HomeMy WebLinkAbout2023-05-15 City Council Agenda PacketCITY COUNCIL
Special Meeting
Monday, May 15, 2023
CITY O F Council Chambers & Hybrid
PALO 5:30 PM
ALTO
Palo Alto City Council meetings will be held as "hybrid" meetings with the option to attend by
teleconference 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,
and streamed to Midpen Media 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.
Special Meeting May 15, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
CALL TO ORDER
This meeting is being held in honor of Older Americans Month.
SPECIAL ORDERS OF THE DAY (5:30 - 5:40 PM)
1. Proclamation Recognizing National Police Week— May 14-20, 2023 and National Peace
Officers' Memorial Day— May 15, 2023
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (5:40 - 6:00 PM)
Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral
Communications period to 30 minutes.
COUNCIL MEMBER QUESTIONS. COMMENTS, ANNOUNCEMENTS (6:00 - 6:15 PM)
Members of the public may not speak to the item(s).
STUDY SESSION (6:15 - 7:15 PM)
2. Study Session to Discuss Next Steps Following Letter Received on March 13, 2023 from
Palo Alto Unified School District titled "Invitation for Cubberley Development Proposals"
Late Packet Report
CONSENT CALENDAR (7:15 - 7:20 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.
3. Approval of Minutes from May 1, 2023 Meeting
4. Approval of a three-year General Services contract with Johnson Controls Fire Protection,
totaling $423,830, for Automatic Fire Extinguishing Systems Inspection, Testing, and
Repair Services; and Approval of a Budget Amendment in the General Fund.
5. QUASI-JUDICIAL. 151 S California Avenue {22PLN-00363}: Ratification of Director's
Approval of Waiver from the Retail Preservation Ordinance for an Alternative Viable Use
to Allow for a Medical Office Use to Occupy a 3,500 Square Foot Tenant Space. Zone
District: CC(2). Environmental Assessment: Exempt from CEQA in Accordance with
Guidelines Section 15061(b)(3) and 15301.
6. Approval of a Design -Build Contract with Parking Guidance Systems, LLC in the Amount
of $4,180,217 with Authorization for the City Manager to Negotiate and Execute Change
Orders up to a Not -to -Exceed Amount of $418,022 for the Downtown Automated Parking
Special Meeting May 15, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
Guidance System, Access Controls & Revenue Collection Equipment Project, Capital
Improvement Program Project PL -15002; and Approval of a Budget Amendment in the
Capital Improvement Fund; CEQA status — exempt under CEQA Guidelines Section
15301(c)
7. Adoption of a Resolution Authorizing the City Manager or their Designee to sign Grant -
Related Documents with Caltrans for the Newell Road/San Francisquito Creek Bridge
Replacement Capital Improvement Program Project PE -12011; CEQA: Environmental
Impact Report for the Newell Road Bridge (Resolution No. 9889)
8. Approval of Amendment No. 3 with RossDrulisCusenbery Architecture, Inc. (Contract No.
C17165953) to add $687,500, increasing the not to exceed amount to $9,725,108, for
additional Professional Services for the Public Safety Building Capital Improvement
Program Project (PE -15001); CEQA: Environmental Impact Report for the PSB and New
California Avenue Area Parking Garage (Resolution No. 9772)
9. Amendment No. 5 to the Agreement between the City of Palo Alto and the Friends of the
Junior Museum and Zoo for Mutual Cooperation and Support to Extend the Agreement
through June 2024 and Accept a $75,000 Grant for a Community Engagement Specialist;
CEQA status — not a project
10. Approval of Professional Services Agreement Contract Number S23184570 with Foster &
Foster Consulting Actuaries, Inc. in an Amount Not to Exceed $147,180 to Provide
Actuary Services for a Period of Five Years: CEQA Status — Not a Project
11. Authorization for approval of a Blanket Purchase Order with Granite Rock Company in
the Amount of $500,000 Annually for a Three -Year Term, beginning July 1, 2023 through
June 30, 2026, for a Total Not -to -Exceed Amount of $1,500,000 for Hot Mix Asphalt
Materials for Public Works and Utilities Departments; CEQA Status — Not a Project
CITY MANAGER COMMENTS (7:20 - 7:40 PM)
ACTION ITEMS (Item 12: 7:40 - 8:40 PM; Item 13: 8:40 - 9:40 PM ; Item 14: 9:40 - 11:00 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished
Business and Council Matters.
12. PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy
Assessments for the Downtown Business Improvement District for FY 2024.
13. Update, Discussion, and Potential Direction regarding State and Federal Legislation
14. PUBLIC HEARING/LEGISLATIVE: Adopt an Ordinance That Changes Palo Alto Municipal
Code Chapters 18.04, 18.09, 18.10, 18.12, and 18.40 related to Accessory Dwelling
Special Meeting May 15, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
Units and Accessory Structures. Environmental Assessment: Exempt from the provisions
of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code
Section 21080.17 and CEQA Guidelines sections 15061(b)(3), 15301, 15302 and 15305.
ADJOURNMENT
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee May 16, 2023 CANCELED
City Schools Liaison Committee May 18, 2023 CANCELED
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
2 Study Session to Discuss Next Steps Following Letter Received on March 13, 2023 from
Palo Alto Unified School District titled "Invitation for Cubberley Development Proposals";
CEQA status — Not a Project Late Packet Report
Special Meeting May 15, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. For 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 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.
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older browsers including Internet Explorer. Or download the Zoom application onto
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identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
o When you wish to speak on an Agenda Item, click on "raise hand." The Clerk will
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o When called, please limit your remarks to the time limit allotted. A timer will be
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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
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remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 362-027-238 Phone: 1-669-900-6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City's ADA Coordinator at
(650) 329-2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
Special Meeting May 15, 2023
Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org.
Item 1
Item 1 Staff Report
City Council
Staff Report
Report Type: INFORMATION REPORTS
CITY O F Lead Department: Police
PALO
LTO
Meeting Date: May 15, 2023
Report #:2304-1340
TITLE
Proclamation Recognizing National Police Week — May 14-20, 2023 and National Peace Officers'
Memorial Day— May 15, 2023
ATTACHMENTS
Attachment A: Proclamation Recognizing National Police Week 2023
APPROVED BY:
Andrew Binder
Item 1: Staff Report Pg. 1 Packet Pg. 6 of 229
Item 1
Attachment A-
Proclamation Recognizing
National Police Week
2023
C/
National Police Week, May 14-20 and
National Peace Officers' Memorial Day, May 15, 2023
WHEREAS, the United States Congress and President of the United States have designated May 15, 2023 as
National Peace Officers' Memorial Day and the week in which it falls as Police Week; and
WHEREAS, the members of the Palo Alto Police Department play an essential role in safeguarding the
rights and freedoms of its citizens; and
WHEREAS, it is important that all citizens know and understand the problems, duties, and responsibilities
of their police department, and that members of our police department recognize their duty to serve the people
by safeguarding life and property, by protecting against violence or disorder, and by protecting the innocent
against deception and the weak against oppression or intimidation; and
WHEREAS, the Palo Alto Police Department has grown to be a modem and progressive law enforcement
agency which unceasingly provides a vital public service; and
WHEREAS, The City of Palo Alto asks all citizens to join in honoring the police officers, past and present,
who by their faithful and loyal devotion to their responsibilities have rendered a dedicated service to their
communities and, in doing so, have established for themselves an enviable and enduring reputation for
preserving the rights and security of all citizens.
NOW, THEREFORE, I, Lydia Kou, Mayor of the City of Palo Alto on behalf of the entire City Council do
hereby proclaim the week of May 14-20, 2023 as Police Week and urge all citizens of Palo Alto to observe
Saturday May 15, 2023 as Peace Officers' Memorial Day in honor of those peace officers who, through their
courageous deeds, have lost their lives or have become disabled in the performance of duty.
Presented: May 15, 2023
Lydia Kou
Mayor
Item 1: Staff Report Pg. 2 I I Packet Pg. 7 of 229
Item 2
Item 2 Staff Report
City Council
Staff Report
Report Type: STUDY SESSION
CITY O F Lead Department: Community Services
PALO
A LTO
Meeting Date: May 15, 2023
Report #:2305-1399
TITLE
Study Session to Discuss Next Steps Following Letter Received on March 13, 2023 from Palo
Alto Unified School District titled "Invitation for Cubberley Development Proposals"
This report will be a special late packet release on Thursday, May 11, 2023.
APPROVED BY:
Kristen O'Kane
Item 2: Staff Report Pg. 1 Packet Pg. 8 of 229
Item 3
Item 3 Staff Report
CITY OF
PALO
ALTO
TITLE
Approval of Minutes from May 1, 2023 Meeting
RECOMMENDATION
That the minutes be reviewed and approved.
ATTACHMENTS
Attachment A: May 1, 2023 Draft Action Minutes
APPROVED BY:
Lesley Milton
City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: May 15, 2023
Report #:2305-1395
Item 3: Staff Report Pg. 1 Packet Pg. 9 of 229
Item 3
Attachment A- May 1,
2023 Draft Action
CITY COUNCIL Minutes
CITY Or
PALO DRAFT ACTION MINUTES
ALTO
Special Meeting
May 1, 2023
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
ecial Orders of the Da
1. Proclamation of May 2023 as Affordable Housing Month
2. Appointment of Applicants for Board and Commission Openings on the Human Relations
Commission and Parks and Recreation Commission
First round of voting for Human Relations Commission two (2) full terms ending 3/31/2026
Katie Causey: Stone, Kou, Lauing, Veenker, Burt, Lythcott-Haims
Miles Goodman: Veenker, Lythcott-Haims
Mary Kate Stimmler: Tanaka
Amy Hsieh: Stone, Tanaka, Kou, Lauing
Daryl Savage: Burt
• Candidate Katie Causey receiving 6 votes is appointed to a full -term expiring March
31, 2026.
• Candidate Amy Hsieh receiving 4 votes is appointed to a full -term expiring March 31,
2026.
First round of voting for Parks and Recreation Commission four (4) full terms ending 3/31/2026
Amanda Brown: Stone, Tanaka, Kou, Lauing, Burt, Lythcott-Haims, Veenker
Bing Wei: Tanaka, Kou, Burt
Nanci Howe: Lythcott-Haims
Yudy Deng: Stone, Tanaka
Jeff LaMere: Veenker
Page 1 of 6
Item 3: Staff Report Pg. 2 Packet Pg. 10 of 229
Item 3
Attachment A - May 1,
DRAFT ACTION MINUT
N U T 2023 Draft Action
Minutes
Laura Granka: Tanaka, Lauing, Burt
Adriana Flores-Ragade:
Shani Kleinhaus: Stone, Kou, Lauing, Veenker
Sierra Peterson: Lythcott-Haims
Joy Oche: Stone, Kou, Lauing, Veenker, Burt, Lythcott-Haims
• Candidate Amanda Brown receiving 7 votes is appointed to a full -term expiring March
31, 2026.
• Candidate Shani Kleinhaus receiving 4 votes is appointed to a full -term expiring March
31, 2026
• Candidate Joy Oche receiving 6 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 was required for the final opening.
Second round of voting for Parks and Recreation Commission one (1) full term ending 3/31/2026
Bing Wei: Kou, Tanaka, Lythcott-Haims
Nanci Howe:
Yudy Deng: Stone, Veenker
Jeff LaMere:
Laura Granka: Burt, Lauing
Adriana Flores-Ragade:
Sierra Peterson:
No other Candidate received a majority of votes required to be appointed to the full -term
expiring March 31, 2026. A third round of voting is required for the final opening.
First round of voting for Human Relations Commission two (2) terms ending 3/31/2024 per
ordinance 5583
• Miles Goodman: Stone, Veenker, Tanaka, Lythcott-Haims
• Mary Kate Stimmler: Kou, Burt, Tanaka, Lythcott-Haims, Lauing
• Daryl Savage: Kou, Stone, Veenker, Burt, Lauing
Candidates Daryl Savage and Mary Kate Stimmler receiving 5 votes is appointed to a partial -
term expiring March 31, 2024.
Item 3: Staff Report Pg. 3
Page 2 of 6
(Sp.) City Council Meeting
Draft Action Minutes: 05/01/2023
Packet Pg. 11 of 229
Item 3
Attachment A - May 1,
D RAFT ACTION M I N UT 2023 Draft Action
Minutes
Third round of voting for Parks and Recreation Commission one (1) full term ending 3/31/2026
Bing Wei: Burt, Kou, Tanaka, Lythcott-Haims
Yudy Deng: Stone, Lauing, Veenker
Laura Granka:
Candidate Bing Wei receiving 4 votes is appointed to the Parks and Recreation Commission
full -term expiring March 31, 2026.
Closed Session
3. Review and Acceptance of Auditor's Office Cybersecurity Assessment
Authority: Govt Code section 54957(a) — Threat to Public Services or Facilities
Consultation with: City Auditor Adriane D. McCoy, City Manager Ed Shikada, and
Information Technology Director Darren Numoto
MOTION: Mayor Kou moved, seconded by Council Member Burt to go into Closed Session.
MOTION PASSED: 7-0
Council returned from Closed Session at 6:50 P.M.
Mayor Kou announced there were no announcements for the public.
Study Session
4. Fiscal Year 2024 Proposed Budget Study Session
Agenda Changes, Additions and Deletions
Public Comment
Consent Calendar
Council Member Tanaka registered a no vote on Agenda Item Numbers 8, 9.
Page 3 of 6
(Sp.) City Council Meeting
Draft Action Minutes: 05/01/2023
Item 3: Staff Report Pg. 4 Packet Pg. 12 of 229
Item 3
Attachment A - May 1,
DRAFT ACTION MINUT
N U T 2023 Draft Action
Minutes
MOTION: Council Member Kou moved, seconded by Council Member Burt to approve Agenda
Item Numbers 5-9
5. Approval of Minutes from April 17, 2023 Meeting
6. SECOND READING: Adoption of a Park Improvement Ordinance 5487 for Renovations and
New Amenities at Rinconada Park (FIRST READING: January 13, 2020 PASSED 7-0)
7. Rental Residential Vacancy Rate Determination for Three Plus Dwelling Units for 2022
8. Approval of Amendment Number 4 to Contract Number C20176363 with Magellan for; 1)
Program Management, Network Operations, and Technical Support for Fiber -to -the -
Premises to; 2) Increase Compensation by $2,770,960 for a New Total Not to Exceed
Amount of $5,685,291; 3) Extend the Contract Term by 31 months through December 31,
2025; and 4) Approval of a Budget Amendment in the Fiber Optics Fund
9. Approval of Professional Services Contract Amendment Number 3 with Smart Energy
Systems, Inc (S18165157) to add $684,023 for a New Total Not -to -Exceed Amount of
$1,030,146; and to Extend the Contract Term for Three Years for the Utilities MyCPAU
MOTION PASSES ITEMS 5-7: 7-0
MOTION PASSES ITEMS 8, 9: 6-1, Tanaka no
City Manager Comments
Artinn Itemc
10. Adoption of the Community Development Block Grant (CDBG) FY2023-24 Annual Action
Plan and the Adoption of a Resolution Approving Use of CDBG Funds for FY 2023-24
MOTION: Council Member Stone moved, seconded by Council Member Lythcott-Haims to:
1. Adopt the draft Fiscal Year 2023-2024 Annual Action Plan (Attachment A) and the
associated resolution (Attachment B) allocating Community Development Block Grant
(CDBG) funding for Fiscal Year 2023-24;
2. Authorize the City Manager to execute the Fiscal Year 2023-24 CDBG application to
fund the Fiscal Year 2023-24 Annual Action Plan and any other necessary documents
Page 4 of 6
(Sp.) City Council Meeting
Draft Action Minutes: 05/01/2023
Item 3: Staff Report Pg. 5 Packet Pg. 13 of 229
Item 3
Attachment A - May 1,
DRAFT ACTION MI N UT 2023 Draft Action
Minutes
concerning the application, and to otherwise bind the City with respect to the
applications and commitment of funds; and
3. Authorize staff to submit the Fiscal Year 2023-24 Annual Action Plan (Attachment A)
to U.S. Department of Housing and Urban Development (HUD) by the May 15, 2023,
deadline.
MOTION PASSED: 7-0
11. PUBLIC HEARING / QUASI-JUDICIAL. 2147 Yale Street [22PLN-00374]: Recommendation
on Applicant's Request for a Preliminary Parcel Map with Exceptions to Divide an Existing
5,770 Square Foot Parcel Into two Approximately 2,885 Square Foot lots, smaller than the
minimum allowed by the Zoning Code. No changes are proposed to the existing
residences. Environmental Assessment: Exempt per CEQA 15301. Zoning District: RND
(NP) Two Unit Multiple -Family Residential District, Neighborhood Preservation Overlay.
MOTION: Council Member Tanaka moved, seconded by Council Member Lythcott-Haims to
approve the item and direct staff to add a condition of approval that any further development or
alterations to the property would be prohibited.
SUBSTITUTE MOTION: Vice Mayor Stone moved, seconded by Council Member Lauing to accept
the staff and PTC recommendation to deny the project.
MOTION PASSED: 5-1, Tanaka no
Council Member Questions, Comments and Announcements
Adjournment: The meeting was adjourned at 10:38 P.M.
ATTEST:
APPROVED:
City Clerk Mayor
Item 3: Staff Report Pg. 6
Page 5 of 6
(Sp.) City Council Meeting
Draft Action Minutes: 05/01/2023
Packet Pg. 14 of 229
Item 3
Attachment A - May 1,
D RAFT ACTION M I N UT 2023 Draft Action
Minutes
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council
found action minutes and the video/audio recordings of Council proceedings to be the official
records of both Council and committee proceedings. These recordings are available on the City's
website.
Item 3: Staff Report Pg. 7
Page 6 of 6
(Sp.) City Council Meeting
Draft Action Minutes: 05/01/2023
Packet Pg. 15 of 229
Item 4
Item 4 Staff Report
CITY OF
PALO
ALTO
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: May 15, 2023
Report #:2303-1078
TITLE
Approval of a three-year General Services contract with Johnson Controls Fire Protection,
totaling $423,830, for Automatic Fire Extinguishing Systems Inspection, Testing, and Repair
Services; and Approval of a Budget Amendment in the General Fund.
RECOMMENDATION
Staff recommends that Council:
1. Approve and authorize the City Manager, or their designee, to execute contract
C23187159, for a term of June 1, 2023 through May 31, 2026, with Johnson Controls
Fire Protection in the amount of $423,830 for Automatic Fire Extinguishing Systems
Inspection, Testing, and Repair Services; and
2. Authorize the City Manager, or their designee, to negotiate and execute one or more
change orders to the contract with Johnson Controls Fire Protection in an amount not to
exceed $42,383 for related, additional but unforeseen work which may develop during
the contract period; and
3. Amend the Fiscal Year 2023 budget appropriation for the General Fund (requires a 2/3
vote) by:
a) Increasing the Public Works Department Public Services Division operating budget
ongoing contract expenses expenditure by $95,825; and
b) Decreasing the Budget Stabilization Reserve by $95,825.
BACKGROUND
The automatic fire extinguishing systems in City facilities require quarterly, annual, and five-
year inspections to ensure functionality. These inspections are done in accordance with the
2013 Edition of the California Code of Regulations (CCR), Title 19, NFPA 25 Chapters 5, 6, and 8.
Item 4: Staff Report Pg. 1 Packet Pg. 16 of 229
Item 4
Item 4 Staff Report
Under the recommended contract', Johnson Controls Fire Protection will be responsible for the
inspections and for correcting any deficiency repairs found during these inspections.
ANALYSIS
Scope Overview
The City has 30 facilities that have automatic fire extinguishing systems. Inspections at these
facilities are performed during the first two weeks of March, June, September, and December
each year. The contractor will use inspection forms from the 2013 Edition of the CCR. Copies of
all completed inspection forms will be emailed to Public Works Facilities Management within
five days. Required deficiency repairs are noted after each inspection and proposals to make
these repairs are sent to Facilities Management shortly thereafter. For annual and five-year
inspections, the contractor will apply the proper inspection stickers per CCR requirements.
Rid PrnrPcs
On February 1, 2023, a notice inviting formal bids for Automatic Fire Extinguishing Systems
Inspection, Testing, and Repair Services was posted on the PlanetBids website. The bidding
period was 23 days. Bids were received from two qualified contractors on February 23, 2023, as
listed on the attached Bid Summary (Attachment A).
Summary of Bid Process
BID NAME/NUMBER
Proposed Length of Contract
Total Days to Respond to Bid
Number of Bids Received
Bid Price Range
AUTOMATIC FIRE EXTINGUISHING SYSTEMS
INSPECTION, TESTING, AND REPAIR
SERVICES
RFQ #187159
Three Years
23
2
$423,830 to $899,700
Staff has reviewed the submitted bids and recommends that the bid of $423,830 submitted by
Johnson Controls Fire Protection be accepted and that Johnson Controls Fire Protection be
declared the lowest responsible bidder. The award of contract includes the base bid. The
change order amount of $42,383 (which equals 10 percent of the total contract) is requested
for related, additional but unforeseen work which may develop during the contract term. Staff
confirmed with the Contractor's State License Board that the contractor has an active license on
file. Staff also confirmed with the California Department of Industrial Relations (DIR) that the
1 Johnson Controls Fire Protection for Automatic Fire Extinguishing Systems Inspection C23187159;
https://www.cityofpaloalto.org/files/assets/public/public-works/public-services/contracts/c23187159-automatic-
fire-extinguishing-final-approved.pdf
Item 4: Staff Report Pg. 2 Packet Pg. 17 of 229
Item 4
Item 4 Staff Report
contractor has an active DIR registration.
Contract Cost Increases
The prior three-year contract was initially for a not -to -exceed amount of $178,737. However,
there were two Amendments to the prior contract to add the cost of unforeseen repairs.
Amendment No. 1 was for $87,207 and Amendment No. 2 was for $113,466. Including the two
amendments, the total three-year amount of the contract was $379,411. The new three-year
contract total as recommended in this report is $466,213. The cost increase for the new
contract can be partially attributed to an increased labor rate which went from $268/hour to
$293/hour, a 9.3% increase. The new contract also includes an allowance for unforeseen
repairs so the City can potentially avoid contract amendments during the three-year contract
term.
FISCAL/RESOURCE IMPACT
Funding for a portion of the first year of this contract is available in the Fiscal Year 2023 Public
Works Department operating budget. For the remaining portion, staff recommends increasing
the Fiscal Year 2023 budget appropriation by $95,825 and decreasing the Budget Stabilization
Reserve by the same amount. Subsequent years of the contract are subject to appropriation of
funds through the annual budget process.
STAKEHOLDER ENGAGEMENT
Ten contractors were notified through Planetbids for this procurement. Staff will be notified if
repair work will be disruptive in their workspace.
ENVIRONMENTAL REVIEW
This contract is categorically exempt from the California Environmental Quality Act (CEQA)
under Sections 15301 and 15302 of the CEQA guidelines as an alteration to an existing facility
and no further environmental review is necessary.
ATTACHMENTS
Attachment A: Bid Summary
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
Item 4: Staff Report Pg. 3 Packet Pg. 18 of 229
Item 4
Attachment A - Bid
Summary
Bid Summary
Automatic Fire Extinguishing Systems Inspection, Testing, and Repair Services
RFQ187159
Vendor Name
Bid Amount
Johnson Controls Fire Protection
$423,830
Majestic Fire, Inc
$899,700
Item 4: Staff Report Pg. 4 Packet Pg. 19 of 229
Item 5
Item 5 Staff Report
City Council
Staff Report
From: City Manager
CITY O F Report Type: CONSENT CALENDAR
PALO Lead Department: Planning and Development Services
ALTO Meeting Date: May 15, 2023
Report #:2304-1311
TITLE
QUASI-JUDICIAL. 151 S California Avenue {22PLN-00363}: Ratification of Director's Approval of
Waiver from the Retail Preservation Ordinance for an Alternative Viable Use to Allow for a
Medical Office Use to Occupy a 3,500 Square Foot Tenant Space. Zone District: CC(2).
Environmental Assessment: Exempt from CEQA in Accordance with Guidelines Section
15061(b)(3) and 15301.
RECOMMENDATION
Staff recommends that Council approve the Record of Land Use Action in Attachment B, ratifying
the Director's decision approving the subject waiver request.
EXECUTIVE SUMMARY
This report transmits the Planning & Development Services Director's tentative approval for a
partial waiver from the retail preservation ordinance adopted by Council on August 24, 2022, for
the property located at 151 S California Street.
Pursuant to Section 18.40.180 of the Municipal Code, owners of properties outside the Ground
Floor (GF) and Retail (R) combining districts may apply for an adjustment or waiver from ground
floor retail protections. This waiver is based on showing that the permitted retail or retail -like use
is not viable, that the proposed use will support the purposes of the zoning district and
Comprehensive Plan land use designation, and that the proposed use will encourage active
pedestrian -oriented activity and connections. Applicants must provide substantial evidence to
support their application and bear the burden of proof. The Director renders a tentative decision,
which is then placed on the City Council's Consent agenda. The Council may accept this decision
on Consent, or alternatively, three council members may pull this item and require a future City
Council public hearing.
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BACKGROUND
The proposed tenant space is located within an interior courtyard (Unit 101 of Building E) of the
Palo Alto Central Mixed -Use Development. A location map is included in Attachment A and the
Applicant's Request Letter is included in Attachment C.
In 2004 Council approved a rezoning for 50% of buildings C and D and all of building E to change
the zoning designation for all or a portion of these buildings, removing the retail combining
district from those specific buildings. This is reflected in Ordinance 4808, which is included in the
supporting documentation in Attachment D. This change allowed for office uses on these ground
floor spaces, while preserving the retail requirements for frontages along Park Boulevard and
California Avenue.
In 2016, Council adopted the retail preservation ordinance codified in 18.40.180 of the municipal
code. Because this site was occupied by a retail -like use (eating and drinking) at the time,
conversion to an office use on the ground floor was no longer permitted.
Tenant History
The current property owner for this 3,500 square foot tenant space acquired title in 2004 and
proposed a restaurant use. From 2004 to 2022, three restaurant uses occupied this tenant space.
Two of these restaurant tenants occupied the space (Orchid and China Delight). Although the
property owner reports the tenants paid less than half of market rate for rent at the time, both
left the site after two years each. Peking Duck occupied the space from 2010 to 2022 but
reportedly paid approximately one-third of market rate for rent until 2020 and less than one -
tenth market rate for rent between 2020 and 2021. The property owner states that the tenant
was ultimately evicted in 2022 for failure to pay rent.
Leasing Efforts
Since April 2021 the owner indicates it has been attempting to lease the space to possible
tenants. The supporting documents in Attachment D include a letter from Newmark Properties
regarding the efforts to lease the space as well as a summary of 145 perspective tenants that
Newmark marketed to but that ultimately indicated that the site would not work for their needs
or otherwise stopped responding. These included a range of retail and retail -like uses such as
personal service uses as well as eating and drinking uses. The applicant has heard more recently
from three interested dental office tenants, but all three indicated that they were reluctant to
commit with unknown factors that could be a barrier to their use of the site (i.e. the need for a
waiver).
Previous Application
The applicant previously submitted a request in 2019 for a retail waiver request due to economic
hardship. Staff denied the request because the site was still occupied and because the applicant
failed to provide documentation to support the need for the waiver such as any information
about rent reductions, concerns about the existing tenant, and/or efforts to lease the space to a
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Item 5 Staff Report
different retail or retail -like use. The applicant withdrew their application prior to Council
ratification of the Director's decision.
ANALYSIS
Since the adoption of the Retail Preservation Ordinance in March 2016, three other waiver
requests were granted. It is unclear if this proposed waiver request will encourage others to
similarly seek relief from the Retail Preservation Ordinance. The subject waiver approval is not
precedent setting, however. Each request received is evaluated on its own merits and is subject
to Council acceptance. The future use of the site by a medical office use that complies with the
required conditions of approval would comply with applicable zoning regulations and the
Comprehensive Plan.
FISCAL/RESOURCE IMPACT
The recommendation in this report has no significant budget or fiscal impacts. The site is
currently vacant and therefore is not generating revenue. When it was occupied as an eating and
drinking facility, the site generated marginal revenues for the City. Given the significant efforts
to lease the space to a new similar tenant that would also generate revenue for the City without
success, granting relief from the Retail Preservation Ordinance would have only marginal fiscal
impacts on the City and may even result in an unquantifiable benefit to area businesses by
avoiding vacancies in this commercial area.
STAKEHOLDER ENGAGEMENT
The Council's approval of this determination, ratifying the Director's decision, is effective
immediately and is final. A request to pull this item of consent would result in scheduling a
future public Council hearing.
As of the writing of this report, no public comments were received on the proposed project.
ENVIRONMENTAL REVIEW
This determination is exempt from the provisions of the California Environmental Quality Act
(CEQA) in accordance with Section 15061(b)(3) of the CEQA Guidelines in that it can be seen with
certainty that there is no possibility the decision to waive this property from the city's retail
preservation ordinance would cause a significant effect on the environment. The project is also
exempt in accordance with CEQA Guidelines Section 15301 (existing facilities).
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ATTACHMENTS
Attachment A: Location Map
Attachment B: Draft Record of Land Use Action 151 S California
Attachment C: Applicant's Request Letter
Attachment D: Supporting documents
Attachment E: 515 S. California Avenue Retail Preservation Waiver Determination 23PLN-00363
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
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chotlgki, 2023-04-26 16:01:29 my of best available sources.
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Item 5
Attachment B - Draft
Record of Land Use
l.Action 151 S California
APPROVAL NO. 2023 -
RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 151 S. California
Avenue: RETAIL PRESERVATION WAIVER REQUEST (23PLN-00363)
On , 2023, the City Council of the City of Palo Alto Ratified the Director of
Planning & Development Services Approval of a Retail Waiver Request for a 3,500 sf tenant space at
151 S. California, allowing for an Alternative Viable Use, Medical Office, making the following findings,
determinations and declarations:
SECTION 1. Background. The City Council of the City of Palo Alto ("City Council") finds,
determines, and declares as follows:
A. The permitted retail or retail -like use is not viable at this time.
B. The proposed use will support the purposes of the zoning district and Comprehensive
Plan land use designation will encourage active pedestrian- oriented activity and
connections.
C. On May 15, 2023, the City Council held considered the matter on its consent calendar,
at which time all persons were afforded an opportunity to be heard in accordance with
the Palo Alto Municipal Code and the Council's Policies and Procedures.
SECTION 2. Environmental Review. This determination is exempt from the provisions of
the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3) of the CEQA
Guidelines in that it can be seen with certainty that there is no possibility the decision to waive this
property from the city's retail preservation ordinance would cause a significant effect on the
environment. The project is also exempt in accordance with CEQA Guidelines Section 15301 (existing
facilities).
SECTION 3. Retail Waiver Request Findings
1. The permitted retail or retail -like use is not viable
The applicant's supporting documentation shows the site's 10 -year history, documentation of
the applicant's efforts to lease the tenant space, information regarding the former tenant and
eviction notice information, information showing significantly reduced rents offered to try to
keep a tenant in the space, the surrounding land uses, previous actions and determinations
related to this tenant space in accordance with Ordinance 4848, the visibility of the space from
the street, and a support letter from the properties' Home Owners Association. This
information is detailed in the administrative record and reflected in the staff report (CMR 2304-
1311). This documentation supports the conclusion that a permitted retail or retail -like use is
not viable in this space at this time.
2. The proposed use will support the purposes of the zoning district and Comprehensive Plan
The proposed Medical Office use is consistent with the allowed uses within the Community
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Attachment B - Draft
Record of Land Use
l.Action 151 S California
Commercial comprehensive plan land use designation and is a permitted use for tenant spaces
less than 5,000 sf and that do not front California Avenue within the Community Commercial
(2) Subdistrict (CC[2]) Zone District.
3. The proposed use will encourage active pedestrian- oriented activity and connections
The proposed use encourages active pedestrian -oriented activity and connections that are
conducive to retail uses. Specifically, medical office can serve as a draw, bringing users to the
commercial district who may then take advantage of other nearby retail or retail -like spaces, such
as eating and drinking or other traditional retail uses.
SECTION 4. Retail Waiver Request Granted. A retail waiver request is granted for the
project by the City Council under Palo Alto Municipal Code Section 18.40.180(c), effective May 15, 2023
and subject to the conditions of approval in Section 5 of this Record of Land Use Action.
SECTION 5. Conditions of Aaoroval.
CONFORMANCE WITH APPROVED USE. This approval allows for a waiver from the
retail preservation ordinance for the proposed medical office use within a 3,500 sf
portion of the existing tenant space, which has been determined to meet the City's
criteria as an approved Alternative Active Viable Use and is an otherwise permitted use
within the CC(2) zone district for spaces less than 5,000 sf and that do not front
California Avenue. Any future use of this tenant space for a land use that does not
meet the definition of retail, retail -like, or medical office use, as defined in Chapter
18.04 of the municipal code and that meets the conditions of approval of this waiver
would require a subsequent retail preservation waiver.
2. SITE MODIFICATIONS. This project does not include approval of any changes to the
building or site. Any future changes to the building or the site would be subject to
applicable approvals and permits in conformance with all applicable regulations
depending on the scope of the proposed work.
SIGNAGE. This approval does not include any signage or modifications to the approved
signs on site. New signage or modifications to existing signage would be required to
submit for a separate review and approval by the Planning Department.
4. MEDICAL OFFICE USE REQUIREMENTS. To ensure that site modifications and use for
any future medical office tenants comply with the requirements in PAMC Section
18.40.180(c)(1)(B) to encourage pedestrian -oriented activity, any medical office use
within this space shall include a storefront/entry lobby design that is a minimum 500 sf
and that is consistent with a retail environment, such as a reception desk or retail
displays and display window. Additionally, medical office uses operating between the
hours of of 10:00 p.m. and 6:00 a.m. are not permitted.
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Item 5
Attachment B - Draft
Record of Land Use
Action 151 S California
INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold
harmless the City, its City Council, its officers, employees and agents (the "indemnified
parties") from and against any claim, action, or proceeding brought by a third party
against the indemnified parties and the applicant to attack, set aside or void, any
permit or approval authorized hereby for the Project, including (without limitation)
reimbursing the City for its actual attorneys' fees and costs incurred in defense of the
litigation. The City may, in its sole discretion, elect to defend any such action with
attorneys of its own choice.
PERMIT EXPIRATION. The project approval shall be valid for a period of one year from
the original date of approval. In the event that the proposed use does not occupy the
space within a period of one year within the time limit specified above, the approval
shall expire and be of no further force or effect. A written request for a one-year
extension shall be submitted prior to the expiration date in order to be considered by
the Director of Planning and Development Services.
SECTION 6. Term of Approval. Retail Waiver Request Approval. In the event that the
tenant space is not occupied within one year of the date of council approval, the approval shall expire
and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.77.090. Application
for a one-year extension of this entitlement may be made prior to the expiration. A written request for
a one-year extension shall be submitted prior to the expiration date in order to be considered by the
Director of Planning and Development Services.
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
Director of Planning and
Development Services
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Item 5
Attachment C - Applicants
Request Letter
JOHN PAUL HANNA
A PROFESSIONAL CORPORATION
DAVID M. VAN ATTA
A PROFESSIONAL CORPORATION
WILLIAM R. GARRETT
A PROFESSIONAL CORPORATION
March 22, 2023
HANNA & VAN ATTA
ATTORNEYS AT LAW
A PARTNERSHIP OF PROFESSIONAL CORPORATIONS
525 MIDDLEFIELD ROAD, SUITE 210
MENLO PARK, CALIFORNIA 94025
www.hanvan.com
DELIVERYBYHAND
City of Palo Alto
Department of Planning and Development Services
250 Hamilton Avenue
Palo Alto, CA 94301
Attn: Claire Raybould, AICP
Senior Planner
TELEPHONE
(650) 321-5700
FACSIMILE
(650) 321-5639
Email: jhanna@hanvan.com
Re: Application to Preserve Zoning Change Previously Adopted by the City
Council
Dear Claire:
This letter accompanies the Planning Review Application filed by our clients, Robert and
Peggy Lee, owners of the property known and described as 151 S. California Avenue,
Condominium Unit No. E101. The property is located on the ground floor of the Palo
Alto Central mixed -use condominium project. The original project plan was created in
1983 with the recordation of the Palo Alto Central East Enabling Declaration and the
Condominium Plan attached as Exhibit "A" to the Declaration. I worked with the
original owner/developer of the Palo Alto Central project, Bill Cox (now deceased). Bill
was a man of many talents. In addition to developing many projects including Palo Alto
Central, Palo Alto Plaza and Forest Towers (all mixed residential/commercial projects),
he was also a very successful restauranteur, owning and managing at one time:
Mustard's in Napa County, Fog City Diner in San Francisco, and Rio Grill in Carmel.
Bill wanted to have a restaurant in his new project in Palo Alto and thought that Palo Alto
Central would be a good location for it. Perhaps his desire to open a restaurant in Palo
Alto caused him to discount the handicap of operating a successful restaurant without
visible street frontage. The unit he selected for the restaurant (Unit No. E101) was
located on the interior of the ground floor of the main Palo Alto Central building. The
initial buyers of Unit No. E101 attempted for many years to operate a restaurant or find a
tenant that would operate it as a restaurant. During the 22 years of their ownership, the
property went through, among other things, foreclosure, bankruptcy, abandonment,
vacation, and change of ownership five or six times. In 2004, the then -owners of the Unit
petitioned the City to amend the zoning ordinance to change the zoning from
CC(2)(R)(P), that is Community Commercial Combined/Retail Shopping
Combining/Pedestrian Combining Classification, to a new zone: CC(2), Community
Commercial Combining Classification. The Planning and Transportation Commission
T: \ W P W IN 60\LETTE RS\JP H\C'
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City of Palo Alto
Attn: Claire Raybould, AICP
March 22, 2023
Page 2
Item 5
Attachment C - Applicants
Request Letter
staff recommended approval of an ordinance modifying section 18.43.030 of the
ordinance in rezoning portions of Palo Alto Central to allow office uses within the rear
50% of Buildings C and D, and all of Building E. Under the proposal, office use should
be allowed as a permitted use within the rear 50% of each Building C and D and within
all of Building E. Section 18.46.040 (Retail Shopping Combining District (R)
Regulations) would be modified to allow office as a permitted use. In adopting the
resolution, the City Council made findings that the amendment was in accord with the
purposes of the Palo Alto Comprehension Plan in that retail uses are preserved in the
areas of Palo Alto Central facing the pedestrian ways of California Avenue and Park
Boulevard and office uses are permitted facing the interior courtyard where they will
"contribute to the vitality of the California Avenue commercial area without detracting
from the retail and pedestrian -oriented character of the area."
Our clients acquired title to the unit in 2004. At the time they purchased, the property
was vacant and they happened to be able to get a restaurant tenant right away. The
remodeling costs spent by the new tenants amounted to $300,000. That tenant did not
make it and sold the restaurant business, together with the 6 -year extended lease, after
two years. At that time, our clients did not have an office prospect to rent, and the cost to
convert the newly remodeled restaurant to an office shell was significant, so they elected
to continue trying to make a go of it with a restaurant as a tenant. They have tried ever
since to obtain and keep a restaurant operator in the unit, and none of the restaurant
operators were successful, including the most recent one, Peking Duck, who has vacated
the property and owes unpaid rent of $250,000.
During those years there were times when the Palo Alto Central East Owners Association
complained to the owners about the restaurant operation which caused friction between
the other owners of other commercial and residential units in the Palo Alto Central
project.
The Palo Alto Central East Commercial HOA Board has asked the City to support the
conversion of the restaurant operation into office -type use as they believe it will be an
improvement to their HOA community. A copy of their letter dated September 22, 2022
is attached to the Planning Review Application.
The ordinance approving the change in the zoning has never been amended or repealed,
and still stands. The City did enact Urgency Interim Ordinance No. 5325 on May 11,
2015, in an effort to prevent conversion of ground floor to office or other non -retail uses
which was at that time a trend in the City's commercial districts. This led to the adoption
of Ordinance No. 5407 in 2017 amending section 18.40.180 to state that any ground floor
retail or retail -like use permitted or operating as of March 2, 2015 may be replaced only
by another retail or retail -like use, as permitted in the applicable district. The ordinance
provided for waivers, adjustments and exemptions, the grounds for which included,
among other things, economic hardship or a showing that a retail or retail -like use is not
viable. Documentation to support a waiver, adjustment or exemption included showing a
ten-year history of the site's occupancy and the reasons for perspective tenants vacating
the premises. In adopting that ordinance in 2015, there is no indication in the record that
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City of Palo Alto
Attn: Claire Raybould, AICP
March 22, 2023
Page 3
Item 5
Attachment C - Applicants
Request Letter
any consideration was given to the prior action taken by the City in 2004, and/or the
justification for that prior action.
Nothing happened between 2004 and 2017 that would indicate any difference between
the situation that existed when the modification of the zoning to permit office use in the
subject premises was discussed and considered. Indeed, the same pattern of unsuccessful
restaurant operations continued unabated for the entire time up to 2017 and including up
until today.
Our clients, Robert and Peggy Lee, applied for a waiver adjustment and exemption in
2020, and the Director of Planning and Development Services denied their application.
The finding was that the applicant had provided insufficient evidence to support the
assertion that retail or retail -like uses (specifically restaurant operations) were not viable
at the site. The Director of Planning and Development Services was of the opinion that
insufficient evidence had been shown that retail or retail -like uses are not viable at that
site. That finding ignored the almost 40 -year history of the owners of the subject
property trying in vain to successfully operate a restaurant within Unit No. E101. It's
noteworthy that all during that period of time, the owners have leased or attempted to
lease the property at a rental per square foot rate which is less than half of the market rate
for such space. As part of their application, the owners have attached a letter from
Newmark Cornish and Carey, the realtors who have been actively working trying to lease
the restaurant space since April of 2019. The realtors had concluded after attempting
unsuccessfully to find a tenant that the location of the unit is such that it does not receive
the foot traffic and retail synergy or the traffic visibility necessary to successfully operate
a restaurant, or for that matter, a "retail -like" use. The realtors concluded that a revision
to allow office and medical uses is necessary to render the property "rentable."
We respectfully submit that the conditions that existed in 2004, when Ordinance No.
4848, Section 1 was adopted, are the same today, and that the appropriate and equitable
response to our clients' application can and should be either of the following:
1. To adopt a resolution stating that the adoption of Ordinance No. 5407 was not
intended to and did not amend or revoke Ordinance No. 4848 which remains in
effect; or
2. That based on findings that the applicant has presented sufficient evidence to
support an alternative viable active use waiver for medical office.
Very truly yours,
John }- anna
JPH.sm
cc: Peggy Lee (pez.ylee1628(a,gmail. com)
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IMG-5253.PNG
Item 5 SS
Attachment D -
Supporting documents
Na,nc
Lotus 'rerro
Rent PSF vs- Market PSF
Remo farLoaviny
5teakhousc
N"A
N/A
Vacant
Bufi'et
N/A
N/A
Bankrupt
Coffee Shop
N/A
N/A
Forclosed
Japanese Restaurant
N/A
N/A
Purchased ti -on Bank
Indian Restaurant
N/A
N/A
Vacant & Sold
Name
Lease TCrrn
Rent PSF vs. Market PSF
Remon for Leavin
Orchid
6/1i04 - 1/30/06
5200/ $4.50
Tenants paid $300k to remodel w/ little traftic.
China Delight
2/1106 - (;30'08
52.00: $5.01)
Hidden courtyward restaurant & sold business w! 6 year
extended lease. No Traffic, Every 2 veers sold business.
Jade Palace
2/1'08 - 4130/08
$2.00! $5.00
No visibility, auto & pedestrian traffic. Sold Business
w/another 6 veer extended lease.
Peking Duck
5/1/ 10 - 03/30/20
$2.00 / $600
To convert office shell needed $200k. Decided to wait w/ the
granted Office Ordinance. Refusal to extend lease.
Peking Duck
411120.41'30'22
$0.00 - S0.I)}1 ! $5.00
Tenants w/ side trading business to sustain. Cannot sell
business
iNodi-ive-tiii-tiorstj-cctdiiiiiig.
Peking Duck
5./1/22 - Present
$0.001 Vacant
Unpaid rent & vacated.
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3 -DAY NOTICE TO PAY RENT OR QUJ Item5
[California Code of Civil Procedure section 1161( AttachmentD-
Supporting documents
Resident(s). Jaff Wai Szeto & Linda Con
(All Adult Occupants and All Others in Possession)
Premises: 151 S California Ave E101, Palo Alto CA94306
(Address, Apt #, City, State, Zip Code)
TO RESIDENT(S):
PLEASE TAKE NOTICE that within three (3) days after service upon you of this Notice
you are hereby required to PAY to the undersigned the rent for the above described premises,
of which you now hold possession, amounting to the sum of ($ 256314,
dollars. enumerated as follows:
$ 82620DUE FROM 04101 2n2f'O 12i011
$ 90840DUE FROM 01/01 . _2021 TO 12/01 , 2021
$
37850 DU E FROM 01/01 , 2022 1O 05/01
or QUIT and deliver up possession of the premises.
2022
YOU ARE FURTHER NOTIFIED that the Landlord does hereby elect to declare a forfeiture of
your rental agreement under which you now hold possession of the above -described premises, and if
you fail to perform or otherwise comply with this Notice, will institute legal proceedings to recover rent
and possession of the premises which could result in a judgment against you including rent, hold -over
rent damages, costs and attorney fees together with treble damages as allowed by law.
SECTION 594 OF THE PENAL COQE OF CALIFORNIA PROVIDES THAT -EVERY PERSON WHO MALICIOUSLY
INJURES, OR DESTROYS ANY REAL PROPERTY NOT HIS OWN ... IS GUILTY OF VANDALISM. - (A FELONY OR
MISDEMEANOR)
'AS REQUIRED BY LAS, YOU ARE HEREBY NOTIFIED THAT A NEGATIVE CREDIT REPORT REFLECTING ON
YOUR CREDIT RECORD MAY BE SUBMITTED TO A CREDIT REPORTING AGENCY IF YOU FAIL TO FULFILL THE
TERMS OF YOUR CREDIT OBLIGATIONS. " California Civil Code section 1785.26(c)(2),
06129 22
Date: ____t
408-306-1 &33
Telephone number:
Address for payment:
Robert Lee
Name of Person or Entity rent is payable to:
Peoci Lee
Name of Person or Entity rent is delivered to:
*If payment may be made in person, the usual hours and days for payment: 12-3 pm
Monday -Friday in person
(Payment.may may be made by Certified Funds and/or Cash Check, pursuant your Rental
Agreement. )
UNAUTHORIZED USE PROHIBITED
For Members Only
Apartment Association,
California Southern Cities
Approved Form 4F70 110€
Item 5: Staff Report Pg. 13 Packet Pg. 32 of 229
Newmark
Cornish & Carey
Josh Shumsky
CA RE License x}0883266
September 21, 2022
City of Palo Alto Planning Department
285 Hamilton Ave., 15'. Floor
Palo Alto, CA 94301
Re: 151 S. Caliornia Avenue, Palo Alto, CA - Retail Leasing Efforts
Dear City Planner:
Item 5
Attachment D -
Supporting documents
My name is Joshua Shumsky, and I have been actively working to lease the -3,500 square feet current restaurant
space at 151 S. California Avenue in Palo Alto since April of 2019. I have been a retail leasing specialist for the last 9
years, with a prior four and a half years working within the retail companies themselves. Through my leasing of
downtown -focused properties in downtown Los Gatos, Mountain View, and the newly created downtown in Cupertino
(Main Street Cupertino), I have developed a broad list of fitness, restaurant, and retail tenants as well as a strong
leasing outreach program to target established and newly expanding groups, alike. The Palo Alto address and
local/regional mix of tenants along California Ave has historically been a strong selling feature for restuarants,
fitness/retail uses, and continues to create a real buzz in the market.
Upon execution of the listing agreement, our marketing efforts began immediately, with a focus on the following
items: visibility to potential tenants online (Co -Star, Loopnet, Marketing Blasts to the brokerage community and retail
users) and finally targeted direct submittals via email as well as phone calls to potential tenants.
Based on the limited availability in the core downtown markets of Palo Alto we expected and initially received interest
from groups such as Orangetheory Fitness, who would have a been a potential fit for the full 3,500 square feet space,
as well as other like users. These inquiries were primarily informational, and what we determined were that few if any
were for retail uses. The majority of the calls were for Office /Medical space, which is currently not approved within the
existing unit. Furthermore, the fitness and retailer users with which we connected were concerned about the lack of
street visibility of the space, due to the location within the courtyard, as well as the unconvential layout of the unit. This
particular space has multiple jogs and step backs that make a traditional retail layout challenging.
The space has been vacanted by Peking Duck for three (3) months now. We have re -focused our efforts on leasing
the space as a turn key restaurant. We have had interest from various restauranters such as Taishoken Ram en, All
That Shabu, Silverlake Ramen, Yuk Dae Jang, and Chubby Cattle . The feedback that we have received is that the
courtyard location lacks visibility. This is a huge negative because there is no car or foot traffic which is vital for
restuarants. In addition, there is no street dining area of drive through capabilities. Furthermore, the space is
triangular in shape and would be extremely difficult to demise into two smaller units. The restroom core would be
impossible to use by a front tenant as it is located to the rear of the space.
Additionally, I created a robust marketing campaign complete with a marketing brochure, marketing e -blast, and
prominent listing placement on both Costar and Loopnet as well as on the Newmark Knight Frank website. The
feedback we received from this more robust marketing exposure was also initially strong, and with the available
3055 Olin Avenue Suite 2200 Sari Jose, CA 95128 T 408.727.9600 F 408.988.6340
www.ngkf.com
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September 21, 2022
Page 2 of 2
Item 5
Attachment D -
Supporting documents
information on the websites the users looking for ±3,500 square feet space were able to see the property understand
that this could be a target opportunity. There was some potential interest in demising the premises, but based on the
layout of the space and the access point from the courtyard this would be challenging.
This marketing effort led to Tenant's such as Orangetheory driving/touring the site, which provided direct tenant
feedback regarding the trade area, the space itself, and the perceived barriers for these types of tenants to lease the
property. It also helped to validate which tenant groups are actively expanding in today's retail market. The direct
feedback we received on 151 S. California Avenue was that the location is far enough from the core University
Avenue downtown to not receive the foot traffic and retail synergy that provides, yet it is close enough to have limited
drive by traffic and visibility, sitting off of El Camino Real. It was my perspective that a destination oriented use was
the only potentially viable retail target for this property. As mentioned with Orangtheory Fitness, while a few of these
fitness groups took a long look at the site, the general consensus remained. With the concern about the limited
visibility and challenging configuration, none were willing to take the risk on the property.
Throughout the process we have worked collaboratively with the properties owners to adjust various marketing
elements such as price, and ultimately deciding to focus on a "negotiable" pricing structure which was designed to
garner the greatest level of interest.
We have ultimately come to the conclusion that a revision to the allowed uses is warranted to include office and
medical uses. Although we have never actively targeted that use for the property, we have received multiple office
and medical user inquiries for every one retail inquiry.
I appreciate your time in reviewing this letter, and would be happy to address any further questions you may have,
upon request.
Sincerely,
sh Shumsky
CA RE License #01883266
jshumsky@ngkf.com
T 408.982.8490
Item 5: Staff Report Pg. 15 Packet Pg. 34 of 229
Item 5
Attachment D -
l.Supporting documents
151 S. California Ave., Palo Alto - Tenant Outreach Report (12/27/2022)
Tenant Name
Use Type
Genre
Size
Location
Last Contact
Commments
StatNrd
Restaurant
Chicken
2,000
Sunnyvale
12/23/2022
Tonant isnegetisongs deal within the trade a rea.
2 Koi Palace
Restaurant
Noodlem tan
5,000
Cupertino
12/23/2022
Tenant has recently opened inCupertino. Looking for 5,000 S.F. sites in higher traffic areas.
agree
3 Fitness
Fitness
Fitness
1,800
Sanlose
12/23/2022
Tenant going to proceed with a new location in Fremont.
4 Carbon Health
Medical
Healih/Wellness
2,500-3,500
Sunnyvale
12/23/2022
ActiveCategory. Site does not have enough visibilty for rotate, with lack of convenient parking
5 Pizza My Heart
Restaurant
Pizza
2,000
Palo Alto
12/21/2022
Tenant is located on University Avenue. No interest in relocating to California Ave.
6 Huckleberry's
Restaurant
Breakfe,t/Wnch
3,500
Livermore
•12/20/2022
Tenant likes the location, but was concemed with parking. Has an active offer in Sunnyvale, which would cover the trade area.
Poet's Coffee
Restaurant
Coffee
2,000
Palo Alto
12/13/2022
Located in Town andCountry Village. Not interested in this site or size.
8 Phil'z
Restaurant
Coffee
1,500
Palo Alto
12/13/2022
Site on Alma. Not interested Ira space on California Ave at this time.
9 Reveille
Restaurant
Coffee
1,800
San Francisco
12/13/2022
Submitted to broker. Tenant hadbeen quiet during the pandemlcaswe hadseen withmany specialtycoffee shops.
10 Verve
Restaurant
Coffee
2,000
Palo Alto
12/13/2022
Great Third Wave coffee purveyor. Not interested in locating to close to University Ave.
if Tech CU
Financial
Financial
2,000
Palo Alto
12/13/2022
Per Broker, Tenants not cunnentle expanding.
12 US Bank
Financial
Financial
3,500
Merit Park
12/13/2022
Tenant had been explonnggrowth via their Union Bank subsidiary. They have been quiet as of late.
13 Blink Fitness
Fitness
Flin555
15,000
N/A
12/9/2022
Tenant is under the equinox umbrella and needs a larger club type setting. Tenant's minimum requirement is 15k S.F.
14 Hates Brewing
Restaurant
Brewery/BrewWb
4,500
San Jose
11/18/2022
Current brewery is large, in San lose. Expansion would be in taproom format, and would not need this amount of space.
15 Silverlake Ramon
Restaurant
Ramon
2,500
WA
11/15/2022
Space is too big
16 Bamboo Asia
Restaurant
Asian OAR
2,000
San Francisco
11/15/2022
Looking to expand, but space is too large.
1 T Spkits
Restaurant
BBO
5,000
Sanlose
11/15/2022
Space is toosmallfonyenant. Sister concept to PluckedChicken& Beer. Located at Santana no.
18 Color Bar
Service
Beauty
1500
San Francisco
11/15/2022
Submitted sites to broker. Tenant isactivelyexpandin& but lookingatshoppingcenters and highlyvisible Downtown Sites. Space is toolarge.
e W rewmg
19 Co
rewery rap
roren
Brewery/Taproom
1,800
Sacramento
11/15/2022
No response.
20 Cottonedc Coffee
Restaurant
Coffee
1,500
Sanlose
11/15/2022
Current location is a oastery and cafe in San lose. Tenant has toyed with expanding to additional rafts, but is not currently actiyr.
empa ee
21 Roasters
Restaurant
Coffee
2,000
Sacramento
11/15/2022
Multi unit operator. They showed interest in expanding into the Bay area, but then pulled back during the Pandemic
22 Venzon Wireless
Retail
Communications
2,500-3,000
Palo Alto
11/15/2022
Submitted to broker.
23 F45
Fitness
Fitness
2,000
Mountain View
11/15/2022
Expansion isstategic and based on franchisees within the market.
24 Ben's Barketplace
Pets
Pet Supply
3,000
Campbell
11/15/2022
Tenant signed a lease in Mountain View. No longer holds a need in the market.
25 Sliver
Restaurant
Pizza
2,00i
Berkeley
11/15/2022
Great local restaurant serving vegetarian pizza.
26 Tasty Pizza
Restaurant
Pizza
2,000
Sunnyvale
11/15/2022
Similar to Curry Pizza House. Strong local operator. Site is too much for them.
2, Hot B yoga
Fitness
yoga
3,500
San Jose
11/15/2022
Open in Santana Row. Tenant had been looking up the Peninsula. Space toosmall/buried. Not enoughpa rkng.
28 RNG Lounge
Restaurant
Chinese
4,000
San Frandsco
11/14/2022
Broker toured space, but did not feel itto be a fit for his client
29 Firewings
Restaurant
Chicken
2,500
San Mateo
10/12/2022
Tenant is looking to grow rapidly. Prefers shopping centers.
30 Xfnity
Retail
Communications
3,000
Pa to Alto
10/12/2022
Existing location on Oregon Espy. No interest ina relocation to our site.
31 AT&T
Retail
Communications
1,50
Palo Alto
10/12/2022
Ten. nt had closed mart locations during the pandemic. Open to strategic growth, but focused on small format high traffic location.
32 Bushido Izakaya
Restaurant
Japanese
3,000
N/A
9/19/2022
Broker toured space, but did not feel it to be a fit for his client
33 Rumble Fish
Restaurant
Japanese
2,500
Mountain View
9/19/2022
wasnsiingtoneloAateareinlooasor,aneiorjneespaoewertheirsnokcr. lretteoinsrwtepvneveercspaocgvetovisiciliryaewellasepaoeeqvsre
footage.
34 yucca de Lac
Restaurant
Asian Fusion
3,000
Palo Alto
9/19/2022
Broker toured and took video. Following client discussions, they elected not to pursue
35 Pancake
Restaurant
Noodle
3,500
San Frandsco
9/19/2022
Broker toured and took video. Following client discussions, they elected not to pursue
36 Aqui Cal Mex
Restaurant
Cal -Men
3,500
Cupertino
9/19/2022
Tenant is focused on higher foot iraffdvisibility with patio
37 Ramen
Restaurant
Ramon
2,500
N/A
9/19/2022
Space is too Ng
Daeh. GalS dim
38 & Beef Soup
Restaurant
Korean
3,500
WA
9/19/2022
Submitted. Broker was evaluating for Tenant. Liked the bade area, but concerned with visibility
Chubby Catlin by
the X POVWagyu
39 House
Restaurant
Hot Pot
6,000
N/A
9/19/2022
Space is too small
40 All That Shabu
Restaurant
Shabu Shebu
5,000
N/A
9/19/2022
Space is too small
4, yuk Dee Jang
Restaurant
Korean
2,500
N/A
9/19/2022
Space is too big
42 Creator
Restaurant
Burger
1,50
San Francisco
9/15/20221nteresting
concept. Needs heavy feet traffic and glassline to the street. Robotic Burger Tenant.
43 Poke House
Restaurant
Poke
1,50
Palo Alto
9/15/2022
Existing location is too close. Space is larger than Tenant needs.
44 Pizza Rev
Restaurant
Pins
2,000
Turlock
8/15/2022
Concept has halted growth
45 Pizzeria Delfina
Restaurant
Pins
3,000
Palo Alto
8/15/2022
Great concept. Net interested as they are already in Palo Alto on Forest.
46 Pias ew or
zz
Restaurant
Pins
3,50
San Jose
8/15/2022
Great local operator, net expanding at this time.
4] Subsalicious
Restaurant
Sandwich
1,50
San Jose
8/12/2022
Neta player. They are focused on low cost expansion by targeting 2nd ten sandwich shops
48 Trailhead Cyclery
Bicycles
Bike Shop
2,000
Cupertino
7/5/2022
Opened aflagshiop location in Cupertino. Not interested in another large space. May explore hub and spoke strategy go -forward.
49 G.W. Roadside
Restaurant
Burger
2,50
Palo Alto
6/23/2022
Located at Town& Country Palo Alto. No interest in relocating.
50 Urban Plates
Restaurant
American
4,000
Dublin
6/15/2022
Focused on Whole Fs/Mall anchored sites.
Sr Shake Shack
Restaurant
Burger
2,000
Stanford
6/15/2022
Location at Stanford Shopping Center. No interest in another location in the trade area.
52 Pelicans Chicken
Restaurant
Chicken
1,50
Cupertino
6/15/2022
Location open in Cupertino.
53 Barefoot Coffee
Restaurant
Coffee
1,50
Campbell
6/15/2022
Tenant struggled during the Pandemic with limited holesale/office roasting contracts. Net expa riding
54 The Woodhouse
Servce
HealfVVVellness
6,000
Walnut Creek
6/15/2022
Space is too small for Tenant. They also prefer 2nd level space in high income areas due to rent sensitivity.
55 Looanda
Restaurant
Italian
2,50
Campbell
6/15/2022
Strong East Bay Operator. lust opened space in Campbell. Focused on strategic growth. Will follow up
56 Halal Guys
Restaurant
Mediterranean
1,80
Redwood City
6/12/2022
Great concept. Space is too big. Passing on site.
5. D.ppi. Zero
Restaurant
Pins
3,50
Mountain View
6/12/2022
Tenants hut down location inCupertino during the pandemic. Net in expansion mode.
58 Pins Bocce Lupo
Restaurant
Pins
2,000
San Jose
6/12/2022
Located in the San Pedro Square market. Tenant prefers market hall settings.
59 Out of the Barrel
Restaurant
Brewery?aproom
1,50
Campbell
6/10/2022
Great operator in We Gatos/Campbell. Needs a smaller space with large patio
60 Burgers & Brew
Restaurant
Burger
4,000
Davis
6/10/2022
Net focused on the Bay Area for now.
Dougnuts and
61 Coffee
Restaurant
Doughnuts
1,80
San Francisco
6/5/2022
No interest in expansion at this time.
62 Zocalos
Restaurant
Meucan/Tapas
5,000
Sacramento
6/5/2022
Pushing Tenant to expand into the Bay Area. Net confirmed yet.
urryPins
63 House
Restaurant
Pizza
1,80
Palo Alto
6/5/2022
Cr University Ave. Great operator. Space too large. Focusing on 2nd generation pizza locations.
rower
64 Guys
Restaurant
Brewery/Taproom
3,000
Reno, NV
6/1/2022
Tenant opened a site in San jeer, but it subsequently closed.
65 Blue B0t95
Restaurant
Coffee
1,50-2,000
Palo Alto
6/1/2022
Locatier, is too close to this site. Concerned about feet traffic compared to their current site in University Ave.
66 Equator Coffees
Restaurant
Coffee
1,50
Burlingame
6/1/2022
Site is nete target. Space is too big
67 Hoskins
Restaurant
Coffee
1,50
Santa Ana
6/1/2022
Tenant was exploring an expansion into Santa Clara County. Net pursuing at this time.
68 Cafe
Restaurant
Coffee
1,50
Santa Clara
6/1/2022
Net expanding at this time.
69 CinnaholiA
Restaurant
Dessert
1,20
Sanlose
6/1/2022
Tenant is looking to sublease location in DTSan lose. Net expandingwith that franchisee.
ra yper
70 WHlness
soW
Service
ih/Wellness
2,50-3,000
Texas
6/1/2022
Broker feedback is that Tenant is focused era PA location, but will need other core demand drivers, such as grocery/fitness.
71 Dish Dash
Restaurant
Meditenanean
1,80
Sunnyvale
6/1/2022
Great operator. Focusing on their smallerformat Dish N Dash concept due to labor shortage. Site too large.
72 Healthy Spot
Pets
Pet Supply
3,000
San Francisco
6/1/2022
to Based concept. Focusing on higher visibility/traffic space.
73 Pins Chicago
Restaurant
Pins
2,50
Palo Alto
6/1/2022
Tenant is net interested in relocating from El Camino Real. Space is too big/buried.
74 UP5 Store
Restaurant
Sem'ceslona
1,50
Palo Alto
6/1/2022
Space too large for Tenant.
75 Ramen Hiroshi
Restaurant
Ramen
2,000
San Ramon
6/1/2022
No interest in expansion at this time.
g
76 Level Learning)
Education
Tutoring
6,000
Santa Clara
6/1/2022
Tenant doing a deal in Mountain View. Too close to site. Sitewast00 small for Tenant.
]] P.ki Bowl
Restaurant
Poke
1,50
Sunnyvale
3/12/2022
Tenant paused expansion until office population returns for lunch business.
78 Blue rcnovry
Retail
Beauty
1,80
Los Altos
1/15/2022
Net enough cotenancy for Tenant. Space is too large for Tenant's use.
79 Burger Lounge
Restaurant
Burger
3,50
Belmont
1/15/2022
Netactivelyexparding.
80 Mom. res
Restaurant
Indian
2,000
Sunnyvale
1/15/2022
Tena ntoper.tes out of their food truck. Great food, but no interest inbnck&mortar.
Sr The Bird
Restaurant
Chicken
1,50
San Francisco
1/12/2022
Net interested in the space.
82 Veggie Grill
Restaurant
Plant -Based
2,50
Mountain View
11/18/2021
Space is to. large for Tenant's requirement Focused on high visibility shopping center/mall sites.
83 Burgers
Restaurant
Burger
2,50
Campbell
11/15/2021
Great local operator. Needs high visibility. Located in Campbell.
84 Afters lye Cream
Restaurant
Dessert
1,20
Oxnard
11/15/2021
Net looking at Northern California at this time.
Sidecar
85 Doughnuts
Restaurant
Doughnuts
1,80
Santa Monica
11/15/2021
Per broker, Tenant's expansion to Norther California was put on hold due to the Pandemic. They have not re-engaged on Northern California opportunities.
86 Ramen Dqo
Restaurant
tamer
1,80
San Mate.
11/15/2021
Space is to. large
Item 5: Staff Report Pg. 16 Packet Pg. 35 of 229
Item 5
Attachment D -
1871Pedego IBieydes IBike Shop I tsoolpaln Alt„ T un21/2o21IElnor/1Bikes. Already in marker.
88 Hops&Scotch
Restaurant
Craft Cocktail
2,500
Walnut Creek
10/12/2021
TenantesasexploringaSouthBayopportunity,butputthateffortonpause. supporting ooeuments
8985C
Restaurant
Dessert
2,500-3,000
Cupertino
10/12/2021
Tenant needs high visibility end cap units.
90 Farm, ino
Restaurant
Sandwich Salad
2500
nab Alto
10/12/2021
Tenant hasa location on Hamilton Ave. No intererst ins spare this close.
USC Curry
9I House
Restaurant
Vietnamese
1,500
Burlingame
10/12/2021
Space is too large. Prefer smaller units with Street visibility
92 Rice an
Restaurant
Vietnamese
1,500
Santa Clara
10/5/2021
Tenant not yet ready toexpand.
93 Blue Line Pizza
Restaurant
Pisa
3,000
Mountain View
9/28/2021
Greatoperator. Looking for heavier foot traffic.
94 Keja Kitchen
Restaurant
Asian OAR
2,500
San Mateo
9/21/2021
Tenant paused on expansion during the pandemic.
95 Base Color Bar
Servce
Beauty
1,500-2,000
Los Angeles
9/20/2021
Space is too large for Tenant's need.
96 Dry Bar
Personal
Service
Beauty
1,500
Stanford
9/20/2021
Space too large for Tenant. Would require demising. Tenant is also concerned about visibility. Looking fora more dynamic/Grocery anchored property.
Fieldwork
97 Brewing
Restaurant
Brewery/Tapr0om
2,000
San Mateo
9/20/2021
Tenant has used all of their taproom/tasting room licenses from their existing brewery. Unable to further expand for the time being. Tenant also required ±1,500
S.F. of patio.
98 The Bar Method
Fitness
Fitness
1,800
nab Alto
9/20/2021
Space is too large for Tenant need. Current location in Town&Country.
99 CrossFlT
Fitness
Fitness
3,500
nab Alto
9/20/2021
Tenant needs significant outdoor space for their workout programs. The site will not work.
BR Arctic Restore
Servce
HealthfWellness
2,500
Alamo
9/20/2021
Tenantshoeeed interest in expanding and then pulled back during the pandemic.
BR Float Station
Servce
HealthfSellness
1,800
Campbell
9/20/2021
No feedback.
BR Cryo Spa
Servce
H.111,0Wellness
1,800
San Francisco
9/20/2021
Tenant not currently growing.
BR Senses
Servce
Health/Wellness
2,000
San Francisco
9/20/2021
Not interested.
`W Falafel Driveln
Restaurant
Mediterranean
1,500
Sanlose
9/20/2021
Tenant is unable to support a Palo Alto location.
IM Meso
Restaurant
Mediterranean
6,000
San Jose
9/20/2021
Located at Santana Row. Concept from the owner of Left Bank. Space is too small for Tenant's format.
pp CCasa
Restaurant
Mexican/Tapas
3,000
Emeryville
9/20/2021
Focused on market halls over freestanding restaurant spaces.
Luna Meucan
I. Kitchen
Restaurant
Mexican/Tapas
3,000
Campbell
9/20/2021
Two current locations on The Alameda (San Jose) and in the Pruneyard (Campbell(. Looking for strategic growth. Need to create a presence, and are concerned
with the space locatino in the central courtyard.
pp Tac-Oh
Restaurant
Mexic tt/Tapas
1,501
Sanlose
9/20/2021
Concept not expanding
## Yoga6
Fitness
yoga
3,000
Mountain View
9/20/2021
Located over at the Village at San Antonio Mountain View. Not interested in expansion in this zone.
## Kebab Shop
Restaurant
Mediterranean
1,800
Santa Clara
9/18/2021
Tenant had contracted and is exploring strategic expansion. Space Is too large
## Tacdicl0us
Restaurant
Mexican/Tapas
1,800
N/A
9/37/2021
Palo Alto location perm nently closed. Concept shut down at Santana Row. Not expanding.
## Sephore
Retail
Beauty
5,000
Pa 10 Alto
9/15/2021
Existing Pa to Alto location. No interest.
0 Brewing
Restaurant
Brewery/fapr0om
1,500
Oakland
9/15/2021
NO Interest.
1 Pure Barre
Fitness
Fitness
1,800
Pa 10 Alto
9/15/2021
Space is too large for Ten. ntneed. No interest in relocating down Cal. flue.
## Dog HaOS
Restaurant
Hot Dog
3,500
San Carlos
9/15/2021
Tenant was starting to look fort ew opportunities mid -pandemic, but then went back on pause.
## Curry Up Now
Restaurant
Indian
1,500-3,000
Pa to Alto
9/15/20210n
Hamilton Ave. Focusing on higher foot traffic locations. Tenant does h —s larger format operation including be r att3,000 S. F.P...ing on site.
## Bevri
Restaurant
Mediterranean
2500-3,000
Pa to Alto
9/15/2021
Ten, nt looking to relocate, but isn dint sot inCallfornia Ave. Focusing on San Mateo County/San Francisco markets.
## Blare Pizza
Restaurant
Pica
3,500
S, n Jose
9/15/2021
Ten, nt has stopped e.pansionduring the pandemic.
0 Chicken&Beer
Restaurant
Chicken
2,000
Pleasanton
9/12/2021
Concept paused on expansion during the pandemic and has not restarted. (Sister concept to Sauced BBQ in Santana Row/Livermore(
## Asian Box
Restaurant
Asian QSR
1,500
Palo Alto
9/7/2021
Located at Town and Country. No interest in relocating. Space too big.
BR Summit Bicycles
Bicycles
Bike Shop
4,000
Palo Alto
9/7/2021
Pushing for Relocation. Tenant not expanding due to inventory shortage, and has no interest in relocating.
BR Connection
Bicycles
Bike Shop
3,000
cab Alto
9/7/2021
Located down the street No interest in relocating.
ii Spa
Servce
HealthM1Nellness
1,800
Napa
9/7/2021
Space is too large.
pp %Pure
Retail
Beauty
2,000
Santa Clara
9/1/2021
Not enough co-tenancyforTenant. Space is too largeforTenant'suse.
B Stacks
Restaurant
Breakfast
3,000
Menlo Park
9/1/2021
Menlo Park location co ors this trade area.
`W Brewing a
Restaurant
Brewery/Taproom
2,000-3,500
Santa Clara
9/1/2021
ncredible operator. Needs more synergy/visibility.
BR Stein's
Restaurant
Brewery/Tapr0om
3,500
Mountain View
9/1/2021
Tenant was closing locations during the pandemic Not expanding.
## Eureka
Restaurant
Burger
4,000
Mountain View
9/1/2021
Concept struggled financially during the pandemic, and was focused on finishing out existing spaces under construction and keeping current stores afloat. No
interest.
#9 ROAM
Restaurant
Burger
2,000
San Mateo
9/1/2021
Likes Palo Alto, but rota fan of California Ave.
0 Roasters o e
Restaurant
Coffee
1,800
Del Mar
9/1/2021
Tenant not looking in Northern California at this time.
pp Blvd Coffee
Restaurant
Coffee
1,500
Los Gatos
9/1/2021
Not expanding at this time.
BR Rooster &Ritz
Restaurant
Needlem ran
1,500
Redwood City
9/1/2021
Tenant was in rapid expansion mode pre -pandemic, but pulled back. Focus has been office/daytime adjce,t locations.
BR Senous Dumpling
Restaurant
Dim Sum/Asian
Noodle
1,500
San Jose
9/1/2021
Founder of Sine/Straits in Santana Row. Concept was in its infancy when the pandemic hit. Tenant working to open San lose site before returning to growth
opportunities.
pp CaRtal One
Financial
Financial
6,000
Santa Clara
9/1/2021
Focusing on highly visble/mall locations. Space is also too small (Capital One Caf€)
pp Ramon Nagi
Restaurant
Ramon
2,000
Palo Alto
9/1/2021
Already in OTPalo Alto. No interest in relocating
pp La Dolor Vdo
Bicycles
Bike Shop
2,000
San Jose
8/17/2021
Great local bike shop. Tenant not expanding due to inventory shortage.
BR Mo's
Restaurant
Breakfast/Burgers
3,000
Campbell
8/17/2021
Needs strong restaurantco-tenancyand fourtafflc
BR Stokern
Restaurant
Indian
2,000
San Francisco
8/17/2021
Not expanding at this time.
#0 Tomalina
Restaurant
Italian
3,500
Santa Clara
8/17/2021
Concept expansion is on hold.
pp Pho Tasdc
Restaurant
Vietnamese
2,000
San Jose
8/13/2021
mart not expanding at this time
,oatgrttflJley
BR Kt an & Bar
Restaurant
Vietnamese
2,500
Sacramento
8/13/2021
No currentinterest in a Palo Alto location
Be Ramon Parlor
Restaurant
Ramen
2,000
San Mateo
7/13/2021
Tenant is not look to expand atthi,ti.e.
Be Lee Sandwiches
Restaurant
Vietnamese
1,800
Sunnyvale
7/13/2021
Space too large. Tenant unable to pursue.
Be Umami Burger
Restaurant
Burger
2,000
N/A
6/12/2021
Tenant not expanding. Location in OT Palo Alto (University Ave) closed.
Be Poke Bar
Restaurant
Poke
1,500
Mountain View
4/18/2021
Tenant paused expansion until office population return, for lunch business.
Item 5: Staff Report Pg. 17 Packet Pg. 36 of 229
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Attachment D -
Supporting documents
PALO ALTO CENTRAL EAST COMMERCIAL HOA BOARD
% Christison Company - Community Management
7901 Stoneridge Drive, Ste 222
Pleasanton, CA 94588
925-371-5700
vin w,christisoncompijcom
September 22, 2022
To: City of Palo Alto Planning Dept.
On Behalf of: Robert and Peggy Lee
P.O. Box 3183
Los Gatos, CA 94024
Owner of Commercial Unit: 151 California Ave., Unit E101, Palo Alto, CA 94306
Dear City of Palo Alto Planning Managers:
The Board of the Palo Alto Central East Commercial HOA has been asked by the owners of
Unit El 01, Robert and Peggy Lee, to write a letter to support their petition to allow their unit to
be converted into medical office use. They have been renting to restaurant tenants for many
years and the last tenant operated the Peking Duck restaurant.
The Board supports this conversion to an office type use as it is believed that it will be an
improvement to the HOA community.
If you have any questions or concerns, please contact our property management company
listed above.
Sincerely,
Rosemary Selby
President, Palo Alto Central East Commercial HOA Board
Item 5: Staff Report Pg. 18 Packet Pg. 37 of 229
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Attachment D -
Supporting documents
AGREEMENT
In consideration for the promises, warranties, and/or covenants set forth in this Agreement, the
Parties agree as follows:
I . Recitals. The Parties acknowledge the truth of the above -stated Recitals and incorporate
them into this Agreement by this reference.
2. Settlement Terms. In full and complete satisfaction and settlement of the Dispute, and
subject to the Parties' mutual obligations under this Agreement, the Parties agree to the
following teens:
2.1. Lees' Payment of Assessments. The Lees hereby agree to pay Fourteen
Thousand Five Hundred Six Dollars and Seventy -Four Cents ($14,506.74) to
Commercial within thirty (30) calendar days of the receipt of a fully executed copy of
this Agreement, as full and final satisfaction of the Assessments.
2.1 (a) The Lees' payment to Commercial shall be made by check made payable
to Palo Alto Central East Commercial Association and sent by certified mail or overnight
mail to Commercial at PACE — Commercial, C/O Christison Company, 7901 Stoneridge
Drive, Suite 222, Pleasanton, CA 94588.
2.2 Commercial's Settlement Payment to Lees. Commercial, through its insurance
carrier, hereby agrees to pay the Lees a settlement payment of five thousand dollars
($5,000), within thirty (30) calendar days of the Commercial's counsels' receipt of a fully
executed copy of this Agreement.
2.2(a) Commercial's payment will be paid to the Lees by check made payable to
"Peggy Lee "and sent to 5736 N. Gladys Ave, San Gabriel, CA 91775. Lees' counsel
shall provide a completed W-9 form to process the payment of the Settlement Sum.
2.3 Grease Trap Remediation. Within thirty (30) business days of receipt of this
fully executed Agreement, the Lees hereby agree that they will provide Commercial with
a copy of a written bid containing a full scope of work from a licensed and bonded
remediation company to fully remediate the crawlspace under the Property and to pay for
the cost of remediating the same. The Lees further agree to provide seventy — two (72)
hours written notice to Commercial of the date remediation work is to begin and agree
that Commercial is allowed to observe and inspect the work performed. Commercial
hereby agrees to not unreasonably withhold their approval of the Lees' bid for
remediation services, but reserves the right to reject the bid. If Commercial rejects the
bid, Commercial and the Lees will obtain a bid from a third remediation company to
perform the work of remediating the crawlspace. If the Lees fail to obtain a bid within
Page 3 of 9
Item 5: Staff Report Pg. 19 Packet Pg. 38 of 229
Item 5
Attachment D -
Supporting documents
thirty (30) business days, Commercial will arrange to have Restoration Management
Company remediate the crawl space, pursuant to the bid obtained by Commercial for the
same, and the Lees hereby agree to pay Commercial for the cost of Restoration
Management's remediation within ten (10) business days of receipt of notice of
completion of remediation.
2.4 Grease Trap Inspection. The Lees hereby agree that they shall provide City
Inspector with a written documentation as required by law of cleaning and inspection of
all grease traps within the Property on a quarterly basis. Said proof and reports shall be
provided Commercial twice annually. With the first proof of reports for the first two
quarters due on or before June 30, and proof of reports for the third and fourth quarters
due on or before December 31, of each year. The Lees hereby understand and agree that
failure to timely provide proof of cleaning and inspection of grease traps will result in
fines assessed on those dates following per Commercial's Fine Policy for Major
Infractions and Violations. The Lees further agree that the Grease Trap Inspections shall
be kept at the restaurant and may be inspected by Commercial upon seventy two (72)
hours prior notice. If and when the Property is no longer used as a restaurant no further
grease trap inspection will be required.
2.5 Repair of Damaged Floor Supports. The Lees hereby agree that the wooden
structural support beams located under the area of the Property that was previously
occupied by an industrial freezer have not been repaired or replaced since the August 20,
2020, inspection by the City of Palo Alto Planning & Development Services' inspector
Kyle Shea. The Lees hereby further agree that within thirty (30) calendar days of the
execution of this Agreement, the Lees will retain a licensed contractor. The Lees further
agree that within thirty (30) days of remediation of the Property as detailed in Paragraph
2.3 above, said contractor will apply for a permit from the City of Palo Alto Planning &
Development Services, or any other governmental entity then responsible for
construction related permitting, for work of repair and/or replacement of structural
support beams located under the area of the Property where the industrial freezer was
previously located. The Lees further agree to provide seventy-two (72) hours written
notice to Commercial of the date of commencement of any construction, repair,
replacement work that is to be performed pursuant to this Paragraph. The Lees further
agree that Commercial will be allowed to observe and inspect any work performed
pursuant to this Paragraph. The Lees further agree that within one -hundred eighty days
(180) days from the date of issues of the permit that the construction and repair work will
be completed. The Lees further understand and agree that the Lees and Lees alone will be
responsible for all costs incurred related to permitting, inspections, construction, repair,
and/or replacement of said structural support beams. In the event that the City of Palo
Alto Planning & Development Services' inspector determines that no permit is required,
the Lees hereby agree that they will obtain written confirmation from the City of Palo
Alto Planning & Development Services that no permit is needed and no further action is
necessary or required.
2.5(a) Summary of Timing:
Page 4 of 9
Item 5: Staff Report Pg. 20 Packet Pg. 39 of 229
Item 5
Attachment D -
Supporting documents
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Item 5: Staff Report Pg. 23 Packet Pg. 42 of 229
9127/22, 6:23 PM Gmail - John Wallace 2004 Summary Study on BI Item 5
Attachment D -
Supporting documents
G a d - peggy c lee <peggy ee @gmail.com>
John Wallace 2004 Summary Study on Bldg E
1 message
peggy c lee <peggylee1628@gmail.com> Tue, Sep 27 2022 at 2:45 PM
To: peggy c lee <Peggylee1628@gmail.com>
John Wallace and (Stichen) 2004 Summary Study on 151 California Ave Building E, Palo Alto
Basically the study was focused on Building E which is the 3200 square -foot building that is interior to the courtyard. It
stated that since the 1980s that space has either been a restaurant or vacant. In that time it has been five (5) different
restaurants and hard to survive and be successful.
The reason the Wallace Study concludes that retail is not appropriate for the building is because it lacks the four basic
elements of successful retail. That is visibility, vehicle traffic, pedestrian traffic and a synergistic relationship with other
types of retail or personal service uses. It notes that the visibility is nonexistent from California Avenue into the courtyard.
The vehicle traffic is much less in that location than it is on the rest of California Avenue. It is located towards the edge of
that retail district. The pedestrian traffic is poor again because people don't walk into the courtyard area. It appears that it
is private property and so there is nothing to entice people into that area. Therefore, it lacks a synergistic relationship with
the rest of California Avenue. So because it lacks those four elements the study really concluded that the most
appropriate use would be for office. They also noted that there are some condominium regulations which require the
business to close at 10:00 PM makes it difficult for a restaurant in particular to operate but other types of retail use as
well. So they do conclude that office is a more appropriate use for Building E. They believe that those same elements are
lacking in at least portions of the rest of the business in that project. So that is what led to the current recommendation.
One of the findings and conclusions of the retail report was that the design the impediments to retail use can't be solved
with design changes. The design challenges, the design flaws are so great in terms of a retail use that they can't be fixed.
There isn't a way to make that interior space more visible from the street that the design flaws are not fixable.
John J. Wallace
Real Estate Expert
Wallace & Steichen, lnc.San Francisco State University
Palo Alto, California, United States
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About
John J. Wallace CRE, FRICS is an expert in real estate. During his 40+ years working in the real estate industry he has
acquired extensive expertise in real estate economics, appraisal, brokerage, management, acquisition, finance, and
planning. He has been retained as a real estate expert witness on more than 50 occasions. His experience has resulted
in a thorough understanding of most facets of the real estate industry, with special expertise in retail real estate. He has
held a California Real Estate Brokers license since 1975 and has been an appraiser since 1972 and a licensed California
Certified General Appraiser since the inception of appraisal licensing in 1985. He is a member of the Counselors of Real
Estate (CRE) and is Fellow of the Royal Institute of Chartered Surveyors (FRICS).
httpsalmail.google.camlmail/u10!?ik=22dddbed3d& Item 5: Staff Report Pg. 24 Packet Pg. 43 of 229 x30279301... 1/2
Hi Judy —
Thanks for sending me your thoughts regarding the Douglas/Moore request
to change the commercial owners' zoning designation. I agree
wholeheartedly that the commercial units should maintain the (P)
designation. However, .they should have the option to convert to office
space. Over the five years when I was President of the Homeowners
Association and served as President of the Plaza Committee, I heard
numerous residents wisfi these commercial properties were o Ice rather
than retal s -pace. a spoke a ou i "cfu�ing Boar ee Ings an once our
Association wrote a recommendation to the Planning Commission supporting
Laura Rasmussen's request to convert her restaurant property.
I know 1'd be very happy to see these commercial owners have the
flexibility to convert from retail to office space. If the whole first
floorwas converted to office space, the property would be more
aestctiiaijjtiLnQw. For example, it appears that Douglas and
Moore may now be out of compliance with the 0 designation —Nina
rents office space for her real estate brokerage and they rent out
office space to others. However, I don't view their office properties
as eyesores or as any other reason for concern to homeowners. To the
contrary, their office space looks much more professional than a couple
of the retail activities with tacky advertisements aimed at pedestrians.
And, Nina's brokerage is a service to homeowners who want to sell their
properties.
In general, I don't think many of the first floor commercial owners
would convert their properties to office space anyway. Even if they
did, there are plenty of other retail amenities on California Avenue and
homeowners wouldn't miss much if a handful of owners converted to office
space. Also, I think office space would -be -mere complementary to
homeowners interests and lifestyles Residents and offices work during
if day and at night, when people are home, the offices would be empty.
Ifd1ie more quiet and there might be fewer conflicts between commercial
owners and residents. The Residential and Commercial Associations might
realize a savings in their Liability Policy if some businesses,_.---
converted. I'd think that offices would be less rises than, restaurants'
and a tanning salon, which are potential fire and health hazards.
There'd likely be less foot traffic fromjeo Ip a walking in and out of
the courtyard area. Also, if one or both of the restaurants converted
there'd certainly be far less garbage, noise and odors. Probably, the
Association would spend a lot less money for garbage pick-ups. And,
there would be fewer concerns expressed to the State Alcohol Beverage
Control Board about possible violations of one of the restaurants'
Conditional Use Permit.
Members of the Planning Commission might feel differently if they lived
at Palo Alto Central. Chances are they live in residential
neighborhoods, such as Midtown, and don't live in a mixed use area. As
multi -use properties become more commonplace in the California Avenue
neighborhood, the Planning Commission needs to understand the real -world
issues faced by residents in our community.
Anyway, thanks again for keeping me in the loop. I left a phone message
with Chris Riordan telling him my opinions.
Warren
Warren K. Beer
Manager, Computer Operations
U.S. Environmental Protection Agency
Item 5
Attachment D -
Supporting documents
Item 5: Staff Report Pg. 25 Packet Pg. 44 of 229
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supporting documents
O� PALO
PLANNING DIVISION
41
STAFF RE -PORT
TO: PLANNING & TRANSPORTATION COMMISSION
FROM: Christopher Riordan, AICP DEPARTMENT:
Planner Planning and
Community Environment
AGENDA DATE: April 14, 2004
SUBJECT: 2401. 2409 2417 Park Blvd and 101 California Avenue #D101:
Application by Richard & Sharon Reyes, Eldad & Charlotte
Matityahu, Donald Douglas & Nina Moore, and Nortman Weintraub
& Deborah London on behalf of Palo Alto Central fora Zoning Map
amendment from CC(2)(R)(P), Community Commercial
Combining./Retail Shopping Combining/Pedestrian Shopping
Combining classification to CC(2) Community Commercial
Combining Classification. Environmental Assessment: A Negative
Declaration is proposed in accordance with CEQA guidelines. File
Numbers: 02-ZC-6, 03-EIA-13 .
RECOMMENDATION
Staff recommends that the Planning and Transportation Commission (Commission)
recommend proval of an ordinance modifying PAMCSection 18.43.030 and rezoning
portions of Palo Alto Central to allow office uses within the rear 50% of Buildings C & D
and all of building E (Attachment A).
BACKGROUND
The Commission previously reviewed this project to rezone properties at 2401, 2409,
2417 Park Boulevard and 101 California Avenue #D101 from CC(2}(R)(P) tq CC(2) at
their meeting of October 8, 2003 and again on February 11, 2004. At the October 8.2003
meeting, the Commission reviewed three possible project options as recommended by
Staff. The Commission reviewed the three options and requested additional information
be provided for further consideration of the third option.
City of Pafo Alto
Page I
Item 5: Staff Report Pg. 26 Packet Pg. 45 of 229
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At the February 11, 2004, the Commission reviewed and recommended approval, on a
5-0-0-1 vote, of the following Staff recommendation (Attachment D):
+ Retain the (R)(P) Combining District for all of Palo Alto Central to ensure the front
50% of each building with street frontage on Park Boulevard and California Avenue
(Buildings C&D) is maintained for uses conforming to the (R)(P) Combining district,
such as personal service, retail, and restaurants. Any existing office in the front 50%
of a street facing space would become legal nonconforming as of the effective date of
City Council adoption of such code amendment. If a legal nonconforming use were to
be discontinued for at least twelve consecutive months, it would be considered
abandoned and could only be replaced by a conforming use.
• Office use would be allowed asap mined use within the rear 50% of each Building
C&D, and within all of Building B PAMC Section 18.46.040 Retail Shopping
Combining District {It) Regulations) would be modified to allow office as a permitted
use .._ . _ ......
DISCUSSION
tnmrssons action was consistent with Staff's recommendation to modifyPAMC
Section 18.46:040 (Retail
e Co
Shopping Combining District (R) Regulations) to allow office
as a permitted use. During preparation of the Ordinance, the City Attorneys office
suggested an alternative that would accomplish the same objective. Instead of modifying
the Retail Shopping Combining District (R) Regulations as discussed above, the
Community Commercial Zone (PAMC Section 18.43.030) could be changed to include
offices at Palo Alto Central as a permitted use within the rear 50% of each Building C&D
and within all of B:aildm Ed Staf agrees with the changes as recommended by, the
Attorneys Office and is ofthe opinion that it is consistent with the Commission's
recommendations. A draft ordinance to modify PAMC Section 18.43.030 and amend the
zoning map toy delete the (R) Combining District on portions of Palo Alto Central to allow
office uses within the rear 50% of Buildings C & D and all of building E is attached to
this report (Attachment A).
ATTACHMENTS/EXHIBITS:
Attachment A: Draft Ordinance with Zoning Map revisions modifying Section
18.43.030 of the PAMC and Rezoning Portions of the property at 2401,
2409, 2417 Park Blvd and 101 California Avenue #D 101 to allow office
uses. in parts of the ground floor of three buildings on that site.
Attachment B: Negative Declaration and Environmental Impact Assessment
Attachment C: PAMC 18.43 (Excerpt, Commission Only)
City of Palo Alto Page
Item 5: Staff Report Pg. 27 Packet Pg. 46 of 229
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Supporting documents
o0 Ptlt
tea, �tr9�
City of Palo Alto
Department of Planning and Community Environment
California Environmental Quality Act
MITIGATED NEGATIVE DECLARATION
1. DESCRIPTION OF PROJECT
Date: April 6, 2004
Application Nos.: 03-ZC-06, 03-EIA-13
Address of Project: 2401, 2409, 2417 Park Blvd. & 101. California Avenue #D101
Assessor's Parcel Number: 124-37-22,25 28,29
Applicant: Richard & Sharon Reyes, Eldad & Charlotte Matityahu, Donald
Douglas & Nina Moore, and Nortman Weintraub & Deborah
London
Property Owner: Palo Alto Central
c/o Nina Moore
101 California Avenue
Palo Alto, CA 94306
Project Description and Location:
The application for zone chang applies to property constructed in 1983 as a portion of the
mixed -use (commercial/residential) project known as Palo Alto Central, in the California Avenue
business district. The CC(2)(R)(P) designation was applied to this property in 1984 as a result of
the California Avenue Study. Three of the units, 2401, 2409, and 2417 front on Park Boulevard
are occupied by a nail salon, title company, and tanning salon, respectively, and 101 California
Avenue #D 101 is occupied by both a real estate office and a restaurant. The existing business
offices are not peiiii EdFonthe grouhd'floor timer current zoning. All of the units are relatively
isolated fromthe main retail -shopping district California Avenue making it difficult for retail
businesses to succeed in these locations due to lack of pedestrian traffic. The commercial
condominium owners have experienced hardship due to difficulty of attracting, retailtenants and
are prohibited from renting their spaces to office uses due to the existing zoning.
The project would modify PAMC Section 18.43 (Community Commercial Zone District) to
include offices at Palo Alto Central as a permitted use within the rear 50% of each Building
C&D and. within_all_of Building E.--
\\CC•TERRA\Shared i'LANWLADP ACwrent PlanninSMAWey.Dcc\2401, 2409 Park Bivd(modificd).doc
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H. DETERMINATION
In accordance with the City of Palo Alto's procedures for compliance with the California
Environmental Quality Act (CEQA), the City has conducted an Initial Study to determine
whether the proposed project located at 2401, 2409, 2417 Park Blvd. & 101 California
Avenue #D101 may have 'a significant effect on the environment. On the basis of that
study, the City makes the following determination:
X The proposed project COULD NOT have a significant effect on the
environment, and a NEGATIVE DECLARATION is hereby adopted.
Although the project, as proposed, could have a significant effect on the
environment, there will not be a significant effect on the environment in this
case because mitigation measures have been added to the project and,
therefore, a MITIGATED NEGATIVE DECLARATION is hereby adopted.
The attached initial study incorporates all relevant information regarding the potential
environmental effects of the project and confirms the determination that an EIR is not
required for the project.
Project anner
Current Manning Manager
Date
Datt
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Attachment D: Minutes of the February 11, 2004 Planning Commission Meeting
(Commission Only)
Attachment E: Letters from Applicants (Commission Only)
Attachment F: Email from Judy Glaes, received October 10, 2003 (Commission Only)
COURTESY COPIES:
Richard & Sharon Reyes
Eldad & Charlotte Matityahu
Donald Douglas & Nina Moore
Norman Weintraub & Deborah London
Laura Rasmussen, Silk Road Cafe Owner
Montoya Jewelers'
Chuck Marsh
Joy Ogawa
Herb Borock
Prepared by: Christopher A. Riordan, AICP, Planner
Reviewed by: Amy French, AJCP, Manager of Current Planning
Department/Division Head Approval:
Lisa Grote, Chief Planning Official
City of Palo Alto
P -a f)e3
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ORDINANCE NO. 4848
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO
ALTO MODIFYING SECTION 18.43.030 OF THE PALO
ALTO MUNICIPAL CODE AND REZONING PORTIONS OF THE
PROPERTY AT 2401, 2409, 2417 PARK BOULEVARD AND
101 CALIFORNIA AVENUE #D101 TO ALLOW OFFICE USES
IN PARTS OF THE GROUND FLOOR OF THREE BUILDINGS
ON THAT SITE
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION 1. Findings and Declarations. The City Council
finds and declares that the amendments to section 18.08.040 (the
zoning map) and chapter 18.43 (Community Commercial District
(CC) Regulations) of Title 18 [Zoning] of the Palo Alto
Municipal Code are in accord with the purposes of that title and
the Palo Alto Comprehensive Plan, in that retail uses are
preserved in the areas of Palo Alto Central facing the
pedestrian ways of California Avenue and Park Boulevard, and
office uses are permitted facing the interior courtyard, where
they will contribute to the vitality of the California Avenue
commercial area without detracting from the retail- and
pedestrian -oriented character of the area.
SECTION 2. Subsection (m) of section 18.43.030 of
Chapter 18.43 (Community Commercial District (CC) Regulations)
of Title 18 [Zoning] of the Palo Alto Municipal Code hereby
reads as follows;
(m) Medical, professional, and general business
offices located on the ground floor of a building, as limited by
Section 18.45.070(f), which (1) have been continuously in
existence in that space since March 19, 2001, and, as of such
date, were neither non -conforming nor in the process of being
amortized pursuant to Chapter 18.95 of this code; or (2) occupy
a space that was not occupied by housing, retail services,
eating and drinking services, personal services, or automotive
services on March 19, 2001 or thereafter; or (3) occupy a space
that was vacant on March 19 , 2001; or (4) are located in new or
remodeled ground floor areas built on or after March 19, 2001 if
the ground floor area devoted to housing, retail services,
eating and drinking services, personal services, and automobile
012104jea 6030031
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services does not decrease; or (5) are on a site located in an
area subject to a specific plan or coordinated area plan, which
specifically allows for such ground floor medical, professional
and general business offices; or (6) are located anywhere in
Building E or in the rear 50% of Building C or D of the property
at the southeast corner of the intersection of Park Boulevard
and California Avenue, as shown on sheet A2 of the plans titled
"101 California Avenue Townhouse/Commercial/Office, Palo Alto,
CA" by Crosby, Thornton, Marshall Associates, Architects, dated
June 14, 1982, revised November 23, 1982, and on file with the
Planning Department. As used in this subsection (m) (6), "rear
50%" means a maximum of 50% of the square footage of the
building, none of which faces Park Boulevard or California
Avenue.;
SECTION 3. Section 18.08.040 of the Palo Alto Municipal
Code, the "Zoning Map," is hereby amended by changing the zoning
of portions of a certain property known as 2401, 2409, 2417 Park
Boulevard and 101 California Avenue #D101 (the "subject
property") from "CC(2)(R)(P) Community Commercial District With
Combining District (2) , Retail, and Pedestrian Overlays" to
"CC(2) (P) Community Commercial District with Combining District
(2) and Pedestrian Overlay." The portions of the property to be
rezoned are the rear 50% of the buildings labeled "Building C
and Building D" and all of the building labeled "Building E," as
those three buildings are shown on sheet A2 of the plans titled
"101. California Avenue Townhouse/Commercial/Office, Palo Alto,
CA" by Crosby, Thornton, Marshall Associates, Architects, dated
June 14, 1982, revised November 23, 1982, and on file with the
Planning Department. The subject property, as rezoned by this
ordinance, is shown on the map labeled Exhibit "A," attached
hereto and incorporated herein by reference.
SECTION 4. The City Council finds that the changes
effected by this ordinance are exempt from the provisions of the
California Environmental Quality Act (CEQA), per section 15061
of CEQA Guidelines, because it can be seen with certainty that
there is no possibility that the project will have a significant
effect on the environment.
//
//
1/
//
D12104jea 6030031
Item 5: Staff Report Pg. 32 Packet Pg. 51 of 229
Item 5
Attachment D -
Supporting documents
SECTION 5. This ordinance shall be effective 30 days
after the date of its adoption.
INTRODUCED: September 20, 2004
PASSED: October 4, 2004
AYES: BEECHAM, BURCH, CORDELL, KLEINBERG, MORTON, MOSSAR
NOES: FREEMAN, KISHIMOTO
ABSENT:
ABSTENTIONS: OJAKIAN
NOT PARTICIPATING:
ATT ,T :
City Clerk
APPROV AS ORM:
` -0ata Aso City A .torney
ftep, Mayor
APPROVED ,
City, gtger
Di'*tr of Planning &
Community Environment
Director of m±nistrative
Services
012104jee 6630031
Item 5: Staff Report Pg. 33 Packet Pg. 52 of 229
Item 5
EXHIBIT 1IAU I1 Attachment D-
Supporting documents
O ►m- 1� (4b1 .•ID mis document i6 a gnpisc repreaenlelbn only or bael —dable sour ,
Pln .q•u,._h pc...,Nq.rw.+...:ua.n nit. The 0Th d Pala am e,aae .n,po a,b y 40r a„y
Item 5: Staff Report Pg. 34 Packet Pg. 53 of 229
DocuSign Envelope ID: 73E81070-1 B3C-4773-BD8D-17149885E7CA
= PLANNING & DEVELOPMENT SERVICES
C I T Y O F 250 Hamilton Avenue, 5t" Floor
PALO Palo Alto, CA 94301
ALTO (650) 329-2441
Peggy C. Lee
PO Box 3183
Los Altos, CA 94024
Item 5
Attachment E - 151 S.
California Avenue Retail
Preservation Waiver
Determination 23PLN-
00363
May 3, 2023
Subject: 151 S. California Avenue Retail Preservation Waiver Determination 23PLN-00363
Dear Ms. Lee,
In accordance with Palo Alto Municipal Code Section 18.40.180(c), your request for a waiver from
the City's retail preservation ordinance to allow an Alternative Viable Active Use (medical office use)
for a 3,500 commercial space located within the interior courtyard (Building E) of Palo Alto Central
at 151 S. California Avenue has been tentatively approved with conditions. The conditions of approval
are provided in Attachment A. This determination will be placed on the City Council's May 15, 2023
consent calendar agenda. If three or more council members vote to pull the item from the consent
agenda, you will be notified of a future public hearing regarding your request. If approved on the
consent agenda, this decision will be final.
This determination is based on information provided to the City, including the site's 10 -year history,
documentation of the applicant's efforts to lease the tenant space, information regarding the former
tenant and eviction notice information, the surrounding land uses, previous actions and
determinations related to this tenant space in accordance with Ordinance 4848, the visibility of the
space from the street, and a support letter from the properties' Home Owners Association. The
proposed Medical Office use is consistent with the allowed uses within the Community Commercial
Comprehensive Plan land use designation and is a permitted use within the CC[2] Zone District. The
proposed use, as conditioned, would encourage active pedestrian -oriented activity and connections
that are conclusive to adjacent retail uses.
In accordance with PAMC 18.40.180(c)(1)(B), the Director may issue a tentative decision to approve
a retail waiver for an Alternative Viable Use based on findings that the permitted retail or retail -like
use is not viable; the proposed use will support the purposes of the zoning district and
Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian -
oriented activity and connections. Based on the aforementioned information, the undersigned finds
retail and retail -like uses are not viable within this tenant space at this time and that the proposed
medical office use supports the purposes of the Zoning District and Comprehensive Plan land use
designation and encourages pedestrian -oriented activity.
No modifications to the building are proposed as part of the proposed project. Any future physical
modifications to the site would be required to comply with the other applicable provisions of the
151 S. California Avenue; Application #23PLN-00363
Item 5: Staff Report Pg. 35 Packet Pg. 54 of 229
DocuSign Envelope ID: 73E81070-1 B3C-4773-BD8D-17149885E7CA
Item 5
Attachment E - 1515.
Municipal Code, be consistent with the City's Comprehensive Plan, and wil rmits
California Avenue Retail
from the City's Planning and/or Building Division. Preservation Waiver
Determination 23PLN-
If you have any questions regarding this determination, please do not hesitat 00363 your
Project Planner, Claire Raybould at claire.raybould@cityofpaloalto.org or (650) 329-2116.
Sincerely,
DocuSigned1/by:
293CF322E1294F6...
Jonathan Lait
Director of Planning & Development Services
Attachment A: Conditions of Approval
151 S. California Avenue; Application #23PLN-00363
Item 5: Staff Report Pg. 36 Packet Pg. 55 of 229
DocuSign Envelope ID: 73E81070-1 B3C-4773-BD8D-17149885E7CA
Item 5
Attachment E - 151 S.
California Avenue Retail
Attachment A: Preservation Waiver
Conditions of Approval (151 S. California; 23PLN-0036 Determination 23PLN-
00363
1. CONFORMANCE WITH APPROVED USE. This approval allows for a waiver from the retail
preservation ordinance for the proposed medical office use within a 3,500 sf existing tenant
space, which has been determined to meet the City's criteria as an approved Alternative Active
Viable Use and is an otherwise permitted use within the CC(2) zone district for spaces less than
5,000 sf and that do not front California Avenue. Any future use of this tenant space for a land
use that does not meet the definition of retail, retail -like, or medical office use, as defined in
Chapter 18.04 of the municipal code and that meets the conditions of approval of this waiver
would require a subsequent retail preservation waiver.
2. SITE MODIFICATIONS. This project does not include approval of any changes to the building or
site. Any future changes to the building or the site would be subject to applicable approvals
and permits in conformance with all applicable regulations depending on the scope of the
proposed work.
SIGNAGE. This approval does not include any signage or modifications to the approved signs on
site. New signage or modifications to existing signage would be required to submit for a
separate review and approval by the Planning Department.
4. MEDICAL OFFICE USE REQUIREMENTS. To ensure that site modifications and use for any future
medical office tenants comply with the requirements in PAMC Section 18.40.180(c)(1)(B) to
encourage pedestrian -oriented activity, any medical office use within this space shall include a
storefront/entry lobby design that is a minimum 500 sf and that is consistent with a retail
environment, such as a reception desk or retail displays and display window. Additionally,
medical office uses operating between the hours of of 10:00 p.m. and 6:00 a.m. are not
permitted.
INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless
the City, its City Council, its officers, employees and agents (the "indemnified parties") from
and against any claim, action, or proceeding brought by a third party against the indemnified
parties and the applicant to attack, set aside or void, any permit or approval authorized hereby
for the Project, including (without limitation) reimbursing the City for its actual attorneys' fees
and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to
defend any such action with attorneys of its own choice.
6. PERMIT EXPIRATION. The project approval shall be valid for a period of one year from the
original date of approval. In the event that the proposed use does not occupy the space within
a period of one year within the time limit specified above, the approval shall expire and be of
no further force or effect. A written request for a one-year extension shall be submitted prior
to the expiration date in order to be considered by the Director of Planning and Development
Services.
151 S. California Avenue; Application #23PLN-00363
Item 5: Staff Report Pg. 37 Packet Pg. 56 of 229
Item 5
Attachment E - 151 S.
California Avenue Retail GUST jn
Certificate Of Completion
Preservation Waiver
Envelope Id: 73E810701 B3C4773BD8D17149885E7CA
Status: C Determination 23PLN-
Subject: Complete with DocuSign: 2023-0503 Retail waiver Tentative Approval Letter
151 S California Fina... 00363
Source Envelope:
Document Pages: 3 Signatures: 1
Envelope Originator:
Certificate Pages: 2 Initials: 0
Jodie Gerhardt
AutoNav: Enabled
250 Hamilton Ave
Envelopeld Stamping: Enabled
Palo Alto , CA 94301
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
Jodie.Gerhardt@CityofPaloAlto.org
IP Address: 199.33.32.254
Record Tracking
Status: Original Holder: Jodie Gerhardt Location: DocuSign
5/3/2023 5:31:18 PM Jodie.Gerhardt@CityofPaloAlto.org
Security Appliance Status: Connected Pool: StateLocal
Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign
Signer Events Signature Timestamp
Jodie Gerhardt Completed Sent: 5/3/2023 5:34:04 PM
jodie.gerhardt@cityofpaloalto.org Viewed: 5/3/2023 5:34:26 PM
Manager Planning Signed: 5/3/2023 5:34:30 PM
COPA Using IP Address: 199.33.32.254
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Jonathan Lait
°ocuSlgned bySent:
1293CF322EI294F6
5/3/2023 5:34:31 PM
jonathan.lait@cityofpaloalto.org
Viewed: 5/4/2023 4:39:16 PM
Interim Director Planning and Community
Signed: 5/4/2023 4:39:51 PM
Environment
City of Palo Alto
Signature Adoption: Uploaded Signature Image
Security Level: Email, Account Authentication
Using P Address: 199.33.32.254
I
(None)
Signed using mobile
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
In Person Signer Events
Signature
Timestamp
Editor Delivery Events
Status
Timestamp
Agent Delivery Events
Status
Timestamp
Intermediary Delivery Events
Status
Timestamp
Certified Delivery Events
Status
Timestamp
Carbon Copy Events Status Timestamp
Claire Raybould COPIED Sent: 5/4/2023 4:39:52 PM
Claire.Raybould@CityofPaloAlto.org
Senior Planner
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Item 5: Staff Report Pg. 38 Packet Pg. 57 of 229
Item 5
Attachment E - 151 S.
Witness Events
Signature
Timest
California Avenue Retail
Notary Events
Signature
Timest Preservation Waiver
Determination 23PLN-
Envelope Summary Events
Status
Timest 00363
Envelope Sent
Hashed/Encrypted
5/3/2023 5:34:05 PM
Certified Delivered
Security Checked
5/4/2023 4:39:16 PM
Signing Complete
Security Checked
5/4/2023 4:39:51 PM
Completed
Security Checked
5/4/2023 4:39:52 PM
Payment Events
Status
Timestamps
Item 5: Staff Report Pg. 39 Packet Pg. 58 of 229
Item 6
Item 6 Staff Report
CITY OF
PALO
ALTO
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: May 15, 2023
Report #:2303-1185
TITLE
Approval of a Design -Build Contract with Parking Guidance Systems, LLC in the Amount of
$4,180,217 with Authorization for the City Manager to Negotiate and Execute Change Orders
up to a Not -to -Exceed Amount of $418,022 for the Downtown Automated Parking Guidance
System, Access Controls & Revenue Collection Equipment Project, Capital Improvement
Program Project PL -15002; and Approval of a Budget Amendment in the Capital Improvement
Fund; CEQA status — exempt under CEQA Guidelines Section 15301(c)
RECOMMENDATION
Staff recommends that Council:
1. Approve and authorize the City Manager, or their designee, to execute the design -build
contract with Parking Guidance Systems, LLC. (Contract No. C23180632A) in an amount
not to exceed $4,180,217 for the Downtown Automated Parking Guidance System,
Access Controls & Revenue Collection Equipment Project (PL -15002);
2. Authorize the City Manager, or their designee, to negotiate and execute change orders
to the contract with Parking Guidance Systems, LLC in an amount not to exceed
$418,022 for related additional, but unforeseen work that may develop during the
project; and
3. Amend the Fiscal Year 2023 Budget Appropriation for the Capital Improvement Fund by
(requires a 2/3 vote):
a. Decreasing the ending fund balance by $2,398,150; and
b. Increasing the Downtown Automated Parking Guidance System, Access Controls
& Revenue Collection Equipment project (PL -15002) appropriation by
$2,398,150.
Item 6: Staff Report Pg. 1 Packet Pg. 59 of 229
Item 6
Item 6 Staff Report
EXECUTIVE SUMMARY
Since 2020, establishment of a downtown automated parking guidance system for the four
Downtown parking garages has been part of the Council -adopted infrastructure plan. The
California Avenue Parking Garage at 350 Sherman Avenue uses the INDECT parking guidance
system, which features ceiling -mounted, multifunctional camera sensors to monitor and display
the availability of parking spaces as well as parking management tools. INDECT also provides
remote monitoring and maintenance services. This system was subsequently adopted as the
standard for all City -owned garages to ensure interoperability, as well as addressing surveillance
ordinance requirements. However, a contract with this company for design and installation was
cancelled due to state contractor licensing difficulties.
This report recommends award of a design -build contract with Parking Guidance Systems, LLC.,
a qualified licensed contractor in California, for the installation of automated parking guidance
systems at all four City -owned downtown garages. This includes contingency funding for
unforeseen work, as well as a budget appropriation amendment to fund the project.
BACKGROUND
The Downtown Automated Parking Guidance Systems, Access Controls & Revenue Collection
Equipment project (PL -15002) provides funding to address infrastructure and capital
improvements for City -owned parking facilities. This includes design and installation of new
parking guidance systems at the four Downtown parking garages.
In June 2014, City Council adopted the 2014 Council Infrastructure Plan that prioritized and
provided a funding plan for projects including the Public Safety Building and the California Avenue
Parking Garage. Later, in 2020, Council added the Downtown Automated Parking Guidance
System, Access Controls & Revenue Collection Equipment Project (PL -15002) to the 2014 Council
Infrastructure Plan, as a part of the Fiscal Year 2020 Capital Budget.
The California Avenue Parking Garage at 350 Sherman Avenue uses the INDECT parking guidance
system to provide drivers with an enhanced parking experience. This system features ceiling -
mounted, multifunctional camera sensors that can monitor and display the status of up to six
parking spaces, with three on each side of the parking aisle. Integrated LED indicators within the
sensor casing display space availability and the type of parking permitted. The sensors provide
detailed parking reports, audits, and performance analysis to help the Office of Transportation
continually improve parking efficiency. Additionally, the system provides custom signage, a
customizable mobile application, and potential license plate recognition capabilities. INDECT also
provides remote monitoring and maintenance services.
In assessing the needs of the Downtown parking garages, staff reached out to subject matter
experts (Watry Design Inc. and Dixon Resources Unlimited) in November 2019 on the parking
guidance system technologies who recommended that the City pursue the same camera -based
technology installed at the New California Avenue Parking Garage project (PE -18000).
Item 6: Staff Report Pg. 2 Packet Pg. 60 of 229
Item 6
Item 6 Staff Report
Staff visited two parking garages at the City of Walnut Creek and the City of Berkeley with the
INDECT system installed to assess its capabilities. The system appeared to be functioning at a
high level and met the City's standards and desired capabilities. Based on recommendations from
subject matter experts and staff's research, the INDECT parking guidance system has all the
capabilities that the City requires to modernize its parking program.
In July 2020, as authorized under PAMC Section 2.30.360(e), the City Manager approved a
standardization exemption from the City's competitive solicitation requirements to procure the
INDECT parking guidance system, so the City would have the same parking system across all City -
owned garages.
In November 2020, Council approved the surveillance policy and use of a parking guidance system
for future installations at other City -owned parking garages 1.
In August 2021, Council approved a design -build contract with INDECT USA (INDECT), Contract
No. C211806322 to install the INDECT parking system. However, INDECT USA, based in Colorado,
could not obtain Engineering and Contracting licenses in the State of California. As a result, the
contract with INDECT USA was cancelled and another procurement initiated.
ANALYSIS
Project Description
Staff developed a scope of services for a design -build project with assistance from the Office of
Transportation and Dixon Resources Unlimited, a consulting firm with expertise in this area. By
involving a single design -build entity, the goal is to reduce change order and schedule risk as the
design -build team and construction contractor work together to provide an outcome within the
City's constructability and budget parameters.
The Design -Build delivery method is recommended instead of the Design -Bid -Build method for
this project, as the design and construction processes in the Design -Build approach offer greater
integration across these phases. In Design -Bid -Build, each phase of design, bid, and construction
is implemented separately, whereas in Design -Build, the phases can overlap to help ensure quick
delivery. The scope of the recommended Design -Build project consists of design, procurement,
fabrication, installation, testing, and implementation, including furnishing all material,
equipment, labor, and supervision for a new fully operational parking guidance system. The scope
also includes digital wayfinding signage.
'city Council, November 2, 2020; Agenda Item #7, SR #11666,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
c m rs/year-archive/2020-2/i d-11666. pd f
2 City Council, August 9, 2021, Agenda Item #3, SR #11680;
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
c m rs/yea r -a rc h ive/2021/i d.-11680. pdf
Item 6: Staff Report Pg. 3 Packet Pg. 61 of 229
Item 6
Item 6 Staff Report
Under this proposed Design -Build contract, the contractor will design and install automated
parking guidance systems at four downtown area garages. The scope includes preliminary design
submittals, construction documents, electrical connections, permitting, and purchase and
installation of all supplies, materials and equipment to provide a turn -key system. The Design -
Build process is expected to take 16 months from the date of the contract notice to proceed.
Additionally, staff intends to enter into a separate contract with INDECT for ongoing service,
maintenance, and online hosting of the parking guidance system software for the four garages
included in this design -build contract, and for the California Avenue Parking Garage. Staff will
return to Council for approval of the ongoing services contract.
Procurement Process
On June 15, 2022, the City released a design -build request for proposal (RFP 180632A) through
the City's PlanetBids eProcurement system. The bidding period was 48 calendar days. The City
received one proposal from Parking Guidance Systems, LLC.
Bid Name/Number
Automated Parking Guidance System (APGS)
Design -Build Project/RFP #180632A
Proposed Length of Project
16 months
Number of Consultants Contacted
12
Number of Builder Exchanges
8
Number of Websites
1 (PlanetBids)
Number of Days to Respond
48 days
Number of Proposals Received
1
Responding Companies
Parking Guidance Systems, LLC
Proposed Fee Range
$4,180,217
The design -build contract includes all four downtown area parking garages:
■ Garage S/L (Bryant/Lytton) — 445 Bryant Street
■ Garage CW (Cowper/Webster) — 520 Webster Street
■ Garage R (Alma/High) — 528 High Street
■ Garage CC (Civic Center) — 250 Hamilton Avenue
A bid was received from Parking Guidance Systems, LLC in the amount of $4,180,217 for all four
downtown garages. Staff reviewed the submitted proposal and recommends acceptance and
approval of Contract No. 23180632A3 with Parking Guidance Systems, LLC for all four downtown
garages. The construction contingency amount of $418,022, which approximately equals ten
3 Parking Guidance Systems, LLC Design -Build Contract for Automated Parking Guidance Systems No. C23180632A;
https://www.cityofpaloalto.org/files/assets/public/public-works/engineering-services/cip-
contracts/c23180632a parking -guidance -systems db 05.15.2023 staff-report.pdf
Item 6: Staff Report Pg. 4 Packet Pg. 62 of 229
Item 6
Item 6 Staff Report
percent of the total contract value, is requested for related, additional, but unforeseen work,
which may arise during the project, implemented via City -approved change orders.
Staff confirmed with the Contractor's State License Board that the contractor has an active
license on file. INDECT USA is a subcontractor of Parking Guidance System, LLC.
FISCAL/RESOURCE IMPACT
The total contract with Parking Guidance Systems, LLC is $4,598,239. Staff recommends
increasing the Fiscal Year 2023 budget appropriation for the Downtown Automated Parking
Guidance System, Access Controls & Revenue Collection Equipment project (PL -15002) by
$2,398,150 using Capital Improvement Fund reserves to award the attached contract and provide
additional funds for project administrative costs including permit fees, printing and project
outreach. A transfer of $4 million in surplus General Funds was transferred to the Capital
Improvement Fund in the FY 2023 Mid -Year Budget in alignment with Council policy and in
anticipation of this needed budget appropriation action.
Not included in this design -build contract is the ongoing annual cost for INDECT's service,
maintenance, and online hosting of the parking guidance system software, the amount of which
is anticipated to be approximately $156,000 annually (excluding City of Palo Alto fiber fees). This
contract will cover the first twelve months of service, maintenance, and online hosting of the
parking guidance system software. Staff will return to Council for approval of an ongoing services
contract. Staff expects that the ongoing services contract will be paid for by the respective
parking funds.
STAKEHOLDER ENGAGEMENT
Outreach will be done during construction including updates to the City's website and
NextDoor posts as well as direct outreach to parking garage users including signage at garages
and email updates.
ENVIRONMENTAL REVIEW
This project is categorically exempt under CEQA Section 15301(c) for minor alterations of
existing public facilities. Therefore, no further environmental review is necessary.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
Item 6: Staff Report Pg. 5 Packet Pg. 63 of 229
Item 7
Item 7 Staff Report
City Council
Staff Report
From: City Manager
CITY O F Report Type: CONSENT CALENDAR
PALO Lead Department: Public Works
ALTO Meeting Date: May 15, 2023
Report #:2304-1248
TITLE
Adoption of a Resolution Authorizing the City Manager or their Designee to sign Grant -Related
Documents with Caltrans for the Newell Road/San Francisquito Creek Bridge Replacement
Capital Improvement Program Project PE -12011; CEQA: Environmental Impact Report for the
Newell Road Bridge (Resolution No. 9889)
RECOMMENDATION
Staff recommends that Council adopt the attached resolution authorizing the City Manager or
their Designee to sign grant -related documents with Caltrans for the Newell Road/San
Francisquito Creek Bridge Replacement Capital Improvement Program Project (PE -12011).
BACKGROUND
The Budget Act of 2022 made appropriations for the support of state governments for the
2022-23 fiscal year. Subdivision (G)(Y) of Section 19.56 of the Budget Act (Act) appropriated
$2,000,000 from the State General Fund to Caltrans to be allocated to the City of Palo Alto for
the replacement of the Newell Road Bridge over San Francisquito Creek. California Department
of Transportation (Caltrans) determined that the best method for allocation and to ensure the
funds are used for the purpose specified in Section 19.56 of the Act is to execute a Funds
Transfer Agreement. Caltrans is preparing the proposed agreement template and has notified
City staff that this may take two to three months to finalize. Based on Caltrans' assurance,
staff expects the template to be similar to the one used for the budget act of 2021.
ANALYSIS
Once the agreement template is finalized and provided to the City of Palo Alto, staff will
complete the necessary information which includes the project background, scope of work, and
clear description of how the $2,000,000 appropriation will be used. Staff estimates it may take
a couple of months for Caltrans to review and approve. The resolution is required by Caltrans to
receive the funding; however, the resolution does not authorize changes to the current design
contract or allow staff to advance construction work. Council will have the ability to review the
Item 7: Staff Report Pg. 1 Packet Pg. 64 of 229
Item 7
Item 7 Staff Report
project expenses and to provide approval on any contract awards or amendments. This
resolution would simply allow staff to quickly secure the funding without a subsequent Council
action.
FISCAL/RESOURCE IMPACT
The recommended Council action does not represent any changes in terms or funding
resources.
This $2,000,000 budget appropriation has been included in the Fiscal Year 2024 proposed
budget for the Newell Road/San Francisquito Creek Bridge Replacement Capital Improvement
Program Project PE -12011.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement has been conducted as part of the Newell Road Bridge Replacement
project.
ENVIRONMENTAL REVIEW
An Environmental Impact Report was prepared and certified by Council on June 1, 2020, by
adoption of Resolution No. 98891.
ATTACHMENTS
Attachment A: Resolution Authorizing Execution of Administering Agency -State Master
Agreements for State and Federal -Aid Funded Projects
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
1 Resolution 9889, https://www.citVofpaloalto.org/files/assets/public/city-clerk/resolutions/reso-
9889. pdf?t=62904.01
Item 7: Staff Report Pg. 2 Packet Pg. 65 of 229
*NOT YET APPROVED*
Resolution No.
Item 7
Attachment A -
Resolution Authorizing
Execution of
Administering Agency -
State Master Agreements
Resolution of the Council of the City of Palo Alto Authorizing Execifor State and Federal -Aid
Funds Transfer Agreement with the California Department of TraL Funded Projects
(Caltrans) for the replacement of the Newell Road Bridge over San Francisquito
Creek.
RECITALS
A. The City of Palo Alto is eligible to receive Federal and/or State funding for certain
Transportation Projects through Caltrans; and
B. The City of Palo Alto is eligible to receive such funding for the replacement of the
Newell Road Bridge over San Francisquito Creek; and
C. Master Agreements, Project Supplemental Agreements, Fund Exchange
Agreements and/or Fund Transfer Agreements must be executed with the Caltrans before such
funds can be claimed; and
D. The City of Palo Alto wishes to delegate the authority to execute these agreements
and any amendments thereto to the City Manager or designee.
//
//
//
//
//
//
//
//
//
//
//
1
0006 20230502 mv30
Item 7: Staff Report Pg. 3 Packet Pg. 66 of 229
Item 7
Attachment
*NOT YET APPROVED*
Resolution Authorizing Ahorizing
Execution of
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as Administering Agency -
State Master Agreements
The City of Palo Alto designates the City Manager or designee as tforStateandFederal -Aid zed
Funded Projects
to execute all Master Agreements, Program Supplemental Agreemehis, ruilu Lxuldnge
Agreements and/or Fund Transfer Agreements, any amendments thereto, and all other
documents with Caltrans in order to receive funding for the replacement of the Newell Road
Bridge.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
Mayor
APPROVED:
City Manager
Director of Public Works
2
0006 20230502 mv30
Item 7: Staff Report Pg. 4 Packet Pg. 67 of 229
Item 8
Item 8 Staff Report
City Council
Staff Report
From: City Manager
CITY O F Report Type: CONSENT CALENDAR
PALO Lead Department: Public Works
ALTO Meeting Date: May 15, 2023
Report #:2304-13 10
TITLE
Approval of Amendment No. 3 with RossDrulisCusenbery Architecture, Inc. (Contract No.
C17165953) to add $687,500, increasing the not to exceed amount to $9,725,108, for additional
Professional Services for the Public Safety Building Capital Improvement Program Project (PE -
15001); CEQA: Environmental Impact Report for the PSB and New California Avenue Area
Parking Garage (Resolution No. 9772)
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to
execute Amendment No. 3 to Contract No. C17165953 with RossDrulisCusenbery Architecture,
Inc. (Attachment A) to add $687,500, increasing the not to exceed amount to $9,725,108, for
Professional Services for the Public Safety Building project and the completed New California
Avenue Area Parking Garage project.
BACKGROUND
The New Public Safety Building (PSB) (PE -15001) and New California Avenue Area Parking
Garage (Garage) (PE -18000) were among ten key projects included in the 2014 Council
Infrastructure Plan. The PSB was identified as the plan's highest priority project, and its
environmental impacts are analyzed with the parking garage project for the purposes of
complying with the California Environmental Quality Act (CEQA). The parking garage opened in
December 2020. On February 1, 2021, Council approved the award of the construction contract
for the Public Safety Building to Swinerton Builders (Swinerton) and authorized execution and
delivery of one series of Certificates of Participation (COPs) in an amount not to exceed $120
million to finance PSB construction.'
1 City Council, February 1, 2021; Agenda Item #4, SR #11752,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
c m rs/yea r -a rc h ive/2021/i d-11752. pdf
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In December 2016, Council authorized a contract with RossDrulisCusenbery Architecture, Inc.
(RDC) to provide design and environmental assessment services for the new PSB and the now
completed California Avenue Parking Garage (Cal Ave Garage).2
On February 1, 2021, Amendment No. 1 to RDC's contract replenished the PSB construction
administration budget, augmented the Cal Ave Garage construction administration project
budget, and replenished the contingency budget in the contract.3 During discussion of that item
at the Council meeting, staff recommended redesigning the Multipurpose Room exterior to
make it more inviting and open consistent with its planned use as a Community Room.
On August 30, 2021, Amendment No. 2 to RDC's contract provided additional compensation for
multiple design changes related to the Cal Ave Garage and the PSB along with the funds
required for the redesign of the Community Room exterior.4
ANALYSIS
Staff recommends the approval of the attached Amendment No. 3. This amendment provides
supplemental funding for five significant additional scopes of work and further replenishes the
budget for additional services. The five items consist of the following:
1. Extended Construction Contract Duration: The construction contract with Swinerton
has been extended via Change Orders to August 25, 2023 and is anticipated to be
further extended. The amendment provides funding to cover architectural services
during this extension.
2. Coordination for Building Information Modelling (BIM) for construction: The BIM
process involves a 3D model of the entire PSB structure to identify and resolve clashes
between building system components, structure components, and cladding systems.
3. Accommodation of supply chain issues: The Covid pandemic significantly impacted the
orderly progress of the PSB work. COVID-related material shortages, discontinued
products, absences of key staff and tradespeople, and unprecedented pricing escalation,
all prompted Swinerton to request accelerated review of high priority Requests for
Information (RFIs) and submittals so that the project could stay on schedule,
subcontracts could be bought out in a timely manner and the project stay on budget.
This approach afforded the contractor the benefit of securing early out -of -sequence
long lead items in response to the COVID-related logistic and marketplace challenges. A
2 City Council, December 12, 2016; Agenda Item #6, SR#7417,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2016/id.-7417-public-safety-building-and-cal-ave-garage-design-contract-approval.pdf
3 City Council, February 1, 2021; Agenda Item #4, SR 11752,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/yea r-archive/2021/id-11752.pdf
4 City Council, August 30, 2021; Agenda Item #4, SR #12318,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
c m rs/yea r -a rc h ive/2021/i d-12318. pdf
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two-tier "Hot" vs. "Standard" RFI review process was added to the construction
administration phase additional to the requirements of the Prime Agreement. The
subsequent accelerated review and approval of these Hot RFls required the design team
to add staff to support this effort so that "Hot" RFls would be accommodated without
slowing the review of lower priority RFIs.
4. Resolution of construction errors: During construction, RDC supported the city in
assessing, documenting and solving a variety of construction issues which arose during
the construction process including assistance with plan check comments on design -build
aspects of the project (i.e., deferred submittals) and the assessment of construction
work which did not conform to the requirements of the Contract Documents. The
circumstances for these issues were not anticipated in the original contract and required
additional hours on the part of the design team. Some of the costs associated with this
category are being back charged to the Swinerton to balance the budget for this item. A
partial list of construction issues covered by this item include but are not limited to the
following:
a. Placement of defective cast -in -place concrete work by the contractor at levels B1
& B2. This required RDC to expend additional site visits and review time to
prepare field reports and issue notices of defective work and attending QA/QC
meetings with Swinerton which were not originally budgeted for in RDC's base
contract.
b. Improper installation of the center skylight requiring its complete removal and
reinstallation.
c. Off -spec vertical location of the buried emergency fire water supply storage tank
requiring the development of multiple design solution alternatives for cost
modeling and decision making.
d. Late, missing, or out sequence exterior wall mock-up reviews.
e. Provision of exterior tile which did not substantially conform with the approved
tile submittal.
5. Storm -related damage assessment: The heavy December 2022 and Winter 2023 storms
damaged portions of the ongoing construction work. RDC assessed the extent of various
aspects of the storm damage and documented the storm -related damage in field
reports and where appropriate, proposed potential solutions. The cost of this damage
assessment and resulting repair could be partially covered by the general contractor's
insurance carrier. RDC's additional services included the assessment of the following
storm damage types:
a. Site flooding,
b. Roof top water ponding and water infiltration,
c. Potential water damage to partially installed roof insulation,
d. Potential water damage to roofing membrane,
e. Water damage to installed gypsum wall board,
f. Flooding at levels B1 & B2,
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g. Floating and dislodgement of underground storage tanks,
h. Sloughing of open site excavations, and
i. Collapse of portions of Jacaranda Lane.
In addition to the above, Amendment No. 3 includes a 10 percent additional services
replenishment in the amount of $62,500 to address other potential unanticipated architectural
services for the project.
FISCAL/RESOURCE IMPACT
Funding for this contract amendment is available in the Fiscal Year 2023 Adopted Capital
Improvement Program budget for the Public Safety Building project (PE -15001). Funding for this
amendment is covered by the PSB project contingency and reserves for items that cost less
than expected. Approval of this amendment does not increase the overall PSB budget approved
by Council when the construction contract was approved in early 2021.
STAKEHOLDER ENGAGEMENT
Public Works has coordinated with key staff from departments whose operations will
be dependent upon the PSB.
ENVIRONMENTAL REVIEW
An Environmental Impact Report for the PSB and the New California Avenue Area
Parking Garage was prepared and certified by Council on June 11, 2018 (ID #8967), by adoption
of Resolution No. 9772.5
ATTACHMENTS
Attachment A: RossDrulisCusenbery Architecture, Inc. Contract C17165953 Amendment 3
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
5 Resolution 9772, https://www.cityofpaloaIto.org/files/assets/public/city-clerk/resolutions/reso-
9772.pdf?t=40475.53
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AMENDMENT NO. 3 TO CONTRACT NO. C17165953
BETWEEN THE CITY OF PALO ALTO AND
ROSSDRULISCUSENBERY ARCHITECTURE, INC.
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Attachment A -
RossDrulisCusenbery
Architecture, Inc.
Contract C17165953
Amendment 3
This Amendment No. 3 (this "Amendment") to Contract No. C17165953 (the "Contract" as
defined below) is entered into as of May 15, 2023, by and between the CITY OF PALO ALTO, a
California chartered municipal corporation ("CITY"), and ROSSDRULISCUSENBERY ARCHITECTURE,
INC., a California corporation, located at 18294 Sonoma Highway, Sonoma, CA 95476
("CONSULTANT"). CITY and CONSULTANT are referred to collectively herein as the "Parties".
RECITALS
A. The Contract (as defined below) was entered into by and between the Parties hereto
for the provision of professional design and environmental services for a new Public Safety Building
(PSB) and a new Parking Garage, as detailed therein.
B. The Parties entered into Amendment No. 1 to provide an additional Scope of
Services under the Contract, increase the Compensation, and extend the Contract term, as detailed
therein.
C. The Parties entered into Amendment No. 2 to provide an additional scope of
services under the Contract and to increase the compensation by Two Hundred Eighty -Three
Thousand Four Hundred Ten Dollars ($283,410), from Eight Million Seven Hundred Fifty -Four
Thousand One Hundred Ninety -Eight Dollars ($8,754,198) to Nine Million Thirty -Seven Thousand
Six Hundred Eight Dollars ($9,037,608), as detailed therein.
C. The Parties now wish to amend the Contract in order to provide additional services
under the Contract and to increase the compensation by Six Hundred Eighty -Seven Thousand Five
Hundred ($687,500), from Nine Million Thirty -Seven Thousand Six Hundred Eight Dollars
($9,037,608) to Nine Million Seven Hundred Twenty -Five Thousand One Hundred Eight Dollars
($9,725,108), as detailed herein.
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. C17165953
between CONSULTANT and CITY, dated December 12, 2016, as amended by:
Amendment No.1, dated February 1, 2021
Amendment No. 2, dated August 30, 2021
Vers.: Aug. 5, 2019
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Other Terms. Capitalized terms used and not defin Contract C17165953 ent
shall have the meanings assigned to such terms in th Amendment3
SECTION 2. SECTION 1, "SCOPE OF SERVICES," of the Contract is hereby amended to read as
follows:
"CONSULTANT will perform the Services described in Exhibit "A," Exhibit "A-1," Exhibit "A-2," and
Exhibit "A-3" in accordance with the terms and conditions contained in this Agreement, to the
reasonable satisfaction of CITY."
SECTION 3. SECTION 4, "COMPENSATION," of the Contract is hereby amended to read as
follows:
"4.1 Basic Services. The compensation to be paid by CITY to CONSULTANT for performance
of the Services (also referred to in this Agreement as the "Basic Services") shall be based on the
compensation structure detailed in Exhibit C, entitled "COMPENSATION," including any
reimbursable expenses specified therein, and the maximum total compensation shall not exceed
Eight Million Seven Hundred Sixty -Five Thousand Five Hundred Eighteen Dollars ($8,765,518).
CONSULTANT agrees to complete all Basic Services, including specified reimbursable expenses,
within this amount.
4.2 Additional Services. In addition to the not -to -exceed compensation specified above, CITY
has set aside the not -to -exceed compensation amount of Nine Hundred Fifty -Nine Thousand Five
Hundred Ninety Dollars ($959,590) for the performance of Additional Services (as defined below).
The total compensation for performance of the Services, Additional Services and any reimbursable
expenses specified in Exhibit C, shall not exceed Nine Million Seven Hundred Twenty -Five
Thousand One Hundred Eight Dollars ($9,725,108), as detailed in Exhibit C.
"Additional Services" means any work that is determined by CITY to be necessary for the
proper completion of the Project, but which is not included within the Scope of Services described
at Exhibit A, Exhibit A-1, Exhibit A-2, and Exhibit A-3. CITY may elect to, but is not required to,
authorize Additional Services up to the maximum amount of compensation set forth forAdditional
Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written
authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized
by CITY with a Task Order assigned and authorized by CITY's Project Manager, as identified in
Section 13 (Project Management). Each Task Order shall be in substantially the same form as
Exhibit E, entitled "PROFESSIONAL SERVICES TASK ORDER". Each Task Order shall contain a specific
scope of services, schedule of performance and maximum compensation amount, in accordance
with the provisions of this Agreement. Compensation for Additional Services shall be specified by
CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in
Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's
Project Manager within the time specified by the Project Manager, and upon authorization by CITY
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RossDrulisCusenbery
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(defined as counter -signature by the CITY Project Manager), the fully exec ContractC17165953 hall
become part of this Agreement. The cumulative total compensation to CO Amendment3 ask
Orders authorized under this Agreement shall not exceed the amount of compensation set forth for
Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional
Services performed under an authorized Task Order and only up to the maximum amount of
compensation set forth for Additional Services in this Section 4. Performance of and payment for
any Additional Services are subject to all requirements and restrictions in this Agreement.
4.3 Rate Schedule. The applicable rates and schedule of payment are setforth in Exhibit "C-
1", entitled "Schedule of Rates" ("Rate Schedule"). CONSULTANT is not entitled to compensation
for any Services performed or reimbursement for expenses incurred to the extent that payment
would result in a total exceeding the maximum amount of compensation set forth herein."
SECTION 5. The following exhibits to the Contract are hereby deleted and replaced in the
entirety, or added, as indicated below, to read as set forth in the attachments to this Amendment,
which are hereby incorporated in full into this Amendment and into the Contract bythis reference:
a. Exhibit "A-3" entitled "SCOPE OF SERVICES, AMENDMENT No. 3," ADDED.
b. Exhibit "B" entitled "SCHEDULE OF PERFORMANCE, AMENDMENT No. 3,"
AMENDED, REPLACES PREVIOUS.
b. Exhibit "C" entitled "COMPENSATION, AMENDMENT No. 3," AMENDED,
REPLACES PREVIOUS.
SECTION 6. 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 7. 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.)
Vers.: Aug. 5, 2019
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SIGNATURES OF THE PARTIES
Item 8
Attachment A -
RossDrulisCusenbery
Architecture, Inc.
Contract C17165953
Amendment 3
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
Attachments:
ROSSDRULISCUSENBERY
ARCHITECTURE, INC.
Officer 1 DocuSigned by:
d�t.a(,lev� Gtisc,vt,l�wl�, �riln,cipc�,
By: m��Qcr^rnn
Mallory Cusenbery, Principal
Name:
Title: Principal
Officer 2 DocuSigned by:
I�VU(,ld bSS, (/f1
By:
Michael Ross, CEO
Name:
CEO
Title:
Exhibit "A-3": SCOPE OF SERVICES, AMENDMENT NO. 3 (ADDED)
Exhibit "B": SCHEDULE OF PERFORMANCE, AMENDMENT NO. 3 (AMENDED, REPLACES
PREVIOUS)
Exhibit "C": COMPENSATION, AMENDMENT NO. 3 (AMENDED, REPLACES PREVIOUS)
Vers.: Aug. 5, 2019
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EXHIBIT "A-3"
SCOPE OF SERVICES, AMENDMENT NO. 3
(ADDED)
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Attachment A -
RossDrulisCusenbery
Architecture, Inc.
Contract C17165953
Amendment 3
CONSULTANT will provide the Services detailed in this Exhibit "A-3" in addition to the Services
detailed under Exhibit "A", Exhibit "A-1", and Exhibit "A-2" of this Agreement.
Additional Scope of Work related to Task B.5 (PSB Construction Administration and
Closeout):
a. Perform extended Construction Administration services to cover extra days granted
to the General Contractor through September 30, 2023
b. Perform additional construction phase Building Information Modeling (BIM)
coordination with the General Contractor
c. Accommodate increased review of material substitutions and accelerated review of
submitted products to mitigate excessive instances of specified products being
discontinued and products having extremely long procurement times due to supply
chain impacts
d. Resolve construction issues due to General Contractor errors where deductions to
the construction contract were made to offset design team costs
e. Assist with storm -related damage assessments due to the extreme weather events
that occurred near the end of 2022 and in early 2023.
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EXHIBIT "B"
SCHEDULE OF PERFORMANCE, AMENDMENT NO. 3
(AMENDED- REPLACES PREVIOUS)
Item 8
Attachment A -
RossDrulisCusenbery
Architecture, Inc.
Contract C17165953
Amendment 3
Consultant must perform the Services to complete each milestone within the date specified below,
measured from the date of City's issuance of the Notice to Proceed (NTP) with the Services. The
time to complete each milestone may be increased or decreased by mutual written agreement of
Consultant and City so long as all Services are completed within the Term of the Agreement.
Consultant must provide a detailed schedule of Services consistent with the schedule below within
2 weeks of receipt of the notice to proceed.
Milestones
Target Completion Date
Task A.1: PSB Preliminary Design - CEQA / EIR
December 2017
Task B.1: PSB Schematic Design
September 2018
Task B.2: PSB Design Development
March 2019
Task B.3: PSB Permit Set / Construction Documents
December 2019
Task B.4: PSB Project Bidding and Award
September 2020
Task B.5: PSB Construction Administration and Closeout
September 2023
Task C.1: Garage Preliminary Design — CEQA / EIR
December 2017
Task C.2: Garage Schematic Design
February 2018
Task C.3: Garage Design Development
March 2018
Task C.4: Garage Permit Set / Construction Documents
May 2018
Task C.5: Garage Project Bidding and Award
October 2018
Task C.6: Garage Construction Administration and Closeout
August 2020
Task E.2: PSB Threat Assessment (Predesign)
January 2018
Task E.4: PSB Programming Services for Technical Systems
January 2018
Task E.6: PSB Fixtures, Furniture and Equipment Design and
Procurement Documents
March 2020
Task E.7: PSB Commissioning (Cx)
June 2023
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EXHIBIT "C"
COMPENSATION, AMENDMENT NO. 3
(AMENDED, REPLACES PREVIOUS)
Item 8
Attachment A -
RossDrulisCusenbery
Architecture, Inc.
Contract C17165953
Amendment 3
The CITY agrees to compensate the CONSULTANT for Services performed in accordance with the
terms and conditions of this Agreement, and as set forth in the budget schedule below, or as
further specified in each Task Order approved by the CITY pursuant to this Agreement.
Compensation shall be calculated based on the hourly rate schedules attached as Exhibit C-1 up to
the not -to -exceed budget amount for each task set forth below.
CONSULTANT shall perform the tasks and categories of work in 3 phases as outlined and budgeted
below. The CITY's Project Manager may approve in writing the transfer of budget amounts
between any of the tasks or categories listed below provided the total compensation does not
exceed the amounts set forth in Section 4 (Not to Exceed Compensation) of this Agreement. Each
phase requires a separate written Notice -to -Proceed (NTP). Phases 2 and 3 will be authorized at
CITY's discretion, and upon approval of environmental review and budget for the project.
(CONTINUED ON THE NEXT PAGE.)
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BUDGET SCHEDULE
NOT TO EXCEED AMOUNT
Item 8
Attachment A -
RossDrulisCusenbery
Architecture, Inc.
Contract C17165953
Amendment 3
BASIC SERVICES (TASK)
Phase 1
Phase 2
Phase 3
Task A.1: PSB Preliminary Design
$242696
-CEQA/EIR
,
Task B.1: PSB Schematic Design
$495,700
Task B.2: PSB Design
$856,210
Development
Task B.3: PSB Permit Set /
$2,966,336
Construction Documents
Task B.4: PSB Project Bidding and
$90,127
Award
Task B.5: PSB Construction
$2,050,973
Administration and Closeout
Task C.1: Garage Preliminary
$121,347
Design — CEQA / EIR
Task C.2: Garage Schematic
$142,607
Design
Task C.3: Garage Design
$190143 ,
Development
Task C.4: Garage Permit Set /
$528,367
Construction Documents
Task C.5: Garage Project Bidding
$19,014
and Award
Task C.6: Garage Construction
$512,220
Administration and Closeout
Task E.2: PSB Threat Assessment
$47,634
(Predesign)
Task E.4: PSB Programming
$34,164
Services for Technical Systems
Task E.6: PSB Fixtures, Furniture
and Equipment (FF&E) Design
$287,622
and Procurement Documents
Task E.7: PSB Commissioning (Cx)
$27,173
Additional Excess Insurance
$25000
,
Coverage
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BASIC SERVICES (TASK)
Phase 1
Phase 2
Phase 3 Contract C17165953 ALS
Amendment 3
$2,590,366 $8,631,333
TOTAL BASIC SERVICES
$2,155,501
$3,891,466
REIMBURSABLES
$128,185
$128,185
SUBTOTAL (BASIC SERVICES &
REIMBURSABLES)
$2,283,686
$3,891,466
$2,590,366
$8,765,518
ADDITIONAL SERVICES
$637,090
$322,500
$959,590
TOTAL NOT -TO -EXCEED AMOUNT
$2,920,776
$3,891,446
$2,912,866
$9,725,108
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or overtime, word processing, photocopying, in-
house printing, insurance and other ordinary business expenses are included within the scope of
payment for Services and are not reimbursable expenses. CITY will reimburse CONSULTANT for the
following expenses at cost, provided that the expenses were reasonably and necessarily incurred
solely for providing the Services:
A. Travel outside the San Francisco Bay Area, including transportation and meals, will be
reimbursed at actual cost subject to limits of the CITY's policy for reimbursement of travel
and meal expenses for CITY employees.
B. Long distance telephone service charges, cellular phone service charges, overnight
delivery, facsimile transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses must be accompanied by appropriate documentation of the
claimed expenditure, such as written receipts. Any expense anticipated to be more than $500 must
be approved in writing in advance by the CITY's Project Manager.
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City Council
Staff Report
From: City Manager
CITY O F Report Type: CONSENT CALENDAR
PALO Lead Department: Community Services
ALTO Meeting Date: May 15, 2023
Report #:2303-1200
TITLE
Amendment No. 5 to the Agreement between the City of Palo Alto and the Friends of the Junior
Museum and Zoo for Mutual Cooperation and Support to Extend the Agreement through June
2024 and Accept a $75,000 Grant for a Community Engagement Specialist; CEQA status — not a
project
RECOMMENDATION
Staff recommends the City Council approve and authorize the City Manager to execute
Amendment Number 5 to the Agreement between the City of Palo Alto and the Friends of the
Palo Alto Junior Museum and Zoo for mutual cooperation and support (Agreement)
(Attachment A) and allow the City Manager to approve future amendments that fall within
statutory limits for cost and term length. This amendment extends the Agreement through
June 2024 and gives the City a $75,000 grant to fund a Community Engagement Specialist
position.
BACKGROUND AND ANALYSIS
The Friends of the Palo Alto Junior Museum and Zoo (Friends) have played an integral role in
the support and operation of the Palo Alto Junior Museum and Zoo (JMZ) since their inception
in 1962. In 2002, the Friends approached the City of Palo Alto (City) to create a public -private
partnership with the intent to raise the capital funds required to renovate the JMZ facility.'
Since then, the Friends continue to be an active advocate for the JMZ and provide annual and
capital support for JMZ programs.
In November 2007, the partnership between the City and the Friends was strengthened via a
written agreement that provided the Friends a greater role in providing input on program
planning and the City a more active role with the Friends. The latter was accomplished by the
1 City Council, December 9, 2002; SR #442:02,
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=79959
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JMZ Manager joining the Board as an ex officio member and the City Council assigning a liaison
to the Friends Board. The agreement provides the framework for City staff to work in unison
with the Friends Board to realize mutual goals.
The first Agreement with the Friends began in 2007 and has been amended every three years.
The amendments were approved as follows:
• Amendment No.1, dated December 3, 2012
• Amendment No.2, dated January 4, 2017
• Amendment No.3, dated April 30, 2020
• Amendment No.4, dated July 1, 2020
The Parties now wish to amend the Agreement to extend the term through June 30, 2024. This
year, the terms are largely the same but for the addition of a clause to enable a temporary part-
time City staff position funded by the Friends. As part of the Parties' activities for July 1, 2022
through June 30, 2024, the Friends shall give a one-time grant of $75,000 to the City to fully
fund a part-time community engagement specialist for a two-year term (City classification: Staff
Specialist, SEIU-H).
This amendment also authorizes the City Manager to approve and sign future amendments to
this Agreement if they are within the existing limits set in the Municipal Code at PAMC 2.30.210
($85,000 per fiscal year or less and term of 3 years or less). Otherwise, the municipal code
requires that amendments to this MOU be approved by Council, even if only to extend the term
of the MOU beyond an additional six months.
This MOU would be categorized as a Joint Venture under the City's Public/Private Partnership
Policy.2
FISCAL/RESOURCE IMPACT
The Friends grant to the City will fund a Staff Specialist position at 0.48 FTE for two years. This
classification has an average hourly rate of $37.42. If approved by the Council, the recognition
of revenue, salary expense, and FTE will be incorporated as a part of the FY 2024 Operating
Budget Process as an amendment to the Proposed Budget for FY 2024.
STAKEHOLDER ENGAGEMENT
Staff engaged with the Friends of the JMZ to develop the Amendment to the Agreement.
2 However, this MOU does not create a "Partnership" or "Joint Venture" under California law as it relates to
business entities.
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Item 9 Staff Report
ENVIRONMENTAL REVIEW
Approval of this amendment is not a project under the California Environmental Quality Act.
ATTACHMENTS
Attachment A: Amendment Number 5 to the Agreement between City of Palo Alto and the
Friends of the Junior Museum & Zoo
APPROVED BY:
Kristen O'Kane, Community Services Director
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Item 9
Attachment A -
%mendment Number 5 to
the Agreement between
AMENDMENT NO.5 TO AGREEMENT BETWEEN THE CITY OF PAUl
City of Palo Alto and the
THE FRIENDS OF THE PALO ALTO JUNIOR MUSEUM AND Friends of the Junior
Museum & Zoo
This Amendment No. 5 (this "Amendment") to MUTUAL COOPERATION AND SUPPORT
AGREEMENT (the "Contract" as defined below) is effective as of July 1, 2022, by and between the
CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and THE FRIENDS OF THE
PALO ALTO JUNIOR MUSEUM AND ZOO, a California public benefit corporation organized under
the California Nonprofit Public Benefit Corporation Law, located at 1451 Middlefield Road, Palo
Alto, CA 94303 ("FRIENDS"). CITY and FRIENDS are referred to collectively as the "Parties" in this
Amendment.
RECITALS
A. The Contract (as defined below) was entered into by and between the Parties hereto
for the provision of assisting the City's Junior Museum and Zoo ("JMZ") staff in supporting and
advocating on behalf of JMZ operation, programs, and activities over the past thirty-eight years.
The Friends intend to benefit the City and the Palo Alto community by providing certain services,
which the Parties intend to be rendered in accordance with the general scope of the City's policy on
Public/Private Partnerships. By the Contract, the Friends will, support the operation- and
education -related programs, activities, and opportunities offered by or within the JMZ, as detailed
therein.
S. The Parties now wish to amend the Contract in order to extend the term through
June 30, 2024, as detailed herein.
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. C08125982 entitled
"MUTUAL COOPERATION AND SUPPORT AGREEMENT" between FRIENDS
and CITY, dated December 17, 2007, as amended by:
Amendment No.1, dated December 3, 2012
Amendment No.2, dated January 4, 2017
Amendment No.3, dated April 30, 2020
Amendment No.4, dated July 1, 2020
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 1.1 of the Contract is hereby amended to read as follows:
Vers.: Aug. 5, 2019
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Item 9
Attachment A -
.mendment Number 5 to
the Agreement between
JMZ, its reduced -priced admissions programs, spe City of Palo Alto and the eer
and employment opportunities, and other service Friends of the Junior
Museum & Zoo
d. Greater diversity among the Museum's paid staff, een
mentoring programs.
C. The Friends shall grant the City $75,000 after the position has been filled and
the employee has completed a probationary period of six months.
SECTION 5. 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 6. Incorporation of Recitals. The recitals set forth above are terms of this
Amendment and are fully incorporated herein by this reference.
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 THE FRIENDS OF THE PALO ALTO
JUNIOR MUSEUM AND ZOO
Officer 1
City Manager By:
Name: Lauren Angelo
Approved: Title: President
Officer 2 (Required for Corp. or LLC)
gy:
Director, Community Services 5
Name: Sabah Mansoor
Title: Vice President
APPROVED AS TO FORM:
Assistant City Attorney
Vers.: Aug. 5, 2019
Page 3 of 3
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Item 10
Item 10 Staff Report
City Council
Staff Report
From: City Manager
CITY O F Report Type: CONSENT CALENDAR
PALO Lead Department: Administrative Services
ALTO
Meeting Date: May 15, 2023
Report #:2303-1065
TITLE
Approval of Professional Services Agreement Contract Number S23184570 with Foster & Foster
Consulting Actuaries, Inc. in an Amount Not to Exceed $147,180 to Provide Actuary Services for
a Period of Five Years: CEQA Status — Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their
designee to execute Contract No. S23184570 (Attachment A) with Foster & Foster Consulting
Actuaries, Inc. to provide Actuary Services for a term of five years and a total amount not -to -
exceed $147,180, including $133,800 for basic services and $13,390 for additional services.
BACKGROUND
The City requires actuarial services for the biennial valuation related to its Other Post -
Employment Benefits (OPEB) and annual Governmental Accounting Standards Board 75
Accounting and Financial Reporting for OPEB (GASB 75), as required by GASB. On February 6,
20231, the Council adopted the City's Retiree Benefit Funding Policy which requires reporting
every four years of the City's progress towards the target of reaching a 90% funded status by FY
2036. In addition, an analysis of retiree benefits is required on an ad hoc basis to support labor
negotiations and financial planning work performed by staff.
Bartel & Associates has been the City's actuary since 2011 and was selected through a
competitive solicitation. Bartel and Associates was acquired by Foster and Foster Consulting
Actuaries, Inc. in 2022. The contract with Foster and Foster expired in February 2023.
1 City Council, February 6, 2023; Agenda Item #
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82218
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ANALYSIS
The use of actuary is necessary due to complexity of calculations and to provide expertise in
comprehensive discussions with Finance Committee and City Council relating to pension
liabilities. The following tasks are included in the attached contract.
Project Description
a) OPEB Benefits Valuation
Determination of the City's OPEB or retiree medical benefit actuarial liability on a biennial basis,
Actuarially Determined Contributions (ADC), and sensitivity analysis.
(b) GASB 75
Prepares on annual basis the accounting and financial reports for OPEB purposes, including
note disclosures, required summary information, and allocation per fund, in compliance with
GASB 75.
c) CaIPERS Review and Rate Proiections
Prepares a comprehensive analysis of the CaIPERS Pension Valuations and impact of changes in
in CaIPERS actuarial assumptions, including but not limited to funding policy, economic and
demographic assumptions, and other risk mitigation strategies.
(d) Other As -Needed Actuarial Analyses
Actuarial analyses related to labor negotiations, CaIPERS pension valuations, or long-term
financial analyses. Additionally, the consultant may require attending arbitration hearings,
Finance Committee meetings, Council meetings, etc.
Summary of Competitive Solicitation Process
On November 8, 2022, a request for proposal (RFP) for Actuarial OPEB Valuation, GASB 75 and
CaIPERS Review and Rate Projections was posted on Planet Bids, the City's eProcurement
portal, as a multi -award RFP. The City received only one proposal which is from our current
actuarial consultant, Foster and Foster.
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Project Description
Actuarial OPEB Valuation & GASB 75 / 184570
Proposed Length of Project
6 years
Number of Vendors Notified
1,115
Number of Proposal Packages Downloaded
16
Total Days to Respond to Proposal
36 calendar days
Pre -Proposal Meeting
Non -Mandatory
Number of Proposals Received
1
Proposal Price Range
$133,800 plus provision for additional
services
Public Link to Solicitation
PlanetBids Vendor Portal2
An evaluation committee consisting of three City staff members from the Administrative
Department evaluated the proposal according to the criteria identified in RFP. Based on the
proposal staff decided that Foster & Foster will continue to provide the abovementioned
services due to firm's demonstrated experience and expertise with OPEB valuation and
comprehensive knowledge of GASB's requirements for reporting of these employee benefits.
Compared to the last six -year agreement with Foster & Foster (previously Bartel and
Associates), the attached five-year agreement assumes an overall 36% decrease, or $82,820,
mainly due to reduction of additional pension forecasting and analysis that was performed for
the Retirement Benefit Policy and from three to two biennial actuarial valuation of OPEB. The
cost for the biennial valuation has increased by 14%, from $37,000 to $42,250 since the last
biennial valuation done in 2021.
FISCAL/RESOURCE IMPACT
This action approves professional services for contract costs that are included in Administrative
Services Department FY 2023 General Fund Adopted Budget. No Council action is needed to
adjust the budget.
STAKEHOLDER ENGAGEMENT
Administrative Services was consulted and coordinated with internally on selection of this
recommended firm.
ENVIRONMENTAL REVIEW
2 https://pbsystem.planetbids.com/portal/25569/bo/bo-detail/99622
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Council action on this item is not a project as defined by CEQA because an award of a contract
for actuarial services is a continuing administrative or maintenance activity. CEQA Guidelines
section 15378(b)(2).
ATTACHMENTS
Attachment A — Foster and Foster Consulting Actuaries, Inc. Contract S23184570
APPROVED BY:
Kiely Nose, Assistant City Manager
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Attachment A - Foster
and Foster Consulting
Actuaries Inc Contract No.
CITY OF PALO ALTO CONTRACT NO. S2318451 S23184570
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND FOSTER AND FOSTER CONSULTING
ACTUARIES, INC.
This Agreement for Professional Services (this "Agreement") is entered into as of the 14th day of
March, 2023 (the "Effective Date"), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation ("CITY"), and FOSTER AND FOSTER CONSULTING
ACTUARIES, INC., a Florida corporation, located at 411 Bore! Avenue, Suite 620, San Mateo,
CA 94402 ("CONSULTANT").
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A. CITY intends to prepare a bi-annual actuarial valuation of its Other Post -Employment
Benefits (OPEB), Government Accounting Standards Board (GASB) 75 accounting information
and CalPERS Review and Rate Projection (the "Project") and desires to engage a consultant to
provide an actuarial valuation of the City's OPEB in compliance with applicable GASB and
actuarial requirements. in connection with the Project (the "Services", as detailed more fully in
Exhibit A).
B. CONSULTANT represents that its employees and subconsultants, if any, possess the
necessary professional expertise, qualifications, and capability, and all required licenses and/or
certifications to provide the Services.
C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit A, entitled "SCOPE OF SERVICES".
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this
Agreement, the parties agree as follows:
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described
in Exhibit A in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
CITY may elect to, but is not required to, authorize on -call Services up to the maximum
compensation amount set forth in Section 4 (Not to Exceed Compensation).
CONSULTANT shall provide on -call Services only by advanced, written authorization
from CITY as detailed in this Section. On -call Services, if any, shall be authorized by
Professional Services
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CITY, as needed, with a Task Order assigned and approved by CI Actuaries Inc Contract No. er,
as identified in Section 13 (Project Management). Each Task Order 523184570 ally
the same form as Exhibit A -I entitled "PROFESSIONAL SERVIC R".
Each Task Order shall contain a specific scope of services, schedule of performance and
maximum compensation amount, in accordance with the provisions of this Agreement.
Compensation for on -call Services shall be specified by CITY in the Task Order, based on
whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set
forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's
Project Manager within the time specified by the Project Manager, and upon authorization
by CITY (defined as counter -signature by the CITY Project Manager), the fully executed
Task Order shall become part of this Agreement. The cumulative total compensation due
to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the
amount of compensation set forth in Section 4. CONSULTANT shall only be compensated
for on -call Services performed under an authorized Task Order and only up to the
maximum compensation amount set forth in Section 4. Performance of and payment for
any on -call Services are subject to all requirements and restrictions in this Agreement.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through March 30, 2028,
unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance
of Services under this Agreement. CONSULTANT shall complete the Services within the term of
this Agreement and in accordance with the schedule set forth in Exhibit B, entitled "SCHEDULE
OF PERFORMANCE". Any Services for which times for performance are not specified in this
Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and
timely manner based upon the circumstances and direction communicated to the CONSULTANT.
CITY's agreement to extend the term or the schedule for performance shall not preclude recovery
of damages for delay if the extension is required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services shall be based on the compensation structure
detailed in Exhibit C, entitled "COMPENSATION," including any reimbursable expenses
specified therein, and the maximum total compensation shall not exceed One Hundred Thirty -
Three Thousand, Eight Hundred Dollars ($133,800.00). The hourly schedule of rates, if
applicable, is set out in Exhibit C-1, entitled "SCHEDULE OF RATES." Any work performed or
expenses incurred for which payment would result in a total exceeding the maximum
compensation set forth in this Section 4 shall be at no cost to the CITY.
® Optional Additional Services Provision (This provision applies only if checked and a
not -to -exceed compensation amount for Additional Services is allocated below under this
Section 4.)
In addition to the not -to -exceed compensation specified above, CITY has set aside the not -
to -exceed compensation amount of Thirteen Thousand Three Hundred Eighty Dollars
($13,380.00) for the performance of Additional Services (as defined below). The total
Professional Services
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compensation for performance of the Services, Additional Services Actuaries Inc Contract No. ble
expenses specified in Exhibit C, shall not exceed One Hundred F S23184570 nd
One Hundred Eighty Dollars ($147,180.00), as detailed in Exhibitt.
"Additional Services" means any work that is determined by CITY to be necessary for the
proper completion of the Project, but which is not included within the Scope of Services
described at Exhibit A. CITY may elect to, but is not required to, authorize Additional
Services up to the maximum amount of compensation set forth for Additional Services in
this Section 4. CONSULTANT shall provide Additional Services only by advanced,
written authorization from CITY as detailed in this Section. Additional Services, if any,
shall be authorized by CITY with a Task Order assigned and authorized by CITY's Project
Manager, as identified in Section 13 (Project Management). Each Task Order shall be in
substantially the same form as Exhibit A-1, entitled "PROFESSIONAL SERVICES TASK
ORDER". Each Task Order shall contain a specific scope of services, schedule of
performance and maximum compensation amount, in accordance with the provisions of
this Agreement. Compensation for Additional Services shall be specified by CITY in the
Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit
C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's
Project Manager within the time specified by the Project Manager, and upon authorization
by CITY (defined as counter -signature by the CITY Project Manager), the fully executed
Task Order shall become part of this Agreement. The cumulative total compensation to
CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the
amount of compensation set forth for Additional Services in this Section 4.
CONSULTANT shall only be compensated for Additional Services performed under an
authorized Task Order and only up to the maximum amount of compensation set forth for
Additional Services in this Section 4. Performance of and payment for any Additional
Services are subject to all requirements and restrictions in this Agreement.
SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the Services performed and the applicable charges (including, if
applicable, an identification of personnel who performed the Services, hours worked, hourly rates,
and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT's schedule
of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of
completion of each task. The information in CONSULTANT's invoices shall be subject to
verification by CITY. CONSULTANT shall send all invoices to CITY's Project Manager at the
address specified in Section 13 (Project Management) below. CITY will generally process and
pay invoices within thirty (30) days of receipt of an acceptable invoice.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed
by CONSULTANT or under CONSULTANT's supervision. CONSULTANT represents that it,
its employees and subcontractors, if any, possess the professional and technical personnel
necessary to perform the Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subcontractors, if any, have and shall maintain during the term
of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature
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that are legally required to perform the Services. All Services to be furnish Actuaries Inc Contract No. NT
under this Agreement shall meet the professional standard and qualit S23184570 ong
professionals in the same discipline and of similar knowledge and skill engaged in related work
throughout California under the same or similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
may affect in any manner the Project or the performance of the Services or those engaged to
perform Services under this Agreement, as amended from time to time. CONSULTANT shall
procure all permits and licenses, pay all charges and fees, and give all notices required by law in
the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT's errors and omissions, including, but not limited to, the costs of corrections such
errors and omissions, any change order markup costs, or costs arising from delay caused by the
errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds the CITY's
stated construction budget by ten percent (10%) or more, CONSULTANT shall make
recommendations to CITY for aligning the Project design with the budget, incorporate CITY
approved recommendations, and revise the design to meet the Project budget, at no additional cost
to CITY.
SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees
that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be
deemed at all times to be an independent contractor and shall be wholly responsible for the manner
in which CONSULTANT performs the Services requested by CITY under this Agreement.
CONSULTANT and any agent or employee of CONSULTANT will not have employee status
with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY
pertaining to or in connection with any retirement, health or other benefits that CITY may offer its
employees. CONSULTANT will be responsible for all obligations and payments, whether
imposed by federal, state or local law, including, but not limited to, FICA, income tax
withholdings, workers' compensation, unemployment compensation, insurance, and other similar
responsibilities related to CONSULTANT's performance of the Services, or any agent or
employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as
creating an employment or agency relationship between CITY and CONSULTANT or any agent
or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY
shall be construed as providing for direction as to policy and the result of CONSULTANT's
provision of the Services only, and not as to the means by which such a result is obtained.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign
or transfer any interest in this Agreement nor the performance of any of CONSULTANT's
obligations hereunder without the prior written approval of the City Manager. Any purported
assignment made without the prior written approval of the City Manager will be void and without
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effect. Subject to the foregoing, the covenants, terms, conditions and provisi Actuaries Inc Contract No. ent
will apply to, and will bind, the heirs, successors, executors, administrator S23184570 the
parties.
SECTION 12. SUBCONTRACTING.
® Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the
Services to be performed under this Agreement without the prior written authorization of the City
Manager or designee. In the event CONSULTANT does subcontract any portion of the work to
be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and
omissions of subcontractors.
CONSULTANT shall be responsible for directing the work of any subcontractors and for any
compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning
compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts
and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with
the prior written approval of the City Manager or designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Drew Ballard as the
CONSULTANT's Project Manager to have supervisory responsibility for the performance,
progress, and execution of the Services and represent CONSULTANT during the day-to-day
performance of the Services. If circumstances cause the substitution of the CONSULTANT's
Project Manager or any other of CONSULTANT's key personnel for any reason, the appointment
of a substitute Project Manager and the assignment of any key new or replacement personnel will
be subject to the prior written approval of the CITY's Project Manager. CONSULTANT, at
CITY's request, shall promptly remove CONSULTANT personnel who CITY finds do not
perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate
or timely completion of the Services or a threat to the safety of persons or property.
CITY's Project Manager is Rocelyn Fernando, Administrative Services Department, Accounting
Division, 250 Hamilton Avenue, 4th Floor, Palo Alto, CA, zip code: 94301, Telephone:(650) 329-
2301 CITY's Project Manager will be CONSULTANT's point of contact with respect to
performance, progress and execution of the Services. CITY may designate an alternate Project
Manager from time to time.
SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without
limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications,
computations, models, recordings, data, documents, and other materials and copyright interests
developed under this Agreement, in any form or media, shall be and remain the exclusive property
of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights
which arise from creation of the work product pursuant to this Agreement are vested in CITY, and
CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual
property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall
make any of such work product available to any individual or organization without the prior written
approval of the City Manager or designee. CONSULTANT makes no representation of the
suitability of the work product for use in or application to circumstances not contemplated by the
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Scope of Services.
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S23184570 J
SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized
representatives to audit, at any reasonable time during the term of this Agreement and for four (4)
years from the date of final payment, CONSULTANT's records pertaining to matters covered by
this Agreement, including without limitation records demonstrating compliance with the
requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain
and retain accurate books and records in accordance with generally accepted accounting principles
for at least four (4) years after the expiration or earlier termination of this Agreement or the
completion of any audit hereunder, whichever is later.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend
and hold harmless CITY, its Council members, officers, employees and agents (each an
"Indemnified Party") from and against any and all demands, claims, or liability of any nature,
including death or injury to any person, property damage or any other loss, including all costs and
expenses of whatever nature including attorney's fees, experts fees, court costs and disbursements
("Claims") resulting from, arising out of or in any manner related to performance or
nonperformance by CONSULTANT, its officers, employees, agents or contractors under this
Agreement, regardless of whether or not it is caused in part by an Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to
require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active
negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of,
or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its
officers, employees, agents or contractors under this Agreement.
16.3. The acceptance of CONSULTANT's Services and duties by CITY shall not
operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive
the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under
this Agreement is effective unless it is in writing in accordance with Section 29.4 of this
Agreement. No delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. Any waiver granted shall
apply solely to the specific instance expressly stated. No single or partial exercise of any right or
remedy will preclude any other or further exercise of any right or remedy.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in Exhibit
D, entitled "INSURANCE REQUIREMENTS". CONSULTANT and its contractors, if any, shall
obtain a policy endorsement naming CITY as an additional insured under any general liability or
automobile policy or policies.
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18.2. All insurance coverage required hereunder shall Actuaries Inc Contract No. gh
carriers with AM Best's Key Rating Guide ratings of A -:VII or higher k 523184570 or
authorized to transact insurance business in the State of California. Any and all contractors of
CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
full force and effect during the term of this Agreement, identical insurance coverage, naming CITY
as an additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be filed with CITY
concurrently with the execution of this Agreement. The certificates will be subject to the approval
of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary
coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except
after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation
or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30)
days' notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written
notice of the cancellation or modification within two (2) business days of the CONSULTANT's
receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates
evidencing the insurance are provided to CITY's Chief Procurement Officer during the entire term
of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement, including
such damage, injury, or loss arising after the Agreement is terminated or the term has expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written
notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material
obligations under this Agreement, in addition to all other remedies provided under this Agreement
or at law, the City Manager may terminate this Agreement sooner upon written notice of
termination. Upon receipt of any notice of suspension or termination, CONSULTANT will
discontinue its performance of the Services on the effective date in the notice of suspension or
termination.
19.2. In event of suspension or termination, CONSULTANT will deliver to the
City Manager on or before the effective date in the notice of suspension or termination, any and
all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed,
prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such
work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).
19.3. In event of suspension or termination, CONSULTANT will be paid for the
Services rendered and work products delivered to CITY in accordance with the Scope of Services
up to the effective date in the notice of suspension or termination; provided, however, if this
Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be
obligated to compensate CONSULTANT only for that portion of CONSULTANT's Services
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provided in material conformity with this Agreement as such determinatio Actuaries Inc Contract No. ity
Manager acting in the reasonable exercise of his/her discretion. The fo S23184570 ill
survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19. , 20� 25,
27, 28, 29 and 30.
19.4. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made
in accordance with Section 17 (Waivers).
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the Project Manager at the address of
CONSULTANT recited on the first page of this Agreement.
CONSULTANT shall provide written notice to CITY of any change of address.
SECTION 21. CONFLICT OF INTEREST.
21.1. In executing this Agreement, CONSULTANT covenants that it presently
has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which
would conflict in any manner or degree with the performance of the Services.
21.2. CONSULTANT further covenants that, in the performance of this
Agreement, it will not employ subcontractors or other persons or parties having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any
conflict arises.
21.3. If the CONSULTANT meets the definition of a "Consultant" as defined by
the Regulations of the Fair Political Practices Commission, CONSULTANT will file the
appropriate financial disclosure documents required by the Palo Alto Municipal Code and the
Political Reform Act of 1974, as amended from time to time.
SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.
22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended
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from time to time, CONSULTANT certifies that in the performance of this lActuaries Inc Contract No. not
discriminate in the employment of any person due to that person's race, ski 523184570 der
identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic
information or condition, housing status, marital status, familial status, weight or height of such
person. CONSULTANT acknowledges that it has read and understands the provisions of Section
2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the
penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining
to nondiscrimination in employment.
22.2. CONSULTANT understands and agrees that pursuant to the Americans
Disabilities Act ("ADA"), programs, services and other activities provided by a public entity to
the public, whether directly or through a contractor or subcontractor, are required to be accessible
to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a
manner that complies with the ADA and any other applicable federal, state and local disability
rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate
against persons with disabilities in the provision of services, benefits or activities provided under
this Agreement.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY'S Environmentally
Preferred Purchasing policies which are available at CITY's Purchasing Department, hereby
incorporated by reference and as amended from time to time. CONSULTANT shall comply with
waste reduction, reuse, recycling and disposal requirements of CITY's Zero Waste Program. Zero
Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and,
third, recycling or composting waste. In particular, CONSULTANT shall comply with the
following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to CITY generated from a
personal computer and printer including but not limited to, proposals, quotes, invoices, reports,
and public education materials, shall be double -sided and printed on a minimum of 30% or greater
post -consumer content paper, unless otherwise approved by CITY's Project Manager. Any
submitted materials printed by a professional printing company shall be a minimum of 30% or
greater post -consumer material and printed with vegetable -based inks.
(b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in
accordance with CITY's Environmental Purchasing Policy including but not limited to Extended
Producer Responsibility requirements for products and packaging. A copy of this policy is on file
at the Purchasing Department's office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from
the facility accepting the pallets to verify that pallets are not being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62
(Citywide Minimum Wage), as amended from time to time. In particular, for any employee
otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a
calendar week within the geographic boundaries of the City, CONSULTANT shall pay such
employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030
for each hour worked within the geographic boundaries of the City of Palo Alto. In addition,
CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in
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accordance with Palo Alto Municipal Code Section 4.62.060. Actuaries Inc Contract N
S23184570 J
SECTION 25. NON -APPROPRIATION. This Agreement is subject to the fiscal provisions of
the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to
time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the
event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal
year in the event that funds are only appropriated for a portion of the fiscal year and funds for this
Agreement are no longer available. This Section shall take precedence in the event of a conflict
with any other covenant, term, condition, or provision of this Agreement.
SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC
WORKS CONTRACTS.
® 26.1. This Project is not subject to prevailing wages and related
requirements. CONSULTANT is not required to pay prevailing wages and meet related
requirements under the California Labor Code and California Code of Regulations in the
performance and implementation of the Project if the contract:
(1) is not a public works contract;
(2) is for a public works construction project of $25,000 or less, per California
Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or
(3) is for a public works alteration, demolition, repair, or maintenance project of
$15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and
1773.3(j).
SECTION 27. CLAIMS PROCEDURE FOR "9204 PUBLIC WORKS PROJECTS". For
purposes of this Section 27, a "9204 Public Works Project" means the erection, construction,
alteration, repair, or improvement of any public structure, building, road, or other public
improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code
Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in
Exhibit F, entitled "Claims for Public Contract Code Section 9204 Public Works Projects".
This Project is not a 9204 Public Works Project.
SECTION 28. CONFIDENTIAL INFORMATION.
28.1. In the performance of this Agreement, CONSULTANT may have access to
CITY's Confidential Information (defined below). CONSULTANT will hold Confidential
Information in strict confidence, not disclose it to any third party, and will use it only for the
performance of its obligations to CITY under this Agreement and for no other purpose.
CONSULTANT will maintain reasonable and appropriate administrative, technical and physical
safeguards to ensure the security, confidentiality and integrity of the Confidential Information.
Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its
employees, agents and subcontractors, if any, to the extent they have a need to know in order to
perform CONSULTANT's obligations to CITY under this Agreement and for no other purpose,
provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality
and security obligations of this Agreement.
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Actuaries Inc Contract No.1
28.2. "Confidential Information" means all data, informatiL S23184570 out
limitation "Personal Information" about a California resident as defined in Civil Code Section
1798 et seq., as amended from time to time) and materials, in any form or media, tangible or
intangible, provided or otherwise made available to CONSULTANT by CITY, directly or
indirectly, pursuant to this Agreement. Confidential Information excludes information that
CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it
was provided or has subsequently become publicly known other than by a breach of this
Agreement; (ii) was rightfully in CONSULTANT's possession free of any obligation of
confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by
CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is
independently developed by employees of CONSULTANT without any use of or access to the
Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an
authorized representative of CITY.
28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential
Information to the extent required by order of a court of competent jurisdiction or governmental
body, provided that CONSULTANT will notify CITY in writing of such order immediately upon
receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing
so), to give CITY an opportunity to oppose or otherwise respond to such order.
28.4. CONSULTANT will notify City promptly upon learning of any breach in
the security of its systems or unauthorized disclosure of, or access to, Confidential Information in
its possession or control, and if such Confidential Information consists of Personal Information,
CONSULTANT will provide information to CITY sufficient to meet the notice requirements of
Civil Code Section 1798 et seq., as applicable, as amended from time to time.
28.5. Prior to or upon termination or expiration of this Agreement,
CONSULTANT will honor any request from the CITY to return or securely destroy all copies of
Confidential Information. All Confidential Information is and will remain the property of the CITY
and nothing contained in this Agreement grants or confers any rights to such Confidential
Information on CONSULTANT.
28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the
terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.
SECTION 29. MISCELLANEOUS PROVISIONS.
29.1. This Agreement will be governed by California law, without regard to its
conflict of law provisions.
29.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
29.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys' fees expended in connection with that
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action. The prevailing party shall be entitled to recover an amount equal toActuarle5 Inc Contract No. lue
of legal services provided by attorneys employed by it as well as any attornS23184570 ird
parties.
29.4. This Agreement, including all exhibits, constitutes the entire and integrated
agreement between the parties with respect to the subject matter of this Agreement, and supersedes
all prior agreements, negotiations, representations, statements and undertakings, either oral or
written. This Agreement may be amended only by a written instrument, which is signed by the
authorized representatives of the parties and approved as required under Palo Alto Municipal
Code, as amended from time to time.
29.5. If a court of competent jurisdiction finds or rules that any provision of this
Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in
full force and effect.
29.6. In the event of a conflict between the terms of this Agreement and the
exhibits hereto (per Section 30) or CONSULTANT'S proposal (if any), the Agreement shall
control. In the event of a conflict between the exhibits hereto and CONSULTANT'S proposal (if
any), the exhibits shall control.
29.7. The provisions of all checked boxes in this Agreement shall apply to this
Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.
29.8. All section headings contained in this Agreement are for convenience and
reference only and are not intended to define or limit the scope of any provision of this Agreement.
29.9. This Agreement may be signed in multiple counterparts, which, when
executed by the authorized representatives of the parties, shall together constitute a single binding
agreement.
SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is
selected below, is hereby attached and incorporated into this Agreement by reference as though
fully set forth herein:
®
EXHIBIT A:
SCOPE OF SERVICES
®
EXHIBIT A-1
PROFESSIONAL SERVICES TASK ORDER
®
EXHIBIT B:
SCHEDULE OF PERFORMANCE
®
EXHIBIT C:
COMPENSATION
®
EXHIBIT C-1:
SCHEDULE OF RATES
®
EXHIBIT D:
INSURANCE REQUIREMENTS
THIS A GREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS
ARE ATTACHED.
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CONTRACT No. 523184570 Actuaries Inc Contract No.
SIGNATURE PAGE S23184570
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement as of the date first above written.
CITY OF PALO ALTO
City Manager
APPROVED AS TO FORM:
FOSTER & FOSTER CONSULTING
ACTUARIES, INC.
DocuSigned by:
By:I�^U'�
7DB A641B 46
Name: Mary i za e h Redding
Title:
City Attorney or designee By
Name:
Title:
Senior Consulting Actuary
DocuSigned by:
E
n.Atubt,AAA, Oaw' ,so
4501DE29AAD9405_
Jonathan Davidson
Chief Legal Officer
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EXHIBIT A Actuaries Inc Contract No.
SCOPE OF SERVICES S23184570
CONSULTANT shall provide the Services detailed in this Exhibit A, entitled "SCOPE OF
SERVICES".
A. Project Purpose
CONSULTANT shall prepare bi-annual actuarial valuation of the City's Other Post -
Employment Benefits (OPEB), Government Accounting Standard Board (GASB) 75 accounting
information, and CalPERS review and rate projections. The last OPEB valuation was prepared
as of June 30, 2021. Additionally, the City requires as -needed actuarial services for labor
negotiations, CalPERS projections, or other financial analyses.
B. Other Post -Employment Benefits Valuation
CONSULTANT shall provide actuarial valuation of the City's OPEB in compliance with
applicable GASB and actuarial requirements. Specifically, the consultant shall provide:
1. A determination of the City's retiree medical benefit actuarial liability on a biannual basis
starting with the first valuation as of June 30, 2023.
2. Within 60 days after receipt of the necessary payroll and other information from CITY,
the CONSULTANT will meet with CITY to discuss the OPEB liability and funding level options
and will recommend actuarial and economic assumptions appropriate for the City based on plan
benefits, anticipated funding levels, and the current economic environment.
3. The required annual total contribution amounts needed to amortize the cost over the
amortization period selected.
4. A breakdown of this liability by the following:
• Age (<65 v. >65)
• Benefit Group (Tier)
• Fund
• Labor Group
• Miscellaneous v. Safety employees
• Normal Costs v. Unfunded Actuarial Accrued Liability (UAAL) Amortization
• Liability and Normal Cost by Bargaining Unit (7 units)
• Current Employees/Retired Employees and Dependents (survivors) (2 groups)
5. A description of the actuarial basis and assumptions used in the valuation.
6. A description of assumption and other changes since the last valuation.
7. A written executive summary describing the results of the valuation.
8. Sensitivity Analysis
• Investment return analysis using all CalPERS Trust options
• Discount Rate
• Amortization Period
• Implied Subsidy
• Other analyses suggested by proposer
9. Preparation of the California Employers' Retiree Benefit Trust (CERBT) Fund
documentation and certifications needed by CITY to send to CalPERS.
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CONSULTANT shall perform the following activities to complete the bi-a Actuaries Inc Contract No, ew
of the City's OPEB programs: S23184570
1. Meet with City representatives including Finance Committee and/or City Council, as well
as staff, at least three to four times. The preliminary meeting shall be conducted to discuss and to
understand assumptions and methods before the study is undertaken. In addition, at the first
meeting, a project schedule will be agreed upon. The subsequent meeting will be held to explain
and to present the results of the project. CONSULTANT will then attend Finance Committee
and/or City Council meetings to present results.
2. Submit a draft report for review and approval prior to submission of final report
3. Prepare a final written report summarizing conclusions and documenting the analysis.
4. The report should include exhibits summarizing all appropriate results for two fiscal
years (i.e. fiscal year ending June 30, 2023 and projected June 30, 2024). The report should also
include information analyzing the impact of any changes in assumptions and methodology as
well as plan experience relative to what would have been expected to occur during the preceding
two years.
C. GASB 75 Reports
In addition to the OPEB valuation work described in Section B, annual reports providing the
accounting information required under GASB Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions (GASB 75). CONSULTANT shall
prepare GASBS 75 reports on annual basis. Each report shall include all actuarial information
required for GASBS 75:
1. Note Disclosures
2. Required Summary Information (RSI)
3. Supporting Exhibits, including the Crossover Test
4. Journal Entries
5. An allocation of OPEB amounts by Fund, and by Department within the General Fund.
6. Benchmark survey comparing the City's GASB 75 information with other agency GASB
75 plan studies prepared by Foster and Foster.
D. CalPERS Review and Rate Projections
In addition to the work above, the CITY will require a comprehensive analysis of CalPERS
Pension Valuations and the impact of changes in CalPERS actuarial assumptions, including but
not limited to funding policy, economic and demographic assumptions, and other risk mitigation
strategies. Specifically, the consultant shall provide:
1. CalPERS Review
A comprehensive review of the City's CalPERS program:
• Review historical actuarial valuation reports,
• Summary of historical information for the Miscellaneous and Safety plans,
• Participant demographic information,
• Funded status
• Discussion of option the City has to pay down the unfunded liability.
2. Contribution projections include projected rates with and without employee cost sharing.
3. Additional projections using a 5.3% discount rate for all years or such other rate as
specified by the City. The contribution projection will include normal cost and unfunded liability
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payments, and show employee cost sharing separately. Actuaries Inc Contract No.
4. Sensitivity analysis and Pension Funding Policy review: S23184570
• Review of CalPERS asset allocation, annual inflation, and discount rate
• Recommend factors for sensitivity analysis
• Perform contribution and funded status projections for selected factors
• Analysis of the impact on funding goals outlined in the City's Pension Funding Policy.
5. Pension Trust analysis:
• Trust projections based on the City's Pension Funding Policy
• Evaluate future trust contribution policy, including one-time contributions made to the
Pension Trust when excess funding is available at year-end.
• Compare savings for contributing Pension Trust assets to CalPERS vs. retaining them in
the Section 115 trust, including using the Pension Trust for Additional Discretionary
Payments, a conceptual "fresh start" to consolidate and re -amortize bases, and other
funding strategies.
6. Other As -Needed Actuarial Analyses
Throughout the contract period, CITY may require additional actuarial analyses related to
labor negotiations, CalPERS pension valuations, or long-term financial analyses.
Additionally, CITY may require the CONSULTANT to attend arbitration hearings,
Finance Committee meetings, Council meetings, etc.
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Actuaries Inc Contract No.
S23184570
EXHIBIT A-1
PROFESSIONAL SERVICES TASK ORDER
CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions
of the Agreement referenced in Item 1 below. All exhibits referenced in Item 8 are incorporated into this
Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical
and supporting personnel required by this Task Order as described below.
CONTRACT NO.
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
IA. MASTER AGREEMENT NO. (MAYBE SAME AS CONTRACT /P.O. NO. ABOVE):
1B. TASK ORDER NO.:
2. CONSULTANT NAME:
3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $
5. BUDGET CODE
COST CENTER
COST ELEMENT
WBS/CIP
PHASE
6. CITY PROJECT MANAGER'S NAME & DEPARTMENT:
7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A)
MUST INCLUDE:
• SERVICES AND DELIVERABLES TO BE PROVIDED
• SCHEDULE OF PERFORMANCE
• MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)
• REIMBURSABLE EXPENSES, if any (with "not to exceed" amount)
8. ATTACHMENTS: A: Task Order Scope of Services B (if any):
I hereby authorize the performance of the
work described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:
Name
Title
Date
I hereby acknowledge receipt and acceptance of
this Task Order and warrant that I have
authority to sign on behalf of Consultant.
APPROVED:
COMPANY NAME:
BY:
Name
Title
Date
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EXHIBIT B I
Actuaries Inc Contract No.
SCHEDULE OF PERFORMANCE S23184570
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so
long as all work is completed within the term of the Agreement. CONSULTANT shall provide a
detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the
notice to proceed ("NTP") from the CITY.
Completion
Milestones
Number of Days/Weeks (as specified below)
from NTP
1. Biennial OPEB (retiree medical plan)
As directed by CITY Project Manager within the
actuarial valuations reports as of June
term of the agreement.
30, 2023 and 2025 with detailed
analysis and results breakdowns and
projections as outlines in the scope of
services. Video meetings with Finance
Committee and City Council
2. GASB 75 accounting and allocation
As directed by CITY Project Manager within the
by Fund and Department as of June
term of the agreement.
30, 2023 -June 30, 2027
3. CalPERS Review and Rate
As directed by CITY Project Manager within the
Projections including up to 2 meetings
term of the agreement.
[via Zoom] with City staff, Finance
Committee and/or Cit Council
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EXHIBIT C
COMPENSATION
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S23184570
CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms
and conditions of this Agreement, and as set forth in the budget schedule below. Compensation
shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed
budget amount for each task set forth below.
CITY's Project Manager may approve in writing the transfer of budget amounts between any of
the tasks or categories listed below, provided that the total compensation for the Services,
including any specified reimbursable expenses, and the total compensation for Additional Services
(if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this
Agreement.
CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and
Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or
expenses incurred for which payment would result in a total exceeding the maximum amount of
compensation set forth in this Agreement shall be at no cost to the CITY.
BUDGET SCHEDULE
TASK
NOT TO EXCEED AMOUNT
Task 1
$84,500
Biennial OPEB (retiree medical plan) actuarial valuations
reports as of June 30, 2023 and 2025 with detailed analysis
and results breakdowns and projections as outlines in the
scope of services.
- Video meetings with City staff to review the
valuation results and Finance Committee
Task 2
$23,300
( - GASB 75 accounting and allocation by Fund and
Department as of June 30, 2023 -June 30, 2027
Task 3
$26,000
(- CalPERS Review and Rate Projections, including
up to 2 meeting [via Zoom] with City staff, Finance
Committee and/or City Council)
Sub -total for Services
$133,800.00
Reimbursable Expenses (if any)
$0
Total for Services and Reimbursable Expenses
$133,800.00
Additional Services (if any, per Section 4)
$13,380.00,
Maximum Total Compensation
$147,180.00
Professional Services
Rev. Dec.15, 2020
Page 19 of 23
Item 10: Staff Report Pg. 23 Packet Pg. 108 of 229
DocuSign Envelope ID: 7167E2CB-6C0E-4E12-B6CC-88696CEC6CA4
REIMBURSABLE EXPENSES
Item 10
Attachment A - Foster
and Foster Consulting
:tuaries Inc Contract N
523184570 J
CONSULTANT'S ordinary business expenses, such as administrative, overhead,
administrative support time/overtime, information systems, software and hardware,
photocopying, telecommunications (telephone, internet), in-house printing, insurance and
other ordinary business expenses, are included within the scope of payment for Services and
are not reimbursable expenses hereunder.
Reimbursable expenses, if any are specified as reimbursable under this section, will be
reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will
be reimbursed are: NONE up to the not -to -exceed amount of: $0.00.
A. Travel outside the San Francisco Bay Area, including transportation and meals, if
specified as reimbursable, will be reimbursed at actual cost subject to the City of Palo Alto's
policy for reimbursement of travel and meal expenses.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges, if specified as reimbursable, will be reimbursed at actual
cost.
All requests for reimbursement of expenses, if any are specified as reimbursable under this
section, shall be accompanied by appropriate backup documentation and information.
Professional Services
Rev. Dec.15, 2020
Page 20 of 23
Item 10: Staff Report Pg. 24 Packet Pg. 109 of 229
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT'S schedule of rates is as follows:
Sff
Senior Consulting Actuary(Redding, Ballard, Lin)
Senior Actuarial Analyst (Herm)
Actuarial Analyst
hourly Rate
$ 475
$ 325
$ 275
Item 10
Attachment A - Foster
and Foster Consulting
Actuaries Inc Contract No.
523184570
Professional Services
Rev. Dec.15, 2020
Page 21 of 23
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Packet Pg. 110 of 229
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Item 10
Attachment A - Foster
and Foster Consulting
EXHIBIT D I
Actuaries Inc Contract No.
INSURANCE REQUIREMENTS S23184570
CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE
CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW,
AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A -:VII, OR HIGHER, LICENSED OR
AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN.
MINIMUM LIMITS
REQUIRED
TYPE OF COVERAGE
REQUIREMENT
EACH
OCCURRENCE
AGGREGATE
YES
WORKER'S COMPENSATION
STATUTORY
STATUTORY
STATUTORY
YES
EMPLOYER'S LIABILITY
STATUTORY
YES
GENERAL LIABILITY, INCLUDING
BODILY INJURY
$1,000,000
$1,000,000
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE
$1,000,000
$1,000,000
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
BODILY INJURY & PROPERTY
$1,000,000
$1,000,000
LIABILITY
DAMAGE COMBINED.
BODILY INJURY
$1,000,000
$1,000,000
- EACH PERSON
$1,000,000
$1,000,000
YES
AUTOMOBILE LIABILITY,
- EACH OCCURRENCE
$1,000,000
$1,000,000
INCLUDING ALL OWNED, HIRED,
PROPERTY DAMAGE
$1,000,000
$1,000,000
NON -OWNED
BODILY INJURY AND PROPERTY
$1,000,000
$1,000,000
DAMAGE, COMBINED
YES
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
ALL DAMAGES
$1,000,000
APPLICABLE), AND NEGLIGENT
PERFORMANCE
YES
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST
AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM
OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY
CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS'
COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL
INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONSULTANT'S AGREEMENT TO INDEMNIFY CITY.
II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE
AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COMIPORTAL/PORTAL.CFM?COMPANYID=25569
III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL
INSUREDS:
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
Professional Services
Rev. Dec.15, 2020
Page 22 of 23
Item 10: Staff Report Pg. 26 Packet Pg. 111 of 229
DocuSign Envelope ID: 7167E2CB-6C0E-4E12-B6CC-88696CEC6CA4
Item 10
Attachment A - Foster
and Foster Consulting
B. CROSS LIABILITY Actuaries Inc Contract No.
S23184570
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
IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON
OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE
CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE
OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT
OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE
FILED WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL:
HTTPS://W W W.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569
OR
HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET BIDS HOW TO.ASP
Professional Services
Rev. Dec.15, 2020
Page 23 of 23
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Item 11
Item 11 Staff Report
CITY COUNCIL
STAFF REPORT
From: City Manager
CITY O F Report Type: CONSENT CALENDAR
PALO Lead Department: Public Works
ALTO Meeting Date: May 15, 2023
Report #: 2301-0866
TITLE
Authorization for approval of a Blanket Purchase Order with Granite Rock Company in the
Amount of $500,000 Annually for a Three -Year Term, beginning July 1, 2023 through June 30,
2026, for a Total Not -to -Exceed Amount of $1,500,000 for Hot Mix Asphalt Materials for Public
Works and Utilities Departments; CEQA Status — Not a Project
RECOMMENDATION
Staff recommends that Council authorize the City Manager or their designee to execute a
blanket purchase order with Granite Rock Company for Hot Mix Asphalt materials in the
not -to -exceed amount of $500,000 annually, for a total not -to -exceed amount of $1,500,000
over a three-year term from July 1, 2023 to June 30, 2026.
BACKGROUND
The Public Works and Utilities departments have working groups that use Hot Mix Asphalt.
Public Works uses Hot Mix Asphalt for performing repairs on damaged sections of roadway,
sidewalk, and bicycle paths, and for projects designed to ensure safety and durability of streets
as measured by the pavement condition index (PCI) throughout the City. Utilities typically uses
Hot Mix Asphalt for permanent trench restoration and roadway resurfacing. Cold Mix -Cut Back
Asphalt, which is supplied to through a separate blanket purchase order, is typically used for
temporarily backfilling trenches and ramping up metal trench plates.
ANALYSIS
There are two primary methods of manufacturing Hot Mix Asphalt, either using a batch plant or
a drum plant. A batch plant allows City crews to specify the mix needed for each unique job. A
drum plant does not have the ability to mix asphalt to order, and City crews are forced to use
whatever mix is being produced at the drum plant on any given day. The City requires that the
primary supplier of asphalt produce their product in a batch plant, as this affords the various
crews the most flexibility when it comes to scheduling and completing jobs throughout the
City. Staff also requires that the plant be located within 10 miles of Palo Alto's Municipal
Item 11: Staff Report Pg. 1 Packet Pg. 113 of 229
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Item 11 Staff Report
Services Center (MSC). The proximity of the plant is important due to the limited shelf life of
Hot Mix Asphalt; transporting hot material over an extended distance will impact the quality of
the Hot Mix Asphalt (HMA) as well as City repaving projects. With the importance of the City's
PCI score, using the best materials for the job is imperative.
A Request for Quotation (RFQ) for Hot Mix Asphalt was sent to three potential vendors and
posted on Planet Bids. Quotes were received from Granite Rock Company and one other
company. The other company was deemed non -responsive because they were unable to
provide all the materials requested in the Scope of Work. Granite Rock Company met all the
requirements, including having a plant located less than 10 miles away, in Redwood City.
Table 1: Summary of Bid Process:
PlanetBids Link: https://pbsystem.planetbids.com/hub/bm/bm-detail/98552#bidlnformation
Hot Mix Asphalt Materials
Bid Name/Number RFQ #185945
Proposed Length of Project Three years
Total Days to Respond to Bid 17
Pre -Bid Meeting No
Number of Responsive Bids Received: 1
Base Bid Price Range $1,499,505
The unit prices in the bid have increased significantly compared to the fixed prices for Fiscal
Years 2021-2023 under the current blanket purchase order. Under the recommended blanket
purchase order, the cost of materials has increased by roughly 35%, attributed to inflation and
overall rise of cost in commodities. Due to this increase in cost, staff recommends a total
blanket purchase order in the amount of $500,000 annually for a total not -to -exceed amount of
$1,500,000, whereas the existing blanket purchase order had a total not -to -exceed amount of
$1,200,0001. Table 2 compares the total annual contract prices for Fiscal Years 2023 and 2024.
1 City Council, November 2, 2020; Agenda Item #2 ; SR#11578,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
c m rs/yea r-archive/2020-2/i d-11578. pdf
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Table 2: Contract Price for Fiscal Year 2023 and 2024
Approx.
Qty. (Tons)
Description
FY23
Unit
Price
FY24
Total
Price
FY23
Unit
Price
FY24
Total
Price
1,000
Asphalt Concrete 3/", medium
$98.40
$98,400
$124.60
$124,600
2,000
Asphalt Concrete, Y2", fine
$101.40
$202,800
$125.78
$251,560
100
Asphalt Concrete, 3/8", fine
$111.90
$11,190
$128.45
$12,845
300
Asphalt Concrete, %", fine
$112.90
$33,870
$129.55
$38,865
100
Asphalt Concrete, Sheet Asphalt
$124.40
$12,440
$130.65
$13,065
1,000
Track Coat, SS -1H
$10.45
$10,450
$8.90
$8,900
Total
$369,150
$499,835
Staff recommends that Council authorize the blanket purchase order for Hot Mix Asphalt with
Granite Rock Company as the primary supplier. Granite Rock Company has been the supplier
under previous blanket purchase orders, and staff has consistently received product that
met both state and the City's standards for consistent temperature and aggregate size.
FISCAL/RESOURCE IMPACT
Funding for the purchase of material under this blanket order is available in the Fiscal Year 2023
Adopted Public Works and Utilities Department operating budgets. Staff recommends that
Council approve the not -to -exceed amount of $500,000 per year; however, actual spending is
dictated by need and will be controlled by each department. The bid table that Granite Rock
Company submitted represents a menu of available asphalt products with unit pricing2. Utilities
and Public Works estimate annual needs of $135,000 and $365,000, respectively. Staffing levels
and planned work deferments may impact those estimates and will be considered before
expending the funds. Funding for contract years two and three are contingent upon Council
approval of each department's budget for each subsequent year.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement for the recommended blanket order was limited to the procurement
process for reaching out to prospective bidders.
2 Granite Rock Co. Bid Form; https://www.cityofpaIoaIto.org/files/assets/public/public-works/public-
services/contracts/attachment-a-granite-rock-co.pdf
Item 11: Staff Report Pg. 3 Packet Pg. 115 of 229
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Item 11 Staff Report
ENVIRONMENTAL REVIEW
This purchase is exempt from the California Environmental Quality Act under the CEQA
guidelines (Sections 15061 and 15301(c)).
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
Item 11: Staff Report Pg. 4 Packet Pg. 116 of 229
Item 12
Item 12 Staff Report
CITY OF
PALO
ALTO
City Council
Staff Report
From: City Manager
Report Type: PUBLIC HEARING
Lead Department: Administrative Services
Meeting Date: May 15, 2023
Report #:2303-1184
TITLE
PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy Assessments
for the Downtown Business Improvement District for FY 2024.
RECOMMENDATION
Staff recommends that Council hold a public hearing and adopt a resolution declining to levy
assessments for Fiscal Year 2024 for the Downtown Business Improvement District (BID).
BACKGROUND
The Palo Alto City Council established the Palo Alto Downtown Business Improvement District
(BID) in 2004 pursuant to the California Parking and Business Improvement Area Law to maintain
economic vitality and physical maintenance of the Palo Alto Downtown business district. The
Council appointed the Palo Alto Downtown Business and Professional Association (PADBPA), a
non-profit corporation, as the advisory board and administrator of the BID. PADBPA, acting
through its independent Board of Directors, has historically advised the Council on the method
and basis for levy of assessments in the BID and has managed the expenditure of revenues
derived from the assessments.
In March of 2020, public health measures in response to the COVID-19 pandemic resulted in a
sharp contraction of business activity. In May of 2020, Council refunded FY 2020 assessments
considering the pandemic -related challenges that Downtown businesses were facing. At
approximately the same time, organizational changes were occurring at PADBPA. As a result of
these developments, on June 30, 2020, the City allowed the contract with PADBPA to expire.
With the economic impacts of COVID-19 continuing to effect local businesses through fiscal years
2021 and 2022, the Council also declined to levy assessments on downtown businesses for those
years. No BID -funded activities have occurred in these years.
On March 1, 2022 the Finance Committee discussed options for the FY 2023 Business Registry
Item 12: Staff Report Pg. 1 Packet Pg. 117 of 229
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Item 12 Staff Report
Certificate (BRC) and BID processes (CMR 139021). The Committee reviewed three options for
the BRC and BID and forwarded their recommendation to the City Council on April 4, 2022, CMR
139012, to restore the BRC in the 2022-2023 collection timeframe, using the established structure
used in pre -pandemic years, while continuing the pause of BID assessments again in FY 2023. The
Palo Alto City Council directed Staff to proceed with this recommendation, and the City Council
approved a resolution to not levy an assessment for FY 2023.
Due to ongoing discussions between PADBPA, the Chamber and the City, it is again requested
that the BID assessment be paused in FY 2024. On April 24, 2023, Council adopted a resolution
of intent to not levy assessments for the Palo Alto Downtown Business Improvement District in
FY 2024 and setting a public hearing for May 15, 2023 (CMR 11823).
ANALYSIS
The attached proposed resolution will result in no collection of BID assessments for FY 2024. No
BID -funded activities will occur in FY 2024. This public hearing is held to afford interested parties
to provide input on the proposal to decline to levy BID assessments in FY 2024. City staff are
currently working on developing alternatives for a new streetscape design on University Avenue,
in consultation with stakeholders and the community more broadly. This work is expected to
generate a plan that will require businesses in the vicinity to invest in capital and potentially
operating costs for implementation. Since it is not clear at this point what structure would be
most appropriate for such investment, the BID is a valuable framework but not necessarily
structured as will be needed. The entities therefore request another year to continue exploring
options for the BID including input from organizations within the BID.
During the FY 2024 period staff will work with representatives from PADBPA and the Chamber to
do outreach to businesses to help identify priority projects that the BID assessment can go
towards and look at different structures for management of the BID.
FISCAL/RESOURCE IMPACT
The BID is set up as a separate fund within the City's accounting system. In recent years, the BID
has required a General Fund subsidy as collected assessments fell short of the costs of operating
1 03/02/2022 Finance Committee, Review the Business Registry Certificate and Business Improvement District FY 2023 Processes and
recommendation to City Council on the Renewal Processes
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
co m m ittee/2022/20220301/20220301 pfcs-linked. pdf
2 04/04/2022 City Council, Approve Finance Committee Recommendation for FY 2023 to (a) Return to the Customary Pre -Pandemic Business
Registry Certificate Requirement and Fee, and (b) Pause for One Year the Downtown Business Improvement District Assessment Program
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-cou ncil-agendas-
m i n utes/2022/20220404/20220404pccs ma m e n d ed I i n ked 1. pdf
3 4/24/2023 Adoption of a Resolution of Intent to Not Levy Assessments for the Palo Alto Downtown Business Improvement District
(BID) in FY 2024 and Setting a Public Hearing for May 15, 2023
https://recordsporta 1. pa loa lto.gov/Webl i n k/DocView.aspx?id=82349
Item 12: Staff Report Pg. 2 Packet Pg. 118 of 229
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the BID. The subsidy amounted to $70,000 in FY 2020. Historically, the City acts as the collection
agent for BID revenues and reimburses PADBPA's expenses after receipt and verification of
invoices. With the BID on pause, an estimated $80,000 will not be collected and no BID business
activities will be provided. In the past business activities have included the streetlight banner
program, Lytton Plaza enhancements, and summer concerts among others.
Additional staff resources include time from the City Manager's Office and Administrative
Services Department to provide oversight to the BID, administer the contract with Avenu
Insights (the third -party administrator for both BID and BRC) liaise with stakeholders, and
prepare the annual reauthorization.
STAKEHOLDER ENGAGEMENT
Staff has met and coordinated with members of PADBA and the Chamber of Commerce in
preparation of these recommendations. In FY 2024 staff will work with these entities to develop
options for a new management agreement for the BID.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the proposed
resolution is a City 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).
ATTACHMENTS
Attachment A: Resolution Declining to Levy Assessments in the Downtown Palo Alto Business
Improvement District for Fiscal Year 2024
APPROVED BY:
Kiely Nose, Assistant City Manager
Item 12: Staff Report Pg. 3 Packet Pg. 119 of 229
Item 12
*NOT YET APPROVED* AttachmentA-
Resolution Declining to
Levy Assessments in the
Resolution No. Downtown Palo Alto
Business Improvement
Resolution of the Council of the City of Palo Alto Providing that District for Fiscal Year
Assessments be Made Against Businesses Within the Downtow 2024
Business Improvement District for Fiscal Year 2024
RECITALS
A. The Parking and Business Improvement Area Law of 1989 (the "Law"), codified at
California Streets and Highways Code Sections 36500 et seq., authorizes the City Council to levy
an assessment against businesses within a parking and business improvement area which is in
addition to any assessments, fees, charges, or taxes imposed in the City.
B. Pursuant to the Law, the City Council adopted Ordinance No. 4819 establishing
the Downtown Palo Alto Business Improvement District (the "District") in the City of Palo Alto.
C. The City Council, by Resolution No. 8416, appointed the Board of Directors of the
Palo Alto Downtown Business & Professional Association ("PADBPA"), a California nonprofit
mutual benefit corporation, to serve as the Advisory Board for the District (the "Advisory Board").
D. Beginning in March of 2020 and continuing through the present, Downtown
businesses have been substantially impacted by the COVID-19 pandemic, the public health
measures taken to reduce the spread of the virus, and the resulting statewide economic
contraction. In recognition of these impacts, the City Council refunded fiscal year 2020 BID
assessments and declined to levy assessments in fiscal years 2021, 2022, and 2023.
E. As California emerges from the pandemic, local businesses are experiencing
additional impacts from changes in on -site and remote work patterns and other developments
in the local economy. In addition, PADBPA is experiencing organizational changes.
F. In recognition of the challenges continuing to effect downtown businesses and
understanding the need for a new direction on BID management, the City Council has determined
not to levy BID assessments for fiscal year 2024 (July 1, 2023 through June 30, 2024). As a result
of not making assessments, no BID -funded activities will occur in fiscal year 2024.
G. On April 24, 2023 the City Council adopted Resolution No. 10104, which declared
its intention not to levy assessments against Downtown businesses for Fiscal Year 2024 and
scheduled a public hearing for May 15, 2023 on the proposed decision to refrain from making
assessments.
H. On May 15, 2023 the City Council held a duly noticed public hearing at which all
interested persons were afforded the opportunity to hear and be heard.
270_20230425_t524 Item 12: Staff Report Pg. 4 Packet Pg. 120 of 229
Item 12
*NOT YET APPROVED* AttachmentA-
Resolution Declining to
Levy Assessments in the
NOW THEREFORE THE CITY COUNCIL OF THE CITY OF PALO ALTO RESOLVE Downtown Palo Alto
Business Improvement
SECTION 1. The Council hereby adopts the above Recitals as fin District for Fiscal Year d I
2024
SECTION 2. The City Council does hereby determine not to levy assessments against
businesses within the Downtown Palo Alto Business Improvement District for Fiscal Year 2024.
SECTION 3. The Council finds that the adoption of this Resolution does not meet the
definition of a project under Section 21065 of the California Environmental Quality Act and,
therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
Mayor
APPROVED:
City Manager
Director of Administrative Services
270_20230425_ts24 Item 12: Staff Report Pg. 5 Packet Pg. 121 of 229
Item 13
Item 13 Staff Report
City Council
-r, Staff Report
From: City Manager
CITY O F Report Type: ACTION ITEMS
PALO Lead Department: City Manager
ALTO
Meeting Date: May 15, 2023
Report #:2304-1281
TITLE
Update, Discussion, and Potential Direction regarding State and Federal Legislation
RECOMMENDATION
Staff recommends that the City Council receive an update on State Legislation and provide
feedback on bills to monitor or take direction on. This action item is a follow-up discussion to
the April 3, 2023 discussion.
BACKGROUND AND ANALYSIS
On April 3, 20231, the City Council received a brief legislative update from Townsend Public
Affairs (Townsend) related to recent actions in Sacramento and Washington, D.C. and asked
Townsend questions of interest. Specific State bills of interest to decide to support or oppose
was not discussed by City Council due to meeting time constraints. Staff has included an
updated memo from Townsend Public Affairs (Attachment A) with the current status of bills
organized in the same way as the last memo.
The memo is organized in the State updates section by pulling a handful of bills to the top and
including specific Palo Alto impact information for those bills. The Mayor has signed letters for 4
of the 5 bills in the first table of the memo and those letters are included as Attachment B. The
memo also lists other bills that Townsend is monitoring on behalf of the City. Staff also
requested the League of California Cities to join for this update, if available, to share their State
advocacy efforts on behalf of cities. Staff will continue to analyze these bills with Townsend as
they progress. If desired, Council members may also raise for discussion other legislation of
Palo Alto interest that is not listed in the memo or may recommend action on any of the bills
listed on the monitoring list. The memo also includes a brief Federal update.
1City Council, April 3, 2023 Item 13:
https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplate Id=1103
Item 13: Staff Report Pg. 1 Packet Pg. 122 of 229
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Item 13 Staff Report
As a reminder, the 2023 State legislative calendar (which includes deadlines and other
important dates) can be found online at: www.assembly.ca.gov/system/files/2023-
01/2023 legislative calendar final.pdf. This calendar provides helpful context when reviewing
the bills included in the Townsend memo.
Process:
The question of process was included in the April 3rd memo and the City Council did not get to
the discussion on that. The City Council expressed interest in being more involved in the
legislative advocacy process, particularly related to State legislation. Going forward, Townsend
and staff will regularly share legislative updates with the City Council based on the bills the City
is monitoring or has taken positions on. If there are additional bills that Council members feel
the City should be monitoring, please let staff know. Townsend and staff will review the bill and
recommend a course of action. For context, the listed bills are being monitored in anticipation
of potentially taking a position in the future depending on what happens with the bill.
Staff would like to confirm the process that the City Council will use for reviewing legislation. In
prior years, the process has varied between going first to the Policy and Services Committee
versus review directly by the full City Council. Given the City Council's interest in discussing and
receiving the updates, staff could plan on a monthly agenda item on legislation between
February and June each year. For 2023, this would be difficult as the City Council docket is very
full in June.
FISCAL/RESOURCE IMPACT
There is no additional funding needed for this update report. The City Council budgets annually
for the legislative advocacy services and these efforts are led by staff in the City Manager's
Office with stakeholder support across departments on key issues.
STAKEHOLDER ENGAGEMENT
Staff from multiple departments are involved in the legislative process in helping to review the
impacts of bills as well as discussing grant opportunities linked to state and federal programs.
ENVIRONMENTAL REVIEW
The City's legislative advocacy activities are not a project under section 15378(b)(25) of the
California Environmental Quality Act Guidelines (administrative activities that will not result in
direct or indirect physical changes in the environment).
ATTACHMENTS
Attachment A: State and Federal Update Memo from Townsend Public Affairs, May 2023
Attachment B: Recent Letters on State Legislation
APPROVED BY:
Ed Shikada, City Manager
Item 13: Staff Report Pg. 2 Packet Pg. 123 of 229
TOWNS END
PUBLIC AFFAIR
EST TPA 1998
MEMORANDUM
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023
To: The Honorable Lydia Kou and Members of the Palo Alto City Council
CC: Ed Shikada, City Manager
Chantal Cotton Gaines, Deputy City Manager
From: Townsend Public Affairs
Christopher Townsend, President
Niccolo De Luca, Vice President
Ben Goldeen, Federal Advocacy Manager
Alex Gibbs, Grants Manager
Carlin Shelby, Associate
Date: May 4, 2023
Subject: State and Federal Legislative Updates
Townsend Public Affairs, Inc. (TPA) has prepared this report for the City of Palo Alto to provide a
summary of State and Federal efforts, highlight the current status of the legislative process, and
identify various pieces of legislation that may be of interest to the City.
State Legislative Updates
With the deadline for measures with a fiscal impact to receive policy committee consideration by
April 28, the month of April featured policy committees with packed agendas. The deadline marks
an important milestone for bills, given that policy committees are responsible for the consideration
of a bill's policy implications. During the policy committee process, bills are amended and refined
pursuant to committee member and stakeholder input. If they are deemed to have a fiscal impact,
they move over to the appropriate Appropriations Committee, which gauges impacts on the state's
financial ability to support proposed programs. The shift from policy considerations to fiscal
considerations aligns with the state's budget process, which will kick into high gear in May, with
the release of the May Revision. The Revision will offer an assessment of the state's overall fiscal
condition and ability to accommodate additional spending programs contained within various bills.
In the coming weeks, appropriations committees may hold bills that are deemed to have too big
of a fiscal impact or one that is duplicative of existing budget programs. We can expect a growing
number of bills to turn into "2 -year bills," meaning that they will not progress during the 2023
Session, but may be revisited in 2024. Because the Legislative cycle runs a 2 -year span, all bills
that do not progress in the first year may be resurrected in the second year.
Priority Legislation for the City of Palo Alto
1. Bills With City Positions
The following chart provides an overview of bills with positions taken or pending positions to take
as of May 2, 2023.
Item 13: Staff Report Pg. 3 Packet Pg. 124 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023 ITION/
BILL SUMMARY/STATUS CITY IMPACT RECOMMENDATION
Appropriates $250,000,000 for the purpose of
Seismic safety improvements
implementing the Seismic Retrofitting Program for
align with the Palo Alto City
AB 1505
Soft Story Multifamily Housing
Council's 2023 Priority of
City Position:
(Rodriguez)
Status: Passed policy committee process in
Community Health and
Safety and will help the City
Support
first house, pending consideration from the
progress in the seismic
Appropriations Committee.
improvements objective.
Updates the definition of "gravely disabled" to
include a new focus on preventing serious
physical and mental harm stemming from a
One of the Palo Alto City
person's inability to provide for their needs for
Council Priorities for 2023 is
nourishment, personal or medical care, find
Community Health and
SB 43
appropriate shelter, or attend to self-protection or
Safety which includes some
City Position:
E man
personal safety, due to their mental or substance
focus on mental health. This
Support
use disorder.
bill seems to align with that
Status: Passed policy committee process in
priority.
first house, pending consideration from the
Appropriations Committee.
One of the Palo Alto City
Establishes a real-time, internet-based dashboard
Council Priorities for 2023 is
to collect, aggregate and display information about
Community Health and
the availability of beds in a range of psychiatric
Safety which includes some
SB 363
and substance abuse facilities,
focus on mental health. This
City Position:
E man
bill seems to align with that
Support
Status: Passed policy committee process in
priority. The City would need
first house, pending consideration from the
to further analyze the
Appropriations Committee.
resources required for this
legislation.
Extends the provisions of SB 35 (Wiener, Statutes
of 2017) indefinitely. Removes coastal exemption
Palo Alto has included in the
SB 423
and objective planning standards criteria.
Legislative Guidelines many
City Position:
(Wiener)
principles to support local
Pending Opposition
Status: Passed policy committee process in
control of land use and this
first house, pending consideration from the
bill contrasts with that.
Appropriations Committee.
The City Council supported
Requires law enforcement agencies to ensure any
similar legislation in 2022. As
non -confidential radio communications are
of Fall 2022, the City of Palo
accessible to the public.
Alto switched routine Palo
SB 719
Alto Police radio
City Position:
(Becker)
Status: Passed policy committee process in
transmissions to now be
Support
first house, pending consideration from the
broadcast on an unencrypted
Appropriations Committee.
channel. This bill in it's
current form should not affect
Palo Alto operations.
2. Bills With Recommended Action
The following chart features four measures that TPA advocates have identified with
recommendations for the City to take a formal position on, pending Council consideration and
approval. These measures are not as clearly covered by the City's Legislative Guidelines.
Item 13: Staff Report Pg. 4 Packet Pg. 125 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023
BILL
SUMMARY/STATUS
CITY IMPACT
POSITION/
RECOMMENDATION
This measure adds another
AB 12
Prohibits tenants from having to pay more than one
tool in protecting renters
against unreasonable housing
Recommendation:
Haney)
month's rent as a security deposit for furnished or
costs. This could benefit
Support
unfurnished rental property.
residents in Palo Alto who
utilize rental housing.
Requires DOJ to prepare a firearm -safety -certificate
study guide, separate from the current instruction
Could improve public safety
manual, explaining information covered on the
related to gun violence. City
AB 1598
firearm safety certificate test, and to develop a new
support demonstrates
Recommendation:
Berman
pamphlet on the risk and benefits of firearm
ownership.
continued support for
Assembly Member Berman's
Support
Status: Pending consideration from
legislative agenda.
Appropriations Committee.
Requires cities to switch to a .gov domain if they
have not already done so. Switching to a .gov
This could present a long and
domain is free of cost to qualified public agencies
costly process for the City to
and incorporates additional cyber security
comply and could impact
AB 1637
protections. While free of cost, the update could
constituents' ability to
Recommendation:
(Irwin)
create additional work for City IT departments.
communicate with the City.
Oppose
Amended to allow local governments until 2026 to
Further, the bill is without
comply.
state compliance support or
Status: Pending consideration from
tangible security benefits.
Appropriations Committee.
Lowers the necessary voter threshold from a two-
thirds supermajority to 55 percent to approve local
This bill creates another
general obligation (GO) bonds and special taxes for
optional tool for infrastructure
ACA 1
affordable housing and public infrastructure
financing and levels the
A uiar-
projects.
threshold between other
Recommendation:
Curry)
Status: Pending policy committee
public agencies that already
Support
consideration. Not required to adhere to typical
enjoy a 55% voter threshold,
such as school boards.
deadlines because it is a constitutional
amendment.
3. Notable bills with Recommendations to Monitor
The following chart encompasses priority legislation TPA advocates are monitoring on behalf of
the City. Positions noted in the "Recommendation" column reflect the suggested position of
"monitoring" from TPA advocates and are subject to change, pending a review of each bill's impact
on the City. Should the City Council or staff note any additional pieces of legislation to incorporate
into this chart, TPA advocates will gladly accommodate.
Item 13: Staff Report Pg. 5 Packet Pg. 126 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023
BILL SUBJECT SUMMARY STAiu MENDATION
Creates the California Housing Authority, as an
independent state body, the mission of which
Pending
would be to ensure that social housing
consideration
AB 309 (Lee)
Housing and
Land Use
developments that are produced and acquired
align with the goals of eliminating the gap
from the
Assembly
Monitoring
between housing production and regional
Appropriations
housing needs assessment targets and
Committee.
preserving affordable housing.
Extends modified teleconferencing provisions
Pending
AB 557
Open
under the Brown Act when a declared state of
consideration
Monitoring
(Hart)
Meetings
emergency is in effect, or in other situations
on Assembly
related to public health, indefinitely.
Floor.
Rescheduled
Allows subsidiary bodies of a local agency to
to a later
policy
AB 817
Open
use alternative teleconferencing provisions
committee
Monitoring
(Pacheco)
Meetings
under the Brown Act, without the need of a
date at the
State of Emergency.
request of the
author.
Pending
Requires public agencies to allow proposed and
consideration
AB 894
Housing and
existing developments to count underutilized
from the
Monitoring
(Friedman)
Land Use
and shared parking spaces toward a parking
Assembly
requirement imposed by the agency.
Appropriations
Committee.
Adopts a pilot program that requires property
Pending
consideration
AB 1317
Housing and
owners of new multi -family residential properties
from the
(Carrillo)
Land Use
in certain counties to unbundle the cost of
Assembly
Monitoring
parking from the cost of the housing unit.
Appropriations
Includes Santa Clara County.
Committee.
Modifies how the Bay Area Housing Finance
Authority (BAHFA) may collect and expend
revenue. Provides that actions taken by BAHFA
Pending
to raise, administer, or allocate funding for
consideration
AB 1319
Housing and
tenant protection, affordable housing
from the
Monitoring
(Wicks)
Land Use
preservation, or new affordable housing
Assembly
production, or to provide technical assistance
Appropriations
consistent with BAHFA's purpose is exempt
Committee.
from the California Environmental Quality Act
(CEQA).
Authorizes the Santa Clara Valley Water District
to assist unsheltered people living along
Pending
AB 1469
streams, in riparian corridors, or otherwise
consideration
Kalra
Homelessness
within the district's jurisdiction, in consultation
from the
Monitoring
with a city or the County of Santa Clara, to
Assembly
provide solutions or improve outcomes for the
floor.
unsheltered individuals.
Revenue,
Authorizes a city or local governments acting
Pending
AB 1476
Taxation, and
jointly to form a community and affordable
consideration
(Alvarez)
Economic
housing reinvestment agency for the purposes
from
Monitoring
Development
of financing infrastructure and housing projects,
Appropriations
purchasing and leasing property within the
Committee.
Item 13: Staff Report Pg. 6 Packet Pg. 127 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023
BILL SUBJECT SUMMARY STAiu MENDATION
redevelopment project area, and other powers
similar to those previously granted to
redevelopment agencies.
Requires temporary employees of cities and
counties to join existing bargaining units
accessible to permanent employees. Imposes
Pending
AB 1484
Labor
requirements on employers with temporary
consideration
(Zbur)
Relations and
employees hired to do the same or similar work
from
Monitoring
Retirement
performed by permanent employees. Requires
Appropriations
complaints alleging a violation of its provisions
Committee.
to be processed as unfair practice charges
under the Meyers-Milias-Brown Act.
Specifies that a local agency has disapproved a
housing project in violation of the Housing
Pending
Accountability Act (HAA) if it fails to make a
consideration
AB 1633
Housing and
determination that a project is exempt from the
from
Monitoring
Tin
Land Use
California Environmental Quality Act (CEQA), or
Appropriations
fails to adopt, certify, or approve certain
Committee
environmental documents under specified
circumstances.
Requires cities to switch to a .gov domain if they
have not already done so. Switching to a .gov
Pending
Informational
domain is free of cost to qualified public
consideration
AB 1637
Technology
agencies, and incorporates additional cyber
from
Monitoring
Irwin
(IT)
security protections. While free of cost, the
Appropriations
update could create additional work for City IT
Committee.
departments. Amended to allow local
governments until 2026 to comply.
Not required
Lowers the necessary voter threshold from a
to adhere to
ACA 1
Revenue and
two-thirds supermajority to 55 percent to
typical
A uiar-
Taxation
approve local general obligation (GO) bonds
deadlines
Monitoring
Cur
and special taxes for affordable housing and
because it is a
public infrastructure projects.
constitutional
amendment.
Creates a new issuing process for concealed
Pending
SB2
carry weapons (CCW) licenses following the
consideration
(Portantino)
Public Safety
U.S. Supreme Court ruling in New York Rifle
from
Monitoring
and Pistol Association v. Bruen from June of
Appropriations
2022.
Committee.
Pending
SB 50
Prohibits peace officers from initiating a traffic
consideration
(Bradford)
Public Safety
stop for specified low-level infractions unless a
from
Monitoring
separate, independent basis for a stop exists.
Appropriations
Committee.
Passed
Judiciary
Labor
Committee.
SB 252
Relations and
Requires CaIPERS to divest existing fossil fuel
Referred to
Monitoring
(Gonzalez)
Retlirement
company investments on or before July 1, 2030.
Appropriations
Committee for
assessment of
fiscal impact.
Item 13: Staff Report Pg. 7 Packet Pg. 128 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023
BILL SUBJECT SUMMARY STAiu MENDATION
Establishes the Local Public Library Partnership
Pending
Program in which the State Librarian would
consideration
SB 321
Community
coordinate with each local public library to
from
Monitoring
(Ashby)
Services
ensure each student is issued a student
tions
Committee.
success card by 3rd grade and increase their
Committee.
access to a library.
Requires local planning agencies to submit to
HCD an electronic copy of its housing inventory
and post it on their website. The inventory
posting must include a notice describing how
Pending
property owners can submit information to the
consideration
SB 405
Housing and
planning agency indicating interest in adding a
from
Monitoring
(Cortese)
Land Use
site to the land inventory and developing the
Appropriations
site for housing. Also requires HCD to launch a
Committee.
pilot program to develop a methodology to
analyze if the inventory of suitable land has
identified adequate sites to accommodate a
city's RHNA goals.
Requires natural gas corporations to credit
customers all revenues, including accrued
Pending
SB 429
Energy and
interest, received as a result of the greenhouse
consideration
(Bradford)
Utilities
gas cap and trade program. Requires those
on Senate
Monitoring
credits to be distributed during the February
Floor.
billing cycle, so as to coincide with the highest
usage gas utility bill during the year.
Identified as the SB 9 (Atkins, Statutes of 2022)
"Clean-up
Pending
bill." Among other things, prevents
consideration
SB 450
Housing and
local agencies from creating zoning,
from
Monitoring
(Atkins)
Land Use
subdivision, and design rules that do not apply
Appropriations
equally to all development within a particular
Committee.
area.
Pending
SB 537
Governance
Allows for members to teleconference in cases
consideration
Becker
and
where a board, commission, or advisory body
from Senate
Monitoring.
Transparency
encompasses a multi -jurisdictional service area.
Judiciary
Committee.
Provides renter protections including expanding
Pending
consideration
SB 567
Housing and
the population of protected tenants, limiting
from
Monitoring
(Durazo)
Land Use
allowable rent increases, and closing loopholes
Appropriations
related to the no-fault just cause for eviction.
Committee.
Requires the PUC, Energy Commission, and
the Federal Energy Regulatory Commission to
Pending
SB 572
Energy and
each consider imposing additional requirements
consideration
(Stern)
Utilities
to protect ratepayers from price spikes,
from
Monitoring
stranded assets, duplication of services, and the
Appropriations
risk of windfall profiteering and market
Committee.
manipulation in wholesale and retail markets.
Creates a new type of low -barrier navigation
Pending
SB 634
centers called "opportunity housing," and
consideration
Becker
Homelessness
expands the by -right approval for low -barrier
from the
Monitoring
navigation centers to include opportunity
Appropriations
housing projects.
Committee.
Item 13: Staff Report Pg. 8 Packet Pg. 129 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Affairs, May 2023
____
BILL SUBJECT SUMMARY STAiu ME ON
Enacts the California Family Home Construction Pending
SB 834 and Homeownership Bond Act of 2023 (bond consideration
(Portantino) Housing act), which, if adopted, would authorize the from the Monitoring
issuance of bonds in the amount of Appropriations
$25,000,000,000. Committee.
State Budget Update
During the last week of April, the Senate Democratic Caucus released its revised budget priorities
document, in preparation for the Governor's release of the May Revision of the budget. Beginning
in January of each year, the Governor releases a preliminary budget proposal, which kicks off the
call -and -response process between the Administration and the Legislature on how best to spend
taxpayer dollars. The budget process is in a unique position this year, with the extension of the
tax filing deadline for individuals and businesses as a result of the severe winter storms. This
extension will impact the delivery of returns data the Department of Finance will need to compile
an accurate and comprehensive spending plan.
One of the fundamental differences between the Governor's and the Legislature's spending plans
is whether or not to draw on reserve funds to mitigate issues associated with the anticipated
deficit, which was projected to be close to $22 billion in January. The Governor proposed spending
cuts and deferrals to programs to protect the over $37 billion in reserve funds, citing concerns
with a looming recession and the need for cash on hand should the state experience an economic
downturn. The Legislature, on the other hand, has proposed using reserve funds to keep key
spending programs funded at current levels, which points to the name of their counter -budget
proposal — "Protect our Progress."
However, other budget experts caution against the use of reserve funds. For instance, in Mid -
April, the State's Legislative Analyst Gabe Petek released an article overviewing the state's
anticipated fiscal condition, its causes, and the implications of drawing from reserve funds to offset
revenue losses. Petek iterated that the revenue construction is not an outright downturn, but
rather the other side of its recent revenue boom. The extraordinary General Fund revenue growth
was allocated toward massive one-time and multi -year spending programs that are too high
relative to revenue performance typical of historic norms.
Petek warned that recent turmoil in the banking sector, tech industry losses, and inflation and
unemployment trends point to a looming recession that could send revenue estimates below
baseline levels. To preserve mid -range financial security within the state, he favors the
preservation of reserve funds and the cut and deferral of existing spending programs. While not
the final decision maker on the matter, the Legislative Analyst's Office offers critical insight into
the state's fiscal condition to be incorporated into spending practices. This insight could influence
the state's final spending strategy.
Key spending priorities within the Senate Democrat's budget plan include the following:
• Rejects proposed cuts and delays to key infrastructure investments, such as broadband,
transit, student housing, climate package investments, libraries, and more.
• Accelerates previously budgeted Transit Infrastructure funds, and provides local flexibility
to enable the funds to be used for operations as a bridge until a permanent operations fix
can be established.
7
Item 13: Staff Report Pg. 9 Packet Pg. 130 of 229
Item 13
Attachment A - State and
Federal Update Memo
from Townsend Public
Creates a $10 billion Housing and Infrastructure Fund to fund o Affairs, May 2023 and
programs that the Governor proposes to cut or delay. This includes Funding affordable
housing, Transit infrastructure, Broadband, Clean energy, Student housing, School
facilities, and more.
Turns current one-time funding for the HHAP program into $1 billion of ongoing funding to
provide local governments.
Provides $4.3 billion in tax relief by slashing tax rates by 25 percent for small businesses,
improving the Renters Tax Credit and CaIEITC, and implementing the Workers Tax
Fairness Tax Credit.
The Governor will release his May revision to the budget next month, which will guide ongoing
negotiations between his Administration and the Legislature. However, due to the delay in tax
return data, a comprehensive budget plan may not be fully realized until later this summer.
Update on Congressionally Directed Spending Submittal
The City/TPA team worked in partnership to draft, fine-tune, and submit a congressionally directed
spending request for infrastructure funding to help redevelop the Buena Vista Mobile Home Park.
The Park, a locally significant affordable housing resource, is in desperate need of sustainable
redevelopment, including 100% electrification. An award would assist the predominantly Latinx
and very low-income residents who call it home. This application was in partnership with the Santa
Clara County Housing Authority and the requested amount was $2 million. The request was
submitted to Senator Padilla, Senator Feinstein, and Congresswoman Eshoo.
Senator Feinstein and Congresswoman Eshoo have chosen the project as one of their priorities
to submit to the Appropriations Committee. While there is still a long road ahead and many
upcoming negotiations between the two parties on how to proceed with the FY24 Appropriations
Process, the support from both members increases the chances of the Buena Vista Mobile Home
Park being incorporated into the final budget agreement.
Federal Budget Update
On April 26, the House voted 217-215 to approve a bill (H.R. 2811) that would raise the nation's
debt limit for one year and scale back federal spending. The legislation — dubbed the Limit, Save,
Grow Act of 2023 — would suspend the nation's borrowing limit, currently set at $31.4 trillion,
through March 31, 2024, or until the federal debt increases by another $1.5 trillion, whichever
comes first. The bill also would freeze fiscal year 2024 discretionary spending at 2022 levels (a
reduction of approximately $130 billion) and limit the growth of spending over the next decade to
one percent annually.
The proposed plan also includes structural changes to social safety net programs like the
Supplemental Nutrition Assistance Program (SNAP), the Temporary Assistance for Needy
Families (TANF) program and Medicaid. These include new work and income threshold
requirements for benefit recipients at specific ages.
The Biden Administration has stood in strong opposition to the spending plan, with the President
threatening to veto it. Should it pass over to the Senate, the measure will be dead on arrival in
8
Item 13: Staff Report Pg. 10 Packet Pg. 131 of 229
Item 13
Attachment A - State and
Federal Update Memo
fromTownsend Public
the Democratic -led Chambers. Without action by Congress to raise th Affairs, May 2023 is
projected to be reached as early as this summer, the U.S. government faces a potentially
catastrophic default. Despite political concerns about its feasibility, GOP members say that it is a
crucial step to strengthen their negotiating position against President Biden amid questions about
whether Speaker McCarthy would be able to unite his fractious conference to pass any fiscal
outline at all.
Item 13: Staff Report Pg. 11 Packet Pg. 132 of 229
Item 13
Attachment B - Recent
Letters on State
Legislation
Attachment B:
Letters Submitted to Date (aligned with Legislative Guidelines)
AB 1505, SB 43, SB 363, and SB 719
Item 13: Staff Report Pg. 12 Packet Pg. 133 of 229
Item 13
C_ityo Attachment B - Recent 0
Letters on State
Office of the it Legislation J)lU1c l
May 4, 2023
The Honorable Freddie Rodriguez
California State Assembly, District 53
1021 O Street, Room 1200
Sacramento, CA 95814
RE: AB 1505 (Rodriguez) Seismic Retrofitting: Soft Story Multifamily Housing
City of Palo Alto - Notice of Support
Dear Assembly Member Rodriguez,
On behalf of the City of Palo Alto, I write in support of your legislation AB 1505, which would grant
$250,000,000 from the General Fund in the 2023-24 Budget Act to the Seismic Retrofitting
Program for Soft Story Multifamily Housing Fund. This critical funding provides for matching
grants for seismic retrofit engineering and construction to protect affordable multifamily housing
developments from earthquakes.
With California's historic vulnerability to earthquakes, it is urgent and imperative to provide funding
for seismic retrofitting. Funding for this program was originally included in budget trailer legislation
and signed into law by the Governor in 2022. However, the funding was proposed to be omitted
from the 2023 preliminary budget submitted to the Legislature. AB 1505 will work to restore this
funding on an urgency basis.
To keep our community safe from future earthquake damage and fatalities, it is pertinent to
comply with seismic building standards, and provide adequate funding to ensure public safety
and disaster preparedness needs are met. California has historically been a hub of major
earthquake disasters, given its position along the tectonic plate boundaries including the San
Andreas, San Gregorio-Hosgri, and Hayward -Rodgers Creek fault zones.
AB 1505 will help protect our State and local communities from earthquake damage and
devastation by ensuring compliance with seismic retrofitting to proactively prepare for future
disasters. By submitting this letter, we express our support for the inclusion of the pre -dedicated
$250 million for seismic retrofitting support in the upcoming iteration of the State's budget,
whether catalyzed by this legislation or similar budget trailer legislation.
For these reasons, the City of Palo Alto supports AB 1505.
Sincerely,
Lydia Kou
Mayor
City of Palo Alto
CITY OF PALO ALTO 1 250 HAMILTON AVENUE, PALO ALTO, CA. 94301 1 650-329-2100
Item 13: Staff Report Pg. 13 Packet Pg. 134 of 229
Item 13
Attachment B - Recent
City -0
Letters on State O
Legislation
Office of the Mayor and City Council
May 4, 2023
The Honorable Susan Eggman
California State Senate
1021 O Street, Room 8530
Sacramento, CA 95814
RE: SB 43 (Eggman) Behavioral Health.
City of Palo Alto — Notice of Support
Dear Senator Eggman,
On behalf of the City of Palo Alto, I write in support of your SB 43, which modernizes portions of
California's behavioral health treatment system and social safety net system to ensure that
vulnerable individuals with the most acute needs receive access to the care they need.
SB 43 modernizes the definition of "gravely disabled" within the Lanterman-Petris-Short Act to
include conditions that result in a substantial risk of serious harm to an individual's physical or
mental health. This includes the inability to seek medical care, adequate shelter, or self-protection
and safety. Updating this definition better reflects the contemporary realities present in our
communities, ensuring that individuals at risk of significant harm receive the help they need.
Additionally, this measure allows relevant medical history to be considered by the court in a
uniform manner across the state by creating a hearsay exemption for information contained in a
medical record so all relevant information can be presented and considered by the court. This
would ensure that a complete and accurate picture is presented in court when considering the
very serious step of conservatorship.
Cities are on the front lines of addressing homelessness and need additional tools and resources
to end this crisis in our state. We recognize that for unsheltered individuals with severe behavioral
health needs, access to a comprehensive care system can be essential to addressing their
homelessness. That is why The City of Palo Alto is eager to support legislation such as SB 43,
which takes a comprehensive look at our existing system and makes targeted improvements.
For these reasons, the City of Palo Alto is pleased to support your SB 43.
Sincerely,
Lydia Kou
Mayor
City of Palo Alto
CITY OF PALO ALTO 1 250 HAMILTON AVENUE, PALO ALTO, CA. 94301 1 650-329-2100
Item 13: Staff Report Pg. 14 Packet Pg. 135 of 229
Item 13
Cam, o I Attachment B - Recent 0
Letters on State
Office of the tbl Legislation wirer/
May 4, 2023
The Honorable Susan Eggman
Chair, Senate Health Committee
State Capitol, Room 3310
Sacramento, CA 95814
RE: SB 363 (Eggman) Facilities for inpatient and residential mental health and
substance use disorder: database.
City of Palo Alto — Notice of Support
Dear Senator Eggman,
On behalf of the City of Palo Alto, I write in support of your SB 363, which would establish a real-
time behavioral health bed database.
Specifically, this measure would require the State Department of Health Care Services to develop
a database by 2025 to collect, aggregate, and display information about beds in inpatient
psychiatric facilities, crisis stabilization units, community care facilities, and licensed residential
alcoholism or drug abuse recovery or treatment facilities. This information would help provide
timely access to care and increase coordination between service settings.
SB 363 would additionally require this database to include data related to the facility, including if
a bed is available, the services provided, diagnoses, and the age range for which the bed is
appropriate. This data would streamline access to care and be a valuable tool for local leaders
and policymakers in directing funding and resources based on bed capacity and utilization.
Mental illness and substance use, like many other health conditions, when treated early and with
appropriate supports and services, will be less disabling and result in fewer adverse outcomes.
SB 363 would provide easily accessible bed availability data that would connect individuals to
care more quickly, and also help cut down on extended emergency room stays. As a City we have
prioritized community health and safety and believe that mental health support is a vital part of
health and safety.
We believe SB 363 is a step in the right direction, providing critical data to help assess the capacity
of our system.
For these reasons, the City of Palo Alto is pleased to support your SB 363.
Sincerely,
Lydia Kou
Mayor
City of Palo Alto
CITY OF PALO ALTO 1 250 HAMILTON AVENUE, PALO ALTO, CA. 94301 1 650-329-2100
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C of Item 13
Attachment B - Recent
Office of the Mai Letters on State I[,li
Legislation
May 4, 2023
The Honorable Josh Becker
California State Senate, District 53
1021 O Street, Room 7250
Sacramento, CA 95814
RE: SB 719 (Becker) Law enforcement agencies: radio communications
City of Palo Alto - Notice of Support
Dear Senator Becker,
On behalf of the City of Palo Alto, I write in support of your SB 719, which requires a law
enforcement agency (LEA) to ensure any non -confidential radio communications are accessible
to the public, in real time. Specifically, this bill allows an LEA to choose one of the following
options to provide public access to certain radio communications: (a) provide unencrypted radio
communications that may be accessed on a scanner or is available on-line, or (b) provide
encrypted communications, if requested. The bill does not require access to channels used for
confidential information or other communications that would unreasonably jeopardize public
safety or the safety of officers if made public.
In October of 2020, the California Department of Justice (DOJ) sent out a bulletin to all law
enforcement agencies regarding radio encryption. This bulletin stemmed from an order by the
Federal Bureau of Investigations to restrict all criminal justice information (CJI) and personal
identifiable information (PII) to authorized personnel. The bulletin stated all transmission of such
information must be encrypted and provided agencies two options: 1) move to full encryption of
radio communications, or 2) establish a policy to restrict dissemination of CJI and PII, or data
elements that meet those definitions.
The City agrees that access to police activity, while still ensuring safeguards for the public's
sensitive and confidential information, is important. This information helps local news outlets
provide real time updates for major news events such as wildfires and other public safety
concerns.
The City of Palo Alto is proud to support your efforts to increase visibility for the public and the
media into police calls for service. Palo Alto last year unencrypted the police department's
primary dispatch channel thus providing real-time radio access to police communications while
protecting personal information. Your bill would encourage other police departments to seek
solutions to protect data while also providing public access.
Existing law does not guarantee public access to police radio communications, nor does it prohibit
public access to unencrypted police radio channels. Existing law does, however, make it a crime
to use any intercepted public safety radio communication to assist in the commission of a crime
or evade capture by law enforcement. This bill provides much needed clarity for how the public
CITY OF PALO ALTO 1 250 HAMILTON AVENUE, PALO ALTO, CA. 94301 1 650-329-2100
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Item 13
Attachment B - Recent
Letters on State
Legislation
may access and utilize police communications to ensure the public's safety, police safety, and
confidentiality.
For these reasons, the City of Palo Alto is pleased to support your SB 719.
Sincerely,
Lydia Kou
Mayor
City of Palo Alto
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City Council
Staff Report
From: City Manager
CITY O F Report Type: ACTION ITEMS
PALO Lead Department: Planning and Development Services
ALTO Meeting Date: May 15, 2023
Report #:2303-1210
TITLE
PUBLIC HEARING/LEGISLATIVE: Adopt an Ordinance That Changes Palo Alto Municipal Code
Chapters 18.04, 18.09, 18.10, 18.12, and 18.40 related to Accessory Dwelling Units and Accessory
Structures. Environmental Assessment: Exempt from the provisions of the California
Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA
Guidelines sections 15061(b)(3), 15301, 15302 and 15305.
Recommendation
Staff recommends the City Council:
1. Adopt the attached Ordinance (Attachment A) amending Palo Alto Municipal Code Title
18 (Zoning) to amend regulations for Accessory Dwelling Units (ADUs), Junior Accessory
Dwelling Units (JADUs), and Accessory Structures, including provision to respond to
direction from the Department of Housing and Community Development (HCD).
Background
The Planning and Transportation Commission (PTC) recommends approval of the attached draft
Ordinance (Attachment A). This ordinance updates various sections of Chapter 18 of the Palo Alto
Municipal Code related to Accessory Dwelling Unit and Accessory Structure standards.
The attached draft Ordinance (Attachment A) incorporates:
• PTC-supported and recommended policies
• Necessary revisions to address the State Housing and Community Development (HCD)
department's December 12, 2022 letter.
The staff reports, meeting minutes, and videos for those hearings can be found online(lii2i.
1 httos://www.citvofraloalto.ore/Departments/Plannine-Development-Services/Plannine-and-Transportation
Commission-PTC/Previous-PTC-Agendas-Minutes 2021/2 Staff reports, meeting minutes, and videos. Select the
Agenda Item on the following dates: February 10, February 24, and May 26, for 2021. July 13, August 10, and
September 28, 2022 for 2022.
1 httos://www.citvofraloalto.ore/Departments/Plannine-Development-Services/Plannini-and-Transoortation-
Commission-PTC/Current-PTC-Agendas-Minutes 2023 Staff reports, meeting minutes, and videos. Select the
Agenda Item on the following dates: February 22, March 8, 2023.
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Discussion
The staff report touches on the following subjects related to changes to Chapter 18:
A. Staff Response to Housing and Community Development (HCD) Letter
i. Application of Daylight Planes for Table 2 Units
ii. Calculating Floor Area for ADUs/JADUs
iii. Noise Producing Equipment Location Standards
iv. Entryways for ADUs/JADUs
v. Parking Attached to ADUs Contributing to the Unit's Maximum Size
B. Proposed Areas for Regulatory Change
i. Basements
ii. Noise Producing Equipment Location Standards
iii. Parking Provided for an Attached ADU
iv. Privacy
v. Retracting Prior Deed Restrictions
vi. Allowing Reconstruction/Expansion of Non -Conforming Structures
vii. Removing the "Existing" Garage/Carport Requirement for Conversions
viii. Conversion/Relocation of Uncovered Parking Stalls
ix. Alignment of ADU and Tree Ordinances
C. Corner Lot Incentives to Maintain Street -side Setback on Corner Lots
D. Incentives for Affordable ADUs
E. Code Modifications to Definitions, Sanitation Facilities, and Accessory Structures
i. Clarifying How FAR/Lot Coverage is Calculated with Attached Units
ii. Translating Second Units through Demolition/Reconstruction
iii. Clarification on JADU Construction and Sanitation Facilities
iv. Calculating Gross Floor Area
v. Clarification on Accessory Buildings with Covered Porches or Patios (>120 sf)
vi. Allowed Accessory Structure Fixtures (PAMC 18.10, 18.12, 18.040)
A. Staff Response to HCD Letter
On December 23, 2021, the City received a letter from HCD regarding the ordinance the City
adopted in November 2020 (Attachment B). HCD raised 12 issues with the City's ordinance which
they thought conflicted with state law or required further clarification in the ordinance. On
February 3, 2022, City staff met with HCD staff to discuss HCD's comments and concerns as well
as to explain the structure and intent of the language incorporated into the City's ordinance.
Following that discussion, City staff provided detailed responses to the HCD letter, indicating
areas where the City would incorporate changes and where staff required clarification
(Attachment C).
On December 21, 2022, the City received a follow up letter from HCD responding to the City's
comments (Attachment D). Five items were included in the revised HCD letter. On January 13,
2023, City staff met with HCD staff to discuss HCD's comments and concerns again. City staff
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provided detailed responses to the HCD letter on the same day, indicating areas where the City
would incorporate changes to its ordinance (Attachment E). The five items from HCD's 2022 letter
are summarized below:
i. Application of Daylight Planes for Table 2 Units
Section 18.09.040 of the City's zoning ordinance identifies that daylight planes can be applied to
ADUs for which the City has some regulatory authority (sometimes referred to as "Table 2 units").
This was based on staff's interpretation of the framework and language that was adopted by
State law in 2020. Staff's interpretation of state law was that requiring a Daylight Plane did not
prohibit units from achieving the 16 -foot height guaranteed by State law. The Daylight Plane did
alter the massing of the unit, to ensure ADUs would more appropriately fit into the context of
Palo Alto neighborhoods and reduce impacts on adjacent properties.
In their response, HCD staff appeared to state that the nuance staff was trying to assert between
total height allowed for an ADU and allowing for a 16 -foot -tall structure at a four -foot setback
was inaccurate. HCD staff asserted that the City could not apply daylight planes to detached ADUs
that prohibit them from achieving these minimum height standards. HCD further clarified that
Senate Bill 897 modified the language of the previous statute to allow for taller attached and
detached ADUs that met certain provisions.
In response to this direction, staff has removed the ADU-specific daylight plane requirement from
PAMC 18.09.040 for detached ADUs and JADUs. Based on the language adopted under SB 897,
the State allows for attached ADUs to be built in conformance with the height requirements of
the main house in the local zoning ordinance. This would mean that for attached ADUs, daylight
planes still apply, and Table 2 is this referenced code section has been updated to reflect this
change.
ii. Calculating Floor Area for ADUs/JADUs
The City's 2020 ordinance provided a "bonus" floor area and lot coverage exemption for ADUs
and JADUs to incentivize the development of these units and provided staff a clear term to convey
development rights to homeowners under PAMC 18.09.040, Table 2. The City also updated its
ordinance in 2020 to allow for JADUs to be expansions of existing or proposed single-family
homes, rather than limiting them to only occur as conversions of an existing home, as required
by the State. The purpose was to eliminate a multi -stepped process requiring a portion of a house
to first be built and then receive a new permit to convert it to a JADU. Additionally, the underlying
house would be limited by its existing floor area and lot coverage restrictions which would
continue to disincentivize the creation of JADUs as a homeowner would need to choose to
sacrifice the allowable square footage of their home to build a JADU.
In the HCD staff's letter, they contest that JADUs do not count towards a property's floor area or
lot coverage limit as they can only exist within the buildable area of an existing or proposed
single-family home. Without expanding the allowances for the primary dwelling to have more
floor area, the City cannot allow JADUs to be additions, nor allow a certain amount to be
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considered exempt from floor area and lot coverage. When staff met with HCD staff and
highlighted the way the City uses terms such as "floor area" and "lot coverage" to convey
development rights to homeowners, HCD staff agreed that the issue between their
understanding of Palo Alto's local terms and the State's approach to implementing ADU/JADU
law may be an issue of semantics, with respect to this specific issue, because they were
supportive of what the City was doing to encourage JADU development. Regardless, HCD
reiterated its position on that state law only allows for JADUs to occur within existing or proposed
single-family homes and that Palo Alto would need to provide more floor area or lot coverage for
the primary home to allow the JADU to benefit from the City's "bonus" provisions.
The City's existing laws are far more generous the state legislation in this regard and staff does
not believe that additional clarification is needed in the City's ordinance. Staff will continue to
meet with HCD staff as needed to explain how this provision furthers the state's interest in
housing production and complies with state law. to ensure that the policies it has been enacting
since 2020 are consistent with the State law.
iii. Noise Producing Equipment Location Standards
In concert with State law, the City updated its 2020 ordinance to allow for reduced setbacks for
ADUs. As an incentive to encourage more units to be built, and in line with what is noted in the
response above, the City also allowed JADUs and noise -producing producing equipment to have
a four -foot setback from the rear and side property lines. HCD repeated its concern that the City
was inappropriately applying setback standards to JADUs that should not exist given that JADUs
are only supposed to exist within the existing or proposed walls of a single-family home. From
HCD's perspective, for a JADU to have a four -foot setback the City would need to update its
zoning code to allow the primary dwelling unit to have a four -foot setback. While it may be
technically more accurate to call this four -foot setback a "setback for the new construction
portion of a single-family home that is dedicated to a JADU," staff believe it is easier for applicants
and staff to refer to this as a "setback for a new construction JADU." For noise -producing
equipment, the City has already updated its code to allow for reduced allowances when that
equipment serves an ADU or JADU. As a result, staff does not believe additional modifications to
the City's ordinance are necessary to address this comment.
iv. Entryways for ADUs/JADUs
Since the City updated its ordinance in 2017 to allow for attached ADU/JADUs, the Palo Alto
Municipal Code requires attached units to have a doorway that faces toward a different property
line than the doorway for the primary dwelling unit. The only exceptions allowed were when an
attached unit was on a corner lot, or the unit was in the rear half of the lot. In 2020, staff updated
this provision to also require that any exterior staircase to second -floor units face towards and
interior side or rear yard. The purpose of this design requirement was to ensure that the primary
facade did not appear cluttered or visually confusing with entries to the building(s).
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HCD contends that this policy could have the potential to unduly restrict ADU/JADU development
by adding additional cost and site development constraints to homeowners. Since 2017, after
reviewing at least 500 applications for ADU/JADUs, staff has yet to encounter a scenario where
this has prevented a unit from being developed on a property. Regardless, HCD states that the
City must either eliminate this provision or add language which states that this provision applies
"when feasible". Staff is concerned that adding "when feasible" to this provision has no clear
definition in the City's municipal code nor state law and will likely create an un-enforceable
standard when applicants don't want to comply with it. As a result, staff recommends removing
the provision altogether if HCD believes that the City's ordinance will not comply with state law
because of this rule.
v. Parking Attached to ADUs Contributing to the Unit's Maximum Size
In HCD's recent letter, the HCD staff reiterated their previous position that garages attached to
ADUs should not contribute to the maximum size or floor area of the ADU. This was agreed to by
the PTC and has been incorporated into the attached ordinance.
Staff met with the PTC in July, August, and September of 2022 to discuss code changes to Chapter
18 as well as February and March of 2023 to discuss the items raised in the HCD letters. After
receiving additional direction from PTC, staff recommends proceeding with the updated draft
ordinance in Attachment A.
B. Proposed Areas for Regulatory Change
The following changes are only in relation to ADU/JADUs that exceed the minimum standards
that the City must approve under state law ("Table 2 units"):
i. Basements
On July 13 and August 10, 2022, the PTC indicated support for allowing basements underneath
ADU/JADUs. In that discussion, the PTC highlighted the following to incorporate into a draft
ordinance:
• The basement cannot encroach into the four -foot ADU/JADU setback, unless a basement
already exists in that area. In this case, the non -conforming area may remain but cannot
be expanded, consistent with other non -conforming provision of City and State law.
• New ADU/JADU lightwells cannot be located closer than four feet to a property line. All
lightwells would need to be screened from view from public rights of way using
landscaping, consistent with the City's current requirements for lightwells associate with
the main house.
• A new basement must not negatively impact tree roots on adjacent lots such that it would
cause the tree to be removed or fail. Protected trees would continue to be subject to the
City's tree regulations. Urban Forestry staff identified that roughly 25% of a tree's
protection zone could be affected without causing it to fail, on a case -by -case basis.
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• All useable3 basement space for ADU/JADUs shall count towards the unit's gross floor
area.
The PTC did not support requiring basements to be fully subterranean and were willing to allow
any variation of the diagram below provided that all useable basement area contribute to the
unit's allowable square footage.
1 LEVEL ABOVE GRADE AND 1 LEVEL BASEMENT
PDU HEIGHT LIMIT
Source: ATTACHMENT C
2 LEVELS ABOVE GRADE, PARTIALLY SUBTERRANEAN
2 LEVELS ABOVE GRADE
21'41
On February 22 and March 8, 2023, staff noted additional basement provisions for the PTC to
consider. Basements in Palo Alto typically do not count towards the floor area, lot coverage, or
maximum house size limitations for single-family homes. Basements are only allowed to be built
underneath the footprint of the first floor. As a result, the size for a basement is inherently tied
to the primary home's development potential. This can range from 2,550 sf (for a typical 6,000 sf
lot) or less and up to the City's maximum house size (6,000 sf in the R1 zones). As it is currently
written, the City's code does not distinguish between the footprint of a primary home or the
footprint of a primary home and an attached second unit for the purposes of determining the
maximum basement size. With new City and state laws, attached ADUs and JADUs can increase
the size of a primary home's footprint by 500 sf or 800 sf, respectively. This creates an unintended
consequence where a homeowner could build the maximum size house possible on their lot, build
an attached ADU and/or JADU, and propose a basement for the primary home which extends
underneath the attached second unit (right image below). Where a primary unit and basement
would normally be limited to a maximum house size of 6,000 sf each, there could be scenarios
where a primary unit is 6,000 sf and a basement that serves it is up to 6,800 sf.
Staff's understanding of the intent behind the existing rule is to not allow basements to expand
beyond the footprint of the primary dwelling unit, though it does not make this distinction clear.
Additionally, the purpose of the bonus square footage for ADUs and JADUs is to encourage the
development of additional housing units, not to build an attached second unit and
propose/expand a basement that serves the primary home underneath it. During the February
22 PTC hearing, the Commissioners seemed open to including language to address this issue into
3 Habitable basement is when there is at least seven feet distance between basement floor and basement ceiling
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the draft ordinance and recommend on March 8 to include the suggested language to Chapter
18.10.090(a) and 18.12.090(a) as shown under Sections 10 and 11 in the draft ordinance.
Potential Basement Configurations Based on Current Code
Typical Basement Configuration Under ADU and Primary Unit
ii. Noise Producing Equipment Location Standards
The draft ordinance reduces the current standard for placement of all noise -producing
equipment associated with an ADU/JADU along the interior side and rear property lines. This
would allow additional development flexibility for homeowners. The current standard requires
noise -producing equipment to follow a 4 -foot setback to the property line for second units. The
proposed ordinance would allow this equipment to be located between the property line and 4
feet under circumstances, including compliance with the City's noise ordinance.
Most municipalities and other agencies specify noise limits in units of dBA, which is intended to
mimic the reduced receptivity of the human ear to Sound Pressure ("Lp") at particularly low or
high frequencies. Sound attenuates over distance. Sound waves are an ever-expanding circle,
moving away from the sound source. The wave starts with an initial amount of energy. That
amount of energy is gradually spread out over a wider and wider area as the wave expands.4
The attenuation of a sound wave's intensity follows an inverse square law. In other words, the
observed intensity of a sound wave decreases depending on the square of the observer's distance
from the source. The intensity of a sound wave will decrease faster and faster the further it gets
from the source. According to the inverse square law, it can be shown that for each doubling of
distance from a point source, the sound pressure level decreases by approximately six dBA.5
Given that most noise -producing equipment that has been provided for ADU/JADU applications
tends to be at or lower than 66 dBA, each successive doubling of distance would bring a unit
further into compliance with the City's Noise Ordinance.
4 Sound Attenuation — Inverse Square Law: https://bit.ly/3Uc6V9t
5 Attenuation of Sound: https://bit.ly/3dgL54g
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The PTC also asked staff to confirm that reduced setbacks for noise -producing equipment would
not conflict with ingress/egress requirements for the Fire Department. The Fire Department
noted that noise -producing equipment can impact ingress/egress requirements but also noted
that an ADU/JADU can be designed in a way that resolves this issue. In essence, the design of the
building is flexible such that locating noise -producing equipment within a zero -to -four -foot
setback would not create a scenario that is impossible to design around and still provide
adequate life safety access to the unit.
With this additional information, the PTC supported staff's proposed language changes to the
placement of noise -producing equipment for ADU/JADUs.
iii. Parking Provided for an Attached ADU
PTC considered whether or not an ADU can have an attached garage. Though there is potential
for illegal conversion of a garage to living space without proper permitting, the PTC did not see
these concerns as any more severe than for other attached garage structures. The PTC directed
staff to modify PAMC 18.09.040(iv) (now 18.09.040(k)(v)) to remove the inclusion of an attached
garage counting towards a second unit's maximum size. This decision occurred prior to HCD's
December 2022 letter indicating the City needed to modify this policy.
iv. Privacy
The PTC indicated that the City needs to maintain stringent privacy measures for ADU/JADUs as
they can be placed closer to property lines than a typical house. The PTC wanted to focus the
City's current policies to limit impacts from windows on the first and second floor of a second
unit.
During the July 13, 2022 PTC meeting, two commissioners asked how to best implement the City's
privacy measures for Table 2 units. They asked whether the City should adopt more stringent
privacy requirements for windows facing adjacent properties, based on a height standard rather
than simply requiring privacy when there is a second floor or equivalent space, as the code
currently requires. At the time, the PTC did not adopt a motion to change the existing policy,
other than to clarify that these policies only applied when a second -floor level was proposed for
an ADU.
Since then, staff have been receiving more complaints from neighbors regarding privacy impacts
from larger ADUs built close to their property lines, as State law now allows. Staff noted on
February 22, 2023 a desire to revisit this discussion with the PTC. The below images are provided
to illustrate the issue of views from two different floor levels:
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View with standard finished floor 1.5 ft above grade View if a finished floor were 2.5 ft above grade
There are no privacy measures in place for one-story, single-family homes with taller first -floor
levels, and only building permits are required for one-story homes. However, new primary homes
in the R1 zones are generally located at least 6 to 8 feet from an interior side property line, and
at least 20 feet from a rear property line.
Privacy measures cannot be imposed on ADU or JADU buildings that are set back four feet from
an interior property line, for units that qualify under PAMC 18.09.030 (aka Table 1). This is true
also for units that do not have a second -floor level, even when the ADU height is 16 feet or more.
The City can introduce privacy measures for ADUs and JADUs with higher first -floor levels placed
at four feet from an interior property line into Chapter 18.09; however, staff can only apply such
privacy measures to units that fall under PAMC 18.09.040 (aka Table 2 units). During the February
22nd PTC hearing, the Commissioners supported staff's proposal to present additional privacy
regulations for ADUs under PAMC 18.09.040(k)(2).
As a result, staff updated section 18.09.040(k)(2) in the attached draft ordinance, to incorporate
the following provisions:
• Clarification that privacy measures will only be applied when there are second floors,
lofts, or equivalent spaces.
• Egress windows shall not be located on walls which face adjacent property lines, when
feasible. When infeasible, these windows shall utilize opaque glazing on the whole
window.
• If the first finished floor of an ADU or JADU is two feet or more above grade, then first
floor windows shall include the following:
a. Non -egress, operable windows facing an adjacent interior property line shall have
a windowsill(s) that start five feet above the first finished floor for the unit;
b. Non -egress, non -operable windows facing an adjacent interior property line shall
have the lower half of window(s) (minimum of five feet above the first finished
floor) utilize opaque glazing.
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• Where feasible, requiring the use of skylights in bathrooms and other spaces where
windows could be considered optional.
• No exterior lighting mounted above seven feet and lighting must be directed downwards
to prevent light spillover onto adjacent properties.
These added measures would provide guidance for applicants and additional protections for
neighbors from the potential privacy impacts from new second units.
v. Retracting Prior Deed Restrictions
The PTC directed staff to review the appropriate process to allow homeowners to remove the
prior owner -occupancy deed restrictions placed on units built prior to 2020. Removing these
restrictions would allow residents who built ADUs before 2022 to rent a primary dwelling unit
and ADU separately. In order to remove deed restrictions that the City has already approved for
ADUs, staff will create a new document that can be recorded with the Santa Clara County
Recorder's Office to supersede the prior deed restriction noting that the restrictions no longer
apply.
vi. Allowing Reconstruction/Expansion of Non -Conforming Structures
The PTC indicated support for allowing owners to expand legal, non -conforming walls in order to
allow a converted structure to provide a better living unit and better meet insulation and energy
requirements for modern habitable buildings. Several commissioners also expressed concerns
with how close some non -conforming buildings can be to adjacent property lines and fences and
how conflicts can come up when work needs to occur in those spaces.
In the draft ordinance, staff sought to address this
concern by limiting when and where a non -conforming
wall can be expanded. Specifically, the proposed language
in section 18.09.060(c)(ii) states that walls that do not
currently have a one -foot separation from the property
line would not be able to benefit from this provision. For
walls that currently have this separation, they could be
expanded up to a maximum of six inches in width
depending on whether or not they would encroach closer
than one foot to a property line. Staff believes this
captures the support, and concerns, raised by the PTC.
The PTC also supported allowing legal, non -conforming
structures to increase in height. Section 18.09.060(c)(i)
indicates that an applicant may modify the height of a
legal, non -conforming structure by up to 12 inches or to a
maximum of 12 feet, whichever is less. Staff anticipates
that most owners that would seek to utilize this process
will most likely be able to use the full one -foot extension.
2 '"
4
EXISTING GARAGE
JI GRAY
•p I
ti I - REVISED FRAMING
AND FINISH
-RED
•- I
6'
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However, it would be important to limit how tall these structures can be given their closer
proximity to adjacent neighbors.
For example, if an existing structure was 11 feet and two inches tall, then the height could be
increased by only 10 inches, rather than one foot. This section also would require retention of
the existing roof line and style. For example, a structure with a shed roof cannot be converted to
a gabled roof. Staff believes that this will help to mitigate potential massing and aesthetic impacts
upon adjacent neighbors. Neighbors will already be familiar with the existing structure's outline,
albeit slightly taller and closer to their property (see example roofline images below).
Sloped roof shapes
shed gable butterfly
gambrel
hip (Dutch Colonial) mansard
Source: Google Images
vii. Removing the "Existing" Garage/Carport Requirement for Conversions
Staff included in the draft ordinance section 18.09.060(d), which follows the PTC's direction to
eliminate the need to have an existing garage/carport when applying to convert a garage to an
ADU/JADU when a new home is also proposed on site. This would eliminate the current two-step
process that prevents homeowners from proposing a new home and ADU with no covered
parking on site.
viii. Conversion/Relocation of Uncovered Parking Stalls
The City's current Zoning Code requires that single-family homes include two parking spaces on site, both
of which need to be located beyond the front yard setback, and one of which must be a covered parking
space. Over time, staff has recognized a disconnect between requirements for single -car garages with
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adjacent uncovered parking spaces converted to an ADU, and two -car garages converted to an ADU.
Namely, PAMC Chapter 18.09 and state law do not require the replacement of covered parking spaces lost
through the conversion of a garage to an ADU, but also do not provide direction on what should occur for
uncovered parking spaces. Staff's current application of the law reflects an interpretation that there is no
such relaxed replacement allowance for uncovered parking spaces and such spaces must comply with the
typical siting requirements — i.e., that these spaces must be placed on site and beyond the front yard
setback. Below is an example to demonstrate this issue:
An owner who wants to eliminate the uncovered parking stall in the left -most example above
would first need to expand a garage within the blue area to accommodate two, 10 -foot wide by
20 -foot -deep parking stalls. Once a final occupancy permit is issued for that building permit, the
owner could then file another permit to convert the new garage into an ADU. This creates a
two- step process that adds time, money, and constraints to developing an ADU whereas,
under a different existing configuration, an owner could already take advantage of the relaxed
conversion allowances. The City currently allows JADUs under PAMC 18.09.040(k) to replace
parking lost through garage conversions in the driveway as uncovered spaces.
On February 22, 2023, Commissioners expressed support for eliminating this two- step process.
The attached draft ordinance captures this new policy under PAMC 18.09.040(l)(2).
ix. Alignment of ADU and Tree Ordinances
Following the PTC review of the ADU ordinance, staff engaged with several applicants seeking to build
ADUs but struggling with the Tree Disclosure Statement required in the new Tree Ordinance. The new
Tree Ordinance, adopted in June 2022, requires all applicants to complete a Tree Disclosure Statement
prepared by a licensed arborist. In reviewing this requirement as it applies to ADUs, staff determined that
the licensed arborist requirement could represent an undue burden on ADU construction. Accordingly,
for projects that solely involve an ADU, the attached ordinance proposes to permit a property owner,
rather than an arborist, complete the Tree Disclosure Statement.
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C. Corner Lot Incentives
Corner lots can be difficult to develop due to their more limiting setback requirements. Draft
ordinance section 18.09.040(j) captures the PTC's direction to allow reduced setbacks for the
primary house when ADU/JADUs are built in tandem. The draft ordinance allows for a primary
home to be placed at a 10 -foot street -side setback and a 16 -foot front yard setback, provided the
ADU/JADU follows these same setbacks. The PTC felt that this will serve as a strong incentive for
homeowners on a corner lot to build an ADU at a greater setback than allowed by state law which
will help to maintain the City's desired aesthetic character for single-family neighborhoods.
Staff noted to the PTC that this policy may create the opportunity for a homeowner to abuse the
City's provisions through a two-step process given the authority state law provides to
homeowners when building ADU/JADUs. That is, an owner could build a house and ADU at a 10 -
foot setback, then after the final occupancy permit is issued, propose an ADU that conforms with
state law requirements. While that would be a significant financial burden to overcome for a
homeowner and is not likely, it is not an impossible situation to occur later at the site or if the
property were sold to another individual whose interests did not align with the City's policy. Staff
suggested to the PTC that a deed restriction could be enacted on the property which serves as
an agreement between the City and homeowner which prevents this from occurring; however,
it could be fraught with legal and practical implementation challenges should a current or future
homeowner contest it conflicts with state law. As a result, the PTC suggested that no restriction
be recorded against the property and floated the question to City Council to decide whether this
concern would be worthwhile to protect against.
D. Incentives for Affordable ADUs
i. Exempting Affordable Units from Impact Fees and Plan Review Fees
On September 28, 2022, the PTC recommended that the Council adopt a pilot program for deed
restricted, affordable ADUs. Under this pilot program, property owners who agreed to deed
restrict an ADU to rents affordable to households earning no more than 80% of area median
income would have development impact fees waived, up to $50,000 per unit. The pilot program
would be limited to a total of $400,000 of waived fees per year. Staff indicated that, prior to
bringing the recommendation to Council, staff would discuss administrative details like income
certification, tenant selection, and monitoring with Alta Housing, the City's affordable housing
administrator.
Early feedback from Alta Housing included several reservations about an affordable ADU program
as recommended by the PTC. Alta's concerns were as follows:
• The eight -year period is shorter than the typical length that affordable housing tenants
remain in one location. This raises additional concerns about transition when the
affordability restriction is over.
• In larger projects, tenants who exceed income thresholds can often convert to a market
rate unit and remain in the same development. That won't be possible for ADUs.
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• The program may result in fair housing/discrimination issues if homeowners are
responsible for choosing tenants. Personality or preferred tenant clashes could create
additional administrative burden.
• Homeowners are typically not in the business of being landlords. Significant outreach is
needed to educate homeowners on what they would be signing up for (vis-a-vis renter
rights, fair housing laws, relocation compensation if work needs to occur on -site and
tenants must move out, etc.).
In short, it appears that the program would result in an additional administrative burden
compared to affordable units typically administered by Alta Housing. Currently, when Alta
Housing works with a private property owner, they typically administer multiple units at a single
site and these units are deed restricted for terms ranging from 55 to 99 years. This limits the
amount of onboarding and education required per unit. By contrast, an affordable ADU program
would involve a different property owner for each unit, and these units would only participate
for a period of 8 years.
In addition, there are currently several affordable housing projects in Palo Alto, which have
already sought or may seek support from the City's affordable housing funds. Projects at various
stages of the process include 231 Grant, 525 E Charleston, Palo Alto Homekey, Buena Vista
Mobile Home Park, and 3001 El Camino Real. In addition, some existing affordable housing
projects have recently reached out to the City to inquire about support for unexpected expenses.
As a result, staff believe there are ample other opportunities for the City to support affordable
housing, which may provide greater overall benefit than an affordable ADU program. With this
additional information, the PTC recommended at the February 22, 2023 hearing to not proceed
with this program.
E. Code Modifications to Definitions, Sanitation Facilities, and Accessory Structures
The PTC voted unanimously to approve staff's recommended changes to the following sections
of the City's municipal code.
i. Clarifying How FAR/Lot Coverage is Calculated with Attached Units
The City provided a uniform bonus for ADU/JADU development in accordance with state law
requirements. As a result, there have been challenges presented regarding how to calculate floor
area for the main home versus the floor area ratios (FAR) with respect to attached units.
Overall, the City's definitions guide how staff calculates these allowed ratios on residential and
commercial lots. However, when it comes to an attached ADU/JADU in an RE, R-1, R-2, and RMD
district, the code states that: "Gross floor area means the total covered area of all floors of a main
structure and accessory structures greater than one hundred and twenty square feet in area,
including covered parking and stairways, measured to the outside of stud walls" (PAMC
18.04.030(a)(65)(C)). When there is an attached unit, there is a shared wall between the two
structures and it is unclear to applicants and staff how this area should be counted between the
units as it is not technically an "exterior wall" (see image below). If the shared wall spans a large
portion of the two units, it can add up to a significant amount of square feet.
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Staff suggests adding language in sections 18.09.030(c) as well as 18.09.040(e) that states that
FAR, Lot Coverage, and Maximum House size should be related to the exterior stud of the primary
unit's shared wall. Staff believes this mirrors the existing policy in PAMC 18.04.030(a)(65)(C) and
in the event a second unit is built, this would provide clear direction on how to calculate these
spaces. The PTC supported staff's approach and voted to incorporate this policy in the draft
ordinance as they felt it would be more accommodating for ADU/JADU development.
Source: Kohler Architects
ii. Relocating Second Units through Demolition/Reconstruction
PAMC section 18.09.030(k) identifies that replacement parking is no longer required when a
garage or carport are demolished "in conjunction with the construction of an ADU." Staff
understands this to mean that an applicant may choose to demolish a structure and replace it
"in -kind", as noted in PAMC section 18.09.030(h), or they may relocate it elsewhere on the
property and still not replace parking on site.
Demolishing and replacing an accessory structure in kind to create an ADU was protected in the
City's ordinance prior to 2020 when the updated state law incorporated a similar framework.
However, state law and the City's ordinance were not entirely specific on what may happen
should an applicant seek to relocate a structure elsewhere on site and what policies (either Table
1 or 2) would apply.
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Generally, staff and applicants have agreed that one would not be able to relocate a legal, non-
conforming structure from one side of a property to another and establish a new non -conforming
situation on site. Staff propose to clearly codify this practice and understanding with the
suggested language in 18.09.040(j)(v). This language directly captures an instance like the
example below and succinctly identifies that an applicant must follow the regulations in Table 2.
Staff believes this will clarify that any type of construction that occurs in this manner must follow
the City's local regulations outlined in Table 2 rather than the state policies outlined in Table 1.
The PTC supported staff's interpretation and application of this rule in the draft ordinance.
sJ-------------------------
" � I I I
Source: FG Architects
iii. Clarification on Type of JADU Construction and Sanitation Facilities
Staff has received multiple questions from applicants and the public since the adoption of the
City's ordinance last year as to whether JADUs can be developed through new construction or
only through the conversion of existing spaces. PAMC 18.09.050(a) currently states: "A junior
accessory dwelling unit shall be created within the walls of an existing or proposed primary
dwelling."
Through the implementation of the City's ordinance, the intention was to encourage the creation
of more JADUs by allowing JADUs to also benefit from the bonus FAR/Lot Coverage/House Size
provisions as well as allowing attached garages to be converted to JADUs and benefit from the
replacement parking policies identified in 18.09.040(k). With this understanding, staff indicated
to applicants and the public that new construction involving the creation of a JADU would be in
keeping with the intent behind the policies adopted by City Council, rather than limiting a JADU
to existing within the walls of an existing or new structure. Staff suggests modifying section
18.09.050(a) to align with staff's implementation of the City's ordinance and provide clarity to
the public.
Additionally, staff has included a new policy that seeks to clarify an already established practice
for JADUs that was not apparent in the previously adopted ordinance. Section 18.09.050(b)(iii)
seeks to clarify that sanitation facilities are required for JADUs but that they may be shared with
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the primary unit. This policy has been in place since the establishment of JADUs in the 2017 state
and City codes. The practice, however, was not codified.
Adding this clarification will provide an easier reference point for staff, the public, and applicants
as it relates to the City's requirements for sanitation facilities for JADUs.
iv. Calculating Gross Floor Area
Applicants have provided many ways of calculating floor area by representing it in whole
numbers, to the tenths, hundredth, and thousandth decimal places. General mathematical
principals indicate that expressing a number to a thousandth decimal or greater is technically
more accurate; however, going beyond the thousands place is not necessarily appropriate when
converting between inches and decimals, which often end in hundreds and thousandths decimal
numbers (e.g. 4% inches is expressed as 0.375, 11 inches is expressed as 0.92).
Over time, staff has not established a consistent policy for how floor area should be captured to
maintain consistency and accuracy of construction. This is especially important when certain
"triggers" occur. Two such triggers are when a building exceeds its allowable floor area/lot
coverage allowances, or when a second unit is subject to payment of development impact fees.
Some applicants have proposed 749.99 square foot structures and successfully argued they are
not be required to pay development impact fees. In speaking with the Chief Building Official, a
contractor would not realistically build a 749.99 square feet structure; it would be built to 750
square feet or slightly larger, given the nature of the construction methods and materials
available today.
Staff believes the suggested language in 18.04.030(65)(E) of the draft ordinance would address
these issues. It would set a clearer standard for how floor area needs to be expressed in block
area diagrams on a plan set. It would also establish a clear and consistent policy for staff and
applicants to implement when determining whether a project exceeds a trigger point, as
described above. Any ADU equal to or greater than 749.995 square feet would be associated with
payment of development impact fees.
v. Clarification on Accessory Buildings with Covered Porches or Patios (>120 sf)
In the last few years, there have been a greater number of proposals for 120 square foot
accessory buildings with covered porches or patios. PAMC 18.04.030(C) identifies that accessory
buildings which exceed 120 square feet in area are included in the overall gross floor area
calculations for a site. The use of the term "square feet" is non-specific to the terms "floor area"
and "lot coverage" staff commonly use to determine size allowances. The code requires that any
addition to this structure beyond 120 square feet immediately triggers an accessory building to
count as floor area. This is regardless of whether that specific addition would traditionally count
as lot coverage based on its design.
Based on this, an accessory building with a substantially open covered porch or patio would
automatically count towards floor area for the site, even though these would be excluded from
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FLOOR PLAN
1/4"=1-O"
floor area for the primary house if it is substantially open (see Attachment C for substantially
open criteria).
12'-O" 4'{
ROOF PLAN
=
Source: Kohler Architects
Due to this conflict, 120 square foot accessory buildings with covered porches or patios that are
substantially open are currently only counted as lot coverage rather than floor area. This
interpretation provides a consistent approach for including these spaces as floor area when they
are not substantially open. Staff propose codifying this as an exclusion under the Low -Density
Residential Exclusions portion of the Definitions (proposed as 18.04.030(a)(65)(D)(ix)).
vi. Allowed Accessory Structure Fixtures (PAMC 18.10, 18.12, 18.040)
As ADU/JADUs have become more commonplace applications due to relaxed regulations at the
state and local level, staff has also recognized an increase in permits for accessory structures.
Some of these structures have started including additional fixtures such as showers (indoor and
outdoor), utility lines, washers/dryers, and other facilities that seek to provide the framework for
a second unit to be created on site but without committing to creating one.
PAMC 18.12 and 18.40 currently limit accessory structures to only two plumbing fixtures. Some
districts, like the RE, R-2, and RMD districts, allow more fixtures for buildings that are less than
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200 square feet or outside of setbacks for the property. As staff has typically relied on the building
code's definition of a plumbing fixture, it does not always capture fixtures such as a gas line or
other appurtenance.
Staff is frequently limited to negotiating with applicants to remove fixtures using vague
comparisons of proposals to "something equivalent to an ADU/JADU" as the code does not give
more clear direction. Staff is concerned this will encourage individuals to use an accessory
building as a housing unit even when a structure is not designed for human habitation.
Due to this, staff propose to better distinguish what are acceptable plumbing fixtures in accessory
buildings. The purpose of this language is to target features that may lead to unsafe conditions
for human habitation. Staff suggests limiting accessory buildings from having certain plumbing
fixtures like a shower and/or bathtub. These will be more challenging and costly to place in a
building than a sink and toilet. While approving this code change will make a significant number
of previously permitted structures non -conforming, staff believes this will help to reduce the
number of illegally constructed units going forward.
ALTERNATIVE ACTIONS
In addition to the recommended action, the City Council may:
1. Provide direction to make further modifications to the ordinance, or
2. Continue the hearing to a date (un)certain to enable staff to perform additional study.
ENVIRONMENTAL REVIEW
The adoption of the Ordinance is exempt from the provisions of the California Environmental
Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines
sections 15061(b)(3), 15301, 15302, and 15305, because of requirements related to accessory
dwelling units as established in Government Code Section 65852.2, and these changes are also
likely to result in few additional dwelling units dispersed throughout the City. As such, it can be
seen with certainty that the proposed action will not have the potential for causing a significant
effect on the environment.
ATTACHMENTS
Attachment A:
Draft ADU Ordinance
Attachment B
- Task Force Letter
Attachment C
- Substantially Open Porches
Attachment D
- HCD Letter on ADU Ordinance (2021)
Attachment E
- Staff Response to HCD (2022)
Attachment F
- HCD Letter on ADU Ordinance (2022)
Attachment G
- Staff Response to HCD (2023)
Attachment H
- Government Code Section 65852.2
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
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Ordinance
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Ordinance No.
Ordinance of the Council of the City of Palo Alto Amending Title 18 (Zoning) of
the Palo Alto Municipal Code to Amend Requirements Relating to Accessory
Dwelling Units and Junior Accessory Dwelling Units
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of
Title 18 (Zoning) of the Palo Alto Municipal Code ("PAMC") is amended to read as follows
(additions underlined and deletions struckgh):
18.09.010 Purpose
The intent of this Chapter is to provide regulations to accommodate accessory and
junior accessory dwelling units (ADU/JADU), in order to provide for variety to the city's
housing stock and additional affordable housing opportunities. These units shall be
separate, self-contained living units, with separate entrances from the main residence,
whether attached or detached. The standards below are provided to minimize the
impacts of units on nearby residents and throughout the city, and to assure that the
size and location of such dwellings is compatible with the existing or proposed
residence(s) on the site and with other structures in the area.
18.09.020 Applicable Zoning Districts
The establishment of an accessory dwelling unit is permitted in zoning districts when
single-family or multi -family residential is a permitted land use. The development of a
single-family home, ADU, and/or a JADU on a lot that allows for single-family
development shall not be considered a multifamily development pursuant to PAMC
Section 18.04.030, nor shall they require Architectural Review pursuant to other
sections of Chapter 18.
18.09.030 Units Exempt from Generally Applicable Local Regulations
(a) Government Code section 65852.2, subdivision (e) provides that certain units shall
be approved notwithstanding state or local regulations that may otherwise apply.
The following types of units shall be governed by the standards in this section. In the
event of a conflict between this section and Government Code section 65852.2,
subdivision (e), the Government Code shall prevail.
i. An ADU and JADU within the existing space of a single-family dwelling or an
ADU within the existing space of an accessory structure (i.e. conversion
without substantial addition).
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Ordinance
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ii. An ADU and JADU within the proposed space of a single-family dwelling.
iii. A detached, new construction ADU on a lot with a proposed or existing
single-family dwelling, provided the ADU does not exceed 800 square feet,
sixteen feet in height, or four -foot side and rear (i.e. interior) setbacks.
iv. ADUs created by conversion of portions of existing multi -family dwellings not
used as livable space.
v. Up to two detached ADUs on a lot with an existing multi -family dwelling.
(b) The Development Standards for units governed by this section are summarized in
Table 1. Regulations set forth in section 18.09.040 do not apply to units created
under 18.09.030. The minimum and maximum sizes indicated in Table 1 do not
prohibit units that are greater than 800 square feet. These sizes simply serve to
distinguish when a unit transitions from regulations set forth in Table 1 and section
18.09.030 to regulations set forth in Table 2 and section 18.09.040.
Table 1: Development Standards for Units Described in Government Code Section 65852.2(e)
Single -Family
Multi -Family
Conversion of
Construction of
New
Conversion of
Conversion or
Space Within
Attached ADU
Construction of
Non -Habitable
Construction of
the Existing
Within the
Detached ADU
Space Within
Detached141ADU
Space of a
Proposed Space
Existing Multi -
Single -Family
of a Single-
family Dwelling
Home or
Family Home
Structure
Accessory
Structure
Number
25% of the
of Units
1 ADU and 1 JADU
existing units
2
Allowed
(at least one)
Minimum
150 sf
size(11
Maximum
N/A2
800 sf
N/A
size111
Underlying zone
4 feet from side
4 feet from side
N/A, if condition
standard for
and rear lot
and rear lot
Setbacks
is sufficient for
Single Family
lines;
N/A
lines; underlying
fire and safety
Home
underlying
zoning for front
zoning for front
(ADU must be
within
setback
setback
Daylight
N/A
N/A
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Plane
allowable space
of Single -Family
Maximum
N/A
1615)
N/A
1615)16)
HeightO'
Home)
Parking
None
State Law
65852.2(e)(1)(A)
65852.2(e)(1)(A)
65852.2(e)(1)(B)
65852.2(e)(1)(C)
65852.2(e)(1)(D)
Reference
(1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface
is 5' or greater shall count towards the unit's floor area.
(2) New construction must be consistent with allowable space (e.g. FAR, Lot Coverage) of a single
family residence, except that up to 150 sf may be added for the purpose of ingress and egress
only, without regard to underlying zone standards.
(3) Units built in a flood zone are not entitled to any height extensions granted to the primary
dwelling.
(4) Units must be detached from existing primary dwellings but may be attached to each other.
(5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or
multifamily dwelling unit that is within one-half of one mile walking distance of a major transit
stop or a high -quality transit corridor, as those terms are defined in Section 21155 of the Public
Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch
on an ADU that is aligned with the roof pitch of the primary dwelling unit.
(6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily,
multistory dwelling.
(c) Development standards stated elsewhere in this Section or Title 18, including
standards related to FAR, lot coverage, and privacy, are not applicable to ADUs or
JADUs that qualify for approval under this section. When there is an ADU or JADU
attached to an existing or or000sed orimary dwelline. the shared wall between
these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and
Maximum House Size of the primary unit. For a single-family home, this
measurement shall be taken to the outside stud wall in accordance with Section
18.04.030(a)(65)(D). For a multi -family dwelling, this measurement shall be taken to
the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B)
and C.
(d) The establishment of accessory dwelling units and junior accessory dwelling units
pursuant to this section shall not be conditioned on the correction of non-
conforming zoning conditions; provided, however, that nothing in this section shall
limit the authority of the Chief Building Official to require correction of building
standards relating to health and safety.
(e) The installation of fire sprinklers shall not be required in an accessory dwelling unit if
sprinklers are not required for the primary residence. Nothing in this section shall
preclude the Fire Marshal from accepting fire sprinklers as an alternative means of
compliance with generally applicable fire protection requirements.
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(f) Rental of any unit created pursuant to this section shall be for a term of 30 days or
more.
(g) Attached units shall have independent exterior access from a proposed or existing
single-family dwelling. Except for JADUs, attached units shall not have an interior
access point to the primary dwelling (e.g. hotel door or other similar
feature/appurtenance).
(h) Conversion of an existing accessory structure pursuant to Government Code section
65852.2(e)(1)(A) may include reconstruction in -place of a non -conforming structure,
so long as the renovation of reconstruction does not increase the degree of non-
compliance, such as increased height, envelope, or further intrusion into required
setbacks. Any portion of an ADU that exceeds the envelope of the existing accessory
structure shall be subject to Section 18.09.040.
(i) Street addresses shall be assigned to all units prior to building permit final to assist in
emergency response.
(j) The unit shall not be sold separately from the primary residence.
(k) Replacement parking is not required when a garage, carport, or covered parking
structure is converted to, or demolished in conjunction with the construction of, an
ADU.
(I) JADUs shall comply with the requirements of Section 18.09.050.
18.09.040 Units Subject to Local Standards
(a) This section shall govern applications for ADUs and JADUs that do not qualify for
approval under section 18.09.030 and for which the City may impose local standards
pursuant to Government Code section 65852.2, subdivisions (a) through (d). Nothing
in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at
the heights stated in Table 2, with a four foot side and rear setbacks.
(b) The Development Standards for units governed by this section are provided in Table
2. These regulations do not limit the height of existing structures converted into
ADU/JADUs unless the envelope of the building is proposed to be modified beyond
any existing legal, non -conforming condition.
Table 2: All other Units
Attached Detached
JADU
Number of Units
Allowed'
1
1
Minimum size
150 sf
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Ordinance
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900 sf (1,000 sf for two
or more bedrooms);
900 sf (1,000 sf for
Maximum size
no more than 50% of
two or more
500 sf
the size of the single-
bedrooms)
family home
Setbacks
4 feet from side and rear lot lines;
underlying zone standard for front setback
Daylight Plane
Underlying zone
N A
Underlying zone
standard per
footnote 7
sttaandardd
a
feet lot line'
Initial t
Annie
at
4Cc
Maximum Height3
Res. Estate (RE)
Open Space (OS)
All other eligible
30 feet
Underlying zone
25 feet
a drd
16 feet151161171
zones
Parking
None
Square Footage
Exemption when in
conjunction with a
Up to 800 sf
Up to 500 sf4)
single family home1°I
(1) An attached or detached ADU may be built in conjunction with a JADU on a lot with an existing
or proposed single family home. One attached or detached ADU may be built in conjunction
with an existing or proposed multifamily building.
(2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface
is 5' or greater shall count towards the unit's floor area.
(3) Units built in a flood zone are not entitled to any height extensions granted to the primary
dwelling.
(4) Lots with both an ADU and a JADU may exempt a maximum combined total of 800 square feet
of the ADU and JADU from FAR, Lot Coverage, and Maximum House Size calculations. kgny
square footage that exceeds this exemption shall contribute to the FAR, Lot Coverage, and (if
(5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or
multifamily dwelling unit that is within one-half of one mile walking distance of a major transit
stop or a high -quality transit corridor, as those terms are defined in Section 21155 of the Public
Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch
on an ADU that is aligned with the roof pitch of the primary dwelling unit.
(6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily,
multistory dwelling.
(7) A height of 25 feet or the height limitation in the underlying zone district that applies to the
primary dwelling, whichever is lower, for an ADU that is attached to a primary dwelling. These
ADUs shall not exceed two stories in height.
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Commented [YA3]: Response to change instate law and
HCD direction re daylight plane
Commented [YA4]: Response to HCD direction re
daylight plane
/Commented [YA5]: Response to HCD direction re JJADUs
Commented [YA6]: Previously recommended by PTC in
July 2022
Item 14: Staff Report Pg. 24
Packet Pg. 162 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
(c) A single-family dwelling shall exist on the lot or shall be constructed on the lot in
conjunction with the construction of an ADU/JADU.
fLADU and/or JADU square footage shall not be included in FAR, Lot Coverage, and
Maximum House Size calculations for a lot with an existing or proposed single family
home, up to the amounts stated in Table 2. ADU and/or JADU square footage in
excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage,
and Maximum House Size calculations for the lot.
{4(e) When there is an ADU or JADU attached to an existing or proposed primary
dwelling, the shared wall between these units shall contribute to the maximum
allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit.
For a single-family home, this measurement shall be taken to the outside stud wall
in accordance with Section 18.04.030(a)(65)(D). For a multi -family dwelling, this
measurement shall be taken to the outside surface of exterior walls in accordance
with Section 18.04.030(a)(65)(B) and (C). Commented [YA7]: Previously recommended by PTC in
July 2022
(e)fL_Attached units shall have independent exterior access from a proposed or
existing single-family dwelling. Except for JADUs, attached units shall not have an
interior access point to the primary dwelling (e.g. hotel door or other similar
feature/appurtenance).
(f)fg)_No protected tree shall be removed for the purpose of establishing an accessory
dwelling unit unless the tree is dead, dangerous or constitutes a nuisance under
Section 8.04.050. Any protected tree removed pursuant to this subsection shall be
replaced in accordance with the standards in the Tree Technical Manual.
{g4f LFor properties listed in the Palo Alto Historic Inventory, the California Register of
Historical Resources, the National Register of Historic Places, or considered a historic
resource after completion of a historic resource evaluation, compliance with the
appropriate Secretary of Interior's Standards for the Treatment of Historic
Properties shall be required.
f#)(LNoise-producing equipment such as air conditioners, water heaters, and similar
service equipment that exclusively serves an ADU/JADU may be located anywhere
on the site, provided they maintain the underlying front yard setback requirements
of the property and, if the property is a corner lot, a 10 -foot street -side setback.
All such equipment shall Commented [YA8]: Previously recommended by PTC in
be insulated and housed, except that the Director may permit installation without September 2022
housing and insulation, provided that a combination of technical noise
specifications, location of equipment, and/or other screening or buffering will assure
compliance with the city's Noise Ordinance at the nearest property line. All service
6
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Item 14: Staff Report Pg. 25 Packet Pg. 163 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
equipment must meet the city's Noise Ordinance in Chapter 9.10 of the Municipal
Code.
04(i) Setbacks
(1) Detached units shall maintain a minimum three-foot distance from the
primary unit, measured from the exterior walls of structures.
20232215_ayl6
(2) Ne-A basement or other subterranean portion that serves-ef an ADU/JADU
&ha[kmay encroach into a setback required for the primary dwelling provided
the following conditions are met:.
f� Newly constructed basement walls are no closer than four feet to an
adjacent interior side or rear property line.
A new lightwell associated with a basement shall not be placed
closer than four feet to an adjacent interior property line. When
visible from the right of way, these facilities shall be screened from
view with vegetation.
The new basement shall not negatively impact tree roots on the
subject property or on adjacent lots such that it would require a
protected tree to be removed or cause the protected tree to die.
{ Habitable ADU/JADU basements shall contribute toward the unit's
total allowable floor area. Any floor area in excess of the exemptions
provided in this Section shall contribute to the total allowable limits
for the site.
f LProjections, including but not limited to windows, doors, mechanical
equipment, venting or exhaust systems, are not permitted to encroach into
the required setbacks, with the exception of a roof eave of up to 2 feet.
Commented [YA9]: Previously recommended by PTC in
July/August 2022
{4)(4) For corner lots developed as a single-family home only, when an existing Commented [YA10]: Previously recommended by PTC in
or proposed primary dwelling unit is expanded or constructed simultaneously July/August 2022
with the construction of a new ADU/JADU, all structures may be built to a 10 -
foot street -side setback and a 16 -foot front yard setback, regardless of the
presence of a special setback, unless a fire or life -safety regulation requires a
greater setback.
{4)(5) When an existing, legal, nonconforming structure is converted or Commented [YA11]: Previously recommended by PTC in
reconstructed to create an ADU/JADU, any portion of the ADU/JADU that is July2022
in the same location and falls within the building envelope of the original
structure shall not be subject to the development standards stated in this
Section. Any portion of the ADU/JADU that is in a different location or
Item 14: Staff Report Pg. 26 Packet Pg. 164 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
exceeds the envelope of the original structure shall comply with the
development standards stated in this Section.
jS-(6) Notwithstanding the development standards stated in Table 2 and
paragraph (5) above, when an existing, legal, non -conforming structure is
converted in -place to an ADU/JADU, the envelope of the structure may be
modified to encroach further into a setback or daylight plane as follows:
{j3j Design
20232215_ayl6
j� The height of the existing structure may be increased by no more
than one linear foot in height commensurate to the existing roofline
of the structure provided the height of the addition does not exceed
12 feet from grade. The roofline shall not be changed to a style other
than what currently exists on the structure.
jJ Each non -conforming wall may be expanded by no more than six
inches in thickness based on its existing location and configuration, as
measured to exterior surface of the material, to provide for greater
insulation and energy requirements provided that a minimum of one
foot is maintained between the addition and an adjacent interior
property line. An existing wall of a structure that does not currently
have a separation of one foot from a parallel property line shall not
be expanded outward.
ll All other additions not specified here shall follow the standard
setbacks for the ADU/JADU identified in Table 2.
Commented [YA12]: Previously recommended by PTC in
July/August 2022
(1) Except on corner lots, it shall be encouraged but not required that the unit Commented [YA13]: Response to HCD direction
s-ha11-not have an entranceway facing the same lot line (property line) as the Commented [SG14]: PTC Recommended language from
entranceway to the main dwelling unit unless the entranceway to the February 20233
accessory unit is located in the rear half of the lot. Exterior staircases to
second floor units shall be located toward the interior side or rear yard of the
property.
(2) Privacy
jA) Second story doors and decks shall not face a neighboring dw
nit property line. Second story decks and balconies shall utilize
screening barriers to prevent views Fate towards an adjacent interior
property line]es. These barriers shall provide be a minimum five-foot,
six-inch height wall from the floor level of the deck or balcony
and shall not include perforations of any kind that would allow
visibility between properties.
jjJ Second Windows on a second floor, loft, or equivalent
elevated space, excluding those required for egress, shall have a five-
Commented [YA15]: Previously recommended by PTC in
2022/23
Item 14: Staff Report Pg. 27
Packet Pg. 165 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
foot sill height as measured from the second -finished floor level, or
utilize obscured opaque glazing on the entirety of the window when
fae+ng any window that faces an adjacent interior propert ly inefes.
Second story e Egress windows shall utilize obscured opaque glazing
en the entirety of the windows which face that face adjacent interior
properties.
(C) Second Windows on a second finished floor, loft, or
equivalent elevated space, shall be offset from neighbor's windows to
maximize privacy.
ll Where feasible, egress windows on the first and second finished floor
of an ADU or JADU shall not face towards an adjacent interior
property line. If this is not feasible, then these windows shall utilize
opaque glazing on the whole window.
j If the first finished floor of an ADU or JADU is two feet or more above
grade, then first floor windows shall include the following:
i. Non -egress, operable windows facing an adjacent interior
property line shall have a windowsill(s) that start five feet
above the first finished floor for the unit;
ii. Non -egress, non -operable windows facing an adjacent interior
property line shall have the lower half of window(s) (minimum
of five feet above the first finished floor) utilize opaque
glazing.
f. Where feasible, the use of skylights (whether operable or not) shall
be used in lieu of operable windows that face adjacent interior
properties
ll No exterior lighting shall be mounted above seven feet. All lighting
mounted on walls shall be directed downwards and shall not direct
light towards adjacent interior property lines. Any ground lighting
shall not direct light upwards to the building or sky.
{1jL_Parking
20232215_ayl6
(1) Replacement parking is not required when a garage, carport, or covered
parking structure is converted to, or demolished in conjunction with the
construction of, an ADU.
Commented [SG1 6]: Recommended by PTC in March
2023
(2) Replacement parking is required when an existing attached garage, carport,
or covered parking structure is converted to a JADU or when a required,
existing, uncovered parking space is expanded into by an ADU. These Commented [SG17]: Suggested PTc language from
replacement spaces may be provided as uncovered spaces in any 2022/23
configuration on the lot including within the front or street side yard setback
for the property.
Item 14: Staff Report Pg. 28 Packet Pg. 166 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
{A) The Director shall have the authority to modify required replacement
parking spaces by up to one foot in width and length upon finding
that the reduction is necessary to accommodate parking in a location
otherwise allowed under this code and is not detrimental to public
health, safety or the general welfare.
ll Existing front and street side yard driveways may be enlarged to the
minimum extent necessary to comply with the replacement parking
requirement above. Existing curb cuts shall not be altered except
when necessary to promote public health, safety or the general
welfare.
{When parking is provided, the unit shall have street access from a driveway
in common with the main residence in order to prevent new curb cuts,
excessive paving, and elimination of street trees, unless separate driveway
access will result in fewer environmental impacts such as paving, grading or
tree removal.
{4)(4) When a single-family dwelling unit is permitted simultaneously with the
construction of new ADU/JADUs, the primary unit's covered parking
requirements identified in Chapter 18.10 and 18.12 do not need to be
provided. Two uncovered parking spaces shall be provided in any
configuration on the lot including within the front or street -side setback for
the property.
Commented [YA18]: Previously recommended by PTC in
July 2022
{4�aLlf covered parking for a unit is provided in any district, the maximum size of
the covered parking area for the accessory dwelling unit is 220 square feet.
This space shall count towards the total floor area for the site but does not
contribute to the maximum size of the unit unless attachhed thheunit. Any Commented [YA19]: Previously recommended by PTC
attached garage shall not have an interior access point to the ADU/JADU (e.g. LA1so responsive to HCD direction July/August 2022
hotel door or other similar feature/appurtenance).
{I�(m) Miscellaneous requirements
(1) Street addresses shall be assigned to all units prior to building permit final to
assist in emergency response.
(2) The unit shall not be sold separately from the primary residence.
(3) Rental of any unit created pursuant to this section shall be for a term of 30
days or more.
(4) The installation of fire sprinklers shall not be required in an accessory
dwelling unit if sprinklers are not required for the primary residence. Nothing
10
20232215_ayl6
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Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
in this section shall preclude the Fire Marshal from accepting fire sprinklers
as an alternative means of compliance with generally applicable fire
protection requirements.
18.09.050 Additional Requirements for JADUs
(a) A junior accessory dwelling unit may only be created on a lot in a single-family Commented [YA20]: Previously recommended byPTC
residential zone with an existing or proposed single family residence. A junior Also responsive to HCD direction
accessory dwelling unit shall be attached to or created within the walls of an existing
or proposed primary dwelling.
(b) The junior accessory dwelling unit shall include an efficiency kitchen, requiring the
following components: A cooking facility with appliances, and; food preparation
counter and storage cabinets that are of reasonable size in relation to the size of the
junior accessory dwelling unit.
i. A cooking facility with appliances shall mean, at minimum a one burner
installed range, an oven or convection microwave, a 10 cubic foot refrigerator
and freezer combination unit, and a sink that facilitates hot and cold water.
A food preparation counter and storage cabinets shall be of reasonable size in
relation to a JADU if they provide counter space equal to a minimum 24 -inch
depth and 36 -inch length.
i1 -iii. JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with Commented [YA21]: Previously recommended by PTC
the primary unit. In this instance, the floor area and lot coverage associated
with shared space shall count towards the primary unit's maximum allowances
only. The combined sanitation facilities between the units shall include
shower, toilet, and sink fixtures at a minimum and shall conform to the
minimum requirements specified in the Building Code
(c) For the purposes of any fire or life protection ordinance or regulation or for the
purposes of providing service for water, sewer, or power, a junior accessory dwelling
unit shall not be considered a separate or new unit.
(d) The owner of a parcel proposed for a junior accessory dwelling unit shall occupy as a
primary residence either the primary dwelling or the junior accessory dwelling.
Owner -occupancy is not required if the owner is a governmental agency, land trust, or
housing organization.
(e) Prior to the issuance of a building permit for a junior accessory dwelling unit, the
owner shall record a deed restriction in a form approved by the city that includes a
prohibition on the sale of the junior accessory dwelling unit separate from the sale of
the single-family residence, requires owner -occupancy consistent with subsection (d)
11
20232215_ayl6
Item 14: Staff Report Pg. 30 Packet Pg. 168 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
above, does not permit short-term rentals, and restricts the size and attributes of the
junior dwelling unit to those that conform with this section.
{a} Commented [YA22]: Previously recommended by PTC
a minimum of 8 years to provide affordable rental units for households earningp to SOUS Commented [SG23R23]: Removed due to February 2023
of area median income. These units shall be exempt from all development impact fees, PTC motion
regardless of size, up to a maximum of $50,000 unit and a Citywide total of $400,000 per
calendar year. To participate in this program, units shall fellow the development
standards in section 18.09.040 unless otherwise stated her,.
SECTION 2. Subsection (g) of Section 16.58.030 of Chapter 16.58 (Development Impact Fees) of
Title 16 (Building) of the Palo Alto Municipal Code ("PAMC") is amended to read:
SECTION 3. Subsections (a)(4) and (a)(65) of Section 18.04.030 (Definitions) of Chapter 18.04
(Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code ("PAMC") is amended to read:
(4) "Accessory dwelling unit" means an attached or a detached residential dwelling unit
which provides complete independent living facilities for one or more persons. It shall
include permanent provisions for living, sleeping, eating, cooking, and sanitation on the
same parcel as the single-family dwelling is situated. An ADU bathroom shall include a
shower. toilet. and sink fixture at a minimum and shall conform to the minimum
requirements specified in the Building Code. An accessory dwelling unit also includes the
following:
12
20232215_ayl6
Commented [YA24]: Previously recommended by PTC
Commented [SG25R25]: Removed due to February
2023 PTC motion
Commented [YA26]: Previously recommended by PTC in
July 2022
Item 14: Staff Report Pg. 31
Packet Pg. 169 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
(65) "Gross Floor Area" is defined as follows:
[...)
(D) Low Density Residential Exclusions: In the RE and R-1 single-family residence
districts and in the R-2 and RMD two-family residence districts, "gross floor area"
shall not include the following:
[...)
(ix) Accessor structures equal to or less than one hundred and twenty square fmmented [YA27]: Previously recommended by PTc in
feet in area shall not contribute to floor area provided that any attached Lju1y 2022
porches, patios, or similar features are substantially open;
E) In all districts. eross floor area shall be calculated to the nearest 1000th decimal
point and represented and rounded on plans to the nearest 100th decimal point
(e.g. 123.456 sf shall be rounded to 123.46 sf). Standard rounding shall apply
such that a number of four or less shall be rounded down and a number of five
or more shall be rounded u
SECTION 4. Subsections (b)(5) of Section 18.10.080 (Accessory Uses and Facilities) of Chapter
18.10 (Low -Density Residential) of Title 18 (Zoning) of the Palo Alto Municipal Code ("PAMC") is
amended to read:
(5) When located within a rcquircd interior yard as permittcd by thus section no such
No accessory building shall have more than two plumbing fixtures. Accessory buildings
shall not be allowed to be turned into habitable space nor shall these structures be Commented [YA28]: Previously recommtl�]
allowed to have showers (indoor or outdoor). eas lines. washer/dryers, and/or cookine July2022
facilities to be provided inside or attached to the structure, unless the structure is
proposed as an ADU/JADU that satisfies all requirements of the Palo Alto Municipal
Code.
SECTION 5. Subsections (b)(5) of Section 18.12.080 (Accessory Uses and Facilities) of Chapter
18.12 (Single -Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code
("PAMC") is amended to read:
(5) No sty#accessory building greater than 200 square feet in size shall have more than Commented [YA29]: Previously recommended by PTc in
two plumbing fixtures. (Accessory buildings shall not be allowed to be turned into July 2022
13
20232215_ayl6
Item 14: Staff Report Pg. 32 Packet Pg. 170 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
habitable space nor shall these structures be allowed to have showers (indoor or
outdoor), gas lines, washer/dryers, and/or cooking facilities to be provided inside or
attached to the structure, unless the structure is proposed as an ADU/JADU that
satisfies all requirements of the Palo Alto Municipal Code.
SECTION 6. Subsection (b)(5) of 18.40.050 (Location and Use of Accessory Buildings) of
Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto
Municipal Code ("PAMC") is amended to read:
(5) No such accessory building shall have more than two plumbing fixtures. Accessory
jbuildings l shall not be allowed to be turned into habitable space nor shall these Commented [YA30]: Previously recommended by PTC in
structures be allowed to have showers (indoor or outdoor), gas lines, washer/dryers, July 2022
and/or cooking facilities to be provided inside or attached to the structure, unless the
structure is proposed as an ADU/JADU that satisfies all requirements of the Palo Alto
Municipal Code.
SECTION 7. Subsection (a) of Section 18.10.090 (Basements) of Chapter 18.10 (Low Density
Residential) of Title 18 (Zoning) of the Palo Alto Municipal Code ("PAMC") is amended to read:
(a) Permitted Basement Area
Basements may not extend beyond the building footprint and basements are not allowed
below any portion of a structure that extends into required setbacks, except to the
extent that the main residence is permitted to extend into the rear yard setback by other
provisions of this code. Basements which serve the primary unit may not extend under
an attached ADU or JADU to the extent those secondary units utilize the bonus floor
area. lot coveraee. and/or maximum house size exemptions identified in Section 18.09.
SECTION 8. Subsection (a) of Section 18.12.090 (Basements) of Chapter 18.13 (Single -Family
Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code ("PAMC") is amended to
read:
(a) Permitted Basement Area
14
20232215_ayl6
Item 14: Staff Report Pg. 33 Packet Pg. 171 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
Basements may not extend beyond the building footprint and basements are not allowed
below any portion of a structure that extends into required setbacks, except to the
extent that the main residence is permitted to extend into the rear yard setback by other
provisions of this code. Basements which serve the primary unit may not extend under
an attached ADU or JADU to the extent those secondary units utilize the bonus floor
area, lot coverage, and/or maximum house size exemptions identified in Section 18.09.
Commented [5G31]: Previously recommended by PTC in
March 2023
SECTION 9. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent
with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is
hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance.
SECTION 10. If any section, subsection, sentence, clause, or phrase of this Ordinance is for
any reason held to be invalid or unconstitutional by a decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this
Ordinance. The City Council hereby declares that it would have passed this Ordinance and
each and every section, subsection, sentence, clause, or phrase not declared invalid or
unconstitutional without regard to whether any portion of the ordinance would be
subsequently declared invalid or unconstitutional.
SECTION 11. The Council finds that the adoption of this Ordinance is exempt from the
provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources
Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), 15301, 15302 and 15305
because it constitutes minor adjustments to the City's zoning ordinance to implement State
law requirements related to accessory dwelling units as established in Government Code
Section 65852.2, and these changes are also likely to result in few additional dwelling units
dispersed throughout the City. As such, it can be seen with certainty that the proposed action
will not have the potential for causing a significant effect on the environment.
SECTION 12. This ordinance shall be effective on the thirty-first date after the date of its
adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
15
20232215_ayl6
Item 14: Staff Report Pg. 34 Packet Pg. 172 of 229
Item 14
Attachment A - Draft ADU
Ordinance
*NOT YET APPROVED*
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
16
20232215_ayl6
Mayor
APPROVED:
City Manager
Director of Planning and
Development Services
Item 14: Staff Report Pg. 35
Packet Pg. 173 of 229
Item 14
Attachment B -Task Force
Letter
City Of Palo Alto ADU Ordinance, First Reading, Meeting Date 10/5/2020 Agenda Item #8
To the Members of The Palo Alto City Council:
We want to begin by expressing commendation for what has been done to date by Council and PTC but
particularly by Staff. This is a complex political and technical topic and we consider the ordinance to be
mostly in alignment with the State Statutes. We applaud the effort where choices have been made to
exceed limitations in a reasonable way, and understand clearly the boundaries established by State
legislation.
What we need to remember is that the State is promoting this legislation to incentivize and streamline the
creation of ADUs. We should also remember to view all of this through the local lens of prioritizing
residential development as a clearly stated Palo Alto goal. As professionals, we seek a clear and precise
set of rules we can rely on in the design process to achieve a predictable result for our clients.
A number of individuals spoke in warning when we came before Council in January, and we have been
proven correct in stating Palo Alto's urgency ordinance was seriously flawed. Many elements did not
properly conform to State legislation. Since then, Staff has adjusted their interpretations, in some cases
after being challenged by the professional community, and partly when influenced by input from HCD.
The updated document before you makes good progress toward alignment, but we still fall short in some
important areas.
The Palo Alto ADU Task Force (PAADUTF), now approximately 20 individuals and growing, was created
out of a grassroots desire for peer communication between professionals who are active in ADU
development. Sharing information regarding regulatory interpretations, design methodology, and
construction strategy, this group came together to evaluate the August 17 staff report and associated
ordinance language. Unfortunately, we were not aware of the May 27 PTC hearing and recognize this
was a missed opportunity to interact with staff. Over the course of five meetings conducted during August
and September, the group developed a narrative along with an annotated review of the proposed
ordinance. As indicated, two additional meetings were conducted with staff included to review and discuss
the information. Several significant points from that discussion have been captured in your staff report.
There are others that were not, that we nonetheless feel are critical to implement as part of this update.
Through direct and frequent interaction with HCD and supported by other experts active in ADU
regulatory action, The PAADUTF has identified several specific areas where the proposed local ordinance
departs from the State intent. We recognize Staff feels they have rigorously evaluated the language
presented to you tonight, but we do not believe they are entirely correct. The HCD ADU Handbook,
released just last week, seems to confirm a few areas where the proposed language is in conflict with
HCD's guidance. As you have heard, if inconsistency is not corrected, there is a significant possibility the
ordinance will be challenged and potentially deemed invalid.
The most significant issue is the approach taken in the ordinance regarding the Statewide Exemption
ADU and how that language relates to all other units, particularly those exceeding 800 square feet.
Gov. Code, § 65852.2, subd. (c)(2)(C) "Any other minimum or maximum size for
an accessory dwelling unit, size based upon a percentage of the proposed or
existing primary dwelling, or limits on lot coverage, floor area ratio, open space,
and minimum lot size, for either attached or detached dwellings that does not
permit at least an 800 square foot accessory dwelling unit that is at/east 16 feet in
height with four -foot side and rear yard setbacks to be constructed in compliance
with all other local development standards."
Item 14: Staff Report Pg. 36 Packet Pg. 174 of 229
Item 14
Attachment B -Task Force
Letter
Staffs interpretation of this section includes a vision that the Exemption Unit is an isolated obligation. In
fact, the Statute language says clearly "at least", so we have been told any attempt at creating limitations
for units which are larger (daylight plane restrictions, placement on the lot, a limitation for subterranean
construction, or basement construction) is simply inconsistent with the State Statute.
Another significant departure is the approach taken in regard to 2 -story construction. Staff is seeking to
create limits on the basis of privacy, but the restrictions they have offered are inconsistent with the
statutes. It is important to remember that the State put these new rules in place to shake up the norms,
and we need to understand and align with that intent. As an example, HCD has described a scenario
where if a lot is so small that 800 sf cannot be accommodated on one level, then 2 -stories can be the only
option. Because of this, HCD has confirmed there can be no restriction against 2 -story units, under any
condition. Whether in conformance with an Exemption ADU or larger, 2 -story construction must be
embraced. We would offer that Santa Cruz has done an excellent job in this area and has elected to allow
22' of height with additional restrictions for distance from the property line once beyond 16' of height.
(https://www.cityofsantacruz.com/government/city-departments/planning-and-community-development/ac
cessory-dwelling-units-adus)
Again, there are a number of specific areas of improvement in the proposed ordinance, and we applaud
that. What we ask of you tonight is the consideration of 15 areas of concern we identify below, some of
which have already been described by Staff. We believe all of these are important and nuanced topics
that are truly necessary to implement. Some are changes only included to simplify the development of
ADUs, but others are very technical responses to costly or avoidably complex limitations. We ask that you
remember our pace is 1,000 units short of our RHNA requirement and that we need to do better and
move faster. This set of considerations provides an easy way to encourage the development of additional
units with minimal collateral impact when compared to larger, more dense projects with their significant
timelines and approval hurdles.
1. Alignment with Gov. Code, § 65852.2, subd. (c)(2)(C)
a. Remove language that improperly restricts daylight plane, placement on the lot, limitation for
subterranean construction, or basement construction.
2. Two -Story
a. Provide definition for subterranean 1st level construction. (1st level partially recessed in the
ground)
i. Clarify how deep this can be without being interpreted as a `basement'
1. Suggest 36" max below existing natural grade as the threshold
b. Confirm Staff's recommendations for privacy management
i. Windows obscured when sills are below 5' above adjacent finish floor on walls parallel to
property lines when the structure is within 8' of a property line
ii. Set sills at 5' above adjacent finish floor on walls parallel to property lines when the structure
is within 8' of a property line
iii. Sleeping rooms endeavor to have egress windows located on walls non -adjacent to property
lines
iv. Use of (operable) skylights in bathrooms and other spaces where windows could be
considered optional
v. No exterior lighting mounted above 7' on walls adjacent to property lines to keep it at or
below maximum fence height
c. Consider adopting language similar to that used in Santa Cruz:
Page 2
Item 14: Staff Report Pg. 37 Packet Pg. 175 of 229
Item 14
Attachment B -Task Force
Letter
i. ADUs higher than one story may be up to 22' tall at the peak, measured from average
grade, and any portion of the structure that exceeds 16' in height must be set back a
minimum of 5' from the side yard property line and 10' from the rear yard property line.
ii. Exception: An ADU that faces an alley or street can be up to 22' tall and any portion of the
structure that exceeds 16' in height must be set back 5' from the side and rear property
lines.
iii. Detached New Construction ADUs higher than one story shall limit the major access stairs,
decks, entry doors, and windows to the interior of the lot or an alley if applicable. Windows
that impact the privacy of the neighboring side or rear yards should be minimized or
otherwise restricted as in (b.) above
3. Fees
a. Significant cost is incurred relative to fees for Plan Check, Building Permit, Planning Impacts,
Specialty Consultants, School Fees, etc. They are not always levied in a relative fashion.
i. Why not just charge a flat fee based on ADU floor area?
ii. Included in that methodology, remove some of the fees to further incentivize ADU
construction.
b. It is important to note that the proportionate language in regard to Planning Impact Fees for units
>750 sf contained in Gov. Code, § 65852.2, subd. (f)(3)(A) creates a significant disincentive for
individuals with existing small homes. Please note the following examples:
i. Project #1, Demolish an existing detached garage and replace it with a new conforming
detached ADU.
1. Main house at 3,427 sf and new ADU at 800 sf = 23.3% = $4,511.47
ii. Project #2, Convert an existing detached garage and construct an addition to create a new
detached ADU.
1. Main house at 1,209.6 sf and new ADU at 882 sf = 73.0% = $14,101.46
c. Both are roughly the same scope but because of the more modest house on Project #2, t12Q
weighted ratio pushes the fee to be 910k more.
d. Add to this about $9,000 for: School Impact Fees ($3,000), Plan Check Fees ($2,800) and
Building Permit Fees ($3,300) - That puts the fees for Project #2 at around $23k, or almost 11%
of the total anticipated project construction cost!
4. Subterranean/Basement Construction
a. Without some flexibility in this, floor to ceiling heights are substandard (+/- 7'-0"). Codifying this in
a thoughtful way can provide tangible improvements in privacy management and enhancement to
overall massing.
b. Partially subterranean 1st floor lowers 2nd floor and allows 8' ceilings with a reasonable roof slope
1 LEVEL ABOVE GRADE AND 1 LEVEL BASEMENT
ADU HEIGHT LIMIT
9 P Z
20V
2 LEVELS ABOVE GRADE, PARTIALLY SUBTERRANEAN
ADU HEIGHT LIMIT
2 LEVELS ABOVE GRADE
ADU HEIGHT LIMIT
21-2
Item 14: Staff Report Pg. 38
Packet Pg. 176 of 229
Item 14
Attachment B -Task Force
Letter
c. Adding a basement could reduce an entire floor of height/massing
1. Reduce impact to neighbors
2. Required exclusionary excavation techniques remove any concerns related to
dewatering
ii. Tree root impacts could be conditioned since the 800 sf exemption ADU is not obligated in
regard to underground space
iii. Add clarifying language requiring the interior basement FA to count toward the 800 sf
exemption triggering the additional area beyond 800 sf to be deducted from overall site FA
iv. No further encroachment other than that required for emergency egress.
v. Consider, as an additional incentive, allowing a 1200 sf max ADU if 50% of FA is below
grade?
5. Minimal increase to non -conforming structures
a. Create an allowance to avoid complete demolition or unnecessary
complexity due to energy or structural upgrades
i. Clarify that it can only be accessed for compliance with energy or
structural obligations
1. Grant an additional 12" of height — increase framing depth
above top plate rather than hanging, which is structurally
complex and reduces ceiling heights.
2. Note that the structure height will still be restricted by the 16'
height limit.
3. Grant an additional 6" in plan on any side for structural
seismic sheathing, exterior insulation, or replacement siding,
so long as no portion of the structure encroaches beyond
the property line.
Add a clarification regarding structures with existing
parapets. A non -conforming portion of the structure
may be modified up to the height of the existing
parapet. This can be done without creating an
increased impact to neighbors. Previous interpretation
of 'shrink-wrap' rules should not apply to recessed roof
areas below the top of the parapet. This flexibility will
allow the interior to be a reasonable residential height.
TOP OF PARAPET:
MAXIMUM ALLOWED
BUILDING HEIGHT
REMOVE (E) FRAMING
EXISTING GARAGE
GRAY
REVISED FRAMING
AND FINISH
RED
6. Utility Connections
a. Separate meters placed only at the owner's discretion
b. The requirement to provide a separate sewer line for detached ADUs has been directed by the
Chief Building Official.
i. There is an exception in the Plumbing Code recognized in many jurisdictions to avoid the
significant cost this causes (often greater than $9,000) CPC 311.1 Exception: Where one
building stands in the rear of another building on an interior lot, and no private sewer is
available or can be constructed to the rear building through an adjoining court, yard, or
driveway, the building drain from the front building shall be permitted to be extended to the
rear building.
Recognize that the high cost can be viewed as the basis for applying the exception
Question - If no separate line is required for an attached ADU, why obligate the cost
and complexity for a detached ADU. The outcome is the same so why regulate
differently?
An alternative to this might be a study performed by experts under CPC 301.3
"Alternate Materials and Methods of Construction Equivalency" with the establishment
Page 4
Item 14: Staff Report Pg. 39 Packet Pg. 177 of 229
Item 14
Attachment B -Task Force
Letter
of standards for equipment (backflow prevention) and cleaning/inspection schedules.
Once established in the City, this could be relied on as an alternate approach.
Routing of utilities at the discretion of property aEET
owner (rear alley or another alternate to avoid
disruption to landscape or trees)
i. This graphic compares three lots with an _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -
alley behind. Parcel 3 has an attached _ __ :__- (N)
ADU and the sewer may connect to the
main house line. There is no impact to the
-------------
site. Parcels1 and 2 have detached ADUs A1111 A°
and are currently required to run their
sewer line shown as 'A', around the main ---- " --,--- ,�,"
house, and out to the street at the front
yard. This is highly problematic, especially
if there are protected trees on site. A
reasonable option would be to allow the
sewer line placement shown by the 'B' or
'C' routing.
7. Garage replacement associated with Detached ADU
a. When replacement covered parking is provided, and attached to an ADU, that area should not
count against the 800 sf 'bonus'
i. Staff has not indicated agreement with this.
ii. It represents a significant disincentive toward the creation of covered parking spaces.
iii. The space designated as a garage should count against the overall FA and not be allowed if
the FAL or Lot Coverage will be exceeded as a result.
8. Retroactive Actions for all ADUs in process after 1/1/2020 (for projects without Building Final)
a. Retract all enacted Deed Restrictions which are not in compliance with the updated regulations
i. Require new Deed Restrictions in conformance with the updated requirements
b. Refund any overpayment of fees for all projects in process (between approvals and Building
Final) since January 1, 2020 for:
i. Proportionate Impact Fees, if they remain in place
ii. Other fees as adjusted by the revised ordinance
iii. Council could elect to refund the full amount or an adjusted amount according to
16.06.110/R108.5 at 80%?
9. Green Building
a. The current detached ADU regulations require Tier 2 with exceptions
i. Tier 2 obligates requirements for third party preparation of documents and site evaluation
which comes at significant cost
b. If a homeowner proposes an addition/alteration to their home under 1,000sf, a third party is not
required and the project is only required to meet CALGreen Mandatory measures
c. To streamline the ADU permitting and construction process, detached ADUs under 1,000 sf
should only be required to comply with CALGreen Mandatory for consistency
10. Noise producing equipment
a. Allow placement at any location on the property as long as documentation is provided which
confirms noise level will be below the 66 decibel limit at the property line. What should be codified
for these issues are rules that direct the desired result. Don't overcomplicate what can be
achieved simply.
i. Equipment should be <66 dB without accessories such as blankets (can fail/degrade over
time)
Page 5
Item 14: Staff Report Pg. 40 Packet Pg. 178 of 229
Item 14
Attachment B -Task Force
Letter
Asking for site -specific studies creates an additional unreasonable cost burden and must be
avoided
11. Doorway between ADU and Primary Unit
a. This really should be allowed as long as it is a hotel style communicating door. Note that it is
allowed for a JADU so why not for an ADU?
i. Provides indoor access to care for or interact with the occupant but can be closed if privacy
or separation is needed
b. Don't create rules people will routinely circumvent - just remove the unnecessary regulation -
Some may take advantage but there is little stopping them anyway
12. 60 -day Processing
a. Sets unrealistic expectations without clear narrative
b. Explain how this will be interpreted/implemented
c. Note that HCD has indicated the State says once an application is submitted, the City must
approve within 60 days or it is automatically approved.
i. It is assumed that the clock is stopped when waiting for applicant response to comments,
but there is nowhere this is codified and creates frustration for homeowners
13. Sprinkler requirements
a. Clarify rules relative to the California State Fire Marshal Information Bulletin 17-001 (1/24/17)
i. Current PA implementation is not in alignment with Senate Bill 1069
ii. Safety concerns and physical constraints must be balanced against compliance with the
State language
14. Flood Zone
a. Better articulate requirements and permitted exceptions
Consider an example of the Exemption 800 sf ADU in the flood zone on a small lot — if
reconstructing a non -conforming structure, it must be allowed to go higher than the 16 foot
limitation by the delta between existing grade and the project site base flood elevation to
raise the first floor level.
15. Remove requirement to convert "existing" garage/carport
a. Only applies to projects where a new home is constructed with the intent of the garage or carport
being converted to an ADU as a second step' after final inspection.
b. Allow for a one -phase process
i. Offer incentive for streamlining
1. Cannot be setbacks, height, etc. as these are enshrined in Gov. Code, § 65852.2,
subd. (c)(2)(C)
Could offer an additional fee reduction for saved staff time or something similar
While we recognize the Ordinance before you has been in process for the better part of a year, your
action tonight will set the tone for what is possible until the next iteration of this language evolves. We are
hopeful the commitment you have voiced toward incentivizing residential development, aligned with a
stated goal of streamlining the approval of ADUs, will lead you to adopt some version of the 15 points we
have presented. As professionals serving as guides to those who wish to construct an ADU, and being
tasked with implementing the regulations, we want you to understand how important we believe these
items are. If anything, we hope you might consider this as a starting point. We welcome your willingness
to perhaps go further and, as many other cities have done, consider the adoption of additional language
which will make ADUs more livable, desirable, and affordable.
Respectfully submitted,
Jessica Resmini, Architect Randy Popp, Architect
Page 6
Item 14: Staff Report Pg. 41 Packet Pg. 179 of 229
Roofed porches on the 1st floor
Item 14
Attachment C - Substantially Open
Porches
Roofed porches on the 1st floor do NOT count toward the gross floor area if at least 50% of the perimeter
is at least 50% open.
How to determine if a porch is at least 50% open (using Fig 5 as an example)
Fig 5 Roofed 1st floor porch
Step 1: Determine the perimeter of the porch and divide it into
segments that will allow a comparison of closed and
open segments.
The perimeter of the porch in Fig 5 is shown below. It is the sum of
segments A throug G. It is 70 linear feet.
L4
W I �
8 Item 14: Staff Report P . 42
p g Packet Pg. 180 of 229
I I I
D ICE _____
' 7' ' 14'
Item 14
Attachment C - Substantially Open
Porches
Step 2: Determine which perimeter segments abut the house walls. These are closed segments,
In Fig 5 sides A, B, & C abut the house walls.
These are considered to be closed segments.
Step 3: Determine the status (open/closed) of the remaining segments based on the design. If at least 50% of the facade area is
open, then the segment or side is considered open.
For purposes of assessing the openess of the facade:
• The height of the segment facades is measured from the top of the porch floor to the the point where the
segment facade intersects with the top of the roof material.
• The widths of the segment facades are measured from the same plane. Allowances may be made for
structural supports that are not excessive.
Intersection
facade & top
material I I
'II Li Li Li'
)rch flr
F
24'
Open Closed Open
(because of decorative glass wall)
Item 14: Staff Report Pg. 43
Open
9
Packet Pg. 181 of 229
Item 14
Attachment C - Substantially Open
Step 4: Finalize the determination of which segments are closed and which are open, total the linear feet i Porches
category, and compare the totals.
n I
For the porch in Fig 5, the summary is as follows:
Closed Open
Segment Feet Segment Feet
A 3' D 7'
jw
B 8' F 24' a «+ B
n
c 10' G 4' 8'
E 14'
35' 35' It.
Conclusion: The perimeter of the porch in Fig5 is 50% open and so the porch would NOT count toward gross floor area
III-11Il llII=inl=11 I — —fill1111-1111-
--fin
Open Open
1 0 Item 14: Staff Report Pg. 44 Packet Pg. 182 of 229
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
December 23, 2021
Jonathan Lait, Planning Director
Planning Department
City of Palo Alto
250 Hamilton Avenue — Fifth Floor
Palo Alto, CA 94301
Dear Jonathan Lait:
Item 14
Attachment D - HCD
Letter on ADU Ordinance
(2021)
RE: Review of Palo Alto's Accessory Dwelling Unit (ADU) Ordinance under ADU
Law (Gov. Code § 65852.2)
Thank you for submitting the City of Palo Alto (City) accessory dwelling unit (ADU)
ordinance (Ordinance No.5507) adopted September 26, 2020, to the California
Department of Housing and Community Development (HCD). The ordinance was
received on October 20, 2020. HCD has reviewed the ordinance and is submitting these
written findings pursuant to Government Code section 65852.2, subdivision (h). HCD has
determined that the ordinance does not comply with section 65852.2 in the manner
noted below. Under the statute, the City has up to 30 days to respond to these findings.
Accordingly, the City must provide a written response to these findings no later than
January 23, 2022. HCD will review and consider any written response received from the
City before that date in advance of taking further action authorized by Government Code
section 65852.2.
The adopted ADU ordinance meets many statutory requirements. However, the
ordinance must be revised to comply with State ADU Law (Gov. Code, § 65852.2), as
follows:
• Section 18.09.030(a)(3) Units Exempt from Generally Applicable Local
Regulations: The text of this Section and the applicable portion of Table 1
indicate the maximum size of a newly constructed detached ADU is 800 square
feet. Although a local agency may establish minimum and maximum size
requirements for ADUs pursuant to subdivision (c)(1) of Government Code
section 65852.2 within limits, a local agency shall not establish a maximum
square footage requirement for either attached or detached ADUs that is less
than 850 square feet and 1,000 square feet for an ADU that provides more than
one bedroom. (Gov. Code, § 65852.2, subd. (c)(2)(B).) Therefore, all relevant
Item 14: Staff Report Pg. 45 Packet Pg. 183 of 229
Jonathan Lait, Planning Director
Page 2
Item 14
Attachment D - HCD
Letter on ADU Ordinance
(2021)
sections of the ordinance must be amended to comply with this mandate in State
ADU Law.
• Section 18.09.030 Units Exempt from Generally Applicable Local Regulations:
There appears to be a conflict between the text of this section and Table 1. The
number of allowable units are correctly noted in Table 1 as "1 ADU and 1
JADU." The text of section 18.09.030(a) appears to limit allowable units to "an
ADU or JADU." Government Code section 65852.2, subdivision (e)(1)(A),
requires an ordinance to allow "one ADU and one JADU per lot... ." The City
must amend the ordinance to correct this inconsistency, clarifying that "one
ADU and one JADU" are permitted if all the conditions of section 65852.2,
subdivision (e)(1)(A) apply.
• Section 18.09.030(b) Application of Development Standards: Local agencies
may establish standards for ADUs pursuant to Government Code section
65852.2, subdivision (a); however, these standards do not apply to ADUs
constructed pursuant to subdivision (e). Table 1 impermissibly applies
"underlying zoning" "for front setback[s]" to subdivision (e) ADUs. (Mun. Code,
§18.09.030(b).) Subdivision (e)(1) describes permitted setbacks in full. Unless
underlying zoning for all residential areas conforms to subdivision (e) limits, this
table must be amended to comply with statute. (Gov. Code, § 65852.2, subd.
(e)(1)(A).)
• Section 18.09.030(b)(1) ADU Height in Flood Zones: The City has
impermissibly restricted the height of ADUs. It appears that the City establishes
minimum elevations for the first floor of structures in the flood zone, which is
essentially the entire city to varying degrees. To account for this, the zoning
code allows most residential structures to exceed otherwise maximum
allowable heights for development. The City does not extend this
accommodation to ADUs. Currently, Table 1 states that the maximum height for
new, detached ADUs is 16 feet, but includes a caveat that "units built in a flood
zone are not entitled to any height extension." (Mun. Code, § 18.09.030(b).) In
many instances, this would operate as an impermissible restriction on ADUs.
Under State ADU Law, the City must accommodate an ADU of at least 800
square feet and 16 feet in height. Thus, the caveat in Table 1 is potentially
confusing and could restrict the height to less than 16 feet. If it would in fact
operate to effectively limit the height of ADUs to less than 16 feet, it would
operate as an impermissible restriction on ADUs. As such, Table 1 should be
revised to clarify that this limitation does not apply where necessary to permit
an 800 -square foot ADU that it at least 16 feet tall. (Gov. Code, § 65852.2,
subds. (c)(2)(C) and (e)(1)(B)(ii).)
• Section 18.09.040(b) Daylight Plane and ADU Height Standards: Table 2 states
that "daylight plane" acts as a limit on the height of ADUs. In many instances,
Item 14: Staff Report Pg. 46 Packet Pg. 184 of 229
Jonathan Lait, Planning Director
Page 3
Item 14
Attachment D - HCD
Letter on ADU Ordinance
(2021)
this may not be a problem; however, daylight plane concerns cannot be used to
unduly limit the height of an ADU. ADUs are permitted up to 16 feet high. (Gov.
Code, § 65852.2, subds. (c)(2)(C), (e)(1)(B)(ii).) Therefore, in considering
restrictions that the City is imposing on ADUs for daylight planes, the ordinance
should note the 16 -foot height allowable for ADUs. This Table must be
amended to clarify this point.
• Section 18.09.040(b) Units Subject to Local Standards: Table 2 sets out the
development standards for ADUs that do not qualify under section 18.09.030.
Although the City has more freedom to establish development standards for
these ADUs, that is not without limitation. This section, and Table 2, must be
amended to clarify that —notwithstanding the development standards —an ADU
of at least 800 square feet, 16 feet in height, and with four -foot rear and side -
yard setbacks is permitted as required by State ADU Law. (Gov. Code, §
65852.2, subd. (c)(2)(C).)
• Section 18.09.040(b) Floor Area and JADUs: Development standards can
account for ADUs in their measurement of the floor area restrictions or ratio
(FAR). But these standards may not account for or consider JADUs. A JADU
may not be included in this calculation, because a JADU is a unit that is
contained entirely within a single-family residence. (Gov. Code § 65852.22,
subd. (h)(1).) Footnote 4 of Table 2 impermissibly includes JADUs as part of
the FAR calculations. This footnote must be amended to clarify this point.
• Section 18.09.040(h) Noise -Producing Equipment: Local agencies may impose
development standards on ADUs; however, these standards shall not exceed
state standards. Section 18.09.040(h) states that noise -producing equipment
"shall be located outside of the setbacks." This section must be revised to only
refer to ADUs since setbacks are not required for JADUs. In addition, this
setback for noise -producing equipment for ADUs must be revised to make clear
that this setback requirement will not impede the minimum state standards of
four -foot setbacks. (Gov. Code, § 65852.2, subd. (c)(2)(C).)
• Section 18.09.040(i)(2) Setbacks: Currently, this section states, "No basement or
other subterranean portion of an ADU/JADU shall encroach into a setback required
for the primary dwelling." Under state law, new attached and detached ADUs have
maximum four -foot rear and side -yard setbacks. (Gov. Code, § 65852.2, subds.
(a)(1)(D)(vii), (c)(2)(C), (e)(1)(B), and (e)(1)(D).) Local agencies may impose
setback requirements if the minimum rear and side -yard setbacks established by
state law are not exceeded. This restriction is concerning on a number of grounds.
First, setbacks may not be required for JADUs as they are constructed within the
walls of the primary dwelling. Second, this requirement imposes excessive
restrictions on ADUs converted from an existing area of the primary dwelling or
accessory structure with a basement or subterranean space. Again, these
Item 14: Staff Report Pg. 47 Packet Pg. 185 of 229
Jonathan Lait, Planning Director
Page 4
Item 14
Attachment D - HCD
Letter on ADU Ordinance
(2021)
structures are not subject to setback requirements. Finally, this section would
violate State ADU Law if the side or rear setback requirement for an ADU or JADU
located in a basement or other subterranean structure exceeded four feet.
Requiring ADUs and JADUs to meet the side and rear setbacks for the primary
dwellings could exceed the maximum four -foot setbacks set out in State ADU Law.
The ordinance must be revised to eliminate these concerns.
• Section 18.09.040(j) Design: This section states, "Except on corner lots, the
unit shall not have an entranceway facing the same lot line (property line) as
the entranceway to the main dwelling unit unless the entranceway to the
accessory unit is located in the rear half of the lot. Exterior staircases to second
floor units shall be located towards the interior side or rear yard of the property."
These standards appear to apply only to the creation of ADUs and may unduly
restrict the placement of an ADU on some lots. Local development standards
provided by ordinance pursuant to subdivisions (a) through (d) of Government
Code section 65852.2 do not apply to ADUs created under subdivision (e).
Please consider eliminating this restriction or modifying it such that it applies
"when feasible."
• Section 18.09.040(j)(2)(A) Privacy: The section states, "Second story doors and
decks shall not face a neighboring dwelling unit." This limitation, however, may
place an impermissible constraint on an ADU. For example, excessive
constraints would be placed on the creation of a second story ADU if residential
units were located on all adjacent parcels. In addition, when operating in
conjunction with Section 18.09.040(j), noted above, this restriction may prohibit
ADUs created under subdivision (e) of Government Code section 65852.2.
Accordingly, this provision must be revised to allow for more flexibility. The City
could revise the first sentence of this section to state, "Second story doors and
decks shall not face a neighboring dwelling unit, where feasible."
• Section 18.09.040(k)(4) Parking: The ordinance indicates if covered parking for a
unit is provided in any district, the maximum size of the covered parking area for
the accessory dwelling unit is 220 square feet. Further, under this section, the
space for the covered parking count towards the total floor area for the site and
the ADU if attached to the unit. Covered parking should not count towards the
total floor area of the site as if it would unduly limit the allowable size of an ADU
established by state law, nor should it directly count toward the area available for
the ADU. Although standards within an underlying zone may apply when noted in
the adopted ADU ordinance, they may not be more restrictive than those
contained in state statute. (See, e.g., Gov. Code, § 65852.2, subs. (a)(1)(B),
(a)(1)(D)(vii), (a)(1)(D)(x), (c), and (e).) The portion of this section stating "unit
unless attached to the unit" should be deleted, or the section should otherwise be
modified to comply with state law.
Item 14: Staff Report Pg. 48 Packet Pg. 186 of 229
Item 14
Attachment D - HCD
Jonathan Lait, Planning Director
Letter on ADU Ordinance
Page 5 (2021)
In these respects, revisions are necessary to comply with statute.
HCD will consider any written response to these findings, such as a revised ordinance
or a detailed plan to bring the ordinance into compliance with law by a date certain,
before taking further action authorized pursuant to Government Code section 65852.2.
Please note that HCD may notify the Attorney General's Office in the event that the City
fails to take appropriate and timely action under section 65852.2, subdivision (h).
HCD appreciates the City's efforts in the preparation and adoption of the ordinance and
welcomes the opportunity to assist the City in fully complying with State ADU Law.
Please contact Lauren Lajoie of our staff, at (916) 776-7495 or at
Lauren.Lajoie hcd.ca.gov if you have any questions or would like HCD's technical
assistance in these matters.
Sincerely,
David Zisser
Assistant Deputy Director
Local Government Relations and Accountability
Item 14: Staff Report Pg. 49 Packet Pg. 187 of 229
DocuSign Envelope ID: 26247F48-AB81-46DC-AE75-91A87A8EE538
PLANNING & DEVELOPMENT SERVICES
Item 14
Attachment E - Staff
Response to HCD (2022)
C I T Y O F 250 Hamilton Avenue, 5th Floor
PALO Palo Alto, CA 94301
ALTO (650) 329-2441
Lauren Lajoie
Housing & Community Development
Division of Housing Policy Development
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
Lauren.Laioie@hcd.ca.gov
Dear Ms. Lajoie,
February 3, 2022
This letter represents the City of Palo Alto's response to your letter dated December 23, 2021 received by
email, and received by hard copy on January 27, 2022. The content of the Housing and Community
Development's letter is italicized. The City of Palo Alto's responses are bolded.
ADU Size - Section 18.09.030(a)(3) Units Exempt from Generally Applicable Local Regulations: The
text of this Section and the applicable portion of Table 1 indicate the maximum size of a newly
constructed detached ADU is 800 square feet. Although a local agency may establish minimum and
maximum size requirements for ADUs pursuant to subdivision (c)(1) of Government Code section
65852.2 within limits, a local agency shall not establish a maximum square footage requirement for
either attached or detached ADUs that is less than 850 square feet and 1,000 square feet for an ADU
that provides more than one bedroom. (Gov. Code, § 65852.2, subd. (c)(2)(B).) Therefore, all relevant
sections of the ordinance must be amended to comply with this mandate in State ADU Law.
PAMC Section 18.09.030 is intended to describe the requirements for ADUs built under Gov. Code
65852.2, subdivision (e). This is not intended to create any limitation on ADUs built under
subdivisions (a) -(d), which are governed by PAMC Section 18.09.040. The City will add clarifying
language to this effect at the top of PAMC Section 18.09.030.
2. ADU & JADU - Section 18.09.030 Units Exempt from Generally Applicable Local Regulations: There
appears to be a conflict between the text of this section and Table 1. The number of allowable units
are correctly noted in Table 1 as "1 ADU and 1 JADU." The text of section 18.09.030(a) appears to
limit allowable units to "an ADU or JADU." Government Code section 65852.2, subdivision (e)(1)(A),
requires an ordinance to allow "one ADU and one JADU per lot...." The City must amend the ordinance
to correct this inconsistency, clarifying that "one ADU and one JADU" are permitted if all the
conditions of section 65852.2, subdivision (e)(1)(A) apply.
The City will update its ordinance to reflect the changes made by AB 3182 with respect to 1 ADU
and 1 JADU.
3. Front Setback - Section 18.09.030(b) Application of Development Standards: Local agencies may
establish standards for ADUs pursuant to Government Code section 65852.2, subdivision (a);
however, these standards do not apply to ADUs constructed pursuant to subdivision (e). Table 1
impermissibly applies "underlying zoning" "for front setback[s]" to subdivision (e) ADUs. (Mun. Code,
§18.09.030(b).) Subdivision (e)(1) describes permitted setbacks in full. Unless underlying zoning for
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all residential areas conforms to subdivision (e) limits, this table must be amended to comply with
statute. (Gov. Code, § 65852.2, subd. (e)(1)(A).)
During our conversation on February 2, 2022, you explained that local rules may apply for front
setbacks, including ADUs built under subdivision (e), and that it is not HCD's position that
subdivision (e) ADUs must be allowed at the front lot line. You explained that the issue with the
current City ordinance is that it does not make clear that "underlying zoning" is only for front
setbacks. The City will clarify this point in its ordinance.
4. Height - Section 18.09.030(b)(1) ADU Height in Flood Zones: The City has impermissibly restricted the
height of ADUs. It appears that the City establishes minimum elevations for the first floor of structures
in the flood zone, which is essentially the entire city to varying degrees. To account for this, the zoning
code allows most residential structures to exceed otherwise maximum allowable heights for
development. The City does not extend this accommodation to ADUs. Currently, Table 1 states that
the maximum height for new, detached ADUs is 16 feet, but includes a caveat that "units built in a
flood zone are not entitled to any height extension." (Mun. Code, § 18.09.030(b).) In many instances,
this would operate as an impermissible restriction on ADUs. Under State ADU Law, the City must
accommodate an ADU of at least 800 square feet and 16 feet in height. Thus, the caveat in Table 1 is
potentially confusing and could restrict the height to less than 16 feet. If it would in fact operate to
effectively limit the height of ADUs to less than 16 feet, it would operate as an impermissible
restriction on ADUs. As such, Table 1 should be revised to clarify that this limitation does not apply
where necessary to permit an 800 -square foot ADU that it at least 16 feet tall. (Gov. Code, § 65852.2,
subds. (c)(2)(C) and (e)(1)(B)(ii).)
For purposes of health and safety, the City of Palo Alto requires structures built in a flood zone to
have a minimum finished floor height based on FEMA regulations. For a primary residence, the City
provides an extra height allowance of 50% the minimum finished floor height. The City does not
provide this allowance for any accessory structures, including ADUs. Nevertheless, ADUs in the
flood zone can still be built to a height of 16 feet. It is unclear to the City how the failure to provide
additional height above 16 feet represents an impermissible restriction on ADUs. During our
conversation, you related that HCD prefers to have as few restrictions as possible on ADU
production. The only restriction here is on finished floor height in the flood zone, which cannot be
waived or relaxed without impacts on health and safety. Even in areas requiring the most extreme
height above the base flood elevation, an ADU remains feasible within the 16 foot height limit.
5. Daylight Plane - Section 18.09.040(b) Daylight Plane and ADU Height Standards: Table 2 states that
"daylight plane" acts as a limit on the height of ADUs. In many instances, this may not be a problem;
however, daylight plane concerns cannot be used to unduly limit the height of an ADU. ADUs are
permitted up to 16 feet high. (Gov. Code, § 65852.2, subds. (c)(2)(C), (e)(1)(B)(ii).) Therefore, in
considering restrictions that the City is imposing on ADUs for daylight planes, the ordinance should
note the 16 foot height allowable for ADUs. This Table must be amended to clarify this point.
Please note that the City's daylight plane regulations do not apply to subdivision (e) ADUs, which
are governed by PAMC Section 18.09.030. The City will add a clarifying sentence at the top of
Section 18.09.040 explaining that none of the regulations in PAMC 18.09.040 apply to subdivision
(e) ADUs. In addition, the City will add a clarifying statement that the regulations in PAMC
18.09.040 are not intended to limit the conversion of existing structures to ADUs or JADU5.
For all other ADUs, however, the City has requested clarity on HCD's position on daylight plane on
numerous occasions, most recently by email dated August 8, 2021. Please see this email, which is
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attached, for an explanation of the City's position. The City looks forward to continued discussion
of this topic.
6. Clarify - Section 18.09.040(b) Units Subject to Local Standards: Table 2 sets out the development
standards for ADUs that do not qualify under section 18.09.030. Although the City has more freedom
to establish development standards for these ADUs, that is not without limitation. This section, and
Table 2, must be amended to clarify that —notwithstanding the development standards —an ADU of
at least 800 square feet, l6 feet in height, and with four foot rear and side- yard setbacks is permitted
as required by State ADU Law. (Gov. Code, § 65852.2, subd. (c)(2)(C).)
The City will add a clarifying statement to this effect.
7. Floor Area & JADUs - Section 18.09.040(b) FloorArea and JADUs: Development standards can account
for ADUs in their measurement of the floor area restrictions or ratio (FAR). But these standards may
not account for or consider JADUs. A JADU may not be included in this calculation, because a JADU is
a unit that is contained entirely within a single-family residence. (Gov. Code § 65852.22, subd. (h)(1).)
Footnote 4 of Table 2 impermissibly includes JADUs as part of the FAR calculations. This footnote
must be amended to clarify this point.
Footnote 4 of Table 2 provides additional FAR on a site for ADUs and JADUs. This is an incentive to
promote production of such units without limiting the development potential of a primary unit.
Because a JADU is contained entirely within the space of a single-family residence, it would
normally be included in the floor area of the primary unit. Footnote 4 provides an opportunity for
a property owner to exempt all JADU square footage from the calculation of floor area for the
primary unit. The removal of JADUs from footnote 4 would only serve to restrict the development
of JADUs. The City will attempt to clarify the language of this footnote.
8. Noise -Producing Equipment - Section 18.09.040(h) Noise -Producing Equipment: Local agencies may
impose development standards on ADUs; however, these standards shall not exceed state standards.
Section 18.09.040(h) states that noise -producing equipment "shall be located outside of the
setbacks." This section must be revised to only refer to ADUs since setbacks are not required for
JADUs. In addition, this setback for noise -producing equipment for ADUs must be revised to make
clear that this setback requirement will not impede the minimum state standards of four foot
setbacks. (Gov. Code, § 65852.2, subd. (c)(2)(C)).
As noted above, the City will add a clarifying statement that the regulations in PAMC 18.09.040 are
not intended to limit the conversion of existing structures to ADUs or JADUs. For new construction,
however, the City permits JADUs to build at a lesser setback than a single-family home normally
would. Therefore, the removal of JADUs from this section will only serve to restrict the
development of JADUs.
Additionally, the City's ordinance states that noise producing equipment needs to be placed
outside the setback for an ADU or JADU. This means that the noise producing equipment itself
cannot be placed closer than four -feet to a property line for either type of structure; not that the
ADU or JADU cannot be placed at those locations. This is consistent with the state setback
requirements for an ADU.
9. Basements - Section 18.09.040(i)(2) Setbacks: Currently, this section states, "No basement or other
subterranean portion of an ADU/JADU shall encroach into a setback required for the primary
dwelling." Understate law, new attached and detached ADUs have maximum four foot rear and side -
yard setbacks. (Gov. Code, § 65852.2, subds. (a)(1)(D)(vii), (c)(2)(C), (e)(1)(B), and (e)(1)(D).) Local
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agencies may impose setback requirements if the minimum rear and side -yard setbacks established
by state law are not exceeded. This restriction is concerning on a number of grounds. First, setbacks
may not be required for JADU5 as they are constructed within the walls of the primary dwelling.
Second, this requirement imposes excessive restrictions on ADUs converted from an existing area of
the primary dwelling or accessory structure with a basement or subterranean space. Again, these
structures are not subject to setback requirements. Finally, this section would violate State ADU Law
if the side or rear setback requirement for an ADU or JADU located in a basement or other
subterranean structure exceeded four feet. Requiring ADUs and JADUs to meet the side and rear
setbacks for the primary dwellings could exceed the maximum four foot setbacks set out in State ADU
Law. The ordinance must be revised to eliminate these concerns.
As noted above, the City will add a clarifying statement that the regulations in PAMC 18.09.040 are
not intended to limit the conversion of existing structures to ADUs or JADUs. In addition, as with
the previous section, the inclusion of JADUs here only serves to increase flexibility of JADU
production.
As noted above, the City will add a clarifying statement an ADU of at least 800 square feet, 16 feet
in height, and with four -foot rear and side- yard setbacks is permitted as required by State ADU
Law.
With these clarifications the City does not believe it would violate State ADU Law to require that a
newly constructed ADU limit any below -grade space to a setback greater than 4 feet. It is the City's
understanding that it could simply state that basements are not permitted for ADUs built under
subdivisions (a) -(d), so long as it was still feasible to construct an ADU of at least 800 square feet. If
this is the case, the City should have the lesser authority to direct the placement of below -grade
development.
The City has significant concerns about basements in general, and those concerns extend to
basements constructed as part of ADUs. Due to a high water table throughout most of Palo Alto,
the construction of basements requires dewatering (pumping water from the construction site).
While this is allowed, there are significant restrictions on timing and procedures taken during the
dewatering process.
Secondly, development of homes in Palo Alto often includes requirements for the planting and
maintenance of trees used to enhance privacy between properties. Placing ADUs with basements
as close as 4 feet from the property line may jeopardize the health of these trees on the subject
property as well as trees on adjacent properties. The trees could fail, which would both diminish
the tree canopy —important for our environment and adaptation to climate change —and diminish
the privacy between properties.
Building below ground is not required in order to achieve a unit which follows the requirements in
Section 65852.2 and can lead to potential impacts on adjacent lots, such as to large stature trees on
adjacent lots which is a common occurrence in Palo Alto. Building a basement in these scenarios
may cause the tree to fail which is a life, safety, and health hazard which would unduly affect both
homeowners as a result of the action by one individual. There are construction methods which can
be implemented for above ground construction to help limit root damage caused by this
construction to preserve trees but that is not possible for below ground construction and can lead
to significant impacts as noted above.
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10. Corner Lots - Section 18.09.040(j) Design: This section states, "Except on corner lots, the unit shall not
have an entrance way facing the same lot line (property line) as the entranceway to the main dwelling
unit unless the entranceway to the accessory unit is located in the rear half of the lot. Exterior
staircases to second floor units shall be located towards the interior side or rear yard of the property."
These standards appear to apply only to the creation of ADUs and may unduly restrict the placement
of an ADU on some lots. Local development standards provided by ordinance pursuant to subdivisions
(a) through (d) of Government Code section 65852.2 do not apply to ADUs created under subdivision
(e). Please consider eliminating this restriction or modifying it such that it applies "when feasible."
As noted above, the City will add a clarifying sentence at the top of Section 18.09.040 explaining
that none of the regulations in PAMC 18.09.040 apply to subdivision (e) ADUs. The City will clarify
this is not applicable for subsection (e) ADUs. We are not aware of any evidence that this simple
design requirement creates an excessive constraint on ADU production and that has not been our
experience.
11. Privacy - Section 18.09.040(j)(2)(A) Privacy: The section states, "Second story doors and decks shall not
face a neighboring dwelling unit." This limitation, however, may place an impermissible constraint on
an ADU. For example, excessive constraints would be placed on the creation of a second story ADU if
residential units were located on all adjacent parcels. In addition, when operating in conjunction with
Section 18.09.040(j), noted above, this restriction may prohibit ADUs created under subdivision (e) of
Government Code section 65852.2. Accordingly, this provision must be revised to allow for more
flexibility. The City could revise the first sentence of this section to state, "Second story doors and decks
shall not face a neighboring dwelling unit, where feasible."
As noted above, the City will add a clarifying sentence at the top of Section 18.09.040 explaining
that none of the regulations in PAMC 18.09.040 apply to subdivision (e) ADUs. We are not aware of
any evidence that this simple design requirement creates an excessive constraint on ADU
production and that has not been our experience.
The City will clarify this is not applicable for subsection (e) ADUs. We are not aware of any evidence
that this creates an excessive constraint and that has not been our experience.
12. Parking - Section 18.09.040(k)(4) Parking: The ordinance indicates if covered parking for a unit is
provided in any district, the maximum size of the covered parking area for the accessory dwelling unit
is 220 square feet. Further, under this section, the space for the covered parking count towards the
total floor area for the site and the ADU if attached to the unit. Covered parking should not count
towards the total floor area of the site as if it would unduly limit the allowable size of an ADU
established by state law, nor should it directly count toward the area available for the ADU. Although
standards within an underlying zone may apply when noted in the adopted ADU ordinance, they may
not be more restrictive than those contained in state statute. (See, e.g., Gov. Code, § 65852.2, subs.
(a)(1)(8), (a)(1)(D)(vii), (a)(1)(D)(x), (c), and (e).) The portion of this section stating "unit unless
attached to the unit" should be deleted, or the section should otherwise be modified to comply with
state law.
As noted above, the City will add a clarifying sentence at the top of Section 18.09.040 explaining
that none of the regulations in PAMC 18.09.040 apply to subdivision (e) ADUs.
Currently, all covered parking in the single-family zones counts towards floor area for the site and
dwelling unit. The City does not understand how this creates a standard that is more restrictive than
that contained in state statute; none of the subsections cited in your letter speak to whether a
garage for an ADU must be exempted from the unit size for the ADU. Moreover, this provision does
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not create a constraint on ADU production, as a property owner may always choose to provide a
detached garage, uncovered parking, or no parking at all for the ADU.
The City has concerns that allowing attached garages onto these structures will incentivize
individuals to illegally expand the unit into the garage, which would both exceed the City's
ordinance, contain unpermitted construction, and potentially place the health and safety of the
occupants at risk.
Sincerely,
DocuSigned by:
293 F322E129 )F6...
Jonathan Lait
Director of Planning and Development Services
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Item 14
LAttachment E - Staff
Response to HCD (2022) GLJSi jn
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DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
December 21, 2022
Jonathan Lait, Director
Planning and Development Services
City of Palo Alto
250 Hamilton Avenue, 5th Floor
Palo Alto, CA 94301
Dear Jonathan Lait:
Item 14
Attachment F - HCD
Letter on ADU Ordinance
(2022)
RE: City of Palo Alto Accessory Dwelling Unit (ADU) Ordinance — Letter of
Technical Assistance
The California Department of Housing and Community Development (HCD) thanks the
City of Palo Alto (City) for submitting accessory dwelling unit (ADU) Ordinance Number
5507 (Ordinance) and for its response to HCD's December 23, 2021, written findings of
non-compliance. HCD appreciates the time and effort the City took in crafting its
February 3, 2022, response, and for the conversation between City staff and HCD
Analyst Lauren Lajoie on February 2, 2022. Nevertheless, HCD has concerns with the
City's response as it fails to address identified inconsistencies between the City's ADU
ordinance and State ADU Law, as outlined in this letter.
HCD requests that the City respond to this letter no later than January 20, 2023, with a
detailed plan of action and timeline, to bring its Ordinance into compliance pursuant to
Government Code section 65852.2, subdivision (h)(2)(B).
Background and Summary of Issues
In its December 23, 2021, findings, HCD detailed where it found the Ordinance violates
Government Code section 65852.2. In its February 3, 2022, letter, the City responded
point by point to the findings as they were presented in the HCD letter. While the
responses indicate a willingness to come into compliance with state law, HCD remains
concerned that the proposed changes to the City's Ordinance are insufficient. This letter
will address HCD's findings for which the City's response and/or commitment to correct
was not satisfactory and where HCD still considers an inconsistency between the
Ordinance and State ADU Law.
1) HCD's Original Finding
Daylight Plane - Section 18.09.040(b): Table 2 states that "daylight plane" acts as a
limit on the height of ADUs. In many instances, this may not be a problem; however,
daylight plane concerns cannot be used to unduly limit the height of an ADU. ADUs
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Attachment F - HCD
Jonathan Lait, Director of Planning and Development Services Letter on ADU Ordinance
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are permitted up to 16 feet high. (Gov. Code, § 65852.2, subds. (c)(2)(C),
(e)(1)(B)(ii).) Therefore, in considering restrictions that the City is imposing on ADUs
for daylight planes, the ordinance should note the 16 -foot height allowable for ADUs.
This Table must be amended to clarify this point.
Palo Alto's Response
"Please note that the City's daylight plane regulations do not apply to subdivision (e)
ADUs, which are governed by PAMC Section 18.09.030. The City will add a
clarifying sentence at the top of Section 18.09.040 explaining that none of the
regulations in PAMC 18.09.040 apply to subdivision (e) ADUs. In addition, the City
will add a clarifying statement that the regulations in PAMC 18.09.040 are not
intended to limit the conversion of existing structures to ADUs or JADUs. For all
other ADUs; however, the City has requested clarity on HCD's position on daylight
plane on numerous occasions, most recently by email dated August 8, 2021. Please
see this email, which is attached, for an explanation of the City's position. The City
looks forward to continued discussion of this topic."
HCD's Follow-up Response
On February 23, 2022, HCD received a copy of an email from Assistant City
Attorney (ACA) Albert Yang dated August 30, 2021. ACA Yang sought clarification
on behalf of the City on whether local government could enforce a development
standard that would require that any portion of an ADU fall below 16 feet in height.
The email states: "Subdivision (c)(2)(C) provides that a local agency may not
establish "[1] any other minimum or maximum size for an accessory dwelling unit, [2]
size based upon a percentage of the proposed or existing primary dwelling, or [3]
limits on lot coverage, [4] floor area ratio, [5] open space, and [6] minimum lot size [.
..] that does not permit at least an 800 square foot accessory dwelling unit that is at
least 16 feet in height with four -foot side and rear yard setbacks to be constructed in
compliance with all other local development standards." ACA Yang argues that the
law is very specific regarding the development standards addressed and it (the
subdivision) specifically recognizes that the list does not encompass all development
standards. ACA Yang states, "The specific development standards addressed in
subdivision (c)(2)(C) do not include daylight plane standards." ACA Yang impliedly
concludes that because the development standards, which ACA Yang numbered
from [1] through [6], do not list daylight plane standards, the City may impose
daylight plane standards over the minimum 16 -foot height requirement.
However, the City incorrectly cited subdivision (c)(2)(C) above; thereby, creating a
list of "development standards" from portions of (c)(2)(A) and (c)(2)(B)(i) and (ii) and
conflated these with "other local development standards" found in subdivision
(c)(2)(C). Accurately cited, subdivision (c)(2)(C) states:
(C) Any other minimum or maximum size for an accessory dwelling unit, size based
upon a percentage of the proposed or existing primary dwelling, or limits on lot
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Attachment F - HCD
Jonathan Lait, Director of Planning and Development Services Letter on ADU Ordinance
Page 3 (2022
coverage, floor area ratio, open space, and minimum lot size, for either attached or
detached dwellings that does not permit at least an 800 square foot accessory dwelling
unit that is at least 16 feet in height with four -foot side and rear yard setbacks to be
constructed in compliance with all other local development standards.
State ADU Law authorizes a local agency to establish the minimum and maximum
size requirements for ADUs in subdivision (c)(1), but any such size requirement
must allow for a minimum height of 16 feet while being constructed in compliance
with all other local development standards. This height requirement is meant to be in
harmony with local development standards. Because the subdivision has set the
minimum height, authorized by statute, local design standards set in the ordinance
cannot invalidate this provision, pursuant to Government Code section 65852.2
(a)(5). Therefore, the minimum height of all proposed ADUs is 16 feet and
cannot be limited by Daylight Plane restrictions. Table 2 must be amended to
clarify this point. Please note that SB 897 (2022), effective January 1, 2023, amends
this subdivision, and adds provisions regarding the minimum height for detached
and attached ADUs.
2) HCD's Original Finding
Floor Area & JADUs - Section 18.09.040(b). Development standards can account for
ADUs in their measurement of the floor area restrictions or ratio (FAR). But these
standards may not account for or consider JADUs. A JADU may not be included in
this calculation, because a JADU is a unit that is contained entirely within a single-
family residence. (Gov. Code § 65852.22, subd. (h)(1).) Footnote 4 of Table 2
impermissibly includes JADUs as part of the FAR calculations. This footnote must be
amended to clarify this point.
Palo Alto's Response
"Footnote 4 of Table 2 provides additional FAR on a site for ADUs and JADUs. This
is an incentive to promote production of such units without limiting the development
potential of a primary unit. Because a JADU is contained entirely within the space of
a single-family residence, it would normally be included in the floor area of the
primary unit. Footnote 4 provides an opportunity for a property owner to exempt all
JADU square footage from the calculation of floor area for the primary unit. The
removal of JADUs from footnote 4 would only serve to restrict the development of
JADUs. The City will attempt to clarify the language of this footnote."
HCD's Follow-up Response
HCD supports the City's attempt to add clarifying language. Converting an area
within an existing home should not be counted. To clarify footnote 4 in Table 2, the
City could include, for example, "This provision applies to JADUs in proposed
single-family dwellings, or remodels that increase the square footage of a single-
family dwelling."
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Item 14
Attachment F - HCD
Jonathan Lait, Director of Planning and Development Services Letter on ADU Ordinance
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3) HCD's Original Finding
Noise -Producing Equipment - Section 18.09.040(h): Local agencies may impose
development standards on ADUs; however, these standards shall not exceed state
standards. Section 18.09.040(h) states that noise -producing equipment "shall be
located outside of the setbacks." This section must be revised to only refer to ADUs
since setbacks are not required for JADUs. In addition, this setback for noise -
producing equipment for ADUs must be revised to make clear that this setback
requirement will not impede the minimum state standards of four -foot setbacks.
(Gov. Code, § 65852.2, subd. (c)(2)(C)).
Palo Alto's Response
"As noted above, the City will add a clarifying statement that the regulations in
PAMC 18.09.040 are not intended to limit the conversion of existing structures to
ADUs or JADUs. For new construction; however, the City permits JADUs to build at
a lesser setback than a single-family home normally would. Therefore, the removal
of JADUs from this section will only serve to restrict the development of JADUs.
"Additionally, the City's ordinance states that noise producing equipment needs to be
placed outside the setback for an ADU or JADU. This means that the noise
producing equipment itself cannot be placed closer than four feet to a property line
for either type of structure; not that the ADU or JADU cannot be placed at those
locations. This is consistent with the state setback requirements for an ADU."
HCD's Follow-up Response
JADUs are entirely within the walls of a proposed or existing single-family dwelling
and as such not subject to any setback requirements. Therefore, the City should
remove the reference to JADU from Section 18.09.040(h). The City writes, "For new
construction; however, the City permits JADUs to be built at a lesser setback than a
single-family home normally would." Please clarify this statement for us. HCD
applauds the City's intention to promote JADUs by relaxing setback requirements.
However, since setbacks do not apply to JADUs, the City would have to relax the
setback requirements for the primary single-family dwelling to achieve the desired
effect.
4) HCD's Original Finding
Corner Lots - Section 18.09.0406) Design: This section states, "Except on corner
lots, the unit shall not have an entranceway facing the same lot line (property line) as
the entranceway to the main dwelling unit unless the entranceway to the accessory
unit is located in the rear half of the lot. Exterior staircases to second floor units shall
be located towards the interior side or rear yard of the property." These standards
appear to apply only to the creation of ADUs and may unduly restrict the placement
of an ADU on some lots. Local development standards provided by ordinance
pursuant to subdivisions (a) through (d) of Government Code section 65852.2 do not
apply to ADUs created under subdivision (e). Please consider eliminating this
restriction or modifying it such that it applies "when feasible. "
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Jonathan Lait, Director of Planning and Development Services
Page 5
Item 14
Attachment F - HCD
Letter on ADU Ordinance
(2022)
Palo Alto's Response
"As noted above, the City will add a clarifying sentence at the top of Section
18.09.040 explaining that none of the regulations in PAMC 18.09.040 apply to
subdivision (e) ADUs. The City will clarify this is not applicable for subsection (e)
ADUs. We are not aware of any evidence that this simple design requirement
creates an excessive constraint on ADU production and that has not been our
experience."
HCD's Follow -Up Response
Requirements such as stipulating the facing of entranceways or the location of
stairways may unduly restrict the creation of ADUs on some lots. Statute for both
ADUs (Gov. Code, § 65852.2, subd. (e)(1)(A)(ii)) and JADUs (Gov. Code, §
65852.22, subd. (a)(5)) require independent entry into the unit, and a constraint on
the location of an entry door may prohibit the creation of an additional housing unit.
In addition, this requirement could add significant expense if entry doors must be
installed in an exterior wall instead of utilizing an existing doorway facing the same
direction as the entryway to the primary dwelling. The City must either eliminate this
restriction or modify it such that it applies "when feasible."
5) HCD's Original Finding
Parking - Section 18.09.040(k)(iv) Parking: The ordinance indicates if covered
parking for a unit is provided in any district, the maximum size of the covered parking
area for the accessory dwelling unit is 220 square feet. Further, under this section,
the space for the covered parking count towards the total floor area for the site and
the ADU if attached to the unit. Covered parking should not count towards the total
floor area of the site as if it would unduly limit the allowable size of an ADU
established by state law, nor should it directly count toward the area available for the
ADU. Although standards within an underlying zone may apply when noted in the
adopted ADU ordinance, they may not be more restrictive than those contained in
state statute. (See, e.g., Gov. Code, § 65852.2, subs. (a)(1)(B), (a)(1)(D)(vii),
(a)(1)(D)(x), (c), and (e).) The portion of this section stating "unit unless attached to
the unit" should be deleted, or the section should otherwise be modified to comply
with state law.
Palo Alto's Response
"As noted above, the City will add a clarifying sentence at the top of Section
18.09.040 explaining that none of the regulations in PAMC 18.09.040 apply to
subdivision (e) ADUs.
"Currently, all covered parking in the single-family zones counts towards floor area
for the site and dwelling unit. The City does not understand how this creates a
standard that is more restrictive than that contained in state statute; none of the
subsections cited in your letter speak to whether a garage for an ADU must be
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Item 14
Attachment F - HCD
Jonathan Lait, Director of Planning and Development Services Letter on ADU Ordinance
Page 6 (2022
exempted from the unit size for the ADU. Moreover, this provision does not create a
constraint on ADU production, as a property owner may always choose to provide a
detached garage, uncovered parking, or no parking at all for the ADU.
"The City has concerns that allowing attached garages onto these structures will
incentivize individuals to illegally expand the unit into the garage, which would both
exceed the City's ordinance, contain unpermitted construction, and potentially place
the health and safety of the occupants at risk."
HCD's Follow-up Response
Covered parking does not count towards the total floor area of the ADU. An ADU is
defined in Government Code section 65852.2, subdivision (j)(1), as "complete
independent living facilities," and subdivision (j)(4) further specifies that the living
area for the ADU "does not include a garage..." Thus, a covered parking space or
garage, whether or not attached to a unit, would be considered "non -livable" space.
Therefore, as stated in our original finding, covered parking should not count
towards the total floor area of the site as it would unduly limit the allowable size of an
ADU established by state law. Similarly, it should not directly count toward the area
available for the ADU, as this could also restrict the size of the ADU. The addition of
garage space to the ADUs livable space would violate ADU size requirements found
in Government Code section 65852.2, subdivisions (a)(1)(D)(iv) and (v), and (c).
While the City raises concerns of potential illegal expansion, the City may not adopt
an ordinance that would violate State ADU Law. The City may rely on its
enforcement of codes and standards to mitigate its concerns. The City should
remove the portion of this section stating "unless attached to the unit" or otherwise
modify the section to comply with State ADU Law.
Conclusion
Given the deficiencies described above and in HCD's December 23, 2021, letter, the
City's Ordinance is inconsistent with State ADU Law. HCD requests that the City
respond to this letter no later than January 20, 2023, with a detailed plan of action and
timeline, to bring its Ordinance into compliance pursuant to Government Code section
65852.2, subdivision (h)(2)(B). Specifically, to bring its ADU ordinance into compliance,
the City must either amend the Ordinance according to HCD's findings to comply with
State ADU Law (Gov. Code, § 65852.2, subd. (h)(2)(B)(i)) or readopt the Ordinance
without changes. Should the City choose to readopt the Ordinance without the changes
specified by HCD, the City must include findings in its resolution that explain the
reasons the City finds that the Ordinance complies with State ADU Law despite the
findings made by HCD. (Gov. Code, § 65852.2, subd. (h)(2)(B)(ii), (h)(3)(A).)
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Attachment F - HCD
Jonathan Lait, Director of Planning and Development Services Letter on ADU 2022) inance
Page 7
(ozz)
HCD will review and consider any plan of action and timeline received from the City
before January 20, 2023, in advance of taking further action authorized by Government
Code section 65852.2.
HCD appreciates the City's efforts provided in the preparation and adoption of the
Ordinance and welcomes the opportunity to assist the City in fully complying with State
ADU Law. Please feel free to contact Mike Van Gorder, of our staff, at (916) 776-7541
or at mike.vangorder(dhcd.ca.gov.
Sincerely,
Shannan West
Housing Accountability Unit Chief
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Attachment G - Staff
Response to HCD (2023)
PLANNING & DEVELOPMENT SERVICES
CITY OF 250 Hamilton Avenue, 5t" Floor
PALO Palo Alto, CA 94301
ALTO (650) 329-2441
January 13, 2023
Mike Van Gorder
Housing & Community Development
Division of Housing Policy Development
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
Mike.VanGorder@ihcd.ca.Rov
Dear Mr. Van Gorder,
Thank you for the telephone call today regarding HCD's letter dated December 21, 2022, which
is attached to and referenced in this response. Staff appreciates HCD's thorough review of the
City's ADU ordinance and consideration of the City's prior comments in response to HCD
compliance concerns. There are five outstanding issues referenced in the letter related to various
development standards. City staff responses to each topic area is provided below; in short, staff
will recommend that the City's ordinance be updated in accordance with HCD's comments.
1. Daylight Plane. Staff understands HCD's response to mean that all portions of an ADU
must be permitted at the heights now provided Government Code section
65852.2(c)(2)(D). City staff will recommend to its legislative body updating the ordinance
to reflect that daylight plane does not limit ADU heights below the heights provided in
the Government Code.
2. Floor Area and JADUs. The City's intention with respect to JADUs has always been that they
will not impact the development potential for single-family dwelling, whether through floor
area, lot coverage, or any other development standard. The City believes this is consistent
with HCD's direction and will ensure that its ordinance reflects this intention in a manner that
makes sense in the context and structure of the City's other zoning regulations.
3. Noise Producing Equipment/JADU setbacks. The City does not believe there is a
substantive disagreement in this area. Typically, in Palo Alto, new construction related to
a single-family residence requires a six-foot side yard and 20 -foot rear yard setback.
However, as an incentive for JADU production, the City's zoning regulations provide a
more lenient four -foot setback for new construction that is proposed to contain a JADU.
While, it may be technically more accurate to call this this four -foot setback a "setback
for the new construction portion of a single-family home that is dedicated to a JADU," we
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Attachment G - Staff
Response to HCD (2023)
believe it is easier for applicants and staff to refer to this as a "setback for a new
construction JADU." Nevertheless, staff will explore whether there are clearer ways to
express this in the upcoming ADU code amendment.
With respect to the topic of noise producing equipment, the City's municipal regulations
prohibit such freestanding or attached appurtenances from being located closer to the
property line than is already allowed by state law for the ADU/JADU structure. The City is
currently working on amendments to the regulations pertaining to certain noise
producing equipment to allow greater flexibility for the primary unit in an effort to
advance the City's carbon reduction goals.
4. Corner Lots. The City continues to be unaware of any evidence that a simple objective design
requirement related to entryways creates an excessive constraint on ADU production — that
has certainly not been our experience processing over 527 ADU permits since 2018.
Nevertheless, City staff will recommend an additional clarifying statement to the effect of
"when feasible," or removal of this provision altogether.
5. Parking. The City was not able to find a relationship in state law between the term "living
area" and minimum or maximum sizes for an ADU. Indeed, the term "living area" is only
used in Gov. Code 65852.2(a)(1)(D)(vii) with respect to conversion of existing structures.
Nonetheless, the City understands HCD's position that garage area should not count
toward the "size" of an ADU. City staff will recommend removal of the phrase "unless
attached to the unit", as suggested by HCD.
City staff intends to propose amendments to the City's ADU ordinance consistent with HCD
direction at the earliest practical opportunity. At this time, staff anticipates a hearing before the
Planning and Transportation Commission (PTC) by the end of March to discuss and address the
requested changes from HCD. Following the PTC's recommendation, staff will then place the
ordinance on the City Council's agenda for adoption; anticipated for May, if not sooner. If the
City deviates from this schedule, staff will contact HCD and provide relevant updates.
Thank you again for reviewing our response letters, if you have any questions, please contact me
at (650) 329-2676 or by email at Jonathan.lait@cityofpaloalto.org.
Sincerely,
DocuSigned by:
r� Lza t
Director of Planning and Development Services
Attachment: HCD Letter, dated December 21, 2022
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DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
caqov
December 21, 2022
Jonathan Lait, Director
Planning and Development Services
City of Palo Alto
250 Hamilton Avenue, 5th Floor
Palo Alto, CA 94301
Dear Jonathan Lait:
RE: City of Palo Alto Accessory Dwelling Unit (ADU) Ordinance — Letter of
Technical Assistance
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The California Department of Housing and Community Development (HCD) thanks the
City of Palo Alto (City) for submitting accessory dwelling unit (ADU) Ordinance Number
5507 (Ordinance) and for its response to HCD's December 23, 2021, written findings of
non-compliance. HCD appreciates the time and effort the City took in crafting its
February 3, 2022, response, and for the conversation between City staff and HCD
Analyst Lauren Lajoie on February 2, 2022. Nevertheless, HCD has concerns with the
City's response as it fails to address identified inconsistencies between the City's ADU
ordinance and State ADU Law, as outlined in this letter.
HCD requests that the City respond to this letter no later than January 20, 2023, with a
detailed plan of action and timeline, to bring its Ordinance into compliance pursuant to
Government Code section 65852.2, subdivision (h)(2)(B).
Background and Summary of Issues
In its December 23, 2021, findings, HCD detailed where it found the Ordinance violates
Government Code section 65852.2. In its February 3, 2022, letter, the City responded
point by point to the findings as they were presented in the HCD letter. While the
responses indicate a willingness to come into compliance with state law, HCD remains
concerned that the proposed changes to the City's Ordinance are insufficient. This letter
will address HCD's findings for which the City's response and/or commitment to correct
was not satisfactory and where HCD still considers an inconsistency between the
Ordinance and State ADU Law.
1) HCD's Original Finding
Daylight Plane - Section 18.09.040(b): Table 2 states that "daylight plane" acts as a
limit on the height of ADUs. In many instances, this may not be a problem; however,
daylight plane concerns cannot be used to unduly limit the height of an ADU. ADUs
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are permitted up to 16 feet high. (Gov. Code, § 65852.2, subds. (c)(2)(C),
(e)(1)(B)(ii).) Therefore, in considering restrictions that the City is imposing on ADUs
for daylight planes, the ordinance should note the 16 -foot height allowable for ADUs.
This Table must be amended to clarify this point.
Palo Alto's Response
"Please note that the City's daylight plane regulations do not apply to subdivision (e)
ADUs, which are governed by PAMC Section 18.09.030. The City will add a
clarifying sentence at the top of Section 18.09.040 explaining that none of the
regulations in PAMC 18.09.040 apply to subdivision (e) ADUs. In addition, the City
will add a clarifying statement that the regulations in PAMC 18.09.040 are not
intended to limit the conversion of existing structures to ADUs or JADUs. For all
other ADUs; however, the City has requested clarity on HCD's position on daylight
plane on numerous occasions, most recently by email dated August 8, 2021. Please
see this email, which is attached, for an explanation of the City's position. The City
looks forward to continued discussion of this topic."
HCD's Follow-up Response
On February 23, 2022, HCD received a copy of an email from Assistant City
Attorney (ACA) Albert Yang dated August 30, 2021. ACA Yang sought clarification
on behalf of the City on whether local government could enforce a development
standard that would require that any portion of an ADU fall below 16 feet in height.
The email states: "Subdivision (c)(2)(C) provides that a local agency may not
establish "[1] any other minimum or maximum size for an accessory dwelling unit, [2]
size based upon a percentage of the proposed or existing primary dwelling, or [3]
limits on lot coverage, [4] floor area ratio, [5] open space, and [6] minimum lot size [.
..] that does not permit at least an 800 square foot accessory dwelling unit that is at
least 16 feet in height with four -foot side and rear yard setbacks to be constructed in
compliance with all other local development standards." ACA Yang argues that the
law is very specific regarding the development standards addressed and it (the
subdivision) specifically recognizes that the list does not encompass all development
standards. ACA Yang states, "The specific development standards addressed in
subdivision (c)(2)(C) do not include daylight plane standards." ACA Yang impliedly
concludes that because the development standards, which ACA Yang numbered
from [1] through [6], do not list daylight plane standards, the City may impose
daylight plane standards over the minimum 16 -foot height requirement.
However, the City incorrectly cited subdivision (c)(2)(C) above; thereby, creating a
list of "development standards" from portions of (c)(2)(A) and (c)(2)(B)(i) and (ii) and
conflated these with "other local development standards" found in subdivision
(c)(2)(C). Accurately cited, subdivision (c)(2)(C) states:
(C) Any other minimum or maximum size for an accessory dwelling unit, size based
upon a percentage of the proposed or existing primary dwelling, or limits on lot
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Response to HCD (2023)
coverage, floor area ratio, open space, and minimum lot size, for either attached or
detached dwellings that does not permit at least an 800 square foot accessory dwelling
unit that is at least 16 feet in height with four -foot side and rear yard setbacks to be
constructed in compliance with all other local development standards.
State ADU Law authorizes a local agency to establish the minimum and maximum
size requirements for ADUs in subdivision (c)(1), but any such size requirement
must allow for a minimum height of 16 feet while being constructed in compliance
with all other local development standards. This height requirement is meant to be in
harmony with local development standards. Because the subdivision has set the
minimum height, authorized by statute, local design standards set in the ordinance
cannot invalidate this provision, pursuant to Government Code section 65852.2
(a)(5). Therefore, the minimum height of all proposed ADUs is 16 feet and
cannot be limited by Daylight Plane restrictions. Table 2 must be amended to
clarify this point. Please note that SB 897 (2022), effective January 1, 2023, amends
this subdivision, and adds provisions regarding the minimum height for detached
and attached ADUs.
2) HCD's Original Finding
Floor Area & JADUs - Section 18.09.040(b). Development standards can account for
ADUs in their measurement of the floor area restrictions or ratio (FAR). But these
standards may not account for or consider JADUs. A JADU may not be included in
this calculation, because a JADU is a unit that is contained entirely within a single-
family residence. (Gov. Code § 65852.22, subd. (h)(1).) Footnote 4 of Table 2
impermissibly includes JADUs as part of the FAR calculations. This footnote must be
amended to clarify this point.
Palo Alto's Response
"Footnote 4 of Table 2 provides additional FAR on a site for ADUs and JADUs. This
is an incentive to promote production of such units without limiting the development
potential of a primary unit. Because a JADU is contained entirely within the space of
a single-family residence, it would normally be included in the floor area of the
primary unit. Footnote 4 provides an opportunity for a property owner to exempt all
JADU square footage from the calculation of floor area for the primary unit. The
removal of JADUs from footnote 4 would only serve to restrict the development of
JADUs. The City will attempt to clarify the language of this footnote."
HCD's Follow-up Response
HCD supports the City's attempt to add clarifying language. Converting an area
within an existing home should not be counted. To clarify footnote 4 in Table 2, the
City could include, for example, "This provision applies to JADUs in proposed
single-family dwellings, or remodels that increase the square footage of a single-
family dwelling."
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3) HCD's Original Finding
Noise -Producing Equipment - Section 18.09.040(h): Local agencies may impose
development standards on ADUs; however, these standards shall not exceed state
standards. Section 18.09.040(h) states that noise -producing equipment "shall be
located outside of the setbacks." This section must be revised to only refer to ADUs
since setbacks are not required for JADUs. In addition, this setback for noise -
producing equipment for ADUs must be revised to make clear that this setback
requirement will not impede the minimum state standards of four -foot setbacks.
(Gov. Code, § 65852.2, subd. (c)(2)(C)).
Palo Alto's Response
"As noted above, the City will add a clarifying statement that the regulations in
PAMC 18.09.040 are not intended to limit the conversion of existing structures to
ADUs or JADUs. For new construction; however, the City permits JADUs to build at
a lesser setback than a single-family home normally would. Therefore, the removal
of JADUs from this section will only serve to restrict the development of JADUs.
"Additionally, the City's ordinance states that noise producing equipment needs to be
placed outside the setback for an ADU or JADU. This means that the noise
producing equipment itself cannot be placed closer than four feet to a property line
for either type of structure; not that the ADU or JADU cannot be placed at those
locations. This is consistent with the state setback requirements for an ADU."
HCD's Follow-up Response
JADUs are entirely within the walls of a proposed or existing single-family dwelling
and as such not subject to any setback requirements. Therefore, the City should
remove the reference to JADU from Section 18.09.040(h). The City writes, "For new
construction; however, the City permits JADUs to be built at a lesser setback than a
single-family home normally would." Please clarify this statement for us. HCD
applauds the City's intention to promote JADUs by relaxing setback requirements.
However, since setbacks do not apply to JADUs, the City would have to relax the
setback requirements for the primary single-family dwelling to achieve the desired
effect.
4) HCD's Original Finding
Corner Lots - Section 18.09.0406) Design: This section states, "Except on corner
lots, the unit shall not have an entranceway facing the same lot line (property line) as
the entranceway to the main dwelling unit unless the entranceway to the accessory
unit is located in the rear half of the lot. Exterior staircases to second floor units shall
be located towards the interior side or rear yard of the property." These standards
appear to apply only to the creation of ADUs and may unduly restrict the placement
of an ADU on some lots. Local development standards provided by ordinance
pursuant to subdivisions (a) through (d) of Government Code section 65852.2 do not
apply to ADUs created under subdivision (e). Please consider eliminating this
restriction or modifying it such that it applies "when feasible. "
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Palo Alto's Response
"As noted above, the City will add a clarifying sentence at the top of Section
18.09.040 explaining that none of the regulations in PAMC 18.09.040 apply to
subdivision (e) ADUs. The City will clarify this is not applicable for subsection (e)
ADUs. We are not aware of any evidence that this simple design requirement
creates an excessive constraint on ADU production and that has not been our
experience."
HCD's Follow -Up Response
Requirements such as stipulating the facing of entranceways or the location of
stairways may unduly restrict the creation of ADUs on some lots. Statute for both
ADUs (Gov. Code, § 65852.2, subd. (e)(1)(A)(ii)) and JADUs (Gov. Code, §
65852.22, subd. (a)(5)) require independent entry into the unit, and a constraint on
the location of an entry door may prohibit the creation of an additional housing unit.
In addition, this requirement could add significant expense if entry doors must be
installed in an exterior wall instead of utilizing an existing doorway facing the same
direction as the entryway to the primary dwelling. The City must either eliminate this
restriction or modify it such that it applies "when feasible."
5) HCD's Original Finding
Parking - Section 18.09.040(k)(iv) Parking: The ordinance indicates if covered
parking for a unit is provided in any district, the maximum size of the covered parking
area for the accessory dwelling unit is 220 square feet. Further, under this section,
the space for the covered parking count towards the total floor area for the site and
the ADU if attached to the unit. Covered parking should not count towards the total
floor area of the site as if it would unduly limit the allowable size of an ADU
established by state law, nor should it directly count toward the area available for the
ADU. Although standards within an underlying zone may apply when noted in the
adopted ADU ordinance, they may not be more restrictive than those contained in
state statute. (See, e.g., Gov. Code, § 65852.2, subs. (a)(1)(B), (a)(1)(D)(vii),
(a)(1)(D)(x), (c), and (e).) The portion of this section stating "unit unless attached to
the unit" should be deleted, or the section should otherwise be modified to comply
with state law.
Palo Alto's Response
"As noted above, the City will add a clarifying sentence at the top of Section
18.09.040 explaining that none of the regulations in PAMC 18.09.040 apply to
subdivision (e) ADUs.
"Currently, all covered parking in the single-family zones counts towards floor area
for the site and dwelling unit. The City does not understand how this creates a
standard that is more restrictive than that contained in state statute; none of the
subsections cited in your letter speak to whether a garage for an ADU must be
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exempted from the unit size for the ADU. Moreover, this provision does not create a
constraint on ADU production, as a property owner may always choose to provide a
detached garage, uncovered parking, or no parking at all for the ADU.
"The City has concerns that allowing attached garages onto these structures will
incentivize individuals to illegally expand the unit into the garage, which would both
exceed the City's ordinance, contain unpermitted construction, and potentially place
the health and safety of the occupants at risk."
HCD's Follow-up Response
Covered parking does not count towards the total floor area of the ADU. An ADU is
defined in Government Code section 65852.2, subdivision (j)(1), as "complete
independent living facilities," and subdivision (j)(4) further specifies that the living
area for the ADU "does not include a garage..." Thus, a covered parking space or
garage, whether or not attached to a unit, would be considered "non -livable" space.
Therefore, as stated in our original finding, covered parking should not count
towards the total floor area of the site as it would unduly limit the allowable size of an
ADU established by state law. Similarly, it should not directly count toward the area
available for the ADU, as this could also restrict the size of the ADU. The addition of
garage space to the ADUs livable space would violate ADU size requirements found
in Government Code section 65852.2, subdivisions (a)(1)(D)(iv) and (v), and (c).
While the City raises concerns of potential illegal expansion, the City may not adopt
an ordinance that would violate State ADU Law. The City may rely on its
enforcement of codes and standards to mitigate its concerns. The City should
remove the portion of this section stating "unless attached to the unit" or otherwise
modify the section to comply with State ADU Law.
Conclusion
Given the deficiencies described above and in HCD's December 23, 2021, letter, the
City's Ordinance is inconsistent with State ADU Law. HCD requests that the City
respond to this letter no later than January 20, 2023, with a detailed plan of action and
timeline, to bring its Ordinance into compliance pursuant to Government Code section
65852.2, subdivision (h)(2)(B). Specifically, to bring its ADU ordinance into compliance,
the City must either amend the Ordinance according to HCD's findings to comply with
State ADU Law (Gov. Code, § 65852.2, subd. (h)(2)(B)(i)) or readopt the Ordinance
without changes. Should the City choose to readopt the Ordinance without the changes
specified by HCD, the City must include findings in its resolution that explain the
reasons the City finds that the Ordinance complies with State ADU Law despite the
findings made by HCD. (Gov. Code, § 65852.2, subd. (h)(2)(B)(ii), (h)(3)(A).)
Item 14: Staff Report Pg. 72 Packet Pg. 210 of 229
DocuSign Envelope ID: 4E99A082-32FD-4318-8448-A9330E581 F35
Jonathan Lait, Director of Planning and Development Services
Page 7
Item 14
Attachment G - Staff
Response to HCD (2023)
HCD will review and consider any plan of action and timeline received from the City
before January 20, 2023, in advance of taking further action authorized by Government
Code section 65852.2.
HCD appreciates the City's efforts provided in the preparation and adoption of the
Ordinance and welcomes the opportunity to assist the City in fully complying with State
ADU Law. Please feel free to contact Mike Van Gorder, of our staff, at (916) 776-7541
or at mike.vangorder(dhcd.ca.gov.
Sincerely,
Shannan West
Housing Accountability Unit Chief
Item 14: Staff Report Pg. 73 Packet Pg. 211 of 229
II STATE OF CALIFORNIA
LEGISLATIVE AUTHENTICATED
COUNSEL
BUREAU ELECTRONIC LEGAL MATERIAL
State of California
GOVERNMENT CODE
Section 65852.2
Item 14
Attachment H -
Government Code
Section 65852.2
65 852.2. (a) (1) A local agency may, by ordinance, provide for the creation of
accessory dwelling units in areas zoned to allow single-family or multifamily dwelling
residential use. The ordinance shall do all of the following:
(A) Designate areas within the jurisdiction of the local agency where accessory
dwelling units may be permitted. The designation of areas may be based on the
adequacy of water and sewer services and the impact of accessory dwelling units on
traffic flow and public safety. A local agency that does not provide water or sewer
services shall consult with the local water or sewer service provider regarding the
adequacy of water and sewer services before designating an area where accessory
dwelling units may be permitted.
(B) (i) Impose objective standards on accessory dwelling units that include, but
are not limited to, parking, height, setback, landscape, architectural review, maximum
size of a unit, and standards that prevent adverse impacts on any real property that is
listed in the California Register of Historical Resources. These standards shall not
include requirements on minimum lot size.
(ii) Notwithstanding clause (i), a local agency may reduce or eliminate parking
requirements for any accessory dwelling unit located within its jurisdiction.
(C) Provide that accessory dwelling units do not exceed the allowable density for
the lot upon which the accessory dwelling unit is located, and that accessory dwelling
units are a residential use that is consistent with the existing general plan and zoning
designation for the lot.
(D) Require the accessory dwelling units to comply with all of the following:
(i) Except as provided in Section 65852.26, the accessory dwelling unit may be
rented separate from the primary residence, but may not be sold or otherwise conveyed
separate from the primary residence.
(ii) The lot is zoned to allow single-family or multifamily dwelling residential use
and includes a proposed or existing dwelling.
(iii) The accessory dwelling unit is either attached to, or located within, the proposed
or existing primary dwelling, including attached garages, storage areas or similar
uses, or an accessory structure or detached from the proposed or existing primary
dwelling and located on the same lot as the proposed or existing primary dwelling,
including detached garages.
(iv) If there is an existing primary dwelling, the total floor area of an attached
accessory dwelling unit shall not exceed 50 percent of the existing primary dwelling.
(v) The total floor area for a detached accessory dwelling unit shall not exceed
1,200 square feet.
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Item 14
Attachment H -
Government Code
Section 65852.2
(vi) No passageway shall be required in conjunction with the construction of an
accessory dwelling unit.
(vii) No setback shall be required for an existing living area or accessory structure
or a structure constructed in the same location and to the same dimensions as an
existing structure that is converted to an accessory dwelling unit or to a portion of an
accessory dwelling unit, and a setback of no more than four feet from the side and
rear lot lines shall be required for an accessory dwelling unit that is not converted
from an existing structure or a new structure constructed in the same location and to
the same dimensions as an existing structure.
(viii) Local building code requirements that apply to detached dwellings, except
that the construction of an accessory dwelling unit shall not constitute a Group R
occupancy change under the local building code, as described in Section 310 of the
California Building Code (Title 24 of the California Code of Regulations), unless the
building official or enforcement agency of the local agency makes a written finding
based on substantial evidence in the record that the construction of the accessory
dwelling unit could have a specific, adverse impact on public health and safety.
Nothing in this clause shall be interpreted to prevent a local agency from changing
the occupancy code of a space that was unhabitable space or was only permitted for
nonresidential use and was subsequently converted for residential use pursuant to this
section.
(ix) Approval by the local health officer where a private sewage disposal system
is being used, if required.
(x) (I) Parking requirements for accessory dwelling units shall not exceed one
parking space per accessory dwelling unit or per bedroom, whichever is less. These
spaces may be provided as tandem parking on a driveway.
(II) Offstreet parking shall be permitted in setback areas in locations determined
by the local agency or through tandem parking, unless specific findings are made that
parking in setback areas or tandem parking is not feasible based upon specific site or
regional topographical or fire and life safety conditions.
(III) This clause shall not apply to an accessory dwelling unit that is described in
subdivision (d).
(xi) When a garage, carport, or covered parking structure is demolished in
conjunction with the construction of an accessory dwelling unit or converted to an
accessory dwelling unit, the local agency shall not require that those offstreet parking
spaces be replaced.
(xii) Accessory dwelling units shall not be required to provide fire sprinklers if
they are not required for the primary residence. The construction of an accessory
dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the
existing primary dwelling.
(2) The ordinance shall not be considered in the application of any local ordinance,
policy, or program to limit residential growth.
(3) (A) A permit application for an accessory dwelling unit or a junior accessory
dwelling unit shall be considered and approved ministerially without discretionary
review or a hearing, notwithstanding Section 65901 or 65906 or any local ordinance
Item 14: Staff Report Pg. 75 Packet Pg. 213 of 229
Item 14
Attachment H -
Government Code
Section 65852.2
regulating the issuance of variances or special use permits. The permitting agency
shall either approve or deny the application to create or serve an accessory dwelling
unit or a junior accessory dwelling unit within 60 days from the date the permitting
agency receives a completed application if there is an existing single-family or
multifamily dwelling on the lot. If the permit application to create or serve an accessory
dwelling unit or a junior accessory dwelling unit is submitted with a permit application
to create a new single-family or multifamily dwelling on the lot, the permitting agency
may delay approving or denying the permit application for the accessory dwelling
unit or the junior accessory dwelling unit until the permitting agency approves or
denies the permit application to create the new single-family or multifamily dwelling,
but the application to create or serve the accessory dwelling unit or junior accessory
dwelling unit shall be considered without discretionary review or hearing. If the
applicant requests a delay, the 60 -day time period shall be tolled for the period of the
delay. If the local agency has not approved or denied the completed application within
60 days, the application shall be deemed approved. A local agency may charge a fee
to reimburse it for costs incurred to implement this paragraph, including the costs of
adopting or amending any ordinance that provides for the creation of an accessory
dwelling unit.
(B) If a permitting agency denies an application for an accessory dwelling unit or
junior accessory dwelling unit pursuant to subparagraph (A), the permitting agency
shall, within the time period described in subparagraph (A), return in writing a full
set of comments to the applicant with a list of items that are defective or deficient
and a description of how the application can be remedied by the applicant.
(4) The ordinance shall require that a demolition permit for a detached garage that
is to be replaced with an accessory dwelling unit be reviewed with the application for
the accessory dwelling unit and issued at the same time.
(5) The ordinance shall not require, and the applicant shall not be otherwise
required, to provide written notice or post a placard for the demolition of a detached
garage that is to be replaced with an accessory dwelling unit, unless the property is
located within an architecturally and historically significant historic district.
(6) An existing ordinance governing the creation of an accessory dwelling unit by
a local agency or an accessory dwelling ordinance adopted by a local agency shall
provide an approval process that includes only ministerial provisions for the approval
of accessory dwelling units and shall not include any discretionary processes,
provisions, or requirements for those units, except as otherwise provided in this
subdivision. If a local agency has an existing accessory dwelling unit ordinance that
fails to meet the requirements of this subdivision, that ordinance shall be null and
void and that agency shall thereafter apply the standards established in this subdivision
for the approval of accessory dwelling units, unless and until the agency adopts an
ordinance that complies with this section.
(7) No other local ordinance, policy, or regulation shall be the basis for the delay
or denial of a building permit or a use permit under this subdivision.
(8) (A) This subdivision establishes the maximum standards that local agencies
shall use to evaluate a proposed accessory dwelling unit on a lot that includes a
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Item 14
Attachment H -
Government Code
Section 65852.2
proposed or existing single-family dwelling. No additional standards, other than those
provided in this subdivision, shall be used or imposed, except that, subject to
subparagraphs (B) and (C), a local agency may require an applicant for a permit issued
pursuant to this subdivision to be an owner -occupant.
(B) (i) Notwithstanding subparagraph (A), a local agency shall not impose an
owner -occupant requirement on an accessory dwelling unit before January 1, 2025.
(ii) Notwithstanding subparagraph (A), a local agency shall not impose an
owner -occupant requirement on an accessory dwelling unit that was permitted between
January 1, 2020, and January 1, 2025.
(C) Notwithstanding subparagraphs (A) and (B), a local agency may require that
an accessory dwelling unit be used for rentals of terms longer than 30 days.
(9) A local agency may amend its zoning ordinance or general plan to incorporate
the policies, procedures, or other provisions applicable to the creation of an accessory
dwelling unit if these provisions are consistent with the limitations of this subdivision.
(10) An accessory dwelling unit that conforms to this subdivision shall be deemed
to be an accessory use or an accessory building and shall not be considered to exceed
the allowable density for the lot upon which it is located, and shall be deemed to be
a residential use that is consistent with the existing general plan and zoning
designations for the lot. The accessory dwelling unit shall not be considered in the
application of any local ordinance, policy, or program to limit residential growth.
(b) (1) When a local agency that has not adopted an ordinance governing accessory
dwelling units in accordance with subdivision (a) receives an application for a permit
to create or serve an accessory dwelling unit pursuant to this subdivision, the local
agency shall approve or disapprove the application ministerially without discretionary
review pursuant to subdivision (a). The permitting agency shall either approve or
deny the application to create or serve an accessory dwelling unit or ajunior accessory
dwelling unit within 60 days from the date the permitting agency receives a completed
application if there is an existing single-family or multifamily dwelling on the lot. If
the permit application to create or serve an accessory dwelling unit or a junior
accessory dwelling unit is submitted with a permit application to create or serve a
new single-family or multifamily dwelling on the lot, the permitting agency may
delay approving or denying the permit application for the accessory dwelling unit or
the junior accessory dwelling unit until the permitting agency approves or denies the
permit application to create or serve the new single-family or multifamily dwelling,
but the application to create or serve the accessory dwelling unit or junior accessory
dwelling unit shall still be considered ministerially without discretionary review or a
hearing. If the applicant requests a delay, the 60 -day time period shall be tolled for
the period of the delay. If the local agency has not approved or denied the completed
application within 60 days, the application shall be deemed approved.
(2) If a permitting agency denies an application for an accessory dwelling unit or
junior accessory dwelling unit pursuant to paragraph (1), the permitting agency shall,
within the time period described in paragraph (1), return in writing a full set of
comments to the applicant with a list of items that are defective or deficient and a
description of how the application can be remedied by the applicant.
Item 14: Staff Report Pg. 77 Packet Pg. 215 of 229
Item 14
Attachment H -
Government Code
Section 65852.2
(c) (1) Subject to paragraph (2), a local agency may establish minimum and
maximum unit size requirements for both attached and detached accessory dwelling
units.
(2) Notwithstanding paragraph (1), a local agency shall not establish by ordinance
any of the following:
(A) A minimum square footage requirement for either an attached or detached
accessory dwelling unit that prohibits an efficiency unit.
(B) A maximum square footage requirement for either an attached or detached
accessory dwelling unit that is less than either of the following:
(i) 850 square feet.
(ii) 1,000 square feet for an accessory dwelling unit that provides more than one
bedroom.
(C) Any requirement for a zoning clearance or separate zoning review or any other
minimum or maximum size for an accessory dwelling unit, size based upon a
percentage of the proposed or existing primary dwelling, or limits on lot coverage,
floor area ratio, open space, front setbacks, and minimum lot size, for either attached
or detached dwellings that does not permit at least an 800 square foot accessory
dwelling unit with four -foot side and rear yard setbacks to be constructed in compliance
with all other local development standards.
(D) Any height limitation that does not allow at least the following, as applicable:
(i) A height of 16 feet for a detached accessory dwelling unit on a lot with an
existing or proposed single family or multifamily dwelling unit.
(ii) A height of 18 feet for a detached accessory dwelling unit on a lot with an
existing or proposed single family or multifamily dwelling unit that is within one-half
of one mile walking distance of a major transit stop or a high -quality transit corridor,
as those terms are defined in Section 21155 of the Public Resources Code. A local
agency shall also allow an additional two feet in height to accommodate a roof pitch
on the accessory dwelling unit that is aligned with the roof pitch of the primary
dwelling unit.
(iii) A height of 18 feet for a detached accessory dwelling unit on a lot with an
existing or proposed multifamily, multistory dwelling.
(iv) A height of 25 feet or the height limitation in the local zoning ordinance that
applies to the primary dwelling, whichever is lower, for an accessory dwelling unit
that is attached to a primary dwelling. This clause shall not require a local agency to
allow an accessory dwelling unit to exceed two stories.
(d) Notwithstanding any other law, and whether or not the local agency has adopted
an ordinance governing accessory dwelling units in accordance with subdivision (a),
all of the following shall apply:
(1) The local agency shall not impose any parking standards for an accessory
dwelling unit in any of the following instances:
(A) Where the accessory dwelling unit is located within one-half mile walking
distance of public transit.
(B) Where the accessory dwelling unit is located within an architecturally and
historically significant historic district.
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Item 14
Attachment H -
Government Code
Section 65852.2
(C) Where the accessory dwelling unit is part of the proposed or existing primary
residence or an accessory structure.
(D) When onstreet parking permits are required but not offered to the occupant of
the accessory dwelling unit.
(E) When there is a car share vehicle located within one block of the accessory
dwelling unit.
(F) When a permit application for an accessory dwelling unit is submitted with a
permit application to create a new single-family dwelling or a new multifamily
dwelling on the same lot, provided that the accessory dwelling unit or the parcel
satisfies any other criteria listed in this paragraph.
(2) The local agency shall not deny an application for a permit to create an accessory
dwelling unit due to the correction of nonconforming zoning conditions, building
code violations, or unpermitted structures that do not present a threat to public health
and safety and are not affected by the construction of the accessory dwelling unit.
(e) (1) Notwithstanding subdivisions (a) to (d), inclusive, a local agency shall
ministerially approve an application for a building permit within a residential or
mixed -use zone to create any of the following:
(A) One accessory dwelling unit and one junior accessory dwelling unit per lot
with a proposed or existing single-family dwelling if all of the following apply:
(i) The accessory dwelling unit or junior accessory dwelling unit is within the
proposed space of a single-family dwelling or existing space of a single-family
dwelling or accessory structure and may include an expansion of not more than 150
square feet beyond the same physical dimensions as the existing accessory structure.
An expansion beyond the physical dimensions of the existing accessory structure
shall be limited to accommodating ingress and egress.
(ii) The space has exterior access from the proposed or existing single-family
dwelling.
(iii) The side and rear setbacks are sufficient for fire and safety.
(iv) The junior accessory dwelling unit complies with the requirements of Section
65852.22.
(B) One detached, new construction, accessory dwelling unit that does not exceed
four -foot side and rear yard setbacks for a lot with a proposed or existing single-family
dwelling. The accessory dwelling unit may be combined with a junior accessory
dwelling unit described in subparagraph (A). A local agency may impose the following
conditions on the accessory dwelling unit:
(i) A total floor area limitation of not more than 800 square feet.
(ii) A height limitation as provided in clause (i), (ii), or (iii) as applicable, of
subparagraph (D) of paragraph (2) of subdivision (c).
(C) (i) Multiple accessory dwelling units within the portions of existing multifamily
dwelling structures that are not used as livable space, including, but not limited to,
storage rooms, boiler rooms, passageways, attics, basements, or garages, if each unit
complies with state building standards for dwellings.
Item 14: Staff Report Pg. 79 Packet Pg. 217 of 229
Item 14
Attachment H -
Government Code
Section 65852.2
(ii) A local agency shall allow at least one accessory dwelling unit within an
existing multifamily dwelling and shall allow up to 25 percent of the existing
multifamily dwelling units.
(D) (i) Not more than two accessory dwelling units that are located on a lot that
has an existing or proposed multifamily dwelling, but are detached from that
multifamily dwelling and are subject to a height limitation in clause (i), (ii), or (iii),
as applicable, of subparagraph (D) of paragraph (2) of subdivision (c) and rear yard
and side setbacks of no more than four feet.
(ii) If the existing multifamily dwelling has a rear or side setback of less than four
feet, the local agency shall not require any modification of the existing multifamily
dwelling as a condition of approving the application to construct an accessory dwelling
unit that satisfies the requirements of this subparagraph.
(2) A local agency shall not require, as a condition for ministerial approval of a
permit application for the creation of an accessory dwelling unit or a junior accessory
dwelling unit, the correction of nonconforming zoning conditions.
(3) The installation of fire sprinklers shall not be required in an accessory dwelling
unit if sprinklers are not required for the primary residence. The construction of an
accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed
in the existing multifamily dwelling.
(4) A local agency may require owner -occupancy for either the primary dwelling
or the accessory dwelling unit on a single-family lot, subject to the requirements of
paragraph (8) of subdivision (a).
(5) A local agency shall require that a rental of the accessory dwelling unit created
pursuant to this subdivision be for a term longer than 30 days.
(6) A local agency may require, as part of the application for a permit to create an
accessory dwelling unit connected to an onsite wastewater treatment system, a
percolation test completed within the last five years, or, if the percolation test has
been recertified, within the last 10 years.
(7) Notwithstanding subdivision (c) and paragraph (1) a local agency that has
adopted an ordinance by July 1, 2018, providing for the approval of accessory dwelling
units in multifamily dwelling structures shall ministerially consider a permit application
to construct an accessory dwelling unit that is described in paragraph (1), and may
impose objective standards including, but not limited to, design, development, and
historic standards on said accessory dwelling units. These standards shall not include
requirements on minimum lot size.
(f) (1) Fees charged for the construction of accessory dwelling units shall be
determined in accordance with Chapter 5 (commencing with Section 66000) and
Chapter 7 (commencing with Section 66012).
(2) An accessory dwelling unit shall not be considered by a local agency, special
district, or water corporation to be a new residential use for purposes of calculating
connection fees or capacity charges for utilities, including water and sewer service,
unless the accessory dwelling unit was constructed with a new single-family dwelling.
(3) (A) A local agency, special district, or water corporation shall not impose any
impact fee upon the development of an accessory dwelling unit less than 750 square
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Item 14
Attachment H -
Government Code
Section 65852.2
feet. Any impact fees charged for an accessory dwelling unit of 750 square feet or
more shall be charged proportionately in relation to the square footage of the primary
dwelling unit.
(B) For purposes of this paragraph, "impact fee" has the same meaning as the term
"fee" is defined in subdivision (b) of Section 66000, except that it also includes fees
specified in Section 66477. "Impact fee" does not include any connection fee or
capacity charge charged by a local agency, special district, or water corporation.
(4) For an accessory dwelling unit described in subparagraph (A) of paragraph (1)
of subdivision (e), a local agency, special district, or water corporation shall not require
the applicant to install a new or separate utility connection directly between the
accessory dwelling unit and the utility or impose a related connection fee or capacity
charge, unless the accessory dwelling unit was constructed with a new single-family
dwelling.
(5) For an accessory dwelling unit that is not described in subparagraph (A) of
paragraph (1) of subdivision (e), a local agency, special district, or water corporation
may require a new or separate utility connection directly between the accessory
dwelling unit and the utility. Consistent with Section 66013, the connection may be
subject to a connection fee or capacity charge that shall be proportionate to the burden
of the proposed accessory dwelling unit, based upon either its square feet or the
number of its drainage fixture unit (DFU) values, as defined in the Uniform Plumbing
Code adopted and published by the International Association of Plumbing and
Mechanical Officials, upon the water or sewer system. This fee or charge shall not
exceed the reasonable cost of providing this service.
(g) This section shall supersede a conflicting local ordinance. This section does
not limit the authority of local agencies to adopt less restrictive requirements for the
creation of an accessory dwelling unit.
(h) (1) A local agency shall submit a copy of the ordinance adopted pursuant to
subdivision (a) to the Department of Housing and Community Development within
60 days after adoption. After adoption of an ordinance, the department may submit
written findings to the local agency as to whether the ordinance complies with this
section.
(2) (A) If the department finds that the local agency's ordinance does not comply
with this section, the department shall notify the local agency and shall provide the
local agency with a reasonable time, no longer than 30 days, to respond to the findings
before taking any other action authorized by this section.
(B) The local agency shall consider the findings made by the department pursuant
to subparagraph (A) and shall do one of the following:
(i) Amend the ordinance to comply with this section.
(ii) Adopt the ordinance without changes. The local agency shall include findings
in its resolution adopting the ordinance that explain the reasons the local agency
believes that the ordinance complies with this section despite the findings of the
department.
(3) (A) If the local agency does not amend its ordinance in response to the
department's findings or does not adopt a resolution with findings explaining the
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Item 14
Attachment H -
Government Code
Section 65852.2
reason the ordinance complies with this section and addressing the department's
findings, the department shall notify the local agency and may notify the Attorney
General that the local agency is in violation of state law.
(B) Before notifying the Attorney General that the local agency is in violation of
state law, the department may consider whether a local agency adopted an ordinance
in compliance with this section between January 1, 2017, and January 1, 2020.
(i) The department may review, adopt, amend, or repeal guidelines to implement
uniform standards or criteria that supplement or clarify the terms, references, and
standards set forth in this section. The guidelines adopted pursuant to this subdivision
are not subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2.
(j) As used in this section, the following terms mean:
(1) "Accessory dwelling unit" means an attached or a detached residential dwelling
unit that provides complete independent living facilities for one or more persons and
is located on a lot with a proposed or existing primary residence. It shall include
permanent provisions for living, sleeping, eating, cooking, and sanitation on the same
parcel as the single-family or multifamily dwelling is or will be situated. An accessory
dwelling unit also includes the following:
(A) An efficiency unit.
(B) A manufactured home, as defined in Section 18007 of the Health and Safety
Code.
(2) "Accessory structure" means a structure that is accessory and incidental to a
dwelling located on the same lot.
(3) "Efficiency unit" has the same meaning as defined in Section 17958.1 of the
Health and Safety Code.
(4) "Living area" means the interior habitable area of a dwelling unit, including
basements and attics, but does not include a garage or any accessory structure.
(5) "Local agency" means a city, county, or city and county, whether general law
or chartered.
(6) "Nonconforming zoning condition" means a physical improvement on a property
that does not conform with current zoning standards.
(7) "Objective standards" means standards that involve no personal or subjective
judgment by a public official and are uniformly verifiable by reference to an external
and uniform benchmark or criterion available and knowable by both the development
applicant or proponent and the public official prior to submittal.
(8) "Passageway" means a pathway that is unobstructed clear to the sky and extends
from a street to one entrance of the accessory dwelling unit.
(9) "Permitting agency" means any entity that is involved in the review of a permit
for an accessory dwelling unit or junior accessory dwelling unit and for which there
is no substitute, including, but not limited to, applicable planning departments, building
departments, utilities, and special districts.
(10) "Proposed dwelling" means a dwelling that is the subject of a permit
application and that meets the requirements for permitting.
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Item 14
Attachment H -
Government Code
Section 65852.2
(11) "Public transit" means a location, including, but not limited to, a bus stop or
train station, where the public may access buses, trains, subways, and other forms of
transportation that charge set fares, run on fixed routes, and are available to the public.
(12) "Tandem parking" means that two or more automobiles are parked on a
driveway or in any other location on a lot, lined up behind one another.
(k) A local agency shall not issue a certificate of occupancy for an accessory
dwelling unit before the local agency issues a certificate of occupancy for the primary
dwelling.
(1) Nothing in this section shall be construed to supersede or in any way alter or
lessen the effect or application of the California Coastal Act of 1976 (Division 20
(commencing with Section 30000) of the Public Resources Code), except that the
local government shall not be required to hold public hearings for coastal development
permit applications for accessory dwelling units.
(m) A local agency may count an accessory dwelling unit for purposes of identifying
adequate sites for housing, as specified in subdivision (a) of Section 65583.1, subject
to authorization by the department and compliance with this division.
(n) In enforcing building standards pursuant to Article 1 (commencing with Section
17960) of Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code for an
accessory dwelling unit described in paragraph (1) or (2), a local agency, upon request
of an owner of an accessory dwelling unit for a delay in enforcement, shall delay
enforcement of a building standard, subject to compliance with Section 17980.12 of
the Health and Safety Code:
(1) The accessory dwelling unit was built before January 1, 2020.
(2) The accessory dwelling unit was built on or after January 1, 2020, in a local
jurisdiction that, at the time the accessory dwelling unit was built, had a noncompliant
accessory dwelling unit ordinance, but the ordinance is compliant at the time the
request is made.
(Amended (as amended by Stats. 2021, Ch. 343, Sec. 1) by Stats. 2022, Ch. 664, Sec. 2.5. (SB 897)
Effective January 1, 2023.)
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Item 2
Staff Report
CITY OF
PALO
ALTO
City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Community Services
Meeting Date: May 15, 2023
Report #:2304-1339
TITLE
Study Session to Discuss Next Steps Following Letter Received on March 13, 2023 from Palo Alto
Unified School District titled "Invitation for Cubberley Development Proposals"; CEQA status —
Not a Project
RECOMMENDATION
Staff recommends that the Council hold a study session to discuss the letter received from the
Palo Alto Unified School District titled "Invitation for Cubberley Development Proposals"
(Attachment A) and next steps.
EXECUTIVE SUMMARY
Cubberley is a 35 -acre site located in south Palo Alto at 4000 Middlefield Road. Most of the site
is owned by the Palo Alto Unified School District (PAUSD or School District) with the City of Palo
Alto owning an 8 -acre portion of the land on the northern side of the site. Cubberley operated
as a public high school until 1979 and later, after various land transactions, operated solely as a
community center until 2020. Between 1990 and 2020, the City leased the School District -portion
of Cubberley and operated the Cubberley Community Center. In 2020, the lease was reduced
and PAUSD began to occupy some of the classrooms and buildings for its own uses. A complete
history and timeline of the Cubberley site is provided below.
PAUSD now has an interest in relinquishing control of a portion of their land. On March 13, 2023,
the PAUSD Board of Education provided a letter to the Palo Alto City Council inviting the City to
submit one or more proposals to transfer a portion of PAUSD-owned land at Cubberley to the
City (Attachment A). This Study Session provides the Council an opportunity to hear from the
public and discuss Cubberley, the letter and next steps.
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BACKGROUND
History of Cubberley
The 35 -acre Cubberley site, located at 4000 Middlefield Road in Palo Alto, opened as a public
high school in 1956 in the Palo Alto Unified School District (PAUSD or School District). Due to
budget constraints resulting from the passage of Proposition 13 in 1978 coupled with declining
enrollment, PAUSD closed many of its schools, including Ellen Fletcher Middle School (formerly
Terman Middle School) and in 1979, Cubberley High School. During the 1980s, the City of Palo
Alto (City) purchased or leased portions of the closed school sites for community uses. In 1981,
the City entered into a Lease to Purchase Agreement with PAUSD to lease the Terman Site (both
the school and park) for 20 years with the right to acquire the Terman Site in the year 2000.
During that time, the City operated it as the Terman Community Center. The City also purchased
Ventura Elementary in 1981, now the Ventura Community Center site.
In 1989, the City and PAUSD entered into a lease agreement in which the City would provide
annual revenue to PAUSD in exchange for: 1) a lease of the entire 35 -acre Cubberley site; 2) a
Covenant Not to Develop five other neighborhood school sites; and 3) an agreement that PAUSD
provide space for extended day care at each of the eleven remaining elementary school sites.
The initial lease term was 15 years beginning in 1990, and the lease amount was $2.7 million per
year. The Covenant Not to Develop required the City to pay PAUSD $970k per year to not sell or
develop the school sites that had been closed.
By the early 2000s PAUSD had a need to establish a third middle school and identified Terman
School as the best location to open the middle school. As a result, the City exchanged its right to
acquire the Terman School site for fee title of an equivalent area of Cubberley. The City retained
Terman Park, and it is currently dedicated parkland. Following this transaction, the Cubberley
lease was reduced to 27 acres in consideration of the 8 acres now owned by the City. The lease
of 27 acres of Cubberley to the City was extended two more times, and in 2015 the Lease was
amended by replacing the Covenant Not to Develop with a Cubberley Property Infrastructure
Fund of the same amount for long neglected and ongoing maintenancel,2. At the time of the
lease's expiration in 2019, the annual lease amount was $5.1M and the Covenant Not to Develop
was $1.86M. Although the lease expired, the City continues to transfer $1.86 million into the
Infrastructure Fund for repairs and maintenance of buildings, facilities, and outdoor spaces.
On July 1, 2020, in response to the City's financial constraints due to the COVID-19 pandemic, a
new 54 -month lease (expires December 2024) began that reduced the amount of building space
leased by the City at Cubberley. The leased premises consists of approximately 52,000 square
feet of building space including the theater, pavilion, Gyms A and B, and some additional rooms;
1 City Council, February 24, 2014, Agenda Item #10, SR#4506,
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/yea r-archive/2014/id-4506-cubberley.pdf
z City Council, February 24, 2014, Meeting Minutes, https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/city-council-agendas-minutes/00-archive/2014/02-24-14-motions.pdf
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and about 16 acres of outdoor recreation area (athletic fields and track). The new lease amount
is $2.5 million per year (for approximately 17 acres). The School District occupies or has tenants
in rooms and buildings no longer leased by the City. Costs to maintain and repair common areas
(walkways and parking lots) are shared between the City and PAUSD.
Current Uses
There are currently 23 tenants and 24 artists who lease space at Cubberley from the City, and
dozens of individual groups who rent the theater, pavilion, classrooms, and athletic fields from
the City. Combined, these groups provide the community with programs that support health and
wellness, childcare, education, and visual and performing arts. The School District uses their
spaces for educational purposes, staff offices and has leases with some tenants that were
previously leasing space from the City. The parking lot in the southeast corner of the property
houses several portable trailers which function as a temporary site for Palo Verde Elementary
School while it undergoes renovations. Hoover Elementary School will then be relocated to the
same portable trailers for two years beginning in the 2023-2024 academic year (unless
construction timeframes shift).
A site map of Cubberley property lines and uses is included in Attachment B.
Master Plans
There have been several master planning efforts over the years to provide a roadmap and
framework for redevelopment of the Cubberley site. In 1991, A Cubberley Conceptual Master
Plan was completed with community input. In 2013, a Cubberley Community Advisory
Committee, consisting of four subcommittees — School Needs, Community Needs, Facilities and
Finance — issued their report after working together for nine months and developing
recommendations for the future of the Cubberley site. In 2016, a former City Manager and
former PAUSD Superintendent signed the Cubberley Compact to demonstrate a commitment to
working together to develop a vision for Cubberley. A Cubberley community co -design process
began in 2018. The year -long effort resulted in publication of a Cubberley Concept Plana in
November 2019 developed with input from over 400 community participants.
ANALYSIS
Since the completion of the 2019 Cubberley Concept Plan there has been limited movement on
advancing a plan for Cubberley due to several reasons. These include a shift in priorities during
the COVID-19 pandemic and the understanding that the PAUSD would not be able to support the
Concept Plan due to limitations in funding projects that are not strictly for education purposes.
In March 2023, the PAUSD Board of Education provided a letter to the Palo Alto City Council
inviting the City to submit one or more proposals to transfer a portion of PAUSD-owned land at
3 Cubberley Concept Plan, 2019, https://www.pausd.org/about-us/committees-task-forces/archived-
committees/cub berley-master-plan
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Cubberley to the City (Attachment A). The letter states the Board of Education is "...open to a
deal that transfers ownership or development control over at least 7 additional acres to the
City..." so the School District can retain 20 acres for development of a future school. However,
the letter also states that they would be open to a proposal that transfers more than 7 acres to
the City and expressed flexibility around the exact location of the City's acquired acreage. The
School District would like to reserve their acreage for a future school site as they determine
necessary.
The invitation from the School District provides an opportunity to re -ignite interest in the future
of Cubberley. Below is a description of the discussions and potential next steps leading to
decisions needed by City Council to respond to the School District with a formal proposal. The
steps described below do not assume an immediate decision on future specific uses for the
Cubberley site.
At this point in the conversation with the School District, staff recommends a focus on simplifying
the decision -making process involved to determine both near and longer -term uses of the
property. The current interdependency of on -site infrastructure across ownership lines has
confounded both parties' ability to make longer term decisions and investments. This suggests
focusing on actions that maximize the extent to which the City can make decisions and
investments on the Cubberley property, while respecting PAUSD's interest in preserving its long-
term options. This would require a new structure that moves away from the current
arrangement of shared use and maintenance responsibilities.
There are 3 topic areas for the City Council to discuss:
1. What is the process the City Council would like to use for discussions and
communications with the School District? Options could include staff -to -staff, the
Cubberley Ad Hoc Committee, the City/Schools Liaison Committee, or only through action
of the full City Council. Staff recommends enabling City staff to engage with PAUSD staff
to develop potentially viable options, with the City/Schools Liaison Committee as a venue
for reporting on progress.
2. What would the City Council like to include in a proposal to the School District? This will
provide guidance on what to include in a draft. Staff recommends holding some of this
discussion in an upcoming closed session (within the bounds of the Brown Act). The types
of decisions that will need to be made and included in a proposal are:
a. Scope of discussion (acreage and location within the Cubberley site, other
properties, other City/PAUSD issues)
b. Financial considerations (price, terms of payment, or equivalent site for land
swap)
3. Would the City Council like to designate a committee to work with staff on proposal
development? Options could include the Cubberley Ad Hoc Committee consisting of
Mayor Kou and Councilmember Lythcott-Haims, or another composition.
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Staff has identified the next steps to follow this study session to move forward with the
development of a property proposal.
1. Closed Session to discuss price and terms of payment options.
2. Finalize a property proposal for presentation to PAUSD.
3. City and PAUSD to engage in negotiations with public reporting at appropriate times.
FISCAL/RESOURCE IMPACT
The resource impact involved with next steps is dependent on the future Council direction and
response by the School District. Cost and terms of payment could vary greatly depending on the
method proposed to acquire land (purchase, ground lease or land swap). Staff expect that
existing staffing will support this effort, however, as this was not identified as a priority objective
for 2023, timing is uncertain.
STAKEHOLDER ENGAGEMENT
The first City Council discussion on this topic was intentionally scheduled as a Study Session to
allow members of the public to participate and share their comments related to this very
important community space.
ENVIRONMENTAL REVIEW
The Study Session is not a Project as defined by the California Environmental Quality Act
(CEQA).
ATTACHMENTS
Attachment A: Invitation for Cubberley Development Proposals
Attachment B: Cubberley Current Land Ownership and Uses
APPROVED BY:
Kristen O'Kane, Community Services Director
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PALO ALTO
UNIFIED SCHOOL DISTRICT
March 10, 2023
Palo Alto City Council
250 Hamilton Ave
Palo Alto, CA 94301
Re: Invitation for Cubberley Development Proposals
Dear Colleagues,
What's happening with Cubberley?
Item 2
Attachment A Invitation 11O N
for Cubberley
nue
Development Proposals 306
(650)329-3983
www.pausd.org
Within the shared canon of our two governmental bodies, few questions evoke the
same wearied engagement as this one. It's a perennial topic at City/School Liaison
Committee meetings (where it is given a light touch) and during election -season
candidate forums (where the response is a touch heavy-handed). It has been the
subject of meetings, workshops, listening sessions, town halls, and a master plan, all
while the site has remained relatively unchanged since the school was closed on
February 6, 1979. As the crumbling infrastructure belies the rich panoply of community -
oriented programs that now inhabit the site, there is general agreement that Cubberley's
current use is unsustainable without significant capital improvements.
We, the PAUSD Board of Education, shoulder some of the responsibility for the
restrained pace of Cubberley's redevelopment plan. But our caution is well-founded. As
fiduciaries of the school district and trustees of students present and future, we have a
fundamental duty to ensure we do not prejudice their interests by repeating the
mistakes of our past selves —when we gave up land during a period of declining
enrollment only to find ourselves in financial dire straits once the need for a new
campus inevitably arose years later.
Indeed, we found ourselves with a student -driven need for the site just this past year.
Two of our elementary schools, Palo Verde and Hoover, are undergoing sitewide
redevelopment. Accordingly, we designated a temporary school campus on the
Cubberley site that will be in use through 2025 to serve those students for the duration
of the construction.
Nevertheless, we understand and fully support the City's desire to move forward on
development of a portion of the site to realize the vision of a fully-fledged Cubberley
Community Center. The polished incarnation of this community gem will surely benefit
our joint stakeholders and serve as a resource for the District's students and families.
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PALO ALTO
UNIFIED SCHOOL DISTRICT
Item 2
Attachment A Invitation I O N
for Cubberley
nue
Development Proposals 306
(650)329-3983
www.pausd.org
Our enthusiasm to support the City's endeavor is caveated by two constraints: (1) we
have a desire to retain ownership over roughly 20 of the 35 acres for future school use,
the exact nature of which cannot be determined until the need for such a school arises;
and (2) we cannot ask the voters to pass a school bond to fund a community center
development, as such a bond may only be used to fund school construction as
specifically enumerated in Education Code section 15100.
Within those constraints lies a viable path forward. We are open to a deal that transfers
ownership or development control over at least 7 additional acres to the City, leaving
the City with a total of 15 or more acres to freely develop without the constraints placed
upon us. (For reference, the current indoor space at Cubberley amounts to roughly 1.5
acres.) While our preference is to retain 20 acres for future school development, we will
not automatically foreclose a deal that might include a transfer of more than 7 acres.
Furthermore, nothing in such a deal would preclude the City from continuing to lease
the remaining acreage from the District until such a time as the need arises for a new
school. Moreover, we are flexible about the exact location of the City's acreage based
on the needs of the City's planned development, subject only to a few limited
considerations for the future school site like street access and neighborhood proximity.
We are also open to the form of the deal —whether it's a land swap, ground lease, or
some other vehicle for land transfer.
As your neighbor and partner, we therefore formally invite you to submit one or more
land transfer proposals for our consideration within the parameters discussed above.
We acknowledge that your process for community feedback and Council consensus
may take time, but we eagerly await the next step in Cubberley's future.
Proposals can be submitted directly to Superintendent Don Austin for placement by the
Board's Agenda Setting Committee on the Board's agenda.
Respectfully,
1
Shounak Dharap
Board Trustee
On behalf of the Palo Alto Unified School District Board of Education*
*Duly authorized under Board Bylaw 9010 to communicate this letter on behalf of the
Board.
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Attachment B Cubberley
Cubberley Current Land Ownership and Facility Uses Current Land Ownership
and Uses
Map Legend
Spaces City leases from PAUSD
City Facilities
Long Term Tenan k5
0 Rental Rooms
93 Accessible Parking
F4- Re5troom5
,aUSD
• Fields
• Gyms A & B
• G5&G8
G8
• Pavilion
• Theatre
• S Building
• FOPAL portable (near track)
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