building), provides patients and doctors with
the most modern clinical advancements and technology, while also creating a more patient- and family-
centered environment of care, with additional single-patient rooms and more spaces for families to be with
their child during treatment and recovery.
1 Temporary certificate of occupancy was issued in 2020; final certificate of occupancy was issued in 2021.
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4 ANNUAL REPORT 2021-22
The LPCH Main building features a new entrance lobby, public concourse with dining, three floors of
nursing units, and new patient rooms. Spaces have been designed with an attention to natural light and
views, and the exterior grounds—more than 3.5 acres of outdoor areas and gardens—provide a park-like
setting for patients, families, and visitors.
LPCH is currently planning for improvements to its preexisting West building which will modernize its
infrastructure and provide a more comfortable patient experience. These improvements include a
redesigned main lobby entry and drop-off for the West Building; plans are anticipated to be formally
submitted to the City for Architectural Review in Summer 2022.
STANFORD HEALTH CARE
Stanford Health Care is constructing new and replacement hospital facilities to usher in a new era
of advanced patient care. Growth in patient volumes and rapidly changing medical technology have
rendered much of the existing midcentury hospital infrastructure inadequate, while new seismic safety
requirements have accelerated the need to construct replacement facilities.
In November 2019, Stanford Health Care’s first phase of facilities renewal completed as the New Stanford
Hospital received its license from the State Department of Public Health and opened to patient care. With
the new Stanford Hospital now complete, Stanford Health Care has begun a series of renovations within
its preexisting facilities, including the conversion of shared patient rooms into private rooms within the
1989 portion of the Hospital; this renovation work is planned to proceed in phases over the next several
2021-2022 SUMMARY OF PROGRESS
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ANNUAL REPORT 2021-22 5
years. In addition, to continue to maintain its current 600-bed count upon conversion of existing shared
patient rooms to private rooms, Stanford Health Care is also planning an addition to the preexisting
Hospital of approximately 37,000 square feet. This proposed addition received Architectural Review
approval in March 2022, and a City grading / excavation permit was issued in June 2022. Grading activity
is expected to commence in Summer 2022
SCHOOL OF MEDICINE
The Stanford University School of Medicine is replacing its outmoded research buildings with new
state-of-the-art facilities designed to support contemporary translational research. The new facilities
will accommodate 21st century medical advancements and enable the development of new medical
innovations, featuring integrated laboratory suites, with easier access between labs and support facilities,
enabling transparency, flexibility, and collaboration.
The first phase of School of Medicine development (BioMedical Innovations Building 1, or “BMI-1”) is now
complete, having received a certificate of occupancy in Spring 2021, and features four above-grade floors
of research labs and light-filled gathering places, and a lower basement level for utility support, as well as
a connective tunnel to other nearby research facilities. Building interiors were designed for best practices
for laboratory design safety and space allocation, with a flexible template to maximize efficient use of
space and ease of renovation. The four above-grade floors provide space for a mix of disciplines, basic
and clinical research, wet and dry labs, and leading-edge translational studies.
2021-2022 SUMMARY OF PROGRESS
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6 ANNUAL REPORT 2021-22
2021-2022 SUMMARY OF PROGRESS
BLAKE WILBUR DRIVE ROADWAY EXTENSION
As required by the 2011 Project Approvals, a new link roadway will be constructed between Sand Hill
Road and Welch Road; this roadway will connect Durand Way to Blake Wilbur Drive, and will provide
an important automobile, bicycle, and pedestrian connection in the vicinity of the Medical Center.
Specifically, it will serve as an uncongested route for emergency vehicles accessing the medical campus
via Sand Hill Road, and will provide improved access to both the Main Medical Campus and the outer
Welch medical office buildings. The scope includes two travel lanes in each direction, Class II bicycle
lanes, sidewalks with planter strips including new tree plantings and bioretention areas, new signal poles,
and underground utilities. The roadway design was approved at the schematic level by the Architectural
Review Board in 2011, but design development and construction were not immediately able to advance
as the impacted site was under third-party lease until 2020. Design work resumed in 2020, and staff-
level Architectural Review approval for the roadway improvements was issued in late 2021. Construction
activities are anticipated to commence in 2022, pending permit issuance.
NET NEW SQUARE FOOTAGE
The following table summarizes the net new square footage for which a certificate of occupancy has been
issued.
PROJECT COMPONENT GROSS SQUARE
FOOTAGE
STANFORD HEALTH CARE
1101 Welch demolished (40,100)
500 Pasteur 719,261
Total 679,161
LUCILE PACKARD CHILDREN’S HOSPITAL EXPANSION
701 Welch demolished (56,300)
703 Welch demolished (23,500)
Lucile Packard Children’s Hospital Expansion 446,088
Total 366,288
SCHOOL OF MEDICINE
BioMedical Innovations building 196,921
Partial decant of 1959 Stone Complex (18,472)
Total 178,449
HOOVER PAVILION
Miscellaneous shops and storage demolished (13,831)
Stanford Neuroscience Health Center (Hoover MOB)91,605
Total 77,774
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ANNUAL REPORT 2021-22 7
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
This section of the Annual Report summarizes the steps that Stanford Medicine has taken to comply with
its obligations under Section 5 of the Development Agreement.
HEALTH CARE BENEFITS
In addition to the health care funds listed below, Stanford Medicine provides certain intrinsic benefits to
the community, as both a global leader in medical care and research, and as a community healthcare
services provider. The Renewal Project enables Stanford Medicine to continue its important work, and
the addition of more beds for adults and children will help to alleviate overcrowding. Additionally, the new
hospital facilities provide critical emergency preparedness and response resources for the community in
the event of an earthquake, pandemic, or other major disaster.
Section 5(a)(ii). Fund for Healthcare Services
The Hospitals have designated the amount of $3 million for Healthcare Services, which will increase
to $5.6 million by December 31, 2025. No further action is required until 2026. This amount will be
reconciled with the construction use tax payments as described in Development Agreement Section 5(b)
(ii)(C), and will be spent between 2026 and 2036.
Section 5(a)(iii). Fund for Community Health and Safety Programs
Stanford Medicine has contributed a single lump-sum payment of $4 million to establish a Community
Health and Safety Program Fund for the City of Palo Alto. This fund is to be distributed to selected
community health programs that benefit residents of the City, including the Project Safety Net Program,
a community-based mental health plan for youth well-being in Palo Alto. A joint committee is to be
established to evaluate proposals regarding the other specific programs to receive funding, composed
of two representatives selected by Stanford Medicine and two representatives selected by the City; this
committee shall make annual recommendations to the City Council regarding proposed disbursements
from the Community Health and Safety Program Fund, and the City Council shall use its reasonable
discretion to decide whether to accept, reject, or modify the joint committee recommendations.
Stanford Medicine provided the entire required contribution to the Community Health and Safety
Program Fund on August 25, 2011. No further action is required by Stanford Medicine to comply with
this Development Agreement provision, though Stanford Medicine has recently engaged with City staff
to establish the joint committee to evaluate proposals for programs to receive funding. Joint committee
meetings are targeted to begin in Summer 2022. As required by Development Agreement Section 12(d),
the City will provide yearly Supplements to the Annual Report to provide an accounting of the City’s
expenditures from this fund, and the purposes for which the expenditures were used.
PALO ALTO FISCAL BENEFITS
The Stanford Medicine Renewal Project brings considerable fiscal benefits to the City of Palo Alto. The
project is expected to generate $8.1 million in sales and use tax revenues for the City, and multiple
mechanisms have been put into place to ensure that this target is met. The Development Agreement also
provides for further fiscal benefits to the City, including a payment by Stanford Medicine to fund the City’s
operating deficit, and the payment of utility user taxes and school fees.
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8 ANNUAL REPORT 2021-22
Sections 5(b)(i) and 5(b)(ii). Payment of Sales and Use Taxes
As required by the Development Agreement, Stanford Medicine submitted its annual Construction Sales
and Use Tax monitoring report to the City on June 30, 2022. The Stanford Medicine parties will continue
to submit such a report annually during the construction period for the Renewal Project so that the City
can determine the share of construction use taxes that it has received as a result of the Renewal Project.
Each year, within 60 days of receiving the monitoring report, the City will provide its determination of
the amount of construction use taxes that it has received as a result of the Renewal Project during the
preceding calendar year. In August 2026 or soon thereafter, Stanford Medicine and the City will conduct
a reconciliation process to confirm that the City has received at least $8.1 million in construction use taxes
as a result of the Renewal Project, as further described in Development Agreement Section 5(b)(ii).
To date, Stanford Medicine has taken the following steps detailed below to maximize the City’s allocation
of sales and use taxes associated with Project construction and operation. Documentation of each of
these items is included in the 2021 construction use tax monitoring report already submitted.
• Stanford Medicine has obtained all permits and licenses necessary to maximize the City’s allocation
of construction use taxes derived from the project, including California Seller ’s Permits and Use Tax
Direct Pay Permits.
• Stanford Medicine has designated and required all contractors and subcontractors to designate the
project site as the place of sale of all fixtures furnished or installed as part of the project.
• Stanford Medicine has designated and required all contractors and subcontractors to designate the
project site as the place of use of all materials used in the construction of the project.
• Stanford Medicine has required all contractors and subcontractors to allocate the local sales and
use taxes derived from their contracts directly to the City. Stanford Medicine has used best efforts
to require contractors and subcontractors to complete and file any forms required by the State
Board of Equalization to effect these designations.
• Both Hospitals have obtained use tax direct pay permits from the State of California for their
existing facilities in order to increase the City tax allocation for the Hospitals’ purchases. The
Hospitals will maintain the use tax direct pay permit for the life of the project.
• Finally, Stanford Medicine has assisted the City in establishing and administering a Retail Sales
and Use Tax Reporting District for the Renewal Project, to enable the City to track the generation,
allocation, reporting and payment of sales and use taxes derived from the Project.
Section 5(b)(iii). Funding of Operating Deficit
In order to assure that City costs associated with the Renewal Project do not exceed revenues to the
City resulting from construction and operation of the project, Stanford Medicine has provided to the City a
single lump sum payment in the amount of $2,417,000. This payment was made on August 25, 2011. No
further action is required by Stanford Medicine to comply with this Development Agreement provision.
Section 5(b)(iv). Payment of Utility User Tax
Stanford Medicine will pay the City a utility user tax at a minimum rate of 5 percent of all electricity, gas,
and water charges allocable to new construction completed as part of the project for the life of the project.
This rate may be increased by the City as provided by Section 2.35.100(b) of the Municipal Code. The 5
percent utility user tax is currently being paid by Stanford Medicine.
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 17 Packet Pg. 64 of 853
ANNUAL REPORT 2021-22 9
Section 5(b)(v). School Fees
Stanford Medicine will pay to the City—which is then to forward to the Palo Alto Unified School District—
school fees upon issuance of each building permit from the City or OSHPD, in the amount that is
generally applicable to non-residential development at the time of payment based upon net new square
footage, as defined in the Development Agreement.
School fees were paid in 2012 for LPCH and SHC in the amounts of $188,815 and $153,802,
respectively. In July 2013, additional school fees were paid in the amount of $7,051 to account for
additional program square footage for the New Stanford Hospital and Garage. In May 2014, an additional
payment of school fees in the amount of $16,119 was made to account for the incremental square footage
associated with the Hoover Medical Office Building, beyond the 60,000 square feet originally planned. In
November 2015, additional school fees in the amount of $461.16 were paid to account for incremental
square footage for the New Stanford Hospital Garage. In May 2022, school fees in the amount of
$22,641 were paid to Palo Alto Unified School District to account for Stanford Health Care’s planned
addition to the 1989 portion of the preexisting hospital.
TRAFFIC MITIGATION AND REDUCED VEHICLE TRIPS
Stanford Medicine has taken a number of steps to mitigate the potential traffic impacts projected at full
project buildout. Stanford Medicine provides a robust transportation demand management program,
offering a variety of incentives for employees to forego driving alone to work. As required by the
Development Agreement, Stanford Medicine has taken the additional actions outlined below.
Section 5(c)(ii). Menlo Park Traffic Mitigation
Stanford Medicine agreed to contribute to the City of Menlo Park a total of $3,699,000 for use in
connection with traffic mitigation, infrastructure enhancements, and the promotion of sustainable
neighborhoods and communities and affordable housing. This contribution has been made in three
equal payments; the first payment of $1,233,000 was made on August 19, 2011. The second payment of
$1,233,000 was made on December 5, 2012, following the November 2012 issuance of the first Hospital
foundation permit. The final payment in the amount of $1,233,000 was made on December 14, 2017,
within 30 days from issuance of the first Hospital occupancy permit. No further action is required by
Stanford Medicine to comply with this Development Agreement provision
Section 5(c)(iii). East Palo Alto Voluntary Mitigation
Stanford Medicine has contributed a single lump sum payment of $200,000 to East Palo Alto to be used
for roadway and traffic signal improvements on University Avenue. This payment was made on August
19, 2011. No further action is required by Stanford Medicine to comply with this Development Agreement
provision. In the event that Stanford Medicine does not meet the alternative transportation mode goals
specified in the Development Agreement in the required timeframe, including any period of permitted
delay, and is assessed a $4 million payment under Development Agreement section 5(c)(ix)(B), the City
will be required to remit $150,000 of such payment to the City of East Palo Alto.
Section 5(c)(iv). Contributions to AC Transit
The Hospitals committed to the following actions within 30 days from issuance of the first Hospital
occupancy permit, and have fulfilled these commitments as outlined below:
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 18 Packet Pg. 65 of 853
10 ANNUAL REPORT 2021-22
• The Hospitals agreed to offer a one-time payment of $250,000 to AC Transit to be used for capital
improvements to the U-Line to increase capacity (Section 5(c)(iv)(A)). As required, the Hospitals
offered to contribute $250,000 to AC Transit for capital improvements to the U Line; this offer was
accepted, and the payment was made on January 5, 2018.
• The Hospitals agreed to offer to make annual payments to AC Transit in a reasonable amount, not
to exceed $50,000, to be used for operating costs of the U-Line to maintain a load factor for bus
service to the Medical Center of less than 1 (Section 5(c)(iv)(B)). The Hospitals are making annual
payments to AC Transit for purposes of U-Line operating costs.
• In order to encourage Hospital employees living in the East Bay to use public transit for their
commute, the Hospitals committed to using best efforts to lease 75 parking spaces at the
Ardenwood Park and Ride lot, or an equivalent location, at a cost not to exceed $45,000 per year
(Section 5(c)(iv)(C)). The Hospitals continue to meet this requirement, and currently lease 100
parking spaces in Newark (35263 Fircrest Drive). However, the Fircrest-Ardenwood route that
provided service to these spaces was suspended in December 2020 due to the pandemic reducing
demand and resulting low ridership. East Bay riders continue to be served by the U Line and DB
Express.
Section 5(c)(v). Opticom Payments
Within 30 days from issuance of the first Hospital occupancy permit, the Hospitals committed to pay
$11,200 to the City of Palo Alto to be used for the installation of Opticom traffic control systems at the
following seven intersections: El Camino Real/Palm Drive/University Avenue; El Camino Real/Page Mill
Road; Middlefield Road/Lytton Road; Junipero Serra/Page Mill Road; Junipero Serra/Campus Drive West;
Galvez/Arboretum; and the Alpine/280 Northbound ramp. However, since the time that this commitment
was made, the City determined that Opticom systems are outdated, and proposed the purchase and
installation of the ATMS.now Emergency.now package, which would allow coordinated prioritization at all
City-maintained traffic signals. Agreement to this change in traffic signal priority system is documented in
a letter dated December 12, 2017 from the City Manager to the SUMC Parties, which was accepted and
agreed to by the SUMC Parties by countersigned letter. The required payment was made on December
12, 2017, within 30 days of issuance of the first Hospital occupancy permit.
Section 5(c)(vi). Caltrain GO Passes
The Development Agreement requires that the Hospitals purchase annual Caltrain GO Passes for
all existing and new Hospital employees who work more than 20 hours per week at a cost of up to
approximately $1.8 million per year, beginning on September 1, 2015. This obligation is expected to
continue for a period of 51 years.
Hospital management accelerated the purchase of the annual GO Pass for Hospital employees, and
began providing free GO Passes to employees commencing on January 1, 2012. Annual passes were
purchased again for all existing and new eligible employees for 2022.
Section 5(c)(vii). Marguerite Shuttle Service
The Hospitals will fund the reasonable costs, in an approximate amount of $2 million, for the purchase
of additional shuttle vehicles for the Marguerite shuttle service, as and when required to meet increased
demand for shuttle service between the project sites and the Palo Alto Intermodal Transit Station. In
addition, the Hospitals will fund as annual payments the reasonable costs, in an approximate amount
of $450,000 per year, to cover the net increase in operating costs for the Marguerite Shuttle. Demand
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 19 Packet Pg. 66 of 853
ANNUAL REPORT 2021-22 11
for the Marguerite shuttle increased in 2012, and the Hospitals funded the purchase of three new hybrid
shuttles to meet this increased demand. Since this time, the Hospitals have funded as annual payments
the reasonable costs of the net increase in operating costs for the Marguerite Shuttle.
Section 5(c)(viii). Transportation Demand Management Coordinator
The Development Agreement requires that the Hospitals employ an onsite qualified Transportation
Demand Management (TDM) Coordinator for Stanford Medicine, commencing on September 1, 2015,
and continuing through the life of the Renewal Project.
Because the Hospitals accelerated the purchase of the Caltrain GO Pass, the Hospitals also accelerated
the hiring of the TDM Coordinator, filling this position in March 2012. The TDM Coordinator is responsible
for overseeing the analysis, development, and implementation of programs to advance the Hospitals’
TDM objectives. Specific duties that are carried out in collaboration with Stanford Transportation include
raising awareness among commuters about alternative transportation options and Stanford’s commute
incentive programs; providing alternative commute planning assistance and responses to customer
inquiries; writing and editing electronic and print communications; coordinating and staffing outreach
events, such as free transit pass distributions and employee fairs; and providing alternative transportation
information and resources at new employee orientations. In addition, the TDM Coordinator is responsible
for overseeing the Transportation Hub within the new Stanford Hospital. The Transportation Hub serves
as an alternative transportation information center available to both staff and patients, and includes a
monitor screen (Transit Screen) that displays all mobility options in the area at a glance, in real time.
The Hospitals have also created a new role, Transportation/TDM Director, that is in addition to the
previously established TDM Coordinator role, to lead the effort of increasing the use of alternative
transportation among Hospital employees.
Section 5(c)(ix). Monitoring of TDM Programs
The Hospitals are required to submit annual monitoring reports showing the current number of employees
employed over 20 hours per week; the number of employees using an alternative transportation mode as
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 20 Packet Pg. 67 of 853
12 ANNUAL REPORT 2021-22
documented by a study or survey to be completed by the Hospitals using a method mutually agreeable
to the City and the Hospitals; and the efforts used by the Hospitals to attempt to achieve the Alternative
Mode Targets identified in the Development Agreement. The Development Agreement specifies
payments to be made in the event that such targets are not met during particular time periods. Stanford
Medicine submitted its 2022 Alternative Mode Share Report to the City on May 31, 2022; this report
shows an alternative mode split of 19.9% for the Hospitals, representing a significant drop in alternative
mode share since the start of the COVID-19 pandemic and a further decrease relative to the Spring
2021 results (28.8%). The continued shift from alternative modes to single-occupancy vehicles among
on-campus Hospital staff is consistent with generally observed changes in transit behavior during the
pandemic, with the key difference that the Hospitals’ on-campus employees largely do not have the
ability to perform work remotely, as they primarily occupy roles which require direct patient interface or
otherwise require physical presence. Given ongoing concerns over the safety of public transportation
during the pandemic, the further reduction in the Hospitals’ alternative mode share from the most recent
reporting year can be more easily understood. Under the circumstances, the Hospitals are excused from
achieving, on schedule, the alternative mode share targets of this section of the Development Agreement.
Due to the pandemic-induced circumstances noted above and as allowed by the Development
Agreement, Stanford Medicine has filed a Notice of Intent to Claim a Permitted Delay with the City which
establishes that due to the ongoing COVID-19 pandemic the Hospitals are unable to meet the alternative
mode share targets on schedule. The Hospitals expect that the period of permitted delay will extend
through a period ending one year after the expiration or termination of the United States Secretary of
Health and Human Services’ determination that a public health emergency exists due to the COVID-19
pandemic. This anticipated period of permitted delay accounts for an end to the current public health
emergency, and the gradual return of commuter confidence in alternative transit. During this period,
other related obligations would continue to be met, including but not limited to implementing an enhanced
TDM program, monitoring progress toward meeting the alternative mode share targets, providing annual
reports to the City, striving to maximize use of alternative commute modes by Hospital employees, and
meeting with the City on a regular basis to identify potential improvements to the enhanced TDM program.
Stanford Medicine plans to file an application for an amendment to the Development Agreement to
implement the period of permitted delay and establish viable timelines for compliance with alternative
mode share targets.
Stanford Medicine remains committed to increasing its alternative mode share, and enabling employees
to travel safely to work using alternative modes.
LINKAGES
To further encourage use of Caltrain, bus, and other transit services, and to enhance and encourage use
of pedestrian and bicycle connections between Stanford Medicine and downtown Palo Alto, Stanford
Medicine has funded the following specific infrastructure improvements.
Section 5(d)(i). Intermodal Transit Fund
Stanford Medicine has provided to the City one lump sum payment of $2.25 million for improvements
to enhance the pedestrian and bicycle connection from the Palo Alto Intermodal Transit Center to the
existing intersection of El Camino Real and Quarry Road. Up to $2 million of this amount is to be used by
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 21 Packet Pg. 68 of 853
ANNUAL REPORT 2021-22 13
the City for the development of an attractive, landscaped passive park/green space with a clearly marked
and lighted pedestrian pathway, benches, and flower borders. Stanford Medicine paid the entire required
amount for the Intermodal Transit Fund on August 25, 2011. No further action is required by Stanford
Medicine to comply with this Development Agreement provision. As required by Development Agreement
Section 12(d), the City will provide yearly Supplements to the Annual Report to provide an accounting of
the City’s expenditures from this fund, and the purposes for which the expenditures were used.
In Summer 2017, prior to issuance of the first Hospital Occupancy Permit, the City completed a temporary
path with associated lighting, landscaping / green space, benches, and flower borders from the transit
center to the existing crosswalk at the intersection of El Camino Real and Quarry Road. Available funds
remaining (approximately $1.69 million) will be applied to the construction of permanent improvements in
the future.
Section 5(d)(ii). Quarry Road Fund
Stanford Medicine has provided to the City one lump sum payment of $400,000 for improvements to and
within the public right-of-way to enhance the pedestrian and bicycle connection from the west side of El
Camino Real to Welch Road along Quarry Road, including urban design elements and way finding, wider
bicycle lanes, as necessary, on Quarry Road, enhanced transit nodes for bus and/or shuttle stops, and
prominent bicycle facilities. Stanford Medicine paid the entire required amount for the Quarry Road Fund
on August 25, 2011. No further action is required by Stanford Medicine to comply with this Development
Agreement provision. As required by Development Agreement Section 12(d), the City will provide yearly
Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and
the purposes for which the expenditures were used. The City was required to construct the improvements
prior to issuance of the first Hospital Occupancy Permit, but as agreed to with Stanford Medicine, delayed
implementation of these improvements until utility trenching to the Medical Center was complete. In late
2018, the City completed these improvements, including enhanced crosswalks and bicycle striping and
signage.
Section 5(d)(iii). Stanford Barn Connection
Stanford Medicine agreed to construct up to $700,000 of improvements to enhance the pedestrian
connection between the Main Medical Campus and the Stanford Shopping Center from Welch Road to
Vineyard Lane, in the area adjacent to the Stanford Barn prior to issuance of the first Hospital Occupancy
permit. Construction of the improvements completed in November 2017, in advance of issuance of the
first Hospital Occupancy permit. No further action is required by Stanford Medicine to comply with this
Development Agreement provision.
INFRASTRUCTURE, SUSTAINABLE NEIGHBORHOODS AND COMMUNITIES, AND
AFFORDABLE HOUSING
Section 5(e). Infrastructure, Sustainable Neighborhoods and Communities, and Affordable
Housing Fund
Stanford Medicine agreed to contribute a total amount of $23.2 million toward City of Palo Alto
infrastructure, sustainable neighborhoods and communities, and affordable housing. As required by the
Development Agreement, this contribution has been made in three equal payments. The first payment, in
the amount of $7,733,333, was made on August 25, 2011; the second payment of $7,733,333 was made
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 22 Packet Pg. 69 of 853
14 ANNUAL REPORT 2021-22
on December 5, 2012, following the November 2012 issuance of the first Hospital foundation permit; and
the final payment of $7,733,333 was made on December 12, 2017, within 30 days from issuance of the
first Hospital occupancy permit. No further action is required by Stanford Medicine to comply with this
Development Agreement provision. As required by Development Agreement Section 12(d), the City will
provide yearly Supplements to the Annual Report to provide an accounting of the City’s expenditures from
this fund, and the purposes for which the expenditures were used.
The City will use $1,720,488 of these funds in the same manner as funds collected under the City’s
housing fee ordinance.
CLIMATE CHANGE
Section 5(f). Climate Change Fund
Stanford Medicine agreed to contribute a total amount of $12 million toward City projects and programs
for a sustainable community, including programs identified in the City’s Climate Action Plan, carbon
credits, and investments in renewable energy and energy conservation. As required by the Development
Agreement, this contribution has been made in three equal payments. The first payment, in the amount
of $4 million, was made on August 25, 2011; the second payment of $4 million was made on December
5, 2012, following the November 2012 issuance of the first Hospital foundation permit; and the final
payment of $4 million was made on December 12, 2017, within 30 days from issuance of the first Hospital
occupancy permit. No further action is required by Stanford Medicine to comply with this Development
Agreement provision. As required by Development Agreement Section 12(d), the City will provide yearly
Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and
the purposes for which the expenditures were used.
SATISFACTION OF CONDITIONS OF APPROVAL
Section 5(h). Satisfaction of All Conditions of Approval
Stanford Medicine will satisfy all Conditions of Approval by the dates and within the time periods required
by the project approvals, subject to modifications allowed by the Development Agreement, and has taken
several steps in order to ensure that this requirement is met (Section 5(h)). The Conditions of Approval
encompass conditions imposed by the Architectural Review Board, mitigation measures enumerated in
the Mitigation Monitoring and Reporting Program, and conditions attached to the Conditional Use Permit.
In order to implement, monitor, and report on the implementation of this diverse array of conditions,
Stanford Medicine, with input from City planning staff, has created two Excel spreadsheet tracking
and reporting tools. These spreadsheets serve as a centralized repository for compliance monitoring
information and documentation, and are updated by the Stanford Medicine project teams on a regular
basis, and reviewed by the City.
COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 23 Packet Pg. 70 of 853
ANNUAL REPORT 2021-22 15
CONCLUSION
As the Renewal Project completes its eleventh year, Stanford Medicine looks forward to continued
engagement with the City of Palo Alto as the project continues to progress.
Item 6
Attachment A FY 2021-
2022 SUMC Annual
Report
Item 6: Staff Report Pg. 24 Packet Pg. 71 of 853
Stanford University Medical Center (SUMC) Annual Reports
Prior Fiscal Year Annual Reports:
•Fiscal Year 2011-2012
http://www.cityofpaloalto.org/civicax/filebank/documents/31976
•Fiscal Year 2012-2013
https://www.cityofpaloalto.org/civicax/filebank/documents/39991
•Fiscal Year 2013-2014
http://www.cityofpaloalto.org/civicax/filebank/documents/45631
•Fiscal Year 2014-2015
http://www.cityofpaloalto.org/civicax/filebank/documents/51645
•Fiscal Year 2015-2016
https://www.cityofpaloalto.org/civicax/filebank/documents/60896
•Fiscal Year 2016-2017
https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=49142.31&BlobID=65285
•Fiscal Years 2017-2018, 2018-2019, and 2019-2020
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2021/11-november/20211101pccs-amended.pdf
•Fiscal Year 2020-2021
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2022/20220321/20220321pccsm-amended-linked-
revised.pdf
Item 6
Attachment B Weblinks to
Prior SUMC Annual
Reports
Item 6: Staff Report Pg. 25 Packet Pg. 72 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
1 SUMC Development Agreement Compliance: FY 2021-20221
0
1
5
Health Care Benefits
DA
Section Description Summary Activity Complies?
5(a)(ii)
Fund for
Healthcare
Services
Financial assistance
for Palo Alto
residents
SUMC establishment of a $3M fund that will
grow to $5.6M by December 31, 2025. Fund
will be used in even increments over a ten-
year period from 2026-2036 to assist Palo
Alto residents who have self-payment
responsibilities beyond their financial
means, as described in Section 5(a)(ii).
Yes, complies – No activity
required in FY 2021-2022.
5(a)(iii)
Fund for
Community
Health and
Safety Programs
$4M fund for
selected community
health programs for
Palo Alto residents
First and only payment of $4M on August
25, 2011 to establish City fund. The joint
committee formed according to the
Development Agreement approved
expenditures from this fund for FY 2021-
2022. There were expenditures from this
fund during the reporting period FY 2021-
2022.
Yes, complies - Fund
activity and balances in FY
2021-2022 reported in
Attachment E.
Fiscal Benefits
DA
Section Description Summary Activity Complies?
5(b)(i), (ii)
Payment of
Sales and Use
Taxes
Activities to
maximize sales and
use taxes paid to the
City
SUMC contributes to General Fund Sales and
Use Tax revenues via construction-related
activities. The City reviews the Construction
Sales & Use Tax Monitoring Report that is
submitted by SUMC on June 30 of each year.
Yes, complies - SUMC
timely submitted the
Construction Sales & Use
Tax Monitoring Report for
the previous calendar year.
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 26 Packet Pg. 73 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
2 SUMC Development Agreement Compliance: FY 2021-20221
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The City submits a letter to SUMC each year
that notes local tax received from SUMC
project activities for the year. Based upon
the City’s review of the annual Construction
Sales and Use Tax Monitoring Report,
revenues for calendar years 2011 through
2021 have totaled $5,405,338.
The City sent their
required response. This
annual reporting assists in
the process of ensuring
that the City would receive
no less than $8.1M in
construction sales and tax
revenue by December 31,
2025.
5(b)(iii)
Funding of
Operating
Deficit /
Expansion Cost
Mitigation
$2.417M fund to
assure City costs
associated with the
project do not
exceed revenues
resulting from
construction and
operation of the
project.
Payment of $2.417M on August 25, 2011 to
establish fund. There were expenditures
from this fund during the reporting period
FY 2021-2022.
Yes, complies -Fund
activity and balances in FY
2021-2022 reported in
Attachment E.
5(b)(iv)Payment of
Utility Users Tax
5% tax on all
electricity, gas and
water charges on
new construction
Utilities confirmed that billing accounts
were created in past fiscal years when new
meters were set for new construction,
including NSH, NSH Garage, LPCH, and BMI,
and the Utility Users Tax is paid through the
normal billing process for each site.
Yes, complies.
5(b)(v)School Fees
Payment of PAUSD
fees for net new
square footage
$342,617 fee paid for LPCH and NSH
expansion in 2012. $7,051 fee paid for NSH
and NSH Garage expansion in July 2013.
Yes, complies - SUMC
made payments to PAUSD
for all net new square
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 27 Packet Pg. 74 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
3 SUMC Development Agreement Compliance: FY 2021-20221
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$16,119 fee paid for Hoover Medical Office
Building expansion in May 2014. $461.16 fee
paid to account for incremental square
footage for the New Stanford Hospital
Garage. Additional PAUSD school fees were
paid in FY 2021-2022 for the Nursing Pod
Extension project due to OSHPD requiring
these payments prior to issuance of a
construction shoring permit.
footage for which school
fees apply at the time of
past permit receipt. Staff
will reconfirm SUMC
payment of PAUSD school
fees for the Nursing Pod
Extension project when
the City issues this permit
in a future fiscal year.
Traffic Mitigation and Reduced Vehicle Trips
DA
Section Description Summary Activity Complies?
5(c)(ii)
Menlo Park
Traffic
Mitigation
$3,699,000 payment
for traffic mitigation,
infrastructure,
sustainable
neighborhoods,
affordable housing
First of three $1.23M payments made on
August 19, 2011. Second payment of
$1.23M made on December 5, 2012. Third
and final payment of $1.23M made on
December 14, 2017, which was within 30
days from issuance of the first Hospital
Occupancy Permit (LPCH).
Yes, complies - SUMC
made all required
payments to Menlo Park,
including the last and final
payment in FY 2017-2018.
5(c)(iii)
East Palo Alto
Voluntary
Mitigation
$200K for roadway
and signal
improvements on
University Ave.
$200K payment made on
August 19, 2011.Yes, complies.
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 28 Packet Pg. 75 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
4 SUMC Development Agreement Compliance: FY 2021-20221
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5(c)(iv)Contributions
to AC Transit
U-line capital
improvements, low
load factor ratios,
parking spaces at
Ardenwood Park &
Ride
$250K payment made to AC Transit on
January 5, 2018.
SUMC is also invoiced by AC Transit for
payments throughout the year that total
over the $50K per year discussed in the
SUMC Development Agreement. Payments
to AC Transit are required for the life of the
project.
Since May 2014 and until April 30, 2018,
SUMC Parties leased a park-and-ride facility
on Kaiser Drive near the Ardenwood Park &
Ride. SUMC used an interim temporary
facility through FY 2019-2020. In FY 2020-
2021 and FY 2021-2022, SUMC leased 100
parking spaces in Newark (35263 Fircrest
Drive).
Yes, complies.
5(c)(v)Opticom
Payments
$11,200 payment
for Opticom traffic
control system at 7
intersections
$11.2K payment made to the City in FY
2017-2018 within 30 days from issuance of
the first Hospital Occupancy Permit (LPCH).
As the City has upgraded systems, the City
and SUMC agreed through a letter exchange
that the payment could be used for the new
coordinated prioritization signaling at City-
maintained traffic signals.
Yes, complies.
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 29 Packet Pg. 76 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
5 SUMC Development Agreement Compliance: FY 2021-20221
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5(c)(vi)Caltrain Go
Passes
SUMC purchase of
passes for all
existing and new
hospital employees
working
>20hrs/week
Go Passes have been purchased per the
Development Agreement since January 1,
2012, including for FY 2021-2022.
Yes, complies.
5(c)(vii)Marguerite
Shuttle Service
Purchase of
additional shuttles
to meet demand
Since 2011, SUMC purchased additional
shuttle buses for the Marguerite Shuttle
service which now includes five renewable
diesel-electric hybrid buses and 23 all-
electric buses. Additional all-electric buses
also came online in FY 2017-2018. Shuttles
were running in FY 2021-2022.
Yes, complies.
5(c)(viii)
SUMC
Transportation
Demand
Management
(TDM)
Coordinator
SUMC hires
coordinator to
promote alternative
transportation
options
TDM Coordinator was hired in March 2012.
This position has since been elevated to a
TDM Program Manager position and the
position remains filled.
Yes, complies.
5(c)(ix)Monitoring of
TDM Programs
Yearly report
regarding
alternative transit
mode use
The SUMC parties found that the alternative
mode share milestone target of 33%
outlined in SUMC DA Section 5(c)(ix) was not
met for 2022, nor was it above the previous
2018 milestone target of 30%; the
SUMC timely submitted
their annual Alternative
Mode Share report for FY
2021-2022. Monitoring in
FY 2021-2022 identified
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 30 Packet Pg. 77 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
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alternative mode share rate for SUMC
decreased to 19.9% in FY 2021-2022
between use of alternative modes versus
driving alone, largely due to ongoing
pandemic conditions.
that SUMC missed the
alternative mode share
target of 33% for two
consecutive years.
As received by the City on
June 14, 2022, the SUMC
Parties asserted a
permitted delay under the
Force Majeure provision of
the Agreement. The SUMC
Parties and City staff are
actively engaged in
developing an amendment
to the Agreement in order
to resolve this issue.
Linkages
DA
Section Description Summary Activity Complies?
5(d)(i)Intermodal
Transit Fund
$2.25M payment to
improve pedestrian
linkages to PA
Intermodal Transit
Center
First and only payment of $2.25M on August
25, 2011 to establish City fund. City
constructed temporary improvements prior
to the issuance of the first Hospital
Occupancy Permit (LPCH) to serve the
linkage goal and functional requirements.
Yes, complies -Fund
activity and balances in FY
2021-2022 reported in
Attachment E.
5(d)(ii)Quarry Road
Fund $400K payment to
improve pedestrian
First and only payment of $400K on August
25, 2011 to establish City fund. City
Yes, complies - As of
FY2019, there is no longer
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 31 Packet Pg. 78 of 853
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
7 SUMC Development Agreement Compliance: FY 2021-20221
0
1
5
linkages along
Quarry Road
constructed the improvements prior to the
issuance of the first Hospital Occupancy
Permit (LPCH) to serve the linkage goal and
functional requirements.
a fund balance in this
category.
5(d)(iii)Stanford Barn
Connection
SUMC budgets up to
$700K for
connections in the
vicinity of barn
SUMC constructed the Stanford Barn
Connection prior to the issuance of the first
Hospital Occupancy Permit (LPCH) to serve
the linkage goal and facilities are fully
operational.
Yes, complies.
Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing
DA
Section Description Summary Activity Complies?
5(e)
Infrastructure,
Sustainable
Neighborhoods
and
Communities,
and Affordable
Housing Fund
$23.2M payment for
these uses
First of three $7,733,333 payments made on
August 19, 2011. Second payment of
$7,733,333 made on December 5, 2012. The
third and final payment of $7,733,333 made
on December 12, 2017, which was within 30
days from issuance of the first Hospital
Occupancy Permit (LPCH). There were
expenditures from this fund during the
reporting period FY 2021-2022.
Of the funds in the Infrastructure,
Sustainable Neighborhoods and
Communities, and Affordable Housing Fund,
$1,720,488 was to be used for support of
Yes, complies -Fund
activity and balances in FY
2021-2022 reported in
Attachment E.
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Attachment C SUMC Development
Agreement Section 5 Compliance
Table
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SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
8 SUMC Development Agreement Compliance: FY 2021-20221
0
1
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affordable housing. SUMC funding
supported the Stevenson House project in
FY 2013 and the remaining affordable
housing funds were fully exhausted in FY
2020 to support the Wilton Court Housing
Project.
Climate Change
DA
Section Description Summary Activity Complies?
5(f)
Climate Change
– Sustainability
Programs
Benefit Fund
$12M payment for
climate change-
related projects and
programs
First of three $4M payments made on
August 19, 2011. Second payment of $4M
made on December 5, 2012. The third and
final payment of $4M made on December
12, 2017, which was within 30 days from
issuance of the first Hospital Occupancy
Permit (LPCH).
Yes, complies -Fund
activity and balances in FY
2021-2022 reported in
Attachment E.
Item 6
Attachment C SUMC Development
Agreement Section 5 Compliance
Table
Item 6: Staff Report Pg. 33 Packet Pg. 80 of 853
Stanford University Medical Center (SUMC)
FY 2021-2022 Construction Activities and Square Footage Summary
SUMC did not add any net new square footage in FY 2021-2022 but continued to remove
occupancy for portions of the 1959 Stone Complex by 18,472 square feet. This suspension of use
provides a temporary option to prevent exceedance of the total occupied square footage allowed
in their entitlements. While not triggered in the FY 2021-2022 monitoring period, there are
provisions in the SUMC entitlements to have a three-year period (or up to five years with Planning
Director approval) whereby SUMC is allowed to exceed the total occupied existing and net new
building square footage. This provision is important for ensuring that SUMC can maintain existing
operations while also efficiently transfer new uses, equipment, and operations over to the new
facilities.
Overall, at the Main SUMC site, SUMC is entitled to construct and use up to 3,534,090 total
square feet of hospital/clinic and research buildings, as well as associated facilities and
infrastructure improvements, including up to 1,265,272 net new square feet. Overall, at the
Hoover Pavilion site, SUMC is entitled to construct and use up to 153,343 total square feet of
medical office/clinic buildings, as well as associated facilities, including up to 46,169 net new
square feet of medical/office buildings.
A total of approximately 133,731 square feet of floor area was previously demolished at the
Stanford Hospital, Lucile Packard Children’s Hospital (LPCH), and Hoover Pavilion sites.
Net new floor area across the SUMC sites reported in previous Fiscal Years include the following:
The new Neuroscience Health Center at the Hoover Pavilion site represents 91,605 new
square feet.
Lucile Packard Children’s Hospital (LPCH) Expansion added 446,088 new square feet.
The New Stanford Hospital (NSH) garage added 29,744 new square feet. The NSH project
added 689,522 new square feet. These two new buildings therefore represent 719,266
new square feet for NSH.
The School of Medicine (SOM) added 196,921 square feet through completion of the
Biomedical Innovation Building (BMI).
Item 6
Attachment D SUMC
Construction Activities
and Square Footage
Summary
Item 6: Staff Report Pg. 34 Packet Pg. 81 of 853
Fiscal Year 2021-2022 Annual Report Supplement
Prepared by the City of Palo Alto
March 2, 2023
Background and Purpose
On June 6, 2011, the City Council approved Comprehensive Plan amendments, zoning changes, a
conditional use permit, annexation and design applications for the Stanford University Medical Center
Facilities Renewal and Replacement Project (the “Projects”). The Projects include the construction of a
new Stanford Hospital and clinics buildings, an expansion of the Lucile Packard Children’s Hospital,
construction of new School of Medicine buildings, renovation of the existing Hoover Pavilion,
construction of a new medical office building and parking garage at Hoover Pavilion, roadway
improvements along Welch Road and Durand Way, and SUMC design guidelines. A Development
Agreement (the “Agreement”) vesting these approvals was entered into between the SUMC Parties and
the City and was effective on June 6, 2011 and continues for thirty (30) years from the effective date.
The Agreement requires an annual report, prepared by SUMC that outlines the activities of the
preceding year and the efforts to fulfill the obligations of the Agreement.
Per the requirements of sections 12(a) and 12(c) of the Agreement, The City of Palo Alto is to prepare a
supplement to the annual report that contains an accounting of the funds described in the Section 5 of
the Agreement (“SUMC Parties’ Promises”) including the fund balances and expenditures and the
purposes for which the expenditures were used.
Public Benefit Fund Accounting
This SUMC Annual Report Supplement covers the period during the eleventh year of the Agreement:
June 6, 2021 through June 6, 2022. Accounting for the funds outlined extends through the end of the
City’s FY 2022.
The specific funding accounts reported in this SUMC Annual Report Supplement are consistent with
Section 5 of the Agreement. These funds have been assigned a unique cost center number for
Attachment E
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Attachment E
Supplement to the
Annual Report
Item 6: Staff Report Pg. 35 Packet Pg. 82 of 853
accounting purposes. This SUMC Annual Report Supplement also contains the investment earnings and
the earnings allocation to the various cost centers.
•Fund for Community Health and Safety, Project Safety Net (Section 5(a)(iii));
•Fund for Expansion Cost Mitigation (Section 5(b)(iii));
•Fund for Pedestrian and Bicycle Connections from Intermodal Transit Center to El Camino
Real/Quarry Road Intersection (Section 5(d)(i));
•Fund for Public Right of Way Improvements to Enhance Pedestrian and Bicycle Connections on
Quarry Road (Section 5(d)(ii));
•Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing
(Section 5(e)), and
•Fund for Climate Change - Sustainable Programs Benefit (Section 5(f)(i)).
• Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing
(Section 5(e));
•Fund for Climate Change -Sustainable Programs Benefit (Section 5(f)(i)); and
•Fund for Community Health and Safety, Project Safety Net (Section 5(a)(iii)).
•$500,000 under “Expansion Cost Mitigation” for Rail Grade Separation (PL-17001),
•$775,000 under “Infrastructure, Sustainable Neighborhoods and Communities, and Affordable
Housing” for $750,000 replacement of Fire Station Four (PE-18004) and $25,000 University
Avenue Streetscape Update (PE-21004), and
•$1,250,000 under “Community Health and Safety” for $1.2 million Charleston/Arastradero
Corridor Project (PE-13011) and $50,000 to the General Fund allocated to local non-profits
through the Human Services Resource Allocation Process (HSRAP).
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Attachment E
Supplement to the
Annual Report
Item 6: Staff Report Pg. 36 Packet Pg. 83 of 853
In FY 2021, CMR# 11877 was approved by the City Council to expense $500,000 for PF-01003 (Building
System Improvements) from the Community Health and Safety Funds. In error, this was processed to
expense from the Cost Expansion Finds. As part of the FY 2022 year-end clean-up, an adjustment was
made to correct this.
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Attachment E
Supplement to the
Annual Report
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Item 6
Attachment E Supplement to the
Annual Report
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: April 17, 2023
Report #:2303-1156
TITLE
Approval of Amendment #3 with Professional Account Management LLC, dba Duncan Solutions
Contract (C17164727) in the Amount of $80,000 and to Extend the Contract Term to April 28,
2024 for Parking Citation Management; CEQA Status – Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or designee to execute
Amendment #3 to Contract Number C17164727 with Professional Account Management/dba
Duncan Solutions to increase compensation by $80,000, for a new total not-to-exceed amount
of $800,000, and to extend the contract term to April 28, 2024.
EXECUTIVE SUMMARY
The Office of Transportation and the Police Department have separate contracts with Duncan
Solutions to respectively administer the parking permit program and to facilitate parking
citation processing and collection. This attached amendment with Duncan Solutions extends
the term for the Police Department contract to align with the Office of Transportation, in
preparation for the next competitive solicitation for comprehensive parking permit and citation
management services.
BACKGROUND
Parking enforcement throughout the city is divided between the two departments. The Police
Department is primarily responsible for timed parking enforcement in commercial zones and
enforcing the state vehicle code and city municipal code throughout the city including most
Stanford property in City jurisdiction. The Office of Transportation is primarily responsible for
enforcing the municipal code as it relates to the Residential Parking Program. Police
Department employees provide physical enforcement for their department while Office of
Transportation contracts the physical parking enforcement service to a vendor. The Police
Department does not issue permits while Office of Transportation manages a parking permit
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program. Both departments use a service provider to process and collect fees and fines for the
issued citations, in conjunction with the Administrative Services Department.
ANALYSIS
The City of Palo Alto contracted with Duncan Solutions to facilitate parking citation processing
and collections in 2016 for the Police Department. The original contract value was not to
exceed $653,0001. The contract was extended and expires April 30, 20232. Office of
Transportation maintains a separate residential permit parking program also using the same
provider for citation processing, contract number C19171363, with a not to exceed amount
$627,000 and is due to expire March 31, 20243. Before this extension, both department
contracts total $1,280,000.
The attached contract extension would align the end dates for the two contracts. By extending
the Police Department contract to align closer to the expiration of Office of Transportation
contract, staff would have sufficient time to further explore options for a consolidated and
more comprehensive parking strategy between the two departments, if feasible. This would
allow the departments to enhance coordination on services offered to the community, parking
enforcement strategies, and to determine whether one service provider can meet the
operational needs across programs.
FISCAL/RESOURCE IMPACT
Apart from the total not-to-exceed amount, updated to accommodate the extension, and the
contract ending date, the terms and conditions of the original contract remain unchanged,
including the original costs for services. The FY2023 Adopted Police Department Operating
Budget has sufficient funding for this contract; no additional budgetary action required.
Funding for the term that ends in FY2024 will be subject to Council’s adoption of that budget
during the normal budget cycle; no additional funding requirement is expected.
STAKEHOLDER ENGAGEMENT
This contract was reviewed and coordinated with internal departments including legal,
procurement, and financial functions to ensure alignment with City policies and procedures.
1 City Council, December 5, 2016, Agenda Item #4, SR #7179
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2016/id-7179.pdf
2 City Council, May 23, 2022, Agenda Item #10, SR #14337 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=81902&dbid=0&repo=PaloAlto
3 City Council, June 24, 2019, Agenda Item #5, SR 10241 #14437
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-cmrs/
year-archive/2019/id-10241.pdf
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ENVIRONMENTAL REVIEW
Adoption of this amendment is not a project under CEQA.
ATTACHMENTS
Attachment A: City of Palo Alto Contract #C17164727 Amendment No. 3
APPROVED BY:
Andrew Binder, Police Chief
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Vers.: Aug. 5, 2019
Page 1 of 4
AMENDMENT NO. THREE TO CONTRACT NO. C17164727
BETWEEN THE CITY OF PALO ALTO AND
PROFESSIONAL ACCOUNT MANAGEMENT, LLC
This Amendment No. Three (this “Amendment”) to Contract No. C17164727 (the “Contract”)
entered into as of April XX, 2023 by and between the CITY OF PALO ALTO, a California chartered
municipal corporation (“CITY”), and PROFESSIONAL ACCOUNT MANAGEMENT, LLC, a Wisconsin
limited liability company, located at 633 W. Wisconsin Avenue, Suite 1600, Milwaukee, WI
53203 ("CONSULTANT").CITY and CONSULTANT are referred to collectively as the “Parties” in
this Amendment.
R E C I T A L S
A. The Contract was entered into by and between the Parties hereto for the provision
of parking citation processing and collection services, as detailed therein.
B. The Parties now wish to amend the Contract in order to increase compensation by
Eighty Thousand Dollars ($80,000) from Seven Hundred Twenty Thousand Dollars ($720,000) to a
new total not-to-exceed amount of Eight Hundred Thousand Dollars ($800,000) with no increased
in rates; to extend the term for one additional year, from April 29, 2023 through April 28, 2024.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of
this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. C17164727
between CONSULTANT and CITY, dated December 5, 2016, as amended by:
Amendment No.1, dated October 21, 2021
Amendment No.2, dated April 29, 2022
b. Other Terms. 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:
“The term of this Agreement shall be from the date of its full execution through April 28,
2024, unless terminated earlier pursuant to Section 19 of this Agreement.”
SECTION 3. Section 4 “COMPENSATION FOR ORIGINAL TERM” of the Contract is hereby
amended to read as follows:
DocuSign Envelope ID: 593164D6-6E2F-4C63-BB98-879033C28451
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Attachment A -
Professional Account
Management LLC, dba
Duncan Solutions
Contract; C17164727
Amendment No. 3
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Vers.: Aug. 5, 2019
Page 2 of 4
“The compensation to be paid to CONSULTANT for performance of the Services
described in Exhibit “A” (“Basic Services”), and reimbursable expenses, for a total not to
exceed amount of Eight Hundred Thousand Dollars ($800,000). CONSULTANT agrees to
complete all Basic Services, including reimbursable expenses, within this amount with
no changes to Exhibit C-1, Schedule of Rates.”
SECTION 4. Legal Effect. 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. Incorporation of Recitals. 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: 593164D6-6E2F-4C63-BB98-879033C28451
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Attachment A -
Professional Account
Management LLC, dba
Duncan Solutions
Contract; C17164727
Amendment No. 3
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Vers.: Aug. 5, 2019
Page 3 of 4
SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed
this Amendment effective as of the date first above written.
CITY OF PALO ALTO
_____________________________
City Manager:
APPROVED AS TO FORM:
_____________________________
City Attorney or designee
PROFESSIONAL ACCOUNT
MANAGEMENT, LLC.
By:______________________________
Name:___________________________
Title:____________________________
Attachments:
Exhibit “C-1” entitled “Schedule of Rates”
DocuSign Envelope ID: 593164D6-6E2F-4C63-BB98-879033C28451
President and CEO
Tim Wendler
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Attachment A -
Professional Account
Management LLC, dba
Duncan Solutions
Contract; C17164727
Amendment No. 3
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Vers.: Aug. 5, 2019
Page 4 of 4
EXHIBIT “C-1”
SCHEDULE OF RATES
2023-2024
Current Services Unit Price
4. Obtain California Registered Owner Information Included in
processing cost
Special Note: DMV liens are currently used as a collections tool and are included as
a comprehensive collections program we reimburse the City $3.00 for every registration
Optional Services
Unit Price
DocuSign Envelope ID: 593164D6-6E2F-4C63-BB98-879033C28451
Item 7
Attachment A -
Professional Account
Management LLC, dba
Duncan Solutions
Contract; C17164727
Amendment No. 3
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: April 17, 2023
Report #:2302-1018
TITLE
Resolution to Oppose the Taxpayer Protection and Government Accountability Act (Initiative
21-0042A1)
RECOMMENDATION
Staff recommends that the City Council adopt a resolution to oppose the Taxpayer Projection
and Government Accountability Act (Initiative 21-0042A1) (Attachment A)
EXECUTIVE SUMMARY
The Taxpayer Protection and Government Accountability Act would amend the California
Constitution with provisions that limit voters’ authority and input, adopt new and stricter rules
for raising taxes and fees, and may make it more difficult to impose fines and penalties for
violation of state and local laws. Staff recommends that the City Council adopt a resolution
supporting opposition for this initiative.
BACKGROUND
The City’s 2023 Federal and State Legislative Guidelines1 reflect the City’s priorities and guides
staff and the City’s legislative advocates on issues that are important to the City Council.
Protecting local government revenue sources is one of the Foundational Principles of the
guidelines and represents the core of the City’s policy agenda.
The Taxpayer and Government Accountability Act (Initiative 21-0042A1) was filed with the
California Attorney General’s Office (AGO) on November 30, 2021. On May 12, 2022, the
initiative sponsors announced their intention to forego the November 2022 election and
instead target the November 2024 election. On February 1, 2023, the initiative qualified for the
1 https://www.cityofpaloalto.org/files/assets/public/city-manager/legislation/2023-legislative-guidelines-final.pdf
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November 5, 2024 election. The full text of the initiative can be found on the California Office of
the Attorney General website2.
3 summarized the current
requirements to approve taxes and fees compared to the proposed amendments to the State
Constitution and outlined the amendments to the Constitution, should the initiative pass in the
November 2024 election. The table below summarizes the LAO’s analysis of the components of
the ballot initiative:
TABLE 1: Major Provisions of the Taxpayer Protection and Government Accountability Act
1. Expands the definition of tax Expands definition of tax and may result in the
reclassification of several fees and charges
that are used to support specific service
delivery as taxes subject to voter approval.
2. Requires voter approval for state taxes Require that new or increased taxes must be
passed by two-thirds note in each legislative
chamber and approved by simple majority of
voters. Applies to any state tax approved
between January 1, 2022 and the effective
date of the measure, unless the tax fulfills
certain requirements.
3. Requirements for approving local taxes Require that new or increased taxes must be
passed by two-thirds vote of the electorate.
Prohibits local advisory measures where local
voters express a preference for how local
general tax dollars should be spent.
Ta
x
e
s
4. Allowable uses and duration of state and
local tax revenues must be specified
Requires that state and local tax measures
identify the type and amount (or rate) of the
2California Office of Attorney General, Ballot Initiatives, Active Measures, #21-0041A1, Full Text of Amended Ballot
Initiative: https://oag.ca.gov/system/files/initiatives/pdfs/21-0042A1%20%28Taxes%29.pdf
3 California Office of Attorney General, Ballot Initiatives, Active Measures, #21-0041A1, Legislative Analyst’s Office
letter dated January 19, 2022: https://oag.ca.gov/system/files/initiatives/pdfs/fiscal-impact-estimate-
report%2821-0042A1%29.pdf
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TABLE 1: Major Provisions of the Taxpayer Protection and Government Accountability Act
tax and duration of the tax; must state that the
revenue can be used for general purposes.
5. Requires the legislature and local
government bodies to impose state and
local fees
Requires that fees be imposed by majority
vote of the local governing body; restricts the
ability of local governments to delegate fee
changes to administrative entities. Any fee
approved between January 1, 2022 and the
effective date of the measure, if passed by
voters, unless the tax fulfills requirements of
the measure.
Fe
e
s
,
C
h
a
r
g
e
s
,
F
i
n
e
s
,
a
n
d
P
e
n
a
l
t
i
e
s
6. Some new state and local fees cannot
exceed actual costs
Except for licensing and other regulatory fees,
fees and charges may not exceed “the
minimum amount necessary.”
Fees and charges paid for use of government
property and the amount paid to purchase or
rent property must be “reasonable.” These
fees and charges are currently allowed to be
market based.
ANALYSIS
The initiative would significantly restrict the flexibility of state and local governments to raise
revenue for services and projects, and potentially jeopardizes billions in annual revenue across
California. The City’s major tax revenues are property tax, sales tax, utility users tax,
documentary transfer tax, and transient occupancy tax. Tax revenues are used to fund a variety
of services such as public safety, emergency response, library, and repair and maintenance of
streets and roads. Most proposed taxes require a two-thirds vote of Council before being
presented to the voters. Special taxes require two-thirds vote by the electorate while general
taxes require a majority vote of the electorate. The initiative expands the definition of a tax that
may result in the reclassification of a fees and charges that are used to support specific service
delivery as taxes subject to voter approval.
In addition to these taxes, a variety of fees and other charges are levied for a variety of services
provided by the City. Cities, counties, and special districts must regularly (e.g., annually) adopt
increases to fee rates and charges and revise rate schedules to adjust for changes in service
delivery costs (“actual cost”) or level of service. “Actual cost” is defined as the “minimum
amount necessary” to provide the service, however the initiative adds provisions that all fees
must be “reasonable to the payor” and does not define what “reasonable” is. The initiative also
increases the burden to show that a levy, charge or exaction is not a tax from a preponderance
of the evidence to a clear and convincing standard.
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Finally, the initiative’s retroactive application is problematic as hundreds of local measures
were approved by the voters in 2022 which may not comply with the initiative’s requirements.
The City’s own Business Tax (Measure K) and Measure to Affirm the Natural Gas Utility Transfer
(Measure L) were approved by voters in November 2022. While we believe the two measures
comply with the requirements of the Initiative, they, like many other local tax measures across
the State, are subject to additional, unexpected scrutiny despite voter-approval.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
•California Business Roundtable
•California National Association for Industrial and Office Parks
•Howard Jarvis Taxpayers Association
•League of California Cities
•California State Association of Counties
•California Special Districts Association
•California Contract Cities Association
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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*NOT YET APPROVED*
1
0003_20230322_MV30
RESOLUTION NO. ____
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING
OPPOSITION TO THE TAXPAYER PROTECTION AND GOVERNMENT
ACCOUNTABILITY ACT (INIATIVE 21-0042A1)
WHEREAS, the measure would amend the Constitution to further restrict the ability of
the state, counties, other local agencies, and the electorate to approve or collect taxes, fees, and
other revenues; and
WHEREAS, the measure includes provisions that would make it more difficult for local
voters to pass measures needed to fund local services and infrastructure, and would limit voter
input by prohibiting local advisory measures where voters provide direction on how they want
their local tax dollars spent; and
WHEREAS, the measure puts billions of dollars across the State currently dedicated to
local services at risk and could force cuts to fire and emergency response, law enforcement,
public health, parks, libraries, affordable housing, services to support homeless residents, mental
health services, and more; and
WHEREAS, the measure would significantly restrict the City’s flexibility to recover cost for
specific services and raise revenue for City services, projects and identified unfunded needs; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALO ALTO, CALIFORNIA DOES
HEREBY RESOLVES AS FOLLOWS:
SECTION 1. Opposition to the Taxpayer Protection and Government Accountability Act
(Initiative 21-0042A1);
SECTION 2. The City of Palo Alto will join the No on Initiative 21-0042A1 coalition, a
growing coalition of public safety, education, labor, local government, and infrastructure groups
throughout the state.
//
//
//
//
Item 8
Attachment A -
Resolution to Oppose the
Taxpayer Protection and
Government
Accountability Act
(Initiative 21-0042A1)
Item 8: Staff Report Pg. 6 Packet Pg. 98 of 853
*NOT YET APPROVED*
2
0003_20230322_MV30
SECTION 3. This resolution shall take effect as of the date of its passage and adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Administrative Services
Item 8
Attachment A -
Resolution to Oppose the
Taxpayer Protection and
Government
Accountability Act
(Initiative 21-0042A1)
Item 8: Staff Report Pg. 7 Packet Pg. 99 of 853
CaliforniaCityFinance.Com
Fiscal and Program Effects of
Initiative 21-0042A1 on Local Governments
If Initiative 21-0042A1 is placed on the ballot and passed by voters, it will result in:
Over $20 billion of local government fee and charge revenues over 10 years placed at heightened legal
peril. Related public service reductions across virtually every aspect of city, county, special district, and
school services especially for drinking water, sewer sanitation, and public health and safety.
About $2 billion of revenues each year from fees and charges adopted after January 1, 2021 subject to
legal peril.1
Over $2 billion dollars of annual revenues from dozens of tax measures approved by voters between
January 1, 2022 and the effective date of the act2 subject to additional voter approval if not in compliance
with the initiative.
Indeterminable legal and administrative burdens and costs on local government from new and more
empowered legal challenges, and bureaucratic cost tracking requirements.
The delay and deterrence of municipal annexations.
Substantially higher legal and administrative cost of public infrastructure financing which will delay and
deter new residential and commercial development.
Service and infrastructure declines including in fire and emergency response, law enforcement, public
health, drinking water, sewer sanitation, parks, libraries, public schools, affordable housing,
homelessness prevention and mental health services.
1. Local Government Taxes and Services Threatened
With regard to taxes, Initiative 21-0042A1:
Prohibits advisory, non-binding measures as to use of tax proceeds on the same ballot.
o Voters may be less informed and more likely to vote against measures.
Eliminates the ability of special tax measures proposed by citizen initiative to be enacted by majority voter
approval (Upland).3
o Because the case law regarding citizen initiative special taxes approved by majority vote (Upland)
is so recent, it is unknown how common these sorts of measures might be in the future. This
initiative would prohibit such measures after the effective date of the initiative. Any such
measures adopted after January 1, 2022 through the effective date of the Act should it pass
would be void a year after the effective date of the initiative.
Requires that tax measures include a specific duration of time that the tax will be imposed. This seems to
require that all tax increases or extensions contain a sunset (end date).
o This would require additional tax measures to extend previously approved taxes.
A city charter may not be amended to impose, extend, or increase a tax might interfere with the ability of
cities that do not already have such authority in their charters to adopt Property Transfer Taxes.
o There are no more than a few of these every few years, but it is a valuable tax for those that
adopt it.
1 Assumes fee increases since January 1, 2022 would be subject to possible legal challenge if not adopted in compliance with the
Initiative.
2 The effective date of the initiative would be sometime in December 2024, the date the California Secretary of State certifies the
election results of the November 5, 2024 election.
3 Unlike the initiative 17-0050, this initiative does not eliminate that ability of cities and counties to adopt general taxes by majority
voter approval.
2 2 1 7 I s l e R o y a l e L a n e • D a v i s , C A • 9 5 6 1 6 - 6 6 1 6
P h o n e : 5 3 0 . 7 5 8 . 3 9 5 2 • F a x : 5 3 0 . 7 5 8 . 3 9 5 2
Rev. January 14, 2023
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 8 Packet Pg. 100 of 853
– 2 – rev January 14, 2023
CaliforniaCityFinance.com
Requires that a tax measure adopted after January 1, 2022 and before the effective date of the initiative
that was not adopted in accordance with the measure be readopted in compliance with the measure or
will be void twelve months after the effective date of the initiative.
o If past election patterns and elections in 2022 are an indication, over 200 tax measures approving
more than $2 billion annual revenues to support local public services would not be in compliance
and would be subject to reenactment. Most will be taxes without a specific end date and special
taxes (including parcel taxes). Because there is no regularly scheduled election within the 12
months following the effective date of the initiative, the measures would each require declaration
of emergency and unanimous vote of the governing board to be placed on a special election
ballot within a year for approval or the tax will be void after that date. I would expect most to
succeed, but some will not, in particular citizen initiative majority vote special taxes which would
have to meet a higher voter approval threshold to continue.
Requires voter approval to expand an existing tax to new territory (annexations). This would require
additional tax measures and would deter annexations and land development in cities.
o If a tax is "extended" to an annexed area without a vote after January 1, 2022, it will be void 12
months later until brought into compliance. Because there is no regularly scheduled election
within the 12 months following the effective date of the initiative, such extensions would each
require unanimous vote of the agency board to be placed on a special election ballot or would be
void a year later.
1.a. Number of Measures and Value of Local Taxes at Risk4
Over a hundred local measures were approved in 2022 that likely do not comply with the provisions of Initiative
21-0042A1. Nearly $2 billion of annual revenues from these voter approved measures will cease a year after the
effective date of the measure, reducing the local public services funded by these measures. We can expect a
similar volume of measures in 2024 and a similar volume of non-compliance. So the combined total of annual
local funding directly affected by Initiative 21-0042A1 due to its retroactivity provision is about $4 billion.
Citizen Initiative Special Taxes in 2022.
Special taxes placed on the ballot by citizen initiative and approved after January 1, 2022 by a majority but less
than two-thirds of the voters are out of compliance with Initiative 21-0042A1.
On June 7, 2022, there were three local special tax measures placed on the ballot by citizen initiative. Two failed
to get majority voter approval. A one percent transactions and use tax (sales tax) for the John C. Fremont
Healthcare District in Mariposa County received 69.6 percent approval, over the two thirds needed for any special
tax under California Constitution Article XIIIC. So this measure was passed in compliance with Initiative 21-
0042A1.
On November 8, 2022, there were 14 local special taxes placed on the ballot by citizen initiative. Seven of these
4 Source: Compilation and summary of data from County elections offices.
June 2022 Initiative Special Taxes - majority voter approval
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
John C. Fremont
Healthcare District Mariposa Measure N Transactions
& Use Tax 1 cent $ 150,000 hospital 40yrs 69.6%PASS
County of Kings Kings Measure F Transactions
& Use Tax 1/2 cent $ 11,700,000 fire none 37.6%FAIL
Manhattan Beach
USD Los Angeles Measure A School Parcel
Tax $1095/yr $ 12,000,000 schools 12yrs 31.2%FAIL
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 9 Packet Pg. 101 of 853
– 3 – rev January 14, 2023
CaliforniaCityFinance.com
measures failed with less than majority voter approval. The other seven measures received majority, but less than
two-thirds, voter approval. These measures passed under current law but are out of compliance with Initiative 21-
0042A1. Taken together these seven taxes will provide estimated annual revenues of from $900,000 to $1.4
billion in support of parks and recreation, zoo, library, affordable housing, transportation, homelessness
prevention, and schools in these communities.
Non-Specific Tax Durations in 2022
Voters approved 106 measures in June 2022 (10) and November 2022 (96) that do not provide a specific duration
of time that the tax will be imposed (end date). Typically, the ballot titles for these measures state that the tax
would be imposed “until ended by voters.” Four of these measures also did not include any estimate of the annual
revenues that the tax would generate, another violation of initiative 21-0042A1. Taken together, these approved
local measures generate $561 million per year that will expire a year after the effective date of the initiative if
Initiative 21-0042A1 passes.
November 2022 Initiative Special Taxes - majority voter approval
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
Crockett Community
Services District Contra Costa Measure L Parcel Tax $50/parcel $ 60,000 parks/recr none 62.8%PASS
Oakland Alameda Measure Y Parcel Tax $68/parcel $ 12,000,000 zoo 20yrs 62.5%PASS
County of Mendocino Measure O Transactions
& Use Tax
1/8 cent then 1/4
cent in 2027 $ 4,000,000 library none 60.8%PASS
Los Angeles Los Angeles Measure ULA Property
Transfer Tax
4% if >$5m, 5.5%
if >$10m $600 m to $1.1 b affordable
housing none 57.3%PASS
County of Sacramento Measure A Transactions
& Use Tax same 1/2 cent $ 212,512,500
transportati 40yrs 55.3%PASS
San Francisco Proposition M Business
Operations Tax
$2500-$5000/
vacant resid unit $ 20,000,000 housing 30yrs 54.5%PASS
Santa Monica Los Angeles Measure GS Property
Transfer Tax
$56/$1000 if
>$8m $ 50,000,000
schools,
homelessne
ss, afford.
housing
none 53.3%PASS
Total $900,000 to
$1.4 billion
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
County of Calaveras Measure A Transactions
& Use Tax 1 cent $ 5,000,000 fire none 49.4%FAIL
South San Francisco
(for Schools)San Mateo Measure DD School Parcel
Tax $2.50/sf $ 55,900,000 schools none 47.2%FAIL
County of Fresno (for CSU ) Measure E Transactions
& Use Tax
1/5 ct,
1/40 ct (Reedley) $ 36,000,000 Calif State
Univ 20yrs 46.9%FAIL
Santa Cruz Santa Cruz Measure N Parcel Tax $6k/v acant SFU xxx vacant
property xxx 44.2%FAIL
County of Monterey Measure Q Parcel Tax $49/parcel $ 5,500,000 childcare 10yrs 41.1%FAIL
San Francisco City
College
San
Francisco Measure O School Parcel
Tax $150/sfu $ 37,000,000 schools 10yrs 36.7%FAIL
Morro Bay San Luis
Obispo Measure B Parcel Tax $120+/parcel $ 680,000 harbor none 36.0%FAIL
Inverness Public
Utility District Marin Measure O Parcel Tax $0.20/sf,
$150/vacant $ 276,000 fire none 27.0%FAIL
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 10 Packet Pg. 102 of 853
– 4 – rev January 14, 2023
CaliforniaCityFinance.com
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
nnual
Revenue Use Sunset YES%
Oakland Alameda Measure T Business Tax
General various $ 20,900,000 none 71.4%PASS
Culver City Los Angeles Measure BL Business Tax
General various $ 10,000,000 none 60.5%PASS
El Segundo Los Angeles Measure BT Business Tax
General various $ 3,000,000 none 51.2%PASS
Pico Rivera Los Angeles Measure AB Business Tax
General various $ 5,800,000 none 75.5%PASS
Santa Ana Orange Measure W Business Tax
General various neutral none 64.8%PASS
Tracy San Joaquin Measure B Business Tax
General various $ 3,200,000 none 72.6%PASS
Burlingame San Mateo Measure X Business Tax
General various $ 2,500,000 none 75.1%PASS
Los Gatos Santa Clara Measure J Business Tax
General various $ 1,100,000 none 53.4%PASS
Santa Clara Santa Clara Measure H Business Tax
General
$45/employee,
$15/rental unit $ 6,000,000 none 59.5%PASS
Brisbane San Mateo Measure O Business Tax
lodging busn $2.50/rm/day $ 250,000 none 69.2%PASS
East Palo Alto San Mateo Measure L Business Tax
resid. rentals
2.5%
grossRcpts $ 1,480,000 none 69.9%PASS
County of Santa Cruz Unincorporated Measure C Busn Tax -
disp cups 12.5cents/cup $ 700,000 none 68.2%PASS
South Lake Tahoe El Dorado Measure G Busn Tax
Cannabis
6% retail,
manufacturing $ 950,000 none 62.9%PASS
McFarland Kern Measure O Busn Tax
Cannabis
8% of gross
receipts retail, $ 1,800,000 none 63.5%PASS
Avenal Kings Measure C Busn Tax
Cannabis
$25+/sf or
15% gr rcpts $ 600,000 none 61.8%PASS
Baldwin Park Los Angeles Measure CB Busn Tax
Cannabis
4%
grossRcpts $ 300,000 none 51.3%PASS
Claremont Los Angeles Measure CT Busn Tax
Cannabis
4%-7% gr
rcpts, $1- $ 500,000 none 61.1%PASS
County of Los Angeles Unincorporated Measure C Busn Tax
Cannabis
4% gross
receipts retail, $ 15,170,000 none 60.1%PASS
Cudahy Los Angeles Measure BA Busn Tax
Cannabis
15%
grossRcpts $ 3,600,000 none 54.0%PASS
El Segundo Los Angeles Measure Y Busn Tax
Cannabis
10%
GrossRcpt, $ 1,500,000 none 72.8%PASS
Hermosa Beach Los Angeles Measure T Busn Tax
Cannabis
10%
GrossRcpt, $ 1,500,000 none 67.6%PASS
Lynwood Los Angeles Measure TR Busn Tax
Cannabis 5%to10% $ 3,000,000 none 66.4%PASS
Santa Monica Los Angeles Measure H Busn Tax
Cannabis
10% gross
Rcpts $ 5,000,000 none 66.4%PASS
South El Monte Los Angeles Measure C Busn Tax
Cannabis
6% special
excise tax on $ 126,000 none 53.7%PASS
Monterey Monterey Measure J Busn Tax
Cannabis 6% grossRcpt $ 1,300,000 none 65.2%PASS
Pacific Grove Monterey Measure N Busn Tax
Cannabis 6% grossRcpt $ 300,000 none 70.8%PASS
Huntington Beach Orange Measure O Busn Tax
Cannabis
6% retail, 1%
other $ 600,000 none 54.7%PASS
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 11 Packet Pg. 103 of 853
– 5 – rev January 14, 2023
CaliforniaCityFinance.com
Notes
?= Ballot measure title did not include an estimate of annual revenues, also not in compliance with Initiative 21-0042A1.
n/a*= Arcadia Measure SW passed but sports betting remains illegal after the failure of Propositions 26 and 27 on the November
statewide ballot.
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
nnual
Revenue Use Sunset YES%
Laguna Woods Orange Measure T Busn Tax
Cannabis
- o
gross receipts $ 750,000 none 61.1%PASS
Corona Riverside Measure G Busn Tax
Cannabis
9% of gross
receipts for $ 5,000,000 none 61.6%PASS
Montclair San Bernardino Measure R Busn Tax
Cannabis
7%
grossRcpts $ 3,500,000 none 70.3%PASS
County of San Diego Unincorporated Measure A Busn Tax
Cannabis
6% retail, 3%
distribution, $ 5,600,000 none 57.4%PASS
Encinitas San Diego Measure L Busn Tax
Cannabis
4% to 7% of
gross receipts $ 1,400,000 none 65.1%PASS
Healdsburg Sonoma Measure M Busn Tax
Cannabis 8% grossRcpt $ 500,000 none 72.7%PASS
Exeter Tulare Measure B Busn Tax
Cannabis
10% retail and
other, $10/sf ? none 66.5%PASS
Tulare Tulare Measure Y Busn Tax
Cannabis
10% retail and
other, $10/sf ? none 65.2%PASS
Woodland Yolo Measure K Busn Tax
Cannabis
10%
grossRcpts ? none 66.2%PASS
Redlands San Bernardino Measure J Busn Tax
Distrib centers
from $0.047/sf
to $0.105/sf $ 530,000 none 53.5%PASS
Arcadia Los Angeles Measure S Busn Tax
Sports Betting
5%
grossRcpts n/a* none 63.9%PASS
Albany Alameda Measure K ParcelTax $0.074+/sf $ 1,950,000 fire/EMS none 76.0%PASS
Cameron Park Airport
District El Dorado Measure J ParcelTax by $600 to
$900/parcel $ 117,900 airport/
streets none 78.2%PASS
Highlands Village
Lighting Benefit Zone El Dorado Measure L ParcelTax $140+/parcel $ 10,920 streets none 86.3%PASS
Knolls Property
Owners CSD El Dorado Measure P ParcelTax by $300+ to
$600+/parcel $ 8,400 streets none 75.5%PASS
Sundance Trail Zone of
Benefit El Dorado Measure C ParcelTax $600+/yr $ 24,000 roads none 73.2%PASS
South Pasadena Los Angeles Measure LL ParcelTax xxx ? library none 86.2%PASS
River Delta Fire District Sacramento Measure H ParcelTax $90/yr $ 130,000 fire none 72.1%PASS
Emeryville Alameda Measure O PropTransfTax $15/$1000 if
$1m-$2m, $ 5,000,000 none 71.6%PASS
San Mateo San Mateo Measure CC PropTransfTax by 1% to 1.5%
if >$10 $ 4,800,000 none 71.8%PASS
Alameda Alameda Measure F TOT by 4% to 14% $ 910,000 none 59.2%PASS
Clovis Fresno Measure B TOT by 2% to 12% $ 500,000 none 69.7%PASS
Kerman Fresno Measure G TOT 10% $ 40,000 none 62.3%PASS
Trinidad Humboldt Measure P TOT by 4% to 12% $ 65,000 none 77.6%PASS
Imperial Imperial Measure G TOT by 4% to 12% $ 600,000 none 56.2%PASS
Arcadia Los Angeles Measure HT TOT by 2% to 12% $ 730,000 none 54.1%PASS
Santa Monica Los Angeles Measure CS TOT by 1%, 3%
home shares $ 4,100,000 none 73.7%PASS
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 12 Packet Pg. 104 of 853
– 6 – rev January 14, 2023
CaliforniaCityFinance.com
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
nnual
Revenue Use Sunset YES%
Anaheim Orange Measure J TOT online travel
companies $ 3,000,000 none 59.2%PASS
La Palma Orange Measure P TOT by 4% to 12% $ 200,000 none 71.1%PASS
Colfax Placer Measure B TOT by 2% to10% $ 29,000 none 73.5%PASS
Rocklin Placer Measure F TOT by 2% to 10% $ 300,000 none 59.8%PASS
Roseville Placer Measure C TOT by 4% to 10% $ 3,000,000 none 73.0%PASS
Big Bear Lake San Bernardino Measure P TOT by 2% to 10% $ 1,300,000 none 54.4%PASS
Grand Terrace San Bernardino Measure M TOT new 10% $ 250,000 none 51.9%PASS
Yucca Valley San Bernardino Measure K TOT by 5% to 12% $ 1,300,000 none 71.9%PASS
Imperial Beach San Diego Measure R TOT by 4% to 14% $ 400,000 none 67.4%PASS
El Paso de Robles San Luis Obisp Measure F TOT by 1% to 11% $ 750,000 none 61.2%PASS
Belmont San Mateo Measure K TOT by 2% to 14% $ 600,000 none 79.3%PASS
Millbrae San Mateo Measure N TOT by 2% to 14% $ 1,500,000 none 75.8%PASS
County of Humboldt Unincorporated Measure J TOT by 2% to 12% $ 3,080,000 none 63.3%PASS
County of Placer -
orth Tahoe TOT Area Measure A TOT by 2% to 10% $ 4,000,000 none 90.0%PASS
County of Santa Cruz Unincorporated Measure B TOT by 1% to 12% $ 2,300,000 none 69.2%PASS
County of El Dorado -
East Slope Tahoe Measure S TOT 2/3 by 4% to 14% $ 2,500,000 none 81.8%PASS
Chico Butte Measure H TrUT 1 cent $ 24,000,000 none 52.4%PASS
Mendota Fresno Measure H TrUT 1.25 cent $ 493,498 none 57.2%PASS
Blue Lake Humboldt Measure R TrUT 1 cent $ 30,000 none 55.4%PASS
Rio Dell Humboldt Measure O TrUT 3/4cent $ 400,000 none 53.3%PASS
County of Kern unincorporated areas Measure K TrUT 1 cent $ 54,000,000 none 50.8%PASS
McFarland Kern Measure M TrUT 1 cent $ 579,662 none 62.2%PASS
Tehachapi Kern Measure S TrUT 1 cent $ 4,000,000 none 57.2%PASS
Avenal Kings Measure A TrUT 1 cent $ 500,000 none 72.5%PASS
Susanville Lassen Measure P TrUT 1 cent $ 1,750,000 none 54.7%PASS
Baldwin Park Los Angeles Measure BP TrUT 3/4 cent $ 6,000,000 none 58.1%PASS
Malibu Los Angeles Measure M TrUT 1/2 cent $ 3,000,000 none 52.6%PASS
Monterey Park Los Angeles Measure M TrUT 3/4 cent $ 6,000,000 none 58.5%PASS
Torrance Los Angeles Measure SS TrUT 1/2 cent $ 18,000,000 none 55.0%PASS
Larkspur Marin Measure G TrUT 1/4 cent $ 700,000 none 59.4%PASS
Sand City Monterey Measure L TrUT by 1/2cent to
1.5cents $ 1,400,000 none 68.7%PASS
Hemet Riverside Measure H TrUT same 1 cent $ 15,000,000 none 58.0%PASS
Elk Grove Sacramento Measure E TrUT 1 cent $ 21,000,000 none 54.1%PASS
Galt Sacramento Measure Q TrUT 1 cent $ 3,600,000 none 52.4%PASS
Colton San Bernardino Measure S TrUT 1 cent $ 9,500,000 none 66.8%PASS
Ontario San Bernardino Measure Q TrUT 1 cent $ 95,000,000 none 53.2%PASS
Solana Beach San Diego Measure S TrUT 1 cent $ 3,000,000 none 66.7%PASS
Brisbane San Mateo Measure U TrUT 1/2 cent $ 2,000,000 none 63.9%PASS
Goleta Santa Barbara Measure B TrUT 1 cent $ 10,600,000 none 64.7%PASS
Solvang Santa Barbara Measure U TrUT 1 cent $ 1,600,000 none 63.1%PASS
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 13 Packet Pg. 105 of 853
– 7 – rev January 14, 2023
CaliforniaCityFinance.com
Co-temporal Advisory Measures in 2022
At the November 2022 election, there was just one local general tax measure that was accompanied by an
advisory measure as to the use of funds. The City of Santa Monica’s Measure DT property transfer tax failed with
just 34 percent approval as voters instead chose the citizen initiative Measure GS.
There was also just one such tax use advisory measure on the June 2022 election. Susanville’s voters passed
Measure P, a 1 percent transactions and use (sales) tax that generates $1.75 million per year5 for general city
services. The measure was accompanied by advisory Measure Q, accompanied the city’s It asked, “If Measure P
passes, should the revenues be used to balance the budget to maintain and enhance existing public safety
services (police and fire), and provide funding to support street infrastructure improvements and provide funding
to support economic development efforts designed to increase businesses, jobs and visitors to Susanville?” Both
measures passed. Under Initiative 21-0042A1, the tax will expire a year after the effective date of the initiative
(i.e., in December 2025).
1.b. Additional Costs and Public Service Effects of the Tax Provisions
Assuming a similar volume of local measures through 2024 as we saw in 2022, there will be over 200 local
measures that will need to be redrafted to comply with the Initiative and placed back on the ballot for the taxes to
continue after December 2025. The costs of re-drafting, re-placing and re-voting on these measures, previously
legally approved by voters, will be in the tens of millions in total statewide.
2. “Exempt Charges” (fees and charges that are not taxes) and Services Threatened
With regard to fees and charges adopted after January 1, 2022, Initiative 21-0042A1:
Subjects new fees and charges for a product or service to a new "actual and reasonable test."
Subjects fees and charges for entrance to local government property; and rental and sale of local
government property to a new, undefined, “reasonable” test.
Allows legal challenge to any tax adopted before the effective date of the initiative and after January 1,
5 The Susanville measure also did not include a specific end date and so is included in the list and totals of those measures.
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
nnual
Revenue Use Sunset YES%
Watsonville Santa Cruz Measure R TrUT 1/2 cent $ 5,000,000 none 64.4%PASS
Vallejo Solano Measure P TrUT 7/8 cent $ 18,000,000 none 54.7%PASS
Modesto Stanislaus Measure H TrUT 1 cent $ 39,000,000 none 62.8%PASS
County of Colusa Measure A TrUT 2/3 1/2 cent $ 2,400,000 EMS none 69.4%PASS
Atwater Merced Measure B TrUT 2/3 same 1 cent $ 4,000,000 police/fire none 73.7%PASS
Truckee Nevada Measure U TrUT 2/3 by 1/4 cent to
1/2 cent $ 3,000,000 open space
/ trails none 76.4%PASS
Palo Alto Santa Clara Measure L UtilityTransfer 18% gas $ 7,000,000 none 77.7%PASS
Santa Clara Santa Clara Measure G UtilityTransfer 5 % $ 30,000,000 none 84.2%PASS
Hercules Contra Costa Measure N UUT 8% $ 3,600,000 none 69.3%PASS
Carson Los Angeles Measure U UUT 2% electr, gas $ 8,000,000 none 78.4%PASS
Sebastopol Sonoma Measure N UUT 3.75% (same) $ 700,000 none 83.5%PASS
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 14 Packet Pg. 106 of 853
– 8 – rev January 14, 2023
CaliforniaCityFinance.com
2022. Such a lawsuit could enjoin (stop) the enactment of the tax pending the outcome of the legal
challenge.
Subjects a challenged fee to new, higher burdens of proof if legally challenged.
2.a. Value on New Local Government Fees and Charges at Risk6
Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and
charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to
new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges
imposed by local agencies and increases in those fees simply to accommodate inflation, the amount of local
government fee and charge revenue placed at risk is about $2 billion per year including those adopted since
January 1, 2022. Of $2 billion, about $900 million (45 percent) is for special districts, $800 million (40
percent) is cities, and $300 million (15 percent) is counties.7
Major examples of affected fees and charges are:
1. Certain water, sanitary sewer, wastewater, garbage, electric, gas service fees.
2. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund
community safety, code enforcement, and neighborhood cleanup programs.
3. Emergency response fees - such as in connection with DUI.
4. Advanced Life Support (ALS) transport charges.
5. Business improvement district charges.
6. Fees for processing of land use and development applications such as plan check fees, use permits,
design review, environmental assessment, plan amendment, subdivision map changes.
7. Document processing and duplication fees.
8. Facility use charges, parking fees, tolls.
9. Fines, penalties.
10. Fees for parks and recreation services.
2.b. Additional Costs and Public Service Effects of the Fee/Charge Provisions
In addition to service delays and disruptions due to fee and charge revenues placed at greater legal risk, there
would be substantial additional costs for legal defense. The risk to fees and charges will make infrastructure
financing more difficult and will deter new residential and commercial development.
***********
mc
6 Source: California State Controller Annual Reports of Financial Transactions concerning cities, counties and special districts,
summarized with an assumed growth due to fee rate increases (not population) of 2 percent annually.
7 School fees are also affected but the amount is negligible by comparison.
Item 8
Attachment B - Fiscal and
Program Effects of
Initiative 21-0042A1 on
Local Governments
Item 8: Staff Report Pg. 15 Packet Pg. 107 of 853
1
7
3
8
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: April 17, 2023
Report #:2302-0991
TITLE
Approve Substantial Amendments to the Community Development Block Grant (CDBG) FY2021-
22 and FY2022-23 Annual Action Plans and the Associated Budget Amendment in Various Funds
and Resolution
RECOMMENDATION
Staff recommends City Council take the following actions:
1. Approve an amendment to the Fiscal Year 2023 Budget Appropriation for the following
funds (requires 2/3 approval):
a. Community Development Block Grant Fund by:
i. Increasing the revenue estimate by $300,000; and
ii. Increasing the transfer to the Capital Improvement Fund appropriation by
$300,000;
b. Capital Improvement Fund by:
i. Increasing the appropriation for the Sidewalk Repairs Capital Project (PO-
89003) by $300,000; and
ii. Increasing the transfer from the Community Development Block Grant
Fund by $300,000.
2. Adopt a Resolution (Attachment A) approving the following Substantial Amendments to
the 2021-22 and 2022-23 Annual Action Plans:
a. For Fiscal Year 2021-22, reallocate funding from Ravenswood Family Health
Network to Sidewalk Repairs Capital Project (PO-89003) for ADA ramp
improvements.
b. For Fiscal Year 2022-23, amend the text for the description of the 525 E.
Charleston Road project to reflect the correct project activity.
EXECUTIVE SUMMARY
The City is required to process a Substantial Amendment to a previously approved Community
Development Block Grant (CDBG) Annual Action Plan (AAP) when certain changes occur to the
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contents of those plans. This report discusses two substantial amendments that need to be
completed for compliance with the CDBG program. The two amendments are as follows:
BACKGROUND
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in the Consolidated Plan. Council adopted the updated FY2020-25 Consolidated Plan and the
FY2020- 21 Annual Action Plan on June 15, 2020.
DISCUSSION
1 The project included the rehabilitation
of the existing entrance and exit ramps and conversion into ADA-accessible ramps. In an email
dated November 29, 2022, Ravenswood Family Health Network informed the City that they no
longer needed the funds due to the lack of contracts to bid for the project and the inability to
expend the funds.
1 This project funding was recorded in Resolution No. 98933 adopted by Council on June 15, 2020.
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89003). An ADA ramp improvement project is a CDBG public facility eligible project (Matrix Code:
03K).
2 project. CDBG funding was to be allocated for predevelopment costs associated
with an affordable housing development. This activity supports the development of affordable
housing at a Santa Clara County-owned property; Eden Housing will develop 50 affordable
housing units, half of which are for people with disabilities. As the owner of the property, the
County plans to execute a long-term lease with the developer, Eden Housing.
Table 1: CDBG Project Description Change
Project Name
Target Area
Goals Supported
Needs Addressed Community Services and Public Improvements
8
Funding
2 This project funding was recorded in Resolution No. 10056 adopted by the Council on June 20, 2022.
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Description The City intends to use the CDBG Funds for public facilities
improvements near the proposed Eden Housing development
site. Eden Housing is developing 50 units of affordable housing.
Approximately half the units are for persons with disabilities. The
parcel is owned by the County and will be a long-term lease with
the developer. The City intends to use CDBG funding for
predevelopment costs as per HUD regulation. Note: At the initial
public comment period for the 2022 2023 AAP, the project
focused on affordable housing. The City is reevaluating this
project and the details are to be determined. The City will follow
the Citizen Participation Plan and will proceed with protocols if a
substantial amendment is required.
Target Date 6/30/2023 12/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
TBD 50 families will benefit from public improvements
Location Description 525 E. Charleston Road
Planned Activities TBD
POLICY IMPLICATIONS
The project recommended for the reallocated CDBG funds is consistent with the priorities
established in the City’s adopted FY 2020-2025 Consolidated Plan.
FISCAL/RESOURCE IMPACT
The recommendations in this report are cost neutral. This action is a reallocation of unspent
funds dedicated by HUD in the FY2021-22 CDBG cycle and does not constitute a new funding
source. The CDBG program runs on a reimbursement basis. Approval of this action will
reallocate existing Community Development Block Grant funding to a new project and allow
for the distribution of funds. There is no impact to the General Fund.
STAKEHOLDER ENGAGEMENT
The draft Substantial Amendments to the FY2021-22 and FY2022-23 Annual Action Plans,
reflected in red-lined versions of the AAPs, were made available on the City’s webpage for
public review beginning March 7, 2023 through April 6, 2023; this was advertised in the Daily
Post on March 3, 2023. This constituted the required 30-day public review period.
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Additionally, the notice provided details of this City Council public hearing, initially scheduled
for April 10, 2023. Due to changes in the Council agenda, the public hearing was moved to April
17, 2023 and a correction notice was placed in the newspaper on April 5, 2023.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Resolution No. _____
Resolution of the Council of the City of Palo Alto Approving the
Substantial Amendments to the Community Development Block
Grant Annual Action Plans for Fiscal Years 2021-2022 and 2022-
2023
A. On June 15, 2020, the Palo Alto City Council approved and adopted a document
entitled “Consolidated Plan” which identified and established the Palo Alto housing and non-
housing community development needs, objectives, and priorities for the period July 1, 2020 to
June 30, 2025.
B. The Substantial Amendments to the Annual Action Plans for Fiscal Year 2021-2022
and 2022-2023, were subjected to public review and commentary during the period from March
7, 2023 through April 6, 2023.
C. The potential uses of Community Development Block Grant funds were evaluated
in light of the needs and objectives identified in the Consolidated Plan and reflected in the
recommendations and comments of interested citizens.
D. Under the CDBG program, the highest priority for funding is given to activities
which will benefit persons with low and moderate incomes.
E. The City Council held a publicly noticed public hearing on the proposed use of the
reallocated CDBG funds for Fiscal Year 2021-2022 and the text amendments for Fiscal Year 2022-
2023.
F. CDBG funds allocated to the City for Fiscal Years 2021-2022 and 2022-2023 are
proposed to implement the programs described in this resolution.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The uses of CDBG funds for Fiscal Year 2021-2022 are hereby approved
and authorized for the following program:
Name of Program Amount
TOTAL
$300,000
//
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SECTION 2. The project description changes for the Fiscal Year 2022-2023 Annual
Action Plan are hereby approved and authorized for the following program:
Project Name Mitchell Park Place 525 E. Charleston Road
Target Area Citywide
Goals Supported Strengthen Neighborhoods
Needs Addressed Community Services and Public Improvements
Funding CDBG: $356,330
Description The City intends to use the CDBG Funds for public facilities
improvements near the proposed Eden Housing development
disabilities. The parcel is owned by the County and will be a
long-term lease with the developer.
Target Date 12/30/2023
Estimate the number and
type of families that will
proposed activities
50 families will benefit from public improvements
Location Description 525 E. Charleston Road
Planned Activities TBD
SECTION 3. The total amount set forth under Section 1 of this resolution represents
the proposed reallocation of $300,000 in CDBG funds from the United States Department of
Housing and Urban Development (HUD) for Fiscal Year 2021-2022.
SECTION 4. The City staff is hereby authorized to submit the CDBG Substantial
Amendments to the Fiscal Year 2021-2022 and Fiscal Year 2022-2023 Annual Action Plans, and
such money shall be spent as set forth in this resolution. The Mayor, City Manager and any other
designated City staff or officials are hereby authorized to execute such application forms and any
other necessary documents to secure these funds. The City Manager or designee is authorized to
sign all necessary grant agreements with the program providers set forth in Section 1.
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SECTION 5. The funding amounts set forth in Section 1 of this resolution are based
on final allocation amounts from CDBG HUD appropriations; City Staff is authorized to make
adjustments increasing or decreasing the funding amounts set forth herein as consistent with the
adopted Citizen Participation Plan.
SECTION 6. The City Council hereby finds that the CDBG programs authorized under
Section 1 and 2 of this resolution are not a project under the California Environmental Quality
Act (CEQA). However, the Council further authorizes and directs City staff to prepare
certifications that may be required, under CEQA and the National Environmental Policy Act
(NEPA), for each project under the CDBG program prior to the release of funds for any such
project.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services
____________________________
Director of Administrative Services
____________________________
CDBG Coordinator
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DRAFT
Substantial Amendment #1
FY 2021-2022 Annual Action Plan
April 17, 2023
Initially Approved on May 3, 2021
Refer to pages 3, 29, & 31 for revisions.
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Executive Summary
AP-05 Executive Summary - 91.200(c), 91.220(b)
1. Introduction
The City of Palo Alto (City) Fiscal Year (FY) 2021-22 One Year Action Plan contains the City’s one-year
plan to carry out housing and community development activities funded by Federal formula grant funds
received from the U.S. Department of Housing and Urban Development (HUD), Community
Development Block Grant (CDBG) program. This Action Plan covers the second of five program years
covered by the City’s 2020-2025 Consolidated Plan which was adopted by the Palo Alto City Council on
June 15, 2020.
The Department of Planning and Development Services is the lead agency for the Consolidated Plan and
submits the Annual Action Plan for the City’s CDBG program.
HUD requires entitlement jurisdictions to submit an Annual Action Plan to report the distribution of
federal entitlement grant funds over the Consolidated Plan’s five-year period identifying how funding
allocations help meet the goals covered in the Consolidated Plan.
A total of $746,715 is available for funding projects and programs during the 2021 Program Year. The
City received $536,756 from the federal CDBG program, approximately $136,049 in program income and
$73,910 in reallocated funds from previous years.
The City’s Action Plan covers the time period from July 1, 2021 to June 30, 2022, (HUD Program Year
2021). The City’s FY 2021-22 Action Plan reports on the status of needs and outcomes the City expects
to achieve in the coming year. All of the activities mentioned in this Action Plan are based on current
priorities. By addressing these priorities, the City hopes to meet those objectives stated in the 2020-
2025 Consolidated Plan. All the proposed projects and activities are intended to principally benefit
residents of the City who have extremely low-, low- and moderate-income, and populations that have
special needs, such as the elderly, disabled, and homeless.
2. Summarize the objectives and outcomes identified in the Plan
This could be a restatement of items or a table listed elsewhere in the plan or a reference to
another location. It may also contain any essential items from the housing and homeless needs
assessment, the housing market analysis or the strategic plan.
The City is part of the San Francisco Metropolitan Bay Area, located 35 miles south of San Francisco and
14 miles north of San José. The City is located within the County of Santa Clara, borders San Mateo
County, and encompasses an area of approximately 26 square miles, one-third of which consists of open
space. According to Quick facts data provided by the U.S. Census Bureau[1]
The City's total resident population is 65,364. The City has the most educated residents in the country
and is one of the most expensive cities to live in. In Silicon Valley, the City is considered a central
economic focal point and is home to over 9,483 businesses.
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The Action Plan provides a summary of how the City will utilizes its allocation to the meet the needs of
the City’s lower income population. According to the U.S. census data[2], 6.1% of all residents within the
City had incomes below the federal poverty level.
Applicant Agency Allocation
Public Services
Palo Alto Housing Corporation – SRO Resident Supportive Services $24,535
Catholic Charities of Santa Clara County – Long Term Care Ombudsman $10,000
Life Moves – Case Management at Opportunity Center $31,545
Silicon Valley Independent Living Center – Case Management Services $14,021
Sub-total $80,101
Planning and Administration
Project Sentinel – Fair Housing Services $33,698
City of Palo Alto Administration $99,304
Sub-total $133,002
Economic Development
Downtown Streets – Workforce Development Program $160,477
Sub-total $160,477
Public Facilities and Improvement
Ravenswood Family Health Network – Construction of ADA ramp
ADA Ramp Improvement Project-City of Palo Alto
$300,000
Sub-total $300,000
Housing Rehabilitation
Rebuilding Together Peninsula – Safe at Home $73,135
Sub-Total $73,135
Grand Total 746,715
Table 1: Fiscal Year 2021 CDBG Budget
3. Evaluation of past performance
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This is an evaluation of past performance that helped lead the grantee to choose its goals or
projects.
The City is responsible for ensuring compliance with all rules and regulations associated with the CDBG
entitlement grant program. The City’s Annual Action Plans and Consolidated Annual Performance and
Evaluation Reports (CAPER) have provided many details about the goals, projects and programs
completed by the City. A review of past CAPERs reveals a strong record of performance in the use of
CDBG funds. For example, during the 2015-2020 Consolidated Plan period, 244 affordable rental units
were rehabilitated, 130 jobs were created or retained, and nearly 2,600 households were assisted
through public service activities for low- and moderate-income housing
The City evaluates the performance of subrecipients on a semiannual basis. Subrecipients are required
to submit semiannual progress reports, which include client data, performance objectives, as well as
data on outcome measures. Prior to the start of the program year, program objectives are developed
collaboratively by the subrecipient and the City, ensuring that they are aligned with the City's overall
goals and strategies. The City utilizes the semiannual reports to review progress towards annual goals.
4. Summary of Citizen Participation Process and consultation process
The City solicited input throughout the development of the FY 2021-22 Annual Action Plan. As required
by HUD, the City provides multiple opportunities for public review and comment on the Action Plan and
on any substantial amendments to it. Per the City’s adopted Citizen Participation Plan, the City held a
30-day public review comment period for the Action Plan. The City published notifications of upcoming
public hearings and the 30-day public review comment period in a local newspaper of general
circulation, on the City’s CDBG webpage and via email blasts to stake holders. The City held two
advertised public hearings on March 11, 2021 and May 3, 2021. The Action Plan 30-day public review
period occurred from March 15, 2021 through April 16, 2021.
5. Summary of public comments
There were no public comments received during the public review period.
6. Summary of comments or views not accepted and the reasons for not accepting them
The City accepts and responds to all comments that are submitted. As mentioned above, no public
comments were received regarding the FY 2021-22 Action Plan.
7. Summary
Please see above.
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PR-05 Lead & Responsible Agencies - 91.200(b)
1. Agency/entity responsible for preparing/administering the Consolidated Plan
The following are the agencies/entities responsible for preparing the Consolidated Plan and those responsible for administration of
each grant program and funding source.
Agency Role Name Department/Agency
Lead Agency PALO ALTO
CDBG Administrator PALO ALTO Department of Planning & Development Services
HOPWA Administrator
HOME Administrator
HOPWA-C Administrator
Table 1 – Responsible Agencies
Narrative
The City is the Lead and Responsible Agency for the United States Department of Housing and Urban Development’s (HUD) entitlement
programs in Palo Alto. The Department of Planning and Development Services is responsible for administering the City’s CDBG program. The City
joined the HOME Consortium in 2015 and receives federal HOME Investment Partnership (HOME) funds through the County.
Entitlement jurisdictions receive entitlement funding (i.e., non-competitive, formula funds) from HUD. HUD requires the City to submit a five-
year Consolidate Plan and Annual Action Plan to HUD listing priorities and strategies for the use of its federal funds.
The Consolidate Plan helps local jurisdictions to assess their affordable housing and community development needs and market conditions to
meet the housing and community development needs of its populations. As a part of the Consolidate Plan process for 2020-2025, the City
collaborated with the County of Santa Clara(County) as the Urban County representing the Cities of Campbell, Los Altos, Los Altos Hills, Los
Gatos, Monte Sereno, Morgan Hill, and Saratoga; the Cities of Cupertino, Gilroy, Mountain View, Sunnyvale, San José, and Santa Clara; and the
Santa Clara County Housing Authority (SCCHA) to identify and prioritize housing and community development needs across the region, and to
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develop strategies to meet those needs. The FY 2021-22 Annual Action Plan represents the second year of CDBG funding of the 2020-2025
Consolidated Plan.
Consolidated Plan Public Contact Information
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AP-10 Consultation - 91.100, 91.200(b), 91.215(l)
1. Introduction
The Action Plan is a one-year plan which describes the eligible programs, projects and activities to be
undertaken with funds expected during FY 2021-22 and their relationship to the priority housing,
homeless and community development needs outlined in the 2020-25 Consolidated Plan.
Provide a concise summary of the jurisdiction’s activities to enhance coordination between
public and assisted housing providers and private and governmental health, mental health
and service agencies (91.215(l)).
During Fiscal Year 2021-22, the City will continue to work with non-profit organizations to provide
programs and services for low-income households; private industry, including financial and housing
development groups, to encourage the development of affordable housing opportunities regionally and
within the City; and other local jurisdictions, including the County of Santa Clara, in carrying out and
monitoring regional projects in a coordinated and cost-effective manner. The City will provide technical
assistance to the public service agencies it funds with CDBG dollars and will continue to attend the
biweekly Regional CDBG/Housing Coordinators meetings.
Describe coordination with the Continuum of Care and efforts to address the needs of
homeless persons (particularly chronically homeless individuals and families, families with
children, veterans, and unaccompanied youth) and persons at risk of homelessness.
The Santa Clara County Office of Supportive Housing is the administrator of the regional Continuum of
Care (CoC). The City continuously coordinates with the Santa Clara County CoC to end and prevent
homelessness in the County. City staff attends monthly meetings. The Santa Clara County CoC is a group
comprising stakeholders throughout the County, including governmental agencies, homeless service and
shelter providers, homeless population, housing advocates, affordable housing developers, and various
private parties, including businesses and foundations.
The City’s representation on the CoC Board is its Human Services Manager. Members of the CoC meet
monthly to plan CoC programs, identify gaps in homeless services, establish funding priorities, and
pursue a systematic approach to addressing homelessness. City staff, as well as staff of other cities,
meet and consult with the County’s CoC staff during the bi-weekly countywide CDBG Coordinators
Group meetings, and communicate more frequently via email and/or phone on joint efforts.
The CoC is governed by the CoC Board, which takes a systems-change approach to preventing and
ending homelessness. This same CoC Board is comprised of the same individuals who serve on the
Destination: Home (Destination Home) Leadership Board. Destination Home is a public-private
partnership that is committed to collective impact strategies to end chronic homelessness. Destination
Home is the governing body for the CoC and is responsible for implementing by-laws and operational
protocols of the CoC.
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Regional efforts of the CoC include the development of The Community Plan to End Homelessness,
which identifies strategies to address the needs of people experiencing homelessness in the County,
including chronically homeless individuals and families, families with children, veterans, and
unaccompanied youth. The plan also addresses the needs of persons at risk of homelessness. The CoC is
now in the process of updating a new plan for the next five years and the City plans to participate in
these efforts.
Describe consultation with the Continuum(s) of Care that serves the jurisdiction’s area in
determining how to allocate ESG funds, develop performance standards for and evaluate
outcomes of projects and activities assisted by ESG funds, and develop funding, policies and
procedures for the operation and administration of HMIS
2. Agencies, groups, organizations and others who participated in the process and
consultations
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Table 2 – Agencies, groups, organizations who participated
Agency/Group/Organization Boys and Girls Clubs of Silicon Valley
Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation?Housing Need Assessment
1
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Santa Clara focus group meeting on 11/7/19 as part
of the 2020-25 Consolidated Plan process
Agency/Group/Organization Healthier Kids Foundation Santa Clara County
Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation?Housing Need Assessment
2
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Santa Clara focus group meeting on 11/7/19 as part
of the 2020-25 Consolidated Plan process
Agency/Group/Organization COMMUNITY SERVICES AGENCY OF MOUNTAIN VIEW AND LOS ALTOS
Agency/Group/Organization Type Services-Elderly Persons
What section of the Plan was addressed by Consultation?Housing Need Assessment
3
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation conference call on
11/15/19 as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization San Jose Conservation Corps Charter
Agency/Group/Organization Type Services-Education
4
What section of the Plan was addressed by Consultation?Housing Need Assessment
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Gilroy focus group meeting on 11/18/19 as part of
the 2020-25 Consolidated Plan process
Agency/Group/Organization CommUniverCity San Jose
Agency/Group/Organization Type Services-Education
What section of the Plan was addressed by Consultation?Strategic Plan
5
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation conference call on
11/25/19 and regional forum meeting in San Jose on 11/20/19 as part
of the 2020-25 Consolidated Plan process.
Agency/Group/Organization The Health Trust
Agency/Group/Organization Type Services-Persons with Disabilities
Services-Persons with HIV/AIDS
Services-Health
What section of the Plan was addressed by Consultation?Housing Need Assessment
Strategic Plan
6
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation on 11/21/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization Rebuilding Together, Silicon Valley
Agency/Group/Organization Type Services - Housing
What section of the Plan was addressed by Consultation?Housing Need Assessment
7
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation conference call on
11/21/19 and San Jose regional forum on 11/20/19 as part of the
2020-25 Consolidated Plan process
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Agency/Group/Organization City of Cupertino Community Development Department Housing
Division
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency/Group/Organization City of Gilroy9
Agency/Group/Organization Type Other government - Local
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What section of the Plan was addressed by Consultation?Housing Need Assessment
Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Market Analysis
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency was consulted and provided emailed feedback as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization City of Mountain View10
Agency/Group/Organization Type Other government - Local
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2021
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OMB Control No: 2506-0117 (exp. 09/30/2021)
8
4
9
What section of the Plan was addressed by Consultation?Housing Need Assessment
Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Market Analysis
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Palo Alto on 11/7/19 as
part of the 2020-25 Consolidated Plan process
Agency/Group/Organization BILL WILSON CENTER
Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation?Housing Need Assessment
Homeless Needs - Families with children
11
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Santa Clara focus group meeting on 11/7/19,
community meetings on 11/4/19 at Morgan Hill and 11/20/19 at
Roosevelt as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization HEART OF THE VALLEY
Agency/Group/Organization Type Services-Elderly Persons
12
What section of the Plan was addressed by Consultation?Housing Need Assessment
Item 9
Attachment B - SA Palo Alto AAP
2021-22 Draft-Ravenwood
Reallocation
Item 9: Staff Report Pg. 22 Packet Pg. 129 of 853
Substantial Amendment 04/10/2023
Annual Action Plan
2021
14
OMB Control No: 2506-0117 (exp. 09/30/2021)
8
4
9
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency was consulted through interview questions. Agency provided
emailed feedback as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization City of San Jose
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
13
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency was contacted for consultation as a partner in addressing the
needs of the County as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization CITY OF MORGAN HILL
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
14
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19 as
part of the 2020-25 Consolidated Plan process
Agency/Group/Organization City of Sunnyvale
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
15
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Palo Alto on 11/7/19 and
provided emailed feedback as part of the 2020-25 Consolidated Plan
process
Agency/Group/Organization Servant Partners16
Agency/Group/Organization Type Neighborhood Organization
Neighborhood Organization
Item 9
Attachment B - SA Palo Alto AAP
2021-22 Draft-Ravenwood
Reallocation
Item 9: Staff Report Pg. 23 Packet Pg. 130 of 853
Substantial Amendment 04/10/2023
Annual Action Plan
2021
15
OMB Control No: 2506-0117 (exp. 09/30/2021)
8
4
9
What section of the Plan was addressed by Consultation?Housing Need Assessment
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Attended community meeting on 11/13/19 at Hillview library as part
of the 2020-25 Consolidated Plan process
Agency/Group/Organization SENIOR ADULTS LEGAL ASSISTANCE (SALA)
Agency/Group/Organization Type Service-Fair Housing
What section of the Plan was addressed by Consultation?Housing Need Assessment
17
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Palo Alto and San Jose public engagement meeting
on 11/17/19 and 11/19/19, regional forum meeting on 11/4/19 at
Morgan Hill and 11/7/19 at Palo Alto as part of the 2020-25
Consolidated Plan process
Agency/Group/Organization HomeFirst
Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed by Consultation?Housing Need Assessment
Homeless Needs - Chronically homeless
18
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19 as
part of the 2020-25 Consolidated Plan process
Agency/Group/Organization Santa Clara County Office of Supportive Housing
Agency/Group/Organization Type Other government - County
What section of the Plan was addressed by Consultation?Housing Need Assessment
19
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19
and at Palo Alto on 11/7/19 as part of the 2020-25 Consolidated Plan
process
Item 9
Attachment B - SA Palo Alto AAP
2021-22 Draft-Ravenwood
Reallocation
Item 9: Staff Report Pg. 24 Packet Pg. 131 of 853
Substantial Amendment 04/10/2023
Annual Action Plan
2021
16
OMB Control No: 2506-0117 (exp. 09/30/2021)
8
4
9
Agency/Group/Organization City of Santa Clara
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
20
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19
and provided emailed feedback as part of the 2020-25 Consolidated
Plan process
Agency/Group/Organization Vista Center for the Blind and Visually Impaired
Agency/Group/Organization Type Services-Persons with Disabilities
What section of the Plan was addressed by Consultation?Non-Homeless Special Needs
21
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation on 12/9/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization Destination: Home
Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed by Consultation?Housing Need Assessment
22
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation on 11/11/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization COMMUNITY SOLUTIONS
Agency/Group/Organization Type Services-Victims of Domestic Violence
What section of the Plan was addressed by Consultation?Housing Need Assessment
23
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended the AFH and ConPlan joint meeting on 12/11/19 at
the Gilroy Council Chambers as part of the 2020-25 Consolidated Plan
process
Item 9
Attachment B - SA Palo Alto AAP
2021-22 Draft-Ravenwood
Reallocation
Item 9: Staff Report Pg. 25 Packet Pg. 132 of 853
Substantial Amendment 04/10/2023
Annual Action Plan
2021
17
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8
4
9
Agency/Group/Organization St Mary Parish
Agency/Group/Organization Type Neighborhood Organization
Neighborhood Organization
What section of the Plan was addressed by Consultation?Housing Need Assessment
24
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended the AFH and ConPlan joint meeting on 12/11/19 at
the Gilroy Council Chambers as part of the 2020-25 Consolidated Plan
process
Agency/Group/Organization Community and Neighborhood Revitalization Committee - Gilroy
Agency/Group/Organization Type Community Organization
What section of the Plan was addressed by Consultation?Housing Need Assessment
25
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency co-hosted the AFH and ConPlan joint meeting on 12/11/18 at
the Gilroy Council Chambers as part of the 2020-25 Consolidated Plan
process
Identify any Agency Types not consulted and provide rationale for not consulting
Through the countywide development of the Consolidated Plan, AT@T was consulted regarding broadband. For Palo Alto specific information on
this topic, staff in the future will contact the City of Palo Alto Utilities Advisory Commission regarding the Cityâ¿¿s Fiber Network Expansion
Project. In regard to resilience specific organizations, Grid Alternatives, an environmental sustainability organization, provided a stakeholder
interview during the Consolidated Plan process. Staff plans to expand outreach in this area through contact with the Santa Clara County Office of
Emergency Management and the City of Palo Alto Emergency Services which has developed a local hazard mitigation plan.
Item 9
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2021-22 Draft-Ravenwood
Reallocation
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Substantial Amendment 04/10/2023
Annual Action Plan
2021
18
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8
4
9
Other local/regional/state/federal planning efforts considered when preparing the Plan
Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan?
Continuum of Care Regional Continuum of
Care Council
Identifies housing inventory count to facilitate the provision of housing services to those
experiencing homelessness
City of Palo Alto
Housing Element
(2015-2023)
City of Palo Alto Identifies barriers to affordable housing, such as land-use controls, inefficiencies of the
development review process, and strategies to alleviate such barriers
2012-2014
Comprehensive HIV
Prevention and Care Pl
Santa Clara County HIV
Planning Council for
Prevention and Care
This plan provides a roadmap for the Santa Clara County HIV Planning Council for
Prevention and Care to provide a comprehensive and compassionate system of HIV
prevention and care services for the County. This effort aligns with the Strategic Plan's
goal to support activities that strengthen neighborhoods through the provision of
community services and public improvements
SCCHA Moving to Work
Annual Plan
Santa Clara County
Housing Authority
Addresses housing authority updates and strategies pertaining to public housing and
vouchers
Regional Housing Need
Plan for San Francisco
Bay A
Association of Bay Area
Governments
This plan analyzes the total regional housing need for the County and all of the Bay Area.
This effort aligns with the Strategic Plan's goal to assist in the creation and preservation
of affordable housing.
Community Plan to End
Homelessness in Santa
Clara
Destination: Home
The Community Plan to End Homelessness in the County is a five-year plan to guide
governmental actors, nonprofits, and other community members as they make decisions
about funding, programs, priorities and needs. This effort aligns with the Strategic Plan's
goal to support activities to end homelessness
Palo Alto's
Infrastructure: Catching
Up, Keeping U
City of Palo Alto
Infrastructure Blue
Ribbon Plan
This plan details recommendations for infrastructure maintenance and replace, as well
as identifies potential sources of funding. This effort aligns with the Strategic Plan's
goal to support activities that strengthen neighborhoods through the provision of
community services and public improvements
Item 9
Attachment B - SA Palo Alto AAP
2021-22 Draft-Ravenwood
Reallocation
Item 9: Staff Report Pg. 27 Packet Pg. 134 of 853
Substantial Amendment 04/10/2023
Annual Action Plan
2021
19
OMB Control No: 2506-0117 (exp. 09/30/2021)
8
4
9
Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan?
City of Palo Alto
Comprehensive Plan
(2030)
City of Palo Alto
This plan is the primary tool for guiding future development in Palo Alto. It provides a
guide for long-term choices and goals for the City future. This effort aligns with the
Strategic Plan's goal to support activities that strengthen neighborhoods through the
provision of community services and public improvements
Table 3 – Other local / regional / federal planning efforts
Narrative
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Annual Action Plan
2021
20
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AP-12 Participation - 91.401, 91.105, 91.200(c)
1. Summary of citizen participation process/Efforts made to broaden citizen participation
Summarize citizen participation process and how it impacted goal-setting
The Planning and Development Services Department is the lead agency for overseeing the development
of the Consolidated Plan and Action Plan. Per the City’s adopted Citizen Participation Plan, the City is to
allow a 30-day public review and comment period for the Action Plan. The City has published
notifications of upcoming public hearings and the 30-day public review comment period in the local
newspaper of general circulation, on its CDBG webpage and via email blasts. The City held two
advertised public hearings on March 11, 2021 and May 3, 2021. The Action Plan 30-day public review
period occurred from March 15, 20121 through April 16, 2021. The City did not receive any public
comments on the Action Plan.
Citizen Participation Outreach
Sort
Orde
r
Mode of
Outreac
h
Target of
Outreac
h
Summary
of
response/
attendanc
e
Summary
of
comment
s receive
d
Summary o
f comment
s not
accepted
and reason
s
URL (If applicable)
1 Public
Hearing
Non-
targeted/
broad
communi
ty
The
Human
Relations
Commissi
on met on
March 11,
2021 to
discuss
the
FY2021-
22 funding
allocations
and
review the
draft
FY2021-22
Annual
Action
Plan
One
member
of the
public
provided
comment
s on the
funding
allocation
. Three
members
represent
ing two
funding
applicant
s
provided
comment
s at the
meeting.
All
comments
were
accepted.
https://www.cityofpaloalto.o
rg/files/assets/public/agenda
s-minutes-reports/agendas-
minutes/human-relations-
commission/2021/03-11-21-
hrc-agenda.pdf
Item 9
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Alto AAP 2021-22 Draft-
Ravenwood Reallocation
Item 9: Staff Report Pg. 29 Packet Pg. 136 of 853
Annual Action Plan
2021
21
OMB Control No: 2506-0117 (exp. 09/30/2021)
Sort
Orde
r
Mode of
Outreac
h
Target of
Outreac
h
Summary
of
response/
attendanc
e
Summary
of
comment
s receive
d
Summary o
f comment
s not
accepted
and reason
s
URL (If applicable)
2 Public
Hearing
Non-
targeted/
broad
communi
ty
The City
Council
met on
May 3,
2021 to
discuss
the
FY2021-22
funding
allocations
and adopt
the draft
FY2021-22
AAP
One
member
of the
public
provided
comment
s on the
funding
allocation
.
All
comments
were
accepted.
https://www.cityofpaloalto.o
rg/files/assets/public/agenda
s-minutes-reports/agendas-
minutes/city-council-
agendas-minutes/2021/05-
03-21-ccm-agenda-revis
3 Newspa
per Ad
Non-
targeted/
broad
communi
ty
Notice of
Public
Hearing
and Public
Comment
Period on
the Draft
AAP was
published
in the
Daily Post
on
February
25, 2021.
N/A N/A
Item 9
Attachment B - SA Palo
Alto AAP 2021-22 Draft-
Ravenwood Reallocation
Item 9: Staff Report Pg. 30 Packet Pg. 137 of 853
Annual Action Plan
2021
22
OMB Control No: 2506-0117 (exp. 09/30/2021)
Sort
Orde
r
Mode of
Outreac
h
Target of
Outreac
h
Summary
of
response/
attendanc
e
Summary
of
comment
s receive
d
Summary o
f comment
s not
accepted
and reason
s
URL (If applicable)
4 Newspa
per Ad
Non-
targeted/
broad
communi
ty
Notice of
Public
Hearing
and Public
Comment
Period on
the Draft
AAP was
published
in the
Daily Post
on March
6, 2021.
N/A N/A
5 Newspa
per Ad
Non-
targeted/
broad
communi
ty
Notice of
City
Council
Public
Hearing
was
published
in the
Daily Post
on April
17, 2021.
N/A N/A
6
Internet
Outreac
h
Non-
targeted/
broad
communi
ty
Draft AAP
FY2021-22
for public
review
and
comments
for posted
at the City
of Palo
Alto's
CDBG
webpage.
N/A N/A
https://www.cityofpaloalto.o
rg/Departments/Planning-
Development-Services/Long-
Range-Planning/Community-
Development-Block-Grant
Item 9
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Ravenwood Reallocation
Item 9: Staff Report Pg. 31 Packet Pg. 138 of 853
Annual Action Plan
2021
23
OMB Control No: 2506-0117 (exp. 09/30/2021)
Sort
Orde
r
Mode of
Outreac
h
Target of
Outreac
h
Summary
of
response/
attendanc
e
Summary
of
comment
s receive
d
Summary o
f comment
s not
accepted
and reason
s
URL (If applicable)
7 Email
Blasts
Non-
targeted/
broad
communi
ty
Notice of
City
Council
Public
Hearing
was
emailed to
approxima
tely 55
stakehold
ers.
N/A N/A
Table 4 – Citizen Participation Outreach
Item 9
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Annual Action Plan
2021
24
OMB Control No: 2506-0117 (exp. 09/30/2021)
Expected Resources
AP-15 Expected Resources - 91.420(b), 91.220(c)(1,2)
Introduction
In FY 2021-22, the City will allocate $746,715 to eligible activities that address the needs identified in the Consolidated Plan. It should be noted
that while the HUD CDBG allocations are critical, the allocations are not sufficient to overcome barriers and address all needs that low-income
individuals and families face in attaining self-sufficiency. The City will continue to leverage additional resources as described below to provide
support and services to the populations in need within the community. The following section discusses the anticipated resources available
during the next five years for community development activities.
Anticipated Resources
Expected Amount Available Year 1ProgramSource
of Funds
Uses of Funds
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
Expected
Amount
Available
Remainder
of ConPlan
$
Narrative Description
CDBG public -
federal
Acquisition
Admin and
Planning
Economic
Development
Housing
Public
Improvements
Public Services 536,756 136,049 73,910 746,715 2,250,000
CDBG funds will be used for the creation
and preservation of affordable rental
units, improvements in lower income
neighborhoods, and public services that
benefit low income and special needs
households
Other public -
federal
Other
0 0 0 0 0
Table 2 - Expected Resources – Priority Table
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Annual Action Plan
2021
25
OMB Control No: 2506-0117 (exp. 09/30/2021)
Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how
matching requirements will be satisfied
Entitlement Funds Leverage, in the context of the CDBG and HOME Investment Partnerships Program (HOME), means bringing other local, state,
and federal financial resources to maximize the reach and impact of the City’s HUD Programs. HUD, like many other federal agencies,
encourages the recipients of federal monies to demonstrate that efforts are being made to strategically leverage additional funds in order to
achieve greater results.
The City joined the Santa Clara County's HOME Consortium in 2015 and does not receive federal HOME funds on an entitlement basis from
HUD. The HOME Consortia consists of the cities of Cupertino, Gilroy, Palo Alto, and the Urban County. HOME funds can be used to fund eligible
affordable housing projects for acquisition, construction and rehabilitation. Starting in FY 2015-16 developers of affordable housing projects
were eligible to competitively apply through an annual RFP process directly to the County for HOME funds to help subsidize affordable housing
projects in Palo Alto. Applications will be directly submitted through the County's request for proposal process for available HOME funds. Certain
nonprofit organizations known as Community Housing Development Organizations (CHDOs) may also apply for funding from State HCD for
housing projects located within Palo Alto. The City received one HOME grant from 1992 HOME funding for the Barker Hotel project. Proceeds
from HOME loan repayments must be deposited into a HOME Program Income Fund and used in accordance with the HOME program
regulations. In addition, the County will only fund a project that has the local support of the City. If the City receives HOME dollars from its
participation in the HOME consortium, the required 25 percent matching funds will be provided from the City’s Affordable Housing Fund, which
is comprised of two sub-funds: The Commercial Housing Fund & the Residential Housing Fund. To date, no projects within the City have been
funded through the HOME Consortium. Moving forward, the City plans to increase outreach to developers in the City to provide additional
information on the HOME Consortium & available funding.
Other State & Federal Grant Programs In addition to the CDBG entitlement dollars, the federal government has several other funding programs
for community development & affordable housing activities. These include: Section 8 Housing Choice Voucher Program, Section 202, Section
811, the Federal Home Loan Bank Affordable Housing Program (AHP) & others. It should be noted that in most cases the City would not be the
applicant for these funding sources as many of these programs offer assistance to affordable housing developers rather than local jurisdictions.
The State of California has recently passed approximately 20 bills with the intent of increasing or preserving affordable housing with the State.
According to the Governor’s State of the State address, bills that help increase housing production, both market-rate & affordable, will be a
priority. The City will continue to track & look for opportunities to leverage State resources for the City.
Local Housing & Community Development Sources: Other local resources that support housing & community development programs include:
Palo Alto Commercial Housing Fund & Palo Alto Residential Housing Fund. The City will continue to seek opportunities for projects that meet
Item 9
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Reallocation
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Annual Action Plan
2021
26
OMB Control No: 2506-0117 (exp. 09/30/2021)
local bond requirements in order to bring additional resources to help the City’s affordable housing shortage.
Item 9
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Reallocation
Item 9: Staff Report Pg. 35 Packet Pg. 142 of 853
Annual Action Plan
2021
27
OMB Control No: 2506-0117 (exp. 09/30/2021)
If appropriate, describe publically owned land or property located within the jurisdiction that
may be used to address the needs identified in the plan
The City has no surplus public land. However, in 2019, the Governor Newsome signed Executive Order
N-06-19 that ordered the California Department of General Services (DGS) and the California
Department of Housing and Community Development (HCD) to identify and prioritize excess state-
owned property and aggressively pursue sustainable, innovative, cost-effective housing projects. There
is no excess state property in the City of Palo Alto.
Please see information provided in previous sections.
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Ravenwood Reallocation
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Annual Action Plan
2021
28
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Annual Goals and Objectives
AP-20 Annual Goals and Objectives - 91.420, 91.220(c)(3)&(e)
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 Affordable
Housing
2020 2025 Affordable
Housing
Affordable Housing CDBG:
$73,135
Homeowner Housing Rehabilitated:
6 Household Housing Unit
2 Homelessness 2020 2025 Homeless Homelessness CDBG:
$56,080
Public service activities other than
Low/Moderate Income Housing
Benefit: 169 Persons Assisted
3 Strengthen
Neighborhoods
2020 2025 Non-Homeless
Special Needs
Non-Housing
Community
Development
Community Services
and Public
Improvements
CDBG:
$324,021
Public Facility or Infrastructure
Activities other than Low/Moderate
Income Housing Benefit: 1,200
Persons Assisted
Public service activities other than
Low/Moderate Income Housing
Benefit: 74 Persons Assisted
4 Fair Housing 2020 2025 Non-Housing
Community
Development
Fair Housing CDBG:
$33,698
Public service activities other than
Low/Moderate Income Housing
Benefit: 13 Persons Assisted
5 Economic
Development
2015 2020 Non-Housing
Community
Development
Economic
Development
CDBG:
$160,477
Jobs created/retained: 15 Jobs
Table 3 – Goals Summary
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Annual Action Plan
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Goal Descriptions
Goal Name Affordable Housing1
Goal
Description
Assist in the creation and preservation of affordable housing for low income and special needs households.
Goal Name Homelessness2
Goal
Description
Support activities to prevent and end homelessness, such as funding affordable housing opportunities, resource centers
for homeless individuals, and support for tenants of single-room occupancy units.
Goal Name Strengthen Neighborhoods3
Goal
Description
Provide community services and public improvements to benefit low-income and special needs households. This includes
assisting those with disabilities to transition from unstable housing to permanent housing, supporting residents of long-
term care facilities, and supporting individuals experiencing domestic violence.
Goal Name Fair Housing4
Goal
Description
Promote fair housing choice by funding fair housing organizations to provide fair housing services, such as education,
tenant-landlord mediation, and testing.
Goal Name Economic Development5
Goal
Description
Support economic development activities that promote employment growth and help lower-income people secure and
maintain jobs. This includes funding nonprofits working toward developing the skills of low-income and homeless
individuals.
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Annual Action Plan
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AP-35 Projects - 91.420, 91.220(d)
Introduction
The Consolidated Plan goals below represent high priority needs for the City of Palo Alto (City) and serve
as the basis for the strategic actions the City will use to meet these needs. The goals, listed in no
particular order, are:
1. Assist in the creation and preservation of affordable housing for low income and special needs
households.
2. Support activities to end homelessness.
3. Support activities that strengthen neighborhoods through the provision of community services
and public improvements to benefit low income and special needs households.
4. Promote fair housing choice.
5. Expand economic opportunities for low income households.
#Project Name
1
Ravenswood Family Health Network: ADA Accessible Clinic Entrance and Exit at the Palo Alto
Clinic ADA Ramp Improvement Project-City of Palo Alto
2 Catholic Charities of Santa Clara County: Long Term Care Ombudsman
3 Silicon Valley Independent Living Center: Housing and Emergency Housing Services.
4 Project Sentinel - Fair Housing Services
5 City of Palo Alto - Planning and Administration
6 Downtown Streets Inc. - Workforce Development Program.
7 Rebuilding Together Peninsula Safe at Home
8 LifeMoves - Opportunity Services Center and Hotel De Zink (HDZ): Case Management
9 Alta Housing (Former: Palo Alto Housing Corporation Management and Services Corporation)
Table 4 – Project Information
Describe the reasons for allocation priorities and any obstacles to addressing underserved
needs
The City awards CDBG funding to projects and programs that will primarily benefit low-income,
homeless and special needs households. The City operates on a two-year grant funding cycle for CDBG
public service grants and a one-year cycle for CDBG capital housing rehabilitation and public facilities
and improvement projects. Projects are only considered for funding within the Consolidated Plan period
if they address the goals discussed above.
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Project Summary Information
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Project Name Ravenswood Family Health Network: ADA Accessible Clinic Entrance and
Exit at the Palo Alto Clinic ADA Ramp Improvement Project-City of Palo
Alto
Target Area Citywide
Goals Supported Strengthen Neighborhoods
Needs Addressed Community Services and Public Improvements
Funding CDBG: $300,000
Description ADA Accessible Clinic Entrance and Exit at the Palo Alto Clinic. Eligible
Activity (Matrix Code):03P. CDBG National Objective:570.208(a)(2).
CDBG Citation:24 CFR 570.201(C). Recipient Type: LMC. This project will
help in rehabilitating existing ramp and convert it into a safe and
accessible ADA ramp at 270 Grant Ave, Palo Alto to allow for adequate
social distancing to prevent the spread of COVID-19 as well as improve
patients' access to the clinic. The City intends to fund and manage a
major curb ramp improvement project that will bring an estimated 70
curb ramps up to current ADA accessibility standards. CDBG Eligible
Activity: Public Facilities and Improvements: Health Facilities (HUD
Matrix Code). The Project meets the following Consolidated Plan Goal(s):
#3 - Support provision of essential human services, particularly for
special needs populations, and maintain/expand community facilities
and infrastructure.
Target Date 6/30/2022 12/30/2023
Estimate the number
and type of families
that will benefit from
the proposed
activities
Approximately 1,200 Palo Alto residents belonging to 80% and low
income bracket will benefit from the proposed activity Approximately 70
curb ramps at many intersections will be improved benefitting elderly
populations and persons with disabilities. 2,283 persons in the City live
with disabilities.
Location Description Palo Alto, CA 94306 Street intersection locations TBD
1
Planned Activities Project activities include removal of the existing ramp and replacement
with an ADA accessible ramp and a stair option. Additionally, a motion
sensor door will be installed to allow safe and easy access to the clinic.
The City intends to competitively bid the removal of noncompliant ADA
intersections and installation of current DOT standard ADA ramp
improvements to be completed in 2023.
Project Name Catholic Charities of Santa Clara County: Long Term Care Ombudsman
Target Area
Goals Supported Strengthen Neighborhoods
Needs Addressed Community Services and Public Improvements
2
Funding CDBG: $10,000
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Description Long-Term Care Ombudsman Program. Eligible Activity (Matrix
Code):05A. CDBG National Objective: 570.208(a)(2). CDBG
Citation:570.201(e). Recipient Type: LMC
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
The program will provide advocacy and complaint investigation for 50
elderly residents of long-term care facilities in Palo Alto.
Location Description Long-term care and skilled nursing facilities throughout the City.
Planned Activities Regular contact with Palo Alto Residential Care Facilities to observe and
monitor conditions of care.
Project Name Silicon Valley Independent Living Center: Housing and Emergency
Housing Services.
Target Area
Goals Supported Strengthen Neighborhoods
Needs Addressed Community Services and Public Improvements
Funding CDBG: $14,021
Description Housing and Emergency Housing Services. Eligible Activity (Matrix
Code):05B. CDBG National Objective:570.208(a)(2). CDBG
Citation:570.201(e). Recipient Type: LMC
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
24 unduplicated Palo Alto residents will benefit from one on one
housing assistance.
Location Description Citywide
3
Planned Activities Silicon Valley Independent Living Center provides assistance for
individuals with disabilities and their families to transition from
homelessness, health care facilities, unstable or temporary housing to
permanent affordable, accessible, integrated housing with emergency
assistance, security deposits, rent, information, and referral, and other
basic essentials.
Project Name Project Sentinel - Fair Housing Services
Target Area
4
Goals Supported Fair Housing
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Needs Addressed Fair Housing
Funding CDBG: $33,698
Description Fair Housing Services. Eligible Activity (Matrix Code):21D. CDBG National
Objective:570.208(a)(2). CDBG Citation: 570.206(c). Recipient Type: LMC
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
13 unduplicated individuals will be provided with fair housing services of
complaint counseling, investigation and where appropriate enforcement
referral.
Location Description Citywide
Planned Activities Project Sentinel will provide community education and outreach
regarding fair housing law and practices, investigation, counseling and
legal referral for victims of housing discrimination, and analyses for City
staff and officials regarding fair housing practices. California and federal
fair housing laws assure specific protected classes the right to be treated
in terms of their individual merits and qualifications in seeking
housing. Unfortunately, some people are not aware of the law or their
rights.
Project Name City of Palo Alto - Planning and Administration
Target Area
Goals Supported Affordable Housing
Homelessness
Strengthen Neighborhoods
Fair Housing
Economic Development
Needs Addressed Affordable Housing
Homelessness
Community Services and Public Improvements
Fair Housing
Economic Development
Funding CDBG: $99,304
Description Planning and Administration: CDBG Citation: 570.206(a)
5
Target Date 6/30/2022
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Estimate the number
and type of families
that will benefit from
the proposed
activities
The City will provide general administrative support to the CDBG
program.
Location Description Citywide
Planned Activities Administer the Administrative costs for the overall management,
coordination, and evaluation of the CDBG program, and the project
delivery costs associated with bringing projects to completion.
Project Name Downtown Streets Inc. - Workforce Development Program.
Target Area
Goals Supported Economic Development
Needs Addressed Economic Development
Funding CDBG: $160,477
Description Workforce Development Program. Eligible Activity (Matrix Code):
05H.CDBG National Objective: 570.208(a)(2)(A). CDBG Citation:
570.204(a)(2). Recipient Type: LMC
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
15 unduplicated homeless and unemployed persons will be placed in
jobs through job training/employment readiness classes and outreach to
local employers.
Location Description Citywide
6
Planned Activities The Workforce Development Program will provide a transition from
unemployment and homelessness to regular employment and housing
through case management, job training, mentoring, housing, and
transportation assistance. Downtown Streets Team will screen and
prepare applicants and will use their community connections to provide
training and job opportunities.
Project Name Rebuilding Together Peninsula ÿ¢ÿ¿ÿ¿ Safe at Home
Target Area
Goals Supported Affordable Housing
Needs Addressed Affordable Housing
7
Funding CDBG: $73,135
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Description Safe at Home Program. Eligible Activity (Matrix Code): 14A/B.CDBG
National Objective: 570.208(a)(3). CDBG Citation: 570.202(b)(11).
Recipient Type: LMH
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
6 households
Location Description Citywide
Planned Activities Provide home safety repairs, mobility and accessibility improvements for
low- income households in Palo Alto with the primary consideration
being the correction of safety hazards.
Project Name LifeMoves - Opportunity Services Center and Hotel De Zink (HDZ): Case
Management
Target Area
Goals Supported Homelessness
Needs Addressed Homelessness
Funding CDBG: $31,545
Description Opportunity Services Center Eligible Activity (Matrix Code):03TCDBG
National Objective: 570.208(a)(2). CDBG Citation:570.201(e). Recipient
Type: LMC
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
38 unduplicated individuals (homeless and/or very low income
individuals per year) will receive case management services including
assistance with housing/job
searches, referrals and mentoring through the Opportunity Services
Center.
Location Description 33 Encina Way, Palo Alto, CA 94301
8
Planned Activities Case management services will be provided to Opportunity Services
Center and Hotel De Zink clients in locating housing and/or employment
and be connected to
benefits.
Project Name Alta Housing (Former: Palo Alto Housing Corporation Management and
Services Corporation)
Target Area
9
Goals Supported Homelessness
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Needs Addressed Homelessness
Funding CDBG: $24,535
Description SRO Resident Support Program. Eligible Activity (Matrix Code):05OCDBG
National Objective:570.208(a)(2). CDBG Citation:570.201(e). Recipient
Type: LMC
Target Date 6/30/2022
Estimate the number
and type of families
that will benefit from
the proposed
activities
Location Description 439 Emerson Street, Palo Alto, CA 94301
735 Alma Street Palo Alto, CA 94301
Planned Activities Palo Alto Housing Corporation engages a service coordinator to provide
40 hours weekly services to provide case management and support
counseling services to residents at Alma Place and Barker Hotel to help
them maintain housing stability. Activities include financial counseling,
health maintenance, information and referral, problem solving,
employment assistance, crisis intervention and case management. Both
Alma Place and Barker Hotel are single-room occupancy facilities.</
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AP-50 Geographic Distribution - 91.420, 91.220(f)
Description of the geographic areas of the entitlement (including areas of low-income and
minority concentration) where assistance will be directed
The City allocates CDBG funds to benefit low-moderate income (LMI) households and does not have
target areas. Instead, the City focuses its services and capital improvements across the City as a whole.
Geographic Distribution
Target Area Percentage of Funds
Table 5 - Geographic Distribution
Rationale for the priorities for allocating investments geographically
Not applicable.
Discussion
Please see discussion above.
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Affordable Housing
AP-55 Affordable Housing - 91.420, 91.220(g)
Introduction
One Year Goals for the Number of Households to be Supported
Homeless
Non-Homeless
Special-Needs
Total
Table 6 - One Year Goals for Affordable Housing by Support Requirement
One Year Goals for the Number of Households Supported Through
Rental Assistance
The Production of New Units
Rehab of Existing Units
Acquisition of Existing Units
Total
Table 7 - One Year Goals for Affordable Housing by Support Type
Discussion
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AP-60 Public Housing - 91.420, 91.220(h)
Introduction
Actions planned during the next year to address the needs to public housing
Actions to encourage public housing residents to become more involved in management and
participate in homeownership
If the PHA is designated as troubled, describe the manner in which financial assistance will be
provided or other assistance
Discussion
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AP-65 Homeless and Other Special Needs Activities - 91.420, 91.220(i)
Introduction
Describe the jurisdictions one-year goals and actions for reducing and ending homelessness
including
Reaching out to homeless persons (especially unsheltered persons) and assessing their
individual needs
Addressing the emergency shelter and transitional housing needs of homeless persons
Helping homeless persons (especially chronically homeless individuals and families, families
with children, veterans and their families, and unaccompanied youth) make the transition to
permanent housing and independent living, including shortening the period of time that
individuals and families experience homelessness, facilitating access for homeless individuals
and families to affordable housing units, and preventing individuals and families who were
recently homeless from becoming homeless again
Helping low-income individuals and families avoid becoming homeless, especially extremely
low-income individuals and families and those who are: being discharged from publicly
funded institutions and systems of care (such as health care facilities, mental health facilities,
foster care and other youth facilities, and corrections programs and institutions); or, receiving
assistance from public or private agencies that address housing, health, social services,
employment, education, or youth needs.
Discussion
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AP-75 Barriers to affordable housing -91.420, 91.220(j)
Introduction
The incorporated and unincorporated jurisdictions within the County face barriers to affordable housing
that are common throughout the Bay Area. High on the list of market barriers is the lack of developable
land, which increases the cost of available lands and increases housing development costs. Local
opposition is another common obstacle as many neighbors have strong reactions to infill and affordable
housing developments. Their opposition is often based on misconceptions, such as a perceived increase
in crime; erosion of property values; increase in parking and traffic congestion; and overwhelmed
schools. However, to ensure a healthy economy the region must focus on strategies and investment that
provide housing for much of the region’s workforce – for example, sales clerks, secretaries, waiters,
baristas, teachers, and health service workers – whose incomes significantly limit their housing choices.
It should be noted that in a constrained housing supply market, when housing developments produce
housing that is relatively affordable, higher income buyers and renters generally outbid lower income
households. A home’s final sale or rental price will typically exceed the projected sales or rental costs.
Public subsidies are often needed to guarantee affordable homes for low and moderate income
households.
Actions it planned to remove or ameliorate the negative effects of public policies that serve
as barriers to affordable housing such as land use controls, tax policies affecting land, zoning
ordinances, building codes, fees and charges, growth limitations, and policies affecting the
return on residential investment
Palo Alto is addressing the barriers to affordable housing through:
•Context-Based Design Codes: The City adopted form-based codes in 2006 to ensure and
encourage residential development by following context-based design guidelines to incentivize
increased density needs.
•Density Bonus Ordinance: The City adopted a Density Bonus Ordinance in January 2014 to allow
for bonuses of 20 to 35 percent, depending on the amount and type of affordable housing
provided, the regulations also allow for exceptions to applicable zoning and other development
standards, to further encourage development of affordable housing.
•Below Market Rate (BMR) Housing Program: Established in 1974, the City’s BMR requires
developers to provide a certain percentage of units as BMR in every approved project of three
units or more. The program originally required that for developments on sites of less than five
acres, the developer must provide 15 percent of the total housing units as BMR housing units. If
the site was larger than five acres, the developer was required to provide 20 percent of the units
as BMR housing. The City of Palo Alto have historically used in-lieu fees and the use of
development impact fees charged on new, market-rate housing and/or commercial
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development. The City updated its Commercial and Residential Impact Fee Nexus Studies and
adopted two ordinances to make changes to its BMR program and adopted a new fee structure.
The ordinances became effective on June 19, 2017.
•Fair Housing: The City provides funding to Project Sentinel. Project Sentinel provides expertise
in fair housing law and tenant-landlord disputes. Services include information, referrals,
community outreach and education. In addition, Project Sentinel resolve fair housing complaints
via investigation, mediation, education and outreach to both property owners and tenants
about fair housing policies.
•Housing Implementation Ordinance (HIP): Effective May 2, 2019, this Ordinance adopted
changes to the following zoning districts: Citywide – where multifamily uses are permitted,
Multifamily Residential Districts (RM), Downtown (CD-C), California Avenue (CC ((2)), and El
Camino Real (CS and CN).
•Affordable Housing (AH) Combining District: In 2018, The City Council adopted the Affordable
Housing Combining District to provide flexible development standards beyond the State Density
Bonus Law to allow 100% affordable housing projects located in a commercial zoned area.
•Workforce Housing (WH) Combining District: The City Council also adopted in 2018 the
Workforce Housing Combining District to encourage the development of housing within half-
mile of major fixed rail transit by modifying flexible development standards for the public
facilities (PF) zoning district.
Discussion
Please see above.
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AP-85 Other Actions - 91.420, 91.220(k)
Introduction
This section discusses the City’s efforts in addressing the underserved needs, expanding and preserving
affordable housing, reducing lead-based paint hazards, and developing institutional structure for
delivering housing and community development activities.
Actions planned to address obstacles to meeting underserved needs
The diminishing amount of funds continues to be the most significant obstacle to addressing the needs
of underserved populations. To address this, the City supplements its CDBG funding with other
resources and funds, such as:
• In FY2020-21, The City’s Human Service Resource Allocation Process (HSRAP) provided
$549,306 from the General Fund in support of human services. The HSRAP funds, in conjunction with
the CDBG public service funds, are distributed to local non-profit agencies. Additionally, approximately
$78,000 was provided to nonprofit organizations serving Palo Alto residents with short-term and/or
urgent funding to address emergency, critical or emerging human services needs through the Emerging
Needs Fund.
• The Palo Alto Commercial Housing Fund is used primarily to increase the number of new
affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from
developers of commercial and industrial projects.
• The Palo Alto Residential Housing Fund is funded with mitigation fees provided under Palo
Alto’s BMR housing program from residential developers and money from other miscellaneous sources,
such as proceeds from the sale or lease of City property. The Residential Housing Fund is used to assist
new housing development or the acquisition, rehabilitation or the preservation of existing housing for
affordable housing.
• The City’s Below Market Rate Emergency Fund was authorized in 2002 to provide funding
on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and
preservation of the City’s stock of BMR ownership units.
• HOME Program funds are available on an annual competitive basis through the State of
California HOME program, and the County’s HOME Consortium.
• The Housing Authority of the County of Santa Clara (HACSC) administers the federal Section
8 program countywide. The program provides rental subsidies and develops affordable housing for low
income households, seniors and persons with disabilities living within the County.
Actions planned to foster and maintain affordable housing
The City will foster and maintain affordable housing by continuing the following programs and
ordinances:
• The Below Market Rate Emergency Fund which provides funding on an ongoing basis for
loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s
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stock of BMR ownership units.
Actions planned to reduce lead-based paint hazards
Actions planned to reduce the number of poverty-level families
•LifeMoves provides basic necessities for persons who are homeless or at risk of becoming
homeless. The Opportunity Services Center is a comprehensive, one-stop, multi-service, day
drop-in center that provides critical services for homeless Palo Alto residents. Specifically, the
facility provides showers, laundry, clothing, snacks, case management, and shelter/housing
referral services.
•Palo Alto Housing Corporation will provide counseling and supportive case management
services for low-income residents of single-room occupancy facilities to help them maintain
housing stability. Activities include financial counseling, health maintenance, information and
referral, problem solving, employment assistance, crisis intervention, and case management.
•Downtown Streets Team works to reduce homelessness through a “work first” model.
Downtown Streets Team uses its community connections to provide training and job
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opportunities to homeless people, specifically in the downtown area.
Actions planned to develop institutional structure
The City is striving to improve intergovernmental and private sector cooperation to synergize efforts and
resources and develop new revenues for community service needs and the production of affordable
housing. Collaborative efforts include:
•Regular bi-weekly meetings between entitlement jurisdictions at the CDBG Coordinators
Meeting and Regional Housing Working Group.
•Joint jurisdiction Request for Proposals and project review committees.
•Coordination on project management for projects funded by multiple jurisdictions.
•HOME Consortium meetings between member jurisdictions for affordable housing projects.
Actions planned to enhance coordination between public and private housing and social
service agencies
The City benefits from a strong jurisdiction and region-wide network of housing and community
development partners, such as the County and the Continuum of Care. To improve intergovernmental
and private sector cooperation, the City will continue to participate with other local jurisdictions and
developers in sharing information and resources.
In addition to the actions listed above, the City will continue to coordinate with the City’s human
services funding efforts to comprehensively address community needs.
Discussion
Please see discussions above.
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Program Specific Requirements
AP-90 Program Specific Requirements - 91.420, 91.220(l)(1,2,4)
Introduction
The following provides additional information about the CDBG program income and program
requirements.
Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the
Projects Table. The following identifies program income that is available for use that is included in
projects to be carried out.
1. The total amount of program income that will have been received before the start of the next
program year and that has not yet been reprogrammed 0
2. The amount of proceeds from section 108 loan guarantees that will be used during the year to
address the priority needs and specific objectives identified in the grantee's strategic plan.0
3. The amount of surplus funds from urban renewal settlements 0
4. The amount of any grant funds returned to the line of credit for which the planned use has not
been included in a prior statement or plan 0
5. The amount of income from float-funded activities 0
Total Program Income:0
Other CDBG Requirements
1. The amount of urgent need activities 0
2. The estimated percentage of CDBG funds that will be used for activities that
benefit persons of low and moderate income.Overall Benefit - A consecutive period
of one, two or three years may be used to determine that a minimum overall
benefit of 70% of CDBG funds is used to benefit persons of low and moderate
income. Specify the years covered that include this Annual Action Plan.100.00%
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Please see discussion above.
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Attachments
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Citizen Participation Comments
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Substantial Amendment #1
FY 2022-2023 Annual Action Plan
April 17, 2023
Initially Approved on June 20, 2022
Refer to page 37 for revisions.
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Executive Summary
AP-05 Executive Summary - 91.200(c), 91.220(b)
1. Introduction
The City of Palo Alto (City) Fiscal Year (FY) 2022-23 One Year Action Plan contains the City’s one- year
plan to carry out housing and community development activities funded by Federal formula grant funds
received from the U.S. Department of Housing and Urban Development (HUD), Community
Development Block Grant (CDBG) program. This Action Plan covers the third of five program years
covered by the City’s 2020-2025 Consolidated Plan which was adopted by the Palo Alto City Council on
June 15, 2020.
The Department of Planning and Development Services is the lead agency for the Consolidated Plan and
submits the Annual Action Plan for the City’s CDBG program.
HUD requires entitlement jurisdictions to submit an Annual Action Plan to report the distribution of
federal entitlement grant funds over the Consolidated Plan’s five-year period identifying how funding
allocations help meet the goals covered in the Consolidated Plan.
The CDBG federal appropriations for FY2022-2023 were released by HUD on May 13, 2022. The total
amount available for allocation in FY2022-2023 is $653,168, which includes the entitlement grant
($513,168) and program income ($140,000) and is available for funding projects and programs during
the 2022 Program Year.
The City’s Action Plan covers the time period from July 1, 2022, to June 30, 2023, (HUD Program Year
2022). The City’s FY 2022-23 Action Plan reports on the status of needs and outcomes the City expects
to achieve in the coming year. All of the activities mentioned in this Action Plan are based on current
priorities. By addressing these priorities, the City hopes to meet those objectives stated in the 2020-
2025 Consolidated Plan. All the proposed projects and activities are intended to principally benefit
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residents of the City who have extremely low-, low- and moderate- income, and populations that have
special needs, such as the elderly, disabled, and homeless.
2. Summarize the objectives and outcomes identified in the Plan
This could be a restatement of items or a table listed elsewhere in the plan or a reference to
another location. It may also contain any essential items from the housing and homeless needs
assessment, the housing market analysis or the strategic plan.
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Table 1: Fiscal Year 2023 CDBG Budget
3. Evaluation of past performance
This is an evaluation of past performance that helped lead the grantee to choose its goals or
projects.
This is an evaluation of past performance that helped lead the grantee (the City) to choose its goals or
projects.
The City is responsible for ensuring compliance with all rules and regulations associated with the CDBG
entitlement grant program. The City’s Annual Action Plans and Consolidated Annual Performance and
Evaluation Reports (CAPER) have provided many details about the goals, projects and programs
completed by the City. A review of past CAPERs reveals a strong record of performance in the use of
CDBG funds. For example, during the 2015-2020 Consolidated Plan period, 244 affordable rental units
were rehabilitated, 130 jobs were created or retained, and nearly 2,600 households were assisted
through public service activities for low- and moderate- income housing.
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4. Summary of Citizen Participation Process and consultation process
Summary from citizen participation section of plan.
5. Summary of public comments
This could be a brief narrative summary or reference an attached document from the Citizen
Participation section of the Con Plan.
6. Summary of comments or views not accepted and the reasons for not accepting them
7. Summary
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PR-05 Lead & Responsible Agencies - 91.200(b)
1. Agency/entity responsible for preparing/administering the Consolidated Plan
The following are the agencies/entities responsible for preparing the Consolidated Plan and those responsible for administration of
each grant program and funding source.
Agency Role Name Department/Agency
Lead Agency PALO ALTO
CDBG Administrator PALO ALTO Department of Planning & Development Services
HOPWA Administrator
HOME Administrator
HOPWA-C Administrator
Table 1 – Responsible Agencies
Narrative
The City is the Lead and Responsible Agency for the United States Department of Housing and Urban Development’s (HUD) entitlement
programs in Palo Alto. The Department of Planning and Development Services is responsible for administering the City’s CDBG program. The City
joined the HOME Consortium in 2015 and receives federal HOME Investment Partnership (HOME) funds through the County.
Entitlement jurisdictions receive entitlement funding (i.e., non-competitive, formula funds) from HUD. HUD requires the City to submit a five-
year Consolidated Plan and Annual Action Plan to HUD listing priorities and strategies for the use of its federal funds.
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The Consolidated Plan helps local jurisdictions to assess their affordable housing and community development needs and market conditions to
meet the housing and community development needs of its populations. As a part of the Consolidated Plan process for 2020-2025, the City
collaborated with the County of Santa Clara (County) as the Urban County representing the cities of Campbell, Los Altos, Los Altos Hills, Los
Gatos, Monte Sereno, Morgan Hill, and Saratoga; the cities of Cupertino, Gilroy, Mountain View, Sunnyvale, San José, and Santa Clara; and the
Santa Clara County Housing Authority (SCCHA) to identify and prioritize housing and community development needs across the region, and to
develop strategies to meet those needs. The FY 2022-23 Annual Action Plan represents the third year of CDBG funding of the 2020-2025
Consolidated Plan.
Consolidated Plan Public Contact Information
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AP-10 Consultation - 91.100, 91.200(b), 91.215(l)
1. Introduction
The Action Plan is a one-year plan which describes the eligible programs, projects, and activities to be
undertaken with funds expected during FY 2022-23 and their relationship to the priority housing,
homeless and community development needs outlined in the 2020-25 Consolidated Plan.
Provide a concise summary of the jurisdiction’s activities to enhance coordination between
public and assisted housing providers and private and governmental health, mental health
and service agencies (91.215(l)).
During Fiscal Year 2022-23, the City will continue to work with non-profit organizations to provide
programs and services for low-income households; private industry, including financial and housing
development groups, to encourage the development of affordable housing opportunities regionally and
within the City; and other local jurisdictions, including the County of Santa Clara, in carrying out and
monitoring regional projects in a coordinated and cost-effective manner. The City will provide technical
assistance to the public service agencies it funds with CDBG dollars and will continue to attend the
biweekly Regional CDBG/Housing Coordinators meetings.
Describe coordination with the Continuum of Care and efforts to address the needs of
homeless persons (particularly chronically homeless individuals and families, families with
children, veterans, and unaccompanied youth) and persons at risk of homelessness.
The Santa Clara County Office of Supportive Housing is the administrator of the regional Continuum of
Care (CoC). The Citys Office of Human Services Manager is in contact with the Santa Clara County Office
of Supportive Housing and Destination Home regarding issues of homelessness in the community. The
Santa Clara County CoC is a group comprising of stakeholders throughout the County, including
governmental agencies, homeless service and shelter providers, homeless population, housing
advocates, affordable housing developers, and various private parties, including businesses and
foundations.
City staff attend a bi-weekly CDBG/Housing Coordinator meeting. Members of the CoC meet monthly to
plan CoC programs, identify gaps in homeless services, establish funding priorities, and pursue a
systematic approach to addressing homelessness.
The CoC is governed by the CoC Board, which takes a systems-change approach to preventing and
ending homelessness. This same CoC Board is comprised of the same individuals who serve on the
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Destination: Home (Destination Home) Leadership Board. Destination Home is a public- private
partnership that is committed to collective impact strategies to end chronic homelessness.
Describe consultation with the Continuum(s) of Care that serves the jurisdiction’s area in
determining how to allocate ESG funds, develop performance standards for and evaluate
outcomes of projects and activities assisted by ESG funds, and develop funding, policies and
procedures for the operation and administration of HMIS
2. Agencies, groups, organizations and others who participated in the process and
consultations
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Table 2 – Agencies, groups, organizations who participated
Agency/Group/Organization Boys and Girls Clubs of Silicon Valley
Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation?Housing Need Assessment
1
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Santa Clara focus group meeting on 11/7/19 as part
of the 2020-25 Consolidated Plan process
Agency/Group/Organization Healthier Kids Foundation Santa Clara County
Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation?Housing Need Assessment
2
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Santa Clara focus group meeting on 11/7/19 as part
of the 2020-25 Consolidated Plan process
Agency/Group/Organization COMMUNITY SERVICES AGENCY OF MOUNTAIN VIEW AND LOS ALTOS
Agency/Group/Organization Type Services-Elderly Persons
What section of the Plan was addressed by Consultation?Housing Need Assessment
3
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation conference call on
11/15/19 as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization San Jose Conservation Corps Charter
Agency/Group/Organization Type Services-Education
4
What section of the Plan was addressed by Consultation?Housing Need Assessment
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Gilroy focus group meeting on 11/18/19 as part of
the 2020-25 Consolidated Plan process
Agency/Group/Organization CommUniverCity San Jose
Agency/Group/Organization Type Services-Education
What section of the Plan was addressed by Consultation?Strategic Plan
5
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation conference call on
11/25/19 and regional forum meeting in San Jose on 11/20/19 as part
of the 2020-25 Consolidated Plan process.
Agency/Group/Organization The Health Trust
Agency/Group/Organization Type Services-Persons with Disabilities
Services-Persons with HIV/AIDS
Services-Health
What section of the Plan was addressed by Consultation?Housing Need Assessment
Strategic Plan
6
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation on 11/21/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization Rebuilding Together, Silicon Valley
Agency/Group/Organization Type Services - Housing
7
What section of the Plan was addressed by Consultation?Housing Need Assessment
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation conference call on
11/21/19 and San Jose regional forum on 11/20/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization City of Cupertino Community Development Department Housing
Division
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
8
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency/Group/Organization City of Gilroy9
Agency/Group/Organization Type Other government - Local
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Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Market Analysis
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency was consulted and provided emailed feedback as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization City of Mountain View10
Agency/Group/Organization Type Other government - Local
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Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Market Analysis
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Palo Alto on 11/7/19 as
part of the 2020-25 Consolidated Plan process
Agency/Group/Organization BILL WILSON CENTER
Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation?Housing Need Assessment
Homeless Needs - Families with children
11
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Santa Clara focus group meeting on 11/7/19,
community meetings on 11/4/19 at Morgan Hill and 11/20/19 at
Roosevelt as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization HEART OF THE VALLEY12
Agency/Group/Organization Type Services-Elderly Persons
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency was consulted through interview questions. Agency provided
emailed feedback as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization City of San Jose
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
13
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency was contacted for consultation as a partner in addressing the
needs of the County as part of the 2020-25 Consolidated Plan process
Agency/Group/Organization CITY OF MORGAN HILL
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
14
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19 as
part of the 2020-25 Consolidated Plan process
Agency/Group/Organization City of Sunnyvale
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
15
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Palo Alto on 11/7/19 and
provided emailed feedback as part of the 2020-25 Consolidated Plan
process
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Agency/Group/Organization Servant Partners
Agency/Group/Organization Type Neighborhood Organization
Neighborhood Organization
What section of the Plan was addressed by Consultation?Housing Need Assessment
16
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Attended community meeting on 11/13/19 at Hillview library as part
of the 2020-25 Consolidated Plan process
Agency/Group/Organization SENIOR ADULTS LEGAL ASSISTANCE (SALA)
Agency/Group/Organization Type Service-Fair Housing
What section of the Plan was addressed by Consultation?Housing Need Assessment
17
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended Palo Alto and San Jose public engagement meeting
on 11/17/19 and 11/19/19, regional forum meeting on 11/4/19 at
Morgan Hill and 11/7/19 at Palo Alto as part of the 2020-25
Consolidated Plan process
Agency/Group/Organization HomeFirst
Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed by Consultation?Housing Need Assessment
Homeless Needs - Chronically homeless
18
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19 as
part of the 2020-25 Consolidated Plan process
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Agency/Group/Organization Santa Clara County Office of Supportive Housing
Agency/Group/Organization Type Other government - County
What section of the Plan was addressed by Consultation?Housing Need Assessment
19
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19
and at Palo Alto on 11/7/19 as part of the 2020-25 Consolidated Plan
process
Agency/Group/Organization City of Santa Clara
Agency/Group/Organization Type Other government - Local
What section of the Plan was addressed by Consultation?Housing Need Assessment
20
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended regional forum meeting at Morgan Hill on 11/4/19
and provided emailed feedback as part of the 2020-25 Consolidated
Plan process
Agency/Group/Organization Vista Center for the Blind and Visually Impaired
Agency/Group/Organization Type Services-Persons with Disabilities
What section of the Plan was addressed by Consultation?Non-Homeless Special Needs
21
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation on 12/9/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization Destination: Home
Agency/Group/Organization Type Services-homeless
22
What section of the Plan was addressed by Consultation?Housing Need Assessment
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended stakeholder consultation on 11/11/19 as part of the
2020-25 Consolidated Plan process
Agency/Group/Organization COMMUNITY SOLUTIONS
Agency/Group/Organization Type Services-Victims of Domestic Violence
What section of the Plan was addressed by Consultation?Housing Need Assessment
23
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended the AFH and ConPlan joint meeting on 12/11/19 at
the Gilroy Council Chambers as part of the 2020-25 Consolidated Plan
process
Agency/Group/Organization St Mary Parish
Agency/Group/Organization Type Neighborhood Organization
Neighborhood Organization
What section of the Plan was addressed by Consultation?Housing Need Assessment
24
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency attended the AFH and ConPlan joint meeting on 12/11/19 at
the Gilroy Council Chambers as part of the 2020-25 Consolidated Plan
process
Agency/Group/Organization Community and Neighborhood Revitalization Committee - Gilroy
Agency/Group/Organization Type Community Organization
What section of the Plan was addressed by Consultation?Housing Need Assessment
25
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the
consultation or areas for improved coordination?
Agency co-hosted the AFH and ConPlan joint meeting on 12/11/18 at
the Gilroy Council Chambers as part of the 2020-25 Consolidated Plan
process
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Identify any Agency Types not consulted and provide rationale for not consulting
Through the countywide development of the Consolidated Plan, AT@T was consulted regarding broadband. For Palo Alto specific information on
this topic, staff in the future will contact the City of Palo Alto Utilities Advisory Commission regarding the City's Fiber Network Expansion Project.
In regard to resilience specific organizations, Grid Alternatives, an environmental sustainability organization, provided a stakeholder interview
during the Consolidated Plan process. Staff plans to expand outreach in this area through contact with the Santa Clara County Office of
Emergency Management and the City of Palo Alto Emergency Services which has developed a local hazard mitigation plan.
Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan?
Continuum of Care Regional Continuum of
Care Council
Identifies housing inventory count to facilitate the provision of housing services to those
experiencing homelessness
City of Palo Alto
Housing Element
(2015-2023)
City of Palo Alto Identifies barriers to affordable housing, such as land-use controls, inefficiencies of the
development review process, and strategies to alleviate such barriers
2012-2014
Comprehensive HIV
Prevention and Care Pl
Santa Clara County HIV
Planning Council for
Prevention and Care
This plan provides a roadmap for the Santa Clara County HIV Planning Council for
Prevention and Care to provide a comprehensive and compassionate system of HIV
prevention and care services for the County. This effort aligns with the Strategic Plan's
goal to support activities that strengthen neighborhoods through the provision of
community services and public improvements
SCCHA Moving to Work
Annual Plan
Santa Clara County
Housing Authority
Addresses housing authority updates and strategies pertaining to public housing and
vouchers
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Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan?
Regional Housing Need
Plan for San Francisco
Bay A
Association of Bay Area
Governments
This plan analyzes the total regional housing need for the County and all of the Bay Area.
This effort aligns with the Strategic Plan's goal to assist in the creation and preservation
of affordable housing.
Community Plan to End
Homelessness in Santa
Clara
Destination: Home
The Community Plan to End Homelessness in the County is a five-year plan to guide
governmental actors, nonprofits, and other community members as they make decisions
about funding, programs, priorities and needs. This effort aligns with the Strategic Plan's
goal to support activities to end homelessness
Palo Alto's
Infrastructure: Catching
Up, Keeping U
City of Palo Alto
Infrastructure Blue
Ribbon Plan
This plan details recommendations for infrastructure maintenance and replace, as well
as identifies potential sources of funding. This effort aligns with the Strategic Plan's goal
to support activities that strengthen neighborhoods through the provision of community
services and public improvements
City of Palo Alto
Comprehensive Plan
(2030)
City of Palo Alto
This plan is the primary tool for guiding future development in Palo Alto. It provides a
guide for long-term choices and goals for the City future. This effort aligns with the
Strategic Plan's goal to support activities that strengthen neighborhoods through the
provision of community services and public improvements
Table 3 - Other local / regional / federal planning efforts
Narrative
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AP-12 Participation - 91.401, 91.105, 91.200(c)
1. Summary of citizen participation process/Efforts made to broaden citizen participation
Summarize citizen participation process and how it impacted goal-setting
The Planning and Development Services Department is the lead agency for overseeing the development of the Consolidated Plan and Action
Plan. Per the City’s adopted Citizen Participation Plan, the City is to allow a 30-day public review and comment period for the Action Plan. The
City has published notifications of upcoming public hearings and the 30-day public review comment period in the local newspaper of general
circulation, on its CDBG webpage and via email blasts. The City held two advertised public hearings on March 10, 2022, and June 20, 2022. The
Action Plan 30-day public review comment period occurred from May 20, 2022, through June 20, 2022. The City did not receive any public
comments.
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Citizen Participation Outreach
Sort Or
der
Mode of Out
reach
Target of Out
reach
Summary of
response/atten
dance
Summary of
comments rec
eived
Summary of com
ments not
accepted
and reasons
URL (If applicable)
1 Public
Hearing
Non-
targeted/broa
d community
The Human
Relations
Commission
met on March
10, 2022 to
discuss the
FY2022-23
funding
allocations and
review the draft
FY2022-23
Annual Action
Plan.
Six members
of the public
provided
comments on
the
Cityÿ¢ÿ¿
ÿ¿s funding
allocations.
Refer to
Appendix A for
detailed
summary
All comments
were accepted.
2 Public
Hearing
Non-
targeted/broa
d community
The City Council
met on June 20,
2022, to discuss
the FY2022-23
funding
allocations and
adopt the draft
FY2022-23 AAP.
No comments
were received.
No comments
were received.
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Sort Or
der
Mode of Out
reach
Target of Out
reach
Summary of
response/atten
dance
Summary of
comments rec
eived
Summary of com
ments not
accepted
and reasons
URL (If applicable)
3 Newspaper
Ad
Non-
targeted/broa
d community
Notice of Public
Hearing and
Public comment
period on the
Second Draft
AAP was
published in the
Daily post on
April 2, 2022,
and May 20,
2022.
No comments
were received.
No comments
were received.
4 Newspaper
Ad
Non-
targeted/broa
d community
Notice of Public
Hearing and
Public comment
period on the
Second Draft
AAP was
published in the
Daily post on
April 2, 2022,
and May 20,
2022.
No comments
were received.
No comments
were received.
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Sort Or
der
Mode of Out
reach
Target of Out
reach
Summary of
response/atten
dance
Summary of
comments rec
eived
Summary of com
ments not
accepted
and reasons
URL (If applicable)
5 Internet
Outreach
Non-
targeted/broa
d community
Draft AAP
FY2022-23 for
public review
and comments
for posted at
the City of Palo
Alto's CDBG
webpage.
No comments
were received.
No comments
were received.
https://www.cityofpaloalto.org/Departm
ents/Planning-Development-
Services/Long-Range-
Planning/Community-Development-
Block-Grant
Table 4 – Citizen Participation Outreach
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Expected Resources
AP-15 Expected Resources - 91.420(b), 91.220(c)(1,2)
Introduction
In FY2022-23, the City will allocate $653,168 to eligible activities that address the needs identified in the Consolidated Plan. It should be noted
that while the HUD CDBG allocations are critical, the allocations are not sufficient to overcome barriers and address all needs that low- income
individuals and families face in attaining self-sufficiency. The City will continue to leverage additional resources as described below to provide
support and services to the populations in need within the community. The following section discusses the anticipated resources available for
community development activities during the next remaining three years of the City’s 5-Year Consolidated Plan.
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Anticipated Resources
Expected Amount Available Year 1ProgramSource
of Funds
Uses of Funds
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
Expected
Amount
Available
Remainder
of ConPlan
$
Narrative Description
CDBG public -
federal
Acquisition
Admin and
Planning
Economic
Development
Housing
Public
Improvements
Public Services 513,168 140,000 0 653,168 1,026,336
CDBG funds will be used for the creation
and preservation of affordable rental
units, improvements in lower income
neighborhoods, and public services that
benefit low income and special needs
households
Other public -
federal
Other
0 0 0 0 0
Table 5 - Expected Resources – Priority Table
Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how
matching requirements will be satisfied
Entitlement Funds
Leverage, in the context of the CDBG and HOME Investment Partnerships Program (HOME), means bringing other local, state, and federal
financial resources to maximize the reach and impact of the City’s HUD Programs. HUD, like many other federal agencies, encourages the
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recipients of federal monies to demonstrate that efforts are being made to strategically leverage additional funds in order to achieve greater
results.
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The State of California has recently passed approximately 20 bills with the intent of increasing or preserving affordable housing with the State.
According to the Governor’s State of the State address, bills that help increase housing production, both market-rate and affordable, will be a
priority in 2020. The City will continue to track and look for opportunities to leverage State resources for the City.
•Palo Alto Commercial Housing Fund, which is for the development of below market rate (BMR) housing units and paid by mitigation fees
on commercial and industrial projects; and
•Palo Alto Residential Housing Fund, which is for the development of below market rate (BMR) housing units and paid by miscellaneous
funding sources.
If appropriate, describe publically owned land or property located within the jurisdiction that may be used to address the needs
identified in the plan
Discussion
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Please see information provided in previous sections.
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Annual Goals and Objectives
AP-20 Annual Goals and Objectives - 91.420, 91.220(c)(3)&(e)
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 Affordable
Housing
2020 2025 Affordable
Housing
Affordable Housing CDBG:
$424,560
Homeowner Housing
Rehabilitated: 4 Household
Housing Unit
2 Homelessness 2020 2025 Homeless Homelessness CDBG:
$49,073
Public service activities other
than Low/Moderate Income
Housing Benefit: 161 Persons
Assisted
3 Strengthen
Neighborhoods
2020 2025 Non-Homeless
Special Needs
Non-Housing
Community
Development
Community Services
and Public
Improvements
CDBG:
$24,021
Public service activities other
than Low/Moderate Income
Housing Benefit: 77 Persons
Assisted
4 Fair Housing 2020 2025 Non-Housing
Community
Development
Fair Housing CDBG:
$33,698
Public service activities other
than Low/Moderate Income
Housing Benefit: 15 Persons
Assisted
5 Economic
Development
2015 2020 Non-Housing
Community
Development
Economic
Development
CDBG: $0 Other: 0 Other
Table 6 – Goals Summary
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Goal Descriptions
Affordable Housing1
Assist in the creation and preservation of affordable housing for low income and special needs households.
Homelessness2
Support activities to prevent and end homelessness, such as funding affordable housing opportunities, resource centers
for homeless individuals, and support for tenants of single-room occupancy units.
Strengthen Neighborhoods3
Provide community services and public improvements to benefit low-income and special needs households. This includes
assisting those with disabilities to transition from unstable housing to permanent housing, supporting residents of long-
term care facilities, and supporting individuals experiencing domestic violence.
Fair Housing4
Promote fair housing choice by funding fair housing organizations to provide fair housing services, such as education,
tenant-landlord mediation, and testing.
Economic Development5
Support economic development activities that promote employment growth and help lower-income people secure and
maintain jobs. This includes funding nonprofits working toward developing the skills of low-income and homeless
individuals.
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AP-35 Projects - 91.420, 91.220(d)
Introduction
The Consolidated Plan goals below represent high priority needs for the City of Palo Alto (City) and serve
as the basis for the strategic actions the City will use to meet these needs. The goals, listed in no
particular order, are:
1. Assist in the creation and preservation of affordable housing for low income and special needs
households.Support activities to end homelessness.
2. Support activities that strengthen neighborhoods through the provision of community services
and public improvements to benefit low income and special needs households.Promote fair
housing choice.Expand economic opportunities for low-income households.
It is important to note, Project Sentinel, whom will be providing fair housing services will be under two
categories, Planning and Administration and Public Services.
#Project Name
1 Catholic Charities of Santa Clara County: Long Term Care Ombudsman
2 LifeMoves - Opportunity Services Center and Hotel De Zink (HDZ): Case Management
3 Alta Housing SRO Resident Support Program
4 Silicon Valley Independent Living Center: Housing and Emergency Housing Services
5 Project Sentinel - Fair Housing Services
6 City of Palo Alto - Planning and Administration
7 Rebuilding Together Peninsula Safe at Home
8 Mitchell Park Place 525 E. Charleston Road
Table 7 – Project Information
Describe the reasons for allocation priorities and any obstacles to addressing underserved
needs
The City awards CDBG funding to projects and programs that will primarily benefit low-income,
homeless, and special needs households. The City operates on a two-year grant funding cycle for CDBG
public service grants and a one-year cycle for CDBG capital housing rehabilitation and public facilities
and improvement projects. Projects are only considered for funding within the Consolidated Plan period
if they address the goals discussed above.
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AP-38 Project Summary
Project Summary Information
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Project Name Catholic Charities of Santa Clara County: Long Term Care Ombudsman
Target Area
Goals Supported Strengthen Neighborhoods
Needs Addressed Community Services and Public Improvements
Funding CDBG: $10,000
Description Long-Term Care Ombudsman Program. Eligible Activity
(MatrixCode):05A. CDBG National Objective: LMC
Target Date 6/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
The program will provide advocacy and complaint investigation for 50
elderly residents of long-term care facilities in Palo Alto.
Location Description Citywide
1
Planned Activities Regular contact with Palo Alto Residential Care Facilities to observe and
monitor conditions of care.
Project Name LifeMoves - Opportunity Services Center and Hotel De Zink (HDZ): Case
Management
Target Area
Goals Supported Homelessness
Needs Addressed Homelessness
Funding CDBG: $26,660
Description Opportunity Services Center Eligible Activity (Matrix Code):03T CDBG
National Objective: LMC
Target Date 6/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
30 unduplicated individuals (homeless and/or very low-income
individuals per year) will receive case management services including
assistance with housing/job searches, referrals and mentoring at the
Opportunity Services Center and Hotel De Zink.
Location Description Citywide
2
Planned Activities Case management services will be provided to Opportunity Services
Center and Hotel De Zink clients in locating housing and/or
employment and be connected to benefits.
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Project Name Alta Housing SRO Resident Support Program
Target Area
Goals Supported Homelessness
Needs Addressed Homelessness
Funding CDBG: $22,413
Description SRO Resident Support Program. Eligible Activity (Matrix Code):05O
CDBG National Objective: LMC
Target Date 6/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
Case management and support counseling services will be provided
to residents of Barker Hotel and Alma Place
Location Description Residents of Barker Hotel (25 units) and Alma Place (106 units)
3
Planned Activities Planned Activities Alta Housing engages a service coordinator to
provide 40 hours weekly services to provide case management and
support counseling services to residents at Alma Place and Barker Hotel
to help them maintain housing stability. Activities include financial
counseling, health maintenance, information and referral, problem
solving, employment assistance, crisis intervention and case
management. Both Alma Place and Barker Hotel are single-room
occupancy facilities.
Project Name Silicon Valley Independent Living Center: Housing and Emergency
Housing Services
Target Area
Goals Supported Strengthen Neighborhoods
Needs Addressed Community Services and Public Improvements
Funding CDBG: $14,021
Description Housing and Emergency Housing Services. Eligible Activity (Matrix
Code):05B. CDBG National Objective: LMC
Target Date 6/30/2023
4
Estimate the number
and type of families
that will benefit from
the proposed activities
27 unduplicated Palo Alto residents will benefit from one-on-one
housing assistance.
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Location Description Citywide
Planned Activities Silicon Valley Independent Living Center provides assistance for
individuals with disabilities and their families to transition from
homelessness, health care facilities, unstable or temporary housing to
permanent affordable, accessible, integrated housing with emergency
assistance, security deposits, rent, information, and referral, and other
basic essentials.
Project Name Project Sentinel - Fair Housing Services
Target Area
Goals Supported Fair Housing
Needs Addressed Fair Housing
Funding CDBG: $33,698
Description Description Planning & Administration - Fair Housing Services.
Eligible Activity (Matrix Code):21D - $13,722. CDBG National Objective:
LMC. Public Service - Fair Housing Services. Eligible Activity (Matrix
Code):05J - $19,976. CDBG National Objective: LMC.
Target Date 6/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
15 unduplicated individuals will be provided with fair housing services
of complaint counseling, investigation, and where appropriate
enforcement referral.
Location Description Citywide
5
Planned Activities Project Sentinel will provide community education and outreach
regarding fair housing law and practices, investigation, counseling, and
legal referral for victims of housing discrimination, and analyses for City
staff and officials regarding fair housing practices. California and federal
fair housing laws assure specific protected classes the right to be
treated in terms of their individual merits and qualifications in seeking
housing. Unfortunately, some people are not aware of the law or their
rights.
Project Name City of Palo Alto - Planning and Administration6
Target Area
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Goals Supported Affordable Housing
Homelessness
Strengthen Neighborhoods
Fair Housing
Economic Development
Needs Addressed Affordable Housing
Homelessness
Community Services and Public Improvements
Fair Housing
Economic Development
Funding CDBG: $116,911
Description Planning and Administration: CDBG Citation: 570.206(a)
Target Date 6/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
The City will provide general administrative support to the
CDBG program.
Location Description Citywide
Planned Activities Administer the Administrative costs for the overall management,
coordination, and evaluation of the CDBG program, and the project
delivery costs associated with bringing projects to completion.
Project Name Rebuilding Together Peninsula Safe at Home
Target Area
Goals Supported Affordable Housing
Needs Addressed Affordable Housing
Funding CDBG: $73,135
Description Preserves affordable housing by transforming homes through critical
repairs and accessibility modifications, at no cost to the service
recipient. The majority of the low-income homeowners served will be
elderly seniors and/or people with disabilities, who are physically and
financially unable to maintain safe living conditions for themselves and
their families Eligible Activity (Matrix Code):14A. CDBG National
Objective: LMH
7
Target Date 6/30/2023
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Estimate the number
and type of families
that will benefit from
the proposed activities
4 households
Location Description Citywide
Planned Activities Provide home safety repairs, mobility, and accessibility improvements
for low- income households in Palo Alto with the primary consideration
being the correction of safety hazards.
Project Name Mitchell Park Place 525 E. Charleston Road
Target Area Citywide
Goals Supported Affordable Housing Strengthen Neighborhoods
Needs Addressed Affordable Housing Community Services and Public Improvements
Funding CDBG: $356,330
Description The City intends to use the CDBG Funds for public facilities
improvements near the proposed Eden Housing development site.
Eden Housing is developing 50 units of affordable housing.
Approximately half the units are for persons with disabilities. The parcel
is owned by the County and will be a long-term lease with the
developer. The City intends to use CDBG funding for predevelopment
costs as per HUD regulation. Note: At the initial public comment period
for the 2022 2023 AAP, the project focused on affordable housing. The
City is reevaluating this project and the details are to be determined.
The City will follow the Citizen Participation Plan and will proceed with
protocols if a substantial amendment is required.
Target Date 6/30/2023 12/30/2023
Estimate the number
and type of families
that will benefit from
the proposed activities
TBD 50 Families will benefit from public improvements
Location Description 525 E. Charleston Road
8
Planned Activities TBD
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AP-50 Geographic Distribution - 91.420, 91.220(f)
Description of the geographic areas of the entitlement (including areas of low-income and
minority concentration) where assistance will be directed
The City allocates CDBG funds to benefit low-moderate income (LMI) households and does not have
target areas. Instead, the City focuses its services and capital improvements across the City as a whole.
Geographic Distribution
Target Area Percentage of Funds
Table 8 - Geographic Distribution
Rationale for the priorities for allocating investments geographically
Not applicable.
Discussion
Please see discussion above.
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AP-75 Barriers to affordable housing -91.420, 91.220(j)
Introduction
The incorporated and unincorporated jurisdictions within the County face barriers to affordable housing that are common throughout the Bay
Area. High on the list of market barriers is the lack of developable land, which increases the cost of available lands and increases housing
development costs. Local opposition is another common obstacle as many neighbors have strong reactions to infill and affordable housing
developments. Their opposition is often based on misconceptions, such as a perceived increase in crime; erosion of property values; increase in
parking and traffic congestion; and overwhelmed schools. However, to ensure a healthy economy the region must focus on strategies and
investment that provide housing for much of the region’s workforce – for example, sales clerkssalesclerks, secretaries, waiters, baristas,
teachers, and health service workers – whose incomes significantly limit their housing choices.
It should be noted that in a constrained housing supply market, when housing developments produce housing that is relatively affordable,
higher income buyers and renters generally outbid lower income households. A home’s final sale or rental price will typically exceed the
projected sales or rental costs. Public subsidies are often needed to guarantee affordable homes for low- and moderate-income households.
Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such
as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and
policies affecting the return on residential investment
Palo Alto is addressing the barriers to affordable housing through:
•Density Bonus Ordinance: The City recently updated its Density Bonus ordinance which lowered the eligibility requirements to qualify
for a higher density bonus percentage up to 80% as well as providing more exceptions to applicable zoning and development standards.
One significant update is if a 100% affordable development is located within a half a mile of a major transit stop, the City cannot impose
any density limits and entitled to a maximum height increase of three additional stories or 33 feet.
•Below Market Rate (BMR) Housing Program: Established in 1974, the City’s BMR requires developers to provide a certain percentage
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of units as BMR in every approved project of three units or more. The program originally required that for developments on sites of less
than five acres, the developer must provide 15 percent of the total housing units as BMR housing units. If the site was larger than five
acres, the developer was required to provide 20 percent of the units as BMR housing. The City of Palo Alto have historically used in-lieu
fees and the use of development impact fees charged on new, market-rate housing and/or commercial development to finance 100%
affordable developments. The City updated its Commercial and Residential Impact Fee Nexus Studies and adopted two ordinances to
make changes to its BMR program and adopted a new fee structure. The ordinances became effective on June 19, 2017.
•Fair Housing: The City provides funding to Project Sentinel. Project Sentinel provides expertise in fair housing law and tenant-landlord
disputes. Services include information, referrals, community outreach and education. In addition, Project Sentinel resolve fair housing
complaints via investigation, mediation, education and outreach to both property owners and tenants about fair housing policies.
•Housing Incentive Program (HIP): Effective May 2, 2019, this Ordinance adopted changes to the following zoning districts: Citywide –
where multifamily uses are permitted, Multifamily Residential Districts (RM), Downtown (CD-C), California Avenue (CC ((2)), and El
Camino Real (CS and CN).
•Affordable Housing (AH) Combining District: In 2018, The City Council adopted the Affordable Housing Combining District to provide
flexible development standards beyond the State Density Bonus Law to allow 100% affordable housing projects located in a commercial
zoned area.
•Workforce Housing (WH) Combining District: The City Council also adopted in 2018 the Workforce Housing Combining District to
encourage the development of housing within half-mile of major fixed rail transit by modifying flexible development standards for the
public facilities (PF) zoning district.
Discussion
Please see above.
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AP-85 Other Actions - 91.420, 91.220(k)
Introduction
This section discusses the City’s efforts in addressing the underserved needs, expanding, and preserving
affordable housing, reducing lead-based paint hazards, and developing institutional structure for
delivering housing and community development activities.
Actions planned to address obstacles to meeting underserved needs
The diminishing amount of funds continues to be the most significant obstacle to addressing the needs
of underserved populations. To address this, the City supplements its CDBG funding with other
resources and funds, such as:
•In FY2020-21, The City’s Human Service Resource Allocation Process (HSRAP) provided $549,306
from the General Fund in support of human services. The HSRAP funds, in conjunction with the
CDBG public service funds, are distributed to local non-profit agencies. Additionally,
approximately $50,000 was provided to nonprofit organizations serving Palo Alto residents with
short-term and/or urgent funding to address emergency, critical or emerging human services
needs through the Emerging Needs Fund.
•The Palo Alto Commercial Housing Fund is funded with mitigation fees provided under Palo
Alto’s BMR housing program from developers of commercial and industrial projects and used to
assist new housing development or the acquisition, rehabilitation, or the preservation of existing
housing for affordable housing
•The Palo Alto Residential Housing Fund is funded with mitigation fees provided under Palo Alto’s
BMR housing program from residential developers and money from other miscellaneous
sources, such as proceeds from the sale or lease of City property. The Residential Housing Fund
is used to assist new housing development or the acquisition, rehabilitation, or the preservation
of existing housing for affordable housing.
•The City’s Below Market Rate Emergency Fund was authorized in 2002 to provide funding on an
ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and
preservation of the City’s stock of BMR ownership units.
•HOME Program funds are available on an annual competitive basis through the State of
California HOME program, and the County’s HOME Consortium.
•The Housing Authority of the County of Santa Clara (HACSC) administers the federal Section 8
program countywide. The program provides rental subsidies and develops affordable housing
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for low-income households, seniors and persons with disabilities living within the County.
Actions planned to foster and maintain affordable housing
The City will foster and maintain affordable housing by continuing the following programs and
ordinances:
•The Below Market Rate Emergency Fund which provides funding on an ongoing basis for loans
to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s
stock of BMR ownership units.
•The Commercial Housing Fund and Residential Housing Fund are used to assist new housing
development or the acquisition, rehabilitation, or the preservation of existing housing for
affordable housing.
•The Density Bonus Ordinance adopted by the City Council in January 2014. The density bonus
regulations allow for bonuses of 20 to 35 percent, depending on the amount and type of
affordable housing provided.
•The City’s participation in the County's HOME Consortium will allow developers of affordable
housing projects to be eligible to competitively apply through an annual RFP process directly to
the County for HOME funds to help subsidize affordable housing projects in Palo Alto, including
acquisition, construction, and rehabilitation.
Actions planned to reduce lead-based paint hazards
The City’s housing and CDBG staff provides information and referral to property owners, developers,
and non-profit organizations rehabilitating older housing about lead-based paint (LBP) hazards. Any
house to be rehabilitated with City financial assistance is required to be inspected for the existence of
LBP and LBP hazards. The City will provide financial assistance for the abatement of LBP hazards in units
rehabilitated with City funding. The City also requires that contractors are trained and certified in an
effort to decrease the risk of potential use of LBP in new units. All development and rehabilitation
projects must be evaluated according to HUD’s Lead Safe Housing Rule 24 CFR Part 35.
Actions planned to reduce the number of poverty-level families
The City, in its continuing effort to reduce poverty, will prioritize funding agencies that provide direct
assistance to the homeless and those in danger of becoming homeless. In FY 2022-2023, these programs
will include the following:
•LifeMoves provides basic necessities for persons who are homeless or at risk of becoming
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homeless. The Opportunity Services Center is a comprehensive, one-stop, multi-service, day
drop-in center that provides critical services for homeless Palo Alto residents. Specifically, the
facility provides showers, laundry, clothing, snacks, case management, and shelter/housing
referral services.
•Alta Housing will provide counseling and supportive case management services for low-income
residents of single-room occupancy facilities to help them maintain housing stability. Activities
include financial counseling, health maintenance, information and referral, problem solving,
employment assistance, crisis intervention, and case management.
Actions planned to develop institutional structure
•Regular bi-weekly meetings between entitlement jurisdictions at the CDBG Coordinators
Meeting and Regional Housing Working Group.
•Joint jurisdiction Request for Proposals and project review committees.
•Coordination on project management for projects funded by multiple jurisdictions.
•HOME Consortium meetings between member jurisdictions for affordable housing projects.
Actions planned to enhance coordination between public and private housing and social
service agencies
The City benefits from a strong jurisdiction and region-wide network of housing and community
development partners, such as the County and the Continuum of Care. To improve intergovernmental
and private sector cooperation, the City will continue to participate with other local jurisdictions and
developers in sharing information and resources.
In addition to the actions listed above, the City will continue to coordinate with the City’s human
services funding efforts to comprehensively address community needs.
Discussion
Please see discussions above.
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Program Specific Requirements
AP-90 Program Specific Requirements - 91.420, 91.220(l)(1,2,4)
Introduction
The following provides additional information about the CDBG program income and program
requirements.
Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the
Projects Table. The following identifies program income that is available for use that is included in
projects to be carried out.
1. The total amount of program income that will have been received before the start of the next
program year and that has not yet been reprogrammed 0
2. The amount of proceeds from section 108 loan guarantees that will be used during the year to
address the priority needs and specific objectives identified in the grantee's strategic plan.0
3. The amount of surplus funds from urban renewal settlements 0
4. The amount of any grant funds returned to the line of credit for which the planned use has not
been included in a prior statement or plan 0
5. The amount of income from float-funded activities 0
Total Program Income:0
Other CDBG Requirements
1. The amount of urgent need activities 0
2. The estimated percentage of CDBG funds that will be used for activities that
benefit persons of low and moderate income.Overall Benefit - A consecutive period
of one, two or three years may be used to determine that a minimum overall
benefit of 70% of CDBG funds is used to benefit persons of low and moderate
income. Specify the years covered that include this Annual Action Plan.70.00%
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Discussion
Please see discussion above.
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Attachments
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Citizen Participation Comments
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Grantee SF-424's and Certification(s)
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: April 17, 2023
Staff Report:2303-1218
TITLE
Staff Recommends that Council Approve Bringing the Water and Wastewater Rate Proposals to Council
on June 19, 2023, Pending Proposition 218 Notifications, for a Public Hearing to Consider Two
Resolutions: 1) Approving the Fiscal Year 2024 Wastewater Collection Utility Financial Plan, Proposed
Reserve Transfers, and Increasing Wastewater Collection Utility Rates by Amending Wastewater
Collection Rate Schedules S-1, S-2, S-6 and S-7; 2) Approving the Fiscal Year 2024 Water Utility Financial
Plan, Proposed Reserve Transfers, and Increasing Water Rates by Amending Water Rate Schedules W-1,
W-2, W-3, W-4, and W-7; CEQA Status: Not a project under Public Resources Code 15378(b)(5)
RECOMMENDATION
Staff recommends that Council direct staff to proceed with Proposition 218 notification of Water and
Wastewater Rate changes recommended by Finance Committee on March 21, 20231, and agendize a
public hearing for these rates on June 19, 2023. For the Water Financial Plan, staff presented a plan with
a 3% distribution rate increase to the Finance Committee (Staff Report 2301-1011)2 on March 7, 2023, but
on March 21, 2023 revised this recommendation to a 2% water distribution rate increase and the Finance
Committee agreed with the staff recommendation. Staff will incorporate those changes and attach the
updated Financial Plan and rate sheets to the June 19, 2023 Council report. The Finance Committee
recommended approval of the Wastewater Financial Plan as written in Staff Report 2302-09443 and staff
will include the Financial Plan and supporting documents in the June 19, 2023 Council report for Council
consideration of the Wastewater Collection rate increase.
Finance Committee recommended the Council adopt the following resolutions, after notice of the
proposed rate changes is sent as required by Proposition 218:
1. For the Water Utility, a Resolution:
a. Approving the FY 2024 Water Utility Financial Plan, including a 2% water distribution rate
increase; and
1 Finance Committee Staff Report
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11228
2 Finance Committee Staff Report 2301-1011
https://cityofpaloalto.primegov.com/meeting/document/1759.pdf?name=Staff%20Report
3 Utilities Advisory Commission Staff Report 2302-0944
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/utilities-advisory-
commission/archived-agenda-and-minutes/agendas-and-minutes-2023/03-mar-2023/03-01-2023-item-1.pdf
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b. Approving a transfer of up to $3.746 million from the Capital Improvement Program (CIP)
Reserve to the Operations Reserve in FY 2023; and
c. Approving a transfer of up to $3.0 million from the Rate Stabilization Reserve to the
Operations Reserve in FY 2023; and
d. Increasing Water Utility Rates via the Amendment of Rate Schedules W-1 (General
Residential Water service), W-2 (Water Service from Fire Hydrants), W3 (Fire Service
Connections), W-4 (Residential Master-Metered and General Non-Residential Water
Service), and W-7 (Non-Residential Irrigation Water Service)
2. For the Wastewater Collection Utility, a Resolution4:
a. Approving the Fiscal Year 2024 Wastewater Collection Financial Plan5, including a 9%
wastewater rate increase; and
b. Approving a transfer of up to $3.178 million from the Capital Improvement Projects Reserve
to the Operations Reserve in FY 2023; and
c. Approving a transfer of up to $342 thousand from the Rate Stabilization Reserve to the
Operations Reserve in FY 2023; and
d. Increasing the Wastewater Collection Utility Rates via the Amendment of Rate Schedules6 S-
1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection
and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial
Wastewater Collection and Disposal – Industrial Discharger)
EXECUTIVE SUMMARY
In March 2023, the Utilities Advisory Commission (UAC) and Finance Committee reviewed the proposed
rate changes recommended by Staff for Fiscal Year (FY) 2024. The overall system average proposed rate
changes are a 9% increase for wastewater, and 6% increase for water. This report summarizes the Water
and Wastewater utilities rate proposals. Drivers of the rate changes include rising costs of construction
inflation, commodity prices and the rising cost to transport water. Additionally, infrastructure is aging and
investment is needed to maintain the health of utilities and protect reliability.
This report requests Council approve moving forward with Proposition 218 customer notifications of the
rate proposals recommended by the Finance Committee on March 21, 2023, with a Council public hearing
on June 19, 2023 for Water and Wastewater utility rate changes. If approved, staff would proceed with
Proposition 218 customer notifications and update the Financial Plans and proposed rate sheets for the
water and wastewater utilities to reflect the motion above.
4 Draft Wastewater Resolution https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/attachments/03-01-2023-id-2301-0798-ww-resolution.pdf
5 Fiscal Year 2024 Wastewater Financial Plan https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/attachments/03-07-2023-id-2302-0944-ww-financial-plan-lisa.pdf
6 Wastewater Rate Schedules https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/attachments/03-07-2023-id-2302-0944-attachment-b-ww-rate-
schedules.pdf
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BACKGROUND
Water
Utilities staff presented to the UAC on March 1, 20237, the Finance Committee on March 7, 20238 and
March 21, 20239 a recommendation that Council approve the FY 2024 Water Utility Financial Plan as
follows:
Staff recommended the following transfers at the end of FY 2023:
1. up to $3.746 million from the Capital Improvement Program (CIP) Reserve to the Operations
Reserve in FY 2023; and
2. up to $3.0 million from the Rate Stabilization Reserve to the Operations Reserve in FY 2023; and
Staff also recommended the following rate actions for FY 2024:
3. An increase to retail Water Distribution Utility Rates W-1 (General Residential Water service),
W-2 (Water Service from Fire Hydrants), W3 (Fire Service Connections), W-4 (Residential
Master-Metered and General Non-Residential Water Service), and W-7 (Non-Residential
Irrigation Water Service) of 2% effective July 1, 2023
The Finance Committee unanimously recommended approval of this proposal on March 21, 2023.
Wastewater Collection
Utilities staff presented to the UAC on March 1, 2023,10 the Finance Committee on March 7, 202311 and
March 21, 202312 a recommendation that Council approve the FY 2024 Wastewater Utility Financial Plan
as follows:
Staff recommended the following transfers at the end of FY 2023:
1. up to $3.178 million from the Capital Improvement Projects Reserve to the Operations Reserve;
and
2. up to $342 thousand from the Rate Stabilization Reserve to the Operations Reserve; and
Staff also recommended the following rate actions for FY 2024:
3. An increase to retail Wastewater Collection Utility Rates S-1 (Residential Wastewater Collection
and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant
7 Utilities Advisory Commission March 1, 2023 Meeting
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/utilities-advisory-
commission/archived-agenda-and-minutes/agendas-and-minutes-2023/03-mar-2023/03-01-2023-agenda-and-
packet.pdf
8 Finance Committee March 7, 2023 Staff Report 2302-1011
https://cityofpaloalto.primegov.com/meeting/document/1759.pdf?name=Staff%20Report
9 Finance Committee March 21, 2023 Staff Report 2302-1125
https://cityofpaloalto.primegov.com/meeting/document/1871.pdf?name=Item%201%20Staff%20Report
10 Utilities Advisory Commission March 1, 2023 Meeting
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/utilities-advisory-
commission/archived-agenda-and-minutes/agendas-and-minutes-2023/03-mar-2023/03-01-2023-item-1.pdf
11 Finance Committee Staff Report 2302-0944
https://cityofpaloalto.primegov.com/meeting/document/1691.pdf?name=Staff%20Report
12 Finance Committee Staff Report 2302-1107
https://cityofpaloalto.primegov.com/meeting/document/1852.pdf?name=Item%202%20Staff%20Report
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Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal –
Industrial Discharger) of 9% effective July 1, 2023
When staff first made this recommendation to the Finance Committee at the March 7, 2023 meeting the
Finance Committee did not approve it, but instead asked staff to return with additional information for
further evaluation for the Wastewater Utility. When staff returned to the Finance Committee on March
21, 2023 the Committee unanimously recommended approval of this proposal after reviewing the
additional information.
ANALYSIS
Refer to the study session report 2304-1247 on the Council’s agenda tonight (April 17, 2023).
TIMELINE
By approving this item the Council would approve moving forward with rate proposals to the Council for
a public hearing on June, 19, 2023; staff will provide notice to customers in accordance with Proposition
218 requirements during April and May. Additionally, for the water commodity pass-through rate, staff
expects SFPUC to vote on a wholesale water rate increase in May that will become effective July 1, 2023.
Upon final approval of the wholesale rate increase by the SFPUC, staff will provide Palo Alto customers
with notice of any adjustments to the wholesale rate increase and pass through the increase.
Should the City Council take action to approve any of these rates, they will become effective July 1, 2023.
FISCAL/RESOURCE IMPACT
Refer to the study session report 2304-1247 on the Council’s agenda tonight.
STAKEHOLDER ENGAGEMENT
On March 1, 202313 the Utilities Advisory Commission (UAC) reviewed and approved the FY 2024
Water and Wastewater Collection Utility Financial Plans and Rate Proposals.
On March 7, 202314, the Finance Committee reviewed the FY 2024 Water and Wastewater
Collection Utility Financial Plans and Rate Proposals. The Finance Committee approved the Water
Utility proposals and asked staff to return with additional information for further evaluation for
the Wastewater Utility.
13 Utilities Advisory Commission Meeting of March 1, 2023
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/utilities-advisory-
commission/archived-agenda-and-minutes/agendas-and-minutes-2023/03-mar-2023/03-01-2023-agenda-and-
packet.pdf
14 Finance Committee Meeting March 7, 2023
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11235
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On March 21, 202315, the Finance Committee reviewed the FY 2024 Water, and Wastewater
Collection Financial Plans and Rate Proposals and unanimously approved the Water and
Wastewater Collection Proposals.
ENVIRONMENTAL REVIEW
APPROVED BY:
15 Finance Committee Meeting March 21, 2023
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11228
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: April 17, 2023
Report #:2303-1152
TITLE
Adoption of a Memorandum of Agreement with the Palo Alto Police Officers' Association and
the Police Management Association; Adopt an Amendment to correct the Fire Chiefs‘
Association salary schedules; and, Adopt revised Management and Professional salary
schedules CEQA Status - Not a project
RECOMMENDATION
Staff recommends that Council:
1. Adopt a new memorandum of agreement between the City of Palo Alto and the Palo
Alto Police Officers' Association (PAPOA) effective upon adoption through June 30, 2025
(Attachment A) and corresponding salary schedule (Attachment C), and
2. Adopt a new memorandum of agreement between the City of Palo Alto and the Palo
Alto Police Management Association (PMA) effective upon adoption through June 30,
2025 (Attachment B) and corresponding salary schedule (Attachment D), and
3. Adopt a corrected Fire Chiefs‘ Association (FCA) salary schedule (Attachment E,
corrected from February 27, 2023), and
4. Adopt revised Management and Professional salary schedules, effective December 31,
2022 through June 30, 2025 (Attachment F, revised from December 19, 2022).
BACKGROUND
In accordance with California state law regulating local public agencies, the City of Palo Alto
(City) meets and confers in good faith with our recognized labor organizations. The team of
negotiators representing the City, comprised of Human Resources staff, outside counsel and
management representatives, met with labor representatives and successfully reached
Tentative Agreement on successor Memoranda of Agreement (MOA).
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The Palo Alto Police Officers’ Association (POA) currently has 76 FTE that are covered under the
MOA. Employees in this unit include the City’s Police Officers, Police Agents and Police
Sergeants. The Palo Alto Police Managers’ Association (PMA) currently has 6FTE that are
covered under the MOA including the classifications of Lieutenant and Captain. Employees
within PMA provide middle and upper-level management for the Police Department’s
personnel and training, field services including patrol and police response, and investigative
services. The prior agreement with POA and PMA was in effect until December 31, 2022 and
a summary of the agreement terms is included in this memo and the proposed MOAs are
attached to this report.
The Fire Chief’s Association reached agreement with the City and the new Memorandum of
Agreement was approved on February 27, 2023.1
ANALYSIS
In alignment with the citywide workforce strategy on recruitment and retention, the parties
negotiated the following terms and conditions targeting competitive market placement and
prioritizing salary and flexibility in benefits increasing employee choice. When coming to
agreement on the prior contract in 2018, the City faced significant vacancies in the Police
Department and recognized the cost and challenges of turnover. The impact of each loss of an
officer is estimated at $200,000 in turnover costs, 12 to 18 months to train a new officer and
the loss of experience and institutional knowledge. The prior agreement helped stabilize
vacancies; however, with the continued industry-wide sparseness of applicants it remains
critical for the City to continue to provide competitive wages and benefits to support workforce
retention. Recent exit survey results identify the top reasons for separation include career
advancement, higher salary, commute, and cost-of-living.
After evaluating the City’s current market placement for these groups in accordance with the
MOA, the MOAs before Council are intended to hold Palo Alto’s targeted competitive market
placement and provide continued uninterrupted services for the community.
The following summarizes the changes to the terms of the agreement with POA and PMA:
•A 2.5 year contract term ending June 30, 2025.
•Targeted market adjustment of 5% upon adoption.
•4% general salary increase in the first full pay period following July 1, 2023, and 4%
general salary increase in the first full pay period following July 1, 2024.
1 City Council February 27, 2023, Agenda Item #3, Staff Report 2301-0906
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•Changes to specific specialty pays
o POA: Traffic Team premium; Field Training Officer pay (for term of contract only)
o PMA: POST Management Education Certification
•Health Benefits Contributions – City’s contributions will be increased to a maximum of
$2,260 per month for calendar year 2023. This contribution, which reflects a 4%
increase, brings POA and PMA into alignment with other groups including International
Association of Firefighters (IAFF), FCA and Management and Professional employees and
will not increase in Year 2 of the contract; employees will instead be provided with
flexible compensation to increase employee choice.
•Flexible Compensation – increase base salary in order to provide more flexibility for
employees with different goals and interests allowing choices for employees
o $100 per month compensation upon adoption
o Additional $100 per month (for a total of $200/month) effective January 2024
•Addition of one floating holiday in recognition of days of historical significance (in-lieu
Holiday Pay)
Salary Schedule Corrections & Revisions:
Fire Chiefs‘ Association (FCA)
Staff recommends adopting the corrected salary schedule for the Fire Chiefs‘ Association (FCA).
A decimal error was made in the calculation of the salary schedule presented and adopted by
City Council on February 27, 2023 (Agenda Item #3). Attachment E to this report reflects the
corrected salary schedule for the Fire Chief’s Association for Council adoption.
Management and Professional Salary Schedule
Staff recommends adopting the revised Management and Professional salary schedule
(Attachment F) adopted by Council on December 19, 20222 (ID#15004) for the following
classifications in the unrepresented Management and Professional group: Fire Chief, Deputy
Fire Chief, and Fire Marshal. These classifications supervise the staff in the FCA and/or the IAFF
Firefighters group and their salary ranges were impacted by the FCA market adjustments (over
term of Fire contracts, a 12% market adjustment was approved). The adjustment to these
ranges are recommended in order to maintain an internal spread between the represented
classifications that is consistent with the City’s practices. The City Manager will review and
2 City Council December 19, 2022, Item #7, Staff Report 15004,
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82159
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approve adjustments for these classifications within authority outlined in the Management and
Professional Compensation Plan.
FISCAL/RESOURCE IMPACT
Total Contract
Over 2.5-yr Term
% Budget Change
Over 2.5-yr Term
Annual Ongoing
Cost
POA
PMA
STAKEHOLDER ENGAGEMENT
ATTACHMENTS
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APPROVED BY:
Sandra Blanch, Human Resources Director
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Palo Alto
Peace Officers' Association
Memorandum of Agreement
July 1, 2018April 10January 1,
2023-June 30, 20212025
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TABLE OF CONTENTS
PREAMBLE 1
Section 1. Recognition 1
Section 2. No Discrimination 1
Section 3. Association Security 2
Section 4. Payroll Deduction 2
Section 5. No Strikes 2
Section 6. Probationary Period 3
Section 7. Salary Provisions 4
Section 8. Night Shift Differential 9
Section 9. Paid Holidays 9
Section 10. Working Out of Class Pay 10
Section 11. Retention/Career Incentive Program (Special Compensation) 11
Section 12. Dependent Care Assistance Program 11
Section 13. Court Pay 12
Section 14. Health Plans 12
Section 15. Dental Benefits 15
Section 16. Life Insurance Benefits 16
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Section 17. Effective date of Coverage for New Employees 16
Section 18. Retirement Benefits 16
Section 19. Retirement Medical Plan 18
Section 20. Psychological Counseling Program 20
Section 21. Uniforms 20
Section 22. Work Schedule 21
Section 23. Overtime Pay and Compensatory Time Off 34
Section 24. Overtime Sign-Up 35
Section 25. Jury Duty 36
Section 26. Vacation Accrual 36
Section 27. Use of Vacation 37
Section 28. Vacation Pay at Termination 39
Section 29. Vacation Benefits for Deceased Employees 39
Section 30. Effect of Extended Military Leave 39
Section 31. Sick Leave 39
Section 32. Leaves of Absence Without Pay 42
Section 33. Leave of Absence With Pay 43
Section 34. Reduction in Force 44
Section 35. Agents 44
Section 36. Commute Incentives and Parking in Civic Center Garage 44
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Section 37. Disciplinary Action and Unsatisfactory Work or Conduct 45
Section 38. Grievance Procedure 47
Section 39. Bulletin Boards and Telephones 50
Section 40. Access to Association Representatives 50
Section 41. Meeting Places 51
Section 42. Voluntary Leave Program: 51
Section 43. Utilization of Reserves for Field Services Division Events 52
Section 44. Overtime Meals for Investigative Services Division 53
Section 45. Hiring Incentives 53
Section 46. Full Understanding 54
Section 47. Printed Agreement 55
Section 48. Duration 55
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MEMORANDUM OF AGREEMENT
CITY OF PALO ALTO and PALO ALTO PEACE OFFICERS' ASSOCIATION
July 1, 2018 2021April 10, 2022January 1, 2023- June 30, 20212025
PREAMBLE
This Memorandum of Agreement is pursuant to and subject to Sections 3500-3510 of the
Government Code of the State of California, the Charter of the City of Palo Alto, and the City of
Palo Alto Merit System Rules and Regulations. (This Memorandum of Agreement made and
entered into at Palo Alto, California, by and between the City of Palo Alto, a municipal
corporation (hereinafter referred to as "City") and the Palo Alto Peace Officers' Association,
Incorporated, a California corporation (hereinafter referred to as "Association"), is intended to
define agreements reached during the meet and confer process concerning wages, hours,
working conditions, and other terms and conditions of employment for the represented group
of employees.
Section 1. Recognition
The City recognizes the Association as the exclusive representative of an employee group
consisting solely of Police Officer Trainees, Police Officers, Police Agents, and Police Sergeants
who are regularly employed by the City and others who might be amended into the
representation unit from time to time under existing law and the Merit System Rules and
Regulations.
Section 2. No Discrimination
(a) The Association and the City hereby agree that there shall be no discrimination
because of race, color, age, disability, sex, sexual orientation, national origin,
political or religious affiliation, or any other protected classification as provided by
applicable local, state or federal law. There shall be no discrimination in
employment conditions or treatment of employees on the basis of membership or
non-membership in the Association, or participation in the lawful activities of the
Association.
(b) The Association and the City hereby agree to protect the rights of all employees to
exercise their free choice to join the Association and to abide by the express
provisions of applicable State and local laws.
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Section 3. Association Security
(a) When a person is hired in any of the covered job classifications, the City shall notify
that person that the Association is the recognized bargaining representative for the
employee in said Unit and give the employee a current copy of the Memorandum of
Agreement.
(b) If there is no disruption of work, members of the Association Board of Directors may
use a reasonable amount of on-duty time without loss of pay to attend to
Association business specifically related to representation of employees. Such
release time must be cleared in advance by the appropriate division manager who is
a member of management.
For purposes of this section, representation shall include:
(i) Meetings with represented employees or management related to a grievance or
disciplinary action, including investigation and preparation time.
(ii) A meeting with management related to benefits, working conditions or other terms
and conditions of employment.
Section 4. Payroll Deduction
The City shall deduct Association membership dues and any other mutually agreed upon
payroll deduction from the bi-weekly pay of member employees. The dues deduction must be
authorized in writing by the employee on an authorization card acceptable to the City and the
Association. The City shall remit the deducted dues to the Association as soon as possible after
deduction.
Section 5. No Strikes
The Association, its representatives, or members, shall not engage in or cause, instigate,
encourage, sanction, or condone a strike, withholding of services, concerted abuse of leave of
absence provisions, work stoppage or work slowdown of any kind. No employee shall refuse
to cross any picket line in the conduct of Police Department business, nor shall the Association,
its representatives, or members discriminate in any way toward anyone who refuses to
participate in a strike, or any of the job actions cited above.
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Section 6. Probationary Period
(a) The probationary period for new employees entering the classifications of Police
Academy Trainee or Police Officer shall end 12 months following the successful
completion of Police Academy training. The probationary period for lateral entry
positions, where Police Academy training is waived, shall be 12 months. In the
event a probationary employee is absent for a period exceeding one-hundred and
twenty (120) hours during the probationary period, probation will be extended by
an equivalent number of duty hours.
(b) The probationary period shall be regarded as part of the testing process and shall be
utilized for closely observing all aspects of the employee's qualifications, for
ensuring the effective adjustment of a new employee to the position and for
rejecting any probationary employee who in the opinion of management is not
suitable to attain permanent status.
(c) During the probationary period a new employee may be terminated at any
time by the appointing authority without cause. The existence of cause for
termination shall not be arbitrable.
Probationary employees shall not be terminated for reasons that violate
Section 2. No Discrimination, of this Agreement, or for reasons that are
unconstitutional or unlawful.
(d) Probationary Period for New Supervisors
(1) The probationary period for newly promoted Agents and Sergeants shall end
12 months from the effective date of the promotion, excluding time off due to
any unscheduled absence or leave.
(2) The probationary period shall be regarded as part of the testing process and
shall be utilized for closely observing all aspects of the employee’s qualifications,
for ensuring the effective adjustment of a newly promoted employee to the
position and for rejecting any newly promoted probationary employee who in
the opinion of management is not suitable to attain permanent status in the
newly promoted rank.
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(3) During the 12 month promotional probationary period the newly promoted
employee shall be evaluated by his/her direct supervisor on a quarterly basis.
(4) Any on-going and/or significant perceived deficiencies in the probationary
employee’s work performance or supervisory aptitude shall be promptly
communicated to the employee. When appropriate, the employee shall be
provided with additional training and given opportunities to demonstrate their
performance in response to the training. Such perceived deficiencies, any related
training, and performance improvement or lack of response to training shall be
documented by the employee’s supervisor and recorded in the employee’s
quarterly evaluation for the quarter(s) in which the matter was addressed.
(5) During the promotional probationary period, a newly promoted employee
may be demoted to their previous rank at any time by the appointing authority if
the employee demonstrates a lack of suitability for the newly promoted position.
The demotion shall be based upon deficiencies in the performance or aptitude
that have been addressed and documented as outlined in subsection (5). The
existence of cause for demotion shall not be arbitrable. Promotional
probationary employees shall; not be demoted for reasons that violate Section 2
of the Memorandum of Agreement, No Discrimination; or for reasons that are
unconstitutional or unlawful.
(6) In the event that management elects to demote an employee during his or
her probationary period, pursuant to subsection (6), the affected employee may
request a hearing with the Chief of Police. The hearing shall be held promptly
and prior to the intended effective date of demotion, so as to afford the
employee with a meaningful and timely opportunity to respond to the stated
reason(s) for demotion.
Section 7. Salary Provisions
(a) General Salary Increase. Effective the first full pay period following adoption of this
MOA by City Council, salary ranges of all represented classifications will be increased by
three percent (3%).Market Adjustment: Effective the first full pay period including City
Council Adoption, salary ranges of all bargaining unit classifications will be increased by
five percent (5.0%), which is sufficient to bring them to the top quartile of market
median as determined by the City’s market study.
(b) Equity Adjustment: Effective the first full pay period following adoption of this MOA by
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City Council, salary ranges of all represented classifications will be increased by one and
three quarters percent (1.75%).General Salary Increase: Effective the first full pay period
following July 1, 2023, salary ranges of all represented classifications will be increased by
four percent (4.0%).
(c) General Salary Increase. Effective the first full pay period folllowing July 1, 2019 salary
ranges of all represented classifications will be increased by threepercent (3%).2024
salary ranges of all represented classifications will be increased by four percent (4.0%.)
(d) Equity Adjustment: Effective the first full pay period followingJuly 1, 2019, salary ranges of all
represented classifications will be increased byforty five one hundredths of a percent
(0.45%).Flexible Compensation: Effective the first full pay period following City Council
Adoption, and in lieu of an increase to the City contribution towards medical premiums,
each represented classification will have their monthly income increased by $100.
(e) General Salary Increase. Effective the first full pay period following July 1, 2020, salary
ranges of all represented classifications will be increased by three percent (3%).Flexible
Compensation: Effective the first full pay period following January 1, 2024, and in lieu of
an increase to the City contribution towards medical premiums, each represented
classification will have their monthly income increased by an additional $100 (total of
$200).
(f) Total Compensation and Survey Database. Management and the Union have agreed to a
compensation survey database structure. Survey Cities include: Alameda, Berkeley,
Concord, Fremont, Hayward, Milpitas, Mountain View, Redwood City, San Leandro, San
Mateo, Santa Clara, Vallejo, and Walnut Creek. Compensation Criteria includes: top step
salary, maximum longevity, maximum education/POST, uniform allowance, holiday pay,
deferred compensation, employee pick up of employer pension costs (Negative EPMC),
and maximum City paid benefits (medical, dental, vision, life insurance, LTD, and EAP).
The database is intended to provide one source of information concerning how the
compensation paid to employees in bargaining unit job classifications compares to that
paid by other employers.
(g) Salary Steps & Ranges (Eligibility)
New officers attending the basic police academy will be compensated at the “Police
Trainee” level.
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Academy Graduates and Lateral Officers with less than two years experience will be
compensated at the “Police Officer” “Step 1” Level or higher.
Jr. First Class Exam: Officers become eligible to take the exam anytime after they
complete the Field Training Program. However, the pay increase will not become
effective until they have successfully completed the test and have been with the
department for a year from the academy graduation (Laterals a year from hire date).
For employees hired prior to July 1, 2018, the pay increase for Jr. First Class is
compensated at the “Police Officer” “Step 4” level (Approximate 5% Increase). For
employees hired on or after July 1, 2018, the pay increase for Jr. First Class is one step
on the salary schedule (approximate 5% increase), no higher than Step 4.
First Class Exam: Officers become eligible to take the exam any time after they have
successfully completed the Jr. First Class Exam. However, the pay increase will not take
effect until one year from the date of the merit increase for the Jr. First Class exam.
(Lateral officers’ pay increase may be effective one year from the date of hire) For
employees hired prior to July 1, 2018, the pay increase for First Class is compensated at
the “Police Officer” “Step 5” Level (Approximate 5% Increase). For employees hired on
or after July 1, 2018, the pay increase for First Class is one step on the salary schedule
(approximate 5% increase), no higher than Step 5.
Effective the first full pay period following adoption of this MOA by City Council, the City
will Implement a new step 6 following the same percentage difference as steps 1-5.
Employees with one (1) year or more of service with the City of Palo Alto at Step 5 will
be moved to Step 6.
(h) POST Certificate/Incentives
Basic Post: Officers become eligible upon completion of their probationary period.
The certificate must be obtained within 18 months of hire date. (No Salary Increase)
Intermediate POST: Employees that qualify for the Intermediate POST certificate will be
compensated at the corresponding salary schedule (e.g., “Police Officer/Inter”), effective
the first full pay period after the employee provides proof of submission of the required
paperwork to POST (approximate 5% increase).
Advanced POST: Employees that qualify for the Advanced POST certificate will be
compensated at the corresponding salary schedule (e.g., “Police Officer/Adv”), effective
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the first full pay period after the employee provides proof of submission of the required
paperwork to POST (approximate 2.5% increase).
Employees are responsible for contacting Personnel & Training in order to arrange taking
tests and application for POST certificates.
(i) Special assignment premium pay
Effective with the pay period including July 1, 2001, biweekly premium pay for
employees assigned to the indicated specialties will be as follows:
Field Training Premium: 5% of base pay per pay period.
Applies to management-assigned Officers and Agents and Traffic Team members during
each pay period in which they provide training to police recruits, Community Service
Officers or Level II reserve officers who are working on their Level I certificate. Applies
to management-assigned FTO Sergeants during each pay period in which they supervise
assigned FTO Officers or Agents who are actively training police recruits, Community
Service Officers or Level II reserve officers who are working on their Level I certificate.
The parties agree that, for the period beginning the first full pay period following the City
Council adoption of the agreement and ending the last full pay period in June 2025,
Officers, Agents and Traffic Team members who management designates as Field
Training Officers and Sergeants designated as FTO Sergeants will Receive the 5% FTO
premium for all pay periods, without regard to whether they are assigned a police
recruit during that pay period. The Parties also agree to revisit this section to determine
whether to continue this program prior to June 30, 2025.
Traffic Premium: 5% of base pay per pay period.
Effective the first full pay period following City Council adoption of the MOA in 2023,
Officers, Agents and Sergeants who management assigns to routinely and consistently
operate or patrol on a motorcycle.
K-9 Program Premium: 5% of base pay per pay period.,
Effective January 1, 2008, K-9 Officers/Agents shall receive 5% of base pay per pay
period to compensate for the time spent by the K-9 Officer/Agent outside regularly
scheduled work hours to feed, groom, house, exercise, attend to the medical and dental
needs of and otherwise maintain the dog.
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Bilingual Premium: 5% of base pay per pay period.
Applies to representation unit employees certified by management as proficient in other
languages as outlined below.
(i) Approved Languages
Spanish, Chinese (Mandarin and Cantonese), Japanese, Tagalog, Korean,
Vietnamese, Russian, American Sign Language, and such other languages as
determined by management.
(ii) Proficiency Requirements
Officers, Agents, and Sergeants who pass a basic “first responder” proficiency test
administered by a professional linguist will be eligible for bilingual pay. This
proficiency test will be a one time test to ensure the candidate has the ability to
verbally communicate (with the exception of American Sign Language) as a first
responder in the selected Language. First responder proficiency will include, but is
not limited to, the ability to take basic crime and accident reports; issue a citation
and explain the court process; complete a field interview card; give directions; give
a Miranda admonition; and generally be able to communicate with a non-English
speaking person in need of basic police services.
Study material will be provided by the City to all employees to assist in test
preparation.
(iii) Testing Process
In order to best accommodate the wide range of languages, proficiency testing will
be conducted by professional linguists outside the Police Department that have
been agreed upon by the Association and Management. A basic first responder
proficiency exam has been developed based upon the needs of the organization.
The City will pay for the initial test for each employee. Employees who do not pass
the initial test may retest as many times as necessary. However, subsequent tests
will be at the employee’s expense.
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Section 8. Night Shift Differential
(a) Night shift differential shall be paid at the rate of 5% to all FSD personnel for all hours
worked between 6:00 p.m. and 8:00 a.m.
(b) All employees covered under Section 23(d) working a regular shift between 7:00 a.m. and
7:00 p.m. shall receive 5% night shift premium for hours worked between 7:00 p.m. and
7:00 a.m.
Vacation and administrative leave pay for employees who regularly work night shifts shall include
appropriate night shift premiums, relating to night shift hours regularly worked.
Shift adjustment hours for employees who regularly work the 4-11 work schedule shall include the
appropriate night shift premium based on the percentage of usual night shift hours worked to
regular hours.
Section 9. Paid Holidays
(a) All represented employees on leave of absence without pay shall not receive in-lieu holiday
accrual during such leave, or any compensation for holidays occurring during such leave.
(b) Effective with the pay period following adoption of this MOA, eEmployees shall not receive
paid holidays, but in lieu thereof shall receive 3.462 hours straight time pay each full pay
period that they are in paid status, to a maximum payment of ninety (90) hours per year.
Effective the first full pay period following City Council adoption of the MOU in 2023, this
amount shall be increased to 3.846 hours straight time pay each pay period that they are in
paid status, to a maximum payment of one hundred (100) hours per year. Holiday hours
will be pro-rated for employees in paid status a portion of a pay period.
In-lieu hours may be taken as pay or time off. Eligible employees will elect, at the beginning
of each fiscal year, the manner in which the in-lieu hours will be taken. Hours under this
provision will accrue be paid each pay period while in a paidy status and will be paid semi-
annually in June and December. If time off is elected under this provision, such time off
may be taken to the maximum of current accrual balances and subject to management
scheduling approval. Employees working non-field services assignments shall be eligible to
use accrued holiday paid leave time balances for any of the following recognized City
holidays subject to management scheduling approval:
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January 1
Third Monday in January
Third Monday in February
Last Monday in May
July 4
First Monday in September
Second Monday in October
November 11
Thanksgiving Day
Day after Thanksgiving Day
December 25
Either December 24 or December 31, see below
A Day of Reflection in recognition of a day of the employee’s choosing,
including Juneteenth Freedom Day (June 19) or Cesar Chavez/Dolores
Huerta Day (March 31)
Additionally, effective with the pay period following adoption of this MOA, in lieu of restoring
Holiday pay to 120 hours, salary ranges of all represented classifications will be increased by 1.44%.
Section 10. Working Out of Class Pay
Officers, Agents and Sergeants working out of class for a period of four or more consecutiveshifts)
shall be compensated with the following premium pay;
Officers and Agents working as an Acting Sergeant: 7% of base pay for all shifts
Sergeants working as an Acting Lieutenant: 10% of base pay for all shifts
Agents, and Sergeants fulfilling the role of an Acting Sergeant and/or Acting Lieutenant for
individual shifts and/or a number of hours within a shift, shall not receive additional compensation.
Periodically working in this capacity shall be deemed a basic duty within an employee’s job
description.
In accordance with Government Code 20480, an employee assigned to work in an out-of-class
appointment may not exceed 960 hours worked in the appointment within a fiscal year if the
employee is appointed to an upgraded position or higher classification that is vacant during
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recruitment for a permanent appointment. This limitation does not apply to a position that is
temporarily available due to a leave of absence.
Section 11. Retention/Career Incentive Program (Special Compensation)
(a) Retention/Career Incentive Program
On July 1, 2007 the City will initiate a Retention/Career Incentive Program. It is recognized
that hiring, training, and retaining qualified law enforcement personnel is becoming
increasingly difficult, time consuming, and very expensive. This program is designed to
provide greater incentives for hiring new employees, retaining long-term employees, and
attracting quality lateral candidates from other law enforcement agencies. This program
will provide special compensation in the form of premium pay at various levels as
employees reach different career milestones. Both parties acknowledge that in the 2007
negotiations, the cost of the program was partially offset through salary and/or benefit
reductions agreed to elsewhere in this Memorandum of Agreement.
All employees with more than 10 years of service shall receive special compensation in
the form of retention pay at 3% of straight time base pay.
All employees with more than 15 years service shall receive special compensation in the
form of retention pay at 6% of straight time base pay. Maximum under this provision is
6%.
As an incentive to recruit and hire lateral law enforcement personnel from other
agencies, the following shall apply. At the Chiefs discretion, up to 5 years of full time law
enforcement service may be counted towards the years of service outlined above.
Special Compensation/Retention Pay outlined in the Retention/Career Incentive
Program shall be deemed PERSable for the purpose of income and retirement however
will not be a factor when calculating “MOU” (non-FLSA) overtime compensation.
Section 12. Dependent Care Assistance Program and Medical Flexible Spending Accounts.
The City will provide a Dependent Care Assistance Program (DCAP) and Medical Flexible
Spending Account (FSA) for employees according to the provisions of the Federal Economic
Recovery Act of 1981, Code Sections 125 and 129. With the exception of matters within the
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City’s sole control (e.g., establishment of the FSA), all matters related to the FSA shall be
excluded from the MOA grievance procedure. Disputes regarding the administration of the
plan shall be subject to the dispute resolution procedure provided by the plan document.
The FSA will be available to representation unit employees effective January 1, 2019, and remain in
effect subject to a reasonable minimum participation level and availability of third-party
administrative services at a reasonable cost.
Section 13. Court Pay
Sworn Police Personnel appearing in court or in an administrative forum in the course and scope of
their normal duties will be compensated according to the following:
or immediately preceding
or following a shift
Time and one-half for period
before or after scheduled
scheduled work day by
employees of Team #3
scheduled work day by
employees of Team #4 or
appearances
Section 14. Health Plans
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(a) PEMHCA Health Plan
During the term of this contract, the maximum City contribution towards medical premiums
for eligible full time employees per employee category shall be up to a maximum of the
following for any plan:
Medical Premium
Category Contribution* Contribution
(inc
PEMHCA
contribution)
effective from time
of ratification
Contirbution
PEMHCA
contribution)
effective Janaury 1,
2019fir
following City
Employee Only $133151.00 $804 $840871
Employee plus one $133151.00 $1606 $16801742
Employee Family $133151.00 $2088 $21802260
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.
*PEMHCA minimum changes annually. Any increases to the PEMHCA minimum during the
term of this contract 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.
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If the State of California or federal government requires the City to participate and
contribute toward coverage under any medical plan outside of PEMHCA including but not
limited to the Affordable Care Act, the City’s total liability for enrolled employees and
retirees and their eligible family members shall not exceed what the City would have paid
toward PEMHCA coverage in the absence of such state or federal plan. The parties will
meet and confer over the impact of such change on matters within the scope of
representation before implementing any change.
(b) Vision Care
The City will offer vision care coverage for employees and dependents. Coverage is
equivalent to $20 deductible Plan A under the Vision Service Plan, with monthly premiums
paid by the employer. Dependents will include domestic partners, as defined under Section
14 (c).
(c) Active Employee Domestic Partners
Active employee domestic partners whose domestic partnership is registered with the State
of California 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.
Active employee domestic partners whose domestic partnership is not registered with the
State, but who meet the requirements of the City of Palo Alto Declaration of Domestic
Partnership, and are registered with the Human Resources Department, will be eligible for a
stipend of two hundred 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
stipend.
(d) Alternative Medical Benefit Program
If a regular employee and/or the employee’s dependent(s) are eligible for and elect to
receive medical insurance through any other non-City of Palo Alto employer-sponsored or
association-sponsored 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 two
hundred eighty four dollars ($284) for each month City coverage is waived.
Examples of waivers eligible for this payment are:
• Employee waives all applicable City medical coverage; or
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• Employee is eligible to enroll his or her spouse or domestic partner 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.
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.
(e) Dual Coverage
When a City employee is married to 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
Section 15. Dental Benefits
(a) The City will maintain the present level of benefits on the City-sponsored dental program for
current employees and their dependents, except that the maximum benefits per calendar
year shall be $2,000 effective in 1988. Dental Coverage shall include composite (tooth
colored) fillings for all teeth.
(b) The City provides a 50% of reasonable charges, $2,000 lifetime maximum orthodontic
benefit for representation unit employees and their dependents.
(c) Dependents will include domestic partner, as defined under Section 14 (c).
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(d) Dental implants in conjunction with one or more missing natural teeth, and removal of
dental implants will be covered as a Major Dental Service at 50% usual, customary and
reasonable (UCR).
Section 16. Life Insurance Benefits
The City agrees to continue the basic life insurance plan as currently in effect for the term of this
Memorandum of Agreement.
Section 17. 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, and life insurance plans if these benefits are
elected.
Section 18. Retirement Benefits
(a) Safety Pension Group A: “3% at 50” Safety Retirement
The City will continue the present benefits under the Public Employees’ Retirement System
(PERS) “3 percent at 50” (3% @ 50) Retirement Formula per California Government Code
§21362.2 for employees hired before the effective date of the “3 percent at 55” (3% @ 55)
formula for new hires as described herein. The final year compensation for employees hired
under the 3% at 50 formula will continue to be the “single highest year” or the highest
average annual compensation earnable by the member during one (1) year of employment
immediately preceding retirement or the one-year period otherwise designated by the
member (Government Code 20042). Current employees continued to be covered under
Government Code 20692, Employer Paid Member Contribution, to the extent there is a City
paid member contribution in the final year.
(b) Safety Pension Group B: 3% at 55 Safety Retirement
Effective December 7, 2012, the City amended its contract with CalPERS to provide
employees hired on or after that date who are not “new members” of CalPERS as defined in
the Public Employees’ Pension reform act (often referred to as “Classic” CalPERS members)
with the CalPERS retirement formula three percent of final salary at age 55 (3% at 55), with
the final salary determination for such employees of “three highest consecutive years” based
on the highest average annual compensation earnable by the member during three (3)
consecutive years of employment immediately preceding retirement or the three year
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period otherwise designated by the member (Government Code Section 20037). This new
tier also eliminated Section 20692, Employer Paid Member Contribution.
(c) Safety Pension Group C: 2.7% at Age 57 Safety Retirement
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 point seven percent at age
57 (2.7%@57) retirement formula with a three year final compensation period.
(d) Employee Share of PERS Contribution
Employees in all sworn represented classes in Pension Groups A and B described above will
make a 12% PERS member contributions by payroll deduction.
Employees in all sworn represented classes in Pension Group C described above shall pay the
employee contribution required by the Public Employees’ Pension Reform Act, currently
calculated at fifty percent (50%) of the normal cost, plus an additional 3%.
Trainees will pay the same employee contribution as miscellaneous members while
attending Basic Academy (see section (g) below).
The City will continue to provide for member contributions to be made as allowed under the
provisions of IRS Code §414(h)(2).
(e) Additional Employee PERS Contributions
• Effective the first full pay period following July 1, 2019 or as soon as administratively
possible, all employees regardless of pension formula in this unit shall contribute an
additional 0.5% to the Employer share of pension for a total of 3.5% contribution toward
the Employer share of pension. (Total Employee contribution will be 12.5% for Classic;
50% of Normal Cost plus 3.5% for PEPRA.)
• Additional contributions will coincide with the City amending its contract with CalPERS
to reflect these changes. However, should CalPERS delay or the Association fail to
approve the CalPERS amendment required to incorporate the additional 0.5%
contribution, the City may implement the additional 0.5% effective July 1, 2019 without
a contract amendment., and additional employee PERS contributions under CalPERS
20516 will be provided on a pre-tax basis to the extent allowable by law.
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(f) 457 Deferred Compensation Plan
Effective the first full pay period following July 1, 2019 all employees who are classified as
“New Members” by PERS or “Group C’ by the MOA will receive $50 per month contributed into
their 457 deferred compensation plan. Eligible employees must have an active 457 plan in order to
receive City contirbutions.
1959 Survivor Benefit
The City will continue to provide the basic level (Level 1) of 1959 Survivor Benefit to eligible
employees in accordance with California Government Code §21571.
(g) Military Service Credit
The City’s contract with the Public Employees' Retirement System provides for Section
20930.3, Military Service Credit as Public Service.
(h) Retirement Privileges
All retired employees and spouses of deceased employees shall have residential
privileges at City libraries, refuse disposal area, golf course, and swimming pools.
(i) PERS Status While in Basic Academy.
While an employee is attending Basic Academy, he or she shall participate in the City’s PERS
Miscellaneous Employee retirement plan with the same employee and employer
contribution rates as applies to Miscellaneous City employees represented by SEIU
(classified unit). When the employee successfully completes Basic Academy and is sworn in
by the Police Chief, he or she shall prospectively participate in the PERS Safety Employee
retirement plan.
Section 19. Retirement Medical Plan
(a) Retiree Medical Coverage - Employees hired before January 1, 2006 who have not
voluntarily elected to participate in the Retirement Healthcare Benefits provided in
Government Code section 22893:
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Monthly City-paid premium contributions for a retiree-selected PEMHCA optional plan will
be made in accordance with the Public Employees' Medical and Hospital Care Act
Resolution for employees who retire on or before December 31, 2007. Effective March 1,
2009, for an employee retiring on or after that date, the City will pay up to the monthly
medical premium for the second most expensive plan among the existing array of plans
during the Agreement term. Effective April 1, 2015, for an employee retiring on or after that
date, the City contribution shall be the same contribution amount it makes for active City
employees. The parties mutually agree that the benefits provided in this paragraph for
employees retiring on or after April 1, 2015 will fluctuate from time to time based on the
City’s contributions to health care for active employees. Accordingly, Association members
who retire on or after April 1, 2015 and have not elected to participate in the Retirement
Healthcare Benefits provided in Government Code section 22893, do not maintain a vested
interest in any particular contribution by the City above the amount required under the
PEMHCA.
(b) Retiree Medical Coverage - Employees who voluntarily elect to participate in Government
Code section 22893, and all Employees hired on or after January 1. 2006:
The CalPERS vesting schedule set forth in California Government Code § 22893 will apply to
all Association members hired on or after January 1, 2006, and employees hired prior to
January 1, 2006 who voluntarily elect to participate in the Retirement Healthcare Benefits
provided in Government Code § 22893.
Under this 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 with the City of Palo Alto. After ten (10) years of service credit, each
additional year of service credit will increase the employer contribution percentage by 5%
until, at twenty (20) years' service credit, the employee will be eligible upon retirement for
100% of the specified employer contribution. However, the maximum contribution for family
members will be 90% of the specified employer contribution. Notwithstanding any other
term of this section, the City of Palo Alto's health premium contribution for employees hired
on or after January 1, 2006, and employees who voluntarily elect to participate in
Retirement Healthcare Benefits provided by Government Code § 22893, will be the
minimum contribution set by CalPERS under California Government Code § 22893 based on
a weighted average of available health plan premiums.
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Section 20. Psychological Counseling Program
The psychological counseling program currently in effect shall be continued. The program shall
provide 24-hour emergency counseling by independent professional consultants.
Section 21. Uniforms
(a) The City will supply complete uniforms to all sworn personnel. All uniform items are the
property of the City. One complete uniform consists of: (1) three pair of trousers, (2) three
short-sleeved shirts with patches and zippers if desired, (3) three long-sleeved shirts with
patches and zippers if desired, (4) three cotton or two synthetic fiber turtleneck shirts, (5)
hat, (6) duty jacket with patches, (7) necktie, and (8) rain gear. The value of the purchase,
rental and/or maintenance of the required uniforms shall be reported as special
compensation to the extent legally permissible, pursuant to Title 2 CCR, Section
571(a)(5) as Uniform Allowance. Based upon existing uniform standards and the
City’s cost experience, the value of this benefit shall be reported as $42.31 per pay
period.
(b) At the time of initial employment, every sworn employee will be issued one complete
uniform. Uniform items will be replaced on an as-needed basis subject to verification by
management.
(c) The City shall provide uniform cleaning for sworn representation unit personnel.
(d) Personnel are accountable for all uniform items issued to them. If a particular item is lost or
damaged due to employee negligence, the employee will be required to reimburse the City
for value of the item(s) lost or damaged.
(e) The City shall reimburse employees for the full cost of job-related safety boots up to $400
per fiscal year. The City will make the reimbursement only upon proof that the previous
boots have become unserviceable due to wear or damage and upon verification of such
purchase by the employee. (Job-related safety boots shall mean well-constructed, high
topped boots that provide full ankle and foot support, which are selected from list agreed to
by Management and the Association.) All Department-provided safety boots shall be
purchased through this program.
Employees are responsible for the full cost of any low-top, black shoes that are worn with
the uniform.
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Section 22. Work Schedule
(a) Field Services Division 4/11 Schedule
The patrol schedule will have two sides, “A-Side” and “B-Side.” There will be ten patrol
teams each supervised by a Sergeant or Acting Sergeant under the management of
patrol lieutenants. Five Patrol teams will work an “A” schedule and five Patrol teams will
work a “B” schedule.
Patrol officers, agents, and sergeants will report for duty promptly at the designated times
for each team. Patrol team schedules are as follows.
Patrol Division Team Schedules
A-Side B-Side
Team 1A 0500 to 1600 Team 1B 0500 to 1600
Team 2A 0700 to 1800 Team 2B 0700 to 1800
Team 3A 1400 to 0100 Team 3B 1400 to 0100
Team 4A 1800 to 0500 Team 4B 1800 to 0500
Team 5A 2000 to 0700 Team 5B 2000 to 0700
Team’s 2A, 3A, and 4A are designated as field training teams.
(1) 4/11 Work Schedule
The work schedule will be based on an eight (8) day cycle with each employee working four
(4) consecutive days on and having four (4) consecutive days off. The eight (8) day cycle will
advance the employee’s workdays and days off within the calendar week one day every
cycle. The overall cycle repeats itself every eight (8) weeks.
Over the course of a year (26 pay periods) each employee works 182 eleven (11) hour
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regular patrol shifts totaling 2002 hours, 78-hours short of the required fulltime equivalent
work year of 2080 hours.
In the Patrol Division and with the approval of the Patrol Captain, a maximum of two (2)
paired “fixed days” schedules (4 Employees) may be established, at the employees’ request.
The regularly scheduled hours of work for such a position must cover the days off of the
position with which it is paired. For example, one position could have Sunday, Monday,
and Tuesday off while the other could have Thursday, Friday, and Saturday off. It shall be
the responsibility of employees interested in a paired fixed day schedule to identify another
employee who is willing to participate in the paired arrangement. If either employee or the
Department desires to terminate a paired schedule once it is in effect, the employee or
Department, as applicable, must give the other affected parties to the arrangement at least
one (1) full pay period advance written notice. Resumption of the employees’ participation
in the normal rotation shall begin on the first day of the second full pay period following the
date notice is delivered to the other parties.
Employees on a fixed schedule will be required to attend the designated CPT (Continued
Professional Training) training days either on their regularly scheduled workday or on a day
off. If they attend training on their regularly scheduled day off, they will be compensated by
receiving an adjusted day off within the same pay period.
Employees requesting a schedule different from the rotating 4/11 must submit their
request in writing prior to the team selection process. The requests will only be considered
on an extreme hardship basis
The following hours and minimum staffing levels will be observed on both sides of the
Patrol Division. During team overlaps, the combined staffing levels of the teams will serve
to meet minimum staffing levels.
0700-2400 hours 1 Lieutenant/Sergeant Watch Commander
1 Sergeant/Agent Supervisor
6 Officers/Agents
0001-0300hours 1 Lieutenant/Sergeant Watch Commander
1 Sergeant/Agent Supervisor
5 Officers/Agents
0300- 0700 hours 1 Sergeant Supervisor
5 Officers/Agents
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Under routine circumstances, personnel will be able to receive time off as long as minimum
staffing numbers remain available for duty. Management may deny time off to maintain
staffing greater than the minimum numbers outlined above. It’s anticipated this will only
occur in special situations where greater staffing is needed.
(2) Designated CPT Training Days within the 4/11 Schedule:
The 4/11 Schedule will have designated CPT training days and flexible training hours to
make up the seventy-eight (78) hours necessary to complete a full work year. A training
bank will be created for each employee on the 4/11 Schedule to track and monitor the use
and balance of the 78-hours. The training bank and its use are outlined in the next section.
For CPT training days which require employees to travel outside the City of Palo Alto, an
additional two (2) hours of training bank time will be made available to account for all
travel time related to attendance at training. The Division Captain may authorize additional
time on a case-by-case basis.
Management will determine the number of designated CPT training days and stagger them
throughout the year in order to avoid overtime insofar as possible.
Designated CPT training days will be scheduled prior to the beginning of each shift year.
Unless otherwise determined by the Department, there will be five (5) designated CPT
training days each year. These training days will vary in duration but will in most cases be
approximately eight (8) to ten (10) hours in duration. The exact number of designated CPT
training days, their duration in hours, and the remaining flexible training bank time will be
determined prior to shift change and vacation selection. If it’s anticipated that the number
of training days will vary in any given year, Management will notify and, on request, meet
with PAPOA to consider any concerns the Association may have.
Patrol personnel will not be permitted to take vacation on any one of these pre-designated
CPT training days. The Division Captain may authorize an exception based on compelling
circumstances.
The course content and training provided on the designated CPT training days can vary
from year to year to meet current and changing training needs. It will be the responsibility
of the Personnel and Training Division to schedule and coordinate the training on
designated CPT training days. Training days may be scheduled during daytime and/or
nighttime hours to accommodate training needs.
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Sworn employees not on the 4/11 Schedule will be required to attend designated C.P.T.
training days. Each of the training days will be broken into two (2) single day sessions for
Patrol (A side and B side). It is anticipated that approximately fifty percent (50%) of the
non-4/11 employees will attend one (1) of the two (2) days during each of the training
cycles.
If the nature and/or complexity of the training does not allow for a larger groups, multiple
sessions can be scheduled on additional training days.
(3) Flexible Training Hours
This schedule results in seventy-eight (78) hours that will be made up during the year
through designated CPT training days and flexible training time. It is anticipated that
approximately fifty (50) hours will be set aside each year for designated CPT training days
(exact number to be determined each year). Once the hours set aside for designated CPT
training days is established, the remaining hours shall be used for flexible training as
follows.
Employees on the 4/11 Schedule attending training on a day off or outside their normal
shift shall use their available Flexible Training Bank hours (Non-CPT Hours) prior to using
overtime. All Flexible Training Bank hours must be used prior to earning overtime. The only
limitation on the use of these training hours is that no employee can exceed the one
hundred seventy-one (171) hour FLSA limit in any twenty-eight (28) day cycle. The
combination of regular work shifts, designated CPT training days, and flexible training time
cannot exceed one hundred seventy-one (171) hours in any FLSA Cycle. Any hours worked
over one hundred seventy-one (171) in a twenty-eight (28) day cycle are considered
premiums hours and must therefore be paid at the overtime rate.
The following is a list of some of the forms of training that could use hours from the
bank;
SWAT DRO Range Masters
Quarterly Shoots FTO Meetings K-9
Sergeant’s meetings FTO School 11550 School
Radar School Supervisor school All other Training
If an employee doesn’t use his or her flexible training hours during the year, he or she will
be required to make up the difference by either working extra shifts, partial shifts or by
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using vacation, compensatory time off, and/or holiday time from one of their banks at the
end of each fiscal year. The Watch Commander and Supervisor will work with employees to
schedule extra shifts or use vacation, holiday or compensatory time off balances. These
hours are hours the employee is being compensated for during the normal twenty-six (26)
pay periods. The employee must work the hours on a straight time basis or use vacation,
holidays or compensatory time off for the compensation received throughout the year.
(4) Other Training (not covered by the flexible training bank)
The 4/11 Schedule significantly impacts designated CPT training days, shift training, and to
some extent training compensated under the flexible training hours. The following
guidelines should be followed when attending training not covered by the flexible training
hours. All training bank hours, adjusted time off associated with training, and/or overtime
associated to training shall be approved in advance by the employee’s watch commander or
supervisor.
training on a day off. of hours at training or adjustment for one patrol shift.
Adjustments will be documented in the City timekeeping
system.
training on a day on.
timekeeping system.
but less than a
week.
off one patrol shift. Adjustments will be documented in
the City timekeeping system
training on a day off. in training. Adjustments will be documented in the City
training on day on. the training and be expected to work the remainder of
their shift. Adjustments will be documented in the City
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A four (4) or five (5)
day (week) training
session that doesn’t
exceed forty-four
(44) hours.
employee is in their twenty-
employee will be adjusted off the patrol schedule when
attending four or five day training sessions. The employee
will be adjusted from four (4) eleven (11) hour shifts as
compensation for attending the course. The four (4)
adjusted days will be as close to the days the employee
attended training as possible. Employees will not receive
overtime under this situation unless the total time training
exceeds forty-four (44) hours. Adjustments will be noted in
(5) Assignments of Sworn Personnel on the 4/11 Schedule
Each year assignments are made for management staff for the coming fiscal year.
Subsequent to those assignments, officers, agents, and sergeants apply for specialty
positions. At the conclusion of those specialty selections, the Patrol Team Selection process
begins. Each year, the following process will be used for patrol team selection.
Field Services Division Shift Assignment Process:
Field Services sergeants, agents, and officers will select their work team based on the
following criteria.
a. Sergeants, in order of seniority, shall select one of the ten patrol teams. Sergeants
may select any open team with the exception of those teams designated as Field
Training teams. FTO Sergeants, in order of seniority, will select one of the
designated FTO teams.
b. Field Training Officers/Agents, in order of seniority, shall select one of the slots
open and designated as FTO slots on one of the three FTO teams. The following
teams have been pre-designated as training teams: Team 2A, Team 3A, and Team
4A.
c. K-9 Officers/Agents – K-9 officers/agents will generally select one of the night shift
teams: Teams 4 and 5. Selections will be based on rank and seniority. Only one K-9
will be allowed per team and K-9’s will be evenly split between the two sides
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Any exception to these assignments must be requested and approved by the Field
Services Coordinator prior to the start of the selection process.
d. Agents, in order of seniority, shall select any of the open agent’s slots remaining on
any of the patrol teams. A minimum of three (3) agents will be assigned to the A-
Side and a minimum of three (3) agents will be assigned to the B-Side. If a greater
number of agents are assigned to patrol, management will evenly designate agent’s
slots insofar as possible to as many of the patrol teams as possible with the goal
being to have one agent on each patrol team.
e. Officers, in order of seniority, shall select any remaining slot available on any of the
patrol teams.
f. Probationary Officers - May be assigned to teams at the discretion of the Field
Services Division Coordinator. These assignments will be made based on the
developmental needs of the new employee, the staffing needs of the organization,
and in a manner that minimizes the loss of prime bidding slots for more senior
officers/ agents.
Additional Team Selection Guidelines
Prior to the selection process, management shall determine the number of agents,
and officers assigned to each team.
Additionally, management will determine which teams are available for selection by K-9
Officers/Agents. Field Training Officers/Agents, Field Training Sergeants, and probationary
employees shall be subject to administrative assignment.
In the spring of each year, all employees participating in the patrol team selection process
will receive a schedule identifying available slots, the process for team selection, and a date
and time for the employee to make their selection Team Selection Reservations – Once
Officers/Agents/Sergeants select a team, they will be guaranteed that team even if they are
unable to work that team at the start of the shift year due to special assignment, internship,
leave of absence, disability, illness etc.
Officers, Agents and Sergeants may not remain in the same time slot for more then two
consecutive years.
Team change request will be considered with the approval of management.
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Any request for an anticipated change to the assignment of sworn personnel shall be
routed to the Field Services Division Coordinator prior to the selection process.
(6) Vacation Selection
Concurrent Vacation Authorization – Officers and Agents
Patrol Division – Four (4) slots are authorized on the A-Side and four (4) slots are
authorized on the B-Side. It is anticipated that this would equate to two (2) slots on
night shift (Teams 3, 4, and 5) and two (2) slots on day shift (Teams 1, and 2) for
each side.
Any exceptions to these rules may be made by the Field Services Division
Coordinator based on special circumstances.
Concurrent Vacation Authorization - Sergeants
Patrol Division – Two (2) slots are authorized in patrol on the A-Side and two (2)
slots are authorized in patrol on the B-Side. It is anticipated that this would equate
to one (1) slot on the night shift (Teams 3, 4, and 5) and one (1) slot on the dayshift
(Teams 1 and 2) for each side. Exceptions to allow two (2) sergeants vacation at the
same time for special circumstances may be made by the shift lieutenant. Other
exceptions to this rule may be made by the Field Services Division Coordinator.
a. The A-side and B-side will have separate vacation signups. It’s also anticipated
that the dayshift and nightshift will have separate signups. For agents and above,
selection will be based on rank and time in rank. Personnel having the greatest
tenure in rank will have priority. For officers, selection will be based on seniority. If
seniority is equal, low badge number shall have priority.
b. Sergeants will have a separate signup sheet from agents and officers. During the
initial sign up sergeants will have two guaranteed slots per side, one (1) on day shift
and one (1) on night shift. Agents/officers will have four (4) guaranteed slots per
side, two (2) on day shift and two (2) on night shift.
Vacation Selection Process: Vacation selection will occur within a few weeks of the
team selection process each spring. Selections will take place on two days, one day
for the A-Side and one day for the B-Side. Sergeant, agents, and officers will be
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given time slots to come in, call in, or may submit in advance written instructions on
choice for vacation weeks. The selections will be made based on rank and seniority.
Both sides agree to monitor the outcome of the process and enter into a mutual
agreement to continue or discontinue the process.
(7) Time Keeping and Payroll
All employees working under the 4/11 schedule will work eleven (11) hours a day, four (4)
consecutive days a week. These eleven (11) hours will be entered in the timekeeping
system on the day they are worked and/or prior to pay period payroll deadlines. Employees
attending one (1) of the designated CPT training days will enter the hours of training on a
“training timesheet” and enter the time in the timekeeping system. Employees using hours
from their flexible training bank shall complete a “training timesheet” and enter the time in
the timekeeping system.
Employees working the 4/11 Schedule will not receive overtime compensation
for hours worked under the following conditions.
• Hours worked as part of a regular 11-hour work day.
• Hours worked on a designated CPT training days.
• Hours associated to training where hours from the flexible training bank could be
used.
• Non-Mandatory training where adjustments from the patrol schedule are possible.
Overtime shall be paid for “Mandatory” training once training bank hours have been
exhausted.
Overtime shall be paid for “Mandatory” meetings that fall outside the specialty exemption
listed below.
Participation in department specialties including training, meetings, and other activities is
not considered a mandatory activity when it comes to overtime compensation. Wherever
possible, employees participating in department specialties and other non-mandatory
activities will be adjusted off the patrol schedule for these activities. Schedule adjustments
will occur as close to the activity outside the employee’s normal work schedule as possible
and within the same FLSA Cycle.
Schedule adjustments for personnel working nights: All personnel attending a full day of
training on a work day will be adjusted off the patrol schedule for their work shift that day.
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In addition to being adjusted off any shift that starts on the day the training occurs,
employees working Teams 3, 4, and 5 the night before the training will be adjusted off the
night before as follows. If the training is all day starting in the morning hours, these
adjustments will apply.
Team 3: Adjusted off at 2200 hours.
Teams 4 & 5: Adjusted off the entire shift.
If a night shift employee is scheduled for a full day of “Mandatory” training on the morning
of his or her first day off, the same adjustments listed above will apply. In addition to the
necessary adjustment, employees will receive compensation for the training hours through
the use of training bank hours. When training bank hours are exhausted, the employee will
receive overtime.
The time keeping system entries: Each employee must enter his or her time in the
timekeeping system that accurately reflects the hours he or she works. When schedule
adjustments are made, overtime is worked, or training bank time is used, employees must
make appropriate notes in the comment section of the timekeeping system. Supervisors
and timekeepers may complete the timekeeping system entries when employees are
unavailable due to illness or other situations and employees will thereafter verify the
timekeeping entry is accurate upon their return to work.
Managers and supervisor will approve time entries made in the time keeping system.
Managers and supervisors will pay special attention to the use of training bank time and
overtime. Time entries should be reviewed for regular hours and training hours that may
exceed the FLSA guideline of 171 hours in a 28 day cycle.
With the 4-day on 4-day off rotation, employees will work either 66 or 88 hours in each pay
period. The timekeeping system will shift adjust the appropriate number of hours into (+14)
and out of (-8) the employees bi-weekly totals so each employee receives compensation for
80 hours. Regardless of the number of hours worked under the FLSA exemption, an
employee will be compensated for 80 regular hours every bi-weekly payroll cycle.
These shift adjusted hours (-8 or +14) will be added to or taken away from the timecard at
the appropriate day/night shift differential rates for each employee. As an example, if an
employee’s normal shift is paid at 75 percent day rate and 25 percent night rate, all hours
shift-adjusted on to or off the timecard will be adjusted using the same approximate ratio
of 75/25 percent for day/night rates.
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If an employee leaves city service while on the 4/11 schedule, staff and payroll shall
perform the training bank reconciliation of the number of hours the employee is over or
under the normal forty (40) hour workweek rate since the beginning of the current one (1)
year (twenty-six [26] pay period) 4/11 cycle. If the employee has worked more hours than
the forty (40) hour a week average, he or she shall be compensated for those hours at the
regular rate. If the employee is under the forty (40) hour a week average, the hours will be
taken from the employee’s vacation, holiday, or comp time bank and/or deducted at the
regular rate from the employee’s last check.
If an employee’s assignment changes from the 4/11 schedule or to the 4/11 schedule, his or
her over/under rate will be calculated the same as above. Time off, extra shifts worked,
and/or the adjustment of holiday, vacation, and/or comp. time banks will be used to
resolve any differences between actual hours worked and the forty (40) hour weekly
average.
Daylight Savings Time/Pacific Standard Time Changes – Personnel on Team 4 and Team 5
will follow these guidelines when working either the spring forward or fall back. Individuals
working in the spring who would lose an hour of work due to the change to Daylight Savings
Time will report for duty one (1) hour early and work an eleven (11) hour shift at straight
time. Individuals working in the fall will work one (1) additional hour (for a total shift of
twelve (12) hours) due to the change to Pacific Standard Time. Such employees will put in
for one (1) hour of overtime. Nothing in this section prevents an employee from leaving
early or using time off to offset the time when staffing allows and approved by the
Supervisor or Watch Commander.
(8) Maximum Hours Worked - Turn Around Time
Sergeants, agents, and officers may work up to a maximum number of 16 hours in a 24-
hour period. Any work beyond 16 hours must be approved by a watch commander or
member of management and only under exigent circumstances. Any time an employee
works 16 hours or more, they must receive an 8-hour break before returning to duty. If the
8-hour break runs into the employees next shift, those hours are considered adjusted hours
off.
Sergeants, agents, and officers shall not exceed a maximum of one hundred forty (140)
hours in a 14 day pay period. Any work beyond one hundred forty (140) hours must be
approved by the employee’s Lieutenant and Captain, and should rarely occur only under
extreme situations.
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Sergeants and Lieutenants authorizing overtime in excess of the daily limit (16-hours)
and/or the bi-weekly limit (140 hours) shall send a short email to their Lieutenant and
Captain explaining the reason for the excess work.
It is the employee’s responsibility to monitor their hours and notify the supervisor and/or
watch commander of their hours worked when approaching the daily or bi-weekly limits or
being requested to work overtime.
(9) Shift Exchanges
Sergeants, agents, and officers may exchange work shifts with another employee of the
same rank. Agents and officers may be interchangeable if simply filling the role of an officer
on the schedule. Personnel must submit a shift exchange request form to their supervisor
and lieutenant. Shift exchanges require a lieutenant’s approval except when short notice
makes that impossible. Shift exchanges can only occur for entire shifts, Shift exchange
request forms must contain the pay back date for the second half of the shift exchange.
Both halves of the exchange must occur in the same 28-day FLSA Cycle (refer to Yearly 4/11
patrol Schedule for FLSA Cycles). Once an employee agrees to an exchange shift, he or she
is responsible for that shift. If he or she fails to show up for the shift and/or is sick, the time
will be deducted from his or her applicable leave balance to the extent the employee
qualifies for such deduction under the applicable leave policy. Failure to show up for a shift
may also result in disciplinary action.
(10) On-duty workout period and sign up:
When staffing allows and with supervisory approval, employees may workout on-duty for a
period of up to one (1) hour. The hour shall include the work out, a shower, and dressing
time. Specific guidelines and conditions are outlined in the Wellness Program Policy.
(11) Upon written request of either party, Section 22(a) of this MOU will reopen and the
parties will meet and confer over the issue of the patrol work schedule. Any changes will be
by mutual agreement of the City and the Association.
(b) Traffic Team
Sworn members of the Traffic Team shall work a ten-hour (10) day, four (4) day workweek
schedule.
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Traffic Team officers/agents may be assigned as part of minimum staffing at the discretion of
management.
Effective July 1, 2008, the Take Home Motor Program will be discontinued.
On a one time basis, employees assigned to motors who are in paid status the first full pay
period after Council adoption of this MOU, will receive one time non PERSable stipend
representing 2.5% of base salary of the employee’s classification minus applicable state and
federal taxes.
(c) Special Operation Sergeant/Crime Suppression Team
The Special Operations Sergeant and team members shall generally work a ten (10) hour
day, four (4) day workweek schedule. Given the nature of the team’s assignment, it is
anticipated and expected that their schedules should be flexible and adapt to organizational
needs.
(d) ISD and Other Sworn Classifications
All sworn personnel assigned to ISD, Staff Assistant, Personnel and Training and Community
Policing shall work a ten (10) hour day, four-day work week schedule.
(1) Work Schedule
The ten hours shall generally be worked between the hours of 0700 and 1900, with
specific schedules subject to approval by appropriate supervisors. The ten (10) -hour
work schedule shall be worked within a period of ten hours, with a working lunch
period not to exceed thirty (30) minutes. As an alternative, with Management
approval, the ten-hour work schedule may be worked within eleven hours, with a
one (1) hour unpaid lunch break. Changing alternatives will require prior approval
by Management.
(2) Work Week
For ISD personnel, one-half of the Division will work Monday through Thursday,
while the other half will work Tuesday through Friday. All other sworn personnel
covered under Section 23 (b) & (c) will also work either Monday through Thursday,
or Tuesday through Friday.
(3) Late Detective Shift
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Two detectives will be assigned on a rotational basis to the late shift from 1200 to
2200 to provide evening coverage. Assignment to the late detective shift, where
possible, will be by advanced sign up with each detective selecting two weeks each
quarter according to a protocol determined by seniority, needs of the division and
needs of the employee. Generally, there will be one detective from each half of the
division working the late detective shift during each week.
(e) Forty-hour Training Schedule
For all sworn employees who attend training that is four (4) or five (5) days in duration
(a week), their schedules will be adjusted from the normal work week. Employees will
not receive overtime during scheduled training as described here unless it exceeds their
normal forty (40) or forty-four (44) hour workweek. Schedule adjustments will be
documented in the notes section when making the timekeeping system entries.
Section 23. Overtime Pay and Compensatory Time Off
(a) Overtime pay shall be provided at the rate of time and one-half of the employee's regular
rate, including night shift differential, working out of classification pay, and specialty
assignment premium pay as defined under Section 7, 8 and 10.
(b) Compensatory time off, which is approved by management in-lieu of overtime payment on a
staffing available basis, will be taken at the rate of 1-1/2 hours for every hour of credited
overtime. In the event compensatory time off is used as the method of compensating for
overtime, the time off will be taken prior to the end of the quarter in which it is earned
except as provided herein. All compensatory time balances over 80 hours shall be paid at
the end of each quarter (i.e., employee to carry over 80 hours). During the final calendar
year quarter only, employees have the option to:
(1) Employees who have vacation accrual balances of less than two times their annual
accrual rate, less 80 hours, may request in writing prior to the payroll deadline to
convert up to 80 hours of unused compensatory time to vacation per calendar year,
to be transferred in the first pay period of the calendar year.
(2) Employees may cash out their entire compensatory balance but must make this
request before payroll deadline.
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(c) Employees called out to perform work, attend meetings or required training shall be
compensated for at least three hours pay for each occurrence at the appropriate overtime
rate.
Section 24. Overtime Sign-Up
(a) Planned Overtime Planned overtime includes patrol staffing, special events, traffic control
functions or any other overtime needs which can be identified prior to the 20th day of the
preceding month. On or about the 20th of each month, watch commanders will post a list of
dates/shifts requiring overtime for the next month.
Officers, Agents, and Sergeants will be given a reasonable period of time to sign up for the
available overtime assignments. On or about the 25th of the month, planned overtime will be
filled from the sign up list using the rotational overtime call out list.
Agents may place themselves on the sign up list for supervisor overtime, however will only
be considered if no sergeant requests the shift.
Overtime that isn’t filled during the planned overtime process may be filled at
management’s discretion.
Employees assigned to a fixed work schedule such as ISD, P&T, and Staff Assistant may
adjust their work schedule with their manager’s approval in order to work a planned patrol
overtime assignment. This schedule adjustment must be completed within the same work
week as the planned overtime assignment. Schedule adjustments will normally be approved
unless there is a conflict with a previously scheduled activity within the work unit or the
schedule adjustment would be disruptive to the operation of the unit. Employees bidding for
planned overtime requiring a shift adjustment must make a notation next to the assignment
indicating a shift adjustment would be necessary. Only one overtime shift requiring a shift
adjustment can be worked per work week.
(b) Unplanned Overtime. Unplanned overtime is overtime that wasn’t identified prior to the
20th of the preceding month. Unplanned overtime will be filled by the following procedures.
1) The Watch Commander or Supervisor may request an employee extend their
shift or come in early. If a volunteer cannot be identified to hold over or come in early, the
rotational overtime list will be used.
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2) Employees interested in working unplanned overtime will be placed on a rotational
overtime list in order of seniority. When an overtime shift is available, a manager or
supervisor will call the next person on the list. If that person declines the opportunity, is
not available, is already working, or takes the overtime, he/she will be placed at the
bottom of the list. The lists will be continually updated in order to rotate the names.
There will be separate lists for sergeants and officers/agents for unplanned overtime. A
separate supervisory list will be maintained for agents interested in working supervisory
overtime. Agents will be offered supervisory overtime positions only if no sergeants have
accepted the opportunity.
3) If the watch commander or supervisor is unable to fill overtime through any of these
procedures, he or she may order an individual to extend their shift, come in early, or
come in on a day off. A log on those required to work mandatory overtime will be kept
in the overtime book. Mandatory overtime should be rotated in order of reverse
seniority.
c) Overtime Minimum. With regard to both planned and unplanned patrol team overtime,
there is no minimum number of hours. Planned overtime postings and unplanned overtime
will be offered for the actual number of hours needed. If small blocks of overtime aren’t
filled by on-duty personnel adding them to an existing shift, managers may apply a 6-hour
minimum to a shift for personnel coming in on a day off.
(d) These overtime procedures may be reviewed and/or modified at the mutual agreement of
both management and PAPOA.
Section 25. Jury Duty
No employee shall be required to work a combination of jury duty and work time to exceed 12
hours during a 24-hour period. The period shall commence at the required time of appearance for
jury duty. Jury duty is defined as the time between required time of appearance and dismissal.
Work time excused as a result of jury duty will be compensated at the regular rate of pay.
Section 26. Vacation Accrual
Vacation will be accrued when an employee is in pay status and will be credited on a bi-weekly
basis. Such accrual and credit shall not exceed three times the annual rate of accrual. Each eligible
employee shall accrue vacation at the following rate for continuous service performed in pay
status:
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(a) Less than four (4) years - For employees completing less than four years continuous service;
(8) Shifts vacation leave per year.
(b) Four, but less than nine years - For employees completing four, but not more than nine (9)
years continuous service; 12 Shifts vacation leave per year.
(c) Nine (9), but less than fourteen (14) years - For employees completing nine (9), but not more
than fourteen (14) years continuous service; (16) Shifts vacation per year.
(d) Fourteen (14), but less than nineteen (19) years - For employees completing fourteen (14),
but not more than nineteen (19) years continuous service; (18) Shifts vacation leave per
year.
(e) Nineteen (19) or more years - For employees completing nineteen (19) or more years
continuous service; (20) Shifts vacation leave per year.
Example: An employee with less than four (4) years working a 4/10 Schedule will receive eight
(8) Shifts or eighty (80) hours of vacation. The same employee working the 4/11 Schedule will
receive eight (8) Shifts or eighty-eight (88) hours of vacation.
Section 27. Use of Vacation
(a) When to be taken. The time at which an employee may use his/her accrued vacation leave
and the amount to be taken at any one time shall be determined by the department head
with particular regard for the needs of the City, but insofar as possible, considering the
wishes of the employee.
(b) Limitation on use. Employees may not use more than their annual rate of accrual in any
calendar year period, provided, however, that a department head my grant exceptions to
this limitation.
(c) Waiting period. Employees shall complete six months continuous service before using
accrued vacation leave.
(d) Double compensation prohibited. Employees shall not work for the City during their
vacation.
(e) Vacation splitting. It is the intention of the City that vacation be taken in units of one week;
however, with the approval of the department head, an employee may use one week of
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his/her accrued vacation in any calendar year in units of less than one work week, but in no
instance in units of less than one-half of the normal workday or shift. Requests for exception
to this procedure must be approved by the City Manager.
(f) Vacation Cashout. Once each calendar year an employee may cash out eight or more hours
of vacation accrual in excess of 80 hours to a maximum of 120 hours, provided that the
employee has taken at least 80 hours as vacation in the previous 12 months.
1. Effective for the 2012 tax year and each subsequent year, to be eligible to cash out
vacation, employees must pre-elect the number of vacation hours they will cash out
during the following calendar year, up to the maximum of 120 hours, prior to the
start of that calendar year. The election will apply only to vacation hours accrued in
the next tax year and eligible for cash out.
2. 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-designated on the election form provided by the City.
3. Employees who do not pre-designate or decline a cash out amount by the annual
deadline established by the City 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.
4. Employees who pre-designate 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 predesignated. 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.
5. For employees who have not requested payment of the elected cash out amount by
November 1 of each year, Payroll will automatically cash out the pre-designated
amount in a paycheck issued on or after the payroll date including November 1.
Within 90 days of adoption of this MOA, the parties agree to talk further about the
administration and communication of the vacation cash out process.
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Section 28. Vacation Pay at Termination
Employees leaving the municipal service with accrued vacation leave shall be paid the amounts of
accrued vacation to the date of termination. Payments for accrued vacation shall be at the
employee's current rate of pay.
Section 29. Vacation Benefits for Deceased Employees
An employee who is eligible for vacation leave and who dies while in the municipal service shall
have the amount of any accrued vacation paid to the employee's estate within thirty days. This
proration will be computed at the last basic rate of pay.
Section 30. Effect of Extended Military Leave
An employee who interrupts his service because of an extended military leave shall be
compensated for accrued vacation at the time the leave becomes effective.
Section 31. Sick Leave
(a) Statement of Policy. Sick leave shall be allowed and used only in case of actual personal
sickness or disability, medical or dental treatment, or as authorized in Subsection 33 (e),
personal business chargeable to sick leave. Up to 8 days sick leave per year may be used for
illness in the immediate family (spouse, child, parent, parent-in-law, brother, sister,
registered domestic partner, or close relative residing in the household of the employee).
(b) Eligibility. Regular and part-time employees shall be eligible to accrue and use sick leave.
(c) Accrual. Sick leave shall be accrued bi-weekly provided the employee has been in a pay
status for 50 percent 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.
(d) Accumulation. Accrued sick leave may be accumulated without limit, except as provided in
Section 31(h).
(e) Use. Sick leave may be used as needed and approved, to the point of depletion, at which
time the employee will no longer receive pay for sick leave. A new employee may, if
necessary, use up to forty-eight hours or shift equivalent of sick leave at any time during the
first six months of employment. Any negative balances generated by such utilization will be
charged against future accrual or deducted from final paycheck in the event of termination.
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An employee who has been disabled for 60 consecutive days and who is otherwise eligible
both for payment under the long-term disability group insurance coverage and accrued sick
leave benefits may, at his/her option, choose either to receive the long-term disability
benefits or to utilize the remainder of his/her accrued sick leave prior to applying for
long-term disability benefits.
Sick leave will not be granted for illness occurring during any leave of absence other than
sick leave, unless the employee can demonstrate that it was necessary to come under the
care of a doctor while on such other leave of absence.
When an employee finds it necessary to be absent for any reason, he/she should cause the
facts to be reported to the department within one hour after his/her regular starting time on
the first working day of absence, and shall regularly report on, or account in advance for
each work day thereafter unless hospitalized or otherwise indisposed. Such reports may be
subject to written documentation if there is reasonable evidence that sick leave abuse has
occurred. Sick leave shall not be granted unless such report or advance accounting has been
made, provided, however, that the department head may grant exception to this policy
where the circumstances warrant.
Documentation may also be required if there is a reasonable basis to believe that the
employee may not be medically fit to return to work.
(f) Depletion of Sick Leave Benefits. Upon depletion of sick leave or the beginning of the
period to be covered by payments under the long-term disability group insurance coverage,
whichever comes first, an employee may be granted a medical leave of absence without pay
for a period not exceeding sixty days. If the employee is unable to return to work at the end
of this period, he/she must request further medical leave which will be subject to the
approval of the City Manager. If further leave is granted, the employee must notify the City
of intent to return to work every thirty days. If further leave is not granted, the employee's
service with the City shall be considered terminated.
(g) Forfeiture Upon Termination. Employees leaving the municipal service shall forfeit all
accumulated sick leave, except as otherwise provided by law and Subsection 32(h). 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.
(h) Payment for Accumulated Sick Leave. Employees hired before August 1, 1986 who leave
the municipal service in good standing, or who die while employed in good standing by the
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City, and who have fifteen or more years of continuous service shall receive compensation
for unused sick leave hours in a sum equal to two and one-half percent of their unused sick
leave hours multiplied by their years of continuous service and their basic hourly rate of pay
at termination.
For all employees entering the service of the City prior to March 2, 1983, full sick leave
accrual will be paid in the event of termination due to disability.
For all employees hired after August 1, 1986, sick leave accrual accumulation shall be limited
to 1,000 hours with no payoff provision for unused balance at termination.
(i) Sick Leave Re-opener. Upon written request of either party, the parties agree to meet to
confer over the issue of sick leave incentive, including but not limited to: (1) sick leave
payout for employees hired after August 1, 1986 and (2) converting to a paid time off policy
in lieu of both vacation and sick leave. Any changes will be by mutual agreement of the City
and the Association.
(j) Personal Business Leave Chargeable to Sick Leave. Up to 2 Shifts (20-Hours for 4/10
employees and 22-Hours for 4/11 employees) per year of personal business leave may be
chargeable to sick leave. Time off under this provision is subject to management scheduling
approval.
(k) Return to Work or Continue Work With Limited/Alternative Duty. In cases of
non-work-related injury, illness or pregnancy, an employee, upon approval of the
department head, City Risk Manager and the employee's doctor, may elect to return to work
or continue work with doctor-approved limited or alternative duty. Approval for such
limited/alternative duty shall be based upon department ability to provide work consistent
with medical limitations and the length of time of the limitations. Shift employees must be
willing to accept any non-shift limited duty schedule work locations and may be subject to
the reasonable availability of limited duty assignments. The City doctor may be consulted in
determining work limitations. Any assignment to a limited/alternative duty will be on a
temporary basis. The provisions of this section are not intended to create any permanent
light/alternative duty assignments.
Any assignment to a limited/alternative assignment shall not displace any other employee
without consent of all parties, including the Association.
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Section 32. Leaves of Absence Without Pay
(a) Disability. Leaves of absence without pay may be granted in cases of disability not covered
by sick leave. Pregnancy will be considered as any other disability. Leaves of absence for
disability are subject to physicians' verification including diagnosis and medical work
restriction.
(b) Other leaves. Leaves of absence without pay may be granted in cases of personal
emergency or when such absences would not be contrary to the best interest of the City.
Non-disability prenatal and/or postpartum leave is available under this provision, but such
leave shall not begin more than six months prenatal nor extend more than six months
postpartum.
(c) During unpaid leaves of absence for disability or other reasons, the employee may elect to
use accrued vacation credits. 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.
(d) Approval of department head. Leave of absence without pay for one week or less may be
granted by the department head, depending on the merit of the individual case.
(e) Approval by City Manager. Leave of absence without pay in excess of one week's duration
may be granted by the City Manager on the merit of the case, but such leave shall not
exceed twelve months' duration.
(f) Absence without leave. Unauthorized leave of absence shall be considered to be without
pay, and reductions in the employee's pay shall be made accordingly. Unauthorized leave of
absence may result in termination of employment.
(g) Leave of absence; death outside the immediate family. Leave without pay may be granted
a regular employee by his/her department head in the event of death to family members
other than one of the immediate family, such leave to be granted in accordance with Section
34 (b), (c) , (d) and (e).
(h) Military leave of absence. State and federal law shall govern the granting of military leaves
of absence and the rights of employees returning from such absence.
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Section 33. Leave of Absence With Pay
The City Manager may grant a regular employee under his/her control a leave of absence with pay
for a period not exceeding thirty calendar days for reasons he/she deems adequate and in the best
interest of the City.
The City Council may grant a regular employee a leave of absence with pay for a period not to
exceed one year for reasons the Council considers adequate and in the best interest of the City.
(a) Subpoenas; leave of absence. Regular employees who are subpoenaed to appear as
witnesses in behalf of the State of California or any of its agencies may be granted leaves of
absence with pay from their assigned duties until released. The employee shall remit all fees
received for such appearances to the City within thirty days from the termination of his or
her services. Compensation for mileage or subsistence allowance shall not be considered as
a fee and shall be retained by the employee.
(b) Employee's time off to vote. Time off with pay to vote at any general or direct primary
election shall be granted as provided in the State of California Elections Code, and notice
that an employee desires such time off shall be given in accordance with the provisions of
said Code.
(c) Leave of absence; death in immediate family. Leave of absence with pay of three days shall
be granted an employee by the head of his or her department in the event of death in the
employee's immediate family, which is defined for purposes of this section as wife, husband,
son, step-son, son-in-law daughter, step-daughter, daughter-in-law, father, step-father,
father-in-law, mother, step-mother, mother-in-law, brother, step-brother, brother-in-law,
sister, step-sister, sister-in-law, grandmother, grandmother-in-law, grandfather,
grandfather-in-law, grandchildren, aunt, uncle, niece, nephew, registered domestic partner,
or a close relative residing in the household of the 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 the City Manager. Approval
of additional leave will be based on the circumstances of each request with consideration
given to the employee’s need for additional time off.
(d) Jury duty; leave of absence. Employees required to report for jury duty shall be granted a
leave of absence with pay from their assigned duties until released by the court, provided
the employee remits to the City all fees received for such duties other than mileage or
subsistence allowances within thirty days from the termination of his/her jury service.
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Section 34. Reduction in Force
In the event of reductions in force, they shall be accomplished wherever possible through attrition.
If the work force is reduced within the bargaining unit for reasons of change in duties or
organization, abolition of position, shortage of work or funds, or completion of work, employees
with the shortest length of service will be laid off first so long as employees retained are fully
qualified, trained and capable of performing remaining work. Length of service for the purpose of
this article will be based on total City service in a regular classification or classifications. Employees
laid off due to the above reasons will be given written notice at least thirty days prior to the
reduction in force. A copy of such notice will be given to the Association.
Section 35. Agents
The number of Agent positions shall be governed by the August 12, 1981, Arbitration Award.
Section 36. Commute Incentives and Parking in Civic Center Garage
Commute Incentives-- Represented employees who qualify may voluntarily elect one of the
following commute incentives:
Public Transit. The City will provide monthly Commuter Checks worth the value of:
$40 for employees traveling three or more zones on Caltrain;
$40 for employees using the Dumbarton Express, BART, the ACE train, or a
commuter highway vehicle;
$35 for employees traveling less than three zones on Caltrain;
$35 for employees using VTA and other buses.
These vouchers may be used toward the purchase of a monthly transit pass.
Carpool. The City will provide carpool vouchers worth the value of $30 per month to each
eligible employee in a carpool with two or more people. These vouchers may be used at
designated service stations toward the purchase of fuel and other vehicle-related expenses.
Vanpool Program. The City will provide Commuter Checks worth the value up to $60 to each
employee voluntarily participating in the Vanpool Program. These vouchers may be used
toward payment of the monthly cost. Employees must fulfill the basic requirements of the
Employee Commute Alternatives Program to qualify.
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Bicycle. The City will provide bicycle vouchers worth the value of $20 per month to eligible
employees who ride a bicycle to work. These vouchers may be used at designated bicycle shops
for related bicycle equipment and expenses.
Walk. The City will provide walker vouchers worth the value of $20 per month to eligible
employees who walk to work. These vouchers may be used at designated stores for expenses
related to walking such as footwear and related accessories.
Parking in the Civic Center Garage--Employees assigned to Civic Center and adjacent work
locations will be provided with a Civic Center Garage parking permit. New 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.
Section 37. Disciplinary Action and Unsatisfactory Work or Conduct
(a) Except as provided in Section 6 (Probationary Period) of this agreement, no employee shall
be disciplined without just cause. For the purpose of this section, "discipline" shall be
deemed to include discharge, demotion, reduction in salary, written reprimand, disciplinary
probation and suspension. Discipline shall be deemed not to include verbal reprimands or
reductions in force.
(b) Non-probationary employees whose work or conduct is unsatisfactory but not sufficiently
deficient to warrant discipline, demotion, or discharge will be given a written notification of
unsatisfactory work or conduct and an opportunity to improve. Failure to correct
deficiencies and improve to meet standards may result in discipline, demotion or discharge.
(c) Notice of disciplinary action must be in writing and served on the employee in person or by
registered mail prior to the disciplinary action becoming effective. However, in extreme
situations where there is reasonable cause, the employee may be removed from duty
immediately with pay pending such disciplinary action. The notice must be filed on a timely
basis with the Human Resources Department and included in the employee's personnel file.
The notice of disciplinary action shall include:
(1) Statement of the nature of the disciplinary action;
(2) Effective date of the action;
(3) Statement of the cause thereof;
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(4) Statement in ordinary and concise language of the art or the omissions upon which the
causes are based;
(5) Copies of any documents or other items of evidence upon which the disciplinary action
was fully or in part based;
(6) Statement advising the employee of his/her right to appeal from such action, and the
right to Association representation.
(d) If the disciplinary action consists of suspension, any suspension time previously given shall
be credited to the final disciplinary action.
(e) Subject to state law requirements, employees may request that disciplinary actions be
sealed according to the following schedule:
(1) Written reprimands with no recurrence after one (1) year.
(2) Disciplinary probation after three (3) years from the implementation of such probation,
if no other disciplinary action has occurred during that period.
(3) Suspensions less than three (3) days without recurrence, after two (2) years.
(4) Suspensions more than three (3) days but less than six (6) days, after three (3) years.
(5) Suspensions of six (6) days or more, after five (5) years.
For the purpose of these sections, the time starts from the time of action following the Skelly
process (day discipline is imposed).
Written requests for the sealing of disciplinary actions should be directed to the Personnel
and Training Coordinator.
Sealing shall include all memos, letters, correspondence, complaint forms, and any other
material pertaining to the disciplinary action that has been placed in the employee's
personnel file.
Sealing shall not include the sealing of any material related to criminal offenses for which the
employee was charged except in concurrence with the sealing or expungement of criminal
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charges by a court of competent jurisdiction or in the event of a complete exoneration of the
employee by the judicial system.
The City Human Resources Department shall be notified in all cases where sealing of
disciplinary action is taken. Human Resources Department copies of the disciplinary actions
will be disposed of in a manner consistent with the Police Department's action.
The sealed action shall not be held to discriminate against the employee in any subsequent
disciplinary action, or in the event of promotion, merit step raise, transfer, request for
educational leave, modification of duties, vacation selection, application for other
employment, or against any other action the employee may take for his or her personal
improvement.
Once sealed, the file shall not be opened unless the employee requests such unsealing and
then only for examination by the person or persons whom the employee specifies or at the
discretion of the Chief of Police, who in the absence of a demonstrable emergency shall
notify the employee a minimum of 48 hours before the opening of the sealed file and the
reason for opening. In the event the employee cannot be notified in advance, notification
must be made on the employee's first duty day after the sealed file is opened.
Section 38. Grievance Procedure
(a) The City and the Association recognize that early settlement of grievances is essential to
sound employee-employer relations. The parties seek to establish a mutually satisfactory
method for the settlement of employee grievances, or Association grievances, as provided
for below. In presenting a grievance, the aggrieved and/or his or her representative is
assured freedom from restraint, interference, coercion, discrimination or reprisal.
(b) Definition. A Grievance is:
(1) An unresolved complaint or dispute regarding the application or interpretation of
Departmental rules, regulations, policies, and procedures, relating to terms conditions
of employment, wages or fringe benefits; or this Memorandum of Agreement, .
(2) An appeal from a disciplinary action of any kind against an employee covered by this
Memorandum of Agreement.
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(c) Access to the Grievance Procedure.
Except as provided in Section 6, Probationary Period, all employees represented by the
Association may file and process a grievance. Such aggrieved employees may be
represented by the Association or may represent themselves in preparing and presenting
their grievance at any level of review. The Association may file a grievance when an
Association right not directly related to an individual employee becomes subject to dispute.
(d) Conduct of Grievance Procedure.
(1) The time limits specified in this Article may be extended by mutual agreement in writing
of the aggrieved employee or the Association and the reviewer concerned.
(2) Should a decision not be rendered within a stipulated time limit, the aggrieved
employee may immediately appeal to the next step.
(3) The grievance may be considered settled if the decision of any step is not appealed
within the specified time limit.
(4) If appropriate, the aggrieved employee or the Association and Management may
mutually agree to waive any step of the grievance procedure.
(5) Written grievances shall be submitted on forms provided by the City or on forms which
are mutually agreeable to the City and the Association.
(6) Any retroactivity on monetary grievances shall be limited to the date of occurrence,
except in no case will retroactivity be granted prior to three months before the
grievance was filed in writing.
Step I. The aggrieved employee will first attempt to resolve the grievance through informal
discussions with his or her immediate supervisor by the end of the tenth working day following the
discovery of or the incident upon which the grievance is based. Every attempt will be made to
settle the issue at this level. (Note: For purposes of time limits, the working days are considered to
be Monday through Friday, exclusive of City holidays.)
Step II. If the grievance is not resolved through the informal discussion, the employee will reduce
the grievance to writing and submit copies to the division head or equivalent level Management
employee as designated by Management as appropriate within ten working days of the discussion
with the immediate supervisor.
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The division head or equivalent level Management employee shall have ten working days from the
receipt of a written grievance to review the matter and prepare a written statement.
Step III. If the grievance is not resolved at Step II, the aggrieved employee may appeal to his or her
department head in writing within ten working days of the receipt of the division head's response.
The department head shall have ten working days from the receipt of a written grievance to review
the matter and convey his or her decision by written statement.
Step IV. If the grievance is not resolved at Step III, the aggrieved employee may choose between
final and binding resolution of the grievance through appeal to the City Manager or through appeal
to final and binding grievance arbitration. Appeals to final and binding arbitration may be
processed only with Association approval. All Step IV appeals must be filed in writing at the Human
Resources Department Office within ten working days of receipt of the Step III response.
If the aggrieved employee elects final and binding resolution by the City Manager, the City Manager
will choose the methods he or she considers appropriate to review and settle the grievance. The
City Manager shall render a written decision to all parties directly involved within ten working days
after receiving the employee's appeal.
If the aggrieved employee elects final and binding arbitration in accordance with this provision, the
parties shall mutually select an arbitrator. In the event the parties cannot agree on an arbitrator,
they shall mutually request a panel of five arbitrators from the California State Conciliation Service
or from the American Arbitration Association if either party objects to the State Conciliation
Service, and select an arbitrator by the alternate strike method.
The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine
compliance with the provisions of this Memorandum of Agreement and such Merit System Rules,
regulations, policies, procedures, City ordinances, resolutions relating to terms or conditions of
employment, wages or fringe benefits, as may hereafter be in effect in the City insofar as may be
necessary to the determination of grievances appealed to the arbitrator. The arbitrator shall be
without power to make any decision:
(1) Regarding matters of interest.
(2) Contrary to, or inconsistent with or modifying in any way, the terms of this
Memorandum of Agreement.
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(3) Granting any wage increases or decreases.
The arbitrator shall be without authority to require the City to delegate or relinquish any powers
which by State law or City Charter the City cannot delegate or relinquish. Where either party seeks
arbitration and the other party claims the matter is not subject to the arbitration provisions of this
Memorandum of Agreement, the issue of arbitrability shall first be decided by the arbitrator using
the standards and criteria set forth in this section and without regard to the merits of the
grievance. If the issue is held to be arbitrable, the arbitration proceedings will be recessed for up to
five working days during which the parties shall attempt to resolve the grievance. If no resolution is
reached, the arbitrator will resume the hearing and hear and resolve the issue on the merits.
Copies of the arbitrator's decision shall be submitted to the City, the aggrieved employee and the
Union. All direct costs emanating from the arbitration procedure shall be shared equally by the City
and the aggrieved employee or the Association.
Section 39. Bulletin Boards and Telephones
The Association shall have access to existing bulletin boards in Unit employee work areas and to
the City e-mail and voice mail systems for the purpose of posting notices or announcements
including notices of social events, recreational events, membership meetings, results of elections
and reports on minutes of Association meetings. Any other material must have prior approval of
the Police Chief. Action on approval will be taken within 24 hours of submission. Emails sent for
Association business shall be copied to the Human Resources Director at distribution.
City telephones may be used for Association business so long as there is no disruption of work and
all toll or message unit calls are charged to the Association credit card.
Section 40. Access to Association Representatives
Representatives of the Association are authorized access to City work locations for the purpose of
conducting business within the scope of representation, provided that no disruption of work is
involved and the business transacted is other than recruiting of members or collecting of dues, and
the representative must notify the Human Resources Department office prior to entering the work
location.
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Section 41. Meeting Places
The Association shall have the right to reserve City meeting and conference rooms for use during
non-working hours. Such meeting places will be made available in conformity with City's
regulations and subject to the limitations of prior commitment.
Section 42. Voluntary Leave Program:
(a) The City of Palo Alto has established a Peace Officer Voluntary Leave Program to provide
members of the Palo Alto Peace Officers’ Association, Incorporated (hereafter referred to
as “PAPOA”) the opportunity to donate their accrued vacation time to assist fellow
members of PAPOA either due to: (a) an employee’s own verifiable non-industrial
catastrophic illness or injury (as defined herein) or (b) in order to care for a member of the
employee’s immediate family (spouse, child, parent or registered domestic partner
suffering from a verifiable catastrophic illness or injury) and have exhausted or will
presently exhaust all of their paid leave.
In order to be eligible to receive donated leave, an employee must have a catastrophic
illness or injury or an employee’s immediate family member must have a catastrophic
illness or injury that requires the employee to provide full-time care for this family member.
Care will be taken to emphasize the voluntary nature of the plan and to insure
confidentiality of employee participants and medical conditions (where applicable).
A Police Officer Voluntary Leave Sharing Program has been established to accept donations
of vacation in accordance with the Program’s guidelines. All donations shall be:
1. Voluntary
2. Irrevocable
3. Confidential, unless disclosure is required by law
4. In whole hour increments of at least (4) hours, with hours donated being converted to
donee hours based on the donee’s salary rate (so that there will be no cost to the City
due to salary differential)
5. The employee shall be required to exhaust all other types of leave to request donated
leave
6. It is understood that employees seeking or receiving leave under this program will apply
for long-term disability benefits for which they may be eligible
7. Where any of the period during which an employee receives donated leave is
designated as family leave under the California Family Rights Act (CFRA) or Family
Medical Leave Act (FMLA), the employee will be eligible for continuation of medical and
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other available benefits during that family leave period (for up to 12 weeks), in
accordance with the requirements of those laws. If the employee receiving donated
leave is not eligible for CFRA/FMLA benefit continuation, or after the employee has
exhausted the available CFRA/FMLA leave period, the employee will need to pay the
premiums for continued medical and other available benefits if the employee chooses
to continue such coverages through the City.
8. If the donation request is based on the need for an employee to care for an immediate
family member, as defined above, the family member must require full-time care by the
employee. Certification of this requirement by a health care professional is required.
9. The maximum donated time a donee may receive is 12 months (if available).
10. Applications to donate leave or receive leave under this Program are made to the
Human Resources Department.
11. This is a pilot program and is subject to cancellation by either party.
PAPOA members interested in donating leave or in applying to receive donated leave shall
complete forms provided by the Human Resources Department. If an applicant for leave is
found to meet the criteria set forth herein, Human Resources will determine the availability
of and (as applicable) allocation of donated paid leave. Payroll will be notified in writing of
the number of hours to be deducted from each donating employee’s vacation balance and
transferred to the donee employee(s).
(b) The City reserves the right to modify or terminate this program at any time.
(c) Catastrophic Illness or Injury (also referred to as “medical emergency” in Revenue Ruling
90-29 and Sections 801(c) and 812 of the Merit Rules and Regulations): A non-occupational
medical condition of an employee that will require the prolonged absence of the employee
from duty and which will result in a substantial loss of income to the employee because the
employee will have exhausted all paid leave available apart from the Voluntary Employee
Leave Sharing Program. Non-disability postpartum leave as referenced in Merit Rule 801(b)
shall not be considered a catastrophic illness or injury under this policy.
(d) Nothing in this section precludes an Association member from utilizing or participating in
the City’s Voluntary Employee Leave Sharing Program.
Section 43. Utilization of Reserves for Field Services Division Events
(a) Management will determine staffing levels for each event.
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(b) Events for which the department receives reimbursement will be staffed by regular officers,
except that in the event a sufficient number of regular officers are unavailable, reserve
officers may be used.
(c) Reserves may be used for the May Day Parade, Stanford University or NFL football games,
park patrol, Black and White Ball, and supplemental patrol staffing in excess of levels set
forth in the Field Services Staffing Levels general order.
(d) Events, for which the department does not receive reimbursement, may be staffed in the
ratio of two reserve officers to one regular officer. Reserves may be used in any situation
where an insufficient number of regular officers are available.
(e) Staffing for the University Avenue Street Fair will consist of no less than a 1:1 ratio of
regular officers to reserve officers.
Section 44. Overtime Meals for Investigative Services Division
Effective July 1, 1996, for ISD personnel who are working authorized investigative overtime
extending for a period either four hours after the conclusion of their normal work shift, or four
hours prior to the beginning of the normal work shift, shall be entitled to reimbursement for the
appropriate meal at the City per diem rate. The meal reimbursement shall also apply for any
authorized investigative overtime on a weekend or holiday in excess of four hours.
Section 45. Hiring Incentives
Qualified lateral officers, who have a current basic or higher POST certificate, hired during the term
of this agreement may upon City Manager approval:
(a) Accrue vacation leave at a beginning rate equal to the rate they were earning at their
previous employer, subject to a maximum of 160 hours per year with progression to higher
accrual rates as provided in Section 27, Vacation Accrual; and
(b) Begin their employment with the City with a sick leave balance not to exceed 96 hours.
(c) Receive a hiring incentive. Any future hiring incentive program will be discussed with the
Association prior to implementation and the Department will reasonably consider any
recommendations from the Association regarding internal referral programs to be utilized in
conjunction with that program.
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(d) Laterals returning to the Palo Alto Police Department must have been separated from the
City for a minimum of 2 years to be eligible for this incentive program.
(e) Based on years of service, level of experience, and educational achievement, experienced
lateral officers may receive a starting salary at any appropriate level within the “Police
Officer” classification as deemed appropriate by the City Manager on recommendation of
the Chief of Police.
Section 46. Full Understanding
(a) The Memorandum of Agreement contains the full and entire understanding of the parties
regarding the matters set forth herein.
(b) It is the intent of the parties that ordinances, resolutions, rules and regulations enacted
pursuant to this Memorandum of Agreement be administered and observed in good faith.
(c) Nothing in this agreement shall preclude the parties from mutually agreeing to meet and
confer on any subject within the scope of representation during the term of this agreement.
(d) Should any of the provisions herein contained be rendered or declared invalid by reason of
any existing State or Federal legislation or by reason of State Supreme Court or U. S.
Supreme Court ruling, such invalidation of such part or portion of this Memorandum of
Agreement shall not invalidate the remaining portions hereof, and they shall remain in full
force and effect, insofar as such remaining portions are severable.
(e) Prior Agreements & Side Letters: Upon Implementation of this agreement, all prior
agreements and side letters become null and void. In any instance where internal
department polices and/or practices are in conflict with this agreement, this agreement shall
take precedence.
(f) During the term of this Memorandum of Agreement, Management may propose certain
changes in the City Merit System Rules and regulations. With regard to such changes which
pertain to the representation unit, the parties agree to review, and upon request, meet and
confer regarding the changes.
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Section 47. Printed Agreement
The City will provide copies of the Memorandum of Agreement resulting from these negotiations in
booklet form to all represented employees.
Section 48. Duration
Except as expressly and specifically provided otherwise herein for the retroactive application of a
specific provision(s), this Memorandum of Agreement shall become effective upon ratification by
both parties hereto and remain in effect through June 30, 20251.
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EXECUTED:
FOR: FOR:
PALO ALTO PEACE OFFICERS' CITY OF PALO ALTO
ASSOCIATION
Chistopher Correira
Sandra Blanch, Human Resources Director
Joel Hornung
Tori Anthony,Manager Employee and Labor Relations
Joshua Salkeld Charles Sakai, Counsel
Sloan Sakai Yeung & Wong, LLP
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TABLE OF CONTENTS
PREAMBLE 1
Section 1. Recognition 1
Section 2. No Discrimination 1
Section 3. Association Security 2
Section 4. Payroll Deduction 2
Section 5. No Strikes 2
Section 6. Probationary Period 3
Section 7. Salary Provisions 4
Section 8. Night Shift Differential 8
Section 9. Paid Holidays 9
Section 10. Working Out of Class Pay 10
Section 11. Retention/Career Incentive Program (Special Compensation) 10
Section 12. Dependent Care Assistance Program 11
Section 13. Court Pay 11
Section 14. Health Plans 12
Section 15. Dental Benefits 14
Section 16. Life Insurance Benefits 15
Section 17. Effective date of Coverage for New Employees 15
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January 1, 2023– June 30, 2025
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Section 18. Retirement Benefits 15
Section 19. Retirement Medical Plan 18
Section 20. Psychological Counseling Program 19
Section 21. Uniforms 19
Section 22. Work Schedule 20
Section 23. Overtime Pay and Compensatory Time Off 33
Section 24. Overtime Sign-Up 34
Section 25. Jury Duty 35
Section 26. Vacation Accrual 36
Section 27. Use of Vacation 36
Section 28. Vacation Pay at Termination 38
Section 29. Vacation Benefits for Deceased Employees 38
Section 30. Effect of Extended Military Leave 38
Section 31. Sick Leave 38
Section 32. Leaves of Absence Without Pay 41
Section 33. Leave of Absence With Pay 42
Section 34. Reduction in Force 43
Section 35. Agents 43
Section 36. Commute Incentives and Parking in Civic Center Garage 43
Section 37. Disciplinary Action and Unsatisfactory Work or Conduct 44
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January 1, 2023– June 30, 2025
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Section 38. Grievance Procedure 46
Section 39. Bulletin Boards and Telephones 49
Section 40. Access to Association Representatives 50
Section 41. Meeting Places 50
Section 42. Voluntary Leave Program: 50
Section 43. Utilization of Reserves for Field Services Division Events 52
Section 44. Overtime Meals for Investigative Services Division 52
Section 45. Hiring Incentives 52
Section 46. Full Understanding 53
Section 47. Printed Agreement 54
Section 48. Duration 54
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Memorandum of
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January 1, 2023 – June 30, 2025
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MEMORANDUM OF AGREEMENT
CITY OF PALO ALTO and PALO ALTO PEACE OFFICERS' ASSOCIATION
January 1, 2023- June 30, 2025
PREAMBLE
This Memorandum of Agreement is pursuant to and subject to Sections 3500-3510 of the
Government Code of the State of California, the Charter of the City of Palo Alto, and the City of
Palo Alto Merit System Rules and Regulations. (This Memorandum of Agreement made and
entered into at Palo Alto, California, by and between the City of Palo Alto, a municipal
corporation (hereinafter referred to as "City") and the Palo Alto Peace Officers' Association,
Incorporated, a California corporation (hereinafter referred to as "Association"), is intended to
define agreements reached during the meet and confer process concerning wages, hours,
working conditions, and other terms and conditions of employment for the represented group
of employees.
Section 1. Recognition
The City recognizes the Association as the exclusive representative of an employee group
consisting solely of Police Officer Trainees, Police Officers, Police Agents, and Police Sergeants
who are regularly employed by the City and others who might be amended into the
representation unit from time to time under existing law and the Merit System Rules and
Regulations.
Section 2. No Discrimination
(a) The Association and the City hereby agree that there shall be no discrimination
because of race, color, age, disability, sex, sexual orientation, national origin,
political or religious affiliation, or any other protected classification as provided by
applicable local, state or federal law. There shall be no discrimination in
employment conditions or treatment of employees on the basis of membership or
non-membership in the Association, or participation in the lawful activities of the
Association.
(b) The Association and the City hereby agree to protect the rights of all employees to
exercise their free choice to join the Association and to abide by the express
provisions of applicable State and local laws.
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Section 3. Association Security
(a) When a person is hired in any of the covered job classifications, the City shall notify
that person that the Association is the recognized bargaining representative for the
employee in said Unit and give the employee a current copy of the Memorandum of
Agreement.
(b) If there is no disruption of work, members of the Association Board of Directors may
use a reasonable amount of on-duty time without loss of pay to attend to
Association business specifically related to representation of employees. Such
release time must be cleared in advance by the appropriate division manager who is
a member of management.
For purposes of this section, representation shall include:
(i) Meetings with represented employees or management related to a grievance or
disciplinary action, including investigation and preparation time.
(ii) A meeting with management related to benefits, working conditions or other terms
and conditions of employment.
Section 4. Payroll Deduction
The City shall deduct Association membership dues and any other mutually agreed upon
payroll deduction from the bi-weekly pay of member employees. The dues deduction must be
authorized in writing by the employee on an authorization card acceptable to the City and the
Association. The City shall remit the deducted dues to the Association as soon as possible after
deduction.
Section 5. No Strikes
The Association, its representatives, or members, shall not engage in or cause, instigate,
encourage, sanction, or condone a strike, withholding of services, concerted abuse of leave of
absence provisions, work stoppage or work slowdown of any kind. No employee shall refuse
to cross any picket line in the conduct of Police Department business, nor shall the Association,
its representatives, or members discriminate in any way toward anyone who refuses to
participate in a strike, or any of the job actions cited above.
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Section 6. Probationary Period
(a) The probationary period for new employees entering the classifications of Police
Academy Trainee or Police Officer shall end 12 months following the successful
completion of Police Academy training. The probationary period for lateral entry
positions, where Police Academy training is waived, shall be 12 months. In the event
a probationary employee is absent for a period exceeding one-hundred and twenty
(120) hours during the probationary period, probation will be extended by an
equivalent number of duty hours.
(b) The probationary period shall be regarded as part of the testing process and shall be
utilized for closely observing all aspects of the employee's qualifications, for
ensuring the effective adjustment of a new employee to the position and for
rejecting any probationary employee who in the opinion of management is not
suitable to attain permanent status.
(c) During the probationary period a new employee may be terminated at any
time by the appointing authority without cause. The existence of cause for
termination shall not be arbitrable.
Probationary employees shall not be terminated for reasons that violate
Section 2. No Discrimination, of this Agreement, or for reasons that are
unconstitutional or unlawful.
(d) Probationary Period for New Supervisors
(1) The probationary period for newly promoted Agents and Sergeants shall end
12 months from the effective date of the promotion, excluding time off due to
any unscheduled absence or leave.
(2) The probationary period shall be regarded as part of the testing process and
shall be utilized for closely observing all aspects of the employee’s qualifications,
for ensuring the effective adjustment of a newly promoted employee to the
position and for rejecting any newly promoted probationary employee who in
the opinion of management is not suitable to attain permanent status in the
newly promoted rank.
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(3) During the 12 month promotional probationary period the newly promoted
employee shall be evaluated by his/her direct supervisor on a quarterly basis.
(4) Any on-going and/or significant perceived deficiencies in the probationary
employee’s work performance or supervisory aptitude shall be promptly
communicated to the employee. When appropriate, the employee shall be
provided with additional training and given opportunities to demonstrate their
performance in response to the training. Such perceived deficiencies, any related
training, and performance improvement or lack of response to training shall be
documented by the employee’s supervisor and recorded in the employee’s
quarterly evaluation for the quarter(s) in which the matter was addressed.
(5) During the promotional probationary period, a newly promoted employee
may be demoted to their previous rank at any time by the appointing authority if
the employee demonstrates a lack of suitability for the newly promoted position.
The demotion shall be based upon deficiencies in the performance or aptitude
that have been addressed and documented as outlined in subsection (5). The
existence of cause for demotion shall not be arbitrable. Promotional
probationary employees shall; not be demoted for reasons that violate Section 2
of the Memorandum of Agreement, No Discrimination; or for reasons that are
unconstitutional or unlawful.
(6) In the event that management elects to demote an employee during his or
her probationary period, pursuant to subsection (6), the affected employee may
request a hearing with the Chief of Police. The hearing shall be held promptly
and prior to the intended effective date of demotion, so as to afford the
employee with a meaningful and timely opportunity to respond to the stated
reason(s) for demotion.
Section 7. Salary Provisions
(a) Market Adjustment: Effective the first full pay period including City Council Adoption,
salary ranges of all bargaining unit classifications will be increased by five percent (5.0%),
which is sufficient to bring them to the top quartile of market median as determined by
the City’s market study.
(b) General Salary Increase: Effective the first full pay period following July 1, 2023, salary
ranges of all represented classifications will be increased by four percent (4.0%).
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(c) General Salary Increase. Effective the first full pay period folllowing July 1, 2024 salary
ranges of all represented classifications will be increased by four percent (4.0%.)
(d) Flexible Compensation: Effective the first full pay period following City Council Adoption, and in
lieu of an increase to the City contribution towards medical premiums, each represented
classification will have their monthly income increased by $100.
(e) Flexible Compensation: Effective the first full pay period following January 1, 2024, and
in lieu of an increase to the City contribution towards medical premiums, each
represented classification will have their monthly income increased by an additional
$100 (total of $200).
(f) Total Compensation and Survey Database. Management and the Union have agreed to a
compensation survey database structure. Survey Cities include: Alameda, Berkeley,
Concord, Fremont, Hayward, Milpitas, Mountain View, Redwood City, San Leandro, San
Mateo, Santa Clara, Vallejo, and Walnut Creek. Compensation Criteria includes: top step
salary, maximum longevity, maximum education/POST, uniform allowance, holiday pay,
deferred compensation, employee pick up of employer pension costs (Negative EPMC),
and maximum City paid benefits (medical, dental, vision, life insurance, LTD, and EAP).
The database is intended to provide one source of information concerning how the
compensation paid to employees in bargaining unit job classifications compares to that
paid by other employers.
(g) Salary Steps & Ranges (Eligibility)
New officers attending the basic police academy will be compensated at the “Police
Trainee” level.
Academy Graduates and Lateral Officers with less than two years experience will be
compensated at the “Police Officer” “Step 1” Level or higher.
Jr. First Class Exam: Officers become eligible to take the exam anytime after they
complete the Field Training Program. However, the pay increase will not become
effective until they have successfully completed the test and have been with the
department for a year from the academy graduation (Laterals a year from hire date).
For employees hired prior to July 1, 2018, the pay increase for Jr. First Class is
compensated at the “Police Officer” “Step 4” level (Approximate 5% Increase). For
employees hired on or after July 1, 2018, the pay increase for Jr. First Class is one step
on the salary schedule (approximate 5% increase), no higher than Step 4.
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First Class Exam: Officers become eligible to take the exam any time after they have
successfully completed the Jr. First Class Exam. However, the pay increase will not take
effect until one year from the date of the merit increase for the Jr. First Class exam.
(Lateral officers’ pay increase may be effective one year from the date of hire) For
employees hired prior to July 1, 2018, the pay increase for First Class is compensated at
the “Police Officer” “Step 5” Level (Approximate 5% Increase). For employees hired on
or after July 1, 2018, the pay increase for First Class is one step on the salary schedule
(approximate 5% increase), no higher than Step 5.
Effective the first full pay period following adoption of this MOA by City Council, the City
will Implement a new step 6 following the same percentage difference as steps 1-5.
Employees with one (1) year or more of service with the City of Palo Alto at Step 5 will
be moved to Step 6.
(h) POST Certificate/Incentives
Basic Post: Officers become eligible upon completion of their probationary period.
The certificate must be obtained within 18 months of hire date. (No Salary Increase)
Intermediate POST: Employees that qualify for the Intermediate POST certificate will be
compensated at the corresponding salary schedule (e.g., “Police Officer/Inter”), effective
the first full pay period after the employee provides proof of submission of the required
paperwork to POST (approximate 5% increase).
Advanced POST: Employees that qualify for the Advanced POST certificate will be
compensated at the corresponding salary schedule (e.g., “Police Officer/Adv”), effective
the first full pay period after the employee provides proof of submission of the required
paperwork to POST (approximate 2.5% increase).
Employees are responsible for contacting Personnel & Training in order to arrange taking
tests and application for POST certificates.
(i) Special assignment premium pay
Effective with the pay period including July 1, 2001, biweekly premium pay for
employees assigned to the indicated specialties will be as follows:
Field Training Premium: 5% of base pay per pay period.
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Applies to management-assigned Officers and Agents and Traffic Team members during
each pay period in which they provide training to police recruits, Community Service
Officers or Level II reserve officers who are working on their Level I certificate. Applies
to management-assigned FTO Sergeants during each pay period in which they supervise
assigned FTO Officers or Agents who are actively training police recruits, Community
Service Officers or Level II reserve officers who are working on their Level I certificate.
The parties agree that, for the period beginning the first full pay period following the City
Council adoption of the agreement and ending the last full pay period in June 2025,
Officers, Agents and Traffic Team members who management designates as Field
Training Officers and Sergeants designated as FTO Sergeants will Receive the 5% FTO
premium for all pay periods, without regard to whether they are assigned a police
recruit during that pay period. The Parties also agree to revisit this section to determine
whether to continue this program prior to June 30, 2025.
Traffic Premium: 5% of base pay per pay period.
Effective the first full pay period following City Council adoption of the MOA in 2023,
Officers, Agents and Sergeants who management assigns to routinely and consistently
operate or patrol on a motorcycle.
K-9 Program Premium: 5% of base pay per pay period.
Effective January 1, 2008, K-9 Officers/Agents shall receive 5% of base pay per pay
period to compensate for the time spent by the K-9 Officer/Agent outside regularly
scheduled work hours to feed, groom, house, exercise, attend to the medical and dental
needs of and otherwise maintain the dog.
Bilingual Premium: 5% of base pay per pay period.
Applies to representation unit employees certified by management as proficient in other
languages as outlined below.
(i) Approved Languages
Spanish, Chinese (Mandarin and Cantonese), Japanese, Tagalog, Korean,
Vietnamese, Russian, American Sign Language, and such other languages as
determined by management.
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(ii) Proficiency Requirements
Officers, Agents, and Sergeants who pass a basic “first responder” proficiency test
administered by a professional linguist will be eligible for bilingual pay. This
proficiency test will be a one time test to ensure the candidate has the ability to
verbally communicate (with the exception of American Sign Language) as a first
responder in the selected Language. First responder proficiency will include, but is
not limited to, the ability to take basic crime and accident reports; issue a citation
and explain the court process; complete a field interview card; give directions; give
a Miranda admonition; and generally be able to communicate with a non-English
speaking person in need of basic police services.
Study material will be provided by the City to all employees to assist in test
preparation.
(iii) Testing Process
In order to best accommodate the wide range of languages, proficiency testing will
be conducted by professional linguists outside the Police Department that have
been agreed upon by the Association and Management. A basic first responder
proficiency exam has been developed based upon the needs of the organization.
The City will pay for the initial test for each employee. Employees who do not pass
the initial test may retest as many times as necessary. However, subsequent tests
will be at the employee’s expense.
Section 8. Night Shift Differential
(a) Night shift differential shall be paid at the rate of 5% to all FSD personnel for all hours
worked between 6:00 p.m. and 8:00 a.m.
(b) All employees covered under Section 23(d) working a regular shift between 7:00 a.m. and
7:00 p.m. shall receive 5% night shift premium for hours worked between 7:00 p.m. and
7:00 a.m.
Vacation and administrative leave pay for employees who regularly work night shifts shall include
appropriate night shift premiums, relating to night shift hours regularly worked.
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Memorandum of
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Shift adjustment hours for employees who regularly work the 4-11 work schedule shall include the
appropriate night shift premium based on the percentage of usual night shift hours worked to
regular hours.
Section 9. Paid Holidays
(a) All represented employees on leave of absence without pay shall not receive in-lieu holiday
accrual during such leave, or any compensation for holidays occurring during such leave.
(b) Employees shall not receive paid holidays, but in lieu thereof shall receive 3.462 hours
straight time pay each full pay period that they are in paid status, to a maximum payment
of ninety (90) hours per year. Effective the first full pay period following City Council
adoption of the MOU in 2023, this amount shall be increased to 3.846 hours straight time
pay each pay period that they are in paid status, to a maximum payment of one hundred
(100) hours per year. Holiday hours will be pro-rated for employees in paid status a portion
of a pay period.
Hours under this provision will be paid each pay period while in a paid status. Employees
working non-field services assignments shall be eligible to use accrued paid leave time
balances for any of the following recognized City holidays subject to management
scheduling approval:
January 1
Third Monday in January
Third Monday in February
Last Monday in May
July 4
First Monday in September
Second Monday in October
November 11
Thanksgiving Day
Day after Thanksgiving Day
December 25
Either December 24 or December 31,
A Day of Reflection in recognition of a day of the employee’s choosing,
including Juneteenth Freedom Day (June 19) or Cesar Chavez/Dolores
Huerta Day (March 31)
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Section 10. Working Out of Class Pay
Officers, Agents and Sergeants working out of class for a period of four or more consecutiveshifts)
shall be compensated with the following premium pay;
Officers and Agents working as an Acting Sergeant: 7% of base pay for all shifts
Sergeants working as an Acting Lieutenant: 10% of base pay for all shifts
Agents, and Sergeants fulfilling the role of an Acting Sergeant and/or Acting Lieutenant for
individual shifts and/or a number of hours within a shift, shall not receive additional compensation.
Periodically working in this capacity shall be deemed a basic duty within an employee’s job
description.
In accordance with Government Code 20480, an employee assigned to work in an out-of-class
appointment may not exceed 960 hours worked in the appointment within a fiscal year if the
employee is appointed to an upgraded position or higher classification that is vacant during
recruitment for a permanent appointment. This limitation does not apply to a position that is
temporarily available due to a leave of absence.
Section 11. Retention/Career Incentive Program (Special Compensation)
(a) Retention/Career Incentive Program
On July 1, 2007 the City will initiate a Retention/Career Incentive Program. It is recognized
that hiring, training, and retaining qualified law enforcement personnel is becoming
increasingly difficult, time consuming, and very expensive. This program is designed to
provide greater incentives for hiring new employees, retaining long-term employees, and
attracting quality lateral candidates from other law enforcement agencies. This program
will provide special compensation in the form of premium pay at various levels as
employees reach different career milestones. Both parties acknowledge that in the 2007
negotiations, the cost of the program was partially offset through salary and/or benefit
reductions agreed to elsewhere in this Memorandum of Agreement.
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All employees with more than 10 years of service shall receive special compensation in
the form of retention pay at 3% of straight time base pay.
All employees with more than 15 years service shall receive special compensation in the
form of retention pay at 6% of straight time base pay. Maximum under this provision is
6%.
As an incentive to recruit and hire lateral law enforcement personnel from other
agencies, the following shall apply. At the Chiefs discretion, up to 5 years of full time law
enforcement service may be counted towards the years of service outlined above.
Special Compensation/Retention Pay outlined in the Retention/Career Incentive
Program shall be deemed PERSable for the purpose of income and retirement however
will not be a factor when calculating “MOU” (non-FLSA) overtime compensation.
Section 12. Dependent Care Assistance Program and Medical Flexible Spending Accounts.
The City will provide a Dependent Care Assistance Program (DCAP) and Medical Flexible
Spending Account (FSA) for employees according to the provisions of the Federal Economic
Recovery Act of 1981, Code Sections 125 and 129. With the exception of matters within the
City’s sole control (e.g., establishment of the FSA), all matters related to the FSA shall be
excluded from the MOA grievance procedure. Disputes regarding the administration of the
plan shall be subject to the dispute resolution procedure provided by the plan document.
The FSA will be available to representation unit employees effective January 1, 2019, and remain in
effect subject to a reasonable minimum participation level and availability of third-party
administrative services at a reasonable cost.
Section 13. Court Pay
Sworn Police Personnel appearing in court or in an administrative forum in the course and scope of
their normal duties will be compensated according to the following:
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(b) During scheduled shift
or immediately preceding
or following a shift
Time and one-half for period
before or after scheduled
scheduled work day by
employees of Team #3
scheduled work day by
employees of Team #4 or
appearances
Section 14. Health Plans
(a) PEMHCA Health Plan
During the term of this contract, the maximum City contribution towards medical premiums
for eligible full time employees per employee category shall be up to a maximum of the
following for any plan:
Medical Premium
Category Contribution* Contirbution
PEMHCA
contribution)
effective first month
following City
Employee Only $151.00 $871
Employee plus one $151.00 $1742
Employee Family $151.00 $2260
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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.
*PEMHCA minimum changes annually. Any increases to the PEMHCA minimum during the
term of this contract 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.
If the State of California or federal government requires the City to participate and
contribute toward coverage under any medical plan outside of PEMHCA including but not
limited to the Affordable Care Act, the City’s total liability for enrolled employees and
retirees and their eligible family members shall not exceed what the City would have paid
toward PEMHCA coverage in the absence of such state or federal plan. The parties will
meet and confer over the impact of such change on matters within the scope of
representation before implementing any change.
(b) Vision Care
The City will offer vision care coverage for employees and dependents. Coverage is
equivalent to $20 deductible Plan A under the Vision Service Plan, with monthly premiums
paid by the employer. Dependents will include domestic partners, as defined under Section
14 (c).
(c) Active Employee Domestic Partners
Active employee domestic partners whose domestic partnership is registered with the State
of California 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.
Active employee domestic partners whose domestic partnership is not registered with the
State, but who meet the requirements of the City of Palo Alto Declaration of Domestic
Partnership, and are registered with the Human Resources Department, will be eligible for a
stipend of two hundred 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
stipend.
(d) Alternative Medical Benefit Program
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If a regular employee and/or the employee’s dependent(s) are eligible for and elect to
receive medical insurance through any other non-City of Palo Alto employer-sponsored or
association-sponsored 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 two
hundred eighty four dollars ($284) for each month City coverage is waived.
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 domestic partner 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.
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.
(e) Dual Coverage
When a City employee is married to 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
Section 15. Dental Benefits
(a) The City will maintain the present level of benefits on the City-sponsored dental program for
current employees and their dependents, except that the maximum benefits per calendar
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year shall be $2,000 effective in 1988. Dental Coverage shall include composite (tooth
colored) fillings for all teeth.
(b) The City provides a 50% of reasonable charges, $2,000 lifetime maximum orthodontic
benefit for representation unit employees and their dependents.
(c) Dependents will include domestic partner, as defined under Section 14 (c).
(d) Dental implants in conjunction with one or more missing natural teeth, and removal of
dental implants will be covered as a Major Dental Service at 50% usual, customary and
reasonable (UCR).
Section 16. Life Insurance Benefits
The City agrees to continue the basic life insurance plan as currently in effect for the term of this
Memorandum of Agreement.
Section 17. 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, and life insurance plans if these benefits are
elected.
Section 18. Retirement Benefits
(a) Safety Pension Group A: “3% at 50” Safety Retirement
The City will continue the present benefits under the Public Employees’ Retirement System
(PERS) “3 percent at 50” (3% @ 50) Retirement Formula per California Government Code
§21362.2 for employees hired before the effective date of the “3 percent at 55” (3% @ 55)
formula for new hires as described herein. The final year compensation for employees hired
under the 3% at 50 formula will continue to be the “single highest year” or the highest
average annual compensation earnable by the member during one (1) year of employment
immediately preceding retirement or the one-year period otherwise designated by the
member (Government Code 20042). Current employees continued to be covered under
Government Code 20692, Employer Paid Member Contribution, to the extent there is a City
paid member contribution in the final year.
(b) Safety Pension Group B: 3% at 55 Safety Retirement
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Effective December 7, 2012, the City amended its contract with CalPERS to provide
employees hired on or after that date who are not “new members” of CalPERS as defined in
the Public Employees’ Pension reform act (often referred to as “Classic” CalPERS members)
with the CalPERS retirement formula three percent of final salary at age 55 (3% at 55), with
the final salary determination for such employees of “three highest consecutive years” based
on the highest average annual compensation earnable by the member during three (3)
consecutive years of employment immediately preceding retirement or the three year
period otherwise designated by the member (Government Code Section 20037). This new
tier also eliminated Section 20692, Employer Paid Member Contribution.
(c) Safety Pension Group C: 2.7% at Age 57 Safety Retirement
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 point seven percent at age
57 (2.7%@57) retirement formula with a three year final compensation period.
(d) Employee Share of PERS Contribution
Employees in all sworn represented classes in Pension Groups A and B described above will
make a 12% PERS member contributions by payroll deduction.
Employees in all sworn represented classes in Pension Group C described above shall pay the
employee contribution required by the Public Employees’ Pension Reform Act, currently
calculated at fifty percent (50%) of the normal cost, plus an additional 3%.
Trainees will pay the same employee contribution as miscellaneous members while
attending Basic Academy (see section (g) below).
The City will continue to provide for member contributions to be made as allowed under the
provisions of IRS Code §414(h)(2).
(e) Additional Employee PERS Contributions
• Effective the first full pay period following July 1, 2019 or as soon as administratively
possible, all employees regardless of pension formula in this unit shall contribute an
additional 0.5% to the Employer share of pension for a total of 3.5% contribution toward
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the Employer share of pension. (Total Employee contribution will be 12.5% for Classic;
50% of Normal Cost plus 3.5% for PEPRA.)
• Additional contributions will coincide with the City amending its contract with CalPERS
to reflect these changes. However, should CalPERS delay or the Association fail to
approve the CalPERS amendment required to incorporate the additional 0.5%
contribution, the City may implement the additional 0.5% effective July 1, 2019 without
a contract amendment., and additional employee PERS contributions under CalPERS
20516 will be provided on a pre-tax basis to the extent allowable by law.
(f) 457 Deferred Compensation Plan
Effective the first full pay period following July 1, 2019 all employees who are classified as “New
Members” by PERS or “Group C’ by the MOA will receive $50 per month contributed into their 457
deferred compensation plan. Eligible employees must have an active 457 plan in order to receive
City contirbutions.
1959 Survivor Benefit
The City will continue to provide the basic level (Level 1) of 1959 Survivor Benefit to eligible
employees in accordance with California Government Code §21571.
(g) Military Service Credit
The City’s contract with the Public Employees' Retirement System provides for Section
20930.3, Military Service Credit as Public Service.
(h) Retirement Privileges
All retired employees and spouses of deceased employees shall have residential
privileges at City libraries, refuse disposal area, golf course, and swimming pools.
(i) PERS Status While in Basic Academy.
While an employee is attending Basic Academy, he or she shall participate in the City’s PERS
Miscellaneous Employee retirement plan with the same employee and employer
contribution rates as applies to Miscellaneous City employees represented by SEIU
(classified unit). When the employee successfully completes Basic Academy and is sworn in
by the Police Chief, he or she shall prospectively participate in the PERS Safety Employee
retirement plan.
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Section 19. Retirement Medical Plan
(a) Retiree Medical Coverage - Employees hired before January 1, 2006 who have not
voluntarily elected to participate in the Retirement Healthcare Benefits provided in
Government Code section 22893:
Monthly City-paid premium contributions for a retiree-selected PEMHCA optional plan will
be made in accordance with the Public Employees' Medical and Hospital Care Act
Resolution for employees who retire on or before December 31, 2007. Effective March 1,
2009, for an employee retiring on or after that date, the City will pay up to the monthly
medical premium for the second most expensive plan among the existing array of plans
during the Agreement term. Effective April 1, 2015, for an employee retiring on or after that
date, the City contribution shall be the same contribution amount it makes for active City
employees. The parties mutually agree that the benefits provided in this paragraph for
employees retiring on or after April 1, 2015 will fluctuate from time to time based on the
City’s contributions to health care for active employees. Accordingly, Association members
who retire on or after April 1, 2015 and have not elected to participate in the Retirement
Healthcare Benefits provided in Government Code section 22893, do not maintain a vested
interest in any particular contribution by the City above the amount required under the
PEMHCA.
(b) Retiree Medical Coverage - Employees who voluntarily elect to participate in Government
Code section 22893, and all Employees hired on or after January 1. 2006:
The CalPERS vesting schedule set forth in California Government Code § 22893 will apply to
all Association members hired on or after January 1, 2006, and employees hired prior to
January 1, 2006 who voluntarily elect to participate in the Retirement Healthcare Benefits
provided in Government Code § 22893.
Under this 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 with the City of Palo Alto. After ten (10) years of service credit, each
additional year of service credit will increase the employer contribution percentage by 5%
until, at twenty (20) years' service credit, the employee will be eligible upon retirement for
100% of the specified employer contribution. However, the maximum contribution for family
members will be 90% of the specified employer contribution. Notwithstanding any other
term of this section, the City of Palo Alto's health premium contribution for employees hired
on or after January 1, 2006, and employees who voluntarily elect to participate in
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Retirement Healthcare Benefits provided by Government Code § 22893, will be the
minimum contribution set by CalPERS under California Government Code § 22893 based on
a weighted average of available health plan premiums.
Section 20. Psychological Counseling Program
The psychological counseling program currently in effect shall be continued. The program shall
provide 24-hour emergency counseling by independent professional consultants.
Section 21. Uniforms
(a) The City will supply complete uniforms to all sworn personnel. All uniform items are the
property of the City. One complete uniform consists of: (1) three pair of trousers, (2) three
short-sleeved shirts with patches and zippers if desired, (3) three long-sleeved shirts with
patches and zippers if desired, (4) three cotton or two synthetic fiber turtleneck shirts, (5)
hat, (6) duty jacket with patches, (7) necktie, and (8) rain gear. The value of the purchase,
rental and/or maintenance of the required uniforms shall be reported as special
compensation to the extent legally permissible, pursuant to Title 2 CCR, Section
571(a)(5) as Uniform Allowance. Based upon existing uniform standards and the
City’s cost experience, the value of this benefit shall be reported as $42.31 per pay
period.
(b) At the time of initial employment, every sworn employee will be issued one complete
uniform. Uniform items will be replaced on an as-needed basis subject to verification by
management.
(c) The City shall provide uniform cleaning for sworn representation unit personnel.
(d) Personnel are accountable for all uniform items issued to them. If a particular item is lost or
damaged due to employee negligence, the employee will be required to reimburse the City
for value of the item(s) lost or damaged.
(e) The City shall reimburse employees for the full cost of job-related safety boots up to $400
per fiscal year. The City will make the reimbursement only upon proof that the previous
boots have become unserviceable due to wear or damage and upon verification of such
purchase by the employee. (Job-related safety boots shall mean well-constructed, high
topped boots that provide full ankle and foot support, which are selected from list agreed to
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by Management and the Association.) All Department-provided safety boots shall be
purchased through this program.
Employees are responsible for the full cost of any low-top, black shoes that are worn with
the uniform.
Section 22. Work Schedule
(a) Field Services Division 4/11 Schedule
The patrol schedule will have two sides, “A-Side” and “B-Side.” There will be ten patrol
teams each supervised by a Sergeant or Acting Sergeant under the management of
patrol lieutenants. Five Patrol teams will work an “A” schedule and five Patrol teams will
work a “B” schedule.
Patrol officers, agents, and sergeants will report for duty promptly at the designated times
for each team. Patrol team schedules are as follows.
Patrol Division Team Schedules
A-Side B-Side
Team 1A 0500 to 1600 Team 1B 0500 to 1600
Team 2A 0700 to 1800 Team 2B 0700 to 1800
Team 3A 1400 to 0100 Team 3B 1400 to 0100
Team 4A 1800 to 0500 Team 4B 1800 to 0500
Team 5A 2000 to 0700 Team 5B 2000 to 0700
Team’s 2A, 3A, and 4A are designated as field training teams.
(1) 4/11 Work Schedule
The work schedule will be based on an eight (8) day cycle with each employee working four
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(4) consecutive days on and having four (4) consecutive days off. The eight (8) day cycle will
advance the employee’s workdays and days off within the calendar week one day every
cycle. The overall cycle repeats itself every eight (8) weeks.
Over the course of a year (26 pay periods) each employee works 182 eleven (11) hour
regular patrol shifts totaling 2002 hours, 78-hours short of the required fulltime equivalent
work year of 2080 hours.
In the Patrol Division and with the approval of the Patrol Captain, a maximum of two (2)
paired “fixed days” schedules (4 Employees) may be established, at the employees’ request.
The regularly scheduled hours of work for such a position must cover the days off of the
position with which it is paired. For example, one position could have Sunday, Monday,
and Tuesday off while the other could have Thursday, Friday, and Saturday off. It shall be
the responsibility of employees interested in a paired fixed day schedule to identify another
employee who is willing to participate in the paired arrangement. If either employee or the
Department desires to terminate a paired schedule once it is in effect, the employee or
Department, as applicable, must give the other affected parties to the arrangement at least
one (1) full pay period advance written notice. Resumption of the employees’ participation
in the normal rotation shall begin on the first day of the second full pay period following the
date notice is delivered to the other parties.
Employees on a fixed schedule will be required to attend the designated CPT (Continued
Professional Training) training days either on their regularly scheduled workday or on a day
off. If they attend training on their regularly scheduled day off, they will be compensated by
receiving an adjusted day off within the same pay period.
Employees requesting a schedule different from the rotating 4/11 must submit their
request in writing prior to the team selection process. The requests will only be considered
on an extreme hardship basis
The following hours and minimum staffing levels will be observed on both sides of the
Patrol Division. During team overlaps, the combined staffing levels of the teams will serve
to meet minimum staffing levels.
0700-2400 hours 1 Lieutenant/Sergeant Watch Commander
1 Sergeant/Agent Supervisor
6 Officers/Agents
0001-0300hours 1 Lieutenant/Sergeant Watch Commander
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1 Sergeant/Agent Supervisor
5 Officers/Agents
0300- 0700 hours 1 Sergeant Supervisor
5 Officers/Agents
Under routine circumstances, personnel will be able to receive time off as long as minimum
staffing numbers remain available for duty. Management may deny time off to maintain
staffing greater than the minimum numbers outlined above. It’s anticipated this will only
occur in special situations where greater staffing is needed.
(2) Designated CPT Training Days within the 4/11 Schedule:
The 4/11 Schedule will have designated CPT training days and flexible training hours to
make up the seventy-eight (78) hours necessary to complete a full work year. A training
bank will be created for each employee on the 4/11 Schedule to track and monitor the use
and balance of the 78-hours. The training bank and its use are outlined in the next section.
For CPT training days which require employees to travel outside the City of Palo Alto, an
additional two (2) hours of training bank time will be made available to account for all
travel time related to attendance at training. The Division Captain may authorize additional
time on a case-by-case basis.
Management will determine the number of designated CPT training days and stagger them
throughout the year in order to avoid overtime insofar as possible.
Designated CPT training days will be scheduled prior to the beginning of each shift year.
Unless otherwise determined by the Department, there will be five (5) designated CPT
training days each year. These training days will vary in duration but will in most cases be
approximately eight (8) to ten (10) hours in duration. The exact number of designated CPT
training days, their duration in hours, and the remaining flexible training bank time will be
determined prior to shift change and vacation selection. If it’s anticipated that the number
of training days will vary in any given year, Management will notify and, on request, meet
with PAPOA to consider any concerns the Association may have.
Patrol personnel will not be permitted to take vacation on any one of these pre-designated
CPT training days. The Division Captain may authorize an exception based on compelling
circumstances.
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The course content and training provided on the designated CPT training days can vary
from year to year to meet current and changing training needs. It will be the responsibility
of the Personnel and Training Division to schedule and coordinate the training on
designated CPT training days. Training days may be scheduled during daytime and/or
nighttime hours to accommodate training needs.
Sworn employees not on the 4/11 Schedule will be required to attend designated C.P.T.
training days. Each of the training days will be broken into two (2) single day sessions for
Patrol (A side and B side). It is anticipated that approximately fifty percent (50%) of the
non-4/11 employees will attend one (1) of the two (2) days during each of the training
cycles.
If the nature and/or complexity of the training does not allow for a larger groups, multiple
sessions can be scheduled on additional training days.
(3) Flexible Training Hours
This schedule results in seventy-eight (78) hours that will be made up during the year
through designated CPT training days and flexible training time. It is anticipated that
approximately fifty (50) hours will be set aside each year for designated CPT training days
(exact number to be determined each year). Once the hours set aside for designated CPT
training days is established, the remaining hours shall be used for flexible training as
follows.
Employees on the 4/11 Schedule attending training on a day off or outside their normal
shift shall use their available Flexible Training Bank hours (Non-CPT Hours) prior to using
overtime. All Flexible Training Bank hours must be used prior to earning overtime. The only
limitation on the use of these training hours is that no employee can exceed the one
hundred seventy-one (171) hour FLSA limit in any twenty-eight (28) day cycle. The
combination of regular work shifts, designated CPT training days, and flexible training time
cannot exceed one hundred seventy-one (171) hours in any FLSA Cycle. Any hours worked
over one hundred seventy-one (171) in a twenty-eight (28) day cycle are considered
premiums hours and must therefore be paid at the overtime rate.
The following is a list of some of the forms of training that could use hours from the bank;
SWAT DRO Range Masters
Quarterly Shoots FTO Meetings K-9
Sergeant’s meetings FTO School 11550 School
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Radar School Supervisor school All other Training
If an employee doesn’t use his or her flexible training hours during the year, he or she will
be required to make up the difference by either working extra shifts, partial shifts or by
using vacation, compensatory time off, and/or holiday time from one of their banks at the
end of each fiscal year. The Watch Commander and Supervisor will work with employees to
schedule extra shifts or use vacation, holiday or compensatory time off balances. These
hours are hours the employee is being compensated for during the normal twenty-six (26)
pay periods. The employee must work the hours on a straight time basis or use vacation,
holidays or compensatory time off for the compensation received throughout the year.
(4) Other Training (not covered by the flexible training bank)
The 4/11 Schedule significantly impacts designated CPT training days, shift training, and to
some extent training compensated under the flexible training hours. The following
guidelines should be followed when attending training not covered by the flexible training
hours. All training bank hours, adjusted time off associated with training, and/or overtime
associated to training shall be approved in advance by the employee’s watch commander or
supervisor.
training on a day off. of hours at training or adjustment for one patrol shift.
Adjustments will be documented in the City timekeeping
system.
training on a day on.
timekeeping system.
but less than a
week.
off one patrol shift. Adjustments will be documented in
the City timekeeping system
training on a day off. in training. Adjustments will be documented in the City
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Partial day of
training on day on. the training and be expected to work the remainder of
their shift. Adjustments will be documented in the City
timekeeping system.
day (week) training
session that doesn’t
exceed forty-four
(44) hours.
employee is in their twenty-eight (28) day cycle, the
employee will be adjusted off the patrol schedule when
attending four or five day training sessions. The employee
will be adjusted from four (4) eleven (11) hour shifts as
compensation for attending the course. The four (4)
adjusted days will be as close to the days the employee
attended training as possible. Employees will not receive
overtime under this situation unless the total time training
exceeds forty-four (44) hours. Adjustments will be noted in
(5) Assignments of Sworn Personnel on the 4/11 Schedule
Each year assignments are made for management staff for the coming fiscal year.
Subsequent to those assignments, officers, agents, and sergeants apply for specialty
positions. At the conclusion of those specialty selections, the Patrol Team Selection process
begins. Each year, the following process will be used for patrol team selection.
Field Services Division Shift Assignment Process:
Field Services sergeants, agents, and officers will select their work team based on the
following criteria.
a. Sergeants, in order of seniority, shall select one of the ten patrol teams. Sergeants
may select any open team with the exception of those teams designated as Field
Training teams. FTO Sergeants, in order of seniority, will select one of the
designated FTO teams.
b. Field Training Officers/Agents, in order of seniority, shall select one of the slots
open and designated as FTO slots on one of the three FTO teams. The following
teams have been pre-designated as training teams: Team 2A, Team 3A, and Team
4A.
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c. K-9 Officers/Agents – K-9 officers/agents will generally select one of the night shift
teams: Teams 4 and 5. Selections will be based on rank and seniority. Only one K-9
will be allowed per team and K-9’s will be evenly split between the two sides
Any exception to these assignments must be requested and approved by the Field
Services Coordinator prior to the start of the selection process.
d. Agents, in order of seniority, shall select any of the open agent’s slots remaining on
any of the patrol teams. A minimum of three (3) agents will be assigned to the A-
Side and a minimum of three (3) agents will be assigned to the B-Side. If a greater
number of agents are assigned to patrol, management will evenly designate agent’s
slots insofar as possible to as many of the patrol teams as possible with the goal
being to have one agent on each patrol team.
e. Officers, in order of seniority, shall select any remaining slot available on any of the
patrol teams.
f. Probationary Officers - May be assigned to teams at the discretion of the Field
Services Division Coordinator. These assignments will be made based on the
developmental needs of the new employee, the staffing needs of the organization,
and in a manner that minimizes the loss of prime bidding slots for more senior
officers/ agents.
Additional Team Selection Guidelines
Prior to the selection process, management shall determine the number of agents,
and officers assigned to each team.
Additionally, management will determine which teams are available for selection by K-9
Officers/Agents. Field Training Officers/Agents, Field Training Sergeants, and probationary
employees shall be subject to administrative assignment.
In the spring of each year, all employees participating in the patrol team selection process
will receive a schedule identifying available slots, the process for team selection, and a date
and time for the employee to make their selection Team Selection Reservations – Once
Officers/Agents/Sergeants select a team, they will be guaranteed that team even if they are
unable to work that team at the start of the shift year due to special assignment, internship,
leave of absence, disability, illness etc.
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Officers, Agents and Sergeants may not remain in the same time slot for more then two
consecutive years.
Team change request will be considered with the approval of management.
Any request for an anticipated change to the assignment of sworn personnel shall be
routed to the Field Services Division Coordinator prior to the selection process.
(6) Vacation Selection
Concurrent Vacation Authorization – Officers and Agents
Patrol Division – Four (4) slots are authorized on the A-Side and four (4) slots are
authorized on the B-Side. It is anticipated that this would equate to two (2) slots on
night shift (Teams 3, 4, and 5) and two (2) slots on day shift (Teams 1, and 2) for
each side.
Any exceptions to these rules may be made by the Field Services Division
Coordinator based on special circumstances.
Concurrent Vacation Authorization - Sergeants
Patrol Division – Two (2) slots are authorized in patrol on the A-Side and two (2)
slots are authorized in patrol on the B-Side. It is anticipated that this would equate
to one (1) slot on the night shift (Teams 3, 4, and 5) and one (1) slot on the dayshift
(Teams 1 and 2) for each side. Exceptions to allow two (2) sergeants vacation at the
same time for special circumstances may be made by the shift lieutenant. Other
exceptions to this rule may be made by the Field Services Division Coordinator.
a. The A-side and B-side will have separate vacation signups. It’s also anticipated
that the dayshift and nightshift will have separate signups. For agents and above,
selection will be based on rank and time in rank. Personnel having the greatest
tenure in rank will have priority. For officers, selection will be based on seniority. If
seniority is equal, low badge number shall have priority.
b. Sergeants will have a separate signup sheet from agents and officers. During the
initial sign up sergeants will have two guaranteed slots per side, one (1) on day shift
and one (1) on night shift. Agents/officers will have four (4) guaranteed slots per
side, two (2) on day shift and two (2) on night shift.
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Vacation Selection Process: Vacation selection will occur within a few weeks of the
team selection process each spring. Selections will take place on two days, one day
for the A-Side and one day for the B-Side. Sergeant, agents, and officers will be
given time slots to come in, call in, or may submit in advance written instructions on
choice for vacation weeks. The selections will be made based on rank and seniority.
Both sides agree to monitor the outcome of the process and enter into a mutual
agreement to continue or discontinue the process.
(7) Time Keeping and Payroll
All employees working under the 4/11 schedule will work eleven (11) hours a day, four (4)
consecutive days a week. These eleven (11) hours will be entered in the timekeeping
system on the day they are worked and/or prior to pay period payroll deadlines. Employees
attending one (1) of the designated CPT training days will enter the hours of training on a
“training timesheet” and enter the time in the timekeeping system. Employees using hours
from their flexible training bank shall complete a “training timesheet” and enter the time in
the timekeeping system.
Employees working the 4/11 Schedule will not receive overtime compensation
for hours worked under the following conditions.
• Hours worked as part of a regular 11-hour work day.
• Hours worked on a designated CPT training days.
• Hours associated to training where hours from the flexible training bank could be
used.
• Non-Mandatory training where adjustments from the patrol schedule are possible.
Overtime shall be paid for “Mandatory” training once training bank hours have been
exhausted.
Overtime shall be paid for “Mandatory” meetings that fall outside the specialty exemption
listed below.
Participation in department specialties including training, meetings, and other activities is
not considered a mandatory activity when it comes to overtime compensation. Wherever
possible, employees participating in department specialties and other non-mandatory
activities will be adjusted off the patrol schedule for these activities. Schedule adjustments
will occur as close to the activity outside the employee’s normal work schedule as possible
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and within the same FLSA Cycle.
Schedule adjustments for personnel working nights: All personnel attending a full day of
training on a work day will be adjusted off the patrol schedule for their work shift that day.
In addition to being adjusted off any shift that starts on the day the training occurs,
employees working Teams 3, 4, and 5 the night before the training will be adjusted off the
night before as follows. If the training is all day starting in the morning hours, these
adjustments will apply.
Team 3: Adjusted off at 2200 hours.
Teams 4 & 5: Adjusted off the entire shift.
If a night shift employee is scheduled for a full day of “Mandatory” training on the morning
of his or her first day off, the same adjustments listed above will apply. In addition to the
necessary adjustment, employees will receive compensation for the training hours through
the use of training bank hours. When training bank hours are exhausted, the employee will
receive overtime.
The time keeping system entries: Each employee must enter his or her time in the
timekeeping system that accurately reflects the hours he or she works. When schedule
adjustments are made, overtime is worked, or training bank time is used, employees must
make appropriate notes in the comment section of the timekeeping system. Supervisors
and timekeepers may complete the timekeeping system entries when employees are
unavailable due to illness or other situations and employees will thereafter verify the
timekeeping entry is accurate upon their return to work.
Managers and supervisor will approve time entries made in the time keeping system.
Managers and supervisors will pay special attention to the use of training bank time and
overtime. Time entries should be reviewed for regular hours and training hours that may
exceed the FLSA guideline of 171 hours in a 28 day cycle.
With the 4-day on 4-day off rotation, employees will work either 66 or 88 hours in each pay
period. The timekeeping system will shift adjust the appropriate number of hours into (+14)
and out of (-8) the employees bi-weekly totals so each employee receives compensation for
80 hours. Regardless of the number of hours worked under the FLSA exemption, an
employee will be compensated for 80 regular hours every bi-weekly payroll cycle.
These shift adjusted hours (-8 or +14) will be added to or taken away from the timecard at
the appropriate day/night shift differential rates for each employee. As an example, if an
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Memorandum of
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employee’s normal shift is paid at 75 percent day rate and 25 percent night rate, all hours
shift-adjusted on to or off the timecard will be adjusted using the same approximate ratio
of 75/25 percent for day/night rates.
If an employee leaves city service while on the 4/11 schedule, staff and payroll shall
perform the training bank reconciliation of the number of hours the employee is over or
under the normal forty (40) hour workweek rate since the beginning of the current one (1)
year (twenty-six [26] pay period) 4/11 cycle. If the employee has worked more hours than
the forty (40) hour a week average, he or she shall be compensated for those hours at the
regular rate. If the employee is under the forty (40) hour a week average, the hours will be
taken from the employee’s vacation, holiday, or comp time bank and/or deducted at the
regular rate from the employee’s last check.
If an employee’s assignment changes from the 4/11 schedule or to the 4/11 schedule, his or
her over/under rate will be calculated the same as above. Time off, extra shifts worked,
and/or the adjustment of holiday, vacation, and/or comp. time banks will be used to
resolve any differences between actual hours worked and the forty (40) hour weekly
average.
Daylight Savings Time/Pacific Standard Time Changes – Personnel on Team 4 and Team 5
will follow these guidelines when working either the spring forward or fall back. Individuals
working in the spring who would lose an hour of work due to the change to Daylight Savings
Time will report for duty one (1) hour early and work an eleven (11) hour shift at straight
time. Individuals working in the fall will work one (1) additional hour (for a total shift of
twelve (12) hours) due to the change to Pacific Standard Time. Such employees will put in
for one (1) hour of overtime. Nothing in this section prevents an employee from leaving
early or using time off to offset the time when staffing allows and approved by the
Supervisor or Watch Commander.
(8) Maximum Hours Worked - Turn Around Time
Sergeants, agents, and officers may work up to a maximum number of 16 hours in a 24-
hour period. Any work beyond 16 hours must be approved by a watch commander or
member of management and only under exigent circumstances. Any time an employee
works 16 hours or more, they must receive an 8-hour break before returning to duty. If the
8-hour break runs into the employees next shift, those hours are considered adjusted hours
off.
Sergeants, agents, and officers shall not exceed a maximum of one hundred forty (140)
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January 1, 2023 – June 30, 2025
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hours in a 14 day pay period. Any work beyond one hundred forty (140) hours must be
approved by the employee’s Lieutenant and Captain, and should rarely occur only under
extreme situations.
Sergeants and Lieutenants authorizing overtime in excess of the daily limit (16-hours)
and/or the bi-weekly limit (140 hours) shall send a short email to their Lieutenant and
Captain explaining the reason for the excess work.
It is the employee’s responsibility to monitor their hours and notify the supervisor and/or
watch commander of their hours worked when approaching the daily or bi-weekly limits or
being requested to work overtime.
(9) Shift Exchanges
Sergeants, agents, and officers may exchange work shifts with another employee of the
same rank. Agents and officers may be interchangeable if simply filling the role of an officer
on the schedule. Personnel must submit a shift exchange request form to their supervisor
and lieutenant. Shift exchanges require a lieutenant’s approval except when short notice
makes that impossible. Shift exchanges can only occur for entire shifts, Shift exchange
request forms must contain the pay back date for the second half of the shift exchange.
Both halves of the exchange must occur in the same 28-day FLSA Cycle (refer to Yearly 4/11
patrol Schedule for FLSA Cycles). Once an employee agrees to an exchange shift, he or she
is responsible for that shift. If he or she fails to show up for the shift and/or is sick, the time
will be deducted from his or her applicable leave balance to the extent the employee
qualifies for such deduction under the applicable leave policy. Failure to show up for a shift
may also result in disciplinary action.
(10) On-duty workout period and sign up:
When staffing allows and with supervisory approval, employees may workout on-duty for a
period of up to one (1) hour. The hour shall include the work out, a shower, and dressing
time. Specific guidelines and conditions are outlined in the Wellness Program Policy.
(11) Upon written request of either party, Section 22(a) of this MOU will reopen and the
parties will meet and confer over the issue of the patrol work schedule. Any changes will be
by mutual agreement of the City and the Association.
(b) Traffic Team
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Sworn members of the Traffic Team shall work a ten-hour (10) day, four (4) day workweek
schedule.
Traffic Team officers/agents may be assigned as part of minimum staffing at the discretion of
management.
Effective July 1, 2008, the Take Home Motor Program will be discontinued.
On a one time basis, employees assigned to motors who are in paid status the first full pay
period after Council adoption of this MOU, will receive one time non PERSable stipend
representing 2.5% of base salary of the employee’s classification minus applicable state and
federal taxes.
(c) Special Operation Sergeant/Crime Suppression Team
The Special Operations Sergeant and team members shall generally work a ten (10) hour
day, four (4) day workweek schedule. Given the nature of the team’s assignment, it is
anticipated and expected that their schedules should be flexible and adapt to organizational
needs.
(d) ISD and Other Sworn Classifications
All sworn personnel assigned to ISD, Staff Assistant, Personnel and Training and Community
Policing shall work a ten (10) hour day, four-day work week schedule.
(1) Work Schedule
The ten hours shall generally be worked between the hours of 0700 and 1900, with
specific schedules subject to approval by appropriate supervisors. The ten (10) -hour
work schedule shall be worked within a period of ten hours, with a working lunch
period not to exceed thirty (30) minutes. As an alternative, with Management
approval, the ten-hour work schedule may be worked within eleven hours, with a
one (1) hour unpaid lunch break. Changing alternatives will require prior approval
by Management.
(2) Work Week
For ISD personnel, one-half of the Division will work Monday through Thursday,
while the other half will work Tuesday through Friday. All other sworn personnel
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covered under Section 23 (b) & (c) will also work either Monday through Thursday,
or Tuesday through Friday.
(3) Late Detective Shift
Two detectives will be assigned on a rotational basis to the late shift from 1200 to
2200 to provide evening coverage. Assignment to the late detective shift, where
possible, will be by advanced sign up with each detective selecting two weeks each
quarter according to a protocol determined by seniority, needs of the division and
needs of the employee. Generally, there will be one detective from each half of the
division working the late detective shift during each week.
(e) Forty-hour Training Schedule
For all sworn employees who attend training that is four (4) or five (5) days in duration
(a week), their schedules will be adjusted from the normal work week. Employees will
not receive overtime during scheduled training as described here unless it exceeds their
normal forty (40) or forty-four (44) hour workweek. Schedule adjustments will be
documented in the notes section when making the timekeeping system entries.
Section 23. Overtime Pay and Compensatory Time Off
(a) Overtime pay shall be provided at the rate of time and one-half of the employee's regular
rate, including night shift differential, working out of classification pay, and specialty
assignment premium pay as defined under Section 7, 8 and 10.
(b) Compensatory time off, which is approved by management in-lieu of overtime payment on a
staffing available basis, will be taken at the rate of 1-1/2 hours for every hour of credited
overtime. In the event compensatory time off is used as the method of compensating for
overtime, the time off will be taken prior to the end of the quarter in which it is earned
except as provided herein. All compensatory time balances over 80 hours shall be paid at
the end of each quarter (i.e., employee to carry over 80 hours). During the final calendar
year quarter only, employees have the option to:
(1) Employees who have vacation accrual balances of less than two times their annual
accrual rate, less 80 hours, may request in writing prior to the payroll deadline to
convert up to 80 hours of unused compensatory time to vacation per calendar year,
to be transferred in the first pay period of the calendar year.
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(2) Employees may cash out their entire compensatory balance but must make this
request before payroll deadline.
(c) Employees called out to perform work, attend meetings or required training shall be
compensated for at least three hours pay for each occurrence at the appropriate overtime
rate.
Section 24. Overtime Sign-Up
(a) Planned Overtime Planned overtime includes patrol staffing, special events, traffic control
functions or any other overtime needs which can be identified prior to the 20th day of the
preceding month. On or about the 20th of each month, watch commanders will post a list of
dates/shifts requiring overtime for the next month.
Officers, Agents, and Sergeants will be given a reasonable period of time to sign up for the
available overtime assignments. On or about the 25th of the month, planned overtime will be
filled from the sign up list using the rotational overtime call out list.
Agents may place themselves on the sign up list for supervisor overtime, however will only
be considered if no sergeant requests the shift.
Overtime that isn’t filled during the planned overtime process may be filled at
management’s discretion.
Employees assigned to a fixed work schedule such as ISD, P&T, and Staff Assistant may
adjust their work schedule with their manager’s approval in order to work a planned patrol
overtime assignment. This schedule adjustment must be completed within the same work
week as the planned overtime assignment. Schedule adjustments will normally be approved
unless there is a conflict with a previously scheduled activity within the work unit or the
schedule adjustment would be disruptive to the operation of the unit. Employees bidding for
planned overtime requiring a shift adjustment must make a notation next to the assignment
indicating a shift adjustment would be necessary. Only one overtime shift requiring a shift
adjustment can be worked per work week.
(b) Unplanned Overtime. Unplanned overtime is overtime that wasn’t identified prior to the
20th of the preceding month. Unplanned overtime will be filled by the following procedures.
1) The Watch Commander or Supervisor may request an employee extend their
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shift or come in early. If a volunteer cannot be identified to hold over or come in early, the
rotational overtime list will be used.
2) Employees interested in working unplanned overtime will be placed on a rotational
overtime list in order of seniority. When an overtime shift is available, a manager or
supervisor will call the next person on the list. If that person declines the opportunity, is
not available, is already working, or takes the overtime, he/she will be placed at the
bottom of the list. The lists will be continually updated in order to rotate the names.
There will be separate lists for sergeants and officers/agents for unplanned overtime. A
separate supervisory list will be maintained for agents interested in working supervisory
overtime. Agents will be offered supervisory overtime positions only if no sergeants have
accepted the opportunity.
3) If the watch commander or supervisor is unable to fill overtime through any of these
procedures, he or she may order an individual to extend their shift, come in early, or
come in on a day off. A log on those required to work mandatory overtime will be kept
in the overtime book. Mandatory overtime should be rotated in order of reverse
seniority.
c) Overtime Minimum. With regard to both planned and unplanned patrol team overtime,
there is no minimum number of hours. Planned overtime postings and unplanned overtime
will be offered for the actual number of hours needed. If small blocks of overtime aren’t
filled by on-duty personnel adding them to an existing shift, managers may apply a 6-hour
minimum to a shift for personnel coming in on a day off.
(d) These overtime procedures may be reviewed and/or modified at the mutual agreement of
both management and PAPOA.
Section 25. Jury Duty
No employee shall be required to work a combination of jury duty and work time to exceed 12
hours during a 24-hour period. The period shall commence at the required time of appearance for
jury duty. Jury duty is defined as the time between required time of appearance and dismissal.
Work time excused as a result of jury duty will be compensated at the regular rate of pay.
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Section 26. Vacation Accrual
Vacation will be accrued when an employee is in pay status and will be credited on a bi-weekly
basis. Such accrual and credit shall not exceed three 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 four (4) years - For employees completing less than four years continuous service;
(8) Shifts vacation leave per year.
(b) Four, but less than nine years - For employees completing four, but not more than nine (9)
years continuous service; 12 Shifts vacation leave per year.
(c) Nine (9), but less than fourteen (14) years - For employees completing nine (9), but not more
than fourteen (14) years continuous service; (16) Shifts vacation per year.
(d) Fourteen (14), but less than nineteen (19) years - For employees completing fourteen (14),
but not more than nineteen (19) years continuous service; (18) Shifts vacation leave per
year.
(e) Nineteen (19) or more years - For employees completing nineteen (19) or more years
continuous service; (20) Shifts vacation leave per year.
Example: An employee with less than four (4) years working a 4/10 Schedule will receive eight
(8) Shifts or eighty (80) hours of vacation. The same employee working the 4/11 Schedule will
receive eight (8) Shifts or eighty-eight (88) hours of vacation.
Section 27. Use of Vacation
(a) When to be taken. The time at which an employee may use his/her accrued vacation leave
and the amount to be taken at any one time shall be determined by the department head
with particular regard for the needs of the City, but insofar as possible, considering the
wishes of the employee.
(b) Limitation on use. Employees may not use more than their annual rate of accrual in any
calendar year period, provided, however, that a department head my grant exceptions to
this limitation.
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(c) Waiting period. Employees shall complete six months continuous service before using
accrued vacation leave.
(d) Double compensation prohibited. Employees shall not work for the City during their
vacation.
(e) Vacation splitting. It is the intention of the City that vacation be taken in units of one week;
however, with the approval of the department head, an employee may use one week of
his/her accrued vacation in any calendar year in units of less than one work week, but in no
instance in units of less than one-half of the normal workday or shift. Requests for exception
to this procedure must be approved by the City Manager.
(f) Vacation Cashout. Once each calendar year an employee may cash out eight or more hours
of vacation accrual in excess of 80 hours to a maximum of 120 hours, provided that the
employee has taken at least 80 hours as vacation in the previous 12 months.
1. Effective for the 2012 tax year and each subsequent year, to be eligible to cash out
vacation, employees must pre-elect the number of vacation hours they will cash out
during the following calendar year, up to the maximum of 120 hours, prior to the
start of that calendar year. The election will apply only to vacation hours accrued in
the next tax year and eligible for cash out.
2. 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-designated on the election form provided by the City.
3. Employees who do not pre-designate or decline a cash out amount by the annual
deadline established by the City 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.
4. Employees who pre-designate 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 predesignated. 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.
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5. For employees who have not requested payment of the elected cash out amount by
November 1 of each year, Payroll will automatically cash out the pre-designated
amount in a paycheck issued on or after the payroll date including November 1.
Section 28. Vacation Pay at Termination
Employees leaving the municipal service with accrued vacation leave shall be paid the amounts of
accrued vacation to the date of termination. Payments for accrued vacation shall be at the
employee's current rate of pay.
Section 29. Vacation Benefits for Deceased Employees
An employee who is eligible for vacation leave and who dies while in the municipal service shall
have the amount of any accrued vacation paid to the employee's estate within thirty days. This
proration will be computed at the last basic rate of pay.
Section 30. Effect of Extended Military Leave
An employee who interrupts his service because of an extended military leave shall be
compensated for accrued vacation at the time the leave becomes effective.
Section 31. Sick Leave
(a) Statement of Policy. Sick leave shall be allowed and used only in case of actual personal
sickness or disability, medical or dental treatment, or as authorized in Subsection 33 (e),
personal business chargeable to sick leave. Up to 8 days sick leave per year may be used for
illness in the immediate family (spouse, child, parent, parent-in-law, brother, sister,
registered domestic partner, or close relative residing in the household of the employee).
(b) Eligibility. Regular and part-time employees shall be eligible to accrue and use sick leave.
(c) Accrual. Sick leave shall be accrued bi-weekly provided the employee has been in a pay
status for 50 percent 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.
(d) Accumulation. Accrued sick leave may be accumulated without limit, except as provided in
Section 31(h).
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(e) Use. Sick leave may be used as needed and approved, to the point of depletion, at which
time the employee will no longer receive pay for sick leave. A new employee may, if
necessary, use up to forty-eight hours or shift equivalent of sick leave at any time during the
first six months of employment. Any negative balances generated by such utilization will be
charged against future accrual or deducted from final paycheck in the event of termination.
An employee who has been disabled for 60 consecutive days and who is otherwise eligible
both for payment under the long-term disability group insurance coverage and accrued sick
leave benefits may, at his/her option, choose either to receive the long-term disability
benefits or to utilize the remainder of his/her accrued sick leave prior to applying for
long-term disability benefits.
Sick leave will not be granted for illness occurring during any leave of absence other than
sick leave, unless the employee can demonstrate that it was necessary to come under the
care of a doctor while on such other leave of absence.
When an employee finds it necessary to be absent for any reason, he/she should cause the
facts to be reported to the department within one hour after his/her regular starting time on
the first working day of absence, and shall regularly report on, or account in advance for
each work day thereafter unless hospitalized or otherwise indisposed. Such reports may be
subject to written documentation if there is reasonable evidence that sick leave abuse has
occurred. Sick leave shall not be granted unless such report or advance accounting has been
made, provided, however, that the department head may grant exception to this policy
where the circumstances warrant.
Documentation may also be required if there is a reasonable basis to believe that the
employee may not be medically fit to return to work.
(f) Depletion of Sick Leave Benefits. Upon depletion of sick leave or the beginning of the
period to be covered by payments under the long-term disability group insurance coverage,
whichever comes first, an employee may be granted a medical leave of absence without pay
for a period not exceeding sixty days. If the employee is unable to return to work at the end
of this period, he/she must request further medical leave which will be subject to the
approval of the City Manager. If further leave is granted, the employee must notify the City
of intent to return to work every thirty days. If further leave is not granted, the employee's
service with the City shall be considered terminated.
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(g) Forfeiture Upon Termination. Employees leaving the municipal service shall forfeit all
accumulated sick leave, except as otherwise provided by law and Subsection 32(h). 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.
(h) Payment for Accumulated Sick Leave. Employees hired before August 1, 1986 who leave
the municipal service in good standing, or who die while employed in good standing by the
City, and who have fifteen or more years of continuous service shall receive compensation
for unused sick leave hours in a sum equal to two and one-half percent of their unused sick
leave hours multiplied by their years of continuous service and their basic hourly rate of pay
at termination.
For all employees entering the service of the City prior to March 2, 1983, full sick leave
accrual will be paid in the event of termination due to disability.
For all employees hired after August 1, 1986, sick leave accrual accumulation shall be limited
to 1,000 hours with no payoff provision for unused balance at termination.
(i) Sick Leave Re-opener. Upon written request of either party, the parties agree to meet to
confer over the issue of sick leave incentive, including but not limited to: (1) sick leave
payout for employees hired after August 1, 1986 and (2) converting to a paid time off policy
in lieu of both vacation and sick leave. Any changes will be by mutual agreement of the City
and the Association.
(j) Personal Business Leave Chargeable to Sick Leave. Up to 2 Shifts (20-Hours for 4/10
employees and 22-Hours for 4/11 employees) per year of personal business leave may be
chargeable to sick leave. Time off under this provision is subject to management scheduling
approval.
(k) Return to Work or Continue Work With Limited/Alternative Duty. In cases of
non-work-related injury, illness or pregnancy, an employee, upon approval of the
department head, City Risk Manager and the employee's doctor, may elect to return to work
or continue work with doctor-approved limited or alternative duty. Approval for such
limited/alternative duty shall be based upon department ability to provide work consistent
with medical limitations and the length of time of the limitations. Shift employees must be
willing to accept any non-shift limited duty schedule work locations and may be subject to
the reasonable availability of limited duty assignments. The City doctor may be consulted in
determining work limitations. Any assignment to a limited/alternative duty will be on a
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temporary basis. The provisions of this section are not intended to create any permanent
light/alternative duty assignments.
Any assignment to a limited/alternative assignment shall not displace any other employee
without consent of all parties, including the Association.
Section 32. Leaves of Absence Without Pay
(a) Disability. Leaves of absence without pay may be granted in cases of disability not covered
by sick leave. Pregnancy will be considered as any other disability. Leaves of absence for
disability are subject to physicians' verification including diagnosis and medical work
restriction.
(b) Other leaves. Leaves of absence without pay may be granted in cases of personal
emergency or when such absences would not be contrary to the best interest of the City.
Non-disability prenatal and/or postpartum leave is available under this provision, but such
leave shall not begin more than six months prenatal nor extend more than six months
postpartum.
(c) During unpaid leaves of absence for disability or other reasons, the employee may elect to
use accrued vacation credits. 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.
(d) Approval of department head. Leave of absence without pay for one week or less may be
granted by the department head, depending on the merit of the individual case.
(e) Approval by City Manager. Leave of absence without pay in excess of one week's duration
may be granted by the City Manager on the merit of the case, but such leave shall not
exceed twelve months' duration.
(f) Absence without leave. Unauthorized leave of absence shall be considered to be without
pay, and reductions in the employee's pay shall be made accordingly. Unauthorized leave of
absence may result in termination of employment.
(g) Leave of absence; death outside the immediate family. Leave without pay may be granted
a regular employee by his/her department head in the event of death to family members
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other than one of the immediate family, such leave to be granted in accordance with Section
34 (b), (c) , (d) and (e).
(h) Military leave of absence. State and federal law shall govern the granting of military leaves
of absence and the rights of employees returning from such absence.
Section 33. Leave of Absence With Pay
The City Manager may grant a regular employee under his/her control a leave of absence with pay
for a period not exceeding thirty calendar days for reasons he/she deems adequate and in the best
interest of the City.
The City Council may grant a regular employee a leave of absence with pay for a period not to
exceed one year for reasons the Council considers adequate and in the best interest of the City.
(a) Subpoenas; leave of absence. Regular employees who are subpoenaed to appear as
witnesses in behalf of the State of California or any of its agencies may be granted leaves of
absence with pay from their assigned duties until released. The employee shall remit all fees
received for such appearances to the City within thirty days from the termination of his or
her services. Compensation for mileage or subsistence allowance shall not be considered as
a fee and shall be retained by the employee.
(b) Employee's time off to vote. Time off with pay to vote at any general or direct primary
election shall be granted as provided in the State of California Elections Code, and notice
that an employee desires such time off shall be given in accordance with the provisions of
said Code.
(c) Leave of absence; death in immediate family. Leave of absence with pay of three days shall
be granted an employee by the head of his or her department in the event of death in the
employee's immediate family, which is defined for purposes of this section as wife, husband,
son, step-son, son-in-law daughter, step-daughter, daughter-in-law, father, step-father,
father-in-law, mother, step-mother, mother-in-law, brother, step-brother, brother-in-law,
sister, step-sister, sister-in-law, grandmother, grandmother-in-law, grandfather,
grandfather-in-law, grandchildren, aunt, uncle, niece, nephew, registered domestic partner,
or a close relative residing in the household of the 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 the City Manager. Approval
of additional leave will be based on the circumstances of each request with consideration
given to the employee’s need for additional time off.
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(d) Jury duty; leave of absence. Employees required to report for jury duty shall be granted a
leave of absence with pay from their assigned duties until released by the court, provided
the employee remits to the City all fees received for such duties other than mileage or
subsistence allowances within thirty days from the termination of his/her jury service.
Section 34. Reduction in Force
In the event of reductions in force, they shall be accomplished wherever possible through attrition.
If the work force is reduced within the bargaining unit for reasons of change in duties or
organization, abolition of position, shortage of work or funds, or completion of work, employees
with the shortest length of service will be laid off first so long as employees retained are fully
qualified, trained and capable of performing remaining work. Length of service for the purpose of
this article will be based on total City service in a regular classification or classifications. Employees
laid off due to the above reasons will be given written notice at least thirty days prior to the
reduction in force. A copy of such notice will be given to the Association.
Section 35. Agents
The number of Agent positions shall be governed by the August 12, 1981, Arbitration Award.
Section 36. Commute Incentives and Parking in Civic Center Garage
Commute Incentives-- Represented employees who qualify may voluntarily elect one of the
following commute incentives:
Public Transit. The City will provide monthly Commuter Checks worth the value of:
$40 for employees traveling three or more zones on Caltrain;
$40 for employees using the Dumbarton Express, BART, the ACE train, or a
commuter highway vehicle;
$35 for employees traveling less than three zones on Caltrain;
$35 for employees using VTA and other buses.
These vouchers may be used toward the purchase of a monthly transit pass.
Carpool. The City will provide carpool vouchers worth the value of $30 per month to each
eligible employee in a carpool with two or more people. These vouchers may be used at
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designated service stations toward the purchase of fuel and other vehicle-related expenses.
Vanpool Program. The City will provide Commuter Checks worth the value up to $60 to each
employee voluntarily participating in the Vanpool Program. These vouchers may be used
toward payment of the monthly cost. Employees must fulfill the basic requirements of the
Employee Commute Alternatives Program to qualify.
Bicycle. The City will provide bicycle vouchers worth the value of $20 per month to eligible
employees who ride a bicycle to work. These vouchers may be used at designated bicycle shops
for related bicycle equipment and expenses.
Walk. The City will provide walker vouchers worth the value of $20 per month to eligible
employees who walk to work. These vouchers may be used at designated stores for expenses
related to walking such as footwear and related accessories.
Parking in the Civic Center Garage--Employees assigned to Civic Center and adjacent work
locations will be provided with a Civic Center Garage parking permit. New 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.
Section 37. Disciplinary Action and Unsatisfactory Work or Conduct
(a) Except as provided in Section 6 (Probationary Period) of this agreement, no employee shall
be disciplined without just cause. For the purpose of this section, "discipline" shall be
deemed to include discharge, demotion, reduction in salary, written reprimand, disciplinary
probation and suspension. Discipline shall be deemed not to include verbal reprimands or
reductions in force.
(b) Non-probationary employees whose work or conduct is unsatisfactory but not sufficiently
deficient to warrant discipline, demotion, or discharge will be given a written notification of
unsatisfactory work or conduct and an opportunity to improve. Failure to correct
deficiencies and improve to meet standards may result in discipline, demotion or discharge.
(c) Notice of disciplinary action must be in writing and served on the employee in person or by
registered mail prior to the disciplinary action becoming effective. However, in extreme
situations where there is reasonable cause, the employee may be removed from duty
immediately with pay pending such disciplinary action. The notice must be filed on a timely
basis with the Human Resources Department and included in the employee's personnel file.
The notice of disciplinary action shall include:
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(1) Statement of the nature of the disciplinary action;
(2) Effective date of the action;
(3) Statement of the cause thereof;
(4) Statement in ordinary and concise language of the art or the omissions upon which the
causes are based;
(5) Copies of any documents or other items of evidence upon which the disciplinary action
was fully or in part based;
(6) Statement advising the employee of his/her right to appeal from such action, and the
right to Association representation.
(d) If the disciplinary action consists of suspension, any suspension time previously given shall
be credited to the final disciplinary action.
(e) Subject to state law requirements, employees may request that disciplinary actions be
sealed according to the following schedule:
(1) Written reprimands with no recurrence after one (1) year.
(2) Disciplinary probation after three (3) years from the implementation of such probation,
if no other disciplinary action has occurred during that period.
(3) Suspensions less than three (3) days without recurrence, after two (2) years.
(4) Suspensions more than three (3) days but less than six (6) days, after three (3) years.
(5) Suspensions of six (6) days or more, after five (5) years.
For the purpose of these sections, the time starts from the time of action following the Skelly
process (day discipline is imposed).
Written requests for the sealing of disciplinary actions should be directed to the Personnel
and Training Coordinator.
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Sealing shall include all memos, letters, correspondence, complaint forms, and any other
material pertaining to the disciplinary action that has been placed in the employee's
personnel file.
Sealing shall not include the sealing of any material related to criminal offenses for which the
employee was charged except in concurrence with the sealing or expungement of criminal
charges by a court of competent jurisdiction or in the event of a complete exoneration of the
employee by the judicial system.
The City Human Resources Department shall be notified in all cases where sealing of
disciplinary action is taken. Human Resources Department copies of the disciplinary actions
will be disposed of in a manner consistent with the Police Department's action.
The sealed action shall not be held to discriminate against the employee in any subsequent
disciplinary action, or in the event of promotion, merit step raise, transfer, request for
educational leave, modification of duties, vacation selection, application for other
employment, or against any other action the employee may take for his or her personal
improvement.
Once sealed, the file shall not be opened unless the employee requests such unsealing and
then only for examination by the person or persons whom the employee specifies or at the
discretion of the Chief of Police, who in the absence of a demonstrable emergency shall
notify the employee a minimum of 48 hours before the opening of the sealed file and the
reason for opening. In the event the employee cannot be notified in advance, notification
must be made on the employee's first duty day after the sealed file is opened.
Section 38. Grievance Procedure
(a) The City and the Association recognize that early settlement of grievances is essential to
sound employee-employer relations. The parties seek to establish a mutually satisfactory
method for the settlement of employee grievances, or Association grievances, as provided
for below. In presenting a grievance, the aggrieved and/or his or her representative is
assured freedom from restraint, interference, coercion, discrimination or reprisal.
(b) Definition. A Grievance is:
(1) An unresolved complaint or dispute regarding the application or interpretation of
Departmental rules, regulations, policies, and procedures, relating to terms conditions
of employment, wages or fringe benefits; or this Memorandum of Agreement, .
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(2) An appeal from a disciplinary action of any kind against an employee covered by this
Memorandum of Agreement.
(c) Access to the Grievance Procedure.
Except as provided in Section 6, Probationary Period, all employees represented by the
Association may file and process a grievance. Such aggrieved employees may be
represented by the Association or may represent themselves in preparing and presenting
their grievance at any level of review. The Association may file a grievance when an
Association right not directly related to an individual employee becomes subject to dispute.
(d) Conduct of Grievance Procedure.
(1) The time limits specified in this Article may be extended by mutual agreement in writing
of the aggrieved employee or the Association and the reviewer concerned.
(2) Should a decision not be rendered within a stipulated time limit, the aggrieved
employee may immediately appeal to the next step.
(3) The grievance may be considered settled if the decision of any step is not appealed
within the specified time limit.
(4) If appropriate, the aggrieved employee or the Association and Management may
mutually agree to waive any step of the grievance procedure.
(5) Written grievances shall be submitted on forms provided by the City or on forms which
are mutually agreeable to the City and the Association.
(6) Any retroactivity on monetary grievances shall be limited to the date of occurrence,
except in no case will retroactivity be granted prior to three months before the
grievance was filed in writing.
Step I. The aggrieved employee will first attempt to resolve the grievance through informal
discussions with his or her immediate supervisor by the end of the tenth working day following the
discovery of or the incident upon which the grievance is based. Every attempt will be made to
settle the issue at this level. (Note: For purposes of time limits, the working days are considered to
be Monday through Friday, exclusive of City holidays.)
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Step II. If the grievance is not resolved through the informal discussion, the employee will reduce
the grievance to writing and submit copies to the division head or equivalent level Management
employee as designated by Management as appropriate within ten working days of the discussion
with the immediate supervisor.
The division head or equivalent level Management employee shall have ten working days from the
receipt of a written grievance to review the matter and prepare a written statement.
Step III. If the grievance is not resolved at Step II, the aggrieved employee may appeal to his or her
department head in writing within ten working days of the receipt of the division head's response.
The department head shall have ten working days from the receipt of a written grievance to review
the matter and convey his or her decision by written statement.
Step IV. If the grievance is not resolved at Step III, the aggrieved employee may choose between
final and binding resolution of the grievance through appeal to the City Manager or through appeal
to final and binding grievance arbitration. Appeals to final and binding arbitration may be
processed only with Association approval. All Step IV appeals must be filed in writing at the Human
Resources Department Office within ten working days of receipt of the Step III response.
If the aggrieved employee elects final and binding resolution by the City Manager, the City Manager
will choose the methods he or she considers appropriate to review and settle the grievance. The
City Manager shall render a written decision to all parties directly involved within ten working days
after receiving the employee's appeal.
If the aggrieved employee elects final and binding arbitration in accordance with this provision, the
parties shall mutually select an arbitrator. In the event the parties cannot agree on an arbitrator,
they shall mutually request a panel of five arbitrators from the California State Conciliation Service
or from the American Arbitration Association if either party objects to the State Conciliation
Service, and select an arbitrator by the alternate strike method.
The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine
compliance with the provisions of this Memorandum of Agreement and such Merit System Rules,
regulations, policies, procedures, City ordinances, resolutions relating to terms or conditions of
employment, wages or fringe benefits, as may hereafter be in effect in the City insofar as may be
necessary to the determination of grievances appealed to the arbitrator. The arbitrator shall be
without power to make any decision:
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(1) Regarding matters of interest.
(2) Contrary to, or inconsistent with or modifying in any way, the terms of this
Memorandum of Agreement.
(3) Granting any wage increases or decreases.
The arbitrator shall be without authority to require the City to delegate or relinquish any powers
which by State law or City Charter the City cannot delegate or relinquish. Where either party seeks
arbitration and the other party claims the matter is not subject to the arbitration provisions of this
Memorandum of Agreement, the issue of arbitrability shall first be decided by the arbitrator using
the standards and criteria set forth in this section and without regard to the merits of the
grievance. If the issue is held to be arbitrable, the arbitration proceedings will be recessed for up to
five working days during which the parties shall attempt to resolve the grievance. If no resolution is
reached, the arbitrator will resume the hearing and hear and resolve the issue on the merits.
Copies of the arbitrator's decision shall be submitted to the City, the aggrieved employee and the
Union. All direct costs emanating from the arbitration procedure shall be shared equally by the City
and the aggrieved employee or the Association.
Section 39. Bulletin Boards and Telephones
The Association shall have access to existing bulletin boards in Unit employee work areas and to
the City e-mail and voice mail systems for the purpose of posting notices or announcements
including notices of social events, recreational events, membership meetings, results of elections
and reports on minutes of Association meetings. Any other material must have prior approval of
the Police Chief. Action on approval will be taken within 24 hours of submission. Emails sent for
Association business shall be copied to the Human Resources Director at distribution.
City telephones may be used for Association business so long as there is no disruption of work and
all toll or message unit calls are charged to the Association credit card.
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Section 40. Access to Association Representatives
Representatives of the Association are authorized access to City work locations for the purpose of
conducting business within the scope of representation, provided that no disruption of work is
involved and the business transacted is other than recruiting of members or collecting of dues, and
the representative must notify the Human Resources Department office prior to entering the work
location.
Section 41. Meeting Places
The Association shall have the right to reserve City meeting and conference rooms for use during
non-working hours. Such meeting places will be made available in conformity with City's
regulations and subject to the limitations of prior commitment.
Section 42. Voluntary Leave Program:
(a) The City of Palo Alto has established a Peace Officer Voluntary Leave Program to provide
members of the Palo Alto Peace Officers’ Association, Incorporated (hereafter referred to
as “PAPOA”) the opportunity to donate their accrued vacation time to assist fellow
members of PAPOA either due to: (a) an employee’s own verifiable non-industrial
catastrophic illness or injury (as defined herein) or (b) in order to care for a member of the
employee’s immediate family (spouse, child, parent or registered domestic partner
suffering from a verifiable catastrophic illness or injury) and have exhausted or will
presently exhaust all of their paid leave.
In order to be eligible to receive donated leave, an employee must have a catastrophic
illness or injury or an employee’s immediate family member must have a catastrophic
illness or injury that requires the employee to provide full-time care for this family member.
Care will be taken to emphasize the voluntary nature of the plan and to insure
confidentiality of employee participants and medical conditions (where applicable).
A Police Officer Voluntary Leave Sharing Program has been established to accept donations
of vacation in accordance with the Program’s guidelines. All donations shall be:
1. Voluntary
2. Irrevocable
3. Confidential, unless disclosure is required by law
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4. In whole hour increments of at least (4) hours, with hours donated being converted to
donee hours based on the donee’s salary rate (so that there will be no cost to the City
due to salary differential)
5. The employee shall be required to exhaust all other types of leave to request donated
leave
6. It is understood that employees seeking or receiving leave under this program will apply
for long-term disability benefits for which they may be eligible
7. Where any of the period during which an employee receives donated leave is
designated as family leave under the California Family Rights Act (CFRA) or Family
Medical Leave Act (FMLA), the employee will be eligible for continuation of medical and
other available benefits during that family leave period (for up to 12 weeks), in
accordance with the requirements of those laws. If the employee receiving donated
leave is not eligible for CFRA/FMLA benefit continuation, or after the employee has
exhausted the available CFRA/FMLA leave period, the employee will need to pay the
premiums for continued medical and other available benefits if the employee chooses
to continue such coverages through the City.
8. If the donation request is based on the need for an employee to care for an immediate
family member, as defined above, the family member must require full-time care by the
employee. Certification of this requirement by a health care professional is required.
9. The maximum donated time a donee may receive is 12 months (if available).
10. Applications to donate leave or receive leave under this Program are made to the
Human Resources Department.
11. This is a pilot program and is subject to cancellation by either party.
PAPOA members interested in donating leave or in applying to receive donated leave shall
complete forms provided by the Human Resources Department. If an applicant for leave is
found to meet the criteria set forth herein, Human Resources will determine the availability
of and (as applicable) allocation of donated paid leave. Payroll will be notified in writing of
the number of hours to be deducted from each donating employee’s vacation balance and
transferred to the donee employee(s).
(b) The City reserves the right to modify or terminate this program at any time.
(c) Catastrophic Illness or Injury (also referred to as “medical emergency” in Revenue Ruling
90-29 and Sections 801(c) and 812 of the Merit Rules and Regulations): A non-occupational
medical condition of an employee that will require the prolonged absence of the employee
from duty and which will result in a substantial loss of income to the employee because the
employee will have exhausted all paid leave available apart from the Voluntary Employee
Leave Sharing Program. Non-disability postpartum leave as referenced in Merit Rule 801(b)
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shall not be considered a catastrophic illness or injury under this policy.
(d) Nothing in this section precludes an Association member from utilizing or participating in
the City’s Voluntary Employee Leave Sharing Program.
Section 43. Utilization of Reserves for Field Services Division Events
(a) Management will determine staffing levels for each event.
(b) Events for which the department receives reimbursement will be staffed by regular officers,
except that in the event a sufficient number of regular officers are unavailable, reserve
officers may be used.
(c) Reserves may be used for the May Day Parade, Stanford University or NFL football games,
park patrol, Black and White Ball, and supplemental patrol staffing in excess of levels set
forth in the Field Services Staffing Levels general order.
(d) Events, for which the department does not receive reimbursement, may be staffed in the
ratio of two reserve officers to one regular officer. Reserves may be used in any situation
where an insufficient number of regular officers are available.
(e) Staffing for the University Avenue Street Fair will consist of no less than a 1:1 ratio of
regular officers to reserve officers.
Section 44. Overtime Meals for Investigative Services Division
Effective July 1, 1996, for ISD personnel who are working authorized investigative overtime
extending for a period either four hours after the conclusion of their normal work shift, or four
hours prior to the beginning of the normal work shift, shall be entitled to reimbursement for the
appropriate meal at the City per diem rate. The meal reimbursement shall also apply for any
authorized investigative overtime on a weekend or holiday in excess of four hours.
Section 45. Hiring Incentives
Qualified lateral officers, who have a current basic or higher POST certificate, hired during the term
of this agreement may upon City Manager approval:
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(a) Accrue vacation leave at a beginning rate equal to the rate they were earning at their
previous employer, subject to a maximum of 160 hours per year with progression to higher
accrual rates as provided in Section 27, Vacation Accrual; and
(b) Begin their employment with the City with a sick leave balance not to exceed 96 hours.
(c) Receive a hiring incentive. Any future hiring incentive program will be discussed with the
Association prior to implementation and the Department will reasonably consider any
recommendations from the Association regarding internal referral programs to be utilized in
conjunction with that program.
(d) Laterals returning to the Palo Alto Police Department must have been separated from the
City for a minimum of 2 years to be eligible for this incentive program.
(e) Based on years of service, level of experience, and educational achievement, experienced
lateral officers may receive a starting salary at any appropriate level within the “Police
Officer” classification as deemed appropriate by the City Manager on recommendation of
the Chief of Police.
Section 46. Full Understanding
(a) The Memorandum of Agreement contains the full and entire understanding of the parties
regarding the matters set forth herein.
(b) It is the intent of the parties that ordinances, resolutions, rules and regulations enacted
pursuant to this Memorandum of Agreement be administered and observed in good faith.
(c) Nothing in this agreement shall preclude the parties from mutually agreeing to meet and
confer on any subject within the scope of representation during the term of this agreement.
(d) Should any of the provisions herein contained be rendered or declared invalid by reason of
any existing State or Federal legislation or by reason of State Supreme Court or U. S.
Supreme Court ruling, such invalidation of such part or portion of this Memorandum of
Agreement shall not invalidate the remaining portions hereof, and they shall remain in full
force and effect, insofar as such remaining portions are severable.
(e) Prior Agreements & Side Letters: Upon Implementation of this agreement, all prior
agreements and side letters become null and void. In any instance where internal
department polices and/or practices are in conflict with this agreement, this agreement shall
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take precedence.
(f) During the term of this Memorandum of Agreement, Management may propose certain
changes in the City Merit System Rules and regulations. With regard to such changes which
pertain to the representation unit, the parties agree to review, and upon request, meet and
confer regarding the changes.
Section 47. Printed Agreement
The City will provide copies of the Memorandum of Agreement resulting from these negotiations in
booklet form to all represented employees.
Section 48. Duration
Except as expressly and specifically provided otherwise herein for the retroactive application of a
specific provision(s), this Memorandum of Agreement shall become effective upon ratification by
both parties hereto and remain in effect through June 30, 2025.
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EXECUTED:
FOR: FOR:
PALO ALTO PEACE OFFICERS' CITY OF PALO ALTO
ASSOCIATION
Chistopher Correira
Sandra Blanch, Human Resources Director
Joel Hornung
Tori Anthony,Manager Employee and Labor Relations
Joshua Salkeld Charles Sakai, Counsel
Sloan Sakai Yeung & Wong, LLP
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TABLE OF CONTENTS
ARTICLE I – PREAMBLE ................................................................................................................... 4
Section 1 – Recognition. .................................................................................................................... 4
Section 2 – Non-Discrimination. ........................................................................................................ 4
ARTICLE II – COMPENSATION ........................................................................................................ 4
Section 3 – Salary. .............................................................................................................................. 4
Section 4 – Working Out of Class Pay. .............................................................................................. 5
Section 5 – Night Shift Differential. .................................................................................................. 5
ARTICLE III – HEALTH CARE BENEFITS ....................................................................................... 5
Section 6 – Active Employee Health Plans. ....................................................................................... 5
Section 7 – Dental Benefits. ............................................................................................................... 6
Section 8 – Vision Care. .................................................................................................................... 6
Section 9 – Basic Life Insurance. ...................................................................................................... 6
Section 10 – Supplemental Life And AD&D Insurance. ................................................................... 6
Section 11 – Effective date of Coverage for New Employees. .......................................................... 7
ARTICLE IV – OTHER BENEFITS ..................................................................................................... 7
Section 12 – Holiday Compensation. ................................................................................................ 7
Section 13 – Vacation. ....................................................................................................................... 7
Section 14 – Long Term Disability. ................................................................................................... 8
Section 15 – Dependent Care Assistance Program. .......................................................................... 8
Section 16 – Medical Flexible Spending Program. ............................................................................ 8
Section 17 – Employee Assistance Plan. ............................................................................................ 9
Section 18 – Commute Incentives and Parking. ................................................................................. 9
Reopener. ............................................................................................................................................ 9
ARTICLE V –RETIREMENT ............................................................................................................... 9
Section 19 – Retirement Benefits. ...................................................................................................... 9
Section 20 – Retirement Medical Plan. ........................................................................................... 10
Section 21 – ICMA - Retirement Health Savings Plan. .................................................................. 11
Section 22 – Deferred Compensation Program. .............................................................................. 11
ARTICLE VI – MANAGEMENT BENEFIT PROGRAM ................................................................. 11
Section 23 – Professional Development Reimbursement. ............................................................... 11
Section 24 – Physical Examinations. .............................................................................................. 12
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Section 25 – Excess Benefit. ............................................................................................................ 12
Section 26 – Management Annual Leave. ....................................................................................... 13
ARTICLE VII – OPERATIONAL ISSUES ....................................................................................... 14
Section 27 – Management Assignments. ......................................................................................... 14
Section 28 – Basic Work Schedules. ............................................................................................... 14
Section 29 – On Duty Workouts. ..................................................................................................... 14
Section 30 – Take Home Emergency Response Vehicles. ............................................................... 14
Section 31 – Modified Duty Assignments. ...................................................................................... 14
Section 32 – Meal Allowance. ........................................................................................................ 15
Section 33 – Uniforms. ..................................................................................................................... 15
ARTICLE VIII – ASSOCIATION AGREEMENTS ........................................................................... 15
Section 34 – Association Security. .................................................................................................. 15
Section 35 – Association Representative Access to Work Locations. ............................................. 16
Section 36 – Release Time. .............................................................................................................. 16
Section 37 – Use of City Facilities for Association Business. ......................................................... 16
Section 38 – Payroll Deduction. ....................................................................................................... 16
ARTICLE IX – LEAVE PROGRAMS ................................................................................................ 16
Section 39 – Sick Leave. .................................................................................................................. 16
Section 40 – Voluntary Catastrophic Leave Program. ..................................................................... 18
Section 41 – Leave of Absence With Pay. ...................................................................................... 18
Section 42 – Leave of Absence Without Pay. .................................................................................. 19
ARTICLE X – EMPLOYEE/EMPLOYER RELATIONS .................................................................. 20
Section 43 – Probationary Period. .................................................................................................... 20
Section 44 – Disciplinary Action and Unsatisfactory Work or Conduct. ........................................ 20
Section 45 – Grievance Procedure. .................................................................................................. 20
Section 46 – No Strikes. ................................................................................................................... 22
Section 47 – Reduction in Workforce. ............................................................................................ 23
ARTICLE XI – LOOKING FORWARD ............................................................................................. 23
Section 48 – Full Understanding. ..................................................................................................... 23
Section 49 – Legal Compliance/Severability. .................................................................................. 23
Section 50 – Duration. ...................................................................................................................... 23
APPENDIX A-1 .................................................................................... Error! Bookmark not defined.
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202318 - 20251 MEMORANDUM OF AGREEMENT
City of Palo Alto and Palo Alto Police Managers' Association
ARTICLE I – PREAMBLE
This Memorandum of Agreement is pursuant to and subject to Sections 3500-3510 of the
Government Code of the State of California, the Charter of the City of Palo Alto, and the City of Palo
Alto Merit System Rules and Regulations.
This Memorandum of Agreement made and entered into at Palo Alto, California, by and between
the City of Palo Alto, a municipal corporation (hereinafter referred to as "City") and the Palo Alto
Police Managers' Association (hereinafter referred to as "Association"), is intended to define
agreements reached during the meet and confer process concerning wages, hours, working
conditions, and other terms and conditions of employment for the represented group of employees.
Section 1 – Recognition. On October 29, 2009, the City of Palo Alto certified the Palo Alto Police
Managers' Association (Association) as a bargaining unit within the City.
The City recognizes the Association as the exclusive representative of an employee group consisting
solely of Police Lieutenants and Police Captains who are regularly employed by the City and others
who might be amended into the representation unit from time to time under existing law and the
Merit System Rules and Regulations.
Section 2 – Non-Discrimination. The City and the Union agree that there shall be no discrimination
of any kind because of age (over 40), race, creed, color, religion national origin, ancestry), veterans
status, physical or mental disability, marital status, sexual orientation, sex (sexual, gender based or
gender identity, pregnancy/childbirth), medical condition (cancer related and genetic
characteristics), or on any other basis prohibited by applicable federal and State law against any
employee or applicant for employment.
The Association shall cooperate with the City, to the extent required by federal and State laws and
regulations, in furthering the objective of Equal Employment Opportunities, as defined by Federal
and State regulations.
ARTICLE II – COMPENSATION
Section 3 – Salary
a) Market Adjustment: Effective the first full pay period including City Council Adoption, salary
ranges of all bargaining unit classifications will be increased by five percent (5.0%), which is
sufficient to bring them to the top quartile of market median as determined by the City’s market
study.
b) General Salary Increase: Effective the first full pay period following July 1, 2023, salary
ranges of all represented classifications will be increased by four percent (4.0%).
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c) General Salary Increase: Effective the first full pay period following July 1, 2024 salary ranges
of all represented classifications will be increased by four percent (4.0%).
d) Flexible Compensation: Effective the first full pay period following City Council Adoption, and
in lieu of an increase to the City contribution towards medical premiums, each represented
classification will have their monthly income increased by $100.
e) Flexible Compensation: Effective the first full pay period following January 1, 2024, and in
lieu of an increase to the City contribution towards medical premiums, each represented
classification will have their monthly income increased by an additional $100 (Total of $200)..
Effective the first full pay period after ratification by the Association and adoption by the City
Council, the base salary rates and ranges for classifications covered by this bargaining unit shall be
increased as set forth in Appendix A-1. Additionally, the base salary rates and ranges for
classifications covered by this bargaining unit shall be increased on the first full pay period following
July 1, 2019 and July 1, 2020 as set forth in Appendix A-1. Actual salary within the range is
determined by experience and performance, as determined by the Chief of Police.
Section 4 – Working Out of Class Pay. Lieutenants or Captains fulfilling the role of an acting captain,
assistant chief, or chief for individual shifts and/or a number of hours within a shift, shall not receive
additional compensation. Periodically working in this capacity shall be deemed a basic duty within
an employee's job description.
Lieutenants and Captains working out of class for a period of four or more consecutive shifts shall be
compensated at the start of the pay period with premium pay determined by the Chief of Police or
his or her designee up to 10% of base pay.
In accordance with Government Code 20480, an employee assigned to work in an out-of-class
appointment may not exceed 960 hours worked in the appointment within a fiscal year if the
employee is appointed to an upgraded position or higher classification that is vacant during
recruitment for a permanent appointment. This limitation does not apply to a position that is
temporarily available due to a leave of absence.
Section 5 – Night Shift Differential. Night shift differential shall be paid at the rate of 5% to all
personnel for all hours worked between 6:00 p.m. and 8:00 a.m.
ARTICLE III – HEALTH CARE BENEFITS
Section 6 – Active Employee Health Plans. The maximum City contribution towards medical
premiums for eligible full time employees per employee category shall be up to a maximum of the
following for any plan:
Medical Premium
Category Contribution* Contribution (inclusive
of PEMHCA
contribution) effective
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month following City
Council Adoption
Employee Only $133151.00 $840871
Employee plus one $133151.00 $16801,742
Employee Family $133151.00 $21802,260
*Total City contribution includes both PEMHCA minimum contributions pursuant to Government
Code section 22892 and an additional City contribution necessary to pay the cost of medical
premiums up to the amount listed in the "Total maximum City contribution" columns above.
Section 7 – Dental Benefits.
a) The City will maintain the present level of benefits on the City-sponsored dental program for
current employees and their dependents, except that the maximum benefits per calendar
year shall be $2,000 effective in 1988. Dental Coverage shall include composite (tooth
colored) fillings for all teeth.
Effective July I, 2007, the City will provide 50% of reasonable charges, $2,000 lifetime
maximum orthodontic benefit for representation unit employees and their dependents.
b) Dependents will include domestic partners, as defined in the Active Employee Domestic
Partners Section below.
c) During the term of the agreement, the City and the Union will work together to review
benefit provisions of the City's self-funded dental program. The purpose of this review is to
contain benefit cost increases. Joint recommendations will be prepared for discussion during
successor agreement negotiations.
d) Dental implants in conjunction with one or more missing natural teeth, and removal of
dental implants will be covered as a Major Dental Service at 50% usual, customary and
reasonable (UCR).
Section 8 – Vision Care. The City will offer vision care coverage for employees and dependents.
Coverage is equivalent to $20 deductible Plan A under the Vision Service Plan, with monthly
premiums paid by the employer. Dependents will include domestic partners, as defined in the Active
Employee Domestic Partners Section below.
Section 9 – 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 $1,000).
Section 10 – 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.
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Section 11 – 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, and life insurance plans if these benefits are elected.
ARTICLE IV – OTHER BENEFITS
Section 12 – Holiday Compensation. Police Managers will receive the twelve (12) paid City holidays
outlined in the City of Palo Alto Merit Rules.
Floating Holiday – Days of Historical Significance. Employees will be provided one floating holiday
each calendar year in acknowledgement of days of historical significance. The employee with prior
approval from their supervisor can use this floating holiday at any time during the year. This holiday
has no cash value and will expire if unused.
Section 13 – Vacation.
a) Vacation Accrual.
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 times the annual rate of accrual.
Each eligible employee shall accrue vacation at the following rate for continuous service performed
in pay status:
1. Less than nine (9) years - For employees completing less than nine (9) years
continuous service; one hundred twenty (120) hours vacation leave per year. The City
Manager may adjust the annual vacation accrual of employees hired on or after July
1, 2001 to provide up to forty (40) additional hours (i.e. to a maximum annual accrual
of one hundred sixty (160) hours) for service with a prior employer.
2. Nine (9), but less than fourteen (14) years - For employees completing nine (9), but
not more than fourteen (14) years continuous service; one hundred sixty (160) hours
vacation leave per year.
3. Fourteen (14), but less than nineteen (19) years - For employees completing fourteen
(14), but not more than nineteen (19) years continuous service; one hundred eighty
(180) hours vacation leave per year.
4. Nineteen (19) or more years - For employees completing nineteen (19) or more years
continuous service; two hundred (200) hours vacation leave per year.
b) Vacation Use.
Vacation use by police managers will be subject to approval by the Chief of Police or his/her
designee. All reasonable efforts will be made to approve vacation requests while maintaining
appropriate oversight of public safety operations.
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Employees shall complete six months continuous service before using accrued vacation leave.
c) Vacation Cashout.
Once each calendar year an employee may cash out eight (8) or more hours of vacation accrual in
excess of eighty (80) hours from a minimum of eight (8) hours to a maximum of one hundred ( 120)
hours, provided that the employee has taken at least eighty (80) hours of vacation in the previous
twelve (12) months.
Effective for the 2012 tax year and each subsequent year, employees must pre-elect an irrevocable
number of vacation hours they will cash out during the upcoming year, up to a maximum of one
hundred twenty (120) hours, prior to the start of the calendar year. Employees who do not pre-
designate or elect to cash out hours will be deemed to have waived the right to cash out any
vacation leave in the following year.
Employees who pre-designate cash out amounts may request a cash out at any time in the
designated tax year by submitting a cash out form to payroll. For employees who have not
requested payment of pre-designated cash out amounts by November 1 of each year, Payroll will
automatically cash out the pre-designated amount in a paycheck issued on or after November 1.
d) Vacation Pay at Termination.
Employees leaving the municipal service with accrued vacation leave shall be paid the amounts of
accrued vacation to the date of termination. Payments for accrued vacation shall be at the
employee's current rate of pay.
e) Vacation Benefits for Deceased Employees.
An employee who is eligible for vacation leave and who dies while in the municipal service shall
have the amount of any accrued vacation paid to the employee's estate within thirty days. This
proration will be computed at the last basic rate of pay.
Section 14 – Long Term Disability. 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.
Section 15 – Dependent Care Assistance Program. The City will provide a Dependent Care
Assistance Program for employees according to the provisions of the Federal Economic Recovery Act
of 1981, Code Sections 125 and 129. The program will be available to representation unit employees
beginning with pay period number 1 of 1992, and remain in effect subject to a reasonable minimum
participation level and availability of third-party administrative services at a reasonable cost.
Section 16 – Medical Flexible Spending Program. The City will provide a Medical Flexible Spending
Program for Association members allowing them to use pre-tax deferrals for reimbursement of
excess or uncovered medical, dental and vision expenses. The plan will follow existing plan
guidelines and conform to all applicable laws and regulations.
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Section 17 – Employee Assistance Plan. The Employee Assistance Plan (EAP) provides employees
with confidential personal counseling, work and family related issues, eldercare, substance abuse,
etc.
Section 18 – Commute Incentives and Parking.
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.
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.
Reopener. It is the City's interest to reduce single occupancy vehicle trips to the extent possible in
order to address current challenges. During the term of this agreement, upon written request by the
City, the parties shall meet and confer through the impasse process if necessary on changes to the
City's commute incentive and parking program adopted by the City Council.
ARTICLE V –RETIREMENT
Section 19 – Retirement Benefits.
A. "3%@50" Safety Retirement (Employees hired on or before December 7, 2012)
For employees hired by the City of Palo Alto on or before December 7, 2012, the California Public
Employees' Retirement System (CalPERS) retirement formula benefit known as the "3 percent at 50
(3%@50)," per California Government Code section 21362.2, shall continue in effect with the final
salary determination for such employees of the "single highest one (1) year period" per California
Government Code section 20042. All unit members in the 3% @ 50 safety retirement plan shall pay
the full 9% CalPERS member contribution. This contribution is pre-tax to the extent allowable by
law.
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B. Second Tier "3% at 55" Safety Retirement ("Classic" Employees)
For those employees hired on or after December 8, 2012 through December 31, 2012 or are classic
members as defined by CalPERS, the CalPERS retirement formula benefit known as the "3 percent at
55 (3%@55)," per Government Code section 21363.1, with the final salary determination for such
employees of the "three (3) highest consecutive years" based on the highest average annual
compensation earnable by the member during three (3) consecutive years of employment
immediately preceding retirement or the three-year period otherwise designated by the member
per Government Code section 20037. All unit members in the second tier shall pay the full 9%
CalPERS member contribution. This contribution is pre-tax to the extent allowable by law.
C. Third Tier "2.7% at 57” Safety Retirement (“New” PEPRA Employees)
For those employees hired on or after January 1, 2013, the CalPERS retirement formula benefit
known as "2.7 percent at 57 (2.7% at 57)," with the final salary determination for such employees of
the "three (3) highest consecutive years." The initial contribution rate will be at least 50% of the
normal cost rate at retirement as determined by CalPERS. This contribution is pre-tax to the extent
allowable by law.
D. Additional Employee PERS Contributions
Effective the pay period that includes June 30, 2017, all employees regardless of pension formula in
this unit shall, in addition to the Member Contribution required, pay a3% towards the Employer
share of Pension.
Effective the pay period that includes June 30, 2021, all employees regardless of pension formula in
this unit shall, in addition to the Member Contribution required, pay an additional 1% towards the
Employer share of Pension for a total of 4%. Such contributions under CalPERS 20516 will be
provided on a pre-tax basis to the extent allowable by law.
Section 20 – Retirement Medical Plan.
A. Retiree Medical Coverage for Unit Employees Hired Before January 1, 2004:
Monthly City-paid premium contributions for a retiree-selected PEMHCA optional plan will be made
in accordance with the Public Employees' Medical and Hospital Care Act Resolution for employees
hired before January 1, 2004 as outlined below.
For employees who retire before June 1, 2012, the City will pay up to the monthly medical premium
for the 2nd most expensive plan offered to PMA employees among the existing array of plans.
For employees who retire on or after June 1, 2012, The City contribution towards retiree medical
shall be the same contribution amount it makes for active City employees.
Effective upon ratification and adoption of this Agreement (Scheduled for January 11, 2016), the
City shall provide active unit 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 People, Strategy, and
Operations department of their election in writing no later than 90 days following the ratification
and adoption of this Agreement.
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B. 20-Year Vesting Schedule for Retiree Medical Coverage for Unit Employees Hired on or
After January 1, 2004 and employees who chose to opt-in to retiree health benefits
provided under California Government Code section 22893 as outlined above:
The retiree health benefit provided in California Government Code section 22893 shall apply to all
employees hired on or after January I, 2004 and employees who opt-in as outlined above. Under
this law, an employee is eligible to receive Fifty (50) percent of benefit after ten (10) years; each
additional service credit year after Ten (10) years will increase employer credit by Five (5%) percent
until Twenty (20) years is reached at which time employee is eligible for One Hundred (100%)
percent of annuitant-only coverage and Ninety (90%) percent of the additional premium for
dependents.
Section 21 – ICMA - Retirement Health Savings Plan. The City provides an ICMA retirement health
savings plan for Association members. The ICMA retirement health savings plan is subject to
applicable IRS rules and plan guidelines as well as any other applicable laws. Each Association
member shall make a pre-tax contribution to the plan as follows:
1. Each member shall contribute 1% of their base salary bi-weekly into the plan.
2. Failure by each member to contribute will deem the health savings plan out of compliance
with IRS and plan guidelines.
3. The administrative fee shall be paid by the Association member.
The manner and amount of contributions may be periodically modified by agreement of both
parties.
Section 22 – Deferred Compensation Program. The City will provide a Deferred Compensation
Program for employees according to the provisions of the plans and applicable IRS guidelines.
ARTICLE VI – MANAGEMENT BENEFIT PROGRAM
Section 23 – Professional Development Reimbursement. 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 to each Association
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
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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.
d) Professional and trade journal subscriptions not to exceed 12 months.
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.
Section 24 – Physical Examinations. All management and professional employees are eligible to
receive an annual physical examination as follows:
a) Use the periodic health exam benefit as provided under the PERS Health Plan option you
have selected. Each of the PERS Health Plans provides for a periodic physical examination.
The examination must be performed by your primary care physician – unless he/she refers
you to another physician.
b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The
guidelines are a suggested minimum based on research studies concerning preventative
care. The judgment of your physician is the final determinant for your care.
c) Any additional necessary asymptomatic tests that are required by your physician that are not
covered by your health plan will be reimbursed by the City. Any symptomatic tests will be
covered under your PERS Health Plan.
The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet
site. This benefit will not be pro-rated.
Section 25 – Excess Benefit. This benefit is designed to meet the requirements of Section 125 of the
Internal Revenue Code. Every calendar year, each employee will be provided with $2,500 annually
that they can designate among the following options:
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 co-payments as
well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold
medicines. 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
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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.
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 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.
The $2,500 excess benefit provided in this section made on a one-time contribution basis on
election by the employee towards the employee's City-sponsored 457 Deferred Compensation plan
with either ICMA-RC or the Hartford.
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-rata 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.
Section 26 – Management Annual Leave. At the beginning of each calendar year regular
management employees will be credited with 80 hours of management annual leave. This leave is
granted in recognition of the extra hours management employees work over their regular schedule.
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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, I 0-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift
workers will receive one-half shift off for each 8 hours charged. 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 fiscal 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 calendar year will be paid in cash unless a different
option as indicated above is elected by the employee.
Section 27 - POST Certificate/Incentive
Management POST Certification: Employees that qualify for the Management POST certificate will
receive a four percent (4%) increase to base pay effective the first full pay period after the employee
provides proof of submission of the required paperwork to POST.
ARTICLE VII – OPERATIONAL ISSUES
Section 287 – Management Assignments. The Chief of Police or his/her designee shall have the
authority to make management assignments at his or her discretion. Where possible, these
assignments should take into account the needs of the organization, development of the employee
and individual employee desires.
Section 289 – Basic Work Schedules. Generally, police managers will be expected to work flexible
schedules and reasonably adjust their hours to oversee their employee groups, manage 24/7 law
enforcement operations, perform routine work, complete daily assignments, and occasionally
attend meetings or other events outside their normal work shifts. Basic work schedules will be the
4/10 schedule.
Section 29 30 – On Duty Workouts. Police managers who complete the yearly Wellness Program
requirements may participate in an on-duty workout for a reasonable period as determined by the
Chief, as long as it does not interfere with the performance of the employee's job duties, for which
the employee will remain accountable. Applicable guidelines and conditions are outlined in the
Department's Wellness Program Policy which the City may change from time to time.
Section 310 – Take Home Emergency Response Vehicles. Subject to approval by the City Manager
and the Police Chief, Police Captains will continue the current take home emergency response
vehicle program which allows for the immediate and emergent response to public safety incidents
involving the City.
The specific use and restrictions for driving these vehicles shall adhere to the guidelines outlined in
the then current version of City Policy and Procedure 4-01.
Section 312 – Modified Duty Assignments. In cases of non-work-related injury, illness or pregnancy,
an employee, upon approval of the department head, City Risk Manager and the employee's doctor,
may return to work or continue work with doctor-approved limited or alternative duty pursuant to
Policy & Procedure 2-04. Approval for reasonable accommodation such as limited/alternative duty
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shall be based upon department ability to provide work consistent with medical limitations and the
length of time of the limitations. The City doctor may be consulted in determining work limitations.
Any assignment to a limited/alternative duty will be on a temporary basis.
Section 323 – Meal Allowance. Police managers attending night meetings will be eligible for meal
re-imbursement under the guidelines set forth in the then current version of City Policy and
Procedure No. 1-02.
Section 343 – Uniforms.
a) The City will supply complete uniforms to all sworn personnel. All uniform items are the
property of the City. One complete uniform consists of: (I) three pair of trousers, (2) three
short-sleeved shirts with patches and zippers if desired, (3) three long-sleeved shirts with
patches and zippers if desired, (4) three cotton or two synthetic fiber turtleneck shirts, (5)
hat, (6) duty jacket with patches, (7) dress jacket with patches, (8) necktie, and (9) rain gear.
b) At the time of initial employment, every sworn employee will be issued one complete
uniform. Uniform items will be replaced on an as-needed basis subject to verification by
management.
c) The City shall provide uniform cleaning for sworn representation unit personnel.
d) Personnel are accountable for all uniform items issued to them. If a particular item is lost or
damaged due to employee negligence, the employee will be required to reimburse the City
for value of the item(s) lost or damaged.
e) The City shall reimburse employees for the full cost of job-related boots upon
verification of such purchase by the employees. The City will make the reimbursement only
upon proof that the previous boots have become unserviceable due to wear or
damage. (Job-related boots shall mean well-constructed, high topped boots that provide full
ankle and foot support, which are selected from list agreed to by Management and the
Association.)
Employees are responsible for the full cost of any low-top, black shoes that are worn with
the uniform.
ARTICLE VIII – ASSOCIATION AGREEMENTS
Section 354 – Association Security.
a) When a person is hired in any of the covered job classifications, the City shall notify that
person that the Association is the recognized bargaining representative for the employee
in said Unit and give the employee a current copy of the Memorandum of Agreement.
b) If there is no disruption of work, members of the Association Board of Directors may use
a reasonable amount of on-duty time without loss of pay to meet with Management
specifically related to representation of employees. Such release time must be cleared in
advance by the Chief (or his/her Designee) who is a member of management.
For purposes of this section, representation shall include:
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(i) Meetings with represented employees or management related to a grievance
or disciplinary action, including investigation and preparation time.
(ii) A meeting with management related to benefits, working conditions or other
terms and conditions of employment.
Section 356 – Association Representative Access to Work Locations. Employee and non-employee
representatives of the Association will be granted access to City work locations to conduct business
related to the administration or negotiation of the parties' Memorandum of Understanding, as long
as advance arrangements for such visits have been made with the affected department manager
and no disruption of work occurs. Advance arrangement shall normally include not less than one
hour's notice in the case of an employee Association representative, two hours in the case of non-
employee Association representatives. Non-employee representatives must also notify the Human
Resources Department Manager (or designee) of the time, date and location of the representative's
intended visit.
Section 376 – Release Time. The Association President or his or her-designee in the representation
unit may use a reasonable amount of time without loss of pay for matters related to the bargaining
process, labor relations, and administration of the MOA, violations of the MOA, grievances,
disciplinary issues, and training for association members.
Release time shall normally be approved in advance by the department head and must not detract
from the performance of the representative's City job duties, for which he or she will remain
accountable.
Section 387 – Use of City Facilities for Association Business. Any use of City facilities shall be
governed by the then current version of City Policy and Procedure No. 4-07.
Section 398 – Payroll Deduction. The City shall deduct Association membership dues and any other
mutually agreed upon payroll deduction from the bi-weekly pay of member employees. The dues
deduction must be authorized in writing by the employee on an authorization card acceptable to the
City and the Association. The City shall remit the deducted dues to the Association as soon as
possible after deduction.
ARTICLE IX – LEAVE PROGRAMS
Section 4039 – Sick Leave.
a) Statement of Policy.
Sick leave shall be allowed and used only in case of actual personal sickness or disability, medical or
dental treatment, or as authorized in Subsection (i), personal business chargeable to sick leave. Up
to 8 days sick leave per year may be used for illness in the immediate family (spouse, child, parent,
parent-in-law, brother, sister, registered domestic partner, or close relative residing in the
household of the employee).
b) Eligibility.
Regular and part-time employees shall be eligible to accrue and use sick leave.
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c) Accrual.
Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50 percent
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.
d) Accumulation.
Sick leave accrual accumulation shall be limited to 1,000 hours with no payoff provision for unused
balance at termination.
e) Use.
Sick leave may be used as needed and approved, to the point of depletion, at which time the
employee will no longer receive pay for sick leave. A new employee may, if necessary, use up to
forty-eight hours or shift equivalent of sick leave at any time during the first six months of
employment. Any negative balances generated by such utilization will be charged against future
accrual or deducted from final paycheck in the event of termination.
An employee who has been disabled for 60 consecutive days and who is otherwise eligible both for
payment under the long-term disability group insurance coverage and accrued sick leave benefits
may, at his/her option, choose either to receive the long-term disability benefits or to utilize the
remainder of his/her accrued sick leave prior to applying for long-term disability benefits.
Sick leave will not be granted for illness occurring during any leave of absence other than sick leave,
unless the employee can demonstrate that it was necessary to come under the care of a doctor
while on such other leave of absence.
When an employee finds it necessary to be absent for any reason, he/she should contact the
Department as soon as possible, but no later than the start of the scheduled shift on the first
working day of absence, and shall regularly report by the start of each subsequent shift unless
hospitalized. Such reports may be subject to written documentation if there is reasonable evidence
that sick leave abuse has occurred. Sick leave shall not be granted unless such report or advance
accounting has been made, provided, however, that the department head may grant exception to
this policy where the circumstances warrant.
Documentation may also be required if there is a reasonable basis to believe that the employee may
not be medically fit to return to work.
f) Depletion of Sick Leave Benefits.
Upon depletion of sick leave or the beginning of the period to be covered by payments under the
long-term disability group insurance coverage, whichever comes first, an employee may be granted
a medical leave of absence without pay for a period not exceeding sixty days. If the employee is
unable to return to work at the end of this period, he/she must request further medical leave which
will be subject to the approval of the City Manager. If further leave is granted, the employee must
notify the City of intent to return to work every thirty days. If further leave is not granted, the
employee's service with the City shall be considered terminated.
g) Forfeiture Upon Termination.
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Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise
provided by law. 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.
h) Personal Business Leave Chargeable to Sick Leave.
Employees may use up to twenty (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.
Section 410 – Voluntary Catastrophic Leave Program. If permitted by agreement between the City
and the Palo Alto Police Officers' Association (P.O.A.) members of the Palo Alto Police Managers'
Association representation unit may participate in the "Voluntary Leave Program" applicable to the
P.O.A. representation unit to assist in maintaining the pay of an employee who is eligible by virtue of
a qualifying catastrophic medical condition. Such participation, when authorized by City- P.O.A.
agreement, shall be allowed only as long as the donors remain anonymous (unless disclosure is
required by law). Otherwise, said program shall be governed by the conditions and restrictions set
forth in the City-P.O.A. Memorandum of Agreement.
Section 412 – Leave of Absence With Pay. The City Manager may grant a regular employee under
his/her control a leave of absence with pay for a period not exceeding thirty calendar days for
reasons he/she deems adequate and in the best interest of the City.
The City Council may grant a regular employee a leave of absence with pay for a period not to
exceed one year for reasons the Council considers adequate and in the best interest of the City.
a) Subpoenas: leave of absence.
Regular employees who are subpoenaed in their capacity as a City employee to appear as witnesses
on behalf of the State of California or any of its agencies may be granted leaves of absence with pay
from their assigned duties until released. The employee shall remit all fees received for such
appearances to the City within thirty days from the termination of his or her services as a witness.
Compensation for mileage or subsistence allowance shall not be considered as a fee and shall be
retained by the employee.
b) Employee's time off to vote.
Pursuant to Elections Code section 14000, when the employee is unable to vote outside of the
employee's work hours, up to two (2) hours' time off with pay to vote at any general or direct
primary election shall be granted at the beginning or end of the employee's scheduled shift,
whichever allows the most free time for voting and the least time off from the regular working shift.
Such time off with pay to vote shall only be granted if the employee provides at least two working
days' notice that time off for voting is desired, unless the nature of the employee's schedule
prevents the employee from anticipating the need for time off to vote.
c) Leave of absence; death in family.
Leave of absence with pay of three (3) days shall be granted an employee by the head of his or her
department in the event of death in the employee's family, but shall not exceed a total of six (6)
paid work days per calendar year. For purposes of this section, family is defined as wife, husband,
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son, step-son, son-in-law, daughter, step-daughter, daughter-in-law, father, step-father, father-in-
law, mother, step-mother, mother-in-law, brother, step-brother, brother-in-law, sister, step-sister,
sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchildren,
aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the
household of the 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 (3) days shall be
subject to the approval of the City Manager. Approval of additional leave will be based on the
circumstances of each request with consideration given to the employee's need for additional time
off.
d) Jury duty: leave of absence.
Employees required to report for jury duty shall be granted a leave of absence with pay from their
assigned duties until released by the court, provided the employee remits to the City all fees
received for such duties other than mileage or subsistence allowances within thirty days from the
termination of his/her jury service.
Section 432 – Leave of Absence Without Pay.
a) Disability.
Leaves of absence without pay may be granted in cases of disability not covered by sick leave.
Pregnancy will be considered as any other disability. Leaves of absence for disability are subject to
physicians' verification including diagnosis and medical work restriction.
b) Other leaves.
Leaves of absence without pay is at the discretion and approval of management. Unauthorized leave
of absence/job abandonment may result in disciplinary action up to and including termination of
employment.
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. All leaves without pay must be approved in advance and in writing by the
department to be effective.
c) Approval of department head.
Leave of absence without pay for one week or less may be granted by the department head,
depending on the merit of the individual case.
d) Approval by City Manager.
Leave of absence without pay in excess of one week's duration may be granted by the City Manager
on the merit of the case, but such leave shall not exceed twelve months' duration.
e) Absence without leave.
Unauthorized leave of absence shall be considered to be without pay, and reductions in the
employee's pay shall be made accordingly. Unauthorized leave of absence may result in termination
of employment.
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f) Leave of absence; death outside the immediate family.
Leave without pay may be granted a regular employee by his/her department head in the event of
death to family members other than one of the immediate family, such leave to be granted in
accordance with Subsections (b), (c), (d) and (e).
g) Military leave of absence.
State and federal law shall govern the granting of military leaves of absence and the rights of
employees returning from such absence.
ARTICLE X – EMPLOYEE/EMPLOYER RELATIONS
Section 443 – Probationary Period.
a) All original appointments to full-time or part-time regular municipal service positions shall be
tentative and subject to a probationary period of twelve months for management employees
b) The probationary period shall be regarded as part of the testing process and shall be utilized
for closely observing the employees work, for securing the effective adjustment of a new
employee to his/her position, and for rejecting any probationary employee whose
performance does not meet the acceptable standards of work.
c) A report of performance of each probationary employee shall be made by the department
head and shown to the probationary employee on or before expiration of the probationary
period.
d) During the probationary period a new employee may be suspended, demoted or terminated
at any time by the appointing authority without cause and without right of appeal or to
submit a grievance.
Section 454 – Disciplinary Action and Unsatisfactory Work or Conduct. Disciplinary action shall be
governed by the City’s Merit Rules and Regulation, Palo Alto Police Department Policy 340 on
Conduct, the Palo Alto Police Department Internal Affairs and Complaint Investigations Guidelines,
and the Police Officer Procedural Bill of Rights Act.
Section 465 – Grievance Procedure.
a) The City and the Association recognize that early settlement of grievances is essential to
sound employee-employer relations. The parties seek to establish a mutually satisfactory
method for the settlement of employee grievances, or Association grievances, as provided
for below. In presenting a grievance, the aggrieved and/or his or her representative is
assured freedom from restraint, interference, coercion, discrimination or reprisal.
b) Definition. A Grievance is:
1. An unresolved complaint or dispute regarding the application or interpretation of this
Memorandum of Agreement
2. An appeal from a disciplinary action of any kind against an employee covered by this
Memorandum of Agreement.
c) Access to the Grievance Procedure. Except as otherwise provided in the Memorandum of
Agreement for probationary employees, all employees represented by the Association may
file and process a grievance. Such aggrieved employees may be represented by the
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Association or may represent themselves in preparing and presenting their grievance at any
level of review. The Association may file a grievance when an Association right under this
Memorandum of Agreement not directly related to an individual employee becomes subject
to dispute.
d) Conduct of Grievance Procedure.
1. The time limits specified in this Article may be extended by written mutual
agreement of the aggrieved employee or the Association and the reviewer
concerned.
2. If a decision is not rendered within a stipulated time limit, the aggrieved employee
may immediately appeal to the next step.
3. The grievance will be considered settled if the decision at any step is not appealed
within the specified time limit.
4. The aggrieved employee or the Association and Human Resources Director may
mutually agree in writing to waive any step of the grievance procedure.
5. Written grievances shall be submitted on forms provided by the City or on forms that
are mutually agreeable to the City and the Association.
6. Any retroactive monetary arbitrator award or settlement by mutual agreement shall
not extend more than ninety (90) days before the date that the grievance was filed in
writing at Step 2 below.
The following steps shall apply:
Step I. The aggrieved employee will first attempt to resolve the grievance through informal
discussions with his or her immediate supervisor by the end of the tenth working day following the
discovery of or the incident upon which the grievance is based. Every attempt will be made to settle
the issue at this level. (Note: For purposes of time limits, the working days are considered to be
Monday through Friday, exclusive of City holidays.) Appeals of disciplinary action should be
processed through the procedures outlined in Step 2-3 of the Grievance Procedure.
Step II. If the grievance is not resolved through the informal discussion, the employee will reduce
the grievance to writing and submit copies to the department head or his/her designee within ten
(10) working days of the discussion with the immediate supervisor.
The department head or his/her designee shall have ten (10) working days from the receipt of a
written grievance to review the matter and prepare a written statement.
Step III. If the grievance is not resolved at Step II, the aggrieved employee may choose between
final and binding resolution of the grievance through appeal to the City Manager or through appeal
to final and binding grievance arbitration. For the term of this Memorandum of Agreement, appeals
to final and binding arbitration may be processed only with Association approval. All Step III appeals
must be filed in writing at the Human Resources Department Office within ten (10) working days of
receipt of the Step II appeal.
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If the aggrieved employee elects final and binding resolution by the City Manager, the City Manager
will choose the methods he or she considers appropriate to review and settle the grievance. The City
Manager shall render a written decision to all parties directly involved within ten working days after
receiving the employee's appeal.
If the aggrieved employee elects final and binding arbitration in accordance with this provision, the
parties shall mutually select an arbitrator. In the event the parties cannot agree on an arbitrator,
they shall mutually request a panel of five arbitrators from the California State Conciliation Service
or from the American Arbitration Association if either party objects to the State Conciliation Service,
and select an arbitrator by the alternate strike method.
The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine compliance
with the provisions of this Memorandum of Agreement and such Merit System Rules, regulations,
policies, procedures, City ordinances, resolutions relating to terms or conditions of employment,
wages or fringe benefits, as may hereafter be in effect in the City insofar as may be necessary to the
determination of grievances appealed to the arbitrator. The arbitrator shall be without power to
make any decision:
1) Regarding matters of interest.
2) Contrary to, or inconsistent with or modifying in any way, the terms of this Memorandum of
Agreement.
3) Granting any wage increases or decreases.
The arbitrator shall be without authority to require the City to delegate or relinquish any powers
which by State law or City Charter the City cannot delegate or relinquish. If either party seeks
arbitration and the other party claims the matter is not subject to the arbitration provisions of this
Memorandum of Agreement, the issue of arbitrability shall first be decided by the arbitrator using
the standards and criteria set forth in this section and without regard to the merits of the grievance.
If the issue is held to be arbitrable, the arbitration proceedings will be recessed for up to five
working days during which the parties shall attempt to resolve the grievance. If no resolution is
reached, the arbitrator will resume the hearing and hear and resolve the issue on the merits.
Copies of the arbitrator's decision shall be submitted to the City, the aggrieved employee and the
Association. All direct costs emanating from the arbitration procedure shall be shared equally by the
City and the aggrieved employee or the Association.
Section 476 – No Strikes. The Association, its representatives, or members, shall not engage in or
cause, instigate, encourage, sanction, or condone a strike, withholding of services, concerted abuse
of leave of absence provisions, work stoppage or work slowdown of any kind. No employee shall
refuse to cross any picket line in the conduct of Police Department business, nor shall the
Association, its representatives, or members discriminate in any way toward anyone who refuses to
participate in a strike, or any of the job actions cited above.
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Section 487 – Reduction in Workforce. In the event of reductions in force, they shall be
accomplished wherever possible through attrition.
If the work force is reduced in the Association, the City will give an employee impacted by a
potential lay off 30 days' notice prior to any reduction in force.
ARTICLE XI – LOOKING FORWARD
Section 489 – Full Understanding. This Memorandum of Agreement contains the full and entire
understanding of the parties regarding the matters set forth herein. The parties agree that they shall
each carry out their responsibilities under the MOA in good faith.
Section 5049 – Legal Compliance/Severability. If any provision herein contained is rendered or
declared invalid by reason of existing State or Federal legislation or by reason of State Supreme
Court or U. S. Supreme Court ruling, such invalidation of such part or portion of this Memorandum
of Agreement shall not invalidate the remaining portions hereof, and they shall remain in full force
and effect, insofar as such remaining portions are severable.
Section 510 – Duration. The term of this Agreement shall commence on October 1, 2018become
effective upon ratification and adoption by both parties and shall expire on June 30, 20251.
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TABLE OF CONTENTS
ARTICLE I – PREAMBLE ................................................................................................................... 4
Section 1 – Recognition. .................................................................................................................... 4
Section 2 – Non-Discrimination. ........................................................................................................ 4
ARTICLE II – COMPENSATION ........................................................................................................ 4
Section 3 – Salary. .............................................................................................................................. 4
Section 4 – Working Out of Class Pay. .............................................................................................. 5
Section 5 – Night Shift Differential. .................................................................................................. 5
ARTICLE III – HEALTH CARE BENEFITS ....................................................................................... 5
Section 6 – Active Employee Health Plans. ....................................................................................... 5
Section 7 – Dental Benefits. ............................................................................................................... 6
Section 8 – Vision Care. .................................................................................................................... 6
Section 9 – Basic Life Insurance. ...................................................................................................... 6
Section 10 – Supplemental Life And AD&D Insurance. ................................................................... 6
Section 11 – Effective date of Coverage for New Employees. .......................................................... 6
ARTICLE IV – OTHER BENEFITS ..................................................................................................... 7
Section 12 – Holiday Compensation. ................................................................................................ 7
Section 13 – Vacation. ....................................................................................................................... 7
Section 14 – Long Term Disability. ................................................................................................... 8
Section 15 – Dependent Care Assistance Program. .......................................................................... 8
Section 16 – Medical Flexible Spending Program. ............................................................................ 8
Section 17 – Employee Assistance Plan. ............................................................................................ 8
Section 18 – Commute Incentives and Parking. ................................................................................. 9
Reopener. ............................................................................................................................................ 9
ARTICLE V –RETIREMENT ............................................................................................................... 9
Section 19 – Retirement Benefits. ...................................................................................................... 9
Section 20 – Retirement Medical Plan. ........................................................................................... 10
Section 21 – ICMA - Retirement Health Savings Plan. .................................................................. 11
Section 22 – Deferred Compensation Program. .............................................................................. 11
ARTICLE VI – MANAGEMENT BENEFIT PROGRAM ................................................................. 11
Section 23 – Professional Development Reimbursement. ............................................................... 11
Section 24 – Physical Examinations. .............................................................................................. 12
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Section 25 – Excess Benefit. ............................................................................................................ 12
Section 26 – Management Annual Leave. ....................................................................................... 13
ARTICLE VII – OPERATIONAL ISSUES ....................................................................................... 14
Section 27 – Management Assignments. ......................................................................................... 14
Section 28 – Basic Work Schedules. ............................................................................................... 14
Section 29 – On Duty Workouts. ..................................................................................................... 14
Section 30 – Take Home Emergency Response Vehicles. ............................................................... 14
Section 31 – Modified Duty Assignments. ...................................................................................... 14
Section 32 – Meal Allowance. ........................................................................................................ 15
Section 33 – Uniforms. ..................................................................................................................... 15
ARTICLE VIII – ASSOCIATION AGREEMENTS ........................................................................... 15
Section 34 – Association Security. .................................................................................................. 15
Section 35 – Association Representative Access to Work Locations. ............................................. 16
Section 36 – Release Time. .............................................................................................................. 16
Section 37 – Use of City Facilities for Association Business. ......................................................... 16
Section 38 – Payroll Deduction. ....................................................................................................... 16
ARTICLE IX – LEAVE PROGRAMS ................................................................................................ 16
Section 39 – Sick Leave. .................................................................................................................. 16
Section 40 – Voluntary Catastrophic Leave Program. ..................................................................... 18
Section 41 – Leave of Absence With Pay. ...................................................................................... 18
Section 42 – Leave of Absence Without Pay. .................................................................................. 19
ARTICLE X – EMPLOYEE/EMPLOYER RELATIONS .................................................................. 20
Section 43 – Probationary Period. .................................................................................................... 20
Section 44 – Disciplinary Action and Unsatisfactory Work or Conduct. ........................................ 20
Section 45 – Grievance Procedure. .................................................................................................. 20
Section 46 – No Strikes. ................................................................................................................... 22
Section 47 – Reduction in Workforce. ............................................................................................ 22
ARTICLE XI – LOOKING FORWARD ............................................................................................. 23
Section 48 – Full Understanding. ..................................................................................................... 23
Section 49 – Legal Compliance/Severability. .................................................................................. 23
Section 50 – Duration. ...................................................................................................................... 23
APPENDIX A-1 .................................................................................... Error! Bookmark not defined.
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2023 - 2025 MEMORANDUM OF AGREEMENT
City of Palo Alto and Palo Alto Police Managers' Association
ARTICLE I – PREAMBLE
This Memorandum of Agreement is pursuant to and subject to Sections 3500-3510 of the
Government Code of the State of California, the Charter of the City of Palo Alto, and the City of Palo
Alto Merit System Rules and Regulations.
This Memorandum of Agreement made and entered into at Palo Alto, California, by and between
the City of Palo Alto, a municipal corporation (hereinafter referred to as "City") and the Palo Alto
Police Managers' Association (hereinafter referred to as "Association"), is intended to define
agreements reached during the meet and confer process concerning wages, hours, working
conditions, and other terms and conditions of employment for the represented group of employees.
Section 1 – Recognition. On October 29, 2009, the City of Palo Alto certified the Palo Alto Police
Managers' Association (Association) as a bargaining unit within the City.
The City recognizes the Association as the exclusive representative of an employee group consisting
solely of Police Lieutenants and Police Captains who are regularly employed by the City and others
who might be amended into the representation unit from time to time under existing law and the
Merit System Rules and Regulations.
Section 2 – Non-Discrimination. The City and the Union agree that there shall be no discrimination
of any kind because of age (over 40), race, creed, color, religion national origin, ancestry), veterans
status, physical or mental disability, marital status, sexual orientation, sex (sexual, gender based or
gender identity, pregnancy/childbirth), medical condition (cancer related and genetic
characteristics), or on any other basis prohibited by applicable federal and State law against any
employee or applicant for employment.
The Association shall cooperate with the City, to the extent required by federal and State laws and
regulations, in furthering the objective of Equal Employment Opportunities, as defined by Federal
and State regulations.
ARTICLE II – COMPENSATION
Section 3 – Salary
a) Market Adjustment: Effective the first full pay period including City Council Adoption,
salary ranges of all bargaining unit classifications will be increased by five percent (5.0%),
which is sufficient to bring them to the top quartile of market median as determined by
the City’s market study.
b) General Salary Increase: Effective the first full pay period following July 1, 2023, salary
ranges of all represented classifications will be increased by four percent (4.0%).
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c) General Salary Increase: Effective the first full pay period following July 1, 2024 salary
ranges of all represented classifications will be increased by four percent (4.0%).
d) Flexible Compensation: Effective the first full pay period following City Council Adoption,
and in lieu of an increase to the City contribution towards medical premiums, each
represented classification will have their monthly income increased by $100.
e) Flexible Compensation: Effective the first full pay period following January 1, 2024, and in
lieu of an increase to the City contribution towards medical premiums, each represented
classification will have their monthly income increased by an additional $100 (Total of
$200).
Section 4 – Working Out of Class Pay. Lieutenants or Captains fulfilling the role of an acting captain,
assistant chief, or chief for individual shifts and/or a number of hours within a shift, shall not receive
additional compensation. Periodically working in this capacity shall be deemed a basic duty within
an employee's job description.
Lieutenants and Captains working out of class for a period of four or more consecutive shifts shall be
compensated at the start of the pay period with premium pay determined by the Chief of Police or
his or her designee up to 10% of base pay.
In accordance with Government Code 20480, an employee assigned to work in an out-of-class
appointment may not exceed 960 hours worked in the appointment within a fiscal year if the
employee is appointed to an upgraded position or higher classification that is vacant during
recruitment for a permanent appointment. This limitation does not apply to a position that is
temporarily available due to a leave of absence.
Section 5 – Night Shift Differential. Night shift differential shall be paid at the rate of 5% to all
personnel for all hours worked between 6:00 p.m. and 8:00 a.m.
ARTICLE III – HEALTH CARE BENEFITS
Section 6 – Active Employee Health Plans. The maximum City contribution towards medical
premiums for eligible full time employees per employee category shall be up to a maximum of the
following for any plan:
Medical Premium
Category Contribution* Contribution (inclusive
of PEMHCA
contribution) effective
First month following
Employee Only $151.00 $871
Employee plus one $151.00 $1,742
Employee Family $151.00 $2,260
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*Total City contribution includes both PEMHCA minimum contributions pursuant to Government
Code section 22892 and an additional City contribution necessary to pay the cost of medical
premiums up to the amount listed in the "Total maximum City contribution" columns above.
Section 7 – Dental Benefits.
a) The City will maintain the present level of benefits on the City-sponsored dental program for
current employees and their dependents, except that the maximum benefits per calendar
year shall be $2,000 effective in 1988. Dental Coverage shall include composite (tooth
colored) fillings for all teeth.
Effective July I, 2007, the City will provide 50% of reasonable charges, $2,000 lifetime
maximum orthodontic benefit for representation unit employees and their dependents.
b) Dependents will include domestic partners, as defined in the Active Employee Domestic
Partners Section below.
c) During the term of the agreement, the City and the Union will work together to review
benefit provisions of the City's self-funded dental program. The purpose of this review is to
contain benefit cost increases. Joint recommendations will be prepared for discussion during
successor agreement negotiations.
d) Dental implants in conjunction with one or more missing natural teeth, and removal of
dental implants will be covered as a Major Dental Service at 50% usual, customary and
reasonable (UCR).
Section 8 – Vision Care. The City will offer vision care coverage for employees and dependents.
Coverage is equivalent to $20 deductible Plan A under the Vision Service Plan, with monthly
premiums paid by the employer. Dependents will include domestic partners, as defined in the Active
Employee Domestic Partners Section below.
Section 9 – 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 $1,000).
Section 10 – 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.
Section 11 – 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, and life insurance plans if these benefits are elected.
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ARTICLE IV – OTHER BENEFITS
Section 12 – Holiday Compensation. Police Managers will receive the twelve (12) paid City holidays
outlined in the City of Palo Alto Merit Rules.
Floating Holiday – Days of Historical Significance. Employees will be provided one floating holiday
each calendar year in acknowledgement of days of historical significance. The employee with prior
approval from their supervisor can use this floating holiday at any time during the year. This holiday
has no cash value and will expire if unused.
Section 13 – Vacation.
a) Vacation Accrual.
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 times the annual rate of accrual.
Each eligible employee shall accrue vacation at the following rate for continuous service performed
in pay status:
1. Less than nine (9) years - For employees completing less than nine (9) years
continuous service; one hundred twenty (120) hours vacation leave per year. The City
Manager may adjust the annual vacation accrual of employees hired on or after July
1, 2001 to provide up to forty (40) additional hours (i.e. to a maximum annual accrual
of one hundred sixty (160) hours) for service with a prior employer.
2. Nine (9), but less than fourteen (14) years - For employees completing nine (9), but
not more than fourteen (14) years continuous service; one hundred sixty (160) hours
vacation leave per year.
3. Fourteen (14), but less than nineteen (19) years - For employees completing fourteen
(14), but not more than nineteen (19) years continuous service; one hundred eighty
(180) hours vacation leave per year.
4. Nineteen (19) or more years - For employees completing nineteen (19) or more years
continuous service; two hundred (200) hours vacation leave per year.
b) Vacation Use.
Vacation use by police managers will be subject to approval by the Chief of Police or his/her
designee. All reasonable efforts will be made to approve vacation requests while maintaining
appropriate oversight of public safety operations.
Employees shall complete six months continuous service before using accrued vacation leave.
c) Vacation Cashout.
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Once each calendar year an employee may cash out eight (8) or more hours of vacation accrual in
excess of eighty (80) hours from a minimum of eight (8) hours to a maximum of one hundred ( 120)
hours, provided that the employee has taken at least eighty (80) hours of vacation in the previous
twelve (12) months.
Effective for the 2012 tax year and each subsequent year, employees must pre-elect an irrevocable
number of vacation hours they will cash out during the upcoming year, up to a maximum of one
hundred twenty (120) hours, prior to the start of the calendar year. Employees who do not pre-
designate or elect to cash out hours will be deemed to have waived the right to cash out any
vacation leave in the following year.
Employees who pre-designate cash out amounts may request a cash out at any time in the
designated tax year by submitting a cash out form to payroll. For employees who have not
requested payment of pre-designated cash out amounts by November 1 of each year, Payroll will
automatically cash out the pre-designated amount in a paycheck issued on or after November 1.
d) Vacation Pay at Termination.
Employees leaving the municipal service with accrued vacation leave shall be paid the amounts of
accrued vacation to the date of termination. Payments for accrued vacation shall be at the
employee's current rate of pay.
e) Vacation Benefits for Deceased Employees.
An employee who is eligible for vacation leave and who dies while in the municipal service shall
have the amount of any accrued vacation paid to the employee's estate within thirty days. This
proration will be computed at the last basic rate of pay.
Section 14 – Long Term Disability. 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.
Section 15 – Dependent Care Assistance Program. The City will provide a Dependent Care
Assistance Program for employees according to the provisions of the Federal Economic Recovery Act
of 1981, Code Sections 125 and 129. The program will be available to representation unit employees
beginning with pay period number 1 of 1992, and remain in effect subject to a reasonable minimum
participation level and availability of third-party administrative services at a reasonable cost.
Section 16 – Medical Flexible Spending Program. The City will provide a Medical Flexible Spending
Program for Association members allowing them to use pre-tax deferrals for reimbursement of
excess or uncovered medical, dental and vision expenses. The plan will follow existing plan
guidelines and conform to all applicable laws and regulations.
Section 17 – Employee Assistance Plan. The Employee Assistance Plan (EAP) provides employees
with confidential personal counseling, work and family related issues, eldercare, substance abuse,
etc.
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Section 18 – Commute Incentives and Parking.
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.
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.
Reopener. It is the City's interest to reduce single occupancy vehicle trips to the extent possible in
order to address current challenges. During the term of this agreement, upon written request by the
City, the parties shall meet and confer through the impasse process if necessary on changes to the
City's commute incentive and parking program adopted by the City Council.
ARTICLE V –RETIREMENT
Section 19 – Retirement Benefits.
A. "3%@50" Safety Retirement (Employees hired on or before December 7, 2012)
For employees hired by the City of Palo Alto on or before December 7, 2012, the California Public
Employees' Retirement System (CalPERS) retirement formula benefit known as the "3 percent at 50
(3%@50)," per California Government Code section 21362.2, shall continue in effect with the final
salary determination for such employees of the "single highest one (1) year period" per California
Government Code section 20042. All unit members in the 3% @ 50 safety retirement plan shall pay
the full 9% CalPERS member contribution. This contribution is pre-tax to the extent allowable by
law.
B. Second Tier "3% at 55" Safety Retirement ("Classic" Employees)
For those employees hired on or after December 8, 2012 through December 31, 2012 or are classic
members as defined by CalPERS, the CalPERS retirement formula benefit known as the "3 percent at
55 (3%@55)," per Government Code section 21363.1, with the final salary determination for such
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employees of the "three (3) highest consecutive years" based on the highest average annual
compensation earnable by the member during three (3) consecutive years of employment
immediately preceding retirement or the three-year period otherwise designated by the member
per Government Code section 20037. All unit members in the second tier shall pay the full 9%
CalPERS member contribution. This contribution is pre-tax to the extent allowable by law.
C. Third Tier "2.7% at 57” Safety Retirement (“New” PEPRA Employees)
For those employees hired on or after January 1, 2013, the CalPERS retirement formula benefit
known as "2.7 percent at 57 (2.7% at 57)," with the final salary determination for such employees of
the "three (3) highest consecutive years." The initial contribution rate will be at least 50% of the
normal cost rate at retirement as determined by CalPERS. This contribution is pre-tax to the extent
allowable by law.
D. Additional Employee PERS Contributions
Effective the pay period that includes June 30, 2017, all employees regardless of pension formula in
this unit shall, in addition to the Member Contribution required, pay a3% towards the Employer
share of Pension.
Effective the pay period that includes June 30, 2021, all employees regardless of pension formula in
this unit shall, in addition to the Member Contribution required, pay an additional 1% towards the
Employer share of Pension for a total of 4%. Such contributions under CalPERS 20516 will be
provided on a pre-tax basis to the extent allowable by law.
Section 20 – Retirement Medical Plan.
A. Retiree Medical Coverage for Unit Employees Hired Before January 1, 2004:
Monthly City-paid premium contributions for a retiree-selected PEMHCA optional plan will be made
in accordance with the Public Employees' Medical and Hospital Care Act Resolution for employees
hired before January 1, 2004 as outlined below.
For employees who retire before June 1, 2012, the City will pay up to the monthly medical premium
for the 2nd most expensive plan offered to PMA employees among the existing array of plans.
For employees who retire on or after June 1, 2012, The City contribution towards retiree medical
shall be the same contribution amount it makes for active City employees.
Effective upon ratification and adoption of this Agreement (Scheduled for January 11, 2016), the
City shall provide active unit 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 People, Strategy, and
Operations department of their election in writing no later than 90 days following the ratification
and adoption of this Agreement.
B. 20-Year Vesting Schedule for Retiree Medical Coverage for Unit Employees Hired on or
After January 1, 2004 and employees who chose to opt-in to retiree health benefits
provided under California Government Code section 22893 as outlined above:
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The retiree health benefit provided in California Government Code section 22893 shall apply to all
employees hired on or after January I, 2004 and employees who opt-in as outlined above. Under
this law, an employee is eligible to receive Fifty (50) percent of benefit after ten (10) years; each
additional service credit year after Ten (10) years will increase employer credit by Five (5%) percent
until Twenty (20) years is reached at which time employee is eligible for One Hundred (100%)
percent of annuitant-only coverage and Ninety (90%) percent of the additional premium for
dependents.
Section 21 – ICMA - Retirement Health Savings Plan. The City provides an ICMA retirement health
savings plan for Association members. The ICMA retirement health savings plan is subject to
applicable IRS rules and plan guidelines as well as any other applicable laws. Each Association
member shall make a pre-tax contribution to the plan as follows:
1. Each member shall contribute 1% of their base salary bi-weekly into the plan.
2. Failure by each member to contribute will deem the health savings plan out of compliance
with IRS and plan guidelines.
3. The administrative fee shall be paid by the Association member.
The manner and amount of contributions may be periodically modified by agreement of both
parties.
Section 22 – Deferred Compensation Program. The City will provide a Deferred Compensation
Program for employees according to the provisions of the plans and applicable IRS guidelines.
ARTICLE VI – MANAGEMENT BENEFIT PROGRAM
Section 23 – Professional Development Reimbursement. 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 to each Association
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
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travel expenses associated with the courses as defined by the City's travel expense report
from the Policy & Procedures Manual Section 1-02 ASD.
d) Professional and trade journal subscriptions not to exceed 12 months.
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.
Section 24 – Physical Examinations. All management and professional employees are eligible to
receive an annual physical examination as follows:
a) Use the periodic health exam benefit as provided under the PERS Health Plan option you
have selected. Each of the PERS Health Plans provides for a periodic physical examination.
The examination must be performed by your primary care physician – unless he/she refers
you to another physician.
b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The
guidelines are a suggested minimum based on research studies concerning preventative
care. The judgment of your physician is the final determinant for your care.
c) Any additional necessary asymptomatic tests that are required by your physician that are not
covered by your health plan will be reimbursed by the City. Any symptomatic tests will be
covered under your PERS Health Plan.
The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet
site. This benefit will not be pro-rated.
Section 25 – Excess Benefit. This benefit is designed to meet the requirements of Section 125 of the
Internal Revenue Code. Every calendar year, each employee will be provided with $2,500 annually
that they can designate among the following options:
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 co-payments as
well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold
medicines. 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.
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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.
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 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.
The $2,500 excess benefit provided in this section made on a one-time contribution basis on
election by the employee towards the employee's City-sponsored 457 Deferred Compensation plan
with either ICMA-RC or the Hartford.
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-rata 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.
Section 26 – Management Annual Leave. At the beginning of each calendar year regular
management employees will be credited with 80 hours of management annual leave. This leave is
granted in recognition of the extra hours management 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, I 0-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift
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workers will receive one-half shift off for each 8 hours charged. 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 fiscal 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 calendar year will be paid in cash unless a different
option as indicated above is elected by the employee.
Section 27 - POST Certificate/Incentive
Management POST Certification: Employees that qualify for the Management POST certificate will
receive a four percent (4%) increase to base pay effective the first full pay period after the employee
provides proof of submission of the required paperwork to POST.
ARTICLE VII – OPERATIONAL ISSUES
Section 28 – Management Assignments. The Chief of Police or his/her designee shall have the
authority to make management assignments at his or her discretion. Where possible, these
assignments should take into account the needs of the organization, development of the employee
and individual employee desires.
Section 29 – Basic Work Schedules. Generally, police managers will be expected to work flexible
schedules and reasonably adjust their hours to oversee their employee groups, manage 24/7 law
enforcement operations, perform routine work, complete daily assignments, and occasionally
attend meetings or other events outside their normal work shifts. Basic work schedules will be the
4/10 schedule.
Section 30 – On Duty Workouts. Police managers who complete the yearly Wellness Program
requirements may participate in an on-duty workout for a reasonable period as determined by the
Chief, as long as it does not interfere with the performance of the employee's job duties, for which
the employee will remain accountable. Applicable guidelines and conditions are outlined in the
Department's Wellness Program Policy which the City may change from time to time.
Section 31 – Take Home Emergency Response Vehicles. Subject to approval by the City Manager and
the Police Chief, Police Captains will continue the current take home emergency response vehicle
program which allows for the immediate and emergent response to public safety incidents involving
the City.
The specific use and restrictions for driving these vehicles shall adhere to the guidelines outlined in
the then current version of City Policy and Procedure 4-01.
Section 32 – Modified Duty Assignments. In cases of non-work-related injury, illness or pregnancy,
an employee, upon approval of the department head, City Risk Manager and the employee's doctor,
may return to work or continue work with doctor-approved limited or alternative duty pursuant to
Policy & Procedure 2-04. Approval for reasonable accommodation such as limited/alternative duty
shall be based upon department ability to provide work consistent with medical limitations and the
length of time of the limitations. The City doctor may be consulted in determining work limitations.
Any assignment to a limited/alternative duty will be on a temporary basis.
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Section 33 – Meal Allowance. Police managers attending night meetings will be eligible for meal re-
imbursement under the guidelines set forth in the then current version of City Policy and Procedure
No. 1-02.
Section 34 – Uniforms.
a) The City will supply complete uniforms to all sworn personnel. All uniform items are the
property of the City. One complete uniform consists of: (I) three pair of trousers, (2) three
short-sleeved shirts with patches and zippers if desired, (3) three long-sleeved shirts with
patches and zippers if desired, (4) three cotton or two synthetic fiber turtleneck shirts, (5)
hat, (6) duty jacket with patches, (7) dress jacket with patches, (8) necktie, and (9) rain gear.
b) At the time of initial employment, every sworn employee will be issued one complete
uniform. Uniform items will be replaced on an as-needed basis subject to verification by
management.
c) The City shall provide uniform cleaning for sworn representation unit personnel.
d) Personnel are accountable for all uniform items issued to them. If a particular item is lost or
damaged due to employee negligence, the employee will be required to reimburse the City
for value of the item(s) lost or damaged.
e) The City shall reimburse employees for the full cost of job-related boots upon
verification of such purchase by the employees. The City will make the reimbursement only
upon proof that the previous boots have become unserviceable due to wear or
damage. (Job-related boots shall mean well-constructed, high topped boots that provide full
ankle and foot support, which are selected from list agreed to by Management and the
Association.)
Employees are responsible for the full cost of any low-top, black shoes that are worn with
the uniform.
ARTICLE VIII – ASSOCIATION AGREEMENTS
Section 35 – Association Security.
a) When a person is hired in any of the covered job classifications, the City shall notify that
person that the Association is the recognized bargaining representative for the employee
in said Unit and give the employee a current copy of the Memorandum of Agreement.
b) If there is no disruption of work, members of the Association Board of Directors may use
a reasonable amount of on-duty time without loss of pay to meet with Management
specifically related to representation of employees. Such release time must be cleared in
advance by the Chief (or his/her Designee) who is a member of management.
For purposes of this section, representation shall include:
(i) Meetings with represented employees or management related to a grievance
or disciplinary action, including investigation and preparation time.
(ii) A meeting with management related to benefits, working conditions or other
terms and conditions of employment.
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Section 36 – Association Representative Access to Work Locations. Employee and non-employee
representatives of the Association will be granted access to City work locations to conduct business
related to the administration or negotiation of the parties' Memorandum of Understanding, as long
as advance arrangements for such visits have been made with the affected department manager
and no disruption of work occurs. Advance arrangement shall normally include not less than one
hour's notice in the case of an employee Association representative, two hours in the case of non-
employee Association representatives. Non-employee representatives must also notify the Human
Resources Department Manager (or designee) of the time, date and location of the representative's
intended visit.
Section 37 – Release Time. The Association President or his or her-designee in the representation
unit may use a reasonable amount of time without loss of pay for matters related to the bargaining
process, labor relations, and administration of the MOA, violations of the MOA, grievances,
disciplinary issues, and training for association members.
Release time shall normally be approved in advance by the department head and must not detract
from the performance of the representative's City job duties, for which he or she will remain
accountable.
Section 38 – Use of City Facilities for Association Business. Any use of City facilities shall be governed
by the then current version of City Policy and Procedure No. 4-07.
Section 39 – Payroll Deduction. The City shall deduct Association membership dues and any other
mutually agreed upon payroll deduction from the bi-weekly pay of member employees. The dues
deduction must be authorized in writing by the employee on an authorization card acceptable to the
City and the Association. The City shall remit the deducted dues to the Association as soon as
possible after deduction.
ARTICLE IX – LEAVE PROGRAMS
Section 40 – Sick Leave.
a) Statement of Policy.
Sick leave shall be allowed and used only in case of actual personal sickness or disability, medical or
dental treatment, or as authorized in Subsection (i), personal business chargeable to sick leave. Up
to 8 days sick leave per year may be used for illness in the immediate family (spouse, child, parent,
parent-in-law, brother, sister, registered domestic partner, or close relative residing in the
household of the employee).
b) Eligibility.
Regular and part-time employees shall be eligible to accrue and use sick leave.
c) Accrual.
Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50 percent
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.
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d) Accumulation.
Sick leave accrual accumulation shall be limited to 1,000 hours with no payoff provision for unused
balance at termination.
e) Use.
Sick leave may be used as needed and approved, to the point of depletion, at which time the
employee will no longer receive pay for sick leave. A new employee may, if necessary, use up to
forty-eight hours or shift equivalent of sick leave at any time during the first six months of
employment. Any negative balances generated by such utilization will be charged against future
accrual or deducted from final paycheck in the event of termination.
An employee who has been disabled for 60 consecutive days and who is otherwise eligible both for
payment under the long-term disability group insurance coverage and accrued sick leave benefits
may, at his/her option, choose either to receive the long-term disability benefits or to utilize the
remainder of his/her accrued sick leave prior to applying for long-term disability benefits.
Sick leave will not be granted for illness occurring during any leave of absence other than sick leave,
unless the employee can demonstrate that it was necessary to come under the care of a doctor
while on such other leave of absence.
When an employee finds it necessary to be absent for any reason, he/she should contact the
Department as soon as possible, but no later than the start of the scheduled shift on the first
working day of absence, and shall regularly report by the start of each subsequent shift unless
hospitalized. Such reports may be subject to written documentation if there is reasonable evidence
that sick leave abuse has occurred. Sick leave shall not be granted unless such report or advance
accounting has been made, provided, however, that the department head may grant exception to
this policy where the circumstances warrant.
Documentation may also be required if there is a reasonable basis to believe that the employee may
not be medically fit to return to work.
f) Depletion of Sick Leave Benefits.
Upon depletion of sick leave or the beginning of the period to be covered by payments under the
long-term disability group insurance coverage, whichever comes first, an employee may be granted
a medical leave of absence without pay for a period not exceeding sixty days. If the employee is
unable to return to work at the end of this period, he/she must request further medical leave which
will be subject to the approval of the City Manager. If further leave is granted, the employee must
notify the City of intent to return to work every thirty days. If further leave is not granted, the
employee's service with the City shall be considered terminated.
g) Forfeiture Upon Termination.
Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise
provided by law. 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.
h) Personal Business Leave Chargeable to Sick Leave.
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 164 Packet Pg. 409 of 853
City of Palo Alto and PAPMA
January 1, 2023 – June 30, 2025
Page 18 of 23
Employees may use up to twenty (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.
Section 41 – Voluntary Catastrophic Leave Program. If permitted by agreement between the City
and the Palo Alto Police Officers' Association (P.O.A.) members of the Palo Alto Police Managers'
Association representation unit may participate in the "Voluntary Leave Program" applicable to the
P.O.A. representation unit to assist in maintaining the pay of an employee who is eligible by virtue of
a qualifying catastrophic medical condition. Such participation, when authorized by City- P.O.A.
agreement, shall be allowed only as long as the donors remain anonymous (unless disclosure is
required by law). Otherwise, said program shall be governed by the conditions and restrictions set
forth in the City-P.O.A. Memorandum of Agreement.
Section 42 – Leave of Absence With Pay. The City Manager may grant a regular employee under
his/her control a leave of absence with pay for a period not exceeding thirty calendar days for
reasons he/she deems adequate and in the best interest of the City.
The City Council may grant a regular employee a leave of absence with pay for a period not to
exceed one year for reasons the Council considers adequate and in the best interest of the City.
a) Subpoenas: leave of absence.
Regular employees who are subpoenaed in their capacity as a City employee to appear as witnesses
on behalf of the State of California or any of its agencies may be granted leaves of absence with pay
from their assigned duties until released. The employee shall remit all fees received for such
appearances to the City within thirty days from the termination of his or her services as a witness.
Compensation for mileage or subsistence allowance shall not be considered as a fee and shall be
retained by the employee.
b) Employee's time off to vote.
Pursuant to Elections Code section 14000, when the employee is unable to vote outside of the
employee's work hours, up to two (2) hours' time off with pay to vote at any general or direct
primary election shall be granted at the beginning or end of the employee's scheduled shift,
whichever allows the most free time for voting and the least time off from the regular working shift.
Such time off with pay to vote shall only be granted if the employee provides at least two working
days' notice that time off for voting is desired, unless the nature of the employee's schedule
prevents the employee from anticipating the need for time off to vote.
c) Leave of absence; death in family.
Leave of absence with pay of three (3) days shall be granted an employee by the head of his or her
department in the event of death in the employee's family, but shall not exceed a total of six (6)
paid work days per calendar year. For purposes of this section, family is defined as wife, husband,
son, step-son, son-in-law, daughter, step-daughter, daughter-in-law, father, step-father, father-in-
law, mother, step-mother, mother-in-law, brother, step-brother, brother-in-law, sister, step-sister,
sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchildren,
aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the
household of the employee. Such leave shall be at full pay and shall not be charged against the
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 165 Packet Pg. 410 of 853
City of Palo Alto and PAPMA
January 1, 2023 – June 30, 2025
Page 19 of 23
employee's accrued vacation or sick leave. Requests for leave in excess of three (3) days shall be
subject to the approval of the City Manager. Approval of additional leave will be based on the
circumstances of each request with consideration given to the employee's need for additional time
off.
d) Jury duty: leave of absence.
Employees required to report for jury duty shall be granted a leave of absence with pay from their
assigned duties until released by the court, provided the employee remits to the City all fees
received for such duties other than mileage or subsistence allowances within thirty days from the
termination of his/her jury service.
Section 43 – Leave of Absence Without Pay.
a) Disability.
Leaves of absence without pay may be granted in cases of disability not covered by sick leave.
Pregnancy will be considered as any other disability. Leaves of absence for disability are subject to
physicians' verification including diagnosis and medical work restriction.
b) Other leaves.
Leaves of absence without pay is at the discretion and approval of management. Unauthorized leave
of absence/job abandonment may result in disciplinary action up to and including termination of
employment.
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. All leaves without pay must be approved in advance and in writing by the
department to be effective.
c) Approval of department head.
Leave of absence without pay for one week or less may be granted by the department head,
depending on the merit of the individual case.
d) Approval by City Manager.
Leave of absence without pay in excess of one week's duration may be granted by the City Manager
on the merit of the case, but such leave shall not exceed twelve months' duration.
e) Absence without leave.
Unauthorized leave of absence shall be considered to be without pay, and reductions in the
employee's pay shall be made accordingly. Unauthorized leave of absence may result in termination
of employment.
f) Leave of absence; death outside the immediate family.
Leave without pay may be granted a regular employee by his/her department head in the event of
death to family members other than one of the immediate family, such leave to be granted in
accordance with Subsections (b), (c), (d) and (e).
g) Military leave of absence.
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 166 Packet Pg. 411 of 853
City of Palo Alto and PAPMA
January 1, 2023 – June 30, 2025
Page 20 of 23
State and federal law shall govern the granting of military leaves of absence and the rights of
employees returning from such absence.
ARTICLE X – EMPLOYEE/EMPLOYER RELATIONS
Section 44 – Probationary Period.
a) All original appointments to full-time or part-time regular municipal service positions shall be
tentative and subject to a probationary period of twelve months for management employees
b) The probationary period shall be regarded as part of the testing process and shall be utilized
for closely observing the employees work, for securing the effective adjustment of a new
employee to his/her position, and for rejecting any probationary employee whose
performance does not meet the acceptable standards of work.
c) A report of performance of each probationary employee shall be made by the department
head and shown to the probationary employee on or before expiration of the probationary
period.
d) During the probationary period a new employee may be suspended, demoted or terminated
at any time by the appointing authority without cause and without right of appeal or to
submit a grievance.
Section 45 – Disciplinary Action and Unsatisfactory Work or Conduct. Disciplinary action shall be
governed by the City’s Merit Rules and Regulation, Palo Alto Police Department Policy 340 on
Conduct, the Palo Alto Police Department Internal Affairs and Complaint Investigations Guidelines,
and the Police Officer Procedural Bill of Rights Act.
Section 46 – Grievance Procedure.
a) The City and the Association recognize that early settlement of grievances is essential to
sound employee-employer relations. The parties seek to establish a mutually satisfactory
method for the settlement of employee grievances, or Association grievances, as provided
for below. In presenting a grievance, the aggrieved and/or his or her representative is
assured freedom from restraint, interference, coercion, discrimination or reprisal.
b) Definition. A Grievance is:
1. An unresolved complaint or dispute regarding the application or interpretation of this
Memorandum of Agreement
2. An appeal from a disciplinary action of any kind against an employee covered by this
Memorandum of Agreement.
c) Access to the Grievance Procedure. Except as otherwise provided in the Memorandum of
Agreement for probationary employees, all employees represented by the Association may
file and process a grievance. Such aggrieved employees may be represented by the
Association or may represent themselves in preparing and presenting their grievance at any
level of review. The Association may file a grievance when an Association right under this
Memorandum of Agreement not directly related to an individual employee becomes subject
to dispute.
d) Conduct of Grievance Procedure.
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 167 Packet Pg. 412 of 853
City of Palo Alto and PAPMA
January 1, 2023 – June 30, 2025
Page 21 of 23
1. The time limits specified in this Article may be extended by written mutual
agreement of the aggrieved employee or the Association and the reviewer
concerned.
2. If a decision is not rendered within a stipulated time limit, the aggrieved employee
may immediately appeal to the next step.
3. The grievance will be considered settled if the decision at any step is not appealed
within the specified time limit.
4. The aggrieved employee or the Association and Human Resources Director may
mutually agree in writing to waive any step of the grievance procedure.
5. Written grievances shall be submitted on forms provided by the City or on forms that
are mutually agreeable to the City and the Association.
6. Any retroactive monetary arbitrator award or settlement by mutual agreement shall
not extend more than ninety (90) days before the date that the grievance was filed in
writing at Step 2 below.
The following steps shall apply:
Step I. The aggrieved employee will first attempt to resolve the grievance through informal
discussions with his or her immediate supervisor by the end of the tenth working day following the
discovery of or the incident upon which the grievance is based. Every attempt will be made to settle
the issue at this level. (Note: For purposes of time limits, the working days are considered to be
Monday through Friday, exclusive of City holidays.) Appeals of disciplinary action should be
processed through the procedures outlined in Step 2-3 of the Grievance Procedure.
Step II. If the grievance is not resolved through the informal discussion, the employee will reduce
the grievance to writing and submit copies to the department head or his/her designee within ten
(10) working days of the discussion with the immediate supervisor.
The department head or his/her designee shall have ten (10) working days from the receipt of a
written grievance to review the matter and prepare a written statement.
Step III. If the grievance is not resolved at Step II, the aggrieved employee may choose between
final and binding resolution of the grievance through appeal to the City Manager or through appeal
to final and binding grievance arbitration. For the term of this Memorandum of Agreement, appeals
to final and binding arbitration may be processed only with Association approval. All Step III appeals
must be filed in writing at the Human Resources Department Office within ten (10) working days of
receipt of the Step II appeal.
If the aggrieved employee elects final and binding resolution by the City Manager, the City Manager
will choose the methods he or she considers appropriate to review and settle the grievance. The City
Manager shall render a written decision to all parties directly involved within ten working days after
receiving the employee's appeal.
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 168 Packet Pg. 413 of 853
City of Palo Alto and PAPMA
January 1, 2023 – June 30, 2025
Page 22 of 23
If the aggrieved employee elects final and binding arbitration in accordance with this provision, the
parties shall mutually select an arbitrator. In the event the parties cannot agree on an arbitrator,
they shall mutually request a panel of five arbitrators from the California State Conciliation Service
or from the American Arbitration Association if either party objects to the State Conciliation Service,
and select an arbitrator by the alternate strike method.
The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine compliance
with the provisions of this Memorandum of Agreement and such Merit System Rules, regulations,
policies, procedures, City ordinances, resolutions relating to terms or conditions of employment,
wages or fringe benefits, as may hereafter be in effect in the City insofar as may be necessary to the
determination of grievances appealed to the arbitrator. The arbitrator shall be without power to
make any decision:
1) Regarding matters of interest.
2) Contrary to, or inconsistent with or modifying in any way, the terms of this Memorandum of
Agreement.
3) Granting any wage increases or decreases.
The arbitrator shall be without authority to require the City to delegate or relinquish any powers
which by State law or City Charter the City cannot delegate or relinquish. If either party seeks
arbitration and the other party claims the matter is not subject to the arbitration provisions of this
Memorandum of Agreement, the issue of arbitrability shall first be decided by the arbitrator using
the standards and criteria set forth in this section and without regard to the merits of the grievance.
If the issue is held to be arbitrable, the arbitration proceedings will be recessed for up to five
working days during which the parties shall attempt to resolve the grievance. If no resolution is
reached, the arbitrator will resume the hearing and hear and resolve the issue on the merits.
Copies of the arbitrator's decision shall be submitted to the City, the aggrieved employee and the
Association. All direct costs emanating from the arbitration procedure shall be shared equally by the
City and the aggrieved employee or the Association.
Section 47 – No Strikes. The Association, its representatives, or members, shall not engage in or
cause, instigate, encourage, sanction, or condone a strike, withholding of services, concerted abuse
of leave of absence provisions, work stoppage or work slowdown of any kind. No employee shall
refuse to cross any picket line in the conduct of Police Department business, nor shall the
Association, its representatives, or members discriminate in any way toward anyone who refuses to
participate in a strike, or any of the job actions cited above.
Section 48 – Reduction in Workforce. In the event of reductions in force, they shall be
accomplished wherever possible through attrition.
If the work force is reduced in the Association, the City will give an employee impacted by a
potential lay off 30 days' notice prior to any reduction in force.
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 169 Packet Pg. 414 of 853
City of Palo Alto and PAPMA
January 1, 2023 – June 30, 2025
Page 23 of 23
ARTICLE XI – LOOKING FORWARD
Section 49 – Full Understanding. This Memorandum of Agreement contains the full and entire
understanding of the parties regarding the matters set forth herein. The parties agree that they shall
each carry out their responsibilities under the MOA in good faith.
Section 50 – Legal Compliance/Severability. If any provision herein contained is rendered or
declared invalid by reason of existing State or Federal legislation or by reason of State Supreme
Court or U. S. Supreme Court ruling, such invalidation of such part or portion of this Memorandum
of Agreement shall not invalidate the remaining portions hereof, and they shall remain in full force
and effect, insofar as such remaining portions are severable.
Section 51 – Duration. The term of this Agreement shall become effective upon ratification and
adoption by both parties and shall expire on June 30, 2025.
Item 11
Attachment B PMA
Memorandum of
Agreement
Item 11: Staff Report Pg. 170 Packet Pg. 415 of 853
Palo Alto Peace Officers' Association (PAPOA)
Schedule
Job Code FLSA Job Title Effective 04/08/2023 (5% Increase + Med Ben)Effective 07/15/2023 (4% Increase)
Monthly Annual
Effective 01/13/2024 (Med Ben)
Monthly Annual
Effective 07/13/2024 (4% Increase)
Step Rate Monthly Annual Step Step Step Rate
$60.40
$60.40
$60.40
$60.40
$60.40
$60.40
Monthly Annual
1 $55.27 1 $57.49 1 $58.07 1
55.27 57.49 58.07
617 Non‐exempt Police Trainee‐Bilingual
$9,580.13 $114,962 $9,964.93 $119,579 $10,065.47 $120,786 $10,469.33 $125,632
1 $52.69 1 $54.80 1 $55.38 1 $57.60
620 Non‐exempt
‐exempt
‐exempt
‐exempt
‐exempt
‐exempt
‐exempt
‐exempt
Police Trainee
Officer
9,132.93
12,362.13
12,975.73
13,251.33
13,913.47
12,975.73
15,684.93
12,362.13
109,595 9,498.67
12,857.87
13,495.73
13,781.73
14,471.60
13,495.73
16,312.40
12,857.87
113,984 9,599.20
12,958.40
13,596.27
13,882.27
14,572.13
13,596.27
16,412.93
12,958.40
115,190 9,984.00
13,478.40
14,140.53
14,438.67
15,156.27
14,140.53
17,069.87
13,478.40
119,808
1 $55.32 1 $57.40 1 $57.98 1 $60.17
1 $58.06 1 $60.25 1 $60.83 1 $63.13
Police Officer‐Inter
1 $59.30 1 $61.51 1 $62.09 1 $64.46
Police Officer‐Adv
1 $62.24 1 $64.60 1 $65.18 1 $67.66
Police Officer‐Adv‐Bilingual
Off Training‐Bilingual
Sergeant‐Bilingual
Off Training
1 $58.06 1 $60.25 1 $60.83 1 $63.13
1 $70.15 1 $72.82 1 $73.40 1 $76.21
1 $55.32 1 $57.40 1 $57.98 1 $60.17
1 $73.78 1 $76.59 1 $77.17 1 $80.12
Item 11
Attachment C POA Salary Schedule
Item 11: Staff Report Pg. 171 Packet Pg. 416 of 853
Palo Alto Peace Officers' Association (PAPOA)
Schedule
Job Code FLSA Job Title Effective 04/08/2023 (5% Increase + Med Ben)Effective 07/15/2023 (4% Increase)
Monthly Annual
Effective 01/13/2024 (Med Ben)
Monthly Annual
Effective 07/13/2024 (4% Increase)
Step Rate Monthly Annual Step Step Step Rate Monthly Annual
2 $77.63 2 $80.62 2 $81.20 2 $84.34
$88.78
$93.45
$98.37
$103.55
81.68 84.86 85.44628Non‐exempt Police Sgt/Inter‐Bilingual
$16,496.13 $197,954 $17,156.53 $205,878 $17,257.07 $207,085 $17,948.67 $215,384
1 $75.42 1 $78.30
82.42
86.76
91.33
96.14
101.20
1 $78.88
83.00
87.34
91.91
96.72
101.78
1 $81.91
$86.22
$90.76
$95.54
$100.57
$105.86
629 Non‐exempt
‐exempt
‐exempt
‐exempt
Police Sgt/Adv‐Bilingual
16,865.33 202,384 17,541.33 210,496 17,641.87 211,702 18,349.07 220,189
1 $66.81 1 $69.36 1 $69.94 1 $72.60
Police Sergeant
1 $70.35 1 $73.02 1 $73.60 1 $76.41
Police Sgt/Inter
1 $71.88 1 $74.63 1 $75.21 1 $78.08
$82.19
$86.52
$91.07
$95.86
$100.91
Police Sgt/Adv
Item 11
Attachment C POA Salary Schedule
Item 11: Staff Report Pg. 172 Packet Pg. 417 of 853
Palo Alto Police Managers' Association (PAPMA)
Schedule
Adoption ‐ Effective 04/08/2023: 5% Market + Benefit Offset
Job Code
147
FLSA
Exempt
Exempt
Classification
Police Captain‐Adv
Police Liet‐Adv
Grade Code Min Hourly Rate Mid Hourly Rate Max Hourly Rate Approx Max Monthly Salary Approx Max Annual Salary
023 $88.05 $110.06 $132.08 $22,894 $274,726
149 086
Effective 07/15/2023: 4% General Increase
Job Code
147
FLSA
Exempt
Exempt
Classification
Police Captain‐Adv
Police Liet‐Adv
Grade Code Min Hourly Rate Mid Hourly Rate Max Hourly Rate Approx Max Monthly Salary Approx Max Annual Salary
023 $91.58 $114.47 $137.37 $23,811 $285,730
149 086
Effective 01/13/2024: Benefit Offset
Job Code
147
FLSA
Exempt
Exempt
Classification
Police Captain‐Adv
Police Liet‐Adv
Grade Code Min Hourly Rate Mid Hourly Rate Max Hourly Rate Approx Max Monthly Salary Approx Max Annual Salary
023 $92.04 $115.05 $138.06 $23,930 $287,165
149 086
Effective 07/13/2024: 4% General Increase
Job Code
147
FLSA
Exempt
Exempt
Classification
Police Captain‐Adv
Police Liet‐Adv
Grade Code Min Hourly Rate Mid Hourly Rate Max Hourly Rate Approx Max Monthly Salary Approx Max Annual Salary
023 $95.73 $119.66 $143.60 $24,891 $298,688
149 086
Item 11
Attachment D PMA Salary Schedule
Item 11: Staff Report Pg. 173 Packet Pg. 418 of 853
Non-Shift
Job Code Classifications Grade Codes Hourly Rate Approx Monthly Salary Approx. Annual Salary
018
015 Battalion Chief EMT 40-hour workweek 28E
2019
Shift
Job Code Classifications Grade Codes Approx Monthly Salary Approx. Annual Salary
116
016
Non-Shift
Job Code Classifications Grade Codes Hourly Rate Approx Monthly Salary Approx. Annual Salary
018
015
2019 Battalion Chief EMT, Training 40-hour workweek 28E
Shift
Job Code Classifications Grade Codes Approx Monthly Salary Approx. Annual Salary
116 Battalion Chief 56-hour workweek 030
016
Non-Shift
Job Code Classifications Grade Codes Hourly Rate Approx Monthly Salary Approx. Annual Salary
018
015
2019
Shift
Job Code Classifications Grade Codes Approx Monthly Salary Approx. Annual Salary
116
016
Non-Shift
Job Code Classifications Grade Codes Hourly Rate Approx Monthly Salary Approx. Annual Salary
018
015
2019
Shift
Job Code Classifications Grade Codes Approx Monthly Salary Approx. Annual Salary
116
016
Non-Shift
Job Code Classifications Grade Codes Hourly Rate Approx Monthly Salary Approx. Annual Salary
018
015
2019
Shift
Job Code Classifications Grade Codes Approx Monthly Salary Approx. Annual Salary
116
016
07/12/2024 (4% Increase)
1/11/2025 (2% Increase)
Adoption (11% Increase+Benefit Offset)
07/15/2023 (4% Increase)
1/13/2024 (Benefit Offset)
Palo Alto Fire Chiefs' Association (PAFCA)
Salary Schedule
Item 11
Attachment E Corrected FCA Salary
Schedule
Item 11: Staff Report Pg. 174 Packet Pg. 419 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
190 Non-Exempt Accountant 690P $40.52 $50.65 $60.78 $84,282 $105,352 $126,422
76 Exempt Administrative Assistant 750P $32.40 $40.50 $48.60 $67,392 $84,240 $101,088
115 Exempt Assistant Chief Building Official 405M $58.82 $73.52 $88.23 $122,346 $152,922 $183,518
132 Exempt Assistant Chief of Police 100A $96.40 $120.49 $144.59 $200,512 $250,619 $300,747
108 Exempt Assistant City Attorney 165A $73.98 $92.47 $110.97 $153,878 $192,338 $230,818
109 Exempt Assistant City Clerk 630M $44.79 $55.98 $67.18 $93,163 $116,438 $139,734
107 Exempt Assistant City Manager 20E $96.15 $120.18 $144.22 $199,992 $249,974 $299,978
73 Exempt Assistant Director Administrative Services 120A $79.80 $99.74 $119.69 $165,984 $207,459 $248,955
126 Exempt Assistant Director Community Services 150A $76.40 $95.50 $114.60 $158,912 $198,640 $238,368
1007 Exempt Assistant Director Human Resources 155A $73.88 $92.34 $110.81 $153,670 $192,067 $230,485
2001 Exempt Assistant Director Library Services 160A $68.99 $86.23 $103.48 $143,499 $179,358 $215,238
10 Exempt Assistant Director Planning & Community Environment 130A $77.70 $97.12 $116.55 $161,616 $202,010 $242,424
143 Exempt Assistant Director Public Works 140A $76.80 $96.00 $115.20 $159,744 $199,680 $239,616
168 Exempt Assistant Fleet Manager 585M $44.50 $55.62 $66.75 $92,560 $115,690 $138,840
102 Exempt Assistant Manager WQCP 240D $63.52 $79.40 $95.28 $132,122 $165,152 $198,182
30 Exempt Assistant to the City Manager 390M $62.29 $77.86 $93.44 $129,563 $161,949 $194,355
118 Exempt Chief Building Official 290M $75.35 $94.18 $113.02 $156,728 $195,894 $235,082
2008 Exempt Chief Communications Officer 135A $73.47 $91.83 $110.20 $152,818 $191,006 $229,216
112 Exempt Chief Planning Official 220D $67.39 $84.23 $101.08 $140,171 $175,198 $210,246
95 Exempt Chief Procurement Officer 235D $57.56 $71.94 $86.33 $119,725 $149,635 $179,566
82 Exempt Chief Transportation Official 140A $73.01 $91.26 $109.52 $151,861 $189,821 $227,802
96 Exempt Claims Investigator 660P $39.36 $49.20 $59.04 $81,869 $102,336 $122,803
24 Exempt Communication Specialist 615M $42.60 $53.24 $63.89 $88,608 $110,739 $132,891
89 Exempt Contracts Administrator 585P $50.00 $62.50 $75.00 $104,000 $130,000 $156,000
186 Non-Exempt Coordinator Library Circulation 675M $40.66 $50.82 $60.99 $84,573 $105,706 $126,859
191 Exempt Fire Marshal*125A $87.72 $109.65 $131.58 $182,458 $228,072 $273,686
11 Exempt Deputy City Attorney 375M $58.02 $72.52 $87.03 $120,682 $150,842 $181,022
71 Exempt Deputy City Clerk 720M $35.08 $43.85 $52.62 $72,966 $91,208 $109,450
55 Exempt Deputy City Manager 115A $76.28 $95.34 $114.41 $158,662 $198,307 $237,973
195 Exempt Deputy Director Technical Services Division 200D $71.96 $89.95 $107.94 $149,677 $187,096 $224,515
20 Exempt Deputy Fire Chief*110A $91.38 $114.22 $137.07 $190,070 $237,578 $285,106
81 Exempt Director Administrative Services/Chief Financial Officer 50E $92.88 $116.09 $139.31 $193,190 $241,467 $289,765
72 Exempt Director Community Services 45E $88.32 $110.39 $132.47 $183,706 $229,611 $275,538
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 12/31/2022 (Market and Benefits Offset)
Page 1
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 175 Packet Pg. 420 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 12/31/2022 (Market and Benefits Offset)
1012 Exempt
133 Exempt Director Human Resources/Chief People Officer 55E $88.55 $110.68 $132.82 $184,184 $230,214 $276,266
128 Exempt Director Information Technology/Chief Information Officer 25E $96.71 $120.88 $145.06 $201,157 $251,430 $301,725
131 Exempt Director Libraries 60E $82.69 $103.36 $124.04 $171,995 $214,989 $258,003
2028 Exempt Director of Emergency Medical Services 215D $69.63 $87.03 $104.44 $144,830 $181,022 $217,235
2005 Exempt Director Office of Emergency Services 215D $69.63 $87.03 $104.44 $144,830 $181,022 $217,235
49 Exempt Director Office of Management and Budget 120A $79.80 $99.74 $119.69 $165,984 $207,459 $248,955
134 Exempt Director Planning & Community Environment 40E $93.12 $116.39 $139.67 $193,690 $242,091 $290,514
135 Exempt Director Public Works/City Engineer 30E $94.31 $117.88 $141.46 $196,165 $245,190 $294,237
121 Exempt Director Utilities 10E $111.29 $139.11 $166.94 $231,483 $289,349 $347,235
2002 Exempt Division Head Library Services 260D $60.28 $75.34 $90.41 $125,382 $156,707 $188,053
172 Exempt Division Manager Open Space, Parks & Golf 245D $62.66 $78.32 $93.99 $130,333 $162,906 $195,499
2031 Exempt Division Manager Planning 220D $67.39 $84.23 $101.08 $140,171 $175,198 $210,246
1005 Exempt Executive Assistant to the City Manager 705M $36.60 $45.74 $54.89 $76,128 $95,139 $114,171
139 Exempt Fire Chief*35E $105.11 $131.38 $157.66 $218,629 $273,270 $327,933
163 Exempt Hearing Officer 480M $51.51 $64.38 $77.26 $107,141 $133,910 $160,701
101 Exempt Human Resources Representative 735P $34.24 $42.79 $51.35 $71,219 $89,003 $106,808
90 Exempt Landscape Architect Park Planner 510M $49.05 $61.31 $73.58 $102,024 $127,525 $153,046
2015 Exempt Legal Fellow 755P $43.14 $53.92 $64.71 $89,731 $112,154 $134,597
171 Exempt Management Analyst 585M $44.50 $55.62 $66.75 $92,560 $115,690 $138,840
79 Exempt Manager Accounting 235D $60.86 $76.07 $91.29 $126,589 $158,226 $189,883
2007 Exempt Manager Airport 210D $69.86 $87.32 $104.79 $145,309 $181,626 $217,963
2023 Exempt
38 Exempt Manager Communications 525M $49.35 $61.68 $74.02 $102,648 $128,294 $153,962
154 Exempt Manager Community Services 630M $45.88 $57.34 $68.81 $95,430 $119,267 $143,125
169 Exempt Manager Community Services Sr Program 585M $49.28 $61.60 $73.92 $102,502 $128,128 $153,754
1013 Exempt Manager Development Center 495M $55.69 $69.61 $83.54 $115,835 $144,789 $173,763
63 Exempt Manager Economic Development 220D $64.31 $80.38 $96.46 $133,765 $167,190 $200,637
44 Exempt Manager Employee Benefits 450M $55.02 $68.77 $82.53 $114,442 $143,042 $171,662
45 Exempt Manager Employee Relations & Training 235D $60.86 $76.07 $91.29 $126,589 $158,226 $189,883
93 Exempt Manager Environmental Control Program 419M $59.86 $74.82 $89.79 $124,509 $155,626 $186,763
1116 Exempt Manager Facilities 445M $52.81 $66.01 $79.22 $109,845 $137,301 $164,778
Exempt
Page 2
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 176 Packet Pg. 421 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 12/31/2022 (Market and Benefits Offset)
127 Exempt
2018 Exempt Manager Human Services 540M $51.74 $64.67 $77.61 $107,619 $134,514 $161,429
32 Exempt Manager Information Technology 230D $62.22 $77.77 $93.33 $129,418 $161,762 $194,126
2006 Exempt Manager Information Technology Security 230D $58.84 $73.55 $88.26 $122,387 $152,984 $183,581
158 Exempt Manager Laboratory Services 495M $50.27 $62.83 $75.40 $104,562 $130,686 $156,832
78 Exempt Manager Library Services 565M $48.66 $60.82 $72.99 $101,213 $126,506 $151,819
92 Exempt Manager Maintenance Operations 469M $49.24 $61.55 $73.86 $102,419 $128,024 $153,629
26 Exempt
51 Exempt Manager Planning 415M $59.10 $73.87 $88.65 $122,928 $153,650 $184,392
103 Exempt Manager Real Property 235D $57.56 $71.94 $86.33 $119,725 $149,635 $179,566
2011 Exempt Manager Revenue Collections 250D $54.09 $67.61 $81.14 $112,507 $140,629 $168,771
160 Exempt Manager Solid Waste 330M $58.22 $72.77 $87.33 $121,098 $151,362 $181,646
57 Exempt
86 Exempt Manager Urban Forestry 436M $54.87 $68.58 $82.30 $114,130 $142,646 $171,184
178 Exempt Manager Water Quality Control Plant 205D $71.70 $89.62 $107.55 $149,136 $186,410 $223,704
39 Exempt Manager Watershed Protection 330M $64.51 $80.63 $96.76 $134,181 $167,710 $201,261
1008 Exempt Office of Emergency Services Coordinator 525M $47.86 $59.82 $71.79 $99,549 $124,426 $149,323
2024 Exempt
100 Exempt
148 Exempt Police Chief 15E $108.51 $135.63 $162.76 $225,701 $282,110 $338,541
2021 Exempt Chief Assistant City Attorney 101A $95.65 $119.56 $143.48 $198,952 $248,685 $298,438
2016 Exempt Principal Business Analyst 310M $61.32 $76.64 $91.97 $127,546 $159,411 $191,298
2029 Exempt Principal Planner 469M $49.64 $62.04 $74.45 $103,251 $129,043 $154,856
2003 Exempt Principal Management Analyst 360M $61.08 $76.34 $91.61 $127,046 $158,787 $190,549
2009 Exempt Project Manager 570M $50.32 $62.90 $75.48 $104,666 $130,832 $156,998
2012 Exempt Public Safety Communications Manager 495M $50.27 $62.83 $75.40 $104,562 $130,686 $156,832
166 Exempt Public Safety Program Manager 585M $44.50 $55.62 $66.75 $92,560 $115,690 $138,840
117 Exempt Senior Accountant 525M $53.78 $67.22 $80.67 $111,862 $139,818 $167,794
2013 Exempt Senior Business Analyst - M 420M $53.39 $66.73 $80.08 $111,051 $138,798 $166,566
187 Exempt Senior Engineer 300M $68.72 $85.89 $103.07 $142,938 $178,651 $214,386
106 Exempt Senior Executive Assistant 450M $52.04 $65.04 $78.05 $108,243 $135,283 $162,344
157 Exempt Senior Human Resources Administrator 545M $46.84 $58.54 $70.25 $97,427 $121,763 $146,120
14 Exempt Senior Management Analyst 465M $52.00 $64.99 $77.99 $108,160 $135,179 $162,219
Page 3
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 177 Packet Pg. 422 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 12/31/2022 (Market and Benefits Offset)
130 Exempt
53 Exempt Senior Project Manager 300M $68.72 $85.89 $103.07 $142,938 $178,651 $214,386
33 Exempt Senior Technologist 420M $53.39 $66.73 $80.08 $111,051 $138,798 $166,566
155 Exempt Superintendent Animal Services 540M $46.72 $58.39 $70.07 $97,178 $121,451 $145,746
83 Exempt Superintendent Community Services 480M $55.78 $69.72 $83.67 $116,022 $145,018 $174,034
1117 Exempt Superintendent Recreation 480M $55.78 $69.72 $83.67 $116,022 $145,018 $174,034
2022 Exempt Supervising Librarian 675M $40.81 $51.01 $61.22 $84,885 $106,101 $127,338
161 Exempt Supervisor Facilities Management 600M $43.51 $54.38 $65.26 $90,501 $113,110 $135,741
113 Exempt Supervisor Inspection and Surveying 540M $46.72 $58.39 $70.07 $97,178 $121,451 $145,746
146 Exempt Supervisor Warehouse 660M $39.36 $49.20 $59.04 $81,869 $102,336 $122,803
181 Exempt Supervisor Water Quality Control Operations 525M $47.86 $59.82 $71.79 $99,549 $124,426 $149,323
2027 Exempt Utilities Chief Operating Officer 60E $80.20 $100.25 $120.30 $166,816 $208,520 $250,224
905 Non-Exempt Human Resources Technician 830C $28.70 $35.87 $43.05 $59,696 $74,610 $89,544
903 Non-Exempt Legal Secretary-Confidential 820C $29.41 $36.76 $44.12 $61,173 $76,461 $91,770
67 Exempt Secretary to City Attorney 800C $34.86 $43.57 $52.29 $72,509 $90,626 $108,763
1004 Non-Exempt Senior Legal Secretary - Confidential 810C $32.40 $40.50 $48.60 $67,392 $84,240 $101,088
* Effective 02/25/2023
Page 4
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 178 Packet Pg. 423 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
190 Non-Exempt Accountant 690P $42.15 $52.68 $63.22 $87,672 $109,574 $131,498
76 Exempt Administrative Assistant 750P $33.70 $42.12 $50.55 $70,096 $87,610 $105,144
115 Exempt Assistant Chief Building Official 405M $61.18 $76.47 $91.77 $127,254 $159,058 $190,882
132 Exempt Assistant Chief of Police 100A $100.25 $125.31 $150.38 $208,520 $260,645 $312,790
108 Exempt Assistant City Attorney 165A $76.94 $96.17 $115.41 $160,035 $200,034 $240,053
109 Exempt Assistant City Clerk 630M $46.58 $58.22 $69.87 $96,886 $121,098 $145,330
107 Exempt Assistant City Manager 20E $100.00 $124.99 $149.99 $208,000 $259,979 $311,979
73 Exempt Assistant Director Administrative Services 120A $82.99 $103.73 $124.48 $172,619 $215,758 $258,918
126 Exempt Assistant Director Community Services 150A $79.46 $99.32 $119.19 $165,277 $206,586 $247,915
1007 Exempt Assistant Director Human Resources 155A $76.84 $96.04 $115.25 $159,827 $199,763 $239,720
2001 Exempt Assistant Director Library Services 160A $71.75 $89.68 $107.62 $149,240 $186,534 $223,850
10 Exempt Assistant Director Planning & Community Environment 130A $80.81 $101.01 $121.22 $168,085 $210,101 $252,138
143 Exempt Assistant Director Public Works 140A $79.88 $99.84 $119.81 $166,150 $207,667 $249,205
168 Exempt Assistant Fleet Manager 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394
102 Exempt Assistant Manager WQCP 240D $66.07 $82.58 $99.10 $137,426 $171,766 $206,128
30 Exempt Assistant to the City Manager 390M $64.79 $80.98 $97.18 $134,763 $168,438 $202,134
118 Exempt Chief Building Official 290M $78.36 $97.95 $117.54 $162,989 $203,736 $244,483
2008 Exempt Chief Communications Officer 135A $76.41 $95.51 $114.62 $158,933 $198,661 $238,410
112 Exempt Chief Planning Official 220D $70.08 $87.60 $105.12 $145,766 $182,208 $218,650
95 Exempt Chief Procurement Officer 235D $59.86 $74.82 $89.79 $124,509 $155,626 $186,763
82 Exempt Chief Transportation Official 140A $75.94 $94.92 $113.91 $157,955 $197,434 $236,933
96 Exempt Claims Investigator 660P $40.94 $51.17 $61.41 $85,155 $106,434 $127,733
24 Exempt Communication Specialist 615M $44.30 $55.37 $66.45 $92,144 $115,170 $138,216
89 Exempt Contracts Administrator 585P $52.00 $65.00 $78.00 $108,160 $135,200 $162,240
186 Non-Exempt Coordinator Library Circulation 675M $42.29 $52.86 $63.44 $87,963 $109,949 $131,955
191 Exempt Fire Marshal 125A $91.24 $114.04 $136.85 $189,779 $237,203 $284,648
11 Exempt Deputy City Attorney 375M $60.35 $75.43 $90.52 $125,528 $156,894 $188,282
71 Exempt Deputy City Clerk 720M $36.49 $45.61 $54.74 $75,899 $94,869 $113,859
55 Exempt Deputy City Manager 115A $79.33 $99.16 $119.00 $165,006 $206,253 $247,520
195 Exempt Deputy Director Technical Services Division 200D $74.84 $93.55 $112.26 $155,667 $194,584 $233,501
20 Exempt Deputy Fire Chief 110A $95.04 $118.79 $142.55 $197,683 $247,083 $296,504
81 Exempt Director Administrative Services/Chief Financial Officer 50E $96.60 $120.74 $144.89 $200,928 $251,139 $301,371
72 Exempt Director Community Services 45E $91.85 $114.81 $137.78 $191,048 $238,805 $286,582
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 07/01/2023 (4% Increase)
Page 5
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 179 Packet Pg. 424 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 07/01/2023 (4% Increase)
1012 Exempt
133 Exempt Director Human Resources/Chief People Officer 55E $92.09 $115.11 $138.14 $191,547 $239,429 $287,331
128 Exempt Director Information Technology/Chief Information Officer 25E $100.58 $125.72 $150.87 $209,206 $261,498 $313,810
131 Exempt Director Libraries 60E $86.00 $107.50 $129.00 $178,880 $223,600 $268,320
2028 Exempt Director of Emergency Medical Services 215D $72.42 $90.52 $108.63 $150,634 $188,282 $225,950
2005 Exempt Director Office of Emergency Services 215D $72.42 $90.52 $108.63 $150,634 $188,282 $225,950
49 Exempt Director Office of Management and Budget 120A $82.99 $103.73 $124.48 $172,619 $215,758 $258,918
134 Exempt Director Planning & Community Environment 40E $96.84 $121.05 $145.26 $201,427 $251,784 $302,141
135 Exempt Director Public Works/City Engineer 30E $98.08 $122.60 $147.12 $204,006 $255,008 $306,010
121 Exempt Director Utilities 10E $115.75 $144.68 $173.62 $240,760 $300,934 $361,130
2002 Exempt Division Head Library Services 260D $62.69 $78.36 $94.04 $130,395 $162,989 $195,603
172 Exempt Division Manager Open Space, Parks & Golf 245D $65.17 $81.46 $97.76 $135,554 $169,437 $203,341
2031 Exempt Division Manager Planning 220D $70.08 $87.60 $105.12 $145,766 $182,208 $218,650
1005 Exempt Executive Assistant to the City Manager 705M $38.06 $47.57 $57.09 $79,165 $98,946 $118,747
139 Exempt Fire Chief 35E $109.32 $136.64 $163.97 $227,386 $284,211 $341,058
163 Exempt Hearing Officer 480M $53.57 $66.96 $80.36 $111,426 $139,277 $167,149
101 Exempt Human Resources Representative 735P $35.61 $44.51 $53.42 $74,069 $92,581 $111,114
90 Exempt Landscape Architect Park Planner 510M $51.02 $63.77 $76.53 $106,122 $132,642 $159,182
2015 Exempt Legal Fellow 755P $44.87 $56.08 $67.30 $93,330 $116,646 $139,984
171 Exempt Management Analyst 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394
79 Exempt Manager Accounting 235D $63.30 $79.12 $94.95 $131,664 $164,570 $197,496
2007 Exempt Manager Airport 210D $72.66 $90.82 $108.99 $151,133 $188,906 $226,699
2023 Exempt
38 Exempt Manager Communications 525M $51.32 $64.15 $76.98 $106,746 $133,432 $160,118
154 Exempt Manager Community Services 630M $47.72 $59.64 $71.57 $99,258 $124,051 $148,866
169 Exempt Manager Community Services Sr Program 585M $51.26 $64.07 $76.89 $106,621 $133,266 $159,931
1013 Exempt Manager Development Center 495M $57.92 $72.40 $86.88 $120,474 $150,592 $180,710
63 Exempt Manager Economic Development 220D $66.88 $83.60 $100.32 $139,110 $173,888 $208,666
44 Exempt Manager Employee Benefits 450M $57.23 $71.53 $85.84 $119,038 $148,782 $178,547
45 Exempt Manager Employee Relations & Training 235D $63.30 $79.12 $94.95 $131,664 $164,570 $197,496
93 Exempt Manager Environmental Control Program 419M $62.26 $77.82 $93.39 $129,501 $161,866 $194,251
1116 Exempt Manager Facilities 445M $54.93 $68.66 $82.40 $114,254 $142,813 $171,392
Exempt
Page 6
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 180 Packet Pg. 425 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 07/01/2023 (4% Increase)
127 Exempt
2018 Exempt Manager Human Services 540M $53.81 $67.26 $80.72 $111,925 $139,901 $167,898
32 Exempt Manager Information Technology 230D $64.72 $80.89 $97.07 $134,618 $168,251 $201,906
2006 Exempt Manager Information Technology Security 230D $61.20 $76.50 $91.80 $127,296 $159,120 $190,944
158 Exempt Manager Laboratory Services 495M $52.28 $65.35 $78.42 $108,742 $135,928 $163,114
78 Exempt Manager Library Services 565M $50.61 $63.26 $75.92 $105,269 $131,581 $157,914
92 Exempt Manager Maintenance Operations 469M $51.22 $64.02 $76.83 $106,538 $133,162 $159,806
26 Exempt
51 Exempt Manager Planning 415M $61.47 $76.83 $92.20 $127,858 $159,806 $191,776
103 Exempt Manager Real Property 235D $59.86 $74.82 $89.79 $124,509 $155,626 $186,763
2011 Exempt Manager Revenue Collections 250D $56.26 $70.32 $84.39 $117,021 $146,266 $175,531
160 Exempt Manager Solid Waste 330M $60.56 $75.69 $90.83 $125,965 $157,435 $188,926
57 Exempt
86 Exempt Manager Urban Forestry 436M $57.07 $71.33 $85.60 $118,706 $148,366 $178,048
178 Exempt Manager Water Quality Control Plant 205D $74.57 $93.21 $111.86 $155,106 $193,877 $232,669
39 Exempt Manager Watershed Protection 330M $67.09 $83.86 $100.64 $139,547 $174,429 $209,331
1008 Exempt Office of Emergency Services Coordinator 525M $49.78 $62.22 $74.67 $103,542 $129,418 $155,314
2024 Exempt
100 Exempt
148 Exempt Police Chief 15E $112.85 $141.06 $169.28 $234,728 $293,405 $352,102
2021 Exempt Chief Assistant City Attorney 101A $99.48 $124.35 $149.22 $206,918 $258,648 $310,378
2016 Exempt Principal Business Analyst 310M $63.77 $79.71 $95.66 $132,642 $165,797 $198,973
2029 Exempt Principal Planner 469M $51.63 $64.53 $77.44 $107,390 $134,222 $161,075
2003 Exempt Principal Management Analyst 360M $63.52 $79.40 $95.28 $132,122 $165,152 $198,182
2009 Exempt Project Manager 570M $52.34 $65.42 $78.51 $108,867 $136,074 $163,301
2012 Exempt Public Safety Communications Manager 495M $52.28 $65.35 $78.42 $108,742 $135,928 $163,114
166 Exempt Public Safety Program Manager 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394
117 Exempt Senior Accountant 525M $55.93 $69.91 $83.90 $116,334 $145,413 $174,512
2013 Exempt Senior Business Analyst - M 420M $55.52 $69.40 $83.28 $115,482 $144,352 $173,222
187 Exempt Senior Engineer 300M $71.47 $89.33 $107.20 $148,658 $185,806 $222,976
106 Exempt Senior Executive Assistant 450M $54.12 $67.65 $81.18 $112,570 $140,712 $168,854
157 Exempt Senior Human Resources Administrator 545M $48.72 $60.89 $73.07 $101,338 $126,651 $151,986
14 Exempt Senior Management Analyst 465M $54.08 $67.59 $81.11 $112,486 $140,587 $168,709
Page 7
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 181 Packet Pg. 426 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective 07/01/2023 (4% Increase)
130 Exempt
53 Exempt Senior Project Manager 300M $71.47 $89.33 $107.20 $148,658 $185,806 $222,976
33 Exempt Senior Technologist 420M $55.52 $69.40 $83.28 $115,482 $144,352 $173,222
155 Exempt Superintendent Animal Services 540M $48.59 $60.73 $72.88 $101,067 $126,318 $151,590
83 Exempt Superintendent Community Services 480M $58.01 $72.51 $87.02 $120,661 $150,821 $181,002
1117 Exempt Superintendent Recreation 480M $58.01 $72.51 $87.02 $120,661 $150,821 $181,002
2022 Exempt Supervising Librarian 675M $42.45 $53.06 $63.68 $88,296 $110,365 $132,454
161 Exempt Supervisor Facilities Management 600M $45.25 $56.56 $67.88 $94,120 $117,645 $141,190
113 Exempt Supervisor Inspection and Surveying 540M $48.59 $60.73 $72.88 $101,067 $126,318 $151,590
146 Exempt Supervisor Warehouse 660M $40.94 $51.17 $61.41 $85,155 $106,434 $127,733
181 Exempt Supervisor Water Quality Control Operations 525M $49.78 $62.22 $74.67 $103,542 $129,418 $155,314
2027 Exempt Utilities Chief Operating Officer 60E $83.41 $104.26 $125.12 $173,493 $216,861 $260,250
905 Non-Exempt Human Resources Technician 830C $29.85 $37.31 $44.78 $62,088 $77,605 $93,142
903 Non-Exempt Legal Secretary-Confidential 820C $30.60 $38.24 $45.89 $63,648 $79,539 $95,451
67 Exempt Secretary to City Attorney 800C $36.26 $45.32 $54.39 $75,421 $94,266 $113,131
1004 Non-Exempt Senior Legal Secretary - Confidential 810C $33.70 $42.12 $50.55 $70,096 $87,610 $105,144
Confidential Classifications
Page 8
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 182 Packet Pg. 427 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
190 Non-Exempt Accountant 690P $42.61 $53.26 $63.92 $88,629 $110,781 $132,954
76 Exempt Administrative Assistant 750P $34.16 $42.70 $51.24 $71,053 $88,816 $106,579
115 Exempt Assistant Chief Building Official 405M $61.64 $77.05 $92.46 $128,211 $160,264 $192,317
132 Exempt Assistant Chief of Police 100A $100.72 $125.89 $151.07 $209,498 $261,851 $314,226
108 Exempt Assistant City Attorney 165A $77.40 $96.75 $116.10 $160,992 $201,240 $241,488
109 Exempt Assistant City Clerk 630M $47.04 $58.80 $70.56 $97,843 $122,304 $146,765
107 Exempt Assistant City Manager 20E $100.46 $125.57 $150.69 $208,957 $261,186 $313,435
73 Exempt Assistant Director Administrative Services 120A $83.45 $104.31 $125.18 $173,576 $216,965 $260,374
126 Exempt Assistant Director Community Services 150A $79.92 $99.90 $119.88 $166,234 $207,792 $249,350
1007 Exempt Assistant Director Human Resources 155A $77.30 $96.62 $115.95 $160,784 $200,970 $241,176
2001 Exempt Assistant Director Library Services 160A $72.21 $90.26 $108.32 $150,197 $187,741 $225,306
10 Exempt Assistant Director Planning & Community Environment 130A $81.28 $101.59 $121.91 $169,062 $211,307 $253,573
143 Exempt Assistant Director Public Works 140A $80.34 $100.42 $120.51 $167,107 $208,874 $250,661
168 Exempt Assistant Fleet Manager 585M $46.75 $58.43 $70.12 $97,240 $121,534 $145,850
102 Exempt Assistant Manager WQCP 240D $66.53 $83.16 $99.80 $138,382 $172,973 $207,584
30 Exempt Assistant to the City Manager 390M $65.25 $81.56 $97.88 $135,720 $169,645 $203,590
118 Exempt Chief Building Official 290M $78.83 $98.53 $118.24 $163,966 $204,942 $245,939
2008 Exempt Chief Communications Officer 135A $76.88 $96.09 $115.31 $159,910 $199,867 $239,845
112 Exempt Chief Planning Official 220D $70.55 $88.18 $105.82 $146,744 $183,414 $220,106
95 Exempt Chief Procurement Officer 235D $60.32 $75.40 $90.48 $125,466 $156,832 $188,198
82 Exempt Chief Transportation Official 140A $76.40 $95.50 $114.60 $158,912 $198,640 $238,368
96 Exempt Claims Investigator 660P $41.40 $51.75 $62.10 $86,112 $107,640 $129,168
24 Exempt Communication Specialist 615M $44.76 $55.95 $67.14 $93,101 $116,376 $139,651
89 Exempt Contracts Administrator 585P $52.47 $65.58 $78.70 $109,138 $136,406 $163,696
186 Non-Exempt Coordinator Library Circulation 675M $42.76 $53.44 $64.13 $88,941 $111,155 $133,390
191 Exempt Fire Marshal 125A $91.70 $114.62 $137.55 $190,736 $238,410 $286,104
11 Exempt Deputy City Attorney 375M $60.81 $76.01 $91.22 $126,485 $158,101 $189,738
71 Exempt Deputy City Clerk 720M $36.96 $46.19 $55.43 $76,877 $96,075 $115,294
55 Exempt Deputy City Manager 115A $79.80 $99.74 $119.69 $165,984 $207,459 $248,955
195 Exempt Deputy Director Technical Services Division 200D $75.31 $94.13 $112.96 $156,645 $195,790 $234,957
20 Exempt Deputy Fire Chief 110A $95.50 $119.37 $143.25 $198,640 $248,290 $297,960
81 Exempt Director Administrative Services/Chief Financial Officer 50E $97.06 $121.32 $145.59 $201,885 $252,346 $302,827
72 Exempt Director Community Services 45E $92.32 $115.39 $138.47 $192,026 $240,011 $288,018
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective pay period inclusive of 01/01/2024 (Annual $100 Medical Offset)
Page 9
Item 11
Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 183 Packet Pg. 428 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective pay period inclusive of 01/01/2024 (Annual $100 Medical Offset)
1012 Exempt
133 Exempt Director Human Resources/Chief People Officer 55E $92.56 $115.69 $138.83 $192,525 $240,635 $288,766
128 Exempt Director Information Technology/Chief Information Officer 25E $101.04 $126.30 $151.56 $210,163 $262,704 $315,245
131 Exempt Director Libraries 60E $86.47 $108.08 $129.70 $179,858 $224,806 $269,776
2028 Exempt Director of Emergency Medical Services 215D $72.88 $91.10 $109.32 $151,590 $189,488 $227,386
2005 Exempt Director Office of Emergency Services 215D $72.88 $91.10 $109.32 $151,590 $189,488 $227,386
49 Exempt Director Office of Management and Budget 120A $83.45 $104.31 $125.18 $173,576 $216,965 $260,374
134 Exempt Director Planning & Community Environment 40E $97.31 $121.63 $145.96 $202,405 $252,990 $303,597
135 Exempt Director Public Works/City Engineer 30E $98.55 $123.18 $147.82 $204,984 $256,214 $307,466
121 Exempt Director Utilities 10E $116.21 $145.26 $174.32 $241,717 $302,141 $362,586
2002 Exempt Division Head Library Services 260D $63.16 $78.94 $94.73 $131,373 $164,195 $197,038
172 Exempt Division Manager Open Space, Parks & Golf 245D $65.64 $82.04 $98.45 $136,531 $170,643 $204,776
2031 Exempt Division Manager Planning 220D $70.55 $88.18 $105.82 $146,744 $183,414 $220,106
1005 Exempt Executive Assistant to the City Manager 705M $38.52 $48.15 $57.78 $80,122 $100,152 $120,182
139 Exempt Fire Chief 35E $109.78 $137.22 $164.67 $228,342 $285,418 $342,514
163 Exempt Hearing Officer 480M $54.04 $67.54 $81.05 $112,403 $140,483 $168,584
101 Exempt Human Resources Representative 735P $36.08 $45.09 $54.11 $75,046 $93,787 $112,549
90 Exempt Landscape Architect Park Planner 510M $51.48 $64.35 $77.22 $107,078 $133,848 $160,618
2015 Exempt Legal Fellow 755P $45.33 $56.66 $68.00 $94,286 $117,853 $141,440
171 Exempt Management Analyst 585M $46.75 $58.43 $70.12 $97,240 $121,534 $145,850
79 Exempt Manager Accounting 235D $63.76 $79.70 $95.64 $132,621 $165,776 $198,931
2007 Exempt Manager Airport 210D $73.12 $91.40 $109.68 $152,090 $190,112 $228,134
2023 Exempt
38 Exempt Manager Communications 525M $51.79 $64.73 $77.68 $107,723 $134,638 $161,574
154 Exempt Manager Community Services 630M $48.18 $60.22 $72.27 $100,214 $125,258 $150,322
169 Exempt Manager Community Services Sr Program 585M $51.72 $64.65 $77.58 $107,578 $134,472 $161,366
1013 Exempt Manager Development Center 495M $58.39 $72.98 $87.58 $121,451 $151,798 $182,166
63 Exempt Manager Economic Development 220D $67.35 $84.18 $101.02 $140,088 $175,094 $210,122
44 Exempt Manager Employee Benefits 450M $57.69 $72.11 $86.54 $119,995 $149,989 $180,003
45 Exempt Manager Employee Relations & Training 235D $63.76 $79.70 $95.64 $132,621 $165,776 $198,931
93 Exempt Manager Environmental Control Program 419M $62.72 $78.40 $94.08 $130,458 $163,072 $195,686
1116 Exempt Manager Facilities 445M $55.40 $69.24 $83.09 $115,232 $144,019 $172,827
Exempt
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Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 184 Packet Pg. 429 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective pay period inclusive of 01/01/2024 (Annual $100 Medical Offset)
127 Exempt
2018 Exempt Manager Human Services 540M $54.28 $67.84 $81.41 $112,902 $141,107 $169,333
32 Exempt Manager Information Technology 230D $65.18 $81.47 $97.77 $135,574 $169,458 $203,362
2006 Exempt Manager Information Technology Security 230D $61.67 $77.08 $92.50 $128,274 $160,326 $192,400
158 Exempt Manager Laboratory Services 495M $52.75 $65.93 $79.12 $109,720 $137,134 $164,570
78 Exempt Manager Library Services 565M $51.08 $63.84 $76.61 $106,246 $132,787 $159,349
92 Exempt Manager Maintenance Operations 469M $51.68 $64.60 $77.52 $107,494 $134,368 $161,242
26 Exempt
51 Exempt Manager Planning 415M $61.93 $77.41 $92.90 $128,814 $161,013 $193,232
103 Exempt Manager Real Property 235D $60.32 $75.40 $90.48 $125,466 $156,832 $188,198
2011 Exempt Manager Revenue Collections 250D $56.72 $70.90 $85.08 $117,978 $147,472 $176,966
160 Exempt Manager Solid Waste 330M $61.02 $76.27 $91.53 $126,922 $158,642 $190,382
57 Exempt
86 Exempt Manager Urban Forestry 436M $57.53 $71.91 $86.30 $119,662 $149,573 $179,504
178 Exempt Manager Water Quality Control Plant 205D $75.04 $93.79 $112.55 $156,083 $195,083 $234,104
39 Exempt Manager Watershed Protection 330M $67.56 $84.44 $101.33 $140,525 $175,635 $210,766
1008 Exempt Office of Emergency Services Coordinator 525M $50.24 $62.80 $75.36 $104,499 $130,624 $156,749
2024 Exempt
100 Exempt
148 Exempt Police Chief 15E $113.32 $141.64 $169.97 $235,706 $294,611 $353,538
2021 Exempt Chief Assistant City Attorney 101A $99.95 $124.93 $149.92 $207,896 $259,854 $311,834
2016 Exempt Principal Business Analyst 310M $64.24 $80.29 $96.35 $133,619 $167,003 $200,408
2029 Exempt Principal Planner 469M $52.09 $65.11 $78.14 $108,347 $135,429 $162,531
2003 Exempt Principal Management Analyst 360M $63.99 $79.98 $95.98 $133,099 $166,358 $199,638
2009 Exempt Project Manager 570M $52.80 $66.00 $79.20 $109,824 $137,280 $164,736
2012 Exempt Public Safety Communications Manager 495M $52.75 $65.93 $79.12 $109,720 $137,134 $164,570
166 Exempt Public Safety Program Manager 585M $46.75 $58.43 $70.12 $97,240 $121,534 $145,850
117 Exempt Senior Accountant 525M $56.40 $70.49 $84.59 $117,312 $146,619 $175,947
2013 Exempt Senior Business Analyst - M 420M $55.99 $69.98 $83.98 $116,459 $145,558 $174,678
187 Exempt Senior Engineer 300M $71.93 $89.91 $107.90 $149,614 $187,013 $224,432
106 Exempt Senior Executive Assistant 450M $54.59 $68.23 $81.88 $113,547 $141,918 $170,310
157 Exempt Senior Human Resources Administrator 545M $49.18 $61.47 $73.77 $102,294 $127,858 $153,442
14 Exempt Senior Management Analyst 465M $54.54 $68.17 $81.81 $113,443 $141,794 $170,165
Page 11
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Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 185 Packet Pg. 430 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective pay period inclusive of 01/01/2024 (Annual $100 Medical Offset)
130 Exempt
53 Exempt Senior Project Manager 300M $71.93 $89.91 $107.90 $149,614 $187,013 $224,432
33 Exempt Senior Technologist 420M $55.99 $69.98 $83.98 $116,459 $145,558 $174,678
155 Exempt Superintendent Animal Services 540M $49.05 $61.31 $73.58 $102,024 $127,525 $153,046
83 Exempt Superintendent Community Services 480M $58.48 $73.09 $87.71 $121,638 $152,027 $182,437
1117 Exempt Superintendent Recreation 480M $58.48 $73.09 $87.71 $121,638 $152,027 $182,437
2022 Exempt Supervising Librarian 675M $42.92 $53.64 $64.37 $89,274 $111,571 $133,890
161 Exempt Supervisor Facilities Management 600M $45.72 $57.14 $68.57 $95,098 $118,851 $142,626
113 Exempt Supervisor Inspection and Surveying 540M $49.05 $61.31 $73.58 $102,024 $127,525 $153,046
146 Exempt Supervisor Warehouse 660M $41.40 $51.75 $62.10 $86,112 $107,640 $129,168
181 Exempt Supervisor Water Quality Control Operations 525M $50.24 $62.80 $75.36 $104,499 $130,624 $156,749
2027 Exempt Utilities Chief Operating Officer 60E $83.88 $104.84 $125.81 $174,470 $218,067 $261,685
905 Non-Exempt Human Resources Technician 830C $30.32 $37.89 $45.47 $63,066 $78,811 $94,578
903 Non-Exempt Legal Secretary-Confidential 820C $31.06 $38.82 $46.59 $64,605 $80,746 $96,907
67 Exempt Secretary to City Attorney 800C $36.72 $45.90 $55.08 $76,378 $95,472 $114,566
1004 Non-Exempt Senior Legal Secretary - Confidential 810C $34.16 $42.70 $51.24 $71,053 $88,816 $106,579
Confidential Classifications
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Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
190 Non-Exempt Accountant 690P $44.32 $55.40 $66.48 $92,186 $115,232 $138,278
76 Exempt Administrative Assistant 750P $35.53 $44.41 $53.30 $73,902 $92,373 $110,864
115 Exempt Assistant Chief Building Official 405M $64.12 $80.14 $96.17 $133,370 $166,691 $200,034
132 Exempt Assistant Chief of Police 100A $104.75 $130.93 $157.12 $217,880 $272,334 $326,810
108 Exempt Assistant City Attorney 165A $80.50 $100.62 $120.75 $167,440 $209,290 $251,160
109 Exempt Assistant City Clerk 630M $48.93 $61.16 $73.40 $101,774 $127,213 $152,672
107 Exempt Assistant City Manager 20E $104.48 $130.60 $156.72 $217,318 $271,648 $325,978
73 Exempt Assistant Director Administrative Services 120A $86.80 $108.49 $130.19 $180,544 $225,659 $270,795
126 Exempt Assistant Director Community Services 150A $83.12 $103.90 $124.68 $172,890 $216,112 $259,334
1007 Exempt Assistant Director Human Resources 155A $80.40 $100.49 $120.59 $167,232 $209,019 $250,827
2001 Exempt Assistant Director Library Services 160A $75.11 $93.88 $112.66 $156,229 $195,270 $234,333
10 Exempt Assistant Director Planning & Community Environment 130A $84.53 $105.66 $126.80 $175,822 $219,773 $263,744
143 Exempt Assistant Director Public Works 140A $83.56 $104.44 $125.33 $173,805 $217,235 $260,686
168 Exempt Assistant Fleet Manager 585M $48.62 $60.77 $72.93 $101,130 $126,402 $151,694
102 Exempt Assistant Manager WQCP 240D $69.20 $86.49 $103.79 $143,936 $179,899 $215,883
30 Exempt Assistant to the City Manager 390M $67.87 $84.83 $101.80 $141,170 $176,446 $211,744
118 Exempt Chief Building Official 290M $81.99 $102.48 $122.98 $170,539 $213,158 $255,798
2008 Exempt Chief Communications Officer 135A $79.96 $99.94 $119.93 $166,317 $207,875 $249,454
112 Exempt Chief Planning Official 220D $73.37 $91.71 $110.06 $152,610 $190,757 $228,925
95 Exempt Chief Procurement Officer 235D $62.74 $78.42 $94.11 $130,499 $163,114 $195,749
82 Exempt Chief Transportation Official 140A $79.46 $99.32 $119.19 $165,277 $206,586 $247,915
96 Exempt Claims Investigator 660P $43.06 $53.82 $64.59 $89,565 $111,946 $134,347
24 Exempt Communication Specialist 615M $46.56 $58.19 $69.83 $96,845 $121,035 $145,246
89 Exempt Contracts Administrator 585P $54.57 $68.21 $81.86 $113,506 $141,877 $170,269
186 Non-Exempt Coordinator Library Circulation 675M $44.47 $55.58 $66.70 $92,498 $115,606 $138,736
191 Exempt Fire Marshal 125A $95.37 $119.21 $143.06 $198,370 $247,957 $297,565
11 Exempt Deputy City Attorney 375M $63.25 $79.06 $94.88 $131,560 $164,445 $197,350
71 Exempt Deputy City Clerk 720M $38.44 $48.04 $57.65 $79,955 $99,923 $119,912
55 Exempt Deputy City Manager 115A $82.99 $103.73 $124.48 $172,619 $215,758 $258,918
195 Exempt Deputy Director Technical Services Division 200D $78.32 $97.90 $117.48 $162,906 $203,632 $244,358
20 Exempt Deputy Fire Chief 110A $99.32 $124.15 $148.98 $206,586 $258,232 $309,878
81 Exempt Director Administrative Services/Chief Financial Officer 50E $100.95 $126.18 $151.42 $209,976 $262,454 $314,954
72 Exempt Director Community Services 45E $96.01 $120.01 $144.02 $199,701 $249,621 $299,562
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective Pay period inclusive of 07/01/2024 (4% Increase)
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and Conf Salary Schedule
Item 11: Staff Report Pg. 187 Packet Pg. 432 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective Pay period inclusive of 07/01/2024 (4% Increase)
1012 Exempt
133 Exempt Director Human Resources/Chief People Officer 55E $96.26 $120.32 $144.39 $200,221 $250,266 $300,331
128 Exempt Director Information Technology/Chief Information Officer 25E $105.09 $131.36 $157.64 $218,587 $273,229 $327,891
131 Exempt Director Libraries 60E $89.93 $112.41 $134.90 $187,054 $233,813 $280,592
2028 Exempt Director of Emergency Medical Services 215D $75.80 $94.75 $113.70 $157,664 $197,080 $236,496
2005 Exempt Director Office of Emergency Services 215D $75.80 $94.75 $113.70 $157,664 $197,080 $236,496
49 Exempt Director Office of Management and Budget 120A $86.80 $108.49 $130.19 $180,544 $225,659 $270,795
134 Exempt Director Planning & Community Environment 40E $101.20 $126.50 $151.80 $210,496 $263,120 $315,744
135 Exempt Director Public Works/City Engineer 30E $102.49 $128.11 $153.74 $213,179 $266,469 $319,779
121 Exempt Director Utilities 10E $120.87 $151.08 $181.30 $251,410 $314,246 $377,104
2002 Exempt Division Head Library Services 260D $65.68 $82.10 $98.52 $136,614 $170,768 $204,922
172 Exempt Division Manager Open Space, Parks & Golf 245D $68.27 $85.33 $102.40 $142,002 $177,486 $212,992
2031 Exempt Division Manager Planning 220D $73.37 $91.71 $110.06 $152,610 $190,757 $228,925
1005 Exempt Executive Assistant to the City Manager 705M $40.07 $50.08 $60.10 $83,346 $104,166 $125,008
139 Exempt Fire Chief 35E $114.17 $142.71 $171.26 $237,474 $296,837 $356,221
163 Exempt Hearing Officer 480M $56.20 $70.25 $84.30 $116,896 $146,120 $175,344
101 Exempt Human Resources Representative 735P $37.52 $46.90 $56.28 $78,042 $97,552 $117,062
90 Exempt Landscape Architect Park Planner 510M $53.55 $66.93 $80.32 $111,384 $139,214 $167,066
2015 Exempt Legal Fellow 755P $47.15 $58.93 $70.72 $98,072 $122,574 $147,098
171 Exempt Management Analyst 585M $48.62 $60.77 $72.93 $101,130 $126,402 $151,694
79 Exempt Manager Accounting 235D $66.32 $82.89 $99.47 $137,946 $172,411 $206,898
2007 Exempt Manager Airport 210D $76.05 $95.06 $114.08 $158,184 $197,725 $237,286
2023 Exempt
38 Exempt Manager Communications 525M $53.86 $67.32 $80.79 $112,029 $140,026 $168,043
154 Exempt Manager Community Services 630M $50.11 $62.63 $75.16 $104,229 $130,270 $156,333
169 Exempt Manager Community Services Sr Program 585M $53.80 $67.24 $80.69 $111,904 $139,859 $167,835
1013 Exempt Manager Development Center 495M $60.72 $75.90 $91.08 $126,298 $157,872 $189,446
63 Exempt Manager Economic Development 220D $70.04 $87.55 $105.06 $145,683 $182,104 $218,525
44 Exempt Manager Employee Benefits 450M $60.00 $75.00 $90.00 $124,800 $156,000 $187,200
45 Exempt Manager Employee Relations & Training 235D $66.32 $82.89 $99.47 $137,946 $172,411 $206,898
93 Exempt Manager Environmental Control Program 419M $65.24 $81.54 $97.85 $135,699 $169,603 $203,528
1116 Exempt Manager Facilities 445M $57.61 $72.01 $86.42 $119,829 $149,781 $179,754
Exempt
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Attachment F Revised Management
and Conf Salary Schedule
Item 11: Staff Report Pg. 188 Packet Pg. 433 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective Pay period inclusive of 07/01/2024 (4% Increase)
127 Exempt
2018 Exempt Manager Human Services 540M $56.45 $70.56 $84.68 $117,416 $146,765 $176,134
32 Exempt Manager Information Technology 230D $67.79 $84.73 $101.68 $141,003 $176,238 $211,494
2006 Exempt Manager Information Technology Security 230D $64.14 $80.17 $96.21 $133,411 $166,754 $200,117
158 Exempt Manager Laboratory Services 495M $54.86 $68.57 $82.29 $114,109 $142,626 $171,163
78 Exempt Manager Library Services 565M $53.12 $66.40 $79.68 $110,490 $138,112 $165,734
92 Exempt Manager Maintenance Operations 469M $53.76 $67.19 $80.63 $111,821 $139,755 $167,710
26 Exempt
51 Exempt Manager Planning 415M $64.41 $80.51 $96.62 $133,973 $167,461 $200,970
103 Exempt Manager Real Property 235D $62.74 $78.42 $94.11 $130,499 $163,114 $195,749
2011 Exempt Manager Revenue Collections 250D $59.00 $73.74 $88.49 $122,720 $153,379 $184,059
160 Exempt Manager Solid Waste 330M $63.47 $79.33 $95.20 $132,018 $165,006 $198,016
57 Exempt
86 Exempt Manager Urban Forestry 436M $59.84 $74.79 $89.75 $124,467 $155,563 $186,680
178 Exempt Manager Water Quality Control Plant 205D $78.04 $97.55 $117.06 $162,323 $202,904 $243,485
39 Exempt Manager Watershed Protection 330M $70.26 $87.82 $105.39 $146,141 $182,666 $219,211
1008 Exempt Office of Emergency Services Coordinator 525M $52.26 $65.32 $78.39 $108,701 $135,866 $163,051
2024 Exempt
100 Exempt
148 Exempt Police Chief 15E $117.85 $147.31 $176.78 $245,128 $306,405 $367,702
2021 Exempt Chief Assistant City Attorney 101A $103.95 $129.93 $155.92 $216,216 $270,254 $324,314
2016 Exempt Principal Business Analyst 310M $66.81 $83.51 $100.22 $138,965 $173,701 $208,458
2029 Exempt Principal Planner 469M $54.18 $67.72 $81.27 $112,694 $140,858 $169,042
2003 Exempt Principal Management Analyst 360M $66.55 $83.18 $99.82 $138,424 $173,014 $207,626
2009 Exempt Project Manager 570M $54.92 $68.64 $82.37 $114,234 $142,771 $171,330
2012 Exempt Public Safety Communications Manager 495M $54.86 $68.57 $82.29 $114,109 $142,626 $171,163
166 Exempt Public Safety Program Manager 585M $48.62 $60.77 $72.93 $101,130 $126,402 $151,694
117 Exempt Senior Accountant 525M $58.65 $73.31 $87.98 $121,992 $152,485 $182,998
2013 Exempt Senior Business Analyst - M 420M $58.23 $72.78 $87.34 $121,118 $151,382 $181,667
187 Exempt Senior Engineer 300M $74.81 $93.51 $112.22 $155,605 $194,501 $233,418
106 Exempt Senior Executive Assistant 450M $56.77 $70.96 $85.16 $118,082 $147,597 $177,133
157 Exempt Senior Human Resources Administrator 545M $51.15 $63.93 $76.72 $106,392 $132,974 $159,578
14 Exempt Senior Management Analyst 465M $56.72 $70.90 $85.08 $117,978 $147,472 $176,966
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and Conf Salary Schedule
Item 11: Staff Report Pg. 189 Packet Pg. 434 of 853
Job Code Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective Pay period inclusive of 07/01/2024 (4% Increase)
130 Exempt
53 Exempt Senior Project Manager 300M $74.81 $93.51 $112.22 $155,605 $194,501 $233,418
33 Exempt Senior Technologist 420M $58.23 $72.78 $87.34 $121,118 $151,382 $181,667
155 Exempt Superintendent Animal Services 540M $51.02 $63.77 $76.53 $106,122 $132,642 $159,182
83 Exempt Superintendent Community Services 480M $60.82 $76.02 $91.23 $126,506 $158,122 $189,758
1117 Exempt Superintendent Recreation 480M $60.82 $76.02 $91.23 $126,506 $158,122 $189,758
2022 Exempt Supervising Librarian 675M $44.64 $55.79 $66.95 $92,851 $116,043 $139,256
161 Exempt Supervisor Facilities Management 600M $47.55 $59.43 $71.32 $98,904 $123,614 $148,346
113 Exempt Supervisor Inspection and Surveying 540M $51.02 $63.77 $76.53 $106,122 $132,642 $159,182
146 Exempt Supervisor Warehouse 660M $43.06 $53.82 $64.59 $89,565 $111,946 $134,347
181 Exempt Supervisor Water Quality Control Operations 525M $52.26 $65.32 $78.39 $108,701 $135,866 $163,051
2027 Exempt Utilities Chief Operating Officer 60E $87.24 $109.04 $130.85 $181,459 $226,803 $272,168
905 Non-Exempt Human Resources Technician 830C $31.53 $39.41 $47.30 $65,582 $81,973 $98,384
903 Non-Exempt Legal Secretary-Confidential 820C $32.31 $40.38 $48.46 $67,205 $83,990 $100,797
67 Exempt Secretary to City Attorney 800C $38.20 $47.74 $57.29 $79,456 $99,299 $119,163
1004 Non-Exempt Senior Legal Secretary - Confidential 810C $35.53 $44.41 $53.30 $73,902 $92,373 $110,864
Confidential Classifications
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: April 10, 2023
Report #:2302-1026
TITLE
Approval of a Funding Agreement with the Santa Clara Valley Water District for Reimbursement
Costs Incurred in Support of the Purified Water Project, and a Budget Amendment in the
Wastewater Treatment Fund Advanced Water Purification Facility capital project (WQ-19003)
RECOMMENDATION
Staff recommends that Council:
1. Approve and authorize the City Manager or their designee to execute an agreement
between the Santa Clara Valley Water District and the City for reimbursement of City
costs incurred in support of Valley Water’s Purified Water Project; and
2. Amend the Fiscal Year 2023 Budget Appropriation for the Wastewater Treatment Fund
by (requires a 2/3 vote):
a. Increasing the revenue estimate from other agencies by $500,000 in the
Advanced Water Purification Facility capital project (WQ-19003); and
b. Increasing the ending fund balance by $500,000.
EXECUTIVE SUMMARY
The Regional Water Quality Control Plant (RWQCP) treats wastewater from the City of Palo Alto
(Palo Alto), City of Mountain View (Mountain View), City of Los Altos, East Palo Alto Sanitary
District, Stanford University and Los Altos Hills. A small fraction of the effluent from the RWQCP
is further treated and then used for irrigation and toilet flushing.
In November 2019, Council approved the Agreement between the City of Palo Alto, City of
Mountain View and Santa Clara Valley Water District to Advance Resilient Water Reuse
Programs in Santa Clara County1 (Partnership Agreement). The Partnership Agreement includes
an option for the Santa Clara Valley Water District (Valley Water) to receive approximately half
1 City Council, November 18,2019; Agenda Item #17; SR #10627,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2019/id-10627-mini-packet-11182019.pdf?t=60382.02
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of the treated wastewater produced by the RWQCP for use in the county south of Mountain
View.
BACKGROUND
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S/CAP Goals and Key Actions2. The S/CAP Goals and Key Actions include a goal to "Develop a
water supply portfolio which is resilient to droughts, changes in climate, and water demand and
regulations, that supports our urban canopy" and a key action to "Develop and implement
projects that result from a "One Water" Portfolio for Palo Alto, including but not limited to:
stormwater, recycled water, on-site reuse, conservation, groundwater.” The partnership with
Valley Water supports this objective by providing $16 million of funding towards Palo Alto’s
Local Salt Removal Facility. Additionally, the Council’s 2023 Objective of “Climate Change and
the Natural Environment” includes a Priority Objective to “Approve agreements with Valley
Water for the purified water facility at LATP Area B”.
Valley Water requires support services from various City departments, including Public Works –
Environmental Services Division, Engineering, Real Estate, Utilities, and City Attorney to
accomplish the various tasks in support of the Purified Water Project. Palo Alto staff currently
assist Valley Water with this effort and will continue to do so to ensure successful
implementation of the Purified Water Project. Assistance will include developing needed
agreements, such as a ground lease for the former LATP site; resolving technical and
operational issues such as tie-ins at the RWQCP for source water, pump station location,
pipeline alignments, and power; and resolving legal issues, including regulatory permitting
requirements. The foregoing will require the dedication of considerable amount of time from
Palo Alto staff and consultants.
ANALYSIS
Valley Water and the City must resolve several key issues before a Purified Water Project can
be constructed in Palo Alto, including but not limited to:
·A facilities and land lease on former Los Altos Treatment Plant (LATP) lands.
·Identification of diversion point of source water (tertiary-treated wastewater) to be
conveyed to the new Purified Water Project facility.
·Siting of pump stations, pipeline, and appurtenances on RWQCP property.
·Siting of pipeline for source water and RO concentrate within the City’s jurisdiction.
·Identification of return point of RO Concentrate to the RWQCP.
·Management and disposal of reverse osmosis (RO) concentrate including an Operations
and Maintenance agreement and an RO concentrate agreement.
·Other requisite legal agreements (i.e., power, signage) associated with purified water
production on City-owned land.
·Potential connection of the Local Salt Removal Facility with the Project. CEQA
documentation preparation and review
2 City Council, September 27, 2022; Agenda Item #10; SR#14606
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·Parameters and expectations for communications and responsiveness of P3 entity to
City and the public during construction and ongoing operations.
The attached Funding Agreement (Attachment A) will enable Valley Water to provide
reimbursement for City of Palo Alto’s staff and consultant time on the Purified Water Project
for:
1) Meeting Attendance
2) Regulatory Coordination and Resolution of RO Concentrate Management and Disposal
3) Land Lease to Site Purification Facilities
4) Development of Agreements: O&M, lease, and RO Concentrate disposal
5) Technical Support and Coordination
The term of the Funding Agreement commences on its Effective Date and expires two years
after the Effective Date. The term of the Funding Agreement will be automatically extended for
additional annual periods up to four additional years unless Palo Alto or Valley Water provide a
notice of termination.
As part of the development of this Funding Agreement, Palo Alto staff identified a list of
expected positions and hourly rates (mainly from Public Works Department and Utilities) that
will support the Purified Water Project. The hourly rates were calculated using the maximum
hourly rate per the current Salary Schedule and a percentage for benefits based on the labor
group. These rates will be updated as new Salary Schedules are adopted by City Council.
In addition to City staff, Palo Alto requires consultant services to support specific technical
issues related to the Purified Water Project. In December 2022, Council approved a Professional
Services Contract3 with Woodard & Curran which includes a task to assist with the coordination
of technical issues related to the Purified Water Project. Woodard & Curran services covered
under this Contract related to the Purified Water Project, will be also reimbursed by Valley
Water.
City staff anticipates returning to Council for approvals and status updates on the project
deliverables and milestones listed above in due course.
Separately, Valley Water will submit a planning application with the City’s Planning and
Development Services Department for any land use approvals, planning entitlements, site and
design reviews and other environmental review under the California Environmental Quality
Act/National Environmental Policy Act. City’s staff time related to these items work is not
3,4 City Council, December 19, 2022; Agenda Item #15, SR#14685
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covered by this Funding Agreement. Valley Water has set up a deposit account with the
Planning and Development Services Department.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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AGREEMENT BY AND BETWEEN THE
SANTA CLARA VALLEY WATER DISTRICT AND
THE CITY OF PALO ALTO RELATING TO VALLEY WATER’S PAYMENT FOR CITY’S
SUPPORT SERVICES TO VALLEY WATER’S PURIFIED WATER PROJECT
This Master Agreement (Agreement) is made and entered this ____ day of ___________ 2023
(Effective Date), by and between the City of Palo Alto (City or Palo Alto), a California municipal
corporation, and the Santa Clara Valley Water District (Valley Water), an independent special
district of the State of California. The City and Valley Water may be referred to individually as a
Party, or collectively as Parties, to this Agreement.
RECITALS
A. The City is the owner and operator for the Palo Alto Regional Water Quality
Control Plant (RWQCP), which treats wastewater for the communities of Los Altos, Los Altos
Hills, Mountain View, Palo Alto, Stanford University, and the East Palo Alto Sanitary District.
B. In August 2017, Valley Water and Palo Alto executed a Memorandum of
Understanding for the purpose of developing plans and studies to expand the production and use
of recycled and purified water within the County.
C. In December 2019, Valley Water, Palo Alto, and the City of Mountain View
executed a Partnership Agreement to Advance Resilient Water Reuse Programs in Santa
Clara County to achieve the most cost effective, environmentally beneficial utilization of
treated wastewater in the County.
D. Valley Water desires to develop a process and facilities to purify treated
wastewater for potable reuse, including (1) using purified water to replenish groundwater basins,
an outcome commonly referred to as Indirect Potable Reuse, and/or (2) delivering the purified
water with additional treatment directly to Valley Water's raw water or treated water sources and
subsequent delivery to potable water consumers, an outcome commonly referred to as Direct
Potable Reuse.
E. In September 2020, Valley Water’s Board of Directors (Board) approved a design-
build-finance-operate-maintain procurement process under a public/private partnership to expand
potable water reuse and delivery to the Los Gatos Recharge System (Purified Water Project).
F. The Parties desire to cooperate with one another to construct the Purified Water
Project, including pipelines, pump station, and related appurtenances, on City-owned property,
using treated effluent from the Palo Alto RWQCP as source water for the advanced water
purification facilities and the Palo Alto RWQCP outfall to discharge the reverse osmosis
concentrate produced by the purification process
G. Valley Water requires support services from various City departments, including
Public Works – Environmental Services Division, Engineering, Real Estate, Utilities, and City
Attorney to accomplish the various tasks in support of the Purified Water Project.
Now, therefore, in consideration of the mutual promises set forth below, the Parties agree
as follows:
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AGREEMENT
1. Purpose
The purpose of this Agreement is to establish the basis and procedure for reimbursement
by Valley Water for the costs and expenses incurred by City in the performance of
support services in connection with the Purified Water Project, including services
performed during the period from July 1, 2022 through the effective date of this
Agreement.
2. Scope of Agreement
A. The Parties have agreed that the City will provide support services generally
described in Scope of Services, attached hereto as Exhibit A and incorporated
into the Agreement by this reference (Scope of Services); the Parties furthermore
agree that City shall provide such services to the extent necessary in its
professional judgment and discretion to complete the tasks described in the
Scope of Services, and to satisfy any regulatory, technical or similarly applicable
requirements.
B. This Agreement does not apply to services performed by the City’s Planning and
Development Services Department for any land use approvals or entitlements
required by the City of Palo Alto and environmental review under the California
Environmental Quality Act/National Environmental Policy Act.
C. Nothing in this Agreement commits either Party to the implementation of any
project, including without limitation, the City's provision of land or permission to
discharge into the RWQCP outfall.
D. Nothing in this Agreement modifies the terms of any existing Agreement between
the City and Valley Water.
3. Agreement Term; Termination
A. Term. The term of this Agreement commences on its Effective Date and expires
two years after the Effective Date. The term of this Agreement shall be
automatically extended for an additional period of one (1) year, not to exceed four
(4) additional years, unless either party provides written notice of termination at
least 30 days prior to the immediately preceding one-year renewal period.
B. Termination. Any Party may terminate this Agreement by providing thirty (30)
days written notice to the other Party. The City shall send Valley Water a final
invoice within sixty (60) days of the effective date of termination of this
Agreement.
4. Reimbursement
A. Services Performed by City Prior to Effective Date of this Agreement. Within thirty
(30) days of the effective date of this Agreement, Valley Water agrees to reimburse
City for services performed in connection with the Purified Water Project for the
period from July 1, 2022 through January 31, 2023, as detailed in Exhibit D.
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B. Services Performed by City After January 31, 2023. The City shall provide Valley
Water with an initial written invoice for work performed from February 1, 2023
through March 31, 2023. Thereafter, commencing on or around July 1, 2023, the
City, on a quarterly basis, shall provide Valley Water a written invoice for the work
performed during the immediately previous three months. The invoice shall set
forth the relevant period, the number of hours worked and the applicable hourly
rates, a description of the reimbursable expenses incurred and the amount of
such expenses, and documents supporting the reimbursable expenses.
C. Within 45 days of receipt of an invoice, Valley Water shall remit payment to City,
subject to review and approval of Valley Water. Such approval shall not be
unreasonably withheld.
5. Responsibilities of the Parties
A. Valley Water agrees to:
1. Ensure sufficient staff resources and consultant services are devoted to
development and pursuit of the Scope of Services.
2. Provide all necessary studies, reports, plans, specifications, maps, and
other documents to City in a timely manner, and allow the City at least 2
weeks for detailed review and comments, unless mutually agreed
otherwise by the Parties.
3. Schedule meetings with 2 weeks advance notice and cognizant of City
availabilities unless mutually agreed to otherwise by the Parties.
4. In collaboration with the City, review and respond to subsequent requests
for additional information to complete the Scope of Services.
5. Work collaboratively with City staff and consultants retained by City to
ensure timely discussion and review of the Purified Water Project tasks.
B. City agrees to:
1. Ensure sufficient staff resources and consultant services are devoted to
City's responsibilities with respect to the Scope of Services, subject to the
appropriation of funds by City's Council.
2. Review and provide comments on the Scope of Services and any
amendments thereto within a timeframe mutually agreed to by the
Parties.
3. Work collaboratively with Valley Water and its consultant, contractors,
and agents (including the private entity) to ensure timely discussion and
review of Purified Water Project tasks associated with design and
construction.
4. Once per quarter, submit invoices documenting costs incurred by the
City and any consultants retained by City for review and approval by
Valley Water.
6. Records Retention and Audit
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A. The City agrees to make available for examination by Valley Water, subject to
limitations established by state law, its authorized agents, officers, or employees, any
and all ledgers, books of accounts, invoices, vouchers, cancelled checks, and other
records or documents evidencing or relating to the expenditures and disbursements
invoiced to Valley Water or amounts deducted from the Funding Account. City
shall also furnish to Valley Water, its authorized agents, officers or employees such
other evidence or information as Valley Water may request with regard to any
such expenditure or disbursement charged by City.
B. The City shall maintain full and adequate records to document the actual costs it
incurs which are subject to reimbursement of the City's costs pursuant to this
Agreement. City shall provide such assistance as may be reasonably requested in
the course of such inspection.
7. Notices
Any and all notices required to be given to a Party hereunder shall be deemed to have
been delivered upon deposit in the United States mail, postage prepaid, addressed to
either of the Parties at the following address or such other address, or via e-mail with a
written confirmation of receipt at the address(es) below, as is provided by either Party in
writing:
City:
City of Palo Alto
Public Works Department
Attention: Karin North, Assistant Director of Public Works
2501 Embarcadero Way
Palo Alto, CA 94303
Phone: (650) 329-2104
Email address: Karin.North@cityofpaloalto.org
Valley Water:
Santa Clara Valley Water District
Water Utility Enterprise
Attention: Kirsten Struve, Assistant Officer
5750 Almaden Expressway
San Jose, CA 95118
Phone: (408) 630-3138
Email address: kstruve@valleywater.org
8. Severability
If a court of competent jurisdiction holds any provision of this Agreement to be illegal,
unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the
remaining provisions, or portions of them, will not be affected, unless an essential purpose of
this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision.
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9. Mutual Indemnification
In lieu of and notwithstanding the pro rata risk allocation, which might otherwise be
imposed between the Parties pursuant to Government Code Section 895.6, the Parties agree that
all losses or liabilities incurred by a Party shall not be shared pro rata but, instead, Valley Water
and City agree that, pursuant to Government Code Section 895.4, each of the Parties hereto shall
fully indemnify and hold each of the other Party, including its officers, board members,
employees, and agents, harmless from any claim, expense or cost, damage or liability imposed
for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent
acts or omissions or willful misconduct of the indemnifying Party, its officers, employees, or
agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated
to such Party under this Agreement. No Party, nor any officer, board member, or agent thereof
shall be responsible for any damage or liability occurring by reason of the negligent acts or
omissions or willful misconduct of the other Party hereto, its officers, board members, employees,
or agents, under or in connection with or arising out of any work authority or jurisdiction delegated
to such other Party under this Agreement.
10. Governing Law and Compliance with Laws
The Parties agree that California law governs this Agreement. In the performance of this
Agreement each Party will comply with all applicable laws, ordinances, codes and regulations of the
federal, state, and applicable local government.
11. Disputes
The Parties agree that they will work together in good faith to achieve the intent of this
Agreement. In the event that a dispute arises as to the proper interpretation of the respective
obligations and responsibilities of the Parties as described herein, or as to any other aspect of this
Agreement, Valley Water and the City agree that they each will assign the appropriate individuals
to meet and make good faith efforts to negotiate in order to arrive at a resolution of the dispute. If
any legal action or other proceeding is commenced to enforce or interpret any provision of, or
otherwise relating to, this Agreement, each Party shall bear the entirety of its owns costs and
expenses including but not limited to attorneys’ fees.
12. Venue
In the event that suit is brought by any Party to this Agreement, the Parties agree that
venue will be exclusively vested in the state courts of the County of Santa Clara, or if federal
jurisdiction is appropriate, exclusively in the United States District Court, Northern District of
California, San Jose, California.
13. Assignability
Parties will not assign this Agreement or any portion thereof to a third party without the
prior written consent of the other Party.
14. Ownership of Materials
All reports, documents, technical data, findings, or other materials (collectively, the Work
Product") developed by City as part of this Agreement shall be the property of the City. Valley
Water shall have right to the Work Product for Valley Water business, including, without limitation,
further development of its water supply infrastructure.
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This section shall not apply to any Work Product or documents or communications
covered by attorney-client privilege.
15. Entire Agreement
This Agreement constitutes the entire agreement between the City and Valley Water
with respect to the subject matter hereof and supersedes all prior offers and negotiations, oral
and written. This Agreement may not be amended or modified in any respect except by an
instrument in writing signed by authorized representatives of the Parties.
16. Counterparts and Electronic Signatures
This Agreement may be executed in any number of counterparts, each of which, when
executed and delivered, will be deemed to be an original, and all of which, taken together, will
be deemed to be one and the same instrument. Unless otherwise prohibited by law or policy
of a Party, the Parties agree that an electronic copy of a signed contract, or an electronically
signed contract, has the same force and legal effect as a contract executed with an original
ink signature. The term “electronic copy of a signed contract” refers to a writing as set forth in
Evidence Code Section 1550. The term “electronically signed contract” means a contract that
is executed by applying an electronic signature using technology approved by the City.
17. Nonwaiver
A Party's waiver of any term, condition, or covenant, or breach of any term, condition or
covenant will not be construed as a waiver of any other term, condition or covenant.
18. Third Parties
This Agreement is entered into only for the benefit of the Parties executing this
Agreement and not for the benefit of any other individual, entity, or person.
19. Debt Limitation
The City and Valley Water are both subject to laws or policies which limit their ability to
incur debt in future years. Nothing in this Agreement shall constitute an obligation of future
legislative bodies of the City or Valley Water to appropriate funds for purposes of this
Agreement.
20. No Partnership or Agency
Nothing in this Agreement is intended to constitute a partnership between the Parties, or
authorize either party to act as agent for the other, or authorize a party to act in the name or on
behalf of or otherwise to bind the other in any way.
21. Exhibits
The following listed Exhibits are incorporated herein by this reference as though set forth in
full:
Exhibit A - Scope of Services
Exhibit B - Schedule of Performance
Exhibit C – Compensation
Exhibit D – Initial Statement
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IN WITNESS WHEREOF, the City and Valley Water have executed this Agreement on the Effective Date
as defined in the introductory paragraph of this Agreement.
APPROVED AS TO FORM FOR CITY:
_______________________________
MOLLY STUMP
City Attorney
CITY OF PALO ALTO
By_______________________________
ED SHIKADA
City Manager
Date_____________________________
APPROVED AS TO FORM FOR
VALLEY WATER:
_______________________________
ANTHONY FULCHER
Sr. Assistant District Counsel
Date_____________________________
Date_____________________________
SANTA CLARA VALLEY WATER DISTRICT
By_______________________________
RICK L. CALLENDER, ESQ
Chief Executive Officer
Date_____________________________
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EXHIBIT A
SCOPE OF SERVICES
A. Background: The Purified Water Project
The Purified Water Project is part of Valley Water's strategy to respond to the multi-year
drought and is consistent with Board direction to expand the County's recycled water
supply. Valley Water’s 2040 Water Supply Master Plan (W SMP) recommends developing
at least 24,000 AFY of potable water reuse (above the current target of 33,000 AFY of non-
potable reuse). Valley Water has developed a Countywide Water Reuse Master Plan
(CoRe Plan) that has evaluated potable reuse expansion throughout Santa Clara County,
including identifying options for achieving the WSMP’s water reuse target.
In September 2020, the Board approved a Design-Build-Finance-Operate-Maintain
procurement process under a Public/Private Partnership (P3) to expand potable water
reuse and delivery to the Los Gatos Recharge System (Purified Water Project). The Board
directed Valley Water staff to launch a P3 procurement process once all necessary
elements for an advanced water purification project were secured. Valley Water will
implement the Board’s potable reuse directive through a North County production facility to
begin operation in 2028. The Purified Water Project will purify water for potable reuse to
supplement groundwater recharge from existing sources such as imported and local water
supplies. Implementation of the Purified Water Project will also mitigate the risk of land
subsidence, which could significantly impact the infrastructure and economy of Santa Clara
County.
Valley Water and the City must resolve several key issues before a Purified Water Project
can be constructed in Palo Alto, including but not limited to:
1. A facilities and land lease on former Los Altos Treatment Plant (LATP)
lands.
2. Identification of diversion point of source water (tertiary-treated wastewater).
3. Siting of pump stations, pipeline, and appurtenances on RWQCP property.
4. Management and disposal of reverse osmosis (RO) concentrate including
an Operations and Maintenance agreement and a RO concentrate
agreement.
5. CEQA document preparation and review.
6. Siting of pipeline for source water and RO concentrate within the City’s
jurisdiction.
7. Potential connection of the Local Salt Removal Facility with the Project.
8. Identification of return point of RO Concentrate to the RWQCP.
9. Other requisite legal agreements (i.e., power, signage) associated with
purified water production on City-owned land.
10. Parameters and expectations for communications and responsiveness of P3
entity to City and the public during construction and ongoing operations.
B. General Provisions
The Parties acknowledge the complexity of the project and the need for ongoing
coordination of efforts; the Parties further agree to work in good faith to resolve the issues
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enumerated above and complete the tasks described below.
Valley Water agrees to provide adequate funding to reimburse the City for approved costs
incurred in connection with the implementation of the project.
City agrees to use Valley Water funds only for direct project costs.
C. Description of Tasks
Task 1 - Attendance of Meetings
City will attend meetings with Valley Water, federal and state regulatory staff, and the
private entity to identify, discuss, and resolve issues, to establish priorities, and to review
progress. This includes development of a schedule for the execution of the needed
agreements for Valley Water’s planning purposes. These meetings will be used to further
refine the principal terms to be included in various agreements that will establish
commitments for the above-listed key issues and legal aspects of a water purification
facility.
Task 2 – Regulatory Coordination and Resolution of RO Concentrate Management
and Disposal
City, Valley Water, and applicable consultants will develop strategies for regulatory
compliance with pertinent regulatory agencies, including the Regional Water Quality
Control Board (RWQCB) on various permitting items including application of existing permit
conditions and agency issues regarding RO concentrate management, NPDES permitting,
and IPR facility permitting.
City’s work under this task may include, but is not limited to:
a) fulfillment of data requests and site access coordination,
b) review of studies prepared by Valley Water or its consultants pertaining to RO
concentrate management including, but not limited to, assessing the feasibility
of using the existing RWQCP outfall for RO concentrate discharge within the
constraints of continued compliance with the City’s National Pollutant Discharge
Elimination System (NPDES) limitations, and
c) participation in the evaluation and discussions of regulatory options for
addressing RO concentrate management.
This task may require City, at City’s sole discretion, to provide peer review, responding to
regulatory agencies, consultant support services, and attendance at meetings, as
appropriate, to discuss study outcomes.
Task 3 - Land Lease for Purification Facilities
City and Valley Water will develop an executable lease agreement option for buildable land
at the site of the former Los Altos Treatment Plant (LATP) to accommodate the Project and
associated facilities. The lease agreement will include an option for additional facilities for
educational outreach and training activities associated with purified water. In addition to
development of the lease, City work under this task may include, but is not limited to:
support and coordination regarding remediation of hazardous materials at the LATP site,
regulatory permitting support, coordination of site entry, permission to sample, and support
of materials registration.
Task 4 – Development of Agreements
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City will review legal memoranda developed by Valley Water and/or its consultants in
support of Project development and implementation. These activities will provide the legal
foundation for agreements supporting purified water facility construction and production,
including but not limited to the following:
1. A facilities and land lease on RWQCP or City lands,
2. Specifications for diversion point of source water (tertiary treated wastewater),
3. Management and disposal of reverse osmosis (RO) concentrate,
4. Return point to RWQCP for RO Concentrate; and
5. Revised legal agreements (i.e., O&M, power, signage) associated with purified
water production on City’s lands.
6. Development and review of the present Funding Agreement
7. Support related to Palo Alto City Council and Valley Water Board approval of
these Agreements
Task 5 – Technical Support and Coordination
City shall provide technical support and coordinate with Valley Water and the private entity
to support the Project development and implementation. City, with necessary consultant
services, will review engineering, environmental, regulatory, and technical memoranda and
reports developed by Valley Water and/or its consultants in support of P3 Purified Water
Project development. This task includes general project coordination during the design-
build and post-construction phases and work activities and coordination associated with but
not limited to:
1. Tie-in Connections at RWQCP for RO concentrate and tertiary effluent pipelines
2. Abandonment of existing monitoring well at the former LATP site
3. Former LATP site boundaries and survey
4. Project Homekey
5. RWQCP water quality sampling, as needed
6. Existing utility identification and connections
7. Current and historical water quality information
8. Effluent water samples for additional testing
9. As-Built drawings of the RWQCP, if available.
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EXHIBIT B
SCHEDULE OF PERFORMANCE
The Parties will mutually agree to the schedule to perform tasks under this Agreement. Parties
agree to perform tasks in a reasonable amount of time.
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EXHIBIT C
COMPENSATION
Not to Exceed Amount: $500,000. Valley Water funding for this Agreement will not exceed $500,000, unless
increased through a written amendment to this Agreement signed by both parties.
Hourly Rates: Valley Water will compensate City at the hourly rates in Exhibit C.1 of this
Agreement. Notwithstanding anything to the contrary, these hourly rates are valid at the time of
execution but may be subject to increase following each new fiscal year.
Reimbursable Expenses: Valley Water will reimburse for expenses subject to the following:
The following expenses are reimbursable to the extent City documents to Valley Water's
satisfaction that they were incurred in performing the work required by Exhibit A:
o the cost of City’s Consultant services supporting the Purified Water Program.
o the cost of mailing, shipping and/or delivery of documents or products to Valley Water.
o the cost of photographing, reproducing and/or copying.
o telephone and fax charges.
o the rental of any specialized equipment to the extent Valley Water has preapproved,
in writing, the cost of such rental.
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EXHIBIT C.1
SCHEDULE OF CHARGES
The following City staff positions are anticipated to be necessary to provide support
services under this Agreement. Additional or alternative positions may be necessary
throughout the Agreement. The rates will be subject to change based on City’s salary
schedules approved by City Council.
City Department Title Hourly Rate (Funding
Agreement)
Public Works Administrative Associate I $63
Public Works Administrative Associate II $68
Public Works Administrative Associate III $73
City Attorney Assistant City Attorney $192
Public Works Assistant Director Public Works $199
Utilities Assistant Director - UTL $210
Utilities Assistant Director (WGW) $215
Public Works Assistant Manager WQCP $165
Public Works Associate Engineer $108
Utilities Associate Resource Planner $105
City Attorney Deputy City Attorney $151
Public Works Director of Public Works $245
Public Works Engineer $122
Utilities Engineering Manager $188
Public Works Management Analyst $116
Public Works Manager Environmental Control $155
Administrative Services Manager Real Property $149
Public Works Manager WQCP $186
Utilities Principal Engineer $164
Public Works Project Engineer $131
Utilities Project Engineer $131
Public Works Project Manager $131
Public Works Sr. Engineer $178
Utilities Sr. Engineer $178
Administrative Services Sr. Management Analyst $135
Utilities Sr. Resource Planner $168
Utilities Supervising Project Engineer $147
Utilities Sr. Resource Planner $168
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EXHIBIT C.2
SCHEDULE OF CHARGES
The following consultant support positions are anticipated to be necessary to provide support
services under this Agreement and are subject to change per consultant agreements between the
City and Woodard & Curran.
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EXHIBIT D
INITIAL STATEMENT JULY 1, 2022
TO JANUARY 31, 2023
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MEMORANDUM
FROM: Karin North, Assistant Director of Public Works
Diego Martinez Garcia, Associate Engineer
TO: Kirsten Struve, Assistant Officer Water Supply Division
PROJECT: Regional Water Purification Facility
DATE: January 31, 2023
SUBJECT: Progress Report #1
The project report for this invoice is provided for the period July 1, 2022 through January 31,
2023.
ACTIVIES THIS PERIOD BY TASK
Task 1. Attendance of Meetings
City staff attended meetings with Valley Water related to the development of
Agreements, ROC Management, Regulatory Strategies, Tie-ins and special studies.
Task 2. Regulatory Coordination and Resolution of RO Concentrate Management and
Disposal
Review and editing Toxicity Pilot Study Plan and Effluent Hauling Memos
Coordination related to Toxicity Pilot Study
Preparation for meetings with Regional Board
Review and editing of technical memo’s: Reasonable Potential Analysis, Selenium
TMDL and Hydraulic Modeling
Task 3. Land Lease for Purification Facilities
No activities performed this period
Task 4. Development of Agreements
Development and review of the Funding Agreement
Development and review of reimbursement statements forms
Development of strategy to fund Planning Account and Public Works staff time
Onboard Consultant to support City on Agreement’s development and review
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Task 5. Technical Support and Coordination
Final effluent data request (5 years of minute flow data)
Recycled Water data request (5 years of hourly flow data)
Internal discussions about tie-in connections at the RWQCP
RWQCP effluent sampling coordination
Responded to RWQCP requests for information (as-builts, process information).
Initial support to setup a Planning Account
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City Support Services for the Period July 1, 2022 to January 31, 2023
Job Classification Employee Department Hours Total Cost
Assistant Director Public Works Karin North Public Works 33.50 $ 6,119.52
Senior Engineer Samantha Engelage Public Works 37.50 $ 5,907.69
Manager RWQCP James Allen Public Works 3.00 $ 500.40
Associate Engineer Diego Martinez Garcia Public Works 99.50 $ 10,779.53
Senior Engineer Tom Kapushinski Public Works 6.00 $ 945.23
Assistant Director Utilities Karla Dailey Utilities 0.00 $ -.--
Senior Resource Planner Lisa Bilir Utilities 0.00 $ -.--
Manager Real State Sunny Tong Administrative
Services
0.00 $ -.--
Assistant City Attorney Caio Arellano City Attorney 13.75 $ 2,569.10
GRAND TOTAL 193.25 $26,821.48
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: April 17, 2023
Report #:2303-1108
TITLE
Approval of Tenant Work Letter for Lease of 300 Homer Avenue Roth Building between the City
of Palo Alto and the Palo Alto Museum; CEQA Status--Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their
designee to execute the Tenant Work Letter, Exhibit D to the lease agreement by and between
the City of Palo Alto and Palo Alto History Museum to rehabilitate the Roth Building to “Warm
Shell” condition.
EXECUTIVE SUMMARY
The Tenant Work Letter is the third and final necessary document for construction to begin the
Roth Building rehabilitation. Staff and the Museum have finalized the Tenant Work Letter to
define the parties’ respective funding contributions and roles and responsibilities during
construction. Both parties acknowledge that construction costs will continue to change and
therefore acknowledge that the total project cost will increase, however, the federal earmark
of $3 million is expected to support the rehabilitation and restoration of this facility and assist
in ensuring the project is funded. The Museum most recently estimated construction to
commence in May 2023 and expects to open its doors to the public at the end of 2024 or early
2025.
BACKGROUND
At the December 12, 2022 meeting (Item 6 – CMR 15017)1, the Council approved the lease and
license agreement with the Palo Alto Museum for the Roth Building at 300 Homer Avenue.
Those two documents have been executed and the Palo Alto Museum has assumed
responsibility for the property. The parties mutually agreed to the extension of the lease term
requiring the completion of the Tenant Work Letter within 60 days of completion of the lease
agreement. All documents remain in full effect.
1 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-agendas-
minutes/2022/20221212/20221212pccsm-amended-linked.pdf
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ANALYSIS
The Tenant Work Letter (Attachment A) is the third and final document and is now before
Council for consideration. The Tenant Work Letter for the Roth Building Warm Shell
rehabilitation, referenced as Exhibit D to the Lease Agreement, sets forth the terms and
conditions for planned Phase 1 “warm shell” rehabilitation of the building and capital
improvements to the site, including project funding. Below is a summary of selected terms
included and recommended for approval in this item. The agreement, containing the full terms
and conditions, can be found in the attachment. This document was delayed as the Museum
and staff worked with the Federal government in the requirements for the $3 million federal
earmark secured by Congresswoman Eshoo. This grant is a critical funding source to ensure this
project can proceed and parties have worked to meet the requirements and adjusted terms
and conditions to provide sufficient time for these funds to be made available.
Summary of Selected Terms Included in Tenant Work Letter:
•Communications:
o Museum will keep the City updated on progress and significant developments by
informal communication in addition to scheduled meetings and reports
o Museum will provide a weekly written report via e-mail summarizing progress
made in preceding week
•Funding:
o City’s contribution of funding from sources such as restricted impact fees and
grant funding is in reliance on the Museum’s commitment to comply with the
applicable conditions associated with those funding sources
o City will contribute $10.02 million – 20% to be deposited after the museum has
provided evidence of required funds/pledges for project construction followed
by periodic disbursements for progress payments by Museum to general
contractor.
o After funds from the City contribution have been exhausted, the museum
anticipates using pledge funding and the Federal HUD funds to pay for remaining
construction costs
▪Museum is solely responsible for complying with HUD grant conditions
and consequences of any failure to comply and the City will make all
reasonable efforts to support the museum in this work.
•Prior to Construction:
o Museum to provide written proof that it has entered into construction contract
with general contractor that meets requirements in TWL
o Museum to obtain all necessary permits and authorizations (the City will
reimburse the museum of permit costs of $100,000)
o Funding schedule to be updated with final Guaranteed Maximum Price contract
amounts
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o Project schedule to be updated based on updated construction contract details
•During Construction:
o Museum is solely responsible for construction administration services during
construction and closeout
o Vance Brown will serve as the general contractor; contract will be a guaranteed
maximum price contract and include all subcontracts and a 10% construction
contingency
o All work will be done in accordance with design documents and construction
contract and in compliance with all applicable laws (including City ordinances,
rules, and regulations)
o A preconstruction conference will take place before any work begins on the
project and weekly meetings will continue through construction
FISCAL/RESOURCE IMPACT
The City and the Museum spent significant resources to reach all three agreements. Staff
dedicated significant staffing resources and outside legal support to the negotiation process. A
FY 2023 Mid-Year budget amendment funded the legal contractual services needed to
complete these documents. Under the City’s supervision, the Museum is responsible for
rehabilitating the Roth Building at a total estimated cost of $11.9 million, which is budgeted in
the Roth Building Rehabilitation capital project (PF-23001).
The Tenant Work Letter reflects revised funding allocations which recognize and allocate
additional grant funding from the County of Santa Clara and most significantly, an additional $3
million received through a federal earmark with the assistance of Congresswoman Anna Eshoo.
These federal funds are to be used for the restoration and rehabilitation of the Museum and
will be critical to enabling the completion of this Phase 1 “warm shell” of the project.
STAKEHOLDER ENGAGEMENT
Staff met with representatives of the Museum including their counsel to discuss and negotiate
the Tenant Work Letter terms.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality
Act (CEQA) in that approval of the Tenant Work Letter is a government fiscal activity which does
not involve any commitment to any specific project which may result in a potentially significant
physical impact on the environment. (CEQA Guidelines section 15378(b)(4)).
The rehabilitation and restoration work to the Roth Building is categorically exempt from the
CEQA review in that the work to be performed is limited to maintenance, repair, stabilization,
rehabilitation, restoration, preservation, conservation or reconstruction of historical resources
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in a manner consistent with the Secretary of the Interior’s Standards for the Treatment of
Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing
Historic Buildings (1995), Weeks and Grimmer. (CEQA Guidelines Section 15331)
ATTACHMENTS
APPROVED BY:
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1 Tenant Work Letter
TENANT WORK LETTER
FOR
ROTH BUILDING WARM SHELL REHABILITATION
EXHIBIT D
TO
LEASE AGREEMENT
BY AND BETWEEN
CITY OF PALO ALTO
AS LANDLORD
AND
PALO ALTO HISTORY MUSEUM
AS TENANT
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TABLE OF CONTENTS
...................................................................................................................................3
1. Definitions and Purpose..................................................................................................4
2. Party Representatives and Relations..............................................................................7
3. Term................................................................................................................................8
4. Project Funding...............................................................................................................8
5. Conditions for Commencement of Project Construction...............................................11
6. Project Construction......................................................................................................12
7. Maintenance and Repair...............................................................................................17
8. Utility Service................................................................................................................17
9. Insurance......................................................................................................................17
10. Damage to Project........................................................................................................19
11. Project Records.............................................................................................................19
12. Disclaimers....................................................................................................................20
13. Default...........................................................................................................................20
14. Notice............................................................................................................................21
15. Miscellaneous Provisions..............................................................................................21
Attachment A Project Funding
Attachment B Project Schedule
Attachment C Insurance Requirements (Architect)
Attachment D Insurance Requirements (General Contractor)
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TENANT WORK LETTER
BUILDING WARM SHELL RENOVATIONS
EXHIBIT D
TO
LEASE AGREEMENT BETWEEN
CITY OF PALO ALTO AND
PALO ALTO HISTORY MUSEUM
This Tenant Work Letter (“Tenant Work Letter”) is made this ___ day of April, 2023
(“Effective Date”), and supplements the Lease Agreement dated December 12, 2022
(“Lease”) between the City of Palo Alto (“City”) and the Palo Alto History Museum
(“Museum”) (individually, a “Party” and, collectively, the “Parties”), in reference to the
following facts and circumstances:
A.Pursuant to the terms of the Lease, Museum is leasing the Premises.
B.The purpose of this Tenant Work Letter is to set forth the terms and conditions
for planned Phase 1 “warm shell” rehabilitation of the Building (the “Project”), including the
terms and conditions for funding Project costs.
C.The Museum has retained the architectural firm Garavaglia Architecture, Inc.
(“Garavaglia”), to develop the design documents, dated October 10, 2008, for construction of
the Project (“Design Documents”), which were submitted for City approval and issuance of a
building permit for construction of the Project.
D.The City issued Building Permit # 16000-03285 on February 26, 2019 for
construction of the Project pursuant to the Design Documents (“Permit”). The Permit was
extended to June 25, 2023.
E.The Museum has retained Vance Brown, Inc., as the general contractor
(“General Contractor”) pursuant to a construction contract dated August 29, 2022, as
amended, to construct the Project pursuant to the Design Documents and as authorized by
the Permit (as amended, “Construction Contract”).
F.Prior to execution of this Tenant Work Letter, the Museum has estimated the
cost to construct the Project based on the Construction Contract’s “Guaranteed Maximum
Price” (“GMP”) of $11,513,075. However, the Museum anticipates that the GMP will increase
prior to commencement of construction on the Project, and this Tenant Work Letter will be
updated prior to Project commencement to reflect the final GMP for the Construction
Contract.
G.The City has agreed to contribute funds derived from various funding sources,
including restricted impact fees and certain grant funding, toward the Museum’s cost to
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4 Tenant Work Letter
construct the Project, as further specified herein, in reliance on the Museum’s commitment to
comply with the applicable conditions associated with those funding sources, as set forth in
the Lease.
H.
Museum Donations”), and (ii) use of federal Community
Project Funding (“CPF”) grant funds pursuant to written notice from the Department of
Housing and Urban Development (“HUD”) confirming that the HUD CPF Form HUD-7015.15,
"Request for Release of Funds and Certification" has been received by the HUD Community
Planning and Development Western Region Officer.
I.
FY 2022
Community Funding Grant Guide (“CPF Grant Guide”), which, among other things, provides
that the provisions of 2 CFR Part 200 apply to all CPF awards, including the procurement
requirements set forth in 2 CFR §200.317-327.
TERMS AND CONDITIONS
1. DEFINITIONS AND PURPOSE.
1.1 Recitals Incorporated. The foregoing Recitals are expressly incorporated
into this Tenant Work Letter.
1.2 Definitions. Capitalized terms used in this Tenant Work Letter have the same
meaning as provided in the Lease for those terms unless otherwise specified herein. The
following terms used in this Tenant Work Letter, including the Recitals, have the meanings
set forth in this Section 1.2:
Architect” means the architectural firm retained by the Museum to provide
architectural design services for the Project.
City” means the City of Palo Alto, a California chartered municipal
corporation, acting by and through its City Council.
City Agents” means individuals or entities acting within their capacity as duly
authorized agents of the City for the Project, including, but not limited to,
members of the Construction Liaison Team.
City Contribution” is the amount the City has agreed to contribute toward the
Construction Cost as further detailed in Section 4.2 and Attachment A (Project
Funding).
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“Commencement Deadline” means the date by which construction of the
Project must commence as stated in Section 4.3, including any duly authorized
amendments thereto, if any.
“Conditions Deadline” means the date by which the conditions precedent for
commencement of construction set forth in Section 5 must be met, as further
specified in Section 5.1.
“Construction Contract” means the contract between Museum and the
General Contractor for construction of the Project as stated in Recital E.
“Construction Cost” means the amount the Museum must pay to the General
Contractor to construct the Project based on the GMP in the fully executed
Construction Contract, at the time that Attachment A is revised with updated
construction costs, if applicable, pursuant to Section 5.4, including the costs for
all subcontracts, and including, unless otherwise indicated by the context,
authorized change orders, if any, and the Contingency Funds included in the
Construction Contract.
“Construction Liaison Team” has the meaning provided in Section 2.1.
“Contingency Funds” means the amount set forth in line 44 of Exhibit B
(Schedule of Values) to the Construction Contract, based on 10 % of the total
Construction Pricing, which may be used, if needed, to cover increases in the
cost to construct the Project as further specified in Section 4.4.
“County” means the County of Santa Clara.
“County Grant Agreements” has the meaning provided in the Lease.
“CPF Grant Guide” has the meaning provided in Recital I.
“Design Documents” means the design documents described in Recital C,
including, unless otherwise indicated by the context, any modifications
pursuant to duly authorized change orders.
“Effective Date” has the meaning set forth in the introductory paragraph to this
Tenant Work Letter.
“General Contractor” means the general contractor referenced in Recital E, or
any replacement contractor, if any, approved by the Parties pursuant to
Section 6.3 to construct the Project.
“GMP” has the meaning provided in Recital F, the amount of which is subject
to update prior to commencement of construction pursuant to Section 5.4.
“HUD Funds” has the meaning provided in Attachment A (Project Funding).
“HUD Grant” means the $3,000,000 CPF grant (Consolidated Appropriations
Act, 2022) approved as Grant number B-22-CP-CA-0071.
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“Laws” means all applicable local, state, and federal laws, regulations, rules,
codes, ordinances, permits, orders, and the like enacted or imposed by or
under the auspices of any governmental entity with jurisdiction over the
Project, including labor, health and safety requirements.
“Museum” means the Palo Alto History Museum (aka, the “Palo Alto
Museum”), a nonprofit corporation.
“Museum’s Agents” means individuals or entities acting within their capacity
as duly authorized agents of the Museum for the Project, which includes the
employees and contractors of Museum.
“Museum Contribution” is the amount the Museum has agreed to contribute
to pay for the Project as further specified in Section 4.3 and Attachment A
(Project Funding).
“Museum Donations” has the meaning provided in Recital H and as further
specified in Attachment A (Project Funding).
“PAMC” means the Palo Alto Municipal Code.
“Permit” has the meaning provided in Recital D above, including any City-
authorized amendments or extensions thereto, if any.
“Project” has the meaning provided in Recital B above, and as further
specified in the Design Documents and as authorized by the Permit.
“Project Account” means the account jointly maintained by the City and the
Museum into which the City Contribution will be deposited in specified
increments for the Museum to pay for progress payments for the Construction
Contract until the City Contribution is exhausted.
“Project Representative” means the individual(s) designated by City to serve
as the primary point of contact for communications with the City regarding
Project construction and as further specified in Section 2.1.
“Project Schedule” means the planned time for construction of the Project as
set forth in Attachment B (Project Schedule), which is subject to update prior to
commencement of construction pursuant to Section 5.2.
“Recital” means the recitals set forth at the beginning of this Tenant Work
Letter.
“Section” means a section or subsection of this Tenant Work Letter, unless
otherwise indicated.
“Site” means the area or areas being used for construction of the Project,
including any staging area(s).
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“Tenant Work Letter” means this Tenant Work Letter regarding construction
of the Project.
“Term” has the meaning provided in Section 3.
1.3 Purpose of Tenant Work Letter. The purpose of this Tenant Work Letter is
to provide for the General Contractor’s construction of the Project, including terms and
conditions for funding, change orders, Project completion, and acceptance.
2. PARTY REPRESENTATIVES AND RELATIONS.
2.1 City’s Representatives.
A.Construction Liaison Team. The City’s representatives for
administration of this Tenant Work Letter are the Director of Administrative Services or
his or her designee(s), the Director of Public Works or his or her designee(s), the City
Manager’s Office representative(s), and the Project Representative (collectively, the
“Construction Liaison Team”). The Construction Liaison Team will be the City’s
representative for all purposes of administering and implementing this Tenant Work
Letter, including approval of change orders on behalf of the City, subject to the limits
of authority granted by the City Council. The Construction Liaison Team will be
responsible for efficient coordination of internal City review and approval procedures,
and for direct communications with the Museum’s representative(s) identified in
Section 2.2, below.
B.Project Representative. The Project Representative will be the
Construction Liaison Team’s primary point of contact for routine communications
concerning the Project. The Project Representative will not have independent
authority to accept, reject, direct, or stop work on the Project; to modify the approved
design; or to approve change order requests on behalf of the City. The Project
Representative may attend the pre-construction conference and weekly progress
meetings, and will be present on the Site during construction.
2.2 Museum’s Representative. The Museum’s authorized representative for
administration and implementation of this Tenant Work Letter, including coordination and
direct communications with the Construction Liaison Team, is Richard C. Green, Board
President, or such other person designated by the Museum from time to time.
2.3 Communications.
A.Duty to Update. Beginning one week after the Effective Date, the
Museum will keep the Construction Liaison Team updated on progress and significant
developments concerning Project construction by informal communication in addition
to the scheduled meetings and reports required in this Tenant Work Letter.
B.Pre-Construction Meetings. In addition to the weekly construction
meetings in Section 6.7, prior to commencement of construction of the Project, the
Parties will schedule regular meetings at mutually convenient times, to keep the
Construction Liaison Team informed and updated on the progress of funding the
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Museum Contribution, meeting other conditions for commencement of construction
pursuant to Section 5, and any other pre-construction issues.
C.Weekly Reports. The Museum will submit a weekly written report,
distributed by email to all members of the Construction Liaison Team, summarizing
the progress made during the preceding week, including funding, schedule and cost
updates, and identifying any significant issues or concerns relating to the Project.
3. TERM.
The Term of this Tenant Work Letter will begin upon the Effective Date and will remain
in effect until a notice of completion has been recorded following City acceptance of the
Project, as further specified in Section 6.13, unless the Tenant Work Letter is terminated
sooner pursuant to Sections 5.1 or 13.
4. PROJECT FUNDING.
4.1 Project Costs. The anticipated costs for all work and services to be
performed to construct the Project, including, but not limited to, the Construction Cost, is set
forth in Attachment A (Project Funding), subject to updating pursuant to Section 5.4.
4.2 City Contribution. The City will contribute funds toward the Construction
Cost as further specified in Attachment A (Project Funding), including both direct funding and
reimbursements, and including funds from the County Grant Agreements (collectively, the
“City Contribution”). The City Contribution includes reimbursement of permit and processing
fees from the City’s general fund, as authorized by the City Council on November 15, 2021.
However, Museum is solely responsible for payment of any utility fees that are due and
payable to any of the City’s enterprise funds or any other fund separate from the City’s
general fund. The City Contribution may not be used for any purpose other than the
Construction Cost in accordance with the terms of this Tenant Work Letter.
A.Limitations. Except as set forth in Section 4.4 and Section 6.8 below,
the City Contribution may not be used for additional costs due to changes or additions
to the scope of work set forth in the Construction Contract and Design Documents
unless and only to the extent that the City agrees in writing in advance to contribute to
the added costs resulting from any such added or changed work. The City has no
obligation to provide any funds for the Project in addition to the City Contribution
unless and only to the extent agreed pursuant to Section 4.4(B) below in a writing
memorialized pursuant to Section 15.1.
B.Payment of City Contribution. Within 30 days after the Museum has
provided evidence, to the Liaison Team’s reasonable satisfaction, that the Museum
has sufficient liquid and reliably pledged funds pursuant to Section 4.3, the City will
deposit 20% of the total City Contribution into the Project Account. Thereafter, once
Project construction has commenced, within 30 days after receiving a copy of the
most recent Museum-approved monthly progress payment application from the
General Contractor, the City will deposit the amount approved for the progress
payment into the Project Account for the Museum to draw on to pay the General
Contractor until the City Contribution is exhausted, at which point the Museum will be
solely responsible for paying the General Contractor for its work on the Project.
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C.County Grant Funding. The portion of the City Contribution derived
from the County Grant Agreements will be specifically and solely allocated for the
particular uses specified in each of the respective County Grant Agreements. The
Museum will ensure that all eligible costs that are funded through the County Grant
Agreements are separately invoiced and documented, to ensure compliance with the
requirements of the individual County Grant Agreements.
4.3 Museum Contribution. The “Museum Contribution” will consist of the
amounts set forth in Section 1 of Attachment A, which are intended to be sufficient to
complete construction of the Project after the City Contribution has been exhausted. The
Museum Contribution will include the cost of those utility and permit costs and fees for the
Project that are not expressly waived or reimbursed by the City. The Museum will use
reasonable efforts to obtain contributions from the community in the amount of the Museum
Donations identified in Section 1 of Attachment A in order to commence construction of the
Project (as evidenced by commencement of labor for the Project at the Premises) no later
than 270 days following the Effective Date (“Commencement Deadline”).
A.Evidence of Sufficient Funds for the Museum Donations. Within 90
days following the Effective Date, the Museum will provide evidence satisfactory to the
City that (i) the Museum holds sufficient liquid funds in the amount of at least ninety
percent (90%) of the Museum Donations and (ii) that funds in the amount of the
remaining ten percent (10%) of the Museum Donations have been reliably pledged to
pay for construction of the Project pursuant to the terms of the Construction Contract.
Within six months following the Effective Date, Museum will provide evidence
satisfactory to the City that any such pledged, but unfunded portions of the Museum
Donations have been funded to the Museum and will be available to timely pay the
General Contractor for construction of the Project.
B.HUD Grant Funds and Compliance. The Parties acknowledge that the
Museum Donations alone will be insufficient to pay all costs to complete the Project
after the City Contribution has been exhausted. The Museum represents that it is
authorized to use the HUD Funds to pay for completion of the Project pursuant to the
terms of the Construction Contract, and for Project-related costs, including required
environmental review. Within 270 days following the Effective Date, the Museum will
provide evidence satisfactory to the City that sufficient HUD Funds will be available on
a timely basis to complete construction of the Project after funds from the City
Contribution have been exhausted. The Museum will use commercially reasonable
efforts to satisfy all applicable conditions and requirements of the HUD Grant,
including the requirements set forth in the CPF Grant Guide, so as to enable the HUD
Funds to be available to pay for construction of the Project as soon as reasonably
possible, and, the City will use commercially reasonable efforts to cooperate with the
Museum to satisfy those requirements. The Museum is solely responsible for
complying with the HUD Grant conditions and for the consequences of any failure to
so comply, including additional costs due to delay from failure to timely secure
adequate funding or for penalties or repayment obligations for failure to comply with
the HUD Grant funding conditions, including the applicable requirements of the CPF
Grant Guide and the federal regulations referenced therein. The Museum represents
that the Construction Contract is exempt from the competitive procurement
requirements included in those federal regulations because the Construction Contract
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pre-dates award of the HUD Grant. The Museum will indemnify, hold harmless, and
defend City against any claim, damages, or liability incurred due to any actual or
alleged failure by Museum to comply with the applicable HUD Grant funding
conditions. The Museum’s obligations in this paragraph will survive expiration or
termination of this Tenant Work Letter.
4.4 Contingency Funds.
A.General. The Contingency Funds are solely intended for unforeseeable
increases to the Construction Contract cost that arise after construction commences,
including costs increases that arise during construction due to changes in the work
authorized pursuant to Section 6.8. The Museum will provide an accounting of any
use of Contingency Funds to the City when such funds are used.
B.Insufficient Funds. If the Contingency Funds will be inadequate to
complete the Project following exhaustion of the City Contribution, the Museum will
complete the Project using the remaining funds from the HUD Grant. If, following
exhaustion of the City Contribution, it becomes evident that the combined
Contingency Funds and funds from the HUD Grant will be insufficient to pay for
unforeseen costs that arise before the Project is completed, at the request of either
Party, the Parties will meet and confer in an endeavor to mutually agree on a plan to
address the shortfall and complete the Project in a manner that is consistent with the
objectives of this Agreement, which may include change of Project scope, value
engineering, or other cost saving measures.
4.5 Project Account. Within 30 days after the Effective Date, the Parties will
establish the Project Account at a mutually acceptable financial institution with an office within
the City of Palo Alto. If a minimum deposit is required to establish the account, the City will
provide the necessary amount from the City Contribution. The City will deposit the City
Contribution into the Project Account as further specified in Section 4.2, above, which the
Museum may then draw from to pay for the Construction Contract, provided that the Project is
timely commenced as specified in Section 5, including any mutually agreed extensions to the
Commencement Deadline. Funds in the Project Account may only be used for costs
authorized by this Tenant Work Letter. Any unauthorized use by Museum of City Contribution
funds constitutes a default subject to the terms of Section 13, below.
A.General. The Museum will administer and coordinate the receipt and
disbursement of such funds for all costs and expenses related to the Project,
consistent with the terms of this Tenant Work Letter, including the most current
version of Attachment A (Project Funding). Deposits into and withdrawals from the
Project Account will be made by the Parties in accordance with this Tenant Work
Letter. The cost of the Project Account will be shared equally by the Parties. Any
earnings from the investment of funds in the Project Account, if any, will remain or be
deposited in the Project Account and be applied toward construction of the Project.
B.Investment Limitations. Except to the extent otherwise approved in
writing by the Parties, funds in the Project Account may only be invested in (1)
immediately available funds (cash and cash equivalents), (2) fully insured FDIC
certificates of deposits with daily trading liquidity, or (3) treasury bonds in tranches
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with the objective to hold to maturity and have sufficient liquidity to pay construction
obligations when due.
C.Disbursements. The Museum will promptly provide the Construction
Liaison Team with a copy of each Museum-approved payment application from the
General Contractor, but disbursements from the Project Account for the Museum’s
payments to the General Contractor, will not be subject to prior approval by the City.
D.Closure. The Parties will take action to close the Project Account once
the City Contribution has been exhausted and all proceeds from the City Contribution
paid out from the Project Account.
5. CONDITIONS FOR COMMENCEMENT OF PROJECT CONSTRUCTION.
The Parties recognize that while time is of the essence for commencing work on the
Project, it would be undesirable to commence Project construction before conditions have
been met to ensure successful and timely completion of the Project, including firm contracts,
required permits and authorizations, and adequate funding to ensure the Project can be
timely completed by the Museum after the City Contribution is exhausted. The terms and
conditions set forth in this Section 5 are intended to supplement the general requirements set
forth in Section 12 of the Lease.
5.1 Conditions Precedent to Construction Commencement. Project
construction may not commence until all of the conditions precedent to construction set forth
in this Section 5 have been satisfied. The Museum will ensure that all of the conditions in this
Section have been met to the City’s reasonable satisfaction within 150 days following the
Effective Date (”Conditions Deadline”). The Museum will notify the Construction Liaison
Team in writing when the Museum believes that all of the conditions set forth in this Section 5
have been met. Within 30 days following receipt of this notice, the Construction Liaison Team
will either (i) notify the Museum in writing that the City is satisfied that all of the Section 5
conditions have been met such that construction may commence; or (ii) notify the Museum in
writing identifying any Section 5 conditions that have not been met to the City’s reasonable
satisfaction, such that construction may not yet commence.
A.Conditions Deadline. If the Museum is unable to meet the conditions
set forth in this Section 5 by the Conditions Deadline, the Museum’s Representative
will meet with the Construction Liaison Team to develop a plan for timely
commencement of the Project consistent with the terms and objectives set forth in
Section 3 of the Lease, which may include value engineering, scope reduction,
phasing, or other cost saving measures so that the Project or an amended version of
the Project can be timely completed with available funds.
B.Commencement Deadline. If construction of the Project has not
commenced by the Commencement Deadline (within 270 days following the Effective
Date), this Tenant Work Letter will terminate unless the Parties mutually agree to
extend the Commencement Deadline.
5.2 Construction Contract and Project Schedule. As a condition precedent to
commencement of construction, the Museum will provide written proof to the Construction
Liaison Team that it has affirmed or entered into a completed and up-to-date Construction
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Contract with the General Contractor that meets the requirements specified in this Tenant
Work Letter, including, but not limited to, Sections 6.3, 6.4, 6.7, 6.10, and 9. The written proof
required for satisfying this condition includes delivery of fully executed copies of the final
Construction Contract and subcontract agreements. If needed, the Parties will revise and
update the Project Schedule set forth in Attachment B (Project Schedule) to ensure that it
reflects the most current as-planned schedule available prior to commencement of
construction. The revised Project Schedule will be dated, memorialized pursuant to Section
15.1, and will supersede the original Attachment B.
5.3 Permits and Authorizations. As a condition precedent to commencement of
construction, the Museum will provide written proof to the Construction Liaison Team that in
addition to the Permit, all necessary permits and approvals for the commencement of
construction from any and all agencies having jurisdiction over the Project, including the City,
have been authorized and will remain in effect during construction, including, as applicable,
street opening permits, encroachment permits, utility encroachment permits, and health
permits.
5.4 Project Funding Update. As a condition precedent to commencement of
construction, Attachment A (Project Funding) will be amended to reflect the final GMP for the
Construction Contract and to adjust the amount of the Museum Contribution commensurate
with any adjustment to the GMP. The revised Attachment A will be dated, memorialized
pursuant to Section 15.1, and will supersede the original Attachment A. The Museum has an
ongoing obligation during the Term to promptly notify the Construction Liaison Team in writing
of any increases in the Construction Cost from the amount stated in Attachment A.
6. PROJECT CONSTRUCTION.
6.1 Project Administration. The Museum will be solely responsible for
construction administration services as needed during Project construction and closeout,
including administration of the Construction Contract, review and response to requests for
information, change order proposals, shop drawings, addressing any claims, if any, and
preparation of record documents.
6.2 Architect. The City hereby approves of Garavaglia as the Architect for the
Project. If, for any reason, the Museum wishes to substitute a different firm to serve as
Architect for the Project, the substitution will be subject to the City’s prior written approval of
the proposed firm, which approval shall not be unreasonably withheld.
Design Services. The Museum will continue to engage and pay for the
services of its Architect to handle any architectural services needed during
construction of the Project, at the Museum’s sole expense.
Insurance. Museum will require the Architect to provide and maintain
insurance coverage, including professional liability insurance, that meets the City’s
standard requirements for design professional insurance as further specified in
Section 9, below.
6.3 General Contractor and Construction Contract. The City hereby approves
of Vance Brown, Inc. to serve as the General Contractor. If the Museum wishes to substitute
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a different contractor to serve as General Contractor for the Project, the substitution will be
subject to the City’s prior written approval of the proposed contractor, which approval shall
not be unreasonably withheld.
Construction Contract. The Construction Contract between the
Museum and its General Contractor will provide for a GMP, including the cost for all
subcontracts and the 10% Construction Contingency Funds. The Construction
Contract must also include provisions to ensure the following:
No Default. The Construction Contract will provide that the
General Contractor will not take any action or fail to take any action which
would cause the Museum to be in default under this Tenant Work Letter or the
Lease, including, but not limited to, compliance with requirements pertaining to
Site security, and compliance with Laws.
Compliance. The Construction Contract will require the General
Contractor to construct the Project as specified in the approved Design
Documents, which must be attached or incorporated therein, and in
accordance with all applicable permits and authorizations. The Construction
Contract will also require the General Contractor to construct the Project in
compliance with applicable Laws, including prevailing wage and Labor Code
requirements.
Bond and Insurance Requirements. The Construction Contract
will include all applicable requirements for a payment and a performance bond,
each for 100% of the Construction Cost, using bond forms provided or
approved by the City and in compliance with Laws, including Civil Code
section 9550 and PAMC section 2.30.500. The Construction Contract will also
require the City’s standard insurance requirements applicable to the General
Contractor as further specified in Section 9, below.
As-Built Drawings. The Construction Contract will require the
General Contractor to prepare and maintain as-built drawings showing any
changes from or details not shown in the Design Documents, suitable for
preparation of record drawings.
Representation as to Form. The Museum represents that the
Construction Contract complies with applicable Laws and the terms of this
Tenant Work Letter, and, as applicable, any funding conditions associated with
the HUD Grant, and the Museum agrees to indemnify, defend, and hold City
harmless against any alleged or actual noncompliance with those
requirements, including, but not limited to, noncompliance with prevailing wage
laws. The Museum’s obligations in this paragraph will survive expiration or
termination of this Tenant Work Letter.
6.4 Compliance. The Museum will require its General Contractor to accomplish all
associated work required to complete the Project in accordance with the Design Documents
and Construction Contract, and to comply with all conditions that are imposed on the Project
during the City’s approval process. The Museum will require its Architect and General
Contractor to ensure that the Project is constructed and completed in accordance with all
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applicable Laws, including City ordinances, rules, and regulations, governing construction
noise, traffic controls, and dust control, as may be set forth in the PAMC and the City’s
Department of Public Works’ Standard Drawings and Specifications for construction projects
and other related construction rules and regulations. The City Contribution will not be
increased to cover any added costs resulting from change order work required for code
compliance requirements that apply generally in the City, unless and only to the extent the
City Council has authorized an increase to the amount of City Contribution for that purpose.
The Museum will require the General Contractor to arrange for the placement of portable
restrooms at the Project Site to the extent required for work to be performed on the Project.
6.5 Access. The Project Representative and City Agents, including City
inspectors, will have reasonable access during normal business hours to the Site during
construction of the Project in order to perform their respective duties following 24 hours prior
notice to the Museum, except in the event of an emergency or for meetings scheduled
pursuant to Sections 2.3.B or 6.7. Any such access shall be subject to the Museum’s and the
General Contractor’s written reasonable security and safety protocols, which will be provided
to the Construction Liaison Team within 30 days following the Effective Date. Nothing in this
Tenant Work Letter will be construed to limit the City’s right to enforce contractual or legal
requirements intended to protect workers, the environment, or public or worker health, safety
and welfare.
6.6 Project Schedule. The Parties’ planned schedule for construction of the
Project is set forth in the Project Schedule, attached as Attachment B (Project Schedule)
hereto, subject to updating pursuant to Section 5.2. Each Party will exercise its reasonable
efforts to perform its respective obligations in a manner to ensure timely completion of the
Project consistent with the Project Schedule to the extent it is possible to do so. The Museum
has an ongoing obligation during the Term to promptly notify the Construction Liaison Team
of any changes or impacts to the Project Schedule that may delay substantial completion (as
set forth in Section 6.11) by two or more weeks.
6.7 Construction Meetings.
Pre-Construction Conference. The Parties will schedule a pre-
construction conference to take place before any work begins on the Project. The pre-
construction conference will be attended by the Project Representative; members of
the Construction Liaison Team; other City Agents with responsibilities relating to
construction of the Project; the Museum’s representative; the General Contractor’s
representatives, including the General Contractor’s designated project representative
and superintendent(s); the Architect; the designated inspector(s); and any other
individuals whom the Parties mutually agree should be in attendance. The Project
Representative and the Museum’s representative, in consultation with the General
Contractor, will mutually develop an agenda for the pre-construction conference,
which must include communication protocols to ensure efficient and effective
communications throughout the construction process; safety requirements;
environmental considerations; scheduling; submittals; change order procedures; traffic
management; noise management; security; parking; and authorized staging area(s).
Weekly Meetings. In addition, the Parties will schedule weekly
meetings for the duration of the Project, which will be attended by the General
Contractor and each Party’s designated representative(s). The weekly meetings will
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focus on Project progress, including updates on construction, schedule, costs, change
orders, and other construction-related issues, such as changes in design, changed
conditions, inspection, testing, and similar matters. The General Contractor will be
responsible for preparing and distributing agendas and minutes for the pre-
construction conference (based on the agenda developed pursuant to Section 6.7.A)
and the weekly meeting to all meeting participants with copies to the Construction
Liaison Team.
6.8 Change Orders. The Museum may authorize change orders to the
Construction Contract without City approval, except under any of the following circumstances,
each of which requires prior written approval by the Construction Liaison Team:
A.Violation of Lease Requirements for Funding Conditions. The proposed
change would likely have a material adverse effect on the ability of the Museum to
satisfy the required services and uses specified in Section 3 the Lease.
B.Material Scope Change. The proposed change would materially alter
the approved Project scope, including, but not limited to, size, footprint, appearance,
or impact on normal operations and use of Heritage Park.
C.Building Impacts. The proposed change would significantly reduce the
quality, functionality, or life-expectancy of the improvements or constituent
components or the current or future value of the Building.
D.Maintenance Impacts. The proposed change would materially increase
the City’s costs to operate, repair, or maintain the Public Parkside Restroom, or
future cost to operate, repair, or maintain the Building.
E.Conflict. The proposed change would conflict with or be inconsistent
with the provisions or objectives of this Tenant Work Letter, including, but not limited
to, the indemnity and insurance requirements set forth herein.
F.Governmental Approval. The proposed change would require new or
amended governmental approval, including amendments to any required permit(s).
G.Insufficient Funds. The cost of the proposed change would likely result
in insufficient funds to complete the Project as approved, including exhaustion of the
City Contribution, the Contingency Funds, and the HUD Grant funds.
6.9 Contractor’s Licenses. The General Contractor, its subcontractors, and any
other Museum’s Agents who will perform construction work for the Project will obtain and
maintain all current licenses required by the State of California before performing any work on
the Project.
6.10 Prevailing Wages. Each worker performing Work under this Contract that is
covered under Labor Code sections 1720 or 1720.9, including cleanup at the Project site,
must be paid at a rate not less than the prevailing wage as defined in sections 1771 and 1774
of the Labor Code. Pursuant to Labor Code section 1773, the general prevailing rate of per
diem wages and the general rate for holiday and overtime work in this locality for each craft,
classification, or type of worker needed to perform the work for the Project may be obtained
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at the Purchasing Office of the City of Palo Alto. The Contractor must post a copy of the
applicable prevailing rates at the Project site. Before entering into the Construction Contract
to perform work on the Project and at all times while performing work on the Project, the
General Contractor and its subcontractors must be registered with the California Department
of Industrial Relations (“DIR”) to perform public work under Labor Code section 1725.5. All
contractors and subcontractors for the Project must comply with the provisions of Labor Code
sections 1775, 1776, 1777.5, 1810, and 1813. The General Contractor must also comply with
the provisions of Labor Code sections 1771.4, 1776 and 1812 and all implementing
regulations, which are fully incorporated by this reference, including requirements for
electronic submission of payroll records. The Construction Contract will be subject to
compliance monitoring and enforcement by the DIR, pursuant to Labor Code section 1771.4.
6.11 Substantial Completion. For purposes of this Tenant Work Letter, the
Project will be deemed substantially completed when all of the following have occurred, as
confirmed by the Construction Liaison Team:
Written Notice. The General Contractor has delivered a written
statement to the Construction Liaison Team stating that the Project is substantially
completed in accordance with the Design Documents and Construction Contract.
Approvals and Inspections. The Museum has obtained all necessary
City final inspections of and approvals for the Project.
Punch List. All work has been completed in conformance with the
Construction Contract with the exception of minor punch list items.
Site Restoration. All equipment, materials, and garbage have been
removed from the Project Site and any staging area(s).
City Access. The City has been provided with the necessary access,
including keys or codes, for those portions of the Building to be used for City
purposes, including the Public Parkside Restrooms, the City Archives Room, and
Community Rooms.
6.12 Record Drawings. Upon completion of the Project, the Architect will prepare
the record drawings and provide the City’s Director of Public Works with one PDF of a red-
lined set of the Design Documents reflecting the actual construction of the Project based on
the Contractor’s as-built drawings. Submission of such complete and accurate record
drawings is a condition precedent to City acceptance of the Project.
6.13 Completion and Acceptance. Once the Project has been completed in
accordance with the Design Documents and the terms of this Tenant Work Letter, the City will
accept the Project as complete in accordance with standard City procedure, and will notify the
Museum of acceptance of the Project, subject to the following conditions:
Punch List Completion. All punch list items have been completed and
the Project site completely restored by the removal of all equipment, fencing, job
trailers, and the like.
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B.Record Drawings. The City must receive the record drawings pursuant
to Section 6.12.
7. CONSTRUCTION SITE MAINTENANCE. At all times during construction of the
Project, the Museum is solely responsible for maintaining the Project Site, including any
staging area(s), in a commercially reasonable, clean and safe manner in compliance with all
permits, the Lease, and applicable Laws. The Museum or the Museum Agents will provide
approved containers for trash generated during construction of the Project and arrange for
regular disposal of such trash.
8. UTILITY SERVICE. The City’s obligation under Section 18 of the Lease to pay for all
utilities for the Public Parkside Restrooms will be suspended once construction of the Project
commences and will be reinstated upon City’s acceptance of the Project. During that time,
Museum will be solely responsible for all utility services to the Building, including the Public
Parkside Restrooms.
9. INSURANCE.
9.1 Coverage Requirements. In addition to the insurance requirements set forth
in the Lease, the Museum must require its Architect to obtain and maintain during the Term
the insurance coverage described in Attachment C (Insurance Requirements (Architect)).
The Museum must require the General Contractor to obtain prior to beginning and to maintain
throughout construction of the Project, up to the date of Project acceptance, the insurance
coverage described in Attachment D (Insurance Requirements (General Contractor)).
9.2 General Requirements. The insurance must remain in full force and effect
during the Term, commencing on the Effective Date, except as otherwise specified for the
General Contractor in Section 9.1, above. Each builder’s risk insurance policy must be
endorsed to name the City of Palo Alto as a loss payee. With the exception of workers’
compensation, employer’s liability, and professional liability insurance, each insurance policy
required by the Tenant Work Letter must contain the following clauses or endorsements:
A. “Coverage will not be suspended, voided, canceled by either party,
reduced in coverage or in limits except after 30 days’ prior written notice by certified
mail, return receipt requested, has been given to the City.”
B. “All rights of subrogation are hereby waived against the City of Palo
Alto and its elected and appointed officials, officers or employees, when acting within
the scope of their employment or appointment.”
C. “The City of Palo Alto, its elected and appointed officials, officers,
employees, agents and volunteers are to be covered as insureds as respects: liability
arising out of activities performed by or on behalf of the insured; products and
completed operations of the insured; premises owned, occupied or used by the
insured; or automobiles owned, subleased, hired or borrowed by the insured. Except
for the waiver of subrogation contained in Section B, the coverage will contain no
special limitations on the scope of protection afforded to the City, its elected and
appointed officials, officers, employees, agents or volunteers.”
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D. “For any claims related to the Tenant Work Letter, the insured’s
insurance coverage will be primary insurance as respects the City of Palo Alto, its
elected and appointed officials, officers, employees, agents and volunteers. Any
insurance or self-insurance maintained by the City, its elected and appointed officials,
officers, employees, agents or volunteers will be in excess of the insured’s insurance
and will not contribute with it.”
E. “Any failure to comply with reporting or other provisions of the policies,
including breaches of warranties, will not affect coverage provided to the City of Palo
Alto, its elected and appointed officials, officers, employees, agents or volunteers.”
F. “The insured’s insurance will apply separately to each insured against
whom a claim is made or suit is brought, except with respect to the limits of the
insurer’s liability.”
9.3 Sufficiency. All insurance required of the Museum, the General Contractor, or
the Architect will be provided by insurance carriers with a current A.M. Best’s rating of not
less than A-VII. The certificates of insurance required for the Architect must be submitted
electronically, on or before the Effective Date. The certificates of insurance required for the
General Contractor must be submitted electronically to the Project Representative for review
by the City’s risk manager, no later than 21 calendar days before commencement of
construction. If the Museum does not provide evidence of required coverage at least 30 days
prior to the expiration of any existing insurance coverage, the City may purchase such
insurance coverage for not more than a six-month period, on behalf of and at the sole cost
and expense of the Museum. The City retains the right to review the coverage, form, and
amount of the insurance coverage required by this Tenant Work Letter and require the
Museum to alter the coverage, or coverage requirements for the Architect or General
Contractor as appropriate. The City’s requirements to alter the coverage, if any, will be
reasonable and will be designed to assure protection from and against the kind and extent of
risk which exists at the time a change in insurance is required. A failure by the Museum to
provide acceptable insurance policies or certificates to the City, incorporating any such
changes, within 30 days of receipt of such notice will constitute a default under this Tenant
Work Letter. Such default will constitute a material breach and will be grounds for termination
of this Tenant Work Letter by the City. The procurement of such required insurance will not
be construed to limit the Museum’s liability hereunder or to fulfill the indemnification
requirements in the Lease. Notwithstanding the policy or policies of insurance, the Museum
will be responsible for the full and total amount of any uninsured damage, injury, or loss
occurring during the Term that is caused, directly or indirectly, by the willful or negligent acts
and/or omissions of the Museum or the Museum’s Agents.
9.4 Subrogation. On behalf of itself and its insurers, all rights of subrogation are
hereby waived by the City against the Museum and its managers, members, employees, and
the Museum’s Agents when any of them is acting on behalf of the Museum in the
performance of this Tenant Work Letter.
10. Damage to Project.
10.1 General. In the event any part of the Project is damaged by fire, other peril, or
any other cause, before the Project has been accepted by the City, the Museum will promptly
direct its General Contractor to take appropriate measures to secure the Building and Project
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Site to avoid further damage or unsafe conditions; and prepare and submit a claim to its
insurer(s) for funds to repair and rebuild all insured loss pursuant to the applicable insurance
coverage required under Section 9. Both Parties will cooperate to expedite recovery of
insurance proceeds to cover the insured loss.
10.2 Project Construction. The Museum will make reasonable efforts to complete
the Project on schedule, if reasonably possible depending on the scope and nature of the
damage. The Museum will promptly apply the insurance proceeds to pay for repair,
replacement, or restoration of damaged components of the Project. Construction of the
Project will be suspended, in whole or in part, to the extent necessary to ensure worker and
public safety or to limit the cost to repair and complete the Project.
10.3 Insufficient Funds. The Museum will notify City in writing if the Museum
determines that it is unable to secure sufficient insurance proceeds to pay for the full cost of
repair. The Parties will arrange to meet and confer within ten days following such notice to
develop a mutually acceptable approach to addressing the uninsured loss, which may include
securing additional funds, phased completion, reduction in scope and/or other reasonable
efforts to complete the Project in furtherance of the purpose set forth in Section 1.3, above. If
the Parties are unable to develop a mutually acceptable solution for completing the Project
despite the uninsured loss, either Party, within 180 days of the date of the notice of uninsured
loss, may terminate the Tenant Work Letter by giving 60 days written notice to the other
Party; provided, however, that the Museum may not exercise the right to terminate if the City
agrees to provide the additional funds needed by the Museum to pay for the uninsured loss. If
the Tenant Work Letter is terminated because of insufficient funds to complete the Project
following damage to or destruction of the Project while it is under construction, once all
outstanding payments have been made, including any payments due to the General
Contractor, any remaining amount of the City Contribution remaining in the Project Account, if
any, will be returned to the City.
11. PROJECT RECORDS.
12. DISCLAIMER.
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course of its performance hereunder, except as expressly provided herein; or any alleged or
actual debts, obligations or liabilities of the Museum, whether due or to become due.
13. DEFAULT.
13.1 Remedies for Museum Default. In addition to any remedies available under
the Lease or Laws, if the Museum defaults in the performance of any covenant, term or
condition contained in this Tenant Work Letter and such default is not corrected within 30
days of receipt of a written notice of default from the City (or such longer period as may be
reasonably required to cure such default so long as the Museum commences to cure such
default within such 30-day period and thereafter diligently pursues such cure), the City retains
the right, but not the obligation, to elect any of the following rights and remedies. The
following rights and remedies are cumulative and the exercise of one right or remedy will not
impair the right of the City to exercise any or all other remedies.
Termination. In the case of a material default, such as wrongful
suspension, termination, or abandonment of the Project; uncorrected or repeated
violation of Laws; or refusal or failure to construct the Project as required by the
Design Documents or this Tenant Work Letter, City may terminate this Tenant Work
Letter and all rights of the Museum and its consultants and contractors, if any, as
further specified in Section 13.4. Upon termination, City will have no further obligation
to deposit any outstanding portion, if any, of the City Contribution into the Project
Account.
City Contribution. Unless otherwise specified in the City’s notice of
default, (i) the Museum’s right to withdraw funds from the Project Account is
suspended until or unless that right is reinstated by the City upon timely cure of the
default, (ii) the City’s obligation to deposit portions of the City Contribution into the
Project Account will likewise be suspended pending timely cure of the default and (iii)
the City will have the right to withdraw all unexpended portions of the City Contribution
from the Project Account, and City will have no further obligation to deposit any
outstanding portion, if any, of the City Contribution into the Project Account.
Cure at Museum’s Expense. The City may cure any default of the
Museum by any act, including payment of money, and the cost and expense thereof,
plus all reasonable administrative costs, will become immediately due and payable by
the Museum to the City.
Legal Action. The City may initiate an action or suit in law or equity to
enjoin any acts which may be unlawful or in violation of the City’s rights hereunder.
Other. The City may pursue any other right or remedy available under
Laws, the Lease, or this Tenant Work Letter.
13.2 Opportunity to Cure. Notwithstanding the foregoing, in the event of default
which cannot reasonably be cured within 30 days, the Museum will have such additional
period of time as is reasonably necessary to cure the default, provided the default can be
cured.
13.3 Remedies for City Default.
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A.Cost to Complete. If City wrongfully stops or suspends work on the
Project, other than as authorized herein or pursuant to exercise of the City’s police
powers, City will be responsible for additional costs, if any, reasonably incurred by
Museum to complete the Project as a direct result of such wrongful stoppage or
suspension. As used in this paragraph, “wrongful” and “wrongfully” refer to actions
that constitute a material breach of this Tenant Work Letter, but exclude City’s
reasonable exercise of its police powers.
B.Remedies. Except as otherwise provided in the Lease or this Tenant
Work Letter, in the event of any material default by City that is not cured within 30
days of written notice of default from the Museum, or such additional period of time as
is reasonably necessary to cure the default, the Museum may pursue any rights or
remedies provided by law or equity to enforce the Tenant Work Letter.
13.4 Termination. If this Tenant Work Letter is terminated by the City for uncured
default by the Museum because of the Museum’s refusal or failure to complete the Project in
accordance with the terms of this Tenant Work Letter or pursuant to Section 5.1, in addition to
any other available remedies, the City will be immediately entitled, but not obligated, to use
any remaining funds in the Project Account to complete the Project, including a modified or
reduced version of the Project.
13.5 Restoration. In case any suit, action or proceeding to enforce any right or
exercise any remedy is brought or taken and then discontinued or abandoned, the Parties will
be restored to their former positions, rights and remedies as if no such suit, action or
proceedings had been brought or taken.
14. NOTICES.
In addition to the notice requirements set forth in the Lease, or as otherwise specified
herein, a copy of any notice required or given pursuant to the terms of this Tenant Work
Letter must be concurrently transmitted to the City’s Director of Public Works in the manner
specified in the Lease.
15. MISCELLANEOUS PROVISIONS.
15.1 Entire Tenant Work Letter; Amendment. This Tenant Work Letter
represents the entire agreement between the Parties with respect to construction of the
Project and supersedes all prior negotiations, representations and contracts, whether written
or oral, except for the applicable terms and conditions of the Lease. This Tenant Work Letter
and the attachments hereto may only be amended as specified in the Lease.
15.2 Attachments. All Attachments referred to in this Tenant Work Letter are by
such references incorporated herein and made a part hereof, including the following:
Attachment A Project Funding
Attachment B Project Schedule
Attachment C Insurance Requirements (Architect)
Attachment D Insurance Requirements (General Contractor)
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15.3 Modification for Lack of Funds. The City Contribution is subject to the fiscal
provisions of the Charter of the City of Palo Alto and the PAMC, and the Tenant Work Letter
will be modified to exclude or reduce the City Contribution under the following circumstances:
at the end of any fiscal year, if funds for the City Contribution are not appropriated for the
following fiscal year; or at any time within a fiscal year if funds are only appropriated for a
portion of the fiscal year and funds for the City Contribution are no longer available, provided
that the City will not be excused from using funds previously appropriated for the City
Contribution. This provision will take precedence in the event of a conflict with any other
covenant, term or condition of this Tenant Work Letter.
15.4 Severability. If a court of competent jurisdiction finds or rules that any
provision of this Tenant Work Letter, the Attachments, or any amendment thereto, is void or
unenforceable, the unaffected provisions of this Tenant Work Letter, the Attachments, or any
amendment thereto, will remain in full force and effect.
15.5 Consent. When either Party is required to give its consent to the other Party,
the Party whose consent is required will not unreasonably withhold or delay that consent,
unless it is specifically stated that it is within the Party’s sole discretion to give or withhold its
consent.
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties by their duly authorized representatives have
executed this Tenant Work Letter.
CITY OF PALO ALTO
_______________________________
City Manager
APPROVED AS TO FORM:
_______________________________
City Attorney
APPROVED:
_______________________________
Director of Administrative Services
_______________________________
Director of Public Works
PALO ALTO HISTORY MUSEUM, a
California nonprofit public benefit
corporation
_______________________________
Board President
_______________________________
Treasurer
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Tenant Work Letter
ATTACHMENT A
This Attachment A details the Parties’ respective funding commitments for construction of the
Project, based on the estimated Construction Cost set forth in Recital F, which is subject to
amendment prior to commencement of Project construction. Pursuant to Section 5.4, this
Attachment A will be amended based on the final GMP, as a condition precedent to
commencement of Project construction.
1.Museum Contribution. The Museum is contributing $1,828,825.00 to pay for
certain hard and soft costs for the construction of the Project as further specified in
Section 4.3, which is comprised of the following:
A. The Museum will contribute $335,750.00 to pay for all construction
phase soft costs, including, without limitation, all permit and utility fees that are
not expressly waived or reimbursed by the City and the premiums for the
Builder’s Risk insurance for the Project.
B. The Museum will contribute $1,493,075.00, based on the difference
between the City Contribution and the estimated amount of the GMP as of the
Effective Date.
The Museum Contribution shall be funded by pledged and received donations in the
amount of $850,000.00 (the “Museum Donations”) and, to the extent available and
subject to Section 4.3 of the Tenant Work Letter, funds from the HUD Grant in the
amount of $978,825.00 (the “HUD Funds”). Notwithstanding the foregoing, the
amounts set forth herein are subject to amendment pursuant to Section 5.4 to reflect
the final GMP and commensurate adjustments to the final amount of the Museum
Contribution as a condition precedent to commencement of Project construction.
2.City Contribution. The City Contribution is comprised of the following
contributions and reimbursements for construction of the Project, for a total City
Contribution of $10,020,000, provided the Museum meets its funding obligations and
timely complies with the conditions for Project commencement set forth in this Tenant
Work Letter:
A. The City will contribute $4,900,000.00 from transferable development
rights and City general funds.
B. The City will contribute $2,000,000.00 from Stanford University Medical
Center development agreement funds.
C. The City will contribute $653,000.00 from funds received pursuant to
the County Grant Agreements, which is to be allocated solely for the
improvements specified in the County Grant Agreements, and conditioned
upon the Museum’s compliance with the terms and conditions of the County
Grant Agreements, as may be further specified in the Lease.
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D. The City will contribute $1,650,000.00 from Community Center Impact
Fees, toward construction cost for the community room facilities in the
Building, provided those facilities are available for public community center use
as further specified in the Lease.
E. The City will contribute $350,000.00 from Park Impact Fees toward
construction costs for the restroom facilities on the northeast side of the
Building, provided those facilities are available as the public restrooms serving
Heritage Park as further specified in the Lease.
F. The City will contribute $300,000.00 from Library Impact Fees toward
construction costs for the City Archive Room, provided the City Archive Room
is available and accessible for City archives as further specified in the Lease.
G. The City will reimburse the Museum in the amount of $100,000.00 for
permit fees previously assessed for the Project.
H. The City will contribute $67,000.00 to offset the cost for the General
Contractor’s procurement of a payment bond and a performance bond.
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ATTACHMENT B
Pursuant to Section 6.6 of the Tenant Work Letter, the attached schedule, dated
<________>, constitutes the planned schedule for construction of the Project.
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ATTACHMENT C
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Rev. 2017
ATTACHMENT “C”
CONTRACTORS, 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, AUTHORIZED TO TRANSACT
INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
MINIMUM LIMITS
REQUIRED TYPE OF COVERAGE REQUIREMENT EACH
OCCURRENCE AGGREGATE
YES WORKER’S COMPENSATION
YES EMPLOYER’S LIABILITY
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
$2,000,000
$2,000,000
$2,000,000
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
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
PROFESSIONAL LIABILITY,
YES INCLUDING, ERRORS AND OMISSIONS,
MALPRACTICE (WHEN APPLICABLE), AND
NEGLIGENT PERFORMANCE
ALL DAMAGES $2,000,000
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST
AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE
TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT
ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS
CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I.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.
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ATTACHMENT “C”
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 CONTRACTOR 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 CONTRACTOR SHALL PROVIDE CITY AT LEAST A
TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF
CANCELLATION.
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Tenant Work Letter
ATTACHMENT D
INSURANCE REQUIREMENTS (GENERAL CONTRACTOR)
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ATTACHMENT “D”
CONTRACTORS, 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, AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF
CALIFORNIA.
MINIMUM LIMITS
R
E
Q
UI
R
E
D
TYPE OF COVERAGE REQUIREMENT EACH
OCCURRENCE AGGREGATE
YES WORKER’S
COMPENSATION
YES EMPLOYER’S LIABILITY
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.
$5,000,000
$5,000,000
$5,000,000
$10,000,000
$10,000,000
$10,000,000
YES AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED,
HIRED, NON-OWNED
BODILY INJURY
-EACH PERSON
-EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
YES POLLUTION LIABILITY ALL DAMAGES $2,000,000
YES BUILDERS RISK- Full Insurable
Value
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE
COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE
ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING
NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS OR SUBCONTRACTORS, 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.
II.ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO
“ADDITIONAL INSUREDS”
A.PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
B.CROSS LIABILITY
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ATTACHMENT “D”
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 CONTRACTOR 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 CONTRACTOR SHALL PROVIDE CITY AT LEAST
A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF
CANCELLATION.
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Utilities
Meeting Date: April 17, 2023
Staff Report: 2303-1219
TITLE
PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Gas Utility Financial
Plan, Including Proposed Reserve and General Fund Transfers and Amending the Gas Utility
Reserve Management Practices, and Increasing Gas Rates by Amending Rate Schedules G-1
(Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3
(Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service); CEQA status:
exempt/not a project under Public Resources Code section 21080(b)(8)
RECOMMENDATION
The Finance Committee and the Utilities Advisory Commission (UAC) recommend the City Council
adopt a resolution (Attachment A):
a. Approving the fiscal year (FY) 2024 Gas Utility Financial Plan (Attachment B);
b. Amending the Gas Utility Reserve Management Practices (Attachment C);
c. Transferring up to 18% of gas utility gross revenues received during fiscal year 2021 to the
general fund in FY 2023;
d. Transferring up to 15.5% of gas utility gross revenues received during fiscal year 2022 to
the general fund in FY 2024;
e. Transferring up to $3.82 million from the CIP Reserve to the Operations Reserve in FY
2023; and
f. Increasing gas rates by amending Rate Schedules G-1 (Residential Gas Service), G-2
(Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas
Service), and G-10 (Compressed Natural Gas Service) (Attachment D).
The UAC and Finance Committee both recommend transferring 15.5% of gas utility gross
revenues received during fiscal year (FY) 2022 to the General Fund in FY 2024, which is below the
voter approved level of 18.0% (item (d) above). The UAC had one dissenting vote for reasons
unrelated to the transfer and the Finance Committee had one dissenting vote specifically related
to the transfer level.
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EXECUTIVE SUMMARY
BACKGROUND
•gas supply costs (60 percent of costs in FY 2023), which represent the cost of buying gas
and transporting it to Palo Alto and associated environmental charges, and
•distribution-related costs (40 percent of costs in FY 2023), which represent the cost of
operating Palo Alto’s gas distribution system, administration, customer service, and
other day to day operations.
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significantly by June 2023, when this rate change would take effect, and are not currently
forecasted (based on current forward market prices) to reach similar levels next winter, though
these forecasts are uncertain.
Figure 1: Monthly Median Residential Gas Bill
ANALYSIS
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2) continuing increases in capital and operating costs. Distribution rates did not keep up with
these increased costs as the City pursued a Council policy to minimize rate increases during the
economic downturn associated with the COVID-19 pandemic.
Table 1 shows
a 6% per year projection as the maximum proposed increase under Alternative 2; actual increases
for the years shown would be capped at 6% or CPI, whichever is less.
Table 1 shows the amount of the transfer both in dollars and as a percentage of utility revenue
for each fiscal year, as well as the projected rate of annual growth in the transfer. Table 2 below
shows the distribution rate increases (as a percentage of the total bill, excluding supply cost
changes) associated with each alternative.
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Table 1: Proposed / Projected General Fund Transfers
as % of Gross Gas Revenues Two FYs Prior1
Proposed Projected
FY 2023 FY 2024 FY 2025 FY 2026
Gas Utility Gross Revenue Two Fiscal Years Prior ($000)
Alternative 1 66,927
Alternative 2 39,950 49,721 72,570 66,269
Percent of gas utility gross revenue to transfer
Alternative 1 18.0%18.0%18.0%
Alternative 2 18.0%15.5%11.1%12.9%
Transfer amount ($000)
Alternative 1 8,934 13,063 12,047
Alternative 2 7,191 7,707 8,080 8,565
Change in Transfer from Prior Fiscal Year (%)
Alternative 1 24%46%-8%
Alternative 2 -1%6%6%6%
Table 2: Summary of Distribution Rate Changes for Transfer Proposal and Alternatives
FY 2023 FY 2024 FY 2025 FY 2026
Alternative 1 9%10%8%
Alternative 2 4%8%7%5%
FISCAL/RESOURCE IMPACT
The resource impact of the recommendations summarized in this report is the continued
financial solvency of the gas utility and, as the City is a ratepayer, an increase to General Fund
expenses (due to the rate increases) and revenues (due to the General Fund transfer). Normal
year sales revenues for the Gas Utility in FY 2024 are projected to increase by roughly 8 percent
or $5.7 million as a result of the proposed rate increases, not including fluctuations in commodity
revenue/cost. General Fund utility bill costs are expected to increase by $0.06 million as a result
of these rate changes. The change in General Fund revenues from FY 2023 to FY 2024 would
depend on the General Fund transfer alternative chosen by Council, as shown above in Table 1.
Under Alternative 2, which was recommended by the UAC and Finance Committee, General Fund
revenues would increase from $7.191 million in FY 2023 to $7.707 million in FY 2024, an increase
of about $516,000.
1 Measure L authorizes a transfer based on 18% (or a lesser percentage if approved by Council) of the
revenue for two fiscal years prior, so the FY 2024 transfer is based on FY 2022 revenue.
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POLICY IMPLICATIONS
The proposed gas rate adjustments are consistent with Council-adopted Reserve Management
Practices that are part of the Financial Plan and were developed using a cost-of-service study and
methodology consistent with the California constitution and industry-accepted cost of service
principles. As noted in the Reserves Management Practices (Attachment B), if reserves fall below
the minimum guidelines, Council approval is required for a rate plan that requires more than one
year to return reserves to within guideline levels.
These recommendations were reviewed by the UAC and Finance Committee in public meetings.
Public communications of issues related to winter gas supply price spikes were done via social
media, City newsletters, and other channels. The public will be notified of the final rate changes
adopted by Council through various channels, including social media, the website, utility bill
inserts, and City newsletters. Published in the Palo Alto Daily on April 7th and 14th, 2023.
Adoption of the Financial Plans and budgeted transfers referenced in this report does not meet
the California Environmental Quality Act’s definition of a project, pursuant to Public Resources
Code Section 21065 and CEQA Guidelines Section 15378(b)(4) and (5), because it is a
governmental fiscal and administrative activity which will not cause a direct or indirect physical
change in the environment. Adoption of the proposed gas rates to meet operating expenses,
purchase supplies and materials, meet financial reserve needs and obtain funds for capital
improvements necessary to maintain service is not subject to the California Environmental
Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of
the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all
attachments presented to Council, the Council incorporates these documents herein and finds
that sufficient evidence has been presented setting forth with specificity the basis for this claim
of CEQA exemption.
Attachment A: Gas Resolution FY24
Attachment B: Reserves Management Practices Redlined
Attachment C: Gas FY 2024 Financial Plan
Attachment D: Rate Schedule for FY2024
:
Dean Batchelor, Director Utilities
Staff: Jonathan Abendschein, Assistant Director of Utilities
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Attachment A
* NOT YET APPROVED *
6056713C
Resolution No.
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Attachment A
* NOT YET APPROVED *
6056713C
SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as attached and
incorporated. Utility Rate Schedule G-1, as amended, shall become effective July 1, 2023.
SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-2 (Residential Master-Metered and Commercial Gas Service) is hereby
amended to read as attached and incorporated. Utility Rate Schedule G-2, as amended, shall
become effective July 1, 2023.
SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as attached and
incorporated. Utility Rate Schedule G-3, as amended, shall become effective July 1, 2023.
SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-10 (Compressed Natural Gas Service Service) is hereby amended to read as
attached and incorporated. Utility Rate Schedule G-10, as amended, shall become effective
July 1, 2023.
SECTION 10. The City Council finds as follows:
a. Revenues derived from the gas rates approved by this resolution do not exceed the
funds required to provide gas service.
b. Revenues derived from the gas rates approved by this resolution shall not be used
for any purpose other than providing gas service, and the purposes set forth in
Article VII, Section 2, of the Charter of the City of Palo Alto.
SECTION 11. The Council finds that the fees and charges adopted by this resolution are
charges imposed for a specific government service or product provided directly to the payor
that are not provided to those not charged, and do not exceed the reasonable costs to the City
of providing the service or product.
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* NOT YET APPROVED *
6056713C
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SECTION 12. The Council finds that approving the Financial Plan does not meet the
California Environmental Quality Act’s (CEQA) definition of a project under Public Resources
Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative
governmental activity which will not cause a direct or indirect physical change in the
environment, and therefore, no environmental assessment is required. The Council finds that
changing gas rates to meet operating expenses, purchase supplies and materials, meet financial
reserve needs and obtain funds for capital improvements necessary to maintain service is not
subject to the California Environmental Quality Act (CEQA), pursuant to California Public
Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec.
15273(a). After reviewing the staff report and all attachments presented to Council, the
Council incorporates these documents herein and finds that sufficient evidence has been
presented setting forth with specificity the basis for this claim of CEQA exemption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
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APPENDIX C : GAS UTILITY RESERVES MANAGEMENT PRACTICES
The following reserves management practices shall be used when developing the Gas Utility
Financial Plan:
Section 1. Definitions
a)“Financial Planning Period” – The Financial Planning Period is the range of future fiscal
years covered by the Financial Plan. For example, if the Financial Plan delivered in
conjunction with the FY 2015 budget includes projections for FY 2015 to FY 2019, FY 2015
to FY 2019 would be the Financial Planning Period.
b)“Fund Balance” – As used in these Reserves Management Practices, Fund Balance refers
to the Utility’s Unrestricted Net Assets.
c)“Net Assets” - The Government Accounting Standards Board defines a Utility’s Net Assets
as the difference between its assets and liabilities.
d)“Unrestricted Net Assets” - The portion of the Utility’s Net Assets not invested in capital
assets (net of related debt) or restricted for debt service or other restricted purposes.
Section 2. Supply Fund Reserves
The Gas Utility’s Supply Fund Balance is reserved for the following purposes:
a)For existing contracts, as described in Section 4 (Reserve for Commitments)
b)For operating and capital budgets re-appropriated from previous years, as described in
Section 5 (Reserve for Re-appropriations)
Section 3. Distribution Fund Reserves
a)For existing contracts, as described in Section 4 (Reserve for Commitments)
b)For operating and capital budgets re-appropriated from previous years, as described in
Section 5 (Reserve for Re-appropriations)
c)For cash flow management and contingencies related to the Gas Utility’s Capital
Improvement Program (CIP), as described in Section 6 (CIP Reserve)
d)For rate stabilization, as described in Section 7 (Rate Stabilization Reserve)
e)For operating contingencies, as described in Section 8 (Operations Reserve)
f) Any funds not included in the other reserves will be considered Unassigned Reserves and
shall be returned to ratepayers or assigned a specific purpose as described in Section 9
(Unassigned Reserves)
Section 4. Reserve for Commitments
At the end of each fiscal year the Gas Supply Fund and Gas Distribution Fund Reserve for
Commitments will be set to an amount equal to the total remaining spending authority for
all contracts in force for the Wastewater Collection Utility at that time.
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Section 5. Reserve for Reappropriations
At the end of each fiscal year the Gas Supply Fund and Gas Distribution Fund Reserve for
Reappropriations will be set to an amount equal to the amount of all remaining capital and
non-capital budgets, if any, that will be re-appropriated to the following fiscal year for each
fund in accordance with Palo Alto Municipal Code Section 2.28.090.
Section 6. CIP Reserve
The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for
capital contingencies. Staff will manage the CIP Reserve according to the following practices:
The following guideline levels are set forth for the CIP Reserve. These guideline levels are
calculated for each fiscal year of the Financial Planning Period based on the levels of CIP
expense budgeted for that year.
a) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and
the Reserve for Commitments when funds are added to or removed from the Reserve for
Commitments as a result of a change in contractual commitments related to CIP projects.
Any other additions to or withdrawals from the CIP reserve require Council action.
b) Minimum Level:
i) Funds held in the Reserve for Commitments may be counted as part of the CIP Reserve
for the purpose of determining compliance with the CIP Reserve minimum guideline
level.
ii) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present
a plan to the City Council to replenish the reserve. The plan shall be delivered by the
end of the following fiscal year, and shall, at a minimum, result in the reserve reaching
its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is
below its minimum level at the end of FY 2017, staff must present a plan by June 30,
2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff
may present, and the Council may adopt, an alternative plan that takes longer than
one year to replenish the reserve, or that does so in a shorter period of time.
c) Maximum Level: If, at any time, the CIP Reserve reaches its maximum level, no funds may
be added to this reserve. If there are funds in this reserve in excess of the maximum level
staff must propose to transfer these funds to another reserve or return them to
ratepayers in the next Financial Plan. Staff may also seek Council approval to hold funds
in this reserve in excess of the maximum level, if they are held for a specific future purpose
related to the CIP.
Section 7. Rate Stabilization Reserve
Funds may be added to the Rate Stabilization Reserve by action of the City Council and held
to manage the trajectory of future year rate increases. Withdrawal of funds from the Rate
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Stabilization Reserve requires Council action. If there are funds in the Rate Stabilization
Reserve at the end of any fiscal year, any subsequent Gas Utility Financial Plan must result in
the withdrawal of all funds from this Reserve by the end of the Financial Planning Period.
Section 8. Operations Reserve
The Operations Reserve is used to manage normal variations in costs and as a reserve for
contingencies. Any portion of the Gas Utility’s Fund Balance not included in the reserves
described in Section 4-Section 7 above will be included in the Operations Reserve unless this
reserve has reached its maximum level as set forth in Section 8 d) below. Staff will manage
the Operations Reserve according to the following practices:
a) The following guideline levels are set forth for the Operations Reserve. These guideline
levels are calculated for each fiscal year of the Financial Planning Period based on the
levels of Operations and Maintenance (O&M) and commodity expense forecasted for that
year in the Financial Plan.
b) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Operations
Reserve are lower than the minimum level set forth above, staff shall present a plan to
the City Council to replenish the reserve. The plan shall be delivered within six months of
the end of the fiscal year, and shall, at a minimum, result in the reserve reaching its
minimum level by the end of the following fiscal year. For example, if the Operations
Reserve is below its minimum level at the end of FY 2014, staff must present a plan by
December 31, 2014 to return the reserve to its minimum level by June 30, 2015. In
addition, staff may present, and the Council may adopt, an alternative plan that takes
longer than one year to replenish the reserve.
c) Target Level: If, at the end of any fiscal year, the Operations Reserve is higher or lower
than the target level, any Financial Plan created for the Gas Utility shall be designed to
return the Operations Reserve to its target level by the end of the forecast period.
d) Maximum Level: If, at any time, the Operations Reserve reaches its maximum level, no
funds may be added to this reserve. Any further increase in the Gas Utility’s Fund Balance
shall be automatically included in the Unassigned Reserve described in Section 9, below.
Section 9. Unassigned Reserve
If the Operations Reserve reaches its maximum level, any further additions to the Gas Utility’s
Fund Balance will be held in the Unassigned Reserve. If there are any funds in the Unassigned
Reserve at the end of any fiscal year, the next Financial Plan presented to the City Council
must include a plan to assign them to a specific purpose or return them to the Gas Utility
ratepayers by the end of the first fiscal year of the next Financial Planning Period. For
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example, if there were funds in the Unassigned Reserves at the end of FY 2015, and the next
Financial Planning Period is FY 2016 through FY 2020, the Financial Plan shall include a plan
to return or assign any funds in the Unassigned Reserve by the end of FY 2016. Staff may
present an alternative plan that retains these funds or returns them over a longer period of
time.
Section 10. Intra-Utility Transfers Between Supply and Distribution Funds
The Gas Utility records costs in two separate funds: the Gas Supply Fund and the Gas
Distribution Fund. At the end of each fiscal year staff is authorized to transfer an amount
equal to the difference between Gas Supply Fund costs and Gas Supply Fund Revenues, from
the Gas Distribution Fund Operations Reserve to the Gas Supply Fund, or vice versa. Such
transfers shall be included in the ordinance closing the budget for the fiscal year.
Section 11. Cap and Trade Program Reserve
This reserve tracks revenues from the sale of carbon allowances freely allocated by the
California Air Resources Board to the gas utility, under the State’s Cap and Trade Program.
Funds in this Reserve are managed in accordance with the City’s Policy on the Use of Freely
Allocated Allowances under the State’s Cap and Trade Program (the Policy), adopted by
Council Resolution 9487 in January 2015. At the end of each fiscal year staff is authorized to
transfer all revenues from the sale of allocated carbon allowances to this reserve.
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FY 2024 GAS
UTILITY
FINANCIAL PLAN
FY 2024 TO FY 2028
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GAS UTILITY FINANCIAL PLAN
FY 2024 TO FY 2028
TABLE OF CONTENTS
Section 1: Definitions and Abbreviations.................................................................................4
Section 2: Executive Summary and Recommendations............................................................5
Section 2A: Overview of Financial Position..................................................................................5
Section 2B: Summary of Proposed Actions..................................................................................8
Section 3: Detail of FY 2023 Rate and Reserve Proposals.........................................................9
Section 3A: Rate Design...............................................................................................................9
Section 3B: Current and Proposed Rates...................................................................................10
Section 3C: Bill impact of Proposed Rate Changes....................................................................12
Section 3D: Proposed Reserve Transfers ...................................................................................13
Section 4: Utility Overview....................................................................................................14
Section 4A: Gas Utility History...................................................................................................14
Section 4B: Customer Base........................................................................................................16
Section 4C: Distribution System.................................................................................................16
Section 4D: Cost Structure and Revenue Sources......................................................................17
Section 4E: Reserves Structure..................................................................................................18
Section 4F: Competitiveness......................................................................................................18
Section 4G: Gas Supply Rates....................................................................................................19
Section 5: Utility Financial Projections...................................................................................21
Section 5A: Load Forecast .........................................................................................................21
Section 5A: FY 2018 to FY 2022 Cost and Revenue Trends........................................................23
Section 5B: FY 2022 Results.......................................................................................................25
Section 5C: FY 2023 Projections.................................................................................................25
Section 5D: FY 2024-FY 2028 Projections..................................................................................26
Section 5E: Risk Assessment and Reserves Adequacy ...............................................................28
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Section 5F: Long-Term Outlook.................................................................................................29
Section 5G: Alternative Gas Increase Plans...............................................................................31
Section 6: Details and Assumptions.......................................................................................34
Section 6A: Gas Purchase Costs.................................................................................................34
Section 6B: Operations..............................................................................................................37
Section 6C: Capital Improvement Program (CIP).......................................................................38
Section 6D: Debt Service............................................................................................................40
Section 6E: Equity Transfer........................................................................................................42
Section 6F: Revenues.................................................................................................................42
Section 6G: Communications Plan.............................................................................................42
Appendices............................................................................................................................44
Appendix A: Gas Financial Forecast Detail................................................................................45
Appendix B: Gas Utility Capital Improvement Program (CIP) Detail .........................................46
Appendix C: Gas Utility Reserves Management Practices.........................................................47
Appendix D: Description of Gas Utility Cost Categories.............................................................51
Appendix E: Gas Utility Communications Samples....................................................................52
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SECTION 1: DEFINITIONS AND ABBREVIATIONS
ABS: Acrylonitirile butydene styrene, a plastic gas main material
AMI: Advanced Metering Infrastructure
CARB: California Air Resources Board
CIP: Capital Improvement Program
CNG: Compressed Natural Gas
CPAU: City of Palo Alto Utilities Department
CPUC: California Public Utilities Commission
Cross-bore: A cross-bore exists when one utility line has been drilled or “bored” through a portion
of another line. Gas cross-bores can occur in sewer lines as a result of “horizontal boring”
construction practices.
Distribution: transportation of gas to customers.
GMR Program: Gas Main Replacement Program
Local Transportation: transportation of gas to Palo Alto across PG&E’s distribution system from
PG&E City Gate.
Malin: a delivery hub referred to in gas purchase contracts and located in Malin, Oregon, where
the northern end of PG&E’s Redwood Transmission Pipeline is located.
MMBtu: Millions of British thermal units, a unit of gas measurement equal to ten therms.
Commonly used for high volume gas measurement. Wholesale purchases of gas from suppliers
are typically measured in MMBtu.
O&M:Operations and Maintenance
PE or HDPE: Polyethylene, a gas main material (more specifically, High-Density Polyethylene)
PG&E: Pacific Gas and Electric
PG&E Citygate, or Citygate: a delivery hub referred to in gas purchase contracts. Any gas
delivered to PG&E’s distribution system (such as gas delivered at the southern end of PG&E’s
Redwood Transmission Pipeline) is said to have been delivered at PG&E Citygate.
PVC: Polyvinyl chloride, a plastic gas main material
Summer: April 1 to October 31
Therms: The standard unit of measurement for natural gas sales to customers, equal to 100,000
British thermal units. Therms measure the heating value of the gas, rather than its volume.
Transmission: transportation of gas between major gas delivery hubs via a gas transmission
pipeline, such as PG&E’s Redwood pipeline.
UAC: Utilities Advisory Commission, an appointed body that advises the City Council on CPAU
issues.
Winter: November 1 to March 31
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SECTION 2: EXECUTIVE SUMMARY AND RECOMMENDATIONS
This document presents a Financial Plan for the City’s Gas Utility for the next five years. This
Financial Plan provides revenues to cover the costs of operating the utility safely over that time
while adequately investing for the future. It also addresses the financial risks facing the utility
over the short term and long term and includes measures to mitigate and manage those risks.
SECTION 2A: OVERVIEW OF FINANCIAL POSITION
Gas commodity costs were extremely high in FY 2023 due to unprecedented supply and demand
conditions throughout the western United States. These commodity costs are not projected to
recur in FY 2024, and staff plans to propose hedging alternatives to Council that could mitigate
futures increases. Staff is proposing to increase the distribution component of the gas rates in
FY 2024 to ensure the utility is recovering its costs of operations. Revenues were already below
costs after keeping rate increases low through the pandemic, but construction inflation and other
factors have driven costs up. The distribution rate increase is projected to increase overall
customer bills approximately 8% if supply costs remain the same in FY 2024 as they were in FY
2023, though staff does not expect this. This 8% increase in customer bills results from increasing
the distribution component of the rates 21% to fully recover distribution costs and avoid
decreasing reserves further. Even with this distribution rate increase, staff expects average
annual customer gas bills to decline 13% in FY 2024 compared to FY 2023 because gas supply
costs were extremely high in FY 2023, particularly in the winter. FY 2024 annual gas supply costs
are forecasted to be about 36% lower than FY 2023. Gas market prices are uncertain, however,
and these forecasts can change.
From FY 2024 through FY 2028 gas supply costs are projected to increase by only 1% per year
(though this forecast is uncertain)1 and distribution operational costs are projected to increase
by about 4% per year, leading to average overall costs for the gas utility to increase about 3% per
year. Total gas bills (including both commodity and distribution components) are forecasted to
rise at a slightly higher average rate, 4% per year. However, because distribution rates are
currently below costs, distribution rates will have to increase faster than distribution costs to
ensure full cost recovery. The commodity component of the rates is forecasted to increase no
more than 1% per year on average, but the distribution component is expected to increase 6%
per year on average, for a net 4% per year on average over the forecast period.
Gas commodity costs are extremely uncertain, and changes in commodity costs are passed
directly to customers through a month-varying rate adjuster (capped at $4/therm). This Financial
Plan projects that increasing gas utility distribution operational costs will cause distribution rates
(all costs excluding commodity, transportation, or environmental rate components, which
includes operational costs, capital costs, overhead, transfers, and other similar costs) to increase
1 This results from a projected gradual decline in the main component of gas supply costs, the cost of gas purchased
in the market (the “commodity” charge), combined with significant increases in smaller components of commodity
costs: gas transportation and environmental charges. The net result is a gradual increase in costs. However,
forecasting commodity costs if very uncertain. For more detail gas supply rate design and the sources for these
forecasts, see Section 4G: Gas Supply Pass-Through Rates and Section 6A: Gas Purchase Costs
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customer bills by 6% per year on average over the forecast period, with higher rate increases in
FY 2024 and FY 2025. The significantly higher rate changes are due to the fact that distribution
revenues are currently approximately 20% below distribution costs, leading to a need for
distribution rate increases to exceed distribution cost increases. Distribution rates are not high
enough to recover costs because the utility minimized rate increases in FY 2021 and FY 2022 to
minimize the impact of gas rate increases on a community struggling to manage the economic
impact of the pandemic.
Table 1: Gas Utility Expenses for FY 2022 to FY 2028 (Thousand $’s)
Expenses
($000)
FY 2022
(act.)
FY 2023
(est.)FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Commodity Costs 24,103 48,057 29,948 28,556 29,625 30,289 31,178
Operations 23,225 26,590 26,101 27,393 28,276 28,363 29,134
Capital Projects 4,674 8,217 7,036 10,347 7,500 10,150 7,818
TOTAL 52,002 82,863 63,085 66,296 65,401 68,802 68,130
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Table 2: Projected Gas Rate Trajectory for FY 2024 to FY 2028
Current (FY 2024) Financial Plan 8%7%5%5%5%
FY 2023 Financial Plan 4%4%4%3%N/A
FY 2022 Financial Plan 5%5%0%N/A N/A
The unprecedented and extreme gas prices in FY 2023 impacted the gas utility’s reserves
significantly, and very high double-digit rate increases would be required to return reserves to
within guidelines. Staff is proposing to allow the Gas Operations Reserve to be below the risk
assessment levels for two fiscal years and below the minimum guideline for three. If costs
exceeded available reserves during this time, the gas utility could explore borrowing from
another City fund or other short-term financing. See Section 5E: Risk Assessment and Reserves
Adequacy for more information.
The gas utility's transfer to the City’s General Fund is another component of the City’s gas rates.
City voters first authorized the transfer in 1950, and in November 2022 voters approved
Measure L, affirming the continuation of this practice by amending the Municipal Code. The
measure states that each year the City Council may transfer from the gas utility to the general
fund an amount up to 18% of the gross revenues of the gas utility,2 though Council may choose
to transfer a lesser amount. This Financial Plan proposes an 18% transfer, $7,191,000 for FY 2023,
which aligns with the voter-approved changes codified in PAMC 2.28.185. Although Council will
formally direct the FY 2024 transfer amount next year, Staff has provided preliminary projections
for FYs 2024 – 2026: Alternative 1 proposes transferring 18% of gross revenue as voters approved
in Measure L, and Alternative 2 proposes a transfer between 15.5% and 11.1% annually through
FY 2026.
Additional details are shown in Section 5G: Alternative Gas Increase Plans.
Table 3 shows the projected reserve transfers over the forecast period. As noted above, staff is
proposing to allow the Gas Operations Reserve to be below the risk assessment levels for two
fiscal years and below the minimum guideline for three. The Gas Utility Reserves Management
Practices (Attachment B, Section 8) require returning Operations reserves to within minimum
guidelines (60 days of O&M and commodity expense) within one year unless an alternative plan
is approved by Council.
2 18% of the gross revenues of the gas utility received “during the fiscal year two fiscal years before the fiscal year
of the transfer.” (Section 2.28.185, Palo Alto Municipal Code).
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Table 3: Operations, Rate Stabilization and CIP Reserve Starting and Ending Balances,
Revenues, Transfers To/(From) Reserves, Capital Program (CIP) Contribution To/(From)
Reserves, and Reserve Guideline Levels for FY 2023 to FY 2028 ($000)
*Operations Reserve represents the Gas Supply Fund Rate Stabilization Reserve and the Gas
Distribution Fund Operations Reserve combined.
Staff proposes the following actions for the Gas Utility in FY 2023:
1. Transfer up to 18% of gas utility gross revenues received during fiscal year 2021 to the
general fund; and
2. Transfer up to $3.82 million from the CIP Reserve to the Operations Reserve; and
3. Amend the Gas Utility Reserve Management Practices reflected in Appendix C: Gas Utility
Reserves Management Practices, section 11.
Staff proposes the following actions for the Gas Utility in FY 2024:
1. Transfer up to ___% of gas utility gross revenues received during fiscal year 2022 to the
general fund; and
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2. Increase distribution rates by 21.4% (for an estimated 8% increase to total rates) for
FY 2024, primarily reflecting increases to capital expenditures and increased operations
costs. See Section 3B: Current and Proposed Rates for more details.
Staff requests that Council determine the FY 2024 General Fund transfer and has provided two
alternatives for determining the amount of the transfer, which are shown in Section 5G:
Alternative Gas Increase Plans. At their March 1, 2023 and March 21, 2023 meetings,
respectively, the UAC and Finance Committee recommended transferring 15.5% of gas utility
revenues received during FY 2022 to the General Fund in FY 2024, and all rate and cost
discussions in this Financial Plan reflect that recommendation.
SECTION 3: DETAIL OF FY 2023 RATE AND RESERVE PROPOSALS
SECTION 3A: RATE DESIGN
The Gas Utility’s rates are evaluated and implemented in compliance with cost of service
requirements set forth in the California Constitution and applicable statutory law. The Gas
Utility’s proposed rates are based on the methodology from the March 2019 Natural Gas Cost of
Service and Rates Study.
The City’s natural gas rates are based on the 2019 Natural Gas Cost of Service and Rates Study,
updated with current and proposed operating costs. During the COVID-19 pandemic, usage
amongst customer classes dropped to reflect people working and staying at home rather than
going to the workplace. Similarly, businesses operated at minimum staffing conditions or fully
remote. Costs related to salaries and benefits, administrative functions provided by the City’s
General Fund staff, and supply costs are increasing. In order to move towards full cost recovery
while minimizing rate impacts, staff recommends a distribution rate increase to all customer
classes of 21.4%, which staff estimates will result in an approximate 8% system average rate
increase. If, after recovery from the pandemic, usage and/or spending projections change, staff
may suggest a re-balancing of rates at that time.
Distribution rates typically comprise approximately 70% of the overall rate, which consists of both
gas supply and distribution components (though in FY 2023 it accounted for about 40% due to
unprecedented supply cost increases). Supply-related costs include the cost of the natural gas
itself (the “commodity” rate), gas transmission, and gas environmental charges, and these are a
fluctuating component of the Gas Utility’s expenses. Commodity rates, which typically make up
approximately 30% of overall retail gas rates, vary significantly due to changes in market
conditions. Staff monitors market prices monthly and automatically incorporates market prices
into monthly supply rate adjustments, which are passed directly to customers as a line item on
their utility bills.
The overall rate changes (commodity plus distribution) referenced in this report are based on
current gas market forecasts that indicate that the commodity portion of the overall rate is
unlikely to continue at the unprecedented level observed in FY 2023. Current gas market forward
prices indicate that average annual commodity costs are likely to decline 36% in FY 2024 from
FY 2023. This is consistent with current gas market forecasts from various sources, including
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forward gas contracts on exchanges and forecasts from suppliers, but staff cautions that these
forecasts can change rapidly due to changing weather, economic factors, or gas supply
constraints.
decrease in their bills in FY 2024 over the prior year, if, as forecasted above, commodity
rates drop 36% from FY 2023 to FY 2024.
Table 4: Cost of Service (COSA) Distribution Revenue Requirement by Customer Class
Cost of Service Analysis
FY 2024
Proposed Distribution
Rate Increase
Forecasted
Commodity Rate
Change
Net Change for
Combined Commodity
and Distribution Rate
SECTION 3B: CURRENT AND PROPOSED RATES
3 In January 2015, the Council adopted a new rate
component to collect the costs of purchasing allowances for the purpose of compliance with the
3 Staff Report 2812, 5/17/2012: http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=31395
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State’s cap-and-trade program.4 This component changes depending on the cost of allowances
and gas demand.
5 PG&E’s G-WSL rate is currently $0.15/therm as shown in the “Transportation
Charge” column of the linked schedule of monthly rates and has a cap of $0.25/therm, which
went into effect on July 1, 2022. The transportation charge continues to increase as PG&E collects
costs related to improving storage facilities, decommissioning older facilities, increased costs
resulting from wildfire mitigation, accounting for and greenhouse gas mitigation costs. Based on
PG&E’s estimates, prices are going to continue to escalate between 6% and 22% between 2023
and 2026. Current and historic per therm rates for the Transportation Charges are posted on the
City Utilities website.6
7 Costs associated with the carbon neutral gas plan are passed
directly to customers as well, although the maximum rate impact is $0.10 per therm. All gas
supply, transmission, and environmental costs are passed through to customers as monthly
prices change. Three years’ worth of history of these supply rate components can be found on
Palo Alto’s website.8
4 Staff Report 5397, 1/26/2015: https://www.cityofpaloalto.org/civicax/filebank/documents/45537
5 Staff Report 7260 10/17/2016 http://www.cityofpaloalto.org/civicax/filebank/documents/54165
6 Monthly Gas Commodity & Volumetric Rates http://www.cityofpaloalto.org/civicax/filebank/documents/30399
7 Staff Report 7533 12/05/2016 http://www.cityofpaloalto.org/civicax/filebank/documents/54882
8 Monthly Gas Commodity & Volumetric Rates http://www.cityofpaloalto.org/civicax/filebank/documents/30399
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monthly, and transportation charges are tied to the PG&E G-WSL rate schedule. Some recent
commodity price history is discussed in Section 6A: Gas Purchase Costs.
Table 5: Current and Proposed Monthly Service Charges
Rate Schedule Current
(as of 1/1/23)
Proposed for
FY 2024 Change ($)Change (%)
G-1 (Residential)$ 11.54 $ 14.01 $ 2.47 21.4%
G-2 (Small Commercial)106.90 129.78 22.88 21.4%
G-3 (Large Commercial)489.12 593.79 104.67 21.4%
G-10 (CNG)72.30 87.77 15.47 21.4%
Table 6: Current and Proposed Gas Distribution Charges
Current
(as of 1/1/23)
Proposed for
FY 2024 Change ($)Change (%)
G-1 (Residential)
Tier 1 Rates $ 0.5607 $ 0.6807 $ 0.1200 21.4%
Tier 2 Rates 1.4338 1.7406 0.3068 21.4%
G-2 (Residential Master-Metered and Small Commercial)
Uniform Rate 0.7365 0.8941 0.1576 21.4%
G-3 (Large Commercial)
Uniform Rate 0.7292 0.8852 0.1560 21.4%
G-10 (CNG)
Uniform Rate 0.0120 0.0145 0.0025 20.8%*
*Adjusted downward due to rounding
SECTION 3C: BILL IMPACT OF PROPOSED RATE CHANGES
Table 7 shows the impact of the proposed July 1, 2023 rate changes on the median residential
bill for representative average winter and summer bills, with average winter bills forecasted to
be significantly lower and summer bills higher. The average annual gas bill for the median
residential customer is projected to be 13% lower in FY 2024 than FY 2023. However, since
customer gas usage varies and the price of commodities changes monthly, the actual change may
vary. Table 7 shows a representative winter period (November thru March) and summer period
(April through October) bill comparison.
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Table 7: Impact of Proposed Gas Rate Changes on Residential Bills
ChangeUsage (Therms/month)Bill under Current
Rates
Bill under Proposed
Rates $/mo.%
Winter Commodity
Prices based on:
Average Actual
Commodity Cost
Nov. 2022 – Jan.
2023
Average Forecast
Commodity Cost
Nov. 2023 – Jan.
2024
30 $ 98.98 $ 66.53 $(32.45)-33%
54 (median)168.93 108.54 (60.39)-36%
80 262.18 175.25 (86.92)-33%
150 527.32 371.99 (155.34)-29%
Summer (Based on May 2022 Commodity Prices)
10 $ 27.41 $ 31.08 $ 3.67 13%
18 (median)40.11 44.74 4.63 12%
30 67.89 75.83 7.94 12%
45 104.80 117.34 12.54 12%
Table 8 shows the impact of the proposed July 1, 2023 rate changes on various representative
commercial customer bills. The overall increases for the G-2 and G-3 classes are projected to be
about -13% on an annual basis, assuming gas commodity prices decline as described in Section
6A: Gas Purchase Costs.
9
ChangeUsage
(Therms/month)
Bill under
Current Rates
Bill under
Proposed Rates %
500 $ 1,282 $ 1,146 -11%
5,000 11,855 10,295 -13%
10,000 23,604 20,460 -13%
50,000 117,609 101,802 -13%
This Financial Plan includes a proposed transfer of up to $3.82 million from the CIP Reserve to
the Operations Reserve in FY 2023, bringing the CIP Reserve to zero. These funds will be used to
cover some of the costs for planned CIP. The CIP Reserve has a minimum level of 12 months of
budgeted CIP expense (more details are in Section 6 of Appendix C: Gas Utility Reserves
Management Practices). In FY 2024, the minimum level is $7.04 million. According to the
Reserves Management Practices, if at the end of any fiscal year, the minimum guideline is not
met, staff shall present a plan to the City Council to replenish the reserve. Due to the extreme
9 Commodity prices for bills under current rates are based on the average actual commodity prices from
July 2022 through February 2023 and projections for March 2023 to June 2023. Commodity prices for
bills under the proposed rates are based on staff’s forecast for July 2023 through June 2024.
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impact of the supply cost spikes during the winter of FY 2023 on the Gas Utility’s reserves,
balances needed to replenish the CIP Reserve are not projected to become available until
FY 2028. In FY 2028, this Financial Plan projects that the Operations Reserve will reach target
levels, and staff plans to transfer amounts above the target level at year end FY 2028 or sooner
to the CIP Reserve and continue to replenish the reserve with available funds until the CIP
Reserve is within the target range.
Appendix A: Gas Utility Financial Forecast Detail.
SECTION 4: UTILITY OVERVIEW
Section 5: Utility
Financial Projections and Section 6: Details and Assumptions.
SECTION 4A: GAS UTILITY HISTORY
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Standard Oil to mitigate large wintertime peaks. Gas sales were at 248,658 million cubic feet
(MCF) with 4,849 active services.
10 The Gas Utility has replaced
all but .11 miles of ABS gas mains, which consists of mainly short sections of pipelines in various
locations throughout the City. These sections will be replaced as the distribution mains around
them are replaced. The majority of ABS, Taenite, and K40 gas services were replaced in 2020. The
only ABS, Tenite and K40 gas services remaining are on moratorium streets; these services will
be replaced as the street moratorium expires. The Gas Utility completed the replacement of
approximately 22,000 linear feet of PVC gas main and over 250 natural gas services in FY22 under
the Gas Main Replacement Project 23. This is an example of how local control of its Gas Utility
has provided Palo Alto residents with substantial benefits. During the 1990s and 2000s, while
CPAU was increasing its main replacement rate to ensure a robust gas distribution system, PG&E
was underspending on safety-related infrastructure, according to a past audit.11
12 which enabled the Gas
Utility (along with other local transportation-only customers) to obtain transmission rights on
PG&E’s Redwood transmission pipeline running from Malin, Oregon into California.
10 Staff Report CMR:183:90. Infrastructure Review and Update, March 1, 1990
11 Focused Financial Audit of The Pacific Gas & Electric Company’s Gas Distribution Operations, Overland Consulting,
made available through a CPUC Administrative Law Judge’s ruling on A12-11-009/I13-03-007 on 5/31/2013
12 CPUC decision 97-08-055. Since then, the Gas Accord has been amended four times, with the most recent being
Gas Accord V, application A.09-09-013
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higher than market gas prices due to fixed price contracts entered into prior to 2008. As a result
the Gas Utility’s wholesale supply costs were higher than PG&E’s for several years. In 2012
Council approved a plan to formally cease the hedging strategy and purchase all gas on the short-
term (“spot”) markets. As of July 1, 2012, the commodity portion of the gas rates changes every
month based on the spot market gas price. In January 2015, the Council adopted a new rate
component to collect the costs of purchasing allowances for the purpose of compliance with the
State’s cap-and-trade program.13 As of November 1, 2016, the Council adopted a resolution
changing the Local Transportation rate (which had been collapsed into the Distribution rate in
2015 to streamline bill presentation), to be a pass-through of PG&E’s Gas Transportation Rate to
Wholesale/Resale Customers (G-WSL) charge to Palo Alto.14 In December 2016, Council approved
a carbon neutral gas plan, with a goal of achieving a carbon neutral gas portfolio by FY 2018.15
The City’s gas utility has been carbon neutral since FY 2018 through the purchase of offsets.
SECTION 4B: CUSTOMER BASE
16 Non-residential customers use gas for
space and water heating (73% of gas consumed), cooking (20%), and industrial processes (6%).17
13 Staff Report 5397, 1/26/2015: https://www.cityofpaloalto.org/civicax/filebank/documents/45537
14 Staff Report 7260 10/17/2016 http://www.cityofpaloalto.org/civicax/filebank/documents/54165
15 Staff Report 7533 12/05/2016 http://www.cityofpaloalto.org/civicax/filebank/documents/54882
16 http://energyalmanac.ca.gov/naturalgas/overview.html
17 Source: Statewide Commercial End Use Study, California Energy Commission report, 2006. Statistics shown are for
end users in PG&E Climate Zone 4 (the Peninsula) where Palo Alto is located.
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SECTION 4C: DISTRIBUTION SYSTEM
To deliver gas from the receiving stations to its customers, the utility owns 210 miles of gas mains
(which transport the gas to various parts of the city) and close to 23,800 gas services (which
connect the gas mains to the customers’ gas lines). These mains and services, along with their
associated valves, regulators, and meters, represent the vast majority of the infrastructure used
to deliver gas in Palo Alto. CPAU has an ongoing CIP to repair and replace its infrastructure over
time, the expense of which normally accounts for around 15 to 20% on average of the utility’s
expenditures. Costs for main replacements have been going up in recent years.
In addition to the CIP, the Gas Utility performs a variety of maintenance activities related to the
system, such as monitoring the system for leaks, testing and replacing meters, monitoring the
condition of steel pipe, and building and replacing gas services for buildings being built or
redeveloped throughout the city. The utility also shares the costs of other system-wide
operational activities (such as customer service, billing, meter reading, supply planning, energy
efficiency, equipment maintenance, and street restoration) with the City’s other utilities. These
maintenance and operations expenses, as well as associated administration, debt service, rent,
and other costs, make up roughly half of the utility’s expenses.
In addition to these ongoing activities, CPAU has conducted a program to find and replace cross-
bores over the last several years. Currently, an average of $0.7 million is estimated per year for
the cross-bore program through FY 2028.
As shown in Figure 1, the Gas Utility
receives about 92% of its revenue from
sales of gas and the remainder from
capacity and connection fees, interest
on reserves, and other sources.
Appendix A: Gas Utility Financial
Forecast Detail shows more detail on
the utility’s cost and revenue
structures.
Figure 1: Revenue Structure (FY 2022)
92%
8%
Sales of Gas
Other Revenue
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As shown in Figure 2, in FY 2022, gas
purchase costs accounted for about
46% of the Gas Utility’s costs. This
percentage can vary widely from year
to year, as this cost is based upon
market purchases, and includes costs
related to cap and trade. Operational
costs in FY 2022 represented 45% of
expenses and capital investment was
responsible for the remaining 9%. CIP
is on average about 15 to 20% of
expenses, but as main replacement
projects are only occurring every other
year, the percentage swings more.
SECTION 4E: RESERVES STRUCTURE
Appendix C: Gas
Utility Reserves Management Practices for more detailed definitions and guidelines for reserve
management:
•Reserve for Commitments: A reserve equal to the utility’s outstanding contract liabilities
for the current fiscal year. Most City funds, including the General Fund, have a
Commitments Reserve.
•Reserve for Re-appropriations: A reserve for funds dedicated to projects re-appropriated
by the City Council, nearly all of which are capital projects. Most City funds, including the
General Fund, have a Re-appropriations Reserve.
•Capital Improvement Program (CIP) Reserve: The CIP reserve can be used to accumulate
funds for future expenditure on CIP projects. This CIP can also act as a contingency reserve
for the CIP. This type of reserve is used in other utility funds (Electric, Water, and
Wastewater Collection) as well.
•Rate Stabilization Reserve: This reserve is intended to be empty unless one or more large
rate increases are anticipated in the forecast period. In that case, funds can be
accumulated to spread the impact of those future rate increases across multiple years.
This type of reserve is used in other utility funds (Electric, Water, and Wastewater
Collection) as well.
•Operations Reserve: This is the primary contingency reserve for the Gas Utility and is used
to manage yearly variances from budget for operational gas costs. This type of reserve is
used in other utility funds (Electric, Water, and Wastewater Collection) as well.
•Unassigned Reserve: This reserve is for any funds not assigned to the other reserves and
is normally empty.
•Cap and Trade Reserve: This reserve tracks unspent or unallocated revenues from the
sale of carbon allowances freely allocated by the California Air Resources Board to the gas
utility, under the State’s Cap and Trade Program.
Figure 2: Cost Structure (FY 2022)
45%
46%
9%
Operations
Gas Purchases
Capital
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SECTION 4F: COMPETITIVENESS
Table 9 presents residential bills for Palo Alto and PG&E for Calendar Years 2021 and 2022
compared to winter months in 2022 – 2023 during the recent supply price spikes at median usage
levels. The annual gas bill for the median residential customer for CY 2022 was $821, about 11%
lower than the annual bill for a PG&E customer with the same consumption. PG&E’s distribution
rates for gas have increased to collect for needed system improvements for pipeline safety and
maintenance.
The bill calculations for PG&E customers are based on PG&E Climate Zone X, an area which
includes the surrounding communities.
18
CY 2021 402 $ 631.28 $ 701.60 (14%)
CY 2022 402 821.33 868.62 (11%)
November 2022 32 62.64 76.93 (19%)
December 2022 69 175.06 171.96 2%
January 2023 76 393.57 217.25 81%
Historically, Palo Alto’s residential gas bills have been competitive relative to PG&E. During
January 2023, bills increased significantly relative to PG&E. Staff is looking into reasons why gas
prices spiked this winter and why PG&E’s gas rates did not rise as rapidly as Palo Alto’s gas rates
during the recent market price spikes. Governor Newsom has requested that the Federal Electric
Regulatory Commission start an investigation of winter gas prices. The Mayor sent a letter to the
Governor on February 7, 2023 expressing the City’s support for pursuing these investigations.
Similar investigations are underway by the California Public Utilities Commission (CPUC) in
collaboration with the California Energy Commission and California Independent System
Operator (CAISO). Staff is also in the process of doing a more extensive competitiveness review
of commercial customer bills and will provide updates in the future.
The City has four pass-through rates related to supplying gas to customers: 1) gas commodity,
which represents the cost of buying gas in the markets, 2) gas transportation, which represents
the cost of transporting purchased gas to Palo Alto, 3) Cap and Trade compliance, which
represents the cost of mandated participation in the State’s cap and trade program, and 4)
carbon offset charge, which represents the cost of buying offsets for the City’s Carbon Neutral
Gas Portfolio. Gas commodity rates are forecasted to decline slightly over the forecast period,
but increases in other rate components are forecasted to lead to a net gradual increase in total
gas supply costs over the forecast period.
18 Median usage data based on CY 2022
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For the gas commodity charge, starting in July 2012, CPAU replaced a “laddering” hedging
strategy for purchasing gas supplies with a strategy to buy gas on the short-term, or “spot”
markets and pass the commodity cost to customers on a monthly basis. Prior to December 2018,
commodity prices had generally fluctuated in a fairly narrow band, averaging around
$0.32/therm. Over the last few years, a variety of factors combined that led to more variability
in prices: Regional temperatures were cooler than normal, but in addition, gas supplies stored in
underground facilities have been lower than normal, as well as constrained due to problems with
the Aliso Canyon facility in southern California. There have been periodic pipeline constraints at
both the northern and southern California borders. While there was not an actual constriction
on supply, the confluence of all these factors drove up the bidweek prices for all California
delivery points. There has continued to be a bit more volatility in the market, and while the gas
market price trend appears slightly downward over time, commodity prices are not projected to
decrease to FY 2022 levels. Figure 3 shows the City’s actual commodity rates through December
2022, and projected rates through FY 2025. Note that while gas commodity costs might be
forecasted to decline slightly, increases in other gas supply components (transportation,
environmental charges) are expected to offset that, leading to a gradual increase in overall gas
supply costs.
Figure 3: Palo Alto Gas Commodity Rates, Actual and Projected, FY 2012 - FY 2025
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highest natural gas spot prices since December 2000. Several trends occurring simultaneously
contributed to prices rising to these levels including widespread below-normal temperatures,
high natural gas consumption, reduced natural gas flows, transmission pipeline constraints, and
low natural gas storage levels in the Pacific region. These extreme market conditions impacted
most utilities throughout the Pacific and Rocky Mountain regions of the United States.
Staff anticipated that the Citygate commodity price for January 2023 would exceed the
Commodity rate cap of $2/therm, based on the monthly forward price data that suggested it
would settle around $3.5/therm. The City Council approved staff’s recommendation to double
the commodity rate cap to $4/therm (see Reso #10090) effective January 1, 2023. The settled
commodity price at Citygate index for January 2023 was around $5/therm - even higher than the
updated rate cap. Due to the rate cap, CPAU was not able to recover the full costs of January
2023 supply purchases from customers, but the impact to the gas reserves was far less than if
the commodity rate cap had stayed at $2/therm.
Figure 4 below shows the actual and projected Palo Alto gas commodity rates and the settled
Citygate price on January 2023. The projected commodity rates in February 2023 and beyond are
expected to be lower than January 2023, but are not expected to decline to FY 2022 levels.
Figure 4: Palo Alto Gas Commodity Rates, Commodity Rate Caps, and Citygate Actual Prices
S E C T I O N 5 : U T I L I T Y F I N A N C I A L P R O J E C T I O N S
S E C T I O N 5 A : L O A D F O R E C A S T
Gas usage in Palo Alto is volatile, varying with both economic and weather conditions. As shown
in Figure 5, in the early 1970s, gas purchases reached over 45 million therms per year. Usage
dropped dramatically in the 1976/1977 drought when customers saved significant amounts of
(hot) water by upgrading to efficient showerheads. During the 1980s and 90s average gas usage
was around 36 million therms per year. Usage dropped again in the early 2000s. In FY 2001, gas
prices escalated during the California energy crisis and Palo Alto’s rates increased by nearly 200%.
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From 2003 to 2011, usage decreased by 2.3% mainly as a result of continued customer
investments in energy efficiency.
Figure 5: Historical Gas Supply Purchases
19 In addition, separate
strategic planning and financial analysis will be performed separate from this Financial Plan to
address a financial and infrastructure strategy for the gas utility during a transition to an
electrified community. Any insights from separate analyses will be integrated into future
Financial plans.
19 The City’s Sustainability and Climate Action Plan (S/CAP) is currently being updated. As building
electrification goals in the S/CAP are updated, they will be modeled in this load forecast or alternative
load forecasts.
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Figure 6: Gas Supply Purchases Forecast
Figure 7 and Appendix A: Gas Utility Financial Forecast Detail show how costs have changed
during the last five years as well as how staff project costs to change over the next five years.
While the gas utility strives to maintain a steady rate of funding for main replacement over time,
this funding pattern was disrupted from FY 2015 to FY 2020. In FY 2015, no funding for gas main
replacement was budgeted due to the fact that staff was completing a prior major gas main
replacement project, the largest in utility history, which completed replacement of most of the
ABS gas mains in Palo Alto. The next main replacement to be budgeted involved replacements of
gas mains on University Avenue, a project that evolved into the Upgrade Downtown project
involving a coordinated replacement of several different types of infrastructure to avoid multiple
disruptions to the business district. This multi-year planning effort did not allow for design of
other new projects, and the hiatus in starting a new main replacement project allowed the Gas
Utility to temporarily keep rates lower. In FY 2021 the gas utility returned to routine funding for
main replacement for the gas utility, though gas main replacement investment is likely to become
more complex as the City plans for a transition to an electrified community.
Revenues have fluctuated but generally matched expenses in the years between FY 2018 and FY
2022. The absence of new budget for main replacement projects for several years, as well as the
availability of relatively large reserves, reduced the need for rate increases until FY 2019.
The last adjustment to gas distribution rates was a 3% increase to the total system average gas
rate (supply rates plus distribution rates) in July 2022. The commodity cost and revenue increases
in FY 2022 were the result of higher market commodity prices. Figure 4 in Section 4G shows the
gas commodity prices and Figure 3 Palo Alto’s gas commodity rates. Gas supply costs are passed
through to customers, and change month to month with a cap of $4/therm.
Figure 7 shows the actual overall system average rate change from FY 2018 through FY 2023
(shown in grey) and the projected overall system average rate change for FY 2024 through FY
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2028 (shown in red) both excluding supply-related rate changes. The rate increases only include
the needed increase for the distribution rate as a percentage of the base gas utility sales revenue.
Figure 7: Gas Utility Expenses, Revenues, Rate Changes Excluding Supply-Related Changes
Figure 8: Gas Utility Expenses, Revenues, Rate Changes Including Supply-Related Changes
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SECTION 5B: FY 2022 RESULTS
Sales revenues were higher than projected in the FY 2023 Financial Plan by about $3.6 million,
due to higher revenue from higher gas commodity rates, but other sources of funds were lower
by $0.7 million. On the expense side, purchase costs came in about $4.4 million higher than
projected due to increased market commodity costs. Operational expenses were about $0.9
million higher than projected, with increases in Salary and Benefits and Allocated Charges. Total
FY 2022 expenses were $52.7 million compared to $47.3 million projected in the FY 2023
Financial Plan. Table 10 summarizes the variances from forecast.
Sales Increase due to Commodity Price Increases (3,624)Revenue Increase
Lower Interest Income and Non-Sales Revenues 721 Revenue Decrease
Higher Gas Purchase Costs 4,396 Cost Increase
Higher O&M and Customer Services Costs 941 Cost Increase
Current projections indicate that sales revenues will be higher than last year’s forecast by about
$23.4 million, due to higher projected commodity costs. Other revenues and transfers are
projected to be nearly $1 million lower. Operations costs estimated to be lower by about $0.6
million due to lower transfers. Gas purchase costs greatly increased due to higher than expected
market commodity prices. Not all gas commodity costs were passed through to customers,
leading to a $5 million variance for FY 2023 that significantly impacted the Operations Reserve.
Table 11 summarizes the projected variances from the FY 2023 Financial Plan.
Sales Increase due to Commodity Price Increases (23,411)Revenue Increase
Lower Interest Income and Non-Sales Revenues 963 Revenue Decrease
Higher Gas Purchase Costs 28,045 Cost Increase
Lower O&M and Customer Services Costs (565)Cost Decrease
Figure 7 above shows overall costs for the Gas Utility increasing by over 50% from FY 2022 to FY
2023 due to the supply cost increases discussed above. Costs are projected to decline in FY 2024
and increase by 3% annually on average throughout the rest of the forecast period.
Gas commodity costs are the most variable component and represent the largest estimated jump
in costs from FY 2022 to FY 2023. Staff projects commodity costs to approximately double from
FY 2022 to FY 2023 and then decline in FY 2024, though not to FY 2022 levels. For the remainder
of the five-year forecast period from FY 2024 through FY 2028, total gas supply costs are
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projected to increase gradually, with gas commodity costs projected to decline gradually, offset
by significant increases in transportation and environmental costs. Commodity price forecasts
that far into the future are highly uncertain. Market prices could increase or decrease. Cap and
Trade allowance costs are increasing by 15.7% annually from FY 2024 to FY 2028.20 Staff projects
transmission costs to increase steadily at 4-6% annually from FY 2024 to FY 2028.21 Carbon offset
products are also increasing at 7% per year on average.22
20 Based on allowance broker quotes.
21 The transportation rates for calendar years 2022-2026 reflect the rates in the September 30, 2021 prepared
testimony (A.21-09-018) regarding PG&E’s 2023 Gas Transmission & Storage (GT&S) Cost Allocation and Rate Design
(CARD), afterward a 3% escalation rate is applied.
22 Based on carbon offset provider quotes.
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Figure 9: Gas Utility Reserves
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Staff is evaluating when to implement a fixed funding amount that will be provided from the
Operations Reserve to the CIP Reserve to fund capital improvements. This approach will provide
stability to the Operations Reserve by providing for a steady funding stream for CIP work and by
reflecting fluctuations due to CIP such as project delays or accelerations in the CIP Reserve;
ultimately, this should result in more stable customer rates. The use of the CIP Reserve in this
way will isolate fluctuations due to CIP delays or accelerations and allow those to be viewed
together in the CIP Reserve. Conversely, other trends or factors affecting the Operations Reserve
will be easier to identify and communicate. Without this change, both CIP costs and revenues
flow solely through the Operations Reserve.
SECTION 5E: RISK ASSESSMENT AND RESERVES ADEQUACY
Figure 11: Operations Reserve Adequacy
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Forecasted Operations Reserve levels also drop below the short-term risk assessment for the
Utility at the end of FY 2023 through FY 2025, return to above the short-term risk assessment
level by the end of FY 2026, and remain above this level for the remainder of the forecast period.
Table 12 summarizes the risk assessment calculation for the Gas Utility through FY 2028. The risk
assessment includes the revenue shortfall that could accrue due to:
Table 12: Gas Risk Assessment ($000)
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Total Risk Assessment value $5,127 $5,716 $6,606 $6,729 $7,403 $8,016
SECTION 5F: LONG-TERM OUTLOOK
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to 1990 levels by 2020. In its December 2007 Climate Protection Plan, the City set a goal of
lowering emissions to 15% below 2005 levels by 2020. As a community Palo Alto achieved these
goals in 2012 even with continued use of natural gas for heating, cooking, and industrial
processes. However, to achieve the recently adopted Sustainability and Climate Action Plan
(S/CAP) goal of an 80% reduction in carbon emissions by 2030, or the State’s adopted goal of an
80% reduction in emissions by 2050, extensive electrification of gas-using appliances is necessary.
Extensive electrification could result in stranded investment and higher rates as the costs of the
distribution system are recovered over a lower sales base. It is instructional that, in the recent
discussion draft of its scoping plan update, CARB says, to meet those goals, natural gas use would
have to be “mostly phased out.”23 Staff has begun to evaluate how to manage potential impacts
of these trends. Staff expects gas utility costs associated with electrification including safely
decommissioning gas pipes. This Financial Plan includes $4 million in FY 2028 for these costs,
although detailed cost estimates are not yet available. These costs are expected to grow as staff
studies them in more detail, and alternative funding sources may be required. The S/CAP Goals
and Key Actions and Work Plan will include strategic planning for the gas utility for managing the
transition to an electrified community, and this is also a strategic planning priority for the Utilities
Department.
SECTION 5G: ALTERNATIVE GAS INCREASE PLANS
Error!
23 Climate Change Scoping Plan, First Update, Discussion Draft for Public Review and Comment, California Air
Resources Board, October 2013, pg. 88.
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Reference source not found. is projected to be 3% long term, though staff projects 5% CPI
increases in FY 2024 and FY 2025. Table 15 shows a 6% per year projection as the maximum
proposed increase under Alternative 2; actual increases for the years shown would be capped at
6% or CPI, whichever is less.
Error! Reference source not found. 16Error! Reference source not found. shows the amount of
the transfer both in dollars and as a percentage of utility revenue for each fiscal year, as well as
the projected rate of annual growth in the transfer. Error! Reference source not found. below
shows the distribution rate increases (as a percentage of the total bill, excluding supply cost
changes) associated with each alternative.
Table 13: Proposed / Projected Transfers as % of Gross Revenues Two FY Prior24
Proposed Projected
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Table 14: Summary of Rate Changes for Alternatives (Excludes Supply Rate Changes)
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
24 Measure L authorizes a transfer based on 18% (or a lesser percentage if approved by Council) of the
revenue for two fiscal years prior, so the FY 2024 transfer is based on FY 2022 revenue.
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Figure 12: Gas Utility Expenses, Revenues, and Rate Changes Excluding Supply-Related Rate
Changes (Alternative 1)
Actual Costs through FY 2022 and Projections through FY 2028
SECTION 6: DETAILS AND ASSUMPTIONS
The Gas Utility purchases much of its gas for delivery at Malin, Oregon which is almost always
less expensive than delivery at PG&E Citygate, even including the costs of transmission from
Malin to Citygate. The Gas Utility purchases gas on a month-ahead and day-ahead basis in the
spot market. The years from FY 2009 through FY 2022 have seen gas prices in a relatively narrow
but low band. Starting in late 2021, and becoming more acute starting in the summer of 2022,
lower levels of natural gas in storage, along with colder than normal weather and transmission
pipeline constraints on both the northern and southern borders of California has created short-
term price spikes and increased volatility, as shown in Figure 13.
These market conditions exacerbated and caused unprecedented price spikes during December
2022 and January 2023 when Citygate prices reached as high as $49.52 on the monthly index and
up to $57.07 on the daily index. Details of this event was described in Section 4G: Gas Supply
Rates. This event has greatly increased the commodity costs in FY 2023, estimated at about $22
million or 327% above budgeted, through January 2023. The commodity costs are a pass-through
to customers, and the gas utility was able to recover most of the costs. To mitigate impacts of
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future short-term spikes for customers, the gas utility plans to investigate the possibility of a
winter hedging program, with the goals to mitigate risks for the gas utility and bring price stability
to ratepayers.
Figure 13: Gas Commodity Monthly Market Prices at Malin and PG&E Citygate
Even as supply conditions improve, relieving the high prices seen in the winter of 2022/2023,
natural gas prices through the forecast period are projected to remain higher than the very low
levels seen in previous years due to a number of factors described in Section 4G: Gas Supply
Rates.
On September 15, 2014, Council adopted a resolution (Reso. #9451) authorizing the City’s
participation in a natural gas purchase from Municipal Gas Acquisition and Supply Corporation
(MuniGas) for the City’s entire retail gas load for a period of at least 10 years. The MuniGas
transaction includes a mechanism for municipal utilities to utilize their tax-exempt status to
achieve a discount on the market price of gas. As of November 1, 2018, gas began flowing under
this program, reducing the City’s gas commodity cost by about $1 million per year and saving gas
customers approximately $0.03 per therm on the commodity portion of their bills.
Gas commodity costs are forecasted to stay fairly steady over the next several years, but forecasts
of commodity costs are very uncertain. Figure 14 shows the projected gas prices used to generate
this forecast. Projections for transmission costs associated with transporting gas over PG&E’s
Redwood transmission pipeline (from Malin, Oregon to the PG&E Citygate) are based on rates
adopted in the most recent update to the Gas Accord.
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Figure 14: Annual Average Wholesale Gas Market Price Projections
PG&E’s Local transportation rates have increased over the past few years and are projected to
slowly increase annually in future years. Figure 15 shows the average annual PG&E gas
transportation rates without the Cap-and-Trade exemption rates for actuals up to Q2 of FY 2023
and projected up to FY 2033.
For Cap and Trade compliance costs, the gas utility has been regulated under California’s
greenhouse house (GHG) regulations since January 2015 with a GHG emissions cap
that declines over time. The gas utility receives carbon allowances equal to the emissions allowed
under the cap and is required to auction off a portion (60% in 2022, increasing by 5% annually)
of the allowances through the state Cap and Trade Program. To meet its annual GHG compliance
obligation, the gas utility must purchase allowances based on actual gas load. Proceeds of
allowance sales must be used within 10 years of their receipt, and Palo Alto is developing
programs and plans to utilize them.
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25) whereby carbon offsets
are purchased in an amount equal to the emissions generated by the communities’ natural gas
use. These high-quality carbon offsets support projects that reduce the amount of GHGs in the
atmosphere, such as forest maintenance or capturing methane from dairy farms. Purchasing
carbon offsets is a good first step towards reducing carbon in the atmosphere, but the longer-
term goal is to reduce the community’s use of natural gas by maximizing efficiency and switching
to high-efficiency electric appliances where possible. The costs for these offsets are projected to
increase from $2.2 million in FY 2022 to $2.9 million in FY 2030.
SECTION 6B: OPERATIONS
Appendix D: Description of Gas Utility Cost
Categories includes detailed descriptions of the activities associated with these cost categories.
Operations costs are generally projected to increase by 2 to 3% per year on average. Salary and
benefits, inflation, and other assumptions match those used in the City’s long-range financial
forecast.
25 https://www.cityofpaloalto.org/civicax/filebank/documents/54588
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increasing vacancies as well as with cost reduction measures implemented across the City
departments.
Figure 16: Actual and Projected Operational Costs
SECTION 6C: CAPITAL IMPROVEMENT PROGRAM (CIP)
•The Gas Main Replacement Program, under which the Gas Utility replaces aging gas
mains and mains ranked to have the greatest risk scores within the system.
•Customer Connections, which cover the cost when the Gas Utility installs new services or
upgrades existing services at a customer’s request in response to development or
redevelopment. The Gas Utility charges a fee to these customers to cover the cost of
these projects.
•Ongoing Projects, which cover the cost of routine meter, regulator, and service
replacement, minor projects to improve reliability or increase capacity, and other general
improvements.
•Tools and Equipment, which cover the cost of capitalized equipment, such as directional
boring, gas pipeline maintenance and emergency equipment.
•One-time Projects, which represent occasional large projects that do not fall into any
other category.
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Table 15: Budgeted Gas CIP Spending ($000)
The Gas Main Replacement (GMR) Program is the largest budgeted category in the gas fund and
is used to replace ageing natural gas infrastructure throughout the City. This program improves
safety and reliability of the natural gas system by replacing pipe material and components, prior
to failure, with reliable polyethylene pipe and fittings.
The GMR Program completed a major milestone in 2013 with the replacement of gas mains made
from Acrylonitrile-Butadiene-Styrene (ABS) plastic with Polyethylene (PE) pipe. The City’s 2015
Distribution Integrity Management Plan (DIMP) identified ABS pipe and components as suitable
for replacement due to the pipe’s brittleness and difficulty of repair. There are 0.1 miles of
remaining ABS in the system, which is scattered throughout the City in very small sections.
After the replacement of ABS pipe, CPAU’s 2015 Risk Assessment identified PVC pipe material as
the next pipe material to be reviewed for replacement. In general, CPAU replaces about 4 miles
(1.9% of the system) of pipe on each GMR project, accounting for approximately 75% of PVC and
25% of steel. The pipelines are replaced with PE pipe.
With the ongoing discussions and direction from City Council related to electrification of homes
and neighborhoods throughout the City and transitioning away from natural gas, it will be
necessary at some point to scale back the rate of replacement of the existing gas system. Staff is
working to develop an efficient phasing plan for electrification and the scaling back of the gas
infrastructure. However, staff believes it is necessary to continue the current efforts to replace
older and higher-risk materials within the gas system to maintain safety and system integrity.
This investment is recommended until a more defined plan on electrification and the transition
away from natural gas is completed. That transition plan may involve aggressive electrification in
areas with PVC pipe to avoid future investments in PVC pipe replacement. The priority for the
gas utility fund is continued safe operation to manage the overall risk and continue the reliable
and safety delivery of natural gas throughout the City. In the short term that requires investing
in replacement of highest risk PVC pipe, prioritizing areas of the gas system that will be needed
the longest during the transition to an electrified community, and gradually that will be
integrated with a strategy to aggressively electrify neighborhoods and abandon PVC pipe rather
than replace it.
Several factors are contributing to an increase in construction costs in the Bay Area, such as a
greater focus on infrastructure improvement by many municipal agencies and the higher demand
for utility contractors within these fields. The current budget for the GMR program has held
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steady over the last few years, which results in a reduction of replacement due to the steady
increase in the replacement cost. CPAU recently posted the Gas Main Replacement 24A Project
for competitive bidding and resulted in one contractor submitting a bid for almost two times the
engineering estimate, even after it was bid a second time. Future GMR projects will require a
budget increase to maintain a similar rate of PVC and steel main replacement. Currently, CPAU
plans to replace as many aging mains as possible within its current budget. However, if this trend
of higher construction cost continues, the Gas Utility may require larger CIP budgets and as a
result, an increase in rates to maintain an adequate rate of replacement to relieve the risks of
PVC and steel pipe in the system.
Tools and Equipment, Ongoing Projects, and Customer Connections
SECTION 6D: DEBT SERVICE
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secured by the net revenues of the Gas Utility. Table 16 shows debt service for this bond for the
financial forecast period. Debt service on this bond will continue through 2026.
Table 16: Gas Utility Debt Service
FY 2024 FY 2025 FY 2026
26
equal to five times the annual debt service. This Financial Plan complies with these covenants
throughout the forecast period, as shown in Table 19 and Table 20.
Table 17: Debt Service Coverage Ratio ($000)
FY 2024 FY 2025 FY 2026
Revenues 66,297 68,966 72,891
Expenses (Excluding
CIP and Debt Service)(54,882)(54,519)(56,572)
Net Revenues 11,415 14,447 16,319
Debt Service 802 799 802
Coverage Ratio 1423%1807%2036%
Table 18: Debt Service Minimum Reserves ($000)
FY 2023 FY 2024 FY 2025 FY 2026
a 28,383 20,108 23,904 18,266
b 1463 1459 1454 1457
c 35x 25x 30x 23x
a) CIP, Rate Stabilization, Operations, and Unassigned Reserves
b) Gas and Water Utility’s share of the debt service on the 2011 bonds.
c) Calculated using combined Gas and Water Utility reserves. The actual reserves ratio for the
2011 bonds is calculated based on the combined Electric, Gas, and Water Utility reserves and
total debt service and is higher than shown here.
26 Available Reserves as defined in the 2011 bonds include the reserves for the Water, Electric, and Gas Utilities
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Table 19: Other Issuances Secured by Gas Utility’s Revenues or Reserves
1999 Utility Revenue
Bonds, Series A
Wastewater Collection
Wastewater Treatment
Storm Drain
$1,207 No Yes
2009 Water Revenue
Bonds (Build America
Bonds)
Water $1,977*No Yes
*Net of Federal interest subsidy
The equity transfer is discussed in Section 5G: Alternative Gas Increase Plans
The Gas Fund receives most of its revenues from sales of gas, but about 8% comes from other
sources including interest income, service connection and capacity fees, and sales of allowances
related to California’s cap-and-trade program. The Cap and Trade compliance charge is another
revenue item related to the cap-and-trade program that is collected in customers’ bills. While
the State provides CPAU with a certain number of free allowances each year, the Gas Utility is
required to sell a portion of those in accordance with the regulations. In order to have enough
allowances to cover customers’ natural gas emissions, CPAU must buy allowances at market, and
subsequently passes through the cost of those allowances to customers. The regulations do not
allow the revenue derived from the sale of the free allowances to offset allowance purchases,
thus the pass-through rate component. These funds are transferred to the Cap and Trade Reserve
(see Section 3D: Proposed Reserve Transfers for more details).
This Financial Plan bases sales revenue projections on the load forecast in Section 5A: Load
Forecast. Except where stated otherwise, these load forecasts are based on normal weather.
Weather can vary substantially, however, and this can affect revenues substantially. Also,
changes in customer behavior, as well as changes to more efficient gas appliances, or switching
to electric appliances, will modify these forecasts. Staff continually evaluates forecasts to see
when new trends emerge.
The FY 2024 gas utility communications strategy covers these primary areas: natural gas market
supply costs, supply and demand, operations, infrastructure, safety, efficiency, carbon neutrality,
and cost containment measures. The City of Palo Alto Utilities (CPAU) communication methods
include the website, utility bill inserts, messaging on bills and envelopes, email newsletters, print
and digital ads in local publications, and participation in community outreach events.
Since moving to market pricing for commodity rates several years ago, monthly gas rates can
fluctuate for CPAU customers based on a variety of factors affecting the market. Staff post the
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monthly rates online at www.cityofpaloalto.org/RatesOverview and provide additional updates
as necessary via other communication channels. During the FY 2023 winter, utilities across the
region saw extremely high gas market prices projected for January and February; much higher
than last year’s winter prices, and the highest since the 2001 energy crisis. Staff have engaged in
a robust and proactive outreach campaign to try to inform customers in advance about the
extremely high gas rates to help avoid surprisingly high bills, emphasizing the importance of
saving energy to keep utility costs low. Consistent with the Utilities Strategic Plan, CPAU is
instituting cost containment as an ongoing priority that is part of our annual cycle. To keep
customers apprised of its rates the status and accomplishments of capital improvement projects,
the City maintains a network of project web pages. Print and digital ads, social media and email
blasts drive traffic to the website.
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APPENDICES
Appendix A: Gas Financial Forecast Detail
Appendix B: Gas Utility Capital Improvement Program (CIP) Detail
Appendix C: Gas Utility Reserves Management Practices
Appendix D: Description of Gas Utility Cost Categories
Appendix E: Gas Utility Communications Samples
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APPENDIX A: GAS FINANCIAL FORECAST DETAIL
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APPENDIX B: GAS UTILITY CAPITAL IMPROVEMENT PROGRAM (CIP) DETAIL
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APPENDIX C: GAS UTILITY RESERVES MANAGEMENT PRACTICES
The following reserves management practices shall be used when developing the Gas Utility
Financial Plan:
Section 1. Definitions
a) “Financial Planning Period” – The Financial Planning Period is the range of future fiscal
years covered by the Financial Plan. For example, if the Financial Plan delivered in
conjunction with the FY 2015 budget includes projections for FY 2015 to FY 2019, FY 2015
to FY 2019 would be the Financial Planning Period.
b) “Fund Balance” – As used in these Reserves Management Practices, Fund Balance refers
to the Utility’s Unrestricted Net Assets.
c) “Net Assets” - The Government Accounting Standards Board defines a Utility’s Net Assets
as the difference between its assets and liabilities.
d) “Unrestricted Net Assets” - The portion of the Utility’s Net Assets not invested in capital
assets (net of related debt) or restricted for debt service or other restricted purposes.
Section 2. Supply Fund Reserves
The Gas Utility’s Supply Fund Balance is reserved for the following purposes:
a) For existing contracts, as described in Section 4 (Reserve for Commitments)
b) For operating and capital budgets re-appropriated from previous years, as described in
Section 5 (Reserve for Re-appropriations)
Section 3. Distribution Fund Reserves
a) For existing contracts, as described in Section 4 (Reserve for Commitments)
b) For operating and capital budgets re-appropriated from previous years, as described in
Section 5 (Reserve for Re-appropriations)
c) For cash flow management and contingencies related to the Gas Utility’s Capital
Improvement Program (CIP), as described in Section 6 (CIP Reserve)
d) For rate stabilization, as described in Section 7 (Rate Stabilization Reserve)
e) For operating contingencies, as described in Section 8 (Operations Reserve)
f) Any funds not included in the other reserves will be considered Unassigned Reserves and
shall be returned to ratepayers or assigned a specific purpose as described in Section 9
(Unassigned Reserves)
Section 4. Reserve for Commitments
At the end of each fiscal year the Gas Supply Fund and Gas Distribution Fund Reserve for
Commitments will be set to an amount equal to the total remaining spending authority for
all contracts in force for the Wastewater Collection Utility at that time.
Section 5. Reserve for Reappropriations
At the end of each fiscal year the Gas Supply Fund and Gas Distribution Fund Reserve for
Reappropriations will be set to an amount equal to the amount of all remaining capital and
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non-capital budgets, if any, that will be re-appropriated to the following fiscal year for each
fund in accordance with Palo Alto Municipal Code Section 2.28.090.
Section 6. CIP Reserve
The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for
capital contingencies. Staff will manage the CIP Reserve according to the following practices:
The following guideline levels are set forth for the CIP Reserve. These guideline levels are
calculated for each fiscal year of the Financial Planning Period based on the levels of CIP
expense budgeted for that year.
Minimum Level 12 months of budgeted CIP expense
Maximum Level 24 months of budgeted CIP expense
a) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and
the Reserve for Commitments when funds are added to or removed from the Reserve for
Commitments as a result of a change in contractual commitments related to CIP projects.
Any other additions to or withdrawals from the CIP reserve require Council action.
b) Minimum Level:
i) Funds held in the Reserve for Commitments may be counted as part of the CIP Reserve
for the purpose of determining compliance with the CIP Reserve minimum guideline
level.
ii) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present
a plan to the City Council to replenish the reserve. The plan shall be delivered by the
end of the following fiscal year, and shall, at a minimum, result in the reserve reaching
its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is
below its minimum level at the end of FY 2017, staff must present a plan by June 30,
2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff
may present, and the Council may adopt, an alternative plan that takes longer than
one year to replenish the reserve, or that does so in a shorter period of time.
c) Maximum Level: If, at any time, the CIP Reserve reaches its maximum level, no funds may
be added to this reserve. If there are funds in this reserve in excess of the maximum level
staff must propose to transfer these funds to another reserve or return them to
ratepayers in the next Financial Plan. Staff may also seek Council approval to hold funds
in this reserve in excess of the maximum level, if they are held for a specific future purpose
related to the CIP.
Section 7. Rate Stabilization Reserve
Funds may be added to the Rate Stabilization Reserve by action of the City Council and held
to manage the trajectory of future year rate increases. Withdrawal of funds from the Rate
Stabilization Reserve requires Council action. If there are funds in the Rate Stabilization
Reserve at the end of any fiscal year, any subsequent Gas Utility Financial Plan must result in
the withdrawal of all funds from this Reserve by the end of the Financial Planning Period.
Section 8. Operations Reserve
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The Operations Reserve is used to manage normal variations in costs and as a reserve for
contingencies. Any portion of the Gas Utility’s Fund Balance not included in the reserves
described in Section 4-Section 7 above will be included in the Operations Reserve unless this
reserve has reached its maximum level as set forth in Section 8 d) below. Staff will manage
the Operations Reserve according to the following practices:
a) The following guideline levels are set forth for the Operations Reserve. These guideline
levels are calculated for each fiscal year of the Financial Planning Period based on the
levels of Operations and Maintenance (O&M) and commodity expense forecasted for that
year in the Financial Plan.
Minimum Level 60 days of O&M and commodity expense
Target Level 90 days of O&M and commodity expense
Maximum Level 120 days of O&M and commodity expense
b) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Operations
Reserve are lower than the minimum level set forth above, staff shall present a plan to
the City Council to replenish the reserve. The plan shall be delivered within six months of
the end of the fiscal year, and shall, at a minimum, result in the reserve reaching its
minimum level by the end of the following fiscal year. For example, if the Operations
Reserve is below its minimum level at the end of FY 2014, staff must present a plan by
December 31, 2014 to return the reserve to its minimum level by June 30, 2015. In
addition, staff may present, and the Council may adopt, an alternative plan that takes
longer than one year to replenish the reserve.
c) Target Level: If, at the end of any fiscal year, the Operations Reserve is higher or lower
than the target level, any Financial Plan created for the Gas Utility shall be designed to
return the Operations Reserve to its target level by the end of the forecast period.
d) Maximum Level: If, at any time, the Operations Reserve reaches its maximum level, no
funds may be added to this reserve. Any further increase in the Gas Utility’s Fund Balance
shall be automatically included in the Unassigned Reserve described in Section 9, below.
Section 9. Unassigned Reserve
If the Operations Reserve reaches its maximum level, any further additions to the Gas Utility’s
Fund Balance will be held in the Unassigned Reserve. If there are any funds in the Unassigned
Reserve at the end of any fiscal year, the next Financial Plan presented to the City Council
must include a plan to assign them to a specific purpose or return them to the Gas Utility
ratepayers by the end of the first fiscal year of the next Financial Planning Period. For
example, if there were funds in the Unassigned Reserves at the end of FY 2015, and the next
Financial Planning Period is FY 2016 through FY 2020, the Financial Plan shall include a plan
to return or assign any funds in the Unassigned Reserve by the end of FY 2016. Staff may
present an alternative plan that retains these funds or returns them over a longer period of
time.
Section 10. Intra-Utility Transfers Between Supply and Distribution Funds
Item 14
Attachment C - Gas
FY2024 Financial Plan
Item 14: Staff Report Pg. 61 Packet Pg. 555 of 853
GAS UTILITY FINANCIAL PLAN
M a r c h 2 0 2 3 48 | P a g e
1
1
8
8
The Gas Utility records costs in two separate funds: the Gas Supply Fund and the Gas
Distribution Fund. At the end of each fiscal year staff is authorized to transfer an amount
equal to the difference between Gas Supply Fund costs and Gas Supply Fund Revenues, from
the Gas Distribution Fund Operations Reserve to the Gas Supply Fund, or vice versa. Such
transfers shall be included in the ordinance closing the budget for the fiscal year.
Section 11. Cap and Trade Program Reserve
This reserve tracks revenues from the sale of carbon allowances freely allocated by the
California Air Resources Board to the gas utility, under the State’s Cap and Trade Program.
Funds in this Reserve are managed in accordance with the City’s Policy on the Use of Freely
Allocated Allowances under the State’s Cap and Trade Program (the Policy), adopted by
Council Resolution 9487 in January 2015. At the end of each fiscal year staff is authorized to
transfer all revenues from the sale of allocated carbon allowances to this reserve.
Item 14
Attachment C - Gas
FY2024 Financial Plan
Item 14: Staff Report Pg. 62 Packet Pg. 556 of 853
GAS UTILITY FINANCIAL PLAN
M a r c h 2 0 2 3 49 | P a g e
1
1
8
8
APPENDIX D: DESCRIPTION OF GAS UTILITY COST CATEGORIES
This appendix describes the activities associated with the various cost categories referred to in
this Financial Plan.
This category includes the Gas Utility’s share of the call center, meter reading,
collections, and billing support functions. Billing support encompasses staff time associated with
bill investigations and quality control on certain aspects of the billing process. It does not include
maintenance of the billing system itself, which is included in Administration. This category also
includes CPAU’s key account representatives, who work with large commercial customers who
have more complex requirements for their gas services.
This category includes gas procurement, contract management, rate
setting, and tracking of legislation and regulation related to the gas industry.
This category includes the costs of a variety of distribution system
maintenance activities, including:
•surveying the gas system (50% of the system each year) and repairing any leaks found;
•investigating reports of damaged mains or services and perform emergency repairs;
•building and replacing gas services for new or redeveloped buildings; and
•testing and replacing meters to ensure accurate sales metering.
This category also includes a variety of functions the utility shares with other City utilities,
including:
•the Field Services team (which does field research of various customer service issues);
•the Cathodic Protection team (which monitors and maintains the systems that prevent
corrosion in metal pipes and reservoirs); and
•the General Services team (which manages and maintains equipment, paves and restores
streets after gas, water, or sewer main replacements, and provides welding services,
including certified gas line welding services)
: Accounting, purchasing, legal, and other administrative functions provided by
the City’s General Fund staff, as well as shared communications services and Utilities Department
administrative overhead and billing system maintenance costs.
: Includes the cost of administering gas efficiency programs and the
direct cost of rebates paid.
The Gas Utility’s engineers focus primarily on the CIP, but a small
portion of their time is spent assisting with distribution system maintenance.
Item 14
Attachment C - Gas
FY2024 Financial Plan
Item 14: Staff Report Pg. 63 Packet Pg. 557 of 853
APPENDIX E: GAS UTILITY COMMUNICATIONS SAMPLES
Item 14
Attachment C - Gas
FY2024 Financial Plan
Item 14: Staff Report Pg. 64 Packet Pg. 558 of 853
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No G-1-1
Effective 71-1-2023
Supersedes Sheet No G-1-1
dated 17-1-20232
A. APPLICABILITY:
This schedule applies to the following Customers receiving Gas Service from City of Palo Alto
Utilities:
1. Separately-metered single-family residential Customers;
2. Separately-metered multi-family residential Customers in multi-family residential
facilities.
B. TERRITORY:
This schedule applies anywhere the City of Palo Alto provides Gas Service.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge: ..................................................................................................$14.011.54
Tier 1 Rates: Per Therm
Supply Charges:
1. Commodity (Monthly Market Based) .............................................. $0.10-$4.00
2. Cap and Trade Compliance Charge ............................................ $0.00-$0.25
3. Transportation Charge ................................................................. $0.00-$0.25
4. Carbon Offset Charge .................................................................. $0.00-$0.10
Distribution Charge: ..........................................................................................$0.68075607
Tier 2 Rates: (All usage over 100% of Tier 1)
Supply Charges:
1. Commodity (Monthly Market Based) .............................................. $0.10-$4.00
2. Cap and Trade Compliance Charge ............................................. $0.00-$0.25
3. Transportation Charge ................................................................. $0.00-$0.25
4. Carbon Offset Charge .................................................................. $0.00-$0.10
Distribution Charge:.............................................................................................
. ...........................................................................................................$1.740643
38
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 65 Packet Pg. 559 of 853
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No G-1-2
Effective 71-1-2023
Supersedes Sheet No G-1-2
dated 17-1-20232
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for
delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance
with the state’s Cap and Trade Program, including the cost of acquiring compliance
instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap
and Trade Compliance Charge will change in response to changing market conditions,
retail sales volumes and the quantity of allowances required.
The Transportation Charge is based on the current PG&E Gas Transportation Rate to
Wholesale/Resale Customers (G-WSL) G-WSL rate for Palo Alto, accounting for delivery
losses to the Customer’s Meter.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse
gases produced in the burning of natural gas. The Carbon Offset Charge will change in
response to changing market conditions, changing sales volumes and the quantity of
offsets purchased within the Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto,
accounting for delivery losses to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Transportation, and Carbon Offset and
Transportation Charges will fall within the minimum/maximum ranges set forth in Section
C. Current and historic per therm rates for the Commodity, Cap and Trade Compliance,
Carbon Offset and Transportation se Charges are posted on the City Utilities website.1
2. Seasonal Rate Changes:
The Summer period is effective April 1 to October 31 and the Winter period is effective
from November 1 to March 31. When the billing period includes use in both the Summer
and the Winter periods, the usage will be prorated based on the number of days in each
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 66 Packet Pg. 560 of 853
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No G-1-3
Effective 71-1-2023
Supersedes Sheet No G-1-3
dated 17-1-20232
1 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/rates-schedules-for-utilities/monthly-gas-commodity-rates.pdf
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 67 Packet Pg. 561 of 853
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No G-1-4
Effective 71-1-2023
Supersedes Sheet No G-1-4
dated 17-1-20232
seasonal period, and the charges based on the applicable rates for each period. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Calculation of Usage Tiers
Tier 1 natural gas usage shall be calculated and billed based upon a level of 0.667 therms
per day during the Summer period and 2.0 therms per day during the Winter period,
rounded to the nearest whole therm, based on meter reading days of service. As an
example, for a 30 day bill, the Tier 1 level would be 20 therms during the Summer period
and 60 therms during the Winter period months. For further discussion of bill calculation
and proration, refer to Rule and Regulation 11.
{End}
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 68 Packet Pg. 562 of 853
RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No G-2-1
Supersedes Sheet No G-2-1
dated 17-1-20232
A. APPLICABILITY:
This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto
Utilities:
1. Commercial Customers who use less than 250,000 therms per year at one site;
2. Master-metered residential Customers in multi-family residential facilities.
B. TERRITORY:
This schedule applies anywhere the City of Palo Alto provides Gas Service.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge: .............................................................................................$129.7806.90
Per Therm
Supply Charges:
1. Commodity (Monthly Market Based) ......................................... $0.10-$4.00
2. Cap and Trade Compliance Charges ........................................... $0.00-$0.25
3. Transportation Charge ................................................................. $0.00-$0.25
4. Carbon Offset Charge .................................................................. $0.00-$0.10
Distribution Charge: ......................................................................................................$0.89417365
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for
delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance
with the state’s Cap and Trade Program, including the cost of acquiring compliance
instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and
Trade Compliance Charge will change in response to changing market conditions, retail sales
volumes and the quantity of allowances required.
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 69 Packet Pg. 563 of 853
RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No G-2-2
Supersedes Sheet No G-2-2
dated 17-1-20232
The Transportation Charge is based on the current PG&E Gas Transportation Rate to
Wholesale/Resale Customers (G-WSL) G-WSL rate for Palo Alto, accounting for delivery
losses to the Customer’s Meter.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases
produced in the burning of natural gas. The Carbon Offset Charge will change in response to
changing market conditions, changing sales volumes and the quantity of offsets purchased
within the Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto,
accounting for delivery losses to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Transportation, and Carbon Offset and
Transportation Charges will fall within the minimum/maximum ranges set forth in Section
C. Current and historic per therm rates for these Commodity, Cap and Trade Compliance,
Carbon Offset and Transportation Charges are posted on the City Utilities website.1
{End}
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 70 Packet Pg. 564 of 853
RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No G-2-3
Supersedes Sheet No G-2-3
dated 17-1-20232
1 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/rates-schedules-for-utilities/monthly-gas-commodity-rates.pdf
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 71 Packet Pg. 565 of 853
LARGE COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-3
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No G-3-1
Supersedes Sheet No G-3-1
dated 17-1-20232
A. APPLICABILITY:
This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto
Utilities:
1. Commercial Customers who use at least 250,000 therms per year at one site;
2. Customers at City-owned generation facilities.
B. TERRITORY:
This schedule applies anywhere the City of Palo Alto provides Gas Service.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge: $593.79489.12
Per Therm
Supply Charges:
1. Commodity (Monthly Market Based) .................................................... $0.10-$4.00
2. Cap and Trade Compliance Charges .................................................... $0.00-$0.25
3. Transportation Charge .......................................................................... $0.00-$0.25
4. Carbon Offset Charge ........................................................................... $0.00-$0.10
Distribution Charge: ......................................................................................................$0.88527292
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for
delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 72 Packet Pg. 566 of 853
LARGE COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-3
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No G-3-2
Supersedes Sheet No G-3-2
dated 17-1-20232
with the state’s Cap and Trade Program, including the cost of acquiring compliance
instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap
and Trade Compliance Charge will change in response to changing market conditions,
retail sales volumes and the quantity of allowances required.
The Transportation Charge is based on the current PG&E Gas Transportation Rate to
Wholesale/Resale Customers (G-WSL) G-WSL rate for Palo Alto, accounting for delivery
losses to the Customer’s Meter.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases
produced in the burning of natural gas. The Carbon Offset Charge will change in response
to changing market conditions, changing sales volumes and the quantity of offsets
purchased within the Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto,
accounting for delivery losses to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Transportation, and Carbon Offset and
Transportation Charges will fall within the minimum/maximum ranges set forth in Section
C. Current and historic per therm rates for these Commodity, Cap and Trade Compliance,
Carbon Offset and Transportation Charges are posted on the City Utilities website.1
2. Request for Service
A qualifying Customer may request service under this schedule for more than one account
or meter if the accounts are located on one site. A site consists of one or more contiguous
parcels of land with no intervening public right-of- ways (e.g. streets).
3. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable City of Palo
Alto full-service rate schedule.
{End}
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 73 Packet Pg. 567 of 853
LARGE COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-3
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No G-3-3
Supersedes Sheet No G-3-3
dated 17-1-20232
1 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/rates-schedules-for-utilities/monthly-gas-commodity-rates.pdf
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 74 Packet Pg. 568 of 853
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No. G-10-1
Supersedes Sheet No G-10-1
dated 17-1-20232
A. APPLICABILITY:
This schedule applies to the sale of natural gas to the City-owned compressed natural gas (CNG) fueling
station at the Municipal Service Center in Palo Alto.
B. TERRITORY:
Applies to the City’s CNG fueling station located at the Municipal Service Center in City of Palo Alto.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge: ...............................................................................................$87.7772.30
Per Therm
Supply Charges:
Commodity (Monthly Market Based) ................................................................ $0.10-$4.00
Cap and Trade Compliance Charges.................................................................. $0.00-$0.25
Transportation Charge ....................................................................................... $0.00-$0.25
Carbon Offset Charge ........................................................................................ $0.00-$0.10
Distribution Charge .........................................................................................................$0.0145120
D. SPECIAL CONDITIONS
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted
for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill
amount may be broken down into appropriate components as calculated under Section C.
The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at
PG&E Citygate, accounting for delivery losses to the Customer’s Meter.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the
state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to
cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will
change in response to changing market conditions, retail sales volumes and the quantity of
allowances required.
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 75 Packet Pg. 569 of 853
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No. G-10-2
Supersedes Sheet No G-10-2
dated 17-1-20232
The Transportation Charge is based on the current PG&E Gas Transportation Rate to
Wholesale/Resale Customers (G-WSL) G-WSL rate for Palo Alto, accounting for delivery losses to
the Customer’s Meter.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases produced
in the burning of natural gas. The Carbon Offset Charge will change in response to changing market
conditions, changing sales volumes and the quantity of offsets purchased within the Council-
approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL rate for Palo Alto, accounting for
delivery losses to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Transportation, and Carbon Offset and
Transportation Charges will fall within the minimum/maximum range set forth in Section C.
Current and historic per therm rates for these Commodity, Cap and Trade Compliance, Carbon
Offset and Transportation Charges are posted on the City Utilities website.1
{End}
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 76 Packet Pg. 570 of 853
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 71-1-2023
Sheet No. G-10-3
Supersedes Sheet No G-10-3
dated 17-1-20232
1 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/rates-schedules-for-utilities/monthly-gas-commodity-rates.pdf
Item 14
Attachment D - Gas Rate
Schedules FY24
Item 14: Staff Report Pg. 77 Packet Pg. 571 of 853
City Council
Staff Report
From: City Manager
Report Type: PUBLIC HEARING
Lead Department: Utilities
Meeting Date: April 17, 2023
Staff Report:2303-1235
TITLE
PUBLIC HEARING: Adoption of a Resolution Approving the Fiscal Year 2024 Electric Utility
Financial Plan and Proposed Reserve Transfers, Deactivating Utility Rate Schedule E‐HRA, and
Amending Utility Rate Schedules E‐1, E‐2, E‐2‐G, E‐ 4, E‐4‐G, E‐4 TOU, E‐7, E‐7‐G, E‐7 TOU, E‐NSE,
and E‐EEC; CEQA Status: Not a project under Public Resources Code 15378(b)(5) and exempt
under Public Resources Code 15273(a)
RECOMMENDATION
The Finance Committee and Staff recommend the City Council adopt a Resolution (Attachment
A):
1. Approving the FY 2024 Electric Financial Plan (Attachment B); and
2. Approving the following transfers at the end of FY 2023:
a. Up to $12 million from the Supply Operations Reserve to the Distribution Operations
Reserve; and
b. Up to $4.5 million from the Supply Operations Reserve to the Cap and Trade Program
Reserve; and
3. Approving the following transfers in FY 2024:
a. Up to $10 million from the Supply Operations Reserve to the Electric Special Projects
(ESP) reserve; and
b. Up to $8 million from the Supply Operations Reserve to the Hydroelectric Stabilization
Reserve; and
c. Up to $3 million from the Supply Operations Reserve to the Cap and Trade Program
Reserve; and
4. Approving the following rate actions for FY 2024 (Attachment C):
a. Deactivation of the hydroelectric rate adjuster from customer bills effective July 1,
2023;
b. An increase to retail electric rates E-1 (Residential Electric Service), E-2 (Small Non-
Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU
(Medium Non-Residential Time of Use Electric Service), E-7 (Large Non-Residential
Electric Service), and E-7 TOU (Large Non-Residential Time of Use Electric Service) of
Item 15
Item 15 Staff Report
Item 15: Staff Report Pg. 1 Packet Pg. 572 of 853
21% effective July 1, 2023;
c. An increase to the Export Electricity Compensation (E-EEC-1) rate to reflect 2022
avoided cost, effective July 1, 2023;
d. An increase to the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect
current projections of FY 2023 avoided cost, effective July 1, 2023; and
e. An update to the Residential Master-Metered and Small Non-Residential Green Power
Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-
4-G), and the Large Non-Residential Green Power Electric Service (E-7-G) rate
schedules to reflect modified distribution and commodity components, effective July
1, 2023
EXECUTIVE SUMMARY
On March 21, 2023 the Finance Committee reviewed the recommended Council actions above
and unanimously recommended them for Council approval. The attached FY 2024 Electric Utility
Financial Plan (Attachment B) and proposed rate changes (Attachment C) reflect the Finance
Committee (and staff) recommendation. The actions above and rate changes included in
Attachment C result in the deactivation of the hydroelectric rate adjuster and a 21% increase to
the base electric rates, the net effect of which is a 5% decrease to the customer bill. Approval of
this item would result in implementation of the finalized rates for FY 2024, beginning July 1, 2023.
BACKGROUND
Every year staff presents the Finance Committee with Financial Plans for its Electric, Gas, Water,
and Wastewater Collection Utilities and recommends any rate adjustments required to maintain
their financial health. These Financial Plans include a comprehensive overview of the utility’s
operations, both retrospective and prospective, and are intended to be a reference for UAC and
Council members as they review the budget and staff’s rate recommendations. Each Financial
Plan also contains a set of Reserves Management Practices describing the reserves for each utility
and the management practices for those reserves
ANALYSIS
Staff and the Finance Committee propose a set of electric utility rate changes that will decrease
bills by 5%. The proposal involves deactivating the hydroelectric rate adjuster while increasing
base electric rates 21%, for a net decrease in utility bills of 5%. This is in contrast to the original
staff proposal recommended for approval by the UAC in March of this year, which involved a 50%
reduction in the hydroelectric rate adjuster and a 14% increase in the base electric rates. The
new proposal is made possible by the pending receipt of a $24 million refund from the Bureau of
Reclamation of overcharges associated with the Central Valley Project, where the City gets most
of its hydroelectric power, due to a successful result in litigation the City participated in against
the Federal Bureau of Reclamation over overcharges associated with the Central Valley Project.
Item 15
Item 15 Staff Report
Item 15: Staff Report Pg. 2 Packet Pg. 573 of 853
Additional detail on the staff proposal is available in the study session staff report on tonight’s
Council agenda (Staff Report 2304-1247, April 17, 2023) and in the March 21, 2023 Finance
Committee staff report (Staff Report 2303-1109).1
FISCAL/RESOURCE IMPACT
The resource impact of the recommendations summarized in this report is the continued
financial solvency of the electric utility and, as the City is a ratepayer, an increase to General Fund
expenses (due to the rate increases) and revenues (due to the General Fund transfer). The
estimated FY 2024 revenue impact of the recommendations in this report would be a $12 million
increase or 6% compared to FY 2023 levels in the Electric Fund (excluding expected monies to be
received from the CVPIA payment). General Fund utility bill costs are expected to increase by
$0.14 million as a result of these rate changes.
POLICY IMPLICATIONS
The proposed electric rate adjustments are consistent with Council-adopted Reserve
Management Practices that are part of the Financial Plan and were developed using a cost-of-
service study and methodology consistent with the California constitution and industry-accepted
cost of service principles. As noted in the Reserves Management Practices (Appendix C of
Attachment B), if reserves fall below the minimum guidelines, Council approval is required for a
rate plan that requires more than one year to return reserves to within guideline levels.
COMMITTEE AND COMMISSION REVIEW
Utilities staff presented a different proposal to the UAC on March 1, 2023 which is summarized
in the staff report presented to the UAC that evening.2
Staff presented to the Finance Committee on March 21, 20233 a recommendation that Council
approve the FY 2024 Electric Utility Financial Plan as follows, as detailed in staff report
2303-1141:
At the March 21 Finance Committee meeting, Staff recommended the following transfers at the
end of FY 2023:
1. Up to $12 million from the Supply Operations Reserve to the Distribution Operations
Reserve; and
2. Up to $4.5 million from the Supply Operations Reserve to the Cap and Trade Program
Reserve; and
1Council Staff Report 2303-1109
https://cityofpaloalto.primegov.com/meeting/document/1854.pdf?name=Item%204%20Staff%20Report
2 Utilities Advisory Commission Staff Report https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-
2023/03-mar-2023/03-01-2023-item-4.pdf
3 Finance Committee Staff Report 2303-1141
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11228
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In addition, Staff recommended the following transfers in FY 2024:
STAKEHOLDER ENGAGEMENT
th and 14th, 2023.
ENVIRONMENTAL REVIEW
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the Council incorporates these documents herein and finds that sufficient evidence has been
presented setting forth with specificity the basis for this claim of CEQA exemption.
ATTACHMENTS
Attachment A: Electric Resolution FY24
Attachment B: Electric FY 2024 Financial Plan
Attachment C: Rate Schedule Combined
APPROVED BY:
Dean Batchelor, Director Utilities
Staff: Micah Babbitt
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*Yet to be Passed*
Resolution No.
Resolution of the Council of the City of Palo Alto Approving the Fiscal
Year 2024 Electric Utility Financial Plan and Reserve Transfers, Deactivating
Utility Rate Schedule E-HRA (Electric Hydro Rate Adjuster), and Amending
Utility Rate Schedules E-1 (Residential Electric Service), E-2 (Residential
Master-Metered and Small Non-Residential Electric Service), E-2-G
(Residential Master- Metered and Small Non-Residential Green Power
Electric Service), E-4 (Medium Non-Residential Electric Service), E-4-G
(Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium
Non-Residential Time of Use Electric Service), E-7 (Large Non-Residential
Electric Service), E-7-G (Large Non- Residential Green Power Electric Service),
E-7 TOU (Large Non-Residential Time of Use Electric Service), E-NSE (Net
Surplus Electricity Compensation Rate), and E-EEC (Export Electricity
Compensation)
R E C I T A L S
A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of
its utilities with the goal of ensuring adequate revenue to fund operations. This includes making
long-term projections of market conditions, the physical condition of the system, and other
factors that could affect utility costs, and setting rates adequate to recover these costs. It does
this with the goal of providing safe, reliable, and sustainable utility services at competitive rates.
The City adopts Financial Plans to summarize these projections.
B. The City uses reserves to protect against contingencies and to manage other
aspects of its operations, and regularly assesses the adequacy of these reserves and the
management practices governing their operation. The status of utility reserves and their
management practices are included in Reserves Management Practices attached to and made
part of the Financial Plans.
C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the
City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and
charges.
D. On April 17, 2023, the City Council heard and approved the proposed
rate increase at a noticed public hearing.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council hereby approves the FY 2024 Electric Utility Financial Plan
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SECTION 2. The Council hereby approves the following transfers to be made by the
end of FY 2023, as described in the FY 2024 Electric Utility Financial Plan:
a. A transfer of up to $12 million from the Supply Operations Reserve to the
Distribution Operations Reserve; and
b. A transfer of up to $4.5 million from the Supply Operations Reserve to the Cap and
Trade Program Reserve; and
SECTION 3. The Council hereby approves the following transfers to be made by the
end of FY 2024, as described in the FY 2024 Electric Utility Financial Plan:
a. A transfer of up to $10 million from the Supply Operations Reserve to the Electric
Special Projects (ESP) reserve; and
b. A transfer of up to $8 million from the Supply Operations Reserve to the
Hydroelectric Stabilization Reserve; and
c. A transfer of up to $3 million from the Supply Operations Reserve to the Cap and Trade
Program Reserve; and
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-HRA (Electric Hydro Rate Adjuster) is hereby deactivated, effective July 1,
2023.
SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-1 (Residential Electric Service) is hereby amended to read as attached and
incorporated. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2023.
SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-2 (Residential Master-Metered and Small Non-Residential Electric Service) is
hereby amended to read as attached and incorporated. Utility Rate Schedule E-2, as amended,
shall become effective July 1, 2023.
SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-2-G (Residential Master-Metered and Small Non-Residential Green Power
Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule
E-2-G, as amended, shall become effective July 1, 2023.
SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-4 (Medium Non-Residential Electric Service) is hereby amended to read as
attached and incorporated. Utility Rate Schedule E-4, as amended, shall become effective July
1, 2023.
SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-4-G (Medium Non-Residential Green Power Electric Service) is hereby
amended to read as attached and incorporated. Utility Rate Schedule E-4-G, as amended, shall
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become effective July 1, 2023.
SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-4 TOU (Medium Non-Residential Time of Use Electric Service) is hereby
amended to read as attached and incorporated. Utility Rate Schedule E-4 TOU, as amended,
shall become effective July 1, 2023.
SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-7 (Large Non-Residential Electric Service) is hereby amended to read as
attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective
July 1, 2023.
SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-7-G (Large Non-Residential Green Power Electric Service) is hereby amended to
read as attached and incorporated. Utility Rate Schedule E-7-G, as amended, shall become
effective July 1, 2023.
SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-7 TOU (Large Non-Residential Time of Use Electric Service) is hereby amended
to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become
effective July 1, 2023.
SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-NSE (Net Surplus Electricity Compensation Rate) is hereby amended to read as
attached and incorporated. Utility Rate Schedule E-NSE-1, as amended, shall become effective
July 1, 2023.
SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-EEC-1 (Export Electricity Compensation) is hereby amended to read as attached and
incorporated. Utility Rate Schedule E-EEC-1, as amended, shall become effective July 1, 2023.
SECTION 16. The Council makes the following findings:
a. The revenue derived from the adoption of this resolution shall be used only for the
purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto.
b. The fees and charges adopted by this resolution are charges imposed for a specific
government service or product provided directly to the payor that are not provided
to those not charged, and do not exceed the reasonable costs to the City of providing
the service or product.
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FY 2024 ELECTRIC
UTILITY
FINANCIAL PLAN
FY 2024 TO FY 2028
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FY 2024 ELECTRIC UTILITY
FY 2024 TO FY 2028
TABLE OF CONTENTS
Section 1: Definitions and Abbreviations.................................................................................4
Section 2: Executive Summary and Recommendations............................................................5
Section 2A: Overview of Financial Position..................................................................................5
Section 2B: Summary of Proposed Actions..................................................................................9
Section 3: Detail of FY 2023 Rate and Reserves Proposals......................................................10
Section 3A: Rate Design.............................................................................................................10
Section 3B: Current and Proposed Rates...................................................................................11
Section 3C: Bill Impact of Proposed Rate Changes....................................................................13
Section 3D: Proposed Reserve Transfers ...................................................................................14
Section 4: Utility Overview....................................................................................................16
Section 4A: Electric Utility History.............................................................................................16
Section 4B: Customer Base........................................................................................................19
Section 4C: Distribution System.................................................................................................19
Section 4D: Cost Structure and Revenue Sources......................................................................20
Section 4E: Reserves Structure..................................................................................................21
Section 4F: Competitiveness......................................................................................................22
Section 5: Utility Financial Projections...................................................................................23
Section 5A: Load Forecast .........................................................................................................23
Section 5B: FY 2018 to FY 2022 Cost and Revenue Trends........................................................25
Section 5C: FY 2022 Results.......................................................................................................27
Section 5D: FY 2023 Projections................................................................................................28
Section 5E: FY 2024 – FY 2028 Projections................................................................................28
Section 5F: Risk Assessment and Reserves Adequacy................................................................30
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Section 5G: Long-Term Outlook.................................................................................................36
Section 5H: Alternative Rate Projections...................................................................................38
Section 6: Details and Assumptions.......................................................................................39
Section 6A: Electricity Purchases...............................................................................................39
Section 6B: Operations..............................................................................................................41
Section 6C: Capital Improvement Program (CIP).......................................................................42
Section 6D: Debt Service............................................................................................................43
Section 6E: Equity Transfer........................................................................................................44
Section 6F: Wholesale Revenues and Other Revenues..............................................................44
Section 6G: Sales Revenues.......................................................................................................45
Section 7: Communications Plan............................................................................................46
Appendices............................................................................................................................48
Appendix A: Electric Utility Financial Forecast Detail................................................................49
Appendix B: Electric Utility Reserves Management Practices ...................................................53
Appendix C: Description of Electric utility Operational Activities..............................................58
Appendix D: Samples of Recent Electric Utility Outreach Communications..............................59
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SECTION 1: DEFINITIONS AND ABBREVIATIONS
CAISO California Independent System Operator
CARB California Air Resources Board
CIP Capital Improvement Program
CPAU City of Palo Alto Utilities Department
CPUC California Public Utilities Commission
CVP Central Valley Project
GWh a gigawatt-hour, equal to 1,000 MWh or 1,000,000 kWh. Commonly used for
discussing total monthly or annual electric load for the entire city, or the monthly or
annual output of an electric generator.
kWh a kilowatt-hour, the standard unit of measurement for electricity sales to customers.
kW a kilowatt, a unit of measurement used in reference a customer’s peak demand (the
highest 15 minute average consumption level in a month), which is used for billing
large and mid-size commercial customers.
kV a kilovolt, one thousand volts, a unit of measurement of the voltage at which a section
of the distribution system operates. The transmission system operates at 115-500 kV,
and this is lowered to 60 kV in the sub-transmission section of the Electric Utility’s
distribution section, then 12 kV or 4 kV in the rest of the distribution system, and
finally 120, 240, or 480 volts at the electric outlet.
MWh a megawatt-hour, equal to 1,000 kWh. Commonly used for measuring wholesale
electricity purchases.
MW a megawatt, equal to 1,000 kW. Commonly used when discussing maximum electricity
demand for all customers in aggregate.
PG&E Pacific Gas and Electric
REC Renewable Energy Certificate
RPS Renewable Portfolio Standard
Sub-transmission System: The section of the Electric Utility’s distribution system that operates
at 60 kV and which interfaces with PG&E’s transmission system.
Transmission System: Sections of the electric grid that operate at high voltages, generally 115 kV
or more. The voltage at the intersection of the Electric Utility’s distribution system
and PG&E’s transmission system is 115 kV. The Electric Utility does not own or operate
any transmission lines.
UCC Utility Control Center
SCADA Supervisory Control and Data Acquisition system, the system of sensors,
communications, and monitoring stations that enables system operators to monitor
and operate the system remotely.
WAPA, or Western: Western Area Power Administration, the agency that markets power from
CVP hydroelectric generators and other hydropower owned by the Bureau of
Reclamation.
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SECTION 2: EXECUTIVE SUMMARY AND RECOMMENDATIONS
This document presents a Financial Plan for the City of Palo Alto (City) Electric Utility for the next
five-year forecast, FY 2024 - 2028. This Financial Plan describes how revenues will cover the costs
of operating the utility safely over that time while adequately investing for the future. It also
addresses the financial risks facing the utility over the short term and long term and includes
measures to mitigate and manage those risks.
SECTION 2A: OVERVIEW OF FINANCIAL POSITION
From July 2019 through April 2022 the City did not increase rates, to mitigate the economic
impact of the COVID-19 pandemic on residents and businesses. In that time supply and
distribution expenses increased $50 million (30%). The expense increases combined with
pandemic-related electricity sales revenue declines created a $43 million shortfall in FY 2022.
Some of this was related to the impacts of extreme drought and rising electricity market prices,
and in response, the City activated the hydroelectric rate adjuster (E-HRA) in April 2022. In 2023
the City began increasing base rates to begin recovering costs, starting with a 5% rate increase
on July 1, 2022. The intent was to use loans from the Electric Special Projects Reserve and what
Operations Reserves remained to phase in rate increases gradually. But in late 2022 electricity
market prices increased at unprecedented levels, leading to the need to increase the
hydroelectric rate adjuster on January 1, 2023 to match the cost of replacing hydroelectric power
with market power. Costs are projected to exceed revenues again in FY 2023, leading to further
depletion of reserves.
This forecast assumes some decrease in power prices after this year, but prices are expected to
continue to remain elevated over FY 2022 and earlier levels based on forward market price curves
developed by OTC Global Holdings, an independent commodity broker. Some recovery of
hydroelectric generation is forecasted in FY 2024 based on the Western Area Power
Administration’s current forecast, but not to normal levels given the dry ground and low reservoir
levels, which are expected to absorb a significant share of precipitation even if it is above average.
Normal levels of hydroelectric generation are not forecasted until FY 2026, assuming normal
rainfall in the winter of 2022/2023 and 2023/2024. The forecast assumes it takes multiple years
to recover because reservoirs can take multiple seasons to fill and return to normal operations
based on historical experience. To reduce hydroelectric-related volatility in the future, staff is
now making its rate projections assuming that long-term “normal” production from the City’s
hydroelectric resources is about 80% of historical average levels.
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Since presenting the rate proposal and financial plan to the UAC on March 1, 2023, new
information has arisen that materially improves the electric utility’s financial position. Staff
expects to receive a $24 million payment in the coming weeks from successful litigation against
the Bureau of Reclamation for overcharges related to power purchased from the Central Valley
Project. The litigation was filed in 2014 by the Northern California Power Agency (NCPA) and its
members (NCPA, City of Redding and City of Roseville v. United States; Case No. 14-817C)1. Based
on the information, staff revised the rate proposal provided to the UAC and proposes a net
average rate reduction of 5%. The net rate reduction results from the combination of deactivating
the hydroelectric rate adjuster (HRA) and increasing the base rates by 21%. The previous plan
presented to UAC reduced the HRA by 50% and increased the base rates by 14%, resulting in a
negligible average rate change. However, the $24M damages repayment can be used to replenish
reserves with some funds available for rate stabilization, providing adequate reserves to manage
hydroelectric risk and enabling future rate increases to be phased over a slightly longer period.
Significantly for this year’s rate proposal, the replenished reserves enable the HRA to be removed
entirely.
•Significant increases in transmission costs
•Significant increases in capital investment to replace aging infrastructure
•Increased operations costs
•Debt service costs for grid modernization improvements and investments in fiber
infrastructure to support AMI.
1 NCPA is a Joint Powers Authority with sixteen public electric utility members, including the City of Palo
Alto.
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market prices. Overall supply costs are projected to increase at an estimated 0.5% per year on
average from FY2023 levels, which are estimated to be the highest on record. Operations and
maintenance costs are about 30% of total costs and are projected to increase by about 1.5% per
year on average due to both inflation as well as salary and benefits increases. Capital
improvement costs are projected to fall slightly in the short term as the Smart Grid technology
project and rebuilding of the Foothill distribution system spending declines from its peaks in
FY2022 and FY2023, then stabilize just over $20 million a year thereafter. Ongoing projects will
include rebuilds of existing underground districts as well as substation improvements and voltage
conversion projects.
Expenses ($000)FY 2022
(act)
FY 2023
(est)FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Power Supply Purchases
Operations
Capital Projects
Debt Service from Grid
Modernization and Fiber
Projects
TOTAL
Expenses ($000)FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Grid Modernization
Projects
Electric Utility Fiber
Backbone
TOTAL
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Table 3: Projected Electric Rates, FY 2024 to FY 2028
Current Proposed Projected
Projection Mid-Year
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
•In FY 2018 Council approved (Staff Report 81862), a $10 million transfer from the Electric
Special Projects (ESP) Reserve to the Operations Reserve to mitigate higher supply costs
due to the drought, the costs of new renewable energy projects coming online and
increasing transmission charges. $5 million was repaid in FY 2020
•In FY 2022 Council approved (Staff Report 13361, June 13, 2022), a $5 million transfer
from the ESP Reserve to the Operations Reserve to avoid rate increases exceeding 5%.
2 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-
manager-reports-cmrs/year-archive/2017/8186.pdf
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Table 4: Reserves Starting and Ending Balances, Revenues, Expenses, Transfers To/(From)
Reserves, Operations and Capital (CIP) Reserve Guideline Levels for FY 2023 to FY 2028 ($000)
F F F F F F
S
1 S 2 1 1 1 2 3
2 D 2 5 7 1 1 1
3 C 8 8 8 8 5 1
4 E 2 1 2 2 2 2
5 H 4 4 8 8 8 8
6 L 7 6 5 4 4 3
7 C 1 5 8 1 1 1
R
8 S 1 1 1 1 1 1
9 D 6 7 8 9 1 1
T
a
-
D (
b
-
a (((
c
-
E -
a S ((((((
1 D 1 --(((
1 C ---5 5 5
1 E -1 -2 2 2
1 H -8 ----
1 L ------
1 C 4 2 2 ---
C
1 D
1 C
E
1 S ((((((
2 D ((((((
2 P ((((((
2 E ((---(
2 H ------
2 L (((((-
E
1 S 1 1 1 2 3 3
2 D 5 7 1 1 1 1
3 C 8 8 8 5 1 1
4 E 1 2 2 2 2 2
5 H 4 8 8 8 8 8
6 L 6 5 4 4 3 3
7 C 5 8 1 1 1 1
O
2 M 2 2 2 2 2 2
2 M 4 4 4 4 4 4
O
2 M 9 8 9 9 1 1
2 M 1 1 1 1 1 1
C
2 M 4 5 5 4 4 5
3 M 2 2 2 3 3 3
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SECTION 2B: SUMMARY OF PROPOSED ACTIONS
SECTION 3: DETAIL OF FY 2024 RATE AND RESERVES PROPOSALS
3
3 Staff Report 6857 http://www.cityofpaloalto.org/civicax/filebank/documents/52274
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drafted by EES Consulting, Inc. in 2015/16. The COSA is also based on design guidelines adopted
by Council on September 15, 2015 (Staff Report 6061).
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Table 5: Current and Proposed Electric Rates
P
R
($%
E
E 0 0 --
E
T 0 0 0 2
T 0 0 0 2
M 0 0 0 2
S 0 0 0 2
W 0 0 0 2
M 0 1 0 2
S 0 0 0 2
W 0 0 0 2
S 3 3 6 2
W 1 2 4 2
M 1 2 3 2
S 0 0 0 2
W 0 0 0 2
S 3 3 6 2
W 1 2 3 2
M 5 6 1 2
C C
E
E
E
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Compensation rate represents the value of the City’s avoided cost or value of customer-
generated electricity in Palo Alto, including compensation for the energy, avoided capacity
charges, avoided transmission and ancillary service charges, avoided transmission and
distribution (T&D) losses, and renewable energy credits (RECs), or environmental attributes. Staff
proposes increasing the E-NSE-1 rate to $0.1535/kWh based on updated avoided cost
calculations for 2022 reflecting the greatly increased electricity market prices expected to
continue into the future.
Table 5: NEM Buyback Rates – Current vs. Proposed
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SECTION 3C: BILL IMPACT OF PROPOSED RATE CHANGES
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Table 6: Impact of Proposed Electric Rate Changes on Customer Bills
Bill under Change
Rate
Schedule
Usage
(kWh/mo)
Peak
Demand
(kW-mo)
Current
Rates
($/mo)
Bill Under
Rates Proposed
7/1/23 ($/mo)$/mo %
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The remaining $6 million would be added to the Supply and Distribution Operations Reserve and
used to phase in the rate increases needed to stabilize those reserves slightly more gradually over
the forecast period.
4 all of this revenue was spent on purchasing renewable energy. In accordance with
Council’s August 2020 direction, the City has began exchanging certain types of renewable energy
to take advantage of market conditions to reduce supply costs, fund electric utility programs and
capital investment, and raise funds for local decarbonization. For FY 2021 and FY 2022 Council
directed that 1/3 of the revenue be used for local decarbonization and 2/3 for rate reduction. On
December 12, 20225 Council approved continuation of the program with 100% of revenue going
to local decarbonization. In accordance with Council policy, staff will fund the Cap and Trade
Program Reserve with unspent revenues from the sale of carbon allowances freely allocated to
the electric utility in an amount equal to 100% of the FY 2022 Renewable Energy Credit (REC)
Exchange program revenues, currently estimated to be between $2.7 million and $4.5 million
going forward, for future local decarbonization projects.
Section 5E:
FY 2022 – FY 2026 Projections show the impact of these transfers on reserves levels. Table 7
shows the projected balance of each of the Electric Utility reserves for the period covered by this
Financial Plan. See also: Appendix A: Electric Utility Financial Forecast Detail
4 https://www.cityofpaloalto.org/civicax/filebank/documents/78046
5 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=8713
Utilities Advisory Commission Recommend the City Council Affirm the
Continuation of the REC Exchange Program, Staff Report #14375
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Table 7: End of Fiscal Year Electric Utility Reserve Balances for FY 2022 to FY 2028
SECTION 4: UTILITY OVERVIEW
Section 5: Utility
Financial Projections and Section 6: Details and Assumptions.
E
(F F F F F F F
R
C
L
C
U
P
S
H
C
R
D
O
U
T
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customer than they had been in 1950. These decades also saw several other notable events,
including:
•1964: CPAU entered into a favorably priced 40-year contract with the Federal Bureau of
Reclamation to purchase power from the Central Valley Project (CVP), a contract which
later was managed by the Western Area Power Administration (WAPA) an office of the
Department of Energy created in the 1970s to market power from various hydroelectric
projects operated by the Federal Government, including the CVP.
•1965: The City began a long-term program to underground its overhead utility lines
(Ordinance 2231).
•1968: Palo Alto joined several other small municipal utilities to form the Northern
California Power Agency (NCPA), a joint action agency intended to make the group less
vulnerable to actions by private utilities and to enable investment in energy supply
projects.
6 that
enabled CPAU to sell electricity outside its service territory and allowed customers within CPAU’s
service territory to choose other providers. The utility unbundled its electric rates, creating
separate supply and distribution components, which would enable customers to receive only
distribution service while purchasing the electricity itself from another provider. The energy crisis
in 2000 to 2001 led to the suspension of direct access by the CPUC in September 2001 as
wholesale energy prices skyrocketed. The Electric Utility was less impacted than other utilities by
the 2000 to 2001 energy crisis thanks to the Calaveras project and its contract with WAPA for
CVP hydropower.
6 Implementation of Direct Access for Electric Utility Customers, CMR:460:97, December 1, 1997
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to balance the monthly and annual variability of CVP generation. The new contract would provide
only a third of Palo Alto’s requirement, and the monthly and annual variability in CVP generation
would be passed directly to Palo Alto. As a result, electric supply costs would increase and CPAU
needed to more actively manage its supply portfolio. CPAU began purchasing power from
marketers and also investigated building a power plant in Palo Alto or partnering in the
development of a gas-fired power plant elsewhere. Climate change was also becoming more of
a concern to the community, and gradually CPAU shifted its focus to the procurement of
renewable energy. In 2002 the Council adopted a goal of achieving 20% of its energy supply from
renewables by 2015. Subsequently the City signed its first contract for renewable power, a
contract for energy from a wind generator commencing deliveries in 2005. In 2011 the renewable
energy goal was increased to at least 33% by 2015, and in 2013 the City adopted a plan to make
its electric supply 100% carbon neutral, which it achieves through the combination of its carbon-
free hydroelectric supplies, purchases of long-term renewable energy supplies, and short-term
RECs to meet the balance of its needs.
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SECTION 4B: CUSTOMER BASE
7 Non-residential customers use the majority of their electricity
for cooling, ventilation, lighting, office equipment (offices), cooking (restaurants), and
refrigeration (grocery stores).8
7 Source: Residential Appliance Saturation Survey, California Energy Commission, 2010
8 Source: Statewide Commercial End Use Study, California Energy Commission report, 2006.
Figure 1: Customer Consumption By Class (FY 2022)
18%
6%
32%
44%Residential
Small Comm.
Med. Comm.
Large Comm.
2
5
3
4 R
S
M
L
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SECTION 4D: COST STRUCTURE AND REVENUE SOURCES
Section
5F: Risk Assessment and Reserves
Adequacy.
Figure 2: Cost Structure (FY 2022)
54%
30%
16%
Commodity
Supply
Operations
Capital
54%
30%
16%
Commodity
Supply
Operations
Capital
5
3
1
C
O
C
Figure 3: Hydroelectric Variability as a % of Load (FY 2022)
0%
50%
100%
150%
200%
Low Hydro Average High Hydro
Surplus Hydro (sales)
Market Power/RECs
Hydro
Renewables
Load
Figure 4: Revenue Structure (FY 2022)
79%
21%
Sales of Electricity
Other Revenue
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program associated with its contract with WAPA, revenues from sales of surplus hydroelectric
energy during wet years, as well as LCFS and Cap and Trade revenues. Appendix A: Electric Utility
Financial Forecast Detail shows more detail on the utility’s cost and revenue structures.
Section 4B: Customer Base, nearly three quarters of the utility’s electricity sales
are to the 960 largest customers, which provide a similar share of the utility’s revenue stream.
About 25% of the utility’s revenue comes from peak demand charges on large non-residential
customers. Due to moderate weather and the prevalence of natural gas heating, however, loads
(and therefore revenues) are very stable for this utility, without the large seasonal air
conditioning or winter heating loads seen at some other utilities.
Appendix B: Electric Utility Reserves
Management Practices for more detailed definitions and guidelines for reserve management:
•Reserves for Commitments: Reserves equal to the utility’s outstanding contract liabilities
for the current fiscal year. Most City funds, including the General Fund, have a
Commitments Reserve.
•Reserves for Reappropriations: Reserves for funds dedicated to projects re-appropriated
by the City Council, nearly all of which are capital projects. Most City funds, including the
General Fund, have a Re-appropriations Reserve. This is currently an important reserve
for all utility funds, but changes in budgeting practices will change that in future years, as
described in Section 3C (Reserves Management Practices).
•Electric Special Projects (ESP) Reserve: This reserve was formerly called the Calaveras
Reserve, which was accumulated during deregulation of California’s electric system to
fund the stranded costs associated primarily with the Calaveras hydroelectric resource
and the California-Oregon Transmission Project. When that reserve was no longer needed
for that purpose, the reserve was renamed and the purpose was changed to fund projects
with significant impact that provide demonstrable value to electric ratepayers.
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•Hydroelectric Stabilization Reserve: This contingency reserve is used for managing
additional costs due to below average hydroelectric generation, or to hold surpluses
resulting from above average hydroelectric generation.
•Underground Loan Reserve: This reserve is an accounting tool used to offset receivables
associated with loans made through the underground loan program. It is adjusted
according to principal payments made on those loans.
•Cap and Trade Program Reserve: This reserve tracks unspent or unallocated revenues
from the sale of carbon allowances freely allocated by the California Air Resources Board
to the electric utility, under the State’s Cap and Trade Program. Funds in this Reserve are
managed in accordance with the City’s Policy on the Use of Freely Allocated Allowances
under the State’s Cap and Trade Program.
•Low Carbon Fuel Standard (LCFS) Reserve: This reserve tracks revenues earned via the
sale of Low Carbon Fuel Credits allocated by the California Air Resources Board to the City,
in accordance with California’s Low Carbon Fuel Standard program.
•Public Benefits Reserve: CPAU’s electric rates include a separate charge called the “Public
Benefits Charge” which generates revenue to be used for energy efficiency, demand-side
renewable energy, research and development, and low-income energy efficiency
services. Any funds not expended in the current year are added to the Public Benefits
Reserve for use in future years.
•Capital Improvement Program (CIP) Reserve: The CIP reserve can be used to accumulate
funds for future expenditure on CIP projects, as well as to manage cash flow for ongoing
capital projects. This reserve can also act as a contingency reserve for unforeseen capital
expenses. This type of reserve is used in other utility funds (Water, Gas, and Wastewater
Collection) as well.
•Supply and Distribution Rate Stabilization Reserves: These reserves are intended to be
empty unless one or more large rate increases are anticipated in the forecast period. In
that case, funds can be accumulated to spread the impact of those future rate increases
across multiple years. This type of reserve is used in other utility funds (Gas, Wastewater
Collection, and Water) as well.
•Supply and Distribution Operations Reserves: These are the primary contingency
reserves for the Electric Utility and are used to manage yearly variances from budget for
operational costs and electric supply costs (aside from variances related to hydroelectric
generation). This type of reserve is used in other utility funds (Gas, Wastewater Collection,
and Water) as well.
•Unassigned Reserves (Supply/Distribution): As in the other utility funds, these reserves
are for any financial resources not assigned to the other reserves and are normally empty.
SECTION 4F: COMPETITIVENESS
For the median consumption level, the annual CPAU residential electric bill for calendar year 2022
was $792, which was $683 (46%) lower than the annual bill for a PG&E customer with the same
consumption ($1,475) and approximately $142 (22%) higher than the annual bill for a City of
Santa Clara customer ($649). The bill calculations for PG&E customers are based on PG&E
Climate Zone X, which includes most surrounding comparison communities.
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Table 8 presents sample median residential bills for Palo Alto, PG&E, and the City of Santa Clara
(Silicon Valley Power) for several usage levels. Rates used to calculate the monthly bills shown
below were in effect as of January 1, 2023.
Over the next several years low usage customers in PG&E territory are expected to continue to
see higher percentage rate increases than high usage customers as PG&E compresses its tiers
from the highly exaggerated levels that have been in place since the energy crisis. This is likely to
make the bill for the median Palo Alto consumer look even more favorable compared to most
PG&E customers. Even with the compressed tiers, bills for high usage Palo Alto consumers are
likely to remain substantially lower than the bills for high usage PG&E customers.
Table 8: Residential Monthly Electric Bill Comparison (Effective 1/1/2023, $/mo.)
Season Usage (kwh)Palo Alto PG&E Santa Clara
300 57.74 94.11 39.31
453 (Median)94.42 143.32 60.09
650 143.94 221.07 86.85Winter
1200 282.18 438.13 161.54
300 57.74 97.76 39.31
(Median) 365 72.31 123.41 48.14
650 143.94 235.88 86.85Summer
1200 282.18 452.94 161.54
SECTION 5: UTILITY FINANCIAL PROJECTIONS
SECTION 5A: LOAD FORECAST
Figure 5 shows a 38-year history of Palo Alto electricity consumption. Average electricity
consumption grew from 1986 to 1998, then returned to 1986 levels by 2002. Since then
electricity consumption has declined slowly as a result of a continuing focus on energy efficiency,
as well as the adoption of more stringent appliance efficiency standards and energy standards in
building codes. Electrification will likely reverse some of this trend, although the pace of that
impact is uncertain at this time. In recent years, some larger commercial customers have
relocated operations or shifted to more light-commercial type usage. It is unknown how long this
trend may continue, or what the longer-term impacts of COVID and work-from home policies
might mean for commercial utilization in Palo Alto.
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Figure 5: Historical Electricity Consumption
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Figure 6: Forecasted Electricity Consumption
Appendix A: Electric Utility Financial Forecast Detail, annual expenses for the Electric
Utility increased markedly in FY 2018 but came back down in FYs 2019 and 2020 before increasing
again in FY 2021 and FY 2022. On the capital side, the large Upgrade Downtown CIP project began
in FY 2018. Electric supply costs increased as new renewable projects came online, and
transmission costs rose and have continued to rise as improvements are made to the California
grid.
Section 6A: Electricity Purchases discusses the factors influencing Electric Utility expenses. During
the last drought in FYs 2014 and 2015 commodity costs were higher due to lower than average
output from hydroelectric resources, and similar circumstances are occurring in FY 2021, FY 2022
and are projected to continue through FY 2024. Transmission costs have increased as projected
in prior financial plans. Better than average hydro conditions in FY 2019 led to lower than
expected generation expenses as well as better than expected surplus energy revenues, but
extreme drought followed.
Projection
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on average by about 0.5% per year over this period and have been negatively impacted due to
declining sales and COVID.
The percentages
listed do not include the hydroelectric rate adjuster. The total rate, including the adjuster, is
shown in Figure 8.
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established on January 1, 2023. These forecasts could change depending on changes in hydroelectric
generation and electricity market prices.
Figure 8: Electric Utility Revenues, Expenses, and Rate Changes:
Actual Costs through FY 2022 and Projections through FY 2028
SECTION 5C: FY 2022 RESULTS
FY 2022 revenues were $4 million lower than projections, as retail sales and surplus energy sales
combined were $2 million less than projected. Revenues from the HRA were also $2 million less
than projected as the rate went into effect later than anticipated. Net supply purchase costs came
in $12 million higher than projected, but these costs were partially offset by approximately $6
million savings from surplus energy sales as well as lower administration and demand side
management (DSM) costs. Capital projects costs exceed projections by $4 million.
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Table 9 FY 2022, Actual Results vs. FY 2022 Financial Plan Forecast ($000)
Net Cost/(Benefit)Type of change
Lower revenues from retail sales, surplus
energy sales, and Hydroelectric Rate Adjuster
$4,000 Revenue decrease
High Capital Projects cost $4,000 Cost increase
Higher net purchase cost $12,446 Cost increase
Lower Admin, DSM, and Surplus Energy Costs (5,962)Cost decrease
Net Cost / (Benefit) of Variances $14,482
Net Cost/(Benefit)Type of change
Sales revenues higher than forecasted ($8,000)Revenue increase
Purchased electricity costs higher than forecasted $19,609 Cost increase
Reduced Surplus Energy Cost and Admin ($3,064)Cost decrease
Net Cost / (Benefit) of Variances to Ops Reserve $8,545
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forecast period. Projected capital expenses are higher due to the rebuilding of existing
underground districts, substation and line voltage upgrades. The City is also evaluating the cost
and scope of other system resiliency projects, such as pole replacements, which may increase
costs as well as rates in the future.
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Figure 10: Electric Utility Reserves (Distribution Fund):
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Table 12: Electric Supply Fund Risk Assessment
Estimates of Adverse
Outcomes (M$)
Estimates of Adverse
Outcomes (M$)
Categories of Electric Supply Cost
Uncertainties
FY 2024 FY 2025
1. Load Net Revenue 4.9 5.0
2. Hydro Production:
Western & Calaveras 8.1 9.1
3. Renewable Production: Landfill
& Wind & Solar 1.8 1.8
4. REC Purchases 0.52 0.56
5. REC Sales -0.52 -0.56
6. Market Price 0.7 0.2
7. Resource Adequacy 1 1
8. Transmission/CAISO 3.9 4.3
9. Plant Outage 1 1
10. Western Cost 1.1 1.6
11. Legislative & Regulatory 0 0
12. Supplier Default+0.2 0.2
Electric Supply Fund Risks 22.73 24.22
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associated retail sales revenue) may be lower than projected, $1.8 million is associated with
uncertainty around renewables production, and $1.0 million is associated with possible
decreases in Resource Adequacy capacity sales revenues (and/or increases in Resource Adequacy
capacity purchase costs).
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Figure 12: Adequacy of Supply Operations and Hydro Stabilization Reserves, Combined
Table 13: Electric Distribution Fund Risk Assessment ($000)
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FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Total non-commodity revenue $76,791 $82,662 $88,987 $99,524 $109,529
Max. revenue variance, previous ten years 8%8%8%8%8%
Risk of revenue loss $6,061 $6,524 $7,023 $7,855 $8,645
CIP Budget $25,508 $24,610 $22,644 $22,716 $22,730
CIP Contingency @10%$2,551 $2,461 $2,264 $2,272 $2,273
Total Risk Assessment value $8,612 $8,985 $9,288 $10,126 $10,918
Figure 13: Electric Distribution Operations Reserve Adequacy
The Electric Utility also has a CIP Reserve that acts as a reserve for short term capital
contingencies or as a place to set aside funds for large, one-time projects that the Utilities would
otherwise need to debt-fund. In the future, staff would also like to use this reserve to manage
cash flow for capital projects on an ongoing basis.
Figure 14 below reflects the maximum and minimum CIP Reserve guideline levels, starting in FY
2022. Because of the fluctuating annual dollar amounts and timing of CIP projects budgeted to
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occur during the forecast period, as well as the potential for new ongoing projects to be included
in the CIP plan in later years, four years of budgeted CIP are used to calculate the reserve
maximum levels. The minimum CIP Reserve level is 20% of the maximum CIP Reserve guideline
level.
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Figure 14: Electric CIP Reserve Adequacy
SECTION 5G: LONG-TERM OUTLOOK
This forecast covers the period from FY 2024 through FY 2028, but various long-term
developments may create new costs for the utility over the next 10 to 35 years. While it is
challenging to accurately forecast the impact these events will have on the utility’s costs, it is
worth noting them as future milestones and keeping them in mind for long-term planning
purposes.
For the supply portfolio, the 2020s will see a number of notable events. The contract with the
Western Area Power Administration (Western) for power from the Central Valley Project (CVP)
will expire in 2024. Determining the future relationship with Western after 2024 will be
important in the years leading up to the contract expiration, especially because this resource
represents nearly 40% of the electric portfolio and is the utility’s largest source of carbon-free
electricity. The utility’s three earliest and lowest cost renewable contracts will also begin expiring
around that time, with the first contract expired in 2021 and the last in 2028. These three
$0
$5
$10
$15
$20
$25
$30
$35
$40
FY
2022
FY
2023
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
CIP Reappropriations
(Year-End)
CIP Reserve (Year-End)
CIP Commitments (Year-
End)
Reserve Minimum
Reserve Target
Reserve Maximum
Mi
l
l
i
o
n
s
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contracts, plus one more expiring in 2030, currently provide 17% to 18% of the energy for the
utility’s supply portfolio at prices under $65 per megawatt-hour (MWh). It is difficult to know
what renewable energy prices will be when those contracts expire. Although recent prices have
been in that range (or even lower), and costs may decrease in the future, current renewable
projects also benefit from a wide range of tax and other incentives that may or may not be
available in the 2020s and beyond. However, staff procured a replacement for the contract
expiring in 2021 at a lower price than any of the City’s current renewable contracts. In addition,
staff is in the process of procurement for a renewable geothermal project expected to start in
2025.
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Over the next several years the Electric Utility will continue to execute its usual monitoring,
repair, and replacement routine for the distribution system, but will also begin the rollout of
various smart grid technologies. The utility is actively promoting electric vehicle ownership and
gas-to-electric fuel switching in Palo Alto. In the coming years these factors are expected to
create notable increases in electric consumption and have a variety of impacts on the distribution
system. Other technologies such as battery storage and rooftop solar installations are also
becoming even more common. The utility has already started to take some of these factors into
account in its long-term planning processes but will need to continue to incorporate them into
its planning methodologies.
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Figure 15: Alternative Rate Proposal
SECTION 6: DETAILS AND ASSUMPTIONS
SECTION 6A: ELECTRICITY PURCHASES
As shown in Figure 16 the utility is projected to get roughly 40% of its energy from hydroelectric
projects in a normal year, but only 30% is expected or projected during FY 2023 and FY 2024 due
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to the drought. Contracts with renewable sources make up approximately 50% of the portfolio
in FY 2024 before increasing to 60% by FY 2025. Staff expects contracts with renewable sources
to continue at approximately 50% of the portfolio for the forecast period. The remainder comes
from unspecified market sources. Under the City’s Carbon Neutral Plan, CPAU purchases RECs
corresponding to the amount of market energy it purchases.
9 as well as
average and actual hydroelectric generation.10 FY 2021, FY 2022, FY 2023, and FY2024 had lower
hydroelectric generation than or are projected to be lower. In addition, staff has reduced average
hydro generation output expectations to more closely align with the past 10 year of historical
averages. Renewable energy costs have stayed relatively flat as one renewable energy contract
ended while another renewable project came online to fulfill the City’s carbon neutral and RPS
goals. The current market outlook is uncertain for newer renewables projects because of
headwinds from supply chain issues and tailwinds from federal subsidies. Transmission charges
are projected to increase as new transmission lines are built throughout California to
9 Costs are shown net of wholesale revenues and cannot be directly compared with the electric supply purchase
figures shown in Appendix A: Electric Utility Financial Forecast Detail.
10 Average hydroelectric generation based on the current E-HRA rate schedule.
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accommodate new renewable projects. In total, net electric supply costs are projected to
increase from about average of $80 million from FY 2018 through FY 2022 to about $100 million
between FY 2023 through FY 2028.
•Administration, including financial management of charges allocated to the Electric Utility
for administrative services provided by the General Fund and for Utilities Department
administration, as well as debt service and other transfers. Additional detail on Electric
Utility debt service is provided in Section 6D (Debt Service)
•Customer Service
•Engineering work for maintenance activities (as opposed to capital activities)
•Operations and Maintenance of the distribution system; and
•Resource Management
Appendix C: Description of Electric utility Operational Activities includes detailed descriptions of
the work associated with each of these activities.
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From FY 2018 to FY 2022, overall operations costs have risen annually by about 3% on average.
Operations and maintenance costs are increasing mainly due to higher inflation, especially in
salaries and benefits, as well as the use of contract line crew to help while the Utility is
understaffed. These costs may be reduced depending on how much work is needed and may be
phased out as longer-term employees are gained. Debt service is also forecasted to increase due
to grid modernization and fiber investments.
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system to maintain/improve reliability. This forecast assumes that the utility finances smart grid
projects (along with funding from the water and gas funds), the Foothill fire mitigation rebuilds,
and the 115kV electric interconnection from the ESP Reserve. Bond financing may also be
considered for some of these capital projects.
P C F F F F F
O 6 6 7 1 1 -
R 6 3 4 4 3 5
U 1 --1 3 -
4 3 1 1 ---
U 2 -4 1 1 -
O 9 5 5 5 5 6
C 5 2 2 2 2 2
G 1 2 2 5 5 5
E ---4 7 1
T 4 4 4 7 7 7
*
*
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unable to make their debt service payments. Staff does not currently foresee this occurring. In
FY 2022, the Electric Utility’s net revenues dropped to -12% of debt service. However, the other
utilities listed in Table 15 below were able to make their debt service payments in FY 2022 and
Electric Utility’s net revenues were not needed. Staff projects that the Electric Utility’s net
revenues in each future year will exceed 125% of debt service (see Appendix B, line 70).
Secured by Electric Utility’s:Bond Issuance Responsible Utilities Annual Debt
Service ($000)Net Revenues Reserves
1999 Utility Revenue Bonds, Series A Storm Drain
Wastewater Collection
Wastewater Treatment
$1,207 No Yes
2009 Water Revenue Bonds (Build
America Bonds)Water $1,977*No Yes
2011 Utility Revenue Refunding
Bonds, Series A
Gas
Water $1,457 No Yes
*Net of Federal interest subsidy
Table 16: Projected Bond Proceeds and Debt Service Costs
11 Each year it is calculated
according to the 2009 Council-adopted methodology and does not require additional Council
action.
11 For more detail on the ordinance adopting the 2009 transfer methodology, see CMR 280:09, Budget Adoption
Ordinance for Fiscal Years 2009 and 2010; and CMR 260:09, Finance Committee Report explaining proposed changes
to equity transfer methodology.
E F F F F F F F F F F
B 6 5 0 5 5 0 5 5 0 0
D 0 ---------
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SECTION 6F: WHOLESALE REVENUES AND OTHER REVENUES
The Electric Utility receives most of its revenues from sales of electricity, but about 20 to 25%
comes from other sources. Of these other sources, about 50% to 75% represents wholesale
revenues of surplus energy sales. These revenues may offset electric supply purchase costs,
smooth rate increases, or fund reserves or other costs. Of the remaining revenues, the largest
revenue sources are interest on reserves, connection fees for new or replacement electric
services, and carbon allowance revenues associated with the State’s cap-and-trade program
Revenues from connection fees have increased since FY 2009 but vary from year to year.
Connection fee revenues are collected to offset costs incurred in setting up new connections and
are pass-through in nature. Staff forecasts $1.8 million in in FY 2024.
Staff projects carbon allowance and interest income revenues to stay relatively stable through
the forecast period. However, both of these revenue sources are subject to some uncertainty.
This forecast assumes the program State’s cap-and-trade program will remain in place but with
declining returns through 2030. It is possible this funding source may be removed entirely in the
future, as the current CARB plan in the gas fund is for free allowances to stop entirely by 2030.
The forecast for interest income assumes current interest rates continue and there are no major
reserve reductions aside from what is anticipated in this Financial Plan. If interest rates rise,
interest income could increase, and if reserves decrease (due to drought or a withdrawal from
the ESP reserve for a major project), interest income would decrease.
SECTION 6G: SALES REVENUES
The load forecast in Section 5A: Load Forecast and the projected rate changes shown in Figure 7
provide the basis for sales revenue projections. As discussed in Section 5A, sales revenues for this
utility have been decreasing due to load reduction but are helped by the mild climate in Palo Alto.
Palo Alto is a built-out City, so the opportunities for increased load growth are limited to the
existing footprint of commercial structures and incremental growth in population. As utilization
of existing spaces changes, and energy efficiency measures continue, Palo Alto could see greater
load loss. Increased loads from electric vehicles and the electrification of households may
increase loads somewhat.
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SECTION 7: COMMUNICATIONS PLAN
The fiscal year (FY) 2024 electric utility communications strategy covers these primary areas:
market price increases, cost containment measures, efficiency services and utility bill savings,
capital improvement, operations and maintenance for infrastructure safety and reliability,
renewables, carbon neutral portfolio, and beneficial electrification. City of Palo Alto Utilities
(CPAU) communication methods include use of the utilities website, utility bill inserts, messaging
on utility bills, email newsletters, print and digital ads in local publications, social media, and
community message boards.
In advance of the rate-setting process, staff working on rates and communications are focusing
on informing customers of higher than anticipated electric rates this year due to lower revenues
from rates and interest income, impacts to hydroelectric supplies as a result of drought
conditions, higher purchase costs, and contract line crew costs. The goal is to help customers
navigate a challenging economic situation through efficiency services, rate assistance and bill
payment relief programs.
CPAU customers also benefit from local control and policy setting, and community values-driven
programs and services, including the decision to go carbon neutral in 2013. Palo Alto’s renewable
energy purchase agreements contribute to our utility’s long-term energy security and
commitment to sustainability. Power purchase agreements have allowed CPAU to procure long-
term renewable electric supplies at low costs. CPAU will highlight these environmental attributes
and value in our communications.
Programs such as the Home Efficiency Genie and commercial energy efficiency audits help
residents and businesses better understand energy usage, activities and/or upgrades they can
implement to improve efficiency and keep utility costs low. For several years, CPAU has offered
a Genie in-home assessment, including a virtual option during the pandemic, and webinars about
home energy and water efficiency to help customers keep utility costs low. Now the Genie
program provides a home electrification readiness assessment so customers who may want to
switch out gas for electric appliances or install an electric vehicle (EV) charger, can understand
what may be necessary for electric panel upgrades.
Recently CPAU also launched new programs to help businesses improve energy efficiency and
investigate the potential to switch from natural gas/fossil-fuel energy supplies to electricity. The
Business Energy Advisor provides a “concierge” service for businesses to evaluate areas of their
facility for efficiency improvements such as in the areas of building envelope, lighting, and
heating. The Business Energy Advisor acts as the flagship program for businesses to then learn
about available rebates for appliance or facility upgrades and opportunities for building
electrification. CPAU also offers programs to help businesses, multi-family properties, non-profits
and schools install EV charging infrastructure to assist employees and tenants with goals to switch
from fossil fueled transportation to clean, electric driving.
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Electric Utility Financial
Plan
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48 | P a g e
APPENDICES
Appendix A: Electric Utility Financial Forecast Detail
Appendix B: Electric Utility Reserves Management Practices
Appendix C: Description of Electric utility Operational Activities
Appendix D: Samples of Recent Electric Utility Outreach Communications
Item 15
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Electric Utility Financial
Plan
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APPENDIX A: ELECTRIC UTILITY FINANCIAL FORECAST DETAIL
Item 15
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Electric Utility Financial
Plan
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1 F F F F F F F F F F F F
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2 N 1 1 1 1 1 1 1 1 1 1 2
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4 R 1 2 2 2 2 2 3 3 3 3 3
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4 S 5 5 5 5 6 6 6 6 7 7 7
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7 N 1 4 5 2 -2 6 6 6 4 4
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Item 15
Attachment B - FY24 Electric Utility
Financial Plan
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6056714
1 F F F F F F F F F F F F
2
3 R
4 N 8 7 7 7 7 7 7 8 8 8 8
5 O 2 2 2 2 2 1 2 1 1 1 1
6 T 1 1 1 1 9 8 1 1 1 1 1
7
8 E
9 C 5 5 5 5 5 5 5 5 5 5 4
1 O
1 A
1 A 4 3 4 4 3 3 3 3 3 3 3
1 R 3 4 4 3 3 3 3 3 3 3 3
1 D 5 6 5 4 4 4 4 3 4 5 6
1 T 8 9 6 5 7 7 7 7 7 7 7
1 S 2 2 1 1 1 1 1 1 1 1 1
1 R 1 1 2 2 1 1 1 2 2 2 1
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1 E 1 1 1 1 1 1 1 1 1 1 1
2 C 1 1 1 1 2 1 2 2 2 2 2
2 A 0 0 0 0 0 0 0 0 0 0 0
2 S 3 3 3 3 2 3 2 3 3 3 3
2 C 1 7 1 1 1 1 1 1 1 1 1
2 T 9 9 9 9 9 9 9 9 9 9 9
2
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2 F F F F F F F F F F F F
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5 R 5 4 6 6 6 7 8 9 9 1 1
5
5 D
5 N 1 4 5 2 -2 6 6 6 4 4
5 A 9 1 1 1 8 6 9 1 1 1 8
Item 15
Attachment B - FY24 Electric Utility
Financial Plan
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ELECTRIC UTILITY FINANCIAL PLAN
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APPENDIX B: ELECTRIC UTILITY RESERVES MANAGEMENT PRACTICES
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Plan
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ELECTRIC UTILITY FINANCIAL PLAN
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Section 4. Reserves for Commitments
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c) Implementation of HRA. The level of the Hydroelectric Stabilization Reserve after the
transfers described above shall be the basis for staff’s determination, with Council
approval, of whether to implement the Hydro Rate Adjuster (Electric Rate E-HRA) for
the following fiscal year.
d) Reserve Guidelines. Staff will manage the Hydroelectric Stabilization Reserve
according to the following guideline levels:
Minimum Level $3 million
Target Level $19 million
Maximum Level $35 million
Section 8. Underground Loan Reserve
At the end of each fiscal year, the Underground Loan Reserve will be adjusted by the principal
payments made against outstanding underground loans.
Section 9. Public Benefits Reserve
The Public Benefits Reserve will be increased by the amount of unspent Public Benefits
Revenues remaining at the end of each fiscal year. Expenditure of these funds requires action
by the City Council.
Section 10. CIP Reserve
The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for
capital contingencies. Staff will manage the CIP Reserve according to the following practices:
a) The following guideline levels are set forth for the CIP Reserve. These guideline levels are
calculated for each fiscal year of the Financial Planning Period and approved by Council
resolution.
Minimum Level 20% of the maximum CIP Reserve guideline
level
Maximum Level Average annual (12 month)12 CIP budget, for
48 months of budgeted CIP expenses13
b) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and
the Reserve for Commitments when funds are added to or removed from the Reserve for
Commitments as a result of a change in contractual commitments related to CIP projects.
Any other additions to or withdrawals from the CIP reserve require Council action.
c) Minimum Level:
i) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present
a plan to the City Council to replenish the reserve. The plan shall be delivered by the
end of the following fiscal year, and shall, at a minimum, result in the reserve reaching
its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is
below its minimum level at the end of FY 2017, staff must present a plan by June 30,
2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff
12 Each month is calculated based upon 1/12 of the annual budget.
13 For example, in the Financial Plan for FY 2021, the 48 month period to use to derive the annual
average is FY 2021 through FY 2024. In the FY 2022 Financial Plan, the 48 month period to use
to derive the annual average would be FY 2022 through FY 2025 etc.
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Electric Utility Financial
Plan
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ELECTRIC UTILITY FINANCIAL PLAN
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may present, and the Council may adopt, an alternative plan that takes longer than
one year to replenish the reserve, or that does so in a shorter period of time.
d) Maximum Level: If there are funds in this reserve in excess of the maximum level staff
must propose in the next Financial Plan to transfer these funds to another reserve or
return them to ratepayers in the funds to ratepayers, or designate a specific use of funds
for CIP investments that will be made by the end of the next Financial Planning period.
Staff may also seek City Council to approve holding funds in this reserve in excess of the
maximum level if they are held for a specific future purpose related to the CIP.
Section 11. Rate Stabilization Reserves
Funds may be added to the Electric Supply or Distribution Fund’s Rate Stabilization Reserves
by action of the City Council and held to manage the trajectory of future year rate increases.
Withdrawal of funds from either Rate Stabilization Reserve requires action by the City
Council. If there are funds in either Rate Stabilization Reserve at the end of any fiscal year,
any subsequent Electric Utility Financial Plan must result in the withdrawal of all funds from
this Reserve by the end of the Financial Planning Period. The Council may approve exceptions
to this requirement, when proposed by staff to provide greater rate stabilization to
customers.
Section 12. Operations Reserves
The Electric Supply Fund and Electric Distribution Fund Operations Reserves are used to
manage normal variations in the costs of providing electric service and as a reserve for
contingencies. Any portion of the Electric Utility’s Fund Balance not included in the reserves
described in Section 4 to 11 above will be included in the appropriate Operations Reserve
unless the reserve has reached its maximum level as set forth in Section 12 (e) below. Staff
will manage the Operations Reserves according to the following practices:
a) The following guideline levels are set forth for the Electric Supply Fund Operations
Reserve. These guideline levels are calculated for each fiscal year of the Financial
Planning Period based on the levels of Operations and Maintenance (O&M) and
commodity expense forecasted for that year in the Financial Plan.
Minimum Level 60 days of Supply Fund O&M and commodity expense
Target Level 90 days of Supply Fund O&M and commodity expense
Maximum Level 120 days of Supply Fund O&M and commodity expense
b) The following guideline levels are set forth for the Electric Distribution Fund Operations
Reserve. These guideline levels are calculated for each fiscal year of the Financial
Planning Period based on the levels of O&M expense forecasted for that year in the
Financial Plan.
Minimum Level 60 days of Distribution Fund O&M expense
Target Level 90 days of Distribution Fund O&M expense
Maximum Level 120 days of Distribution Fund O&M expense
c) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Supply Fund
or Distribution Fund’s Operations Reserve are lower than the minimum level set forth
above, staff shall present a plan to the City Council to replenish the reserve. The plan
shall be delivered within six months of the end of the fiscal year, and shall, at a
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Electric Utility Financial
Plan
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minimum, result in the reserve reaching its minimum level by the end of the following
fiscal year. For example, if the Operations Reserve is below its minimum level at the end
of FY 2014, staff must present a plan by December 31, 2014 to return the reserve to its
minimum level by June 30, 2015. In addition, staff may present an alternative plan that
takes longer than one year to replenish the reserve.
d) Target Level: If, at the end of any fiscal year, either Operations Reserve is higher or
lower than the target level, any Financial Plan created for the Electric Utility shall be
designed to return both Operations Reserves to their target levels by the end of the
forecast period.
e) Maximum Level: If, at any time, either Operations Reserve reaches its maximum level,
no funds may be added to this Reserve. Any further increase in that fund’s Fund
Balance shall be automatically included in the Unassigned Reserve described in Section
13, below.
Section 13. Unassigned Reserves
If the Operations Reserve in either the Electric Supply Fund or the Electric Distribution Fund
reaches its maximum level, any further additions to that fund’s Fund Balance will be held in
the Unassigned Reserve. If there are any funds in either Unassigned Reserve at the end of
any fiscal year, the next Financial Plan presented to the City Council must include a plan to
assign them to a specific purpose or return them to the Electric Utility ratepayers by the end
of the first fiscal year of the next Financial Planning Period. For example, if there were funds
in the Unassigned Reserves at the end of FY 2016, and the next Financial Planning Period is
FY 2017 through FY 2021, the Financial Plan shall include a plan to return or assign the funds
in the Unassigned Reserve by the end of FY 2017. Staff may present an alternative plan that
retains these funds or returns them over a longer period of time.
Section 14. Intra-Utility Transfers between Supply and Distribution Funds
Transfers between Electric Distribution Fund Reserves and Electric Supply Fund Reserves are
permitted if consistent with the purposes of the two reserves involved in the transfer. Such
transfers require action by the City Council.
Section 15. Low Carbon Fuel Standard (LCFS) Reserve
This reserve tracks revenues earned via the sale of Low Carbon Fuel Credits allocated by the
California Air Resources Board to the City, as well as expenses incurred, in accordance with
California’s Low Caron Fuel Standard program. At the end of each fiscal year, the LCFS
Reserve will be adjusted by the net of revenues and expenses associated with California’s
LCFS program.
Section 16. Cap and Trade Program Reserve
This reserve tracks unspent or unallocated revenues from the sale of carbon allowances freely
allocated by the California Air Resources Board to the electric utility, under the State’s Cap
and Trade Program. Funds in this Reserve are managed in accordance with the City’s Policy
on the Use of Freely Allocated Allowances under the State’s Cap and Trade Program (the
Policy), adopted by Council Resolution 9487 in January 2015.
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Attachment B - FY24
Electric Utility Financial
Plan
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ELECTRIC UTILITY FINANCIAL PLAN
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APPENDIX C: DESCRIPTION OF ELECTRIC UTILITY OPERATIONAL ACTIVITIES
Customer Service: This category includes the Electric Utility’s share of the call center, meter
reading, collections, and billing support functions. Billing support encompasses staff time
associated with bill investigations and quality control on certain aspects of the billing process. It
does not include maintenance of the billing system itself, which is included in Administration.
This category also includes CPAU’s key account representatives, who work with large commercial
customers who have more complex requirements for their electric services.
Resource Management: This category includes supply portfolio management, energy
procurement, rate setting, and tracking of legislation and regulation related to the electric
industry.
Operations and Maintenance: This category includes the costs of a variety of distribution system
maintenance activities, including:
•monitoring the substations and performing routine maintenance;
•performing preventative maintenance on the system;
•monitoring the system’s status from the UCC using SCADA;
•maintaining the SCADA system;
•investigating outages and other customer complaints and performing emergency
repairs;
•clearing vegetation near overhead power lines; and
•testing and replacing meters to ensure accurate sales metering.
Administration: Accounting, purchasing, legal, and other administrative functions provided by
the City’s General Fund staff, as well as shared communications services, Utilities Department
administrative overhead and billing system maintenance costs.
Demand Side Management: Includes the cost of administering energy efficiency programs and
the direct cost of rebates paid. Includes solar rebates.
Engineering (Operating): The Electric Utility’s engineers focus primarily on the CIP, but a small
portion of their time is spent assisting with distribution system maintenance.
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Attachment B - FY24
Electric Utility Financial
Plan
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APPENDIX D: SAMPLES OF RECENT ELECTRIC UTILITY OUTREACH COMMUNICATIONS
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Electric Utility Financial
Plan
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RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-1-1 Sheet No E-1-1
dated 7-1-20192022 Effective 7-1-20222023
A. APPLICABILITY:
This Rate Schedule applies to separately metered single-family residential dwellings receiving
Electric Service from the City of Palo Alto Utilities.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total
Tier 1 usage
$
0.099990.08
$
0.069540.05429
$
0.005680.00469
$
0.175210.1444
Any usage over Tier 1
0.138730.11
0.102250.08008
0.005680.00469
0.203354666
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
2. Calculation of Usage Tiers
Tier 1 Electricity usage shall be calculated and billed based upon a level of 11 kWh per
day, prorated by Meter reading days of Service. As an example, for a 30-day bill, the
Tier 1 level would be 330 kWh. For further discussion of bill calculation and proration,
refer to Rule and Regulation 11.
{End}
Item 15
Attachment C - Rate
Schedules Combined
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RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL ELECTRIC
SERVICE
UTILITY RATE SCHEDULE E-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-2-1 Sheet No E-2-1
dated 7-1-20192022 Effective 7-1-20222023
A. APPLICABILITY:
This Rate Schedule applies to the following Customers receiving Electric Service from the City
of Palo Alto Utilities:
1. Small non-residential Customers receiving Non-Demand Metered Electric Service; and
2. Customers with Accounts at Master-Metered multi-family facilities.
B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total
Summer Period
$
0.142160.121
$
$
$
0.265590.2189
0.101960.087 0.186250.1535
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use in both the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 70 Packet Pg. 641 of 853
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL ELECTRIC
SERVICE
UTILITY RATE SCHEDULE E-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-2-2 Sheet No E-2-2
dated 7-1-20192022 Effective 7-1-20222023
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive
months, a maximum Demand Meter will be installed as promptly as is practicable and
thereafter continued in service until the monthly use of energy has fallen below 6,000
kWh for twelve consecutive months, whereupon, at the option of the City, it may be
removed.
The maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A
thermal-type Demand Meter which does not reset after a definite time interval may be
used at the City's option.
The billing Demand to be used in computing charges under this schedule will be the
actual maximum Demand in kilowatts for the current month. An exception is that the
billing Demand for Customers with Thermal Energy Storage (TES) will be based upon
the actual maximum Demand of such Customers between the hours of noon and 6 pm on
weekdays.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 71 Packet Pg. 642 of 853
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER
ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-2-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-2-G-1 Sheet No E-2-G-1
dated 7-1-20221 Effective 7-1-20232
A. APPLICABILITY:
This Rate Schedule applies to the following Customers receiving Electric Service from the City
of Palo Alto Utilities under the Palo Alto Green Program:
1. Small non-residential Customers receiving Non-Demand Metered Electric Service; and
2. Customers with Accounts at Master-Metered multi-family facilities.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
1. 100% Renewable Option:
Per kilowatt-hour (kWh) Commodity Distribution
Public Green
$
0.142160.12
$
0.117750.09
$
0.005680.0
$
0.273090.
0.101960.08 0.078610.06 0.005680.0 $ 0.19375
2. 1000 kWh Block Purchase Option:
Per kilowatt-hour (kWh) Commodity Distribution
Public
Benefits
Total
Summer Period
$
0.142160.12
$
0.117750.09
$
0.005680.0
$
0.265590.
0.101960.08 0.078610.06 0.005680.0 0.186250.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 72 Packet Pg. 643 of 853
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER
ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-2-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-2-G-2 Sheet No E-2-G-2
dated 7-1-20221 Effective 7-1-20232
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use in both the Summer
and Winter Periods, usage will be prorated based upon the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Palo Alto Green Program Description and Participation
Palo Alto Green provides for either the purchase of enough renewable energy credits
(RECs) to match 100% of the energy usage at the facility every month, or for the
purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the
production of renewable energy, increase the financial value of power from renewable
sources, and create a transparent and sustainable market that encourages new
development of wind and solar power.
Customers choosing to participate shall fill out a Palo Alto Green Power Program
application provided by the Customer Service Center. Customers may request at any
time, in writing, a change to the number of blocks they wish to purchase under the Palo
Alto Green Program.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 73 Packet Pg. 644 of 853
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER
ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-2-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-2-G-3 Sheet No E-2-G-3
dated 7-1-20221 Effective 7-1-20232
4. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive
months, a maximum Demand Meter will be installed as promptly as is practicable and
thereafter continued in service until the monthly use of energy has fallen below 6,000
kWh for twelve consecutive months, whereupon, at the option of the City, it may be
removed.
The maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer-s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A
thermal-type Demand Meter which does not reset after a definite time interval may be
used at the City's option.
The billing Demand to be used in computing charges under this schedule will be the
actual maximum Demand in kilowatts for the current month. An exception is that the
billing Demand for Customers with Thermal Energy Storage (TES) will be based upon
the actual maximum Demand of such Customers between the hours of noon and 6 pm on
weekdays.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 74 Packet Pg. 645 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-1 Sheet No E-4-1
dated 7-1-202219 Effective 7-1-20223
A. APPLICABILITY:
This Rate Schedule applies to Demand metered Secondary Electric Service for Customers with
a maximum Demand below 1,000 kilowatts. This Rate Schedule applies to three-phase Electric
Service and may include Service to master-metered multi-family facilities or other facilities
requiring Demand-metered Service, as determined by the City.
B. TERRITORY:
This rate schedule applies anywhere everywhere the City of Palo Alto provides Electric
Service.
C. UNBUNDLED RATES:
Rates per kilowatt (kW) and kilowatt-hour (kWh):
Commodity Distribution Public Benefits Total
Summer Period
Demand Charge (per kW) $ 5.284.52 $ 31.5425.84 $ 36.8230.36
Energy Charge (per kWh)
0.131570.10 0.026380.020 0.005680.004
0.094610.07 0.026380.020 0.005680.004
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 75 Packet Pg. 646 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-2 Sheet No E-4-2
dated 7-1-202219 Effective 7-1-20223
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive
months, a Maximum Demand Meter will be installed as promptly as is practicable and
thereafter continued in Service until the monthly use of energy has fallen below 6,000
kWh for twelve consecutive months, whereupon, at the option of the City, it may be
removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A
thermal-type Demand Meter which does not reset after a definite time interval may be
used at the City's option.
The Billing Demand to be used in computing charges under this schedule will be the
actual Maximum Demand in kilowatts for the current month. An exception is that the
Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon
the actual Maximum Demand of such Customers between the hours of noon and 6 pm on
weekdays.
4. Power Factor
For new or existing Customers whose Demand is expected to exceed or has exceeded 300
kilowatts for three consecutive months, the City has the option of installing applicable
Metering to calculate a Power Factor. The City may remove such Metering from the
Service of a Customer whose Demand has been below 200 kilowatts for four consecutive
months.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 76 Packet Pg. 647 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-3 Sheet No E-4-3
dated 7-1-202219 Effective 7-1-20223
When such metering is installed, the monthly Electric bill will include a “Power Factor
Adjustment”, if applicable. The adjustment will be applied to a Customer’s bill prior to
the computation of any primary voltage discount. The Power Factor Adjustment is
applied by increasing the total energy and Demand charges for any month by 0.25
percent (0.25%) for each one percent (1%) that the monthly Power Factor of the
Customer’s load was less than 95%.
The monthly Power Factor is the average Power Factor based on the ratio of kilowatt
hours to kilovolt-ampere hours consumed during the month. Where time-of-day
Metering is installed, the monthly Power Factor shall be the Power Factor coincident with
the Customer's Maximum Demand.
5. Changing Rate Schedules
Customers may request a rate schedule change at any time to any City of Palo Alto full-
service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage
profile.
6. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better
suited to the Customer's electrical requirements, as determined in the City’s sole
discretion. The City retains the right to change its line voltage at any time after providing
reasonable advance notice to any Customer receiving the discount in this section. The
Customer then has the option to change his system so as to receive Service at the new
line voltage or to accept Service (without voltage discount) through transformers to be
supplied by the City subject to a maximum kilovolt-ampere size limitation.
7. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection
D(7)(e), applies to Customers that have a non-utility generation source
interconnected on the Customer’s side of the City’s revenue meter and that
occasionally require backup power from the City due to non-operation of the non-
utility generation source.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 77 Packet Pg. 648 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-4 Sheet No E-4-4
dated 7-1-202219 Effective 7-1-20223
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand (as defined in Section
D.3) occurs when one or more of the non-utility generators on the Customer’s
side of the City’s revenue meter are not operating, the Maximum Demand will be
reduced by the sum of the Maximum Generation of those non-utility generators,
but in no event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing
cycle, the standby charge does not apply and the Customer shall not receive the
Maximum Demand credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 78 Packet Pg. 649 of 853
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-G-1 Sheet No E-4-G-1
dated 7-1-20221 Effective 7-1-20223
A. APPLICABILITY:
This Rate Schedule applies to Demand metered Secondary Electric Service for Customers with a
maximum Demand below 1,000 kilowatts (kW) who receive power under the Palo Alto Green
Program. This Rate Schedule applies to three-phase Electric Service and may include Service to
Master-metered multi-family facilities or other facilities requiring Demand metered Service, as
determined by the City.
B. TERRITORY: The rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES: 1. 100% Renewable Option:
Public Green
$ 36.8230.3
0.131570.10 0.026380.020 0.005680.0.171130.
$ 24.1619.9
0.094610.07 0.026380.020 0.005680.0.134170.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 79 Packet Pg. 650 of 853
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-G-2 Sheet No E-4-G-2
dated 7-1-20221 Effective 7-1-20223
2. 1000 kWh Block Purchase Option:
36.8230.3
24.1619.9
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges, and/or taxes. On a Customer’s bill statement,
the bill amount may be broken down into appropriate components as calculated under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
consecutive months, a Maximum Demand Meter will be installed as promptly as is
practicable and thereafter continued in Service until the monthly use of energy has
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 80 Packet Pg. 651 of 853
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-G-3 Sheet No E-4-G-3
dated 7-1-20221 Effective 7-1-20223
dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the
option of the City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A
thermal-type Demand Meter, which does not reset after a definite time interval, may be
used at the City's option.
The Billing Demand to be used in computing charges under this schedule will be the
actual Maximum Demand in kilowatts for the current month. An exception is that the
Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon
the actual Maximum Demand of such Customers between the hours of noon and 6 PM on
weekdays.
4. Power Factor
For new or existing Customers whose Demand is expected to exceed or has exceeded 300
kilowatts for three consecutive months, the City has the option of installing applicable
Metering to calculate a Power Factor. The City may remove such Metering from the
Service of a Customer whose Demand has dropped below 200 kilowatts for four
consecutive months.
When such Metering is installed, the monthly Electric bill will include a “Power Factor
Adjustment”, if applicable. The adjustment will be applied to a Customer’s bill prior to
the computation of any primary voltage discount. The Power Factor Adjustment is
applied by increasing the total energy and Demand charges for any month by 0.25
percent or (1/4) for each one percent (1%) that the monthly Power Factor of the
Customer’s load was less than 95%.
The monthly Power Factor is the average Power Factor based on the ratio of kilowatt-
hours to kilovolt-ampere hours consumed during the month. Where time-of-day
Metering is installed, the monthly Power Factor shall be the Power Factor coincident with
the Customer's Maximum Demand.
5. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable full-service
rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 81 Packet Pg. 652 of 853
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-G-4 Sheet No E-4-G-4
dated 7-1-20221 Effective 7-1-20223
6. Palo Alto Green Program Description and Participation
Palo Alto Green provides for either the purchase of enough renewable energy credits
(RECs) to match 100% of the energy usage at the facility every month, or for the
purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the
production of renewable energy, increase the financial value of power from renewal
sources, and creates a transparent and sustainable market that encourages new
development of wind and solar.
Customers choosing to participate shall fill out a Palo Alto Green Power Program
application provided by the Customer Service Center. Customers may request at any
time, in writing, a change to the number of blocks they wish to purchase under the Palo
Alto Green Program.
7. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2.5 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better
suited to the Customer's electrical requirements, as determined in the City’s sole
discretion. The City retains the right to change its line voltage at any time after providing
reasonable advance notice to any Customer receiving the discount in this section. The
Customer then has the option to change the system so as to receive Service at the new
line voltage or to accept Service (without voltage discount) through transformers to be
supplied by the City subject to a maximum kilovolt-ampere size limitation.
8. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection
D(8)(e), applies to Customers that have a non-utility generation source
interconnected on the Customer’s side of the City’s revenue Meter and that
occasionally require backup power from the City due to non-operation of the non-
utility generation source.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 82 Packet Pg. 653 of 853
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-G-5 Sheet No E-4-G-5
dated 7-1-20221 Effective 7-1-20223
b. Standby Charges:
c. Meters: A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit:
(1) In the event the Customer’s Maximum Demand (as defined in Section
D.3) occurs when one or more of the non-utility generators on the Customer’s
side of the City’s revenue Meter are not operating, the Maximum Demand will be
reduced by the sum of the Maximum Generation of those non-utility generators,
but in no event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing
cycle, the standby charge does not apply and the Customer shall not receive the
Maximum Demand credit described in this Section.
e. Exemptions:
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 83 Packet Pg. 654 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-TOU-1 Sheet No E-4-TOU-1
dated 7-1-202219 Effective 7-1-20232
A. APPLICABILITY:
This voluntary Rate Schedule applies to Demand metered Secondary Electric Service for
Customers with Demand between 500 and 1,000 kilowatts per month and who have sustained
this level of usage for at least three consecutive months during the most recent 12 month period.
This Rate Schedule applies to three-phase Electric Service and may include Service to Master-
Metered multi-family facilities or other facilities requiring Demand-metered Service, as
determined by the City. In addition, this Rate Schedule is applicable for Customers who did
not pay power factor adjustments during the last 12 months.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Rates per kilowatt (kW) and kilowatt-hour (kWh):
0.120200.10 $ $
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 84 Packet Pg. 655 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-TOU-2 Sheet No E-4-TOU-2
dated 7-1-202219 Effective 7-1-20232
0.147440.12 $ $
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement,
the bill amount may be broken down into appropriate components as calculated under Section C.
2. Definition of Time Periods
SUMMER PERIOD (Service from May 1 to October 31):
Peak: 12:00 noon to 6:00 p.m. Monday through Friday (except holidays)
Mid Peak: 8:00 a.m. to 12:00 noon Monday through Friday (except holidays)
6:00 p.m. to 9:00 p.m.
Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
WINTER PERIOD (Service from November 1 to April 30):
Peak: 8:00 a.m. to 9:00 p.m. Monday through Friday (except holidays)
Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
SEASONAL RATE CHANGES: When the billing period includes use in both the
Summer and the Winter periods, the usage will be prorated based on the number of days
in each seasonal period, and the charges based on the applicable rates therein. For further
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 85 Packet Pg. 656 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-TOU-3 Sheet No E-4-TOU-3
dated 7-1-202219 Effective 7-1-20232
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
consecutive months, a Demand Meter will be installed as promptly as is practicable and
thereafter continued in Service until the monthly use of energy has fallen below 6,000
kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it
may be removed.
The Billing Demand to be used in computing charges under this schedule will be the
actual Maximum Demand in kilowatts taken during any 15-minute interval in each of the
designated time periods as defined under Section D.2.
4. Power Factor Adjustment
Time of Use Customers must not have had a power factor adjustment assessed on their
Service for at least 12 months. Power factor is calculated based on the ratio of kilowatt
hours to kilovolt-ampere hours consumed during the month, and must not have fallen
below 95% to avoid the power factor adjustment.
Should the City of Palo Alto Utilities Department find that the Customer’s Service should
be subject to power factor adjustments, the Customer will be removed from the E-4-TOU
rate schedule and placed on another applicable rate schedule as is suitable to their
kilowatt Demand and kilowatt-hour usage.
5. Changing Rate Schedules
Customers electing to be served under E-4 TOU must remain on said Rate Schedule for a
minimum of 12 months. Should the Customer so wish, at the end of 12 months, the
Customer may request a Rate Schedule change to any applicable City of Palo Alto full-
service Rate Schedule as is suitable to their kilowatt Demand and kilowatt-hour usage.
6. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better
suited to the Customer's electrical requirements, as determined in the City’s sole
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 86 Packet Pg. 657 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-TOU-4 Sheet No E-4-TOU-4
dated 7-1-202219 Effective 7-1-20232
discretion. The City retains the right to change its line voltage at any time after providing
reasonable advance notice to any Customer receiving the discount in this section. The
Customer then has the option to change his system so as to receive Service at the new
line voltage or to accept Service (without voltage discount) through transformers to be
supplied by the City subject to a maximum kilovolt-ampere size limitation.
7. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection
D(7)(e), applies to Customers that have a non-utility generation source
interconnected on the Customer’s side of the City’s revenue Meter and that
occasionally require backup power from the City due to non-operation of the non-
utility generation source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand occurs when one or more
of the non-utility generators on the Customer’s side of the City’s revenue Meter
are not operating, the Maximum Demand will be reduced by the sum of the
Maximum Generation of those non-utility generators, but in no event shall the
Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing
cycle, the standby charge does not apply and the Customer shall not receive the
Maximum Demand credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 87 Packet Pg. 658 of 853
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-4-TOU-5 Sheet No E-4-TOU-5
dated 7-1-202219 Effective 7-1-20232
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 88 Packet Pg. 659 of 853
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-1 Sheet No E-7-1
dated 7-1-202219 Effective 7-1-20232
A. APPLICABILITY:
This Rate Schedule applies to Demand Metered Service for large non-residential Customers
with a Maximum Demand of at least 1,000KW per month per site, who have sustained this
Demand level at least 3 consecutive months during the last twelve months.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh):
D. SPECIAL NOTES:
1. Calculation of Charges
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 89 Packet Pg. 660 of 853
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-2 Sheet No E-7-2
dated 7-1-202219 Effective 7-1-20232
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the summer
and in the winter periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Request for Service
Qualifying Customers may request Service under this schedule for more than one
Account or one Meter if the Accounts are on one site. A site, for the purposes of this Rate
Schedule, consists of one or more Accounts which cover contiguous parcels of land with
no intervening public right-of-ways (e.g. streets) and which have a common billing
address.
4. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
consecutive months, a Maximum Demand Meter will be installed as promptly as is
practicable and thereafter continued in Service until the monthly use of energy has fallen
below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of
the City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-
type Demand Meter which does not reset after a definite time interval may be used at the
City's option.
The Billing Demand to be used in computing charges under this schedule will be the
actual Maximum Demand in kilowatts for the current month. An exception is that the
Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon
the actual Maximum Demand of such Customers between the hours of noon and 6 pm on
weekdays.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 90 Packet Pg. 661 of 853
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-3 Sheet No E-7-3
dated 7-1-202219 Effective 7-1-20232
5. Power Factor
For new or existing Customers whose Demand is expected to exceed or has exceeded 300
kilowatts for three consecutive months, the City has the option to install applicable
Metering to calculate a Power Factor. The City may remove such Metering from the
Service of a Customer whose Demand has been below 200 kilowatts for four consecutive
months.
When such metering is installed, the monthly Electric bill shall include a “Power Factor
Adjustment”, if applicable. The adjustment shall be applied to a Customer’s bill prior to
the computation of any primary voltage discount. The power factor adjustment is applied
by increasing the total energy and Demand charges for any month by 0.25 percent
(0.25%) for each one percent (1%) that the monthly Power Factor of the Customer’s load
was less than 95%.
The monthly Power Factor is the average Power Factor based on the ratio of kilowatt
hours to kilovolt-ampere hours consumed during the month. Where time-of-day
Metering is installed, the monthly Power Factor shall be the Power Factor coincident with
the Customer's Maximum Demand.
6. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable full service
rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile.
7. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better
suited to the Customer's electrical requirements, as determined in the City’s sole
discretion. The City retains the right to change its line voltage at any time after providing
reasonable advance notice to any Customer receiving the discount in this section. The
Customer then has the option to change his system so as to receive Service at the new
line voltage or to accept Service (without voltage discount) through transformers to be
supplied by the City subject to a maximum kVA size limitation.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 91 Packet Pg. 662 of 853
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-4 Sheet No E-7-4
dated 7-1-202219 Effective 7-1-20232
8. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection
D(8)(e), applies to Customers that have a non-utility generation source
interconnected on the Customer’s side of the City’s revenue Meter and that
occasionally require backup power from the City due to non-operation of the non-
utility generation source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand (as defined in Section
D.4) occurs when one or more of the non-utility generators on the Customer’s
side of the City’s revenue Meter are not operating, the Maximum Demand will be
reduced by the sum of the Maximum Generation of those non-utility generators,
but in no event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing
cycle, the standby charge does not apply and the Customer shall not receive the
Maximum Demand credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 92 Packet Pg. 663 of 853
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-5 Sheet No E-7-5
dated 7-1-202219 Effective 7-1-20232
Section 2827(b)(4) , as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 93 Packet Pg. 664 of 853
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-G-1 Sheet No E-7-G-1
dated 7-1-20221 Effective 7-1-20232
A. APPLICABILITY:
This Rate Schedule applies to Demand metered Service for large non-residential Customers who
choose Service under the Palo Alto Green Program. A Customer may qualify for this Rate
Schedule if the Customer’s Maximum Demand is at least 1,000KW per month per site, who have
sustained this Demand level at least 3 consecutive months during the last twelve months.
B. TERRITORY:
The rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
1. 100% Renewable Option:
Public Green
39.0832.
21.7117.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 94 Packet Pg. 665 of 853
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-G-2 Sheet No E-7-G-2
dated 7-1-20221 Effective 7-1-20232
2. 1000 kWh Block Purchase Option:
39.0832.
21.7117.
D. SPECIAL NOTES:
1. Calculation of Charges
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as
calculated under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 95 Packet Pg. 666 of 853
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-G-3 Sheet No E-7-G-3
dated 7-1-20221 Effective 7-1-20232
consecutive months, a Maximum Demand Meter will be installed as promptly as is
practicable and thereafter continued in Service until the monthly use of energy has
dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the
option of the City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A
thermal-type Demand Meter which does not reset after a definite time interval may be
used at the City's option.
The Billing Demand to be used in computing charges under this schedule will be the
actual Maximum Demand in kilowatts for the current month. An exception is that the
Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon
the actual Maximum Demand of such Customers between the hours of noon and 6 PM on
weekdays.
4. Request for Service
Qualifying Customers may request Service under this schedule for more than one
Account or one Meter if the Accounts are at one site. A site, for the purposes of this Rate
Schedule, consists of one or more Accounts which cover contiguous parcels of land with
no intervening public right-of-ways (e.g. streets) and which have a common billing
address.
5. Power Factor
For new or existing Customers whose Demand is expected to exceed or has exceeded 300
kilowatts for three consecutive months, the City has the option of installing applicable
Metering to calculate a Power Factor. The City may remove such Metering from the
Service of a Customer whose Demand has dropped below 200 kilowatts for four
consecutive months.
When such Metering is installed, the monthly Electric bill shall include a “Power Factor
Adjustment”, if applicable. The adjustment shall be applied to a Customer’s bill prior to
the computation of any primary voltage discount. The power factor adjustment is applied
by increasing the total energy and Demand charges for any month by 0.25 percent or
(1/4) for each one percent (1%) that the monthly Power Factor of the Customer’s load
was less than 95%.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 96 Packet Pg. 667 of 853
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-G-4 Sheet No E-7-G-4
dated 7-1-20221 Effective 7-1-20232
The monthly Power Factor is the average Power Factor based on the ratio of kilowatt-
hours to kilovolt-ampere hours consumed during the month. Where time-of-day
Metering is installed, the monthly Power Factor shall be the Power Factor coincident with
the Customer's Maximum Demand.
6. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable full service
rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile
7. Palo Alto Green Program Description and Participation
Palo Alto Green provides for either the purchase of enough renewable energy credits
(RECs) to match 100% of the energy usage at the facility every month, or for the
purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the
production of renewable energy, increase the financial value of power from renewal
sources, and creates a transparent and sustainable market that encourages new
development of wind and solar.
Customers choosing to participate shall fill out a Palo Alto Green Power Program
application provided by the Customer Service Center. Customers may request at any
time, in writing, a change to the number of blocks they wish to purchase under the Palo
Alto Green Program.
8. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a qualified line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better
suited to the Customer's Electrical requirements, as determined in the City’s sole
discretion. The City retains the right to change its line voltage at any time after providing
reasonable advance notice to any Customer receiving the discount in this section. The
Customer then has the option to change the system so as to receive Service at the new
line voltage or to accept Service (without voltage discount) through transformers to be
supplied by the City subject to a maximum kilovolt-ampere size limitation.
9. Standby Charge
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 97 Packet Pg. 668 of 853
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-G-5 Sheet No E-7-G-5
dated 7-1-20221 Effective 7-1-20232
a. Applicability: The standby charge, subject to the exemptions in subsection
D(9)(e), applies to Customers that have a non-utility generation source
interconnected on the Customer’s side of the City’s revenue Meter and that
occasionally require backup power from the City due to non-operation of the non-
utility generation source.
b. Standby Charges:
c. Meters: A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit:
(1) In the event the Customer’s Maximum Demand (as defined in Section
D.3) occurs when one or more of the non-utility generators on the Customer’s
side of the City’s revenue Meter are not operating, the Maximum Demand will be
reduced by the sum of the Maximum Generation of those non-utility generators,
but in no event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing
cycle, the standby charge does not apply and the Customer shall not receive the
Maximum Demand credit described in this Section.
e. Exemptions:
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 98 Packet Pg. 669 of 853
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-G-6 Sheet No E-7-G-6
dated 7-1-20221 Effective 7-1-20232
the Utilities Director.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 99 Packet Pg. 670 of 853
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-TOU-1 Sheet No E-7-TOU-1
dated 7-1-202219 Effective 7-1-20232
A. APPLICABILITY:
This voluntary Rate Schedule applies to Demand Metered Service for non-residential
Customers with a Maximum Demand of at least 1,000KW per month per site, who have
sustained this Demand level at least 3 consecutive months during the last twelve months. In
addition, this Rate Schedule is applicable for Customers who did not pay power factor
adjustments during the last 12 months.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Rates per kilowatt (kW) and kilowatt-hour (kWh):
0.144570.11 $ $ $
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 100 Packet Pg. 671 of 853
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-TOU-2 Sheet No E-7-TOU-2
dated 7-1-202219 Effective 7-1-20232
D. SPECIAL NOTES:
1. Calculation of Charges
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement,
the bill amount may be broken down into appropriate components as calculated under Section C.
2. Definition of Time Periods
SUMMER PERIOD (Service from May 1 to October 31):
Peak: 12:00 noon to 6:00 p.m. Monday through Friday (except holidays)
Mid Peak: 8:00 a.m. to 12:00 noon Monday through Friday (except holidays)
6:00 p.m. to 9:00 p.m.
Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday
All day Saturday, Sunday, and holidays
WINTER PERIOD (Service from November 1 to April 30):
Peak: 8:00 a.m. to 9:00 p.m. Monday through Friday (except holidays)
Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
SEASONAL RATE CHANGES: When the billing period includes use in both the Summer and
the Winter periods, the usage will be prorated based on the number of days in each seasonal
period, and the charges based on the applicable rates therein. For further discussion of bill
calculation and proration, refer to Rule and Regulation 11.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 101 Packet Pg. 672 of 853
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-TOU-3 Sheet No E-7-TOU-3
dated 7-1-202219 Effective 7-1-20232
3. Request for Service
Qualifying Customers may request Service under this schedule for more than one Account or one
Meter if the Accounts are on one site. A site, for the purposes of this Rate Schedule, consists of
one or more Accounts which cover contiguous parcels of land with no intervening public right-
of-ways (e.g. streets) and which have a common billing address. 4. Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive
months, a Demand Meter will be installed as promptly as is practicable and thereafter continued
in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve
consecutive months, whereupon, at the option of the City, it may be removed.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated
time periods as defined under Section D.2.
5. Power Factor Adjustment
Time of Use Customers must not have had a power factor adjustment assessed on their Service
for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt-
ampere hours consumed during the month, and must not have fallen below 95% to avoid the
power factor adjustment.
Should the City of Palo Alto Utilities Department find that the Customer’s Service should be
subject to power factor adjustments, the Customer will be removed from the E-7-TOU rate
schedule and placed on another applicable rate schedule as is suitable to their kilowatt Demand
and kilowatt-hour usage.
6. Changing Rate Schedules
Customers electing to be served under E-7 TOU must remain on said Rate Schedule for a
minimum of 12 months. Should the Customer so wish, at the end of 12 months, the Customer
may request a Rate Schedule change to any applicable City of Palo Alto full-service Rate
Schedule as is suitable to their kilowatt Demand and kilowatt-hour usage.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 102 Packet Pg. 673 of 853
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-TOU-4 Sheet No E-7-TOU-4
dated 7-1-202219 Effective 7-1-20232
7. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be offered,
but the City is not required to supply Service at a particular line voltage where it has, or will
install, ample facilities for supplying at another voltage equally or better suited to the Customer's
electrical requirements, as determined in the City’s sole discretion. The City retains the right to
change its line voltage at any time after providing reasonable advance notice to any Customer
receiving the discount in this section. The Customer then has the option to change his system so
as to receive Service at the new line voltage or to accept Service (without voltage discount)
through transformers to be supplied by the City subject to a maximum kilovolt-ampere size
limitation.
8. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e),
applies to Customers that have a non-utility generation source interconnected on the
Customer’s side of the City’s revenue Meter and that occasionally require backup power
from the City due to non-operation of the non-utility generation source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand occurs when one or more of the
non-utility generators on the Customer’s side of the City’s revenue Meter are not
operating, the Maximum Demand will be reduced by the sum of the Maximum
Generation of those non-utility generators, but in no event shall the Customer’s
Maximum Demand be reduced below zero.
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 103 Packet Pg. 674 of 853
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-7-TOU-5 Sheet No E-7-TOU-5
dated 7-1-202219 Effective 7-1-20232
(2) If the non-utility generation source does not operate for an entire billing cycle, the
standby charge does not apply and the Customer shall not receive the Maximum Demand
credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate only in
the event of an interruption in utility Service and which are not used to offset Customer
electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code Section
2827(b)(4) , as amended.
(3) The applicability of these exemptions shall be determined at the discretion of the
Utilities Director.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 104 Packet Pg. 675 of 853
NET METERING NET SURPLUS ELECTRICITY COMPENSATION
UTILITY RATE SCHEDULE E-NSE-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. E-NSE-1 Sheet No. E-NSE-1
dated 07-01-20221 Effective 7-1-20232
A. APPLICABILITY:
This Rate Schedule applies to eligible residential and small commercial Net Energy Metering
Customers who, at the end of an annual settlement period, as described in Rule 29, are Net Surplus
Customer-Generators of electricity who elect to receive monetary compensation as such preference
is indicated on the net surplus electricity election form. This Rate Schedule only applies to
Customers who participate in Net Energy Metering, and does not apply to Customers that take
service under the City’s Net Energy Metering Successor Rate, as each of these terms are defined in
Rule and Regulation 2.
B. TERRITORY:
This rate schedule applies everyanywhere the City of Palo Alto provides eElectric Sservice.
C. RATES:
Per kWh
Net Surplus Electricity Compensation rate $ 0.1535 0.1026
D. SPECIAL CONDITIONS
1. Net Surplus Electricity Compensation Rate eligibility shall be determined as specified in Rule
29. Net surplus electricity, as specified in Rule 29, if applicable, will be multiplied by the above
compensation rate to determine the Customer’s annual net surplus electricity compensation
stated in dollars.
2. Additional terms, conditions and definitions govern Net Energy Metering Service and
Interconnection, as described in Rule 29.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 105 Packet Pg. 676 of 853
EXPORT ELECTRICITY COMPENSATION
UTILITY RATE SCHEDULE E-EEC-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. E-EEC-1 Sheet No.E-EEC-1
dated 7-1-20212 Effective 7-1-20232
A. APPLICABILITY:
This Rate Schedule applies in conjunction with the otherwise applicable Rate Schedules for each
Customer class. This Rate Schedule may not apply in conjunction with any time-of-use Rate
Schedule. This Rate Schedule applies to Customer-Generators as defined in Rule and Regulation 2
who are either not eligible for Net Energy Metering or who are eligible for Net Energy metering but
elect to take Service under this Rate Schedule.
B. TERRITORY:
This rate schedule Aapplies everywhere to locations within the service area of the City of Palo Alto
provides Electric Service.
C. RATE:
The following compensationbuyback rate shall apply to all electricity exported to the grid.
Per kWh
Export electricity compensation rate $ 0.1685 0.1045
D. SPECIAL CONDITIONS
1. Metering equipment: Electricity delivered by CPAU to the Customer-Generator or received by
CPAU from the Customer-Generator shall be measured using a Meter capable of registering the
flow of electricity in two directions (aka “bidirectional meter”). The electrical power
measurements will be used for billing the Customer-Generator. CPAU shall furnish, install and
own the appropriate Meter.
2. Billing:
a. CPAU shall measure during the billing period, in kilowatt-hours, the electricity delivered
and received after the Customer-Generator serves its own instantaneous load.
b. CPAU shall bill the Customer-Generator consumption charges for the electricity delivered
by CPAU to the Customer-Generator based on the Customer-Generator’s applicable Rate
Schedule.
c. In the event the electricity generated exceeds the electricity consumed and therefore is
received by CPAU, the Customer will receive a credit for all electricity received by
CPAU at the buyback Rate designated in section C above.
{End}
Item 15
Attachment C - Rate
Schedules Combined
Item 15: Staff Report Pg. 106 Packet Pg. 677 of 853
Item No. 6. Page 1 of 3
City Council
Supplemental Report
From: Jonathan Lait, Planning and Development Services Director
Meeting Date: April 17, 2023
Item Number: 6
Report #:2304-1292
TITLE
Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year 2021-2022 -
Supplemental Report
DISCUSSION
Following discussion with SUMC after the publication of the SUMC Annual Report to Council
Fiscal Year 2021-2022 (CMR #2303-1129), staff determined that the published text in the staff
recommendation and the Executive Summary may have mischaracterized the SUMC Parties’
current compliance with the requirements of the Development Agreement. As a result, staff
wish to modify the staff recommendation and the Executive Summary as set forth below. In
addition, staff wish to correct a clerical error in Attachment C. The remainder of the report
(CMR #2303-1129) remains unchanged. For clarity, the limited modifications are provided in
underline/strikeout format.
RECOMMENDATION
Staff recommends that the City Council:
1. Review the Stanford University Medical Center (SUMC) Annual Report for Fiscal Year 2021-
2022, and find that Stanford Hospitals & Clinics, Lucile Packard Children’s Hospital, and Stanford
University (SUMC Parties) have complied in good faith with the terms and conditions of the
SUMC Development Agreement;
2. Find that the SUMC Parties are not in default with the terms and conditions of the
Agreement in all sections, with the exception of alternative mode share targets, for which the
SUMC Parties have claimed a permitted delay due to the effects of the COVID19 Pandemic; and
3. Accept the City of Palo Alto’s (City) Annual Report Supplements regarding the funds received
from the SUMC Parties, as required under Section 12(d) of the Development Agreement
(Attachment E).
Item 6
Supplemental Report
Item 6: Staff Report Pg. 1 Packet Pg. 678 of 853
Item No. 6. Page 2 of 3
EXECUTIVE SUMMARY
The City Council is required to review the SUMC Development Agreement (the “Agreement”) to
confirm compliance with the Agreement’s terms. The Agreement is between Stanford Hospital
and Clinics, Lucile Packard Children’s Hospital, Stanford University (SUMC Parties), and the City
of Palo Alto. The City also uses this Annual Report to Council to provide information on the
City’s compliance obligations, such as providing the required summary and description of how
the City expended funds provided by SUMC per the Agreement. As documented in this Annual
Report to Council, both SUMC and the City are in compliance with the terms of the Agreement
for the reporting period Fiscal Year 2021-2022. with the exception of alternative mode share
targets. In regard to the achievement of the alternative mode share milestone targets,
however, SUMC was not able to meet the specific target outlined in the Agreement. This was
due to the effect of the COVID-19 pandemic on SUMC employee use of alternative
transportation modes, such as Caltrain and other public transit systems. The failure to meet
alternative mode share targets is not itself a default under the Agreement, as the Agreement
contemplates the payment of fees in the event the targets cannot be achieved. In addition, As
received by the City on June 14, 2022, the SUMC Parties asserted a permitted delay under the
Force Majeure provision of the Agreement. The SUMC Parties and City staff are actively
engaged in discussing an amendment to the Agreement to address this issue. In the meantime,
the City has deferred any action to collect from the SUMC Parties a $175,000 payment provided
for in the Agreement.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises FY 2021-2022
DA
Section Description Summary Activity Complies?
5(c)(ix)
Monitoring of
TDM
Programs
Yearly
report
regarding
alternative
transit
mode use
The SUMC parties
found that the
alternative mode
share milestone
target of 33%
outlined in SUMC DA
Section 5(c)(ix) was
not met for 2022, nor
was it above the
previous 2018
milestone target of
30%; the alternative
mode share rate for
SUMC decreased to
19.9% in FY 2021-
2022 between use of
Yes, complies - SUMC
timely submitted their
annual Alternative Mode
Share report for FY 2021-
2022. Monitoring in FY
2021-2022 identified that
SUMC missed the
alternative mode share
target of 33% for two
consecutive years.
As received by the City on
June 14, 2022, the SUMC
Parties asserted a
permitted delay under the
Force Majeure provision of
the Agreement. The SUMC
Item 6
Supplemental Report
Item 6: Staff Report Pg. 2 Packet Pg. 679 of 853
Item No. 6. Page 3 of 3
alternative modes
versus driving alone,
largely due to
ongoing pandemic
conditions.
Parties and City staff are
actively engaged in
developing an amendment
to the Agreement in order
to resolve this issue.
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
Item 6
Supplemental Report
Item 6: Staff Report Pg. 3 Packet Pg. 680 of 853
2
0
0
3
City Council
Staff Report
From: City Attorney
Report Type: CONSENT CALENDAR
Lead Department: City Attorney
Meeting Date: April 17, 2023
Report #:2304-1253
TITLE
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 Allergan Finance, LLC and related entities (Allergan), Teva
Pharmaceutical Industries Ltd. and related entities (Teva); Walgreens Co.; CVS Health
Corporation and CVS Pharmacy, Inc. (CVS), and Walmart, 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.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution authorizing the City to participate in
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 Resolution No. ______, authorizing the City Manager to complete and
execute the Settlement Participation Forms to authorize the City of Palo Alto’s participation in
the settlements, and to take such further actions as necessary to ensure that the City receives
settlement proceeds allocated to it under the allocation agreements with the Attorney General.
Furthermore, in the event settlement agreements are entered into with additional
manufacturers and distributors in the opioid pharmaceutical supply chain, Staff recommends
that the City Council authorize the City Manager to complete and execute any future
Settlement Participation Forms and to take all necessary action to ensure the City receives
proceeds from future settlements in the national opioid litigation.
BACKGROUND
2021 National Settlements
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
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substance abuse disorder. A coalition of state attorneys general entered into negotiations in an
attempt to reach a global resolution with defendants in the litigation.
2022 National Settlements
Teva to pay up to $3.34 billion over 13 years and to provide either $1.2 billion of its
generic version of the drug Narcan over 10 years or $240 million of cash in lieu of
product, as each state may elect;
Allergan to pay up to $2.02 billion over 7 years;
CVS to pay up to $4.90 billion over 10 years;
Walgreens to pay up to $5.52 billion over 15 years; and
Walmart to pay up to $2.74 billion in 2023, and all payments to be made within 6 years.
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The national settlement agreements also 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. On October 27, 2021 the California Attorney General and local
government representatives reached an agreement regarding intrastate allocation agreements
for California. These allocation agreements were used for the 2021 National Settlements, which
the City previously signed, and identical allocation agreements are used for the 2022 National
Settlement Agreements.
The Intrastate Allocation Agreements
Palo Alto’s Allocation
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agreement. The deadline for the City to elect to participate in the 2022 National Settlements is
April 18, 2023. If the City declines to participate, the City’s allocated settlement funds will
default to the State and the City will maintain its right to pursue litigation against Allergan,
Teva, Walgreens, CVS, and Walmart.
ANALYSIS
ENVIRONMENTAL REVIEW
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”).
ATTACHMENTS
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-b-12-13-2021-staff-
report.pdf
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Attachment C: CA Allocation Agreement for Allergan Settlement
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-c_allergan-
participation-form.pdf
Attachment D: CA Allocation Agreement for Teva Settlement
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-d_teva-participation-
form.pdf
Attachment E: CA Allocation Agreement for Walgreens Settlement
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-e_walgreens-
participation-form.pdf
Attachment F: CA Allocation Agreement for CVS Settlement
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-f_cvs-participation-
form.pdf
Attachment G: CA Allocation Agreement for Walmart Settlement
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-g_walmart-
participation-form.pdf
Attachment H: Allowed uses under the 2022 National Settlements
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/new-folder/attachment-h_final-allergan-
exhibit-epdf.pdf
:
Molly Stump, City Attorney
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*NOT YET APPROVED*
1
0005_20230406_mv30
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 Allergan Finance, LLC and
related entities (Allergan), Teva Pharmaceutical Industries Ltd. and related
entities (Teva); Walgreens Co.; CVS Health Corporation and CVS Pharmacy, Inc.
(CVS), and Walmart, 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. 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. 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 two manufacturers, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-
McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc., and 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 (“2021 National Settlements”); and
C. The 2021 National Settlements provided that the settling states, commonwealths,
and territories would receive a combined total of up to $26 billion to alleviate the impacts of
opioids-related substance use disorder that would be allocated to participating subdivisions that
affirmatively elect to participate in the settlements, and in doing so releases their claims against
the settling defendants; and
D. On December 13, 2021, the City Council adopted Resolution No. 10010 authorizing
the City Manager to execute participation agreements on behalf of the City of Palo Alto to enter
into the 2021 National Settlements; and
E. In late 2022, the additional settlement agreements were reached with three
pharmacy chains—CVS, Walgreens, and Walmart—and two manufacturers—Allergan and Teva
(“2022 National Settlements); and
F. The 2022 National Settlements provide that settling states, commonwealths, and
territories will receive a combined total of up to approximately $18 billion to address the impacts
of the opioid epidemic and, like the 2021 National Settlements, subdivisions that wished to
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 6 Packet Pg. 686 of 853
*NOT YET APPROVED*
2
0005_20230406_mv30
participate had to affirmatively elect to participate to receive an allocation from the settlements;
and
G. Like 2021 National Settlements, the 2022 National 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
H. The California Attorney General and the local government representatives agreed to
a Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement
Funds in the 2021 National Settlement, which allocates proceeds to participating cities and
counties; and
I. The Distribution and Use Agreements used in the 2021 National Settlements are
identical in material terms to the Agreements in the 2022 National Settlement Agreements,
attached hereto as Exhibit 1 (Allergan Allocation Agreement); Exhibit 2 (Teva Allocation
Agreement); Exhibit 3 (Walgreens Allocation Agreement); Exhibit 4 (CVS Allocation Agreement);
Exhibit 5 (Walmart Allocation Agreement); and
J. The City of Palo Alto must affirmatively elect to participate in 2022 National
Settlements to receive the allocation of settlement proceeds set forth in the Allocation
Agreements attached hereto, and in doing so will release its claims against the settling
defendants; and
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
authorize the City Manager to complete and execute the Settlement Participation Forms to
authorize the City of Palo Alto’s participation in the 2022 National Settlements, and to take such
further actions as necessary to ensure that the City receives settlement proceeds allocated to it
under the Allocation Agreements.
SECTION 2. In the event settlement agreements are entered into with additional
manufacturers and distributors, the City Council does hereby further authorize the City Manager
to complete and execute any future Settlement Participation Forms and to take all necessary
action to ensure the City receives proceeds from future settlements in the national opioid
litigation.
//
//
//
//
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 7 Packet Pg. 687 of 853
*NOT YET APPROVED*
3
0005_20230406_mv30
SECTION 3. 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:
__________________________ _____________________________
Assistant City Attorney City Manager
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 8 Packet Pg. 688 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 9 Packet Pg. 689 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 10 Packet Pg. 690 of 853
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Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 11 Packet Pg. 691 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 12 Packet Pg. 692 of 853
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Attachment AItem AA1
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Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 13 Packet Pg. 693 of 853
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Distribution of Opioid
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Attachment AItem AA1
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to Execute Participation
Agreements obo CPA to
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Agreements re
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Distribution of Opioid
Products
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to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 16 Packet Pg. 696 of 853
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EXHIBIT 1
Attachment AItem AA1
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Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 17 Packet Pg. 697 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 18 Packet Pg. 698 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 19 Packet Pg. 699 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 20 Packet Pg. 700 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 21 Packet Pg. 701 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 22 Packet Pg. 702 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 23 Packet Pg. 703 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 24 Packet Pg. 704 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 25 Packet Pg. 705 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 26 Packet Pg. 706 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 27 Packet Pg. 707 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 28 Packet Pg. 708 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 29 Packet Pg. 709 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 30 Packet Pg. 710 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 31 Packet Pg. 711 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 32 Packet Pg. 712 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 33 Packet Pg. 713 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 34 Packet Pg. 714 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 35 Packet Pg. 715 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 36 Packet Pg. 716 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 37 Packet Pg. 717 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 38 Packet Pg. 718 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 39 Packet Pg. 719 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 40 Packet Pg. 720 of 853
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EXHIBIT 1
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 41 Packet Pg. 721 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 42 Packet Pg. 722 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
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Item AA1: Staff Report Pg. 43 Packet Pg. 723 of 853
!"!! # !"!! $ !"!! % !"!! EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 44 Packet Pg. 724 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 45 Packet Pg. 725 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 46 Packet Pg. 726 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 47 Packet Pg. 727 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 49 Packet Pg. 729 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 50 Packet Pg. 730 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Enter into Settlement
Agreements re
Manufacture and
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 56 Packet Pg. 736 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 57 Packet Pg. 737 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 58 Packet Pg. 738 of 853
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Attachment AItem AA1
Attachment A Resolution
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Item AA1: Staff Report Pg. 59 Packet Pg. 739 of 853
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Attachment AItem AA1
Attachment A Resolution
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to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 61 Packet Pg. 741 of 853
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Attachment AItem AA1
Attachment A Resolution
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Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 62 Packet Pg. 742 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 63 Packet Pg. 743 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 64 Packet Pg. 744 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 65 Packet Pg. 745 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 66 Packet Pg. 746 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 67 Packet Pg. 747 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 68 Packet Pg. 748 of 853
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Attachment AItem AA1
Attachment A Resolution
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Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 69 Packet Pg. 749 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 70 Packet Pg. 750 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 71 Packet Pg. 751 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 72 Packet Pg. 752 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 73 Packet Pg. 753 of 853
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EXHIBIT 2
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 74 Packet Pg. 754 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 75 Packet Pg. 755 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 76 Packet Pg. 756 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 77 Packet Pg. 757 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 78 Packet Pg. 758 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 79 Packet Pg. 759 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 80 Packet Pg. 760 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 81 Packet Pg. 761 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 82 Packet Pg. 762 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 83 Packet Pg. 763 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 84 Packet Pg. 764 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 85 Packet Pg. 765 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 86 Packet Pg. 766 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 87 Packet Pg. 767 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 88 Packet Pg. 768 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 89 Packet Pg. 769 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 90 Packet Pg. 770 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 91 Packet Pg. 771 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 92 Packet Pg. 772 of 853
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Attachment A Resolution
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Attachment A Resolution
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Attachment AItem AA1
Attachment A Resolution
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Enter into Settlement
Agreements re
Manufacture and
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Item AA1: Staff Report Pg. 95 Packet Pg. 775 of 853
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Attachment AItem AA1
Attachment A Resolution
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Agreements obo CPA to
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Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 96 Packet Pg. 776 of 853
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Attachment AItem AA1
Attachment A Resolution
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to Execute Participation
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Item AA1: Staff Report Pg. 97 Packet Pg. 777 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 98 Packet Pg. 778 of 853
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Attachment A Resolution
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Agreements re
Manufacture and
Distribution of Opioid
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Item AA1: Staff Report Pg. 99 Packet Pg. 779 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 100 Packet Pg. 780 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
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Item AA1: Staff Report Pg. 101 Packet Pg. 781 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 102 Packet Pg. 782 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 103 Packet Pg. 783 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 104 Packet Pg. 784 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 105 Packet Pg. 785 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 106 Packet Pg. 786 of 853
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EXHIBIT 3
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 107 Packet Pg. 787 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 108 Packet Pg. 788 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 109 Packet Pg. 789 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 110 Packet Pg. 790 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 111 Packet Pg. 791 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 112 Packet Pg. 792 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 113 Packet Pg. 793 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 114 Packet Pg. 794 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 115 Packet Pg. 795 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 116 Packet Pg. 796 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 117 Packet Pg. 797 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 118 Packet Pg. 798 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 120 Packet Pg. 800 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 121 Packet Pg. 801 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 122 Packet Pg. 802 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 123 Packet Pg. 803 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 124 Packet Pg. 804 of 853
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Attachment AItem AA1
Attachment A Resolution
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Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 125 Packet Pg. 805 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 126 Packet Pg. 806 of 853
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Attachment A Resolution
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Item AA1: Staff Report Pg. 127 Packet Pg. 807 of 853
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Attachment AItem AA1
Attachment A Resolution
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Attachment AItem AA1
Attachment A Resolution
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Products
Item AA1: Staff Report Pg. 129 Packet Pg. 809 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 130 Packet Pg. 810 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
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Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 131 Packet Pg. 811 of 853
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Attachment AItem AA1
Attachment A Resolution
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Manufacture and
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 133 Packet Pg. 813 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 134 Packet Pg. 814 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 135 Packet Pg. 815 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 136 Packet Pg. 816 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 137 Packet Pg. 817 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 138 Packet Pg. 818 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 139 Packet Pg. 819 of 853
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EXHIBIT 4
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 140 Packet Pg. 820 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 141 Packet Pg. 821 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 142 Packet Pg. 822 of 853
!"! # !"! $ !"! % !"! EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 143 Packet Pg. 823 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 144 Packet Pg. 824 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 145 Packet Pg. 825 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 146 Packet Pg. 826 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 147 Packet Pg. 827 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 148 Packet Pg. 828 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 149 Packet Pg. 829 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 150 Packet Pg. 830 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 151 Packet Pg. 831 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 152 Packet Pg. 832 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 153 Packet Pg. 833 of 853
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Attachment AItem AA1
Attachment A Resolution
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Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 154 Packet Pg. 834 of 853
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Attachment AItem AA1
Attachment A Resolution
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Enter into Settlement
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Manufacture and
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Item AA1: Staff Report Pg. 155 Packet Pg. 835 of 853
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Attachment AItem AA1
Attachment A Resolution
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Agreements re
Manufacture and
Distribution of Opioid
Products
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 157 Packet Pg. 837 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 158 Packet Pg. 838 of 853
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Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 159 Packet Pg. 839 of 853
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Attachment AItem AA1
Attachment A Resolution
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Item AA1: Staff Report Pg. 160 Packet Pg. 840 of 853
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Attachment AItem AA1
Attachment A Resolution
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Attachment AItem AA1
Attachment A Resolution
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 163 Packet Pg. 843 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 164 Packet Pg. 844 of 853
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Attachment AItem AA1
Attachment A Resolution
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Manufacture and
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Products
Item AA1: Staff Report Pg. 165 Packet Pg. 845 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 166 Packet Pg. 846 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 167 Packet Pg. 847 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 168 Packet Pg. 848 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 169 Packet Pg. 849 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 170 Packet Pg. 850 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 171 Packet Pg. 851 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 172 Packet Pg. 852 of 853
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EXHIBIT 5
Attachment AItem AA1
Attachment A Resolution
Authorizing City Manager
to Execute Participation
Agreements obo CPA to
Enter into Settlement
Agreements re
Manufacture and
Distribution of Opioid
Products
Item AA1: Staff Report Pg. 173 Packet Pg. 853 of 853