Loading...
HomeMy WebLinkAbout2023-05-22 City Council Agenda PacketCITY COUNCIL Special Meeting Monday, May 22, 2023 Council Chambers & Hybrid 5:30 PM Amended Agenda Amended agenda items appear below in RED 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. CALL TO ORDER                This meeting will be called to order in honor of Jewish American Heritage Month SPECIAL ORDER OF THE DAY (5:35 – 5:50 PM) 1 Proclamation Honoring Thomas Foon Chew 2 Proclamation Honoring Birge Clark AGENDA CHANGES, ADDITIONS AND DELETIONS PUBLIC COMMENT (5:50‐6:05 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. CLOSED SESSION (6:05 – 7:35 PM) 3.PUBLIC EMPLOYEE APPOINTMENT Authority: Gov Code section 54957(b) Titles: City Clerk 4.CONFERENCE WITH LABOR NEGOTIATORS Unrepresented Employee: City Clerk City representatives: Sandra Blanch Authority: Government Code Section 54957.6 COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:35 ‐ 7:50 PM) Members of the public may not speak to the item(s). STUDY SESSION (7:50‐9:20 PM) AA1.FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update and Council Budget Discussion CONSENT CALENDAR (9:20 ‐ 9:25 PM) Items will be voted in one motion unless removed from the calendar by three Council Members. 5.Approval of Minutes from May 8, 2023 Meeting 6.Approve the Services Agreement between the City of Palo Alto and the Peninsula Corridor Joint Powers Board (Caltrain) for the Connecting Palo Alto Grade Separation Projects and Authorize the City Manager to Execute the Agreement; CEQA status – not a project. Q&A 7.Approval of Amendment No. 1 to Contract No. S20178516 with Hohbach‐Lewin, Inc. to increase compensation by $10,000 and to extend the Contract Term through March 30, 2026 for On‐Call Structural Engineering Services for various Public Art Installations; CEQA Status – Not a Project. Q&A 8.SECOND READING: Adopt an Ordinance Continuing the Interim Parklet Program Until March 31, 2024 (FIRST READING: May 8, 2023 PASSED 6‐1, Kou no) 9.Amendment to Palo Alto Municipal Code Title 18 Chapter 18.42, Standards for Special Uses, to Codify Firearms Sales Limitations Ordinance; CEQA status—exempt under CEQA Guidelines section 15061(c)(3). Moved to Consent 10.Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement State Housing Legislation from the 2021 Legislative Session, Including SB 9. Environmental Analysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b) (3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning and Transportation Commission (PTC) has recommended Council adopt the ordinance. Moved to Consent CITY MANAGER COMMENTS CLOSED SESSION (9:25 ‐ 10:50 PM) AA2.CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda. 11.Palo Alto Transportation Management Association 2022 Annual Report, Strategic Plan, and Commute Survey OTHER INFORMATION Standing Committee Meetings         Rail Committee May 23, 2023 Public Comment Letters Schedule of Meetings AMENDED AGENDA ITEMS AA1 FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update and Council Budget Discussion AA2 CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐ 410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) 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. You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK 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.  1 Special Meeting May 22, 2023 Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org. CITY COUNCILSpecial MeetingMonday, May 22, 2023Council Chambers & Hybrid5:30 PMAmended AgendaAmended agenda items appear below in REDPalo Alto City Council meetings will be held as “hybrid” meetings with the option to attend byteleconference or in person. To maximize public safety while still maintaining transparency andpublic 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 endof the agenda. Masks are strongly encouraged if attending in person. The meeting will bebroadcast 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)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the  Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATES Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. CALL TO ORDER                This meeting will be called to order in honor of Jewish American Heritage Month SPECIAL ORDER OF THE DAY (5:35 – 5:50 PM) 1 Proclamation Honoring Thomas Foon Chew 2 Proclamation Honoring Birge Clark AGENDA CHANGES, ADDITIONS AND DELETIONS PUBLIC COMMENT (5:50‐6:05 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. CLOSED SESSION (6:05 – 7:35 PM) 3.PUBLIC EMPLOYEE APPOINTMENT Authority: Gov Code section 54957(b) Titles: City Clerk 4.CONFERENCE WITH LABOR NEGOTIATORS Unrepresented Employee: City Clerk City representatives: Sandra Blanch Authority: Government Code Section 54957.6 COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:35 ‐ 7:50 PM) Members of the public may not speak to the item(s). STUDY SESSION (7:50‐9:20 PM) AA1.FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update and Council Budget Discussion CONSENT CALENDAR (9:20 ‐ 9:25 PM) Items will be voted in one motion unless removed from the calendar by three Council Members. 5.Approval of Minutes from May 8, 2023 Meeting 6.Approve the Services Agreement between the City of Palo Alto and the Peninsula Corridor Joint Powers Board (Caltrain) for the Connecting Palo Alto Grade Separation Projects and Authorize the City Manager to Execute the Agreement; CEQA status – not a project. Q&A 7.Approval of Amendment No. 1 to Contract No. S20178516 with Hohbach‐Lewin, Inc. to increase compensation by $10,000 and to extend the Contract Term through March 30, 2026 for On‐Call Structural Engineering Services for various Public Art Installations; CEQA Status – Not a Project. Q&A 8.SECOND READING: Adopt an Ordinance Continuing the Interim Parklet Program Until March 31, 2024 (FIRST READING: May 8, 2023 PASSED 6‐1, Kou no) 9.Amendment to Palo Alto Municipal Code Title 18 Chapter 18.42, Standards for Special Uses, to Codify Firearms Sales Limitations Ordinance; CEQA status—exempt under CEQA Guidelines section 15061(c)(3). Moved to Consent 10.Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement State Housing Legislation from the 2021 Legislative Session, Including SB 9. Environmental Analysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b) (3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning and Transportation Commission (PTC) has recommended Council adopt the ordinance. Moved to Consent CITY MANAGER COMMENTS CLOSED SESSION (9:25 ‐ 10:50 PM) AA2.CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda. 11.Palo Alto Transportation Management Association 2022 Annual Report, Strategic Plan, and Commute Survey OTHER INFORMATION Standing Committee Meetings         Rail Committee May 23, 2023 Public Comment Letters Schedule of Meetings AMENDED AGENDA ITEMS AA1 FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update and Council Budget Discussion AA2 CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐ 410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) 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. You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK 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.  2 Special Meeting May 22, 2023 Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org. CITY COUNCILSpecial MeetingMonday, May 22, 2023Council Chambers & Hybrid5:30 PMAmended AgendaAmended agenda items appear below in REDPalo Alto City Council meetings will be held as “hybrid” meetings with the option to attend byteleconference or in person. To maximize public safety while still maintaining transparency andpublic 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 endof the agenda. Masks are strongly encouraged if attending in person. The meeting will bebroadcast 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)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the  Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Council reserves the right to use more or less time on any item, tochange the order of items and/or to continue items to another meeting. Particular items may beheard before or after the time estimated on the agenda. This may occur in order to best managethe time at a meeting or to adapt to the participation of the public.CALL TO ORDER               This meeting will be called to order in honor of Jewish American Heritage MonthSPECIAL ORDER OF THE DAY (5:35 – 5:50 PM)1 Proclamation Honoring Thomas Foon Chew2Proclamation Honoring Birge ClarkAGENDA CHANGES, ADDITIONS AND DELETIONSPUBLIC COMMENT (5:50‐6:05 PM)Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of OralCommunications period to 30 minutes.CLOSED SESSION (6:05 – 7:35 PM)3.PUBLIC EMPLOYEE APPOINTMENT Authority: Gov Code section 54957(b) Titles: City Clerk4.CONFERENCE WITH LABOR NEGOTIATORS Unrepresented Employee: City Clerk Cityrepresentatives: Sandra Blanch Authority: Government Code Section 54957.6COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:35 ‐ 7:50 PM)Members of the public may not speak to the item(s).STUDY SESSION (7:50‐9:20 PM)AA1.FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update andCouncil Budget DiscussionCONSENT CALENDAR (9:20 ‐ 9:25 PM)Items will be voted in one motion unless removed from the calendar by three Council Members. 5.Approval of Minutes from May 8, 2023 Meeting 6.Approve the Services Agreement between the City of Palo Alto and the Peninsula Corridor Joint Powers Board (Caltrain) for the Connecting Palo Alto Grade Separation Projects and Authorize the City Manager to Execute the Agreement; CEQA status – not a project. Q&A 7.Approval of Amendment No. 1 to Contract No. S20178516 with Hohbach‐Lewin, Inc. to increase compensation by $10,000 and to extend the Contract Term through March 30, 2026 for On‐Call Structural Engineering Services for various Public Art Installations; CEQA Status – Not a Project. Q&A 8.SECOND READING: Adopt an Ordinance Continuing the Interim Parklet Program Until March 31, 2024 (FIRST READING: May 8, 2023 PASSED 6‐1, Kou no) 9.Amendment to Palo Alto Municipal Code Title 18 Chapter 18.42, Standards for Special Uses, to Codify Firearms Sales Limitations Ordinance; CEQA status—exempt under CEQA Guidelines section 15061(c)(3). Moved to Consent 10.Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement State Housing Legislation from the 2021 Legislative Session, Including SB 9. Environmental Analysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b) (3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning and Transportation Commission (PTC) has recommended Council adopt the ordinance. Moved to Consent CITY MANAGER COMMENTS CLOSED SESSION (9:25 ‐ 10:50 PM) AA2.CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda. 11.Palo Alto Transportation Management Association 2022 Annual Report, Strategic Plan, and Commute Survey OTHER INFORMATION Standing Committee Meetings         Rail Committee May 23, 2023 Public Comment Letters Schedule of Meetings AMENDED AGENDA ITEMS AA1 FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update and Council Budget Discussion AA2 CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐ 410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) 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. You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK 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.  3 Special Meeting May 22, 2023 Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org. CITY COUNCILSpecial MeetingMonday, May 22, 2023Council Chambers & Hybrid5:30 PMAmended AgendaAmended agenda items appear below in REDPalo Alto City Council meetings will be held as “hybrid” meetings with the option to attend byteleconference or in person. To maximize public safety while still maintaining transparency andpublic 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 endof the agenda. Masks are strongly encouraged if attending in person. The meeting will bebroadcast 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)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the  Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Council reserves the right to use more or less time on any item, tochange the order of items and/or to continue items to another meeting. Particular items may beheard before or after the time estimated on the agenda. This may occur in order to best managethe time at a meeting or to adapt to the participation of the public.CALL TO ORDER               This meeting will be called to order in honor of Jewish American Heritage MonthSPECIAL ORDER OF THE DAY (5:35 – 5:50 PM)1 Proclamation Honoring Thomas Foon Chew2Proclamation Honoring Birge ClarkAGENDA CHANGES, ADDITIONS AND DELETIONSPUBLIC COMMENT (5:50‐6:05 PM)Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of OralCommunications period to 30 minutes.CLOSED SESSION (6:05 – 7:35 PM)3.PUBLIC EMPLOYEE APPOINTMENT Authority: Gov Code section 54957(b) Titles: City Clerk4.CONFERENCE WITH LABOR NEGOTIATORS Unrepresented Employee: City Clerk Cityrepresentatives: Sandra Blanch Authority: Government Code Section 54957.6COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:35 ‐ 7:50 PM)Members of the public may not speak to the item(s).STUDY SESSION (7:50‐9:20 PM)AA1.FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update andCouncil Budget DiscussionCONSENT CALENDAR (9:20 ‐ 9:25 PM)Items will be voted in one motion unless removed from the calendar by three Council Members.5.Approval of Minutes from May 8, 2023 Meeting6.Approve the Services Agreement between the City of Palo Alto and the Peninsula CorridorJoint Powers Board (Caltrain) for the Connecting Palo Alto Grade Separation Projects andAuthorize the City Manager to Execute the Agreement; CEQA status – not a project. Q&A7.Approval of Amendment No. 1 to Contract No. S20178516 with Hohbach‐Lewin, Inc. toincrease compensation by $10,000 and to extend the Contract Term through March 30,2026 for On‐Call Structural Engineering Services for various Public Art Installations; CEQAStatus – Not a Project. Q&A8.SECOND READING: Adopt an Ordinance Continuing the Interim Parklet Program UntilMarch 31, 2024 (FIRST READING: May 8, 2023 PASSED 6‐1, Kou no)9.Amendment to Palo Alto Municipal Code Title 18 Chapter 18.42, Standards for SpecialUses, to Codify Firearms Sales Limitations Ordinance; CEQA status—exempt under CEQAGuidelines section 15061(c)(3). Moved to Consent10.Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement StateHousing Legislation from the 2021 Legislative Session, Including SB 9. EnvironmentalAnalysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b)(3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning andTransportation Commission (PTC) has recommended Council adopt theordinance. Moved to ConsentCITY MANAGER COMMENTSCLOSED SESSION (9:25 ‐ 10:50 PM)AA2.CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, etal. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐410811 (OneCase, as Defendant); Authority: Government Code Section 54956.9(d)(1)ADJOURNMENTINFORMATION REPORTSInformation reports are provided for informational purposes only to the Council and the public but are not listed for actionduring this meeting’s agenda.11.Palo Alto Transportation Management Association 2022 Annual Report, Strategic Plan,and Commute Survey OTHER INFORMATION Standing Committee Meetings         Rail Committee May 23, 2023 Public Comment Letters Schedule of Meetings AMENDED AGENDA ITEMS AA1 FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update and Council Budget Discussion AA2 CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐ 410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) 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. You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK 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.  4 Special Meeting May 22, 2023 Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org. CITY COUNCILSpecial MeetingMonday, May 22, 2023Council Chambers & Hybrid5:30 PMAmended AgendaAmended agenda items appear below in REDPalo Alto City Council meetings will be held as “hybrid” meetings with the option to attend byteleconference or in person. To maximize public safety while still maintaining transparency andpublic 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 endof the agenda. Masks are strongly encouraged if attending in person. The meeting will bebroadcast 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)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the  Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Council reserves the right to use more or less time on any item, tochange the order of items and/or to continue items to another meeting. Particular items may beheard before or after the time estimated on the agenda. This may occur in order to best managethe time at a meeting or to adapt to the participation of the public.CALL TO ORDER               This meeting will be called to order in honor of Jewish American Heritage MonthSPECIAL ORDER OF THE DAY (5:35 – 5:50 PM)1 Proclamation Honoring Thomas Foon Chew2Proclamation Honoring Birge ClarkAGENDA CHANGES, ADDITIONS AND DELETIONSPUBLIC COMMENT (5:50‐6:05 PM)Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of OralCommunications period to 30 minutes.CLOSED SESSION (6:05 – 7:35 PM)3.PUBLIC EMPLOYEE APPOINTMENT Authority: Gov Code section 54957(b) Titles: City Clerk4.CONFERENCE WITH LABOR NEGOTIATORS Unrepresented Employee: City Clerk Cityrepresentatives: Sandra Blanch Authority: Government Code Section 54957.6COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:35 ‐ 7:50 PM)Members of the public may not speak to the item(s).STUDY SESSION (7:50‐9:20 PM)AA1.FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update andCouncil Budget DiscussionCONSENT CALENDAR (9:20 ‐ 9:25 PM)Items will be voted in one motion unless removed from the calendar by three Council Members.5.Approval of Minutes from May 8, 2023 Meeting6.Approve the Services Agreement between the City of Palo Alto and the Peninsula CorridorJoint Powers Board (Caltrain) for the Connecting Palo Alto Grade Separation Projects andAuthorize the City Manager to Execute the Agreement; CEQA status – not a project. Q&A7.Approval of Amendment No. 1 to Contract No. S20178516 with Hohbach‐Lewin, Inc. toincrease compensation by $10,000 and to extend the Contract Term through March 30,2026 for On‐Call Structural Engineering Services for various Public Art Installations; CEQAStatus – Not a Project. Q&A8.SECOND READING: Adopt an Ordinance Continuing the Interim Parklet Program UntilMarch 31, 2024 (FIRST READING: May 8, 2023 PASSED 6‐1, Kou no)9.Amendment to Palo Alto Municipal Code Title 18 Chapter 18.42, Standards for SpecialUses, to Codify Firearms Sales Limitations Ordinance; CEQA status—exempt under CEQAGuidelines section 15061(c)(3). Moved to Consent10.Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement StateHousing Legislation from the 2021 Legislative Session, Including SB 9. EnvironmentalAnalysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b)(3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning andTransportation Commission (PTC) has recommended Council adopt theordinance. Moved to ConsentCITY MANAGER COMMENTSCLOSED SESSION (9:25 ‐ 10:50 PM)AA2.CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In My Backyard, etal. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐410811 (OneCase, as Defendant); Authority: Government Code Section 54956.9(d)(1)ADJOURNMENTINFORMATION REPORTSInformation reports are provided for informational purposes only to the Council and the public but are not listed for actionduring this meeting’s agenda.11.Palo Alto Transportation Management Association 2022 Annual Report, Strategic Plan,and Commute SurveyOTHER INFORMATIONStanding Committee Meetings        Rail Committee May 23, 2023Public Comment LettersSchedule of MeetingsAMENDED AGENDA ITEMSAA1FY 2024 Proposed Operating and Capital Budget ‐ Finance Committee Update andCouncil Budget DiscussionAA2CONFERENCE WITH CITY ATTORNEY‐ EXISTING LITIGATION; Subject: Yes In MyBackyard, et al. v. City of Palo Alto; Santa Clara County Superior Court Case No.  23‐CV‐ 410811 (One Case, as Defendant); Authority: Government Code Section 54956.9(d)(1) 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. You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK 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.  5 Special Meeting May 22, 2023 Materials submitted after distribution are available for public inspection at www.CityofPaloAlto.org. City Council Staff Report Report Type: SPECIAL ORDER OF THE DAY Lead Department: City Clerk Meeting Date: May 22, 2023 Report #:2305-1439 TITLE Proclamation Honoring Thomas Foon Chew RECOMMENDATION See attached proclamation. ATTACHMENTS Attachment A: Thomas Foon Chew Proclamation APPROVED BY: Lesley Milton Item 1 Item 1 Staff Report        Item 1: Staff Report Pg. 1  Packet Pg. 6 of 193  Proclamation __________________________ Lydia Kou Mayor HONORING THOMAS FOON CHEW WHEREAS, the City of Palo recognizes the contributions made by Thomas Foon Chew and Bayside Cannery to the history and development of our city; and WHEREAS, Thomas Foon Chew was a visionary businessman who was willing to take risks and take advantage of luck even in hard times, and his father Sai Yen Chew was the owner of the Precita Canning Company, which canned tomatoes; and WHEREAS, Thomas Foon Chew arrived in America in 1897 at the age of 8 and stayed with relatives in Los Gatos, where he learned English and American ways; and WHEREAS, Bayside Cannery was located in Alviso, an ideal spot because of the waterway that connected the South Bay and the East Bay, and used the water and rail to ship produce by boat to San Francisco, Sacramento, and Stockton; and WHEREAS, Bayside Cannery had additional fruit canneries, including Sacramento, Isleton, and Mayfield in Palo Alto, where it packed apricots, pears, peaches, and fruit salad, employing Spanish and Portuguese-speaking workers, white workers, and many administrators and supervisors who were Chinese; and WHEREAS, Bayside Cannery had a fruit and asparagus sorter and was known for its high-quality produce, especially the Bayside label, and was the first to can green asparagus, making Thomas Foon Chew known as the Asparagus King; and WHEREAS, Thomas Foon Chew and Lee Gum Ching were married in 1907 and completed their family of seven children, who were raised on the premises and attended an elementary and high school started by Thomas Foon Chew; and WHEREAS, Thomas Foon Chew's legacy continued through his children, who inherited the land he placed in their name every two years and continued to run the cannery until demand dropped during the Great Depression; and WHEREAS, Thomas Foon Chew passed away on February 25, 1931, leaving behind a legacy of innovation and hard work, and was honored with a funeral procession of over 25,000 people in San Francisco Chinatown and State officials. THEREFORE, BE IT RESOLVED, that the City of Palo Alto honors Thomas Foon Chew, a visionary businessman and a man of the times whose hard work and innovative ways and whose Bayside Cannery played an important role in the history and development of our City of Palo Alto. NOW, THEREFORE, I, Lydia Kou, Mayor of Palo Alto, further encourage the community to learn more about the history of Thomas Foon Chew and Bayside Cannery, and to appreciate the contributions made by Chinese immigrants to the development of Palo Alto. PRESENTED: May 22, 2023 Item 1 Attachment A - Proclamation        Item 1: Staff Report Pg. 2  Packet Pg. 7 of 193  City Council Staff Report Report Type: SPECIAL ORDER OF THE DAY Lead Department: City Clerk Meeting Date: May 22, 2023 Report #:2305-1440 TITLE Proclamation Honoring Birge Clark RECOMMENDATION See attached proclamation ATTACHMENTS Attachment A: Proclamation Honoring Birge Clark APPROVED BY: Lesley Milton Item 2 Item 2 Staff Report        Item 2: Staff Report Pg. 1  Packet Pg. 8 of 193  Proclamation __________________________ Lydia Kou Mayor Celebrating the 100th Anniversary of the Founding of Birge Clark’s Architectural Practice WHEREAS, in 1922, Birge Clark established his architectural practice in Palo Alto, marking the beginning of a career that lasted over fifty years and profoundly influenced the architecture of Palo Alto; and WHEREAS, Birge Clark designed hundreds of buildings in Palo Alto and Stanford, including many prominent public buildings and three buildings that are now on the National Register of Historic Places; and WHEREAS, Birge Clark taught architecture for over two decades at Stanford University and was elected to Fellowship in the American Institute of Architects; and WHEREAS, Birge Clark made significant contributions to the preservation of Palo Alto’s architectural history as an inaugural member of the Historic Resources Board; and WHEREAS, Birge Clark’s designs and the legacy of his work are an enduring and significant part of Palo Alto’s architectural heritage. NOW, THEREFORE, I, Lydia Kou, Mayor of the City of Palo Alto on behalf of the entire City Council do hereby recognize the Birge Clark’s contribution to Palo Alto’s architectural history on the hundredth anniversary of the founding of his architectural practice. PRESENTED: May 22, 2023 Item 2 Attachment A - Birge Clark Proclamation        Item 2: Staff Report Pg. 2  Packet Pg. 9 of 193  City Council Staff Report Report Type: CONSENT CALENDAR Lead Department: City Clerk Meeting Date: May 22, 2023 Report #:2305-1421 TITLE Approval of Minutes from May 8, 2023 Meeting RECOMMENDATION That the minutes be reveiwed and approved. ATTACHMENTS Attachment A: May 8, 2023 Draft Minutes APPROVED BY: Lesley Milton Item 5 Item 5 Staff Report        Item 5: Staff Report Pg. 1  Packet Pg. 10 of 193  CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 4 Special Meeting May 8, 2023 The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:03 P.M. Present In Person: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker Present Remotely: Absent: Special Orders of the Day 1. Proclamation Recognizing Public Employees and City Service Accomplishments Coinciding With National Public Service Recognition Week: May 7-13, 2023 Closed Session AA1. CONFERENCE WITH CITY ATTORNEY-POTENTIAL LITIGATION Subject: SPG Center, LLC, application for building permit for Building EE, Stanford Shopping Center Authority: Potential Exposure to Litigation Under Government Code Section 54956.9(d)(2) One Case, as Defendant: Letter from Shimko to Yang, dated April 28, 2023 MOTION: Council Member Lauing moved, seconded by Council Member Burt to go into Closed Session. MOTION PASSED: 6-0-1, Veenker abstain Council went into Closed Session at 5:20 P.M. Council returned from Closed Session at 6:15 P.M. Mayor Kou announced no reportable action. Item 5 Attachment A - May 8 Draft Action Minutes        Item 5: Staff Report Pg. 2  Packet Pg. 11 of 193  DRAFT ACTION MINUTES Page 2 of 4 Sp. City Council Meeting Draft Action Minutes: 05/08/2023 Consent Calendar Mayor Kou registered a no vote on Agenda Item Number 6. Council Member Tanaka registered a no vote on Agenda Item Number 4. MOTION: Vice Mayor Stone moved, seconded by Mayor Kou to approve Agenda Item Numbers 2-6, AA2. MOTION SPLIT FOR THE PURPOSE OF VOTING MOTION PASSED ITEMS 2, 3, 5, AA2: 7-0 MOTION PASSED ITEMS 4: 6-1, Tanaka no MOTION PASSED ITEMS 6: 6-1, Kou no 2. Approval of Minutes from April 24, 2023 Meeting 3. Approval of the Sewer System Management Plan Update 2023 as required by the reissued Statewide Waste Discharge Requirements General Order for Sanitary Sewer Systems, Order 2022-0103-DWQ 4. Approval of Contract Number C23186907 With Cratus, Inc. in an Amount Not-to-Exceed $7,707,055 for Sanitary Sewer Replacement Project 31 (WC-19001) on El Camino Real and Page Mill Road; Authorization for the City Manager to Negotiate and Execute Related Change Orders for a Total Not-to-Exceed Amount of $8,360,555; and Approval of Budget Amendments in the Wastewater Collection Fund; CEQA status: categorically exempt under CEQA Guidelines Sec. 15301 and 15302 5. Approval of a Contract Amendment for Time Only with Romig Engineers, Inc. for Geotechnical Services for the Public Safety Building Capital Improvement Program Project (PE-15001); CEQA: Environmental Impact Report for the Public Safety Building and the New California Avenue Area Parking Garage (Resolution No. 9772) 6. Adopt an Ordinance and Resolution Continuing the Interim Parklet Program Until March 31, 2024; CEQA status – categorically exempt (Regulations 15301 and 15304) AA2. Approval of CAO Committee Recommendation to complete recruitment for interim City Clerk and to engage Peckham & McKinney Firm to Conduct the City Clerk Executive Recruitment Item 5 Attachment A - May 8 Draft Action Minutes        Item 5: Staff Report Pg. 3  Packet Pg. 12 of 193  DRAFT ACTION MINUTES Page 3 of 4 Sp. City Council Meeting Draft Action Minutes: 05/08/2023 Called to order the City Council and Planning and Transportation Commission Joint Special meeting at 6:58 P.M. Present In-person: Lu, Summa, Hechtman, Akin, Reckdahl, Chang, Templeton Action Items 7. Adoption of a Resolution Adopting the 2023-31 Housing Element and Consideration of the Associated California Environmental Quality Act (CEQA) Addendum to the Comprehensive Plan 2017 Final Environmental Impact Report Planning and Transportation Commission: MOTION: Commissioner Chang moved, seconded by Commissioner Hechtman to recommend the City Council adopt the resolution in Attachment C adopting the 2023-2031 Housing Element. MOTION PASSED: 7-0 City Council: MOTION: Council Member Lauing moved, seconded by Vice Mayor Stone, with consideration of the addendum to the 2017 Comprehensive Plan Final Environmental Impact Report, to adopt the resolution in Attachment C adopting the 2023-2031 Housing Element with the revisions noted by staff in the report and the following additional changes: 1. Amending the second sentence to read: “Past discriminatory redlining and lending practices prohibiting non-white people from purchasing homes in certain neighborhoods are likely contributing factors for these Racially Concentrated Areas of Affluence (RCAAs).” MOTION PASSED: 6-1, Kou no Adjournment: The meeting was adjourned at 11:55 P.M. Item 5 Attachment A - May 8 Draft Action Minutes        Item 5: Staff Report Pg. 4  Packet Pg. 13 of 193  DRAFT ACTION MINUTES Page 4 of 4 Sp. City Council Meeting Draft Action Minutes: 05/08/2023 ATTEST: APPROVED: ____________________ ____________________ City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC) 2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section 2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website. Item 5 Attachment A - May 8 Draft Action Minutes        Item 5: Staff Report Pg. 5  Packet Pg. 14 of 193  City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Transportation Meeting Date: May 22, 2023 Report #:2304-1237 TITLE Approve the Services Agreement between the City of Palo Alto and the Peninsula Corridor Joint Powers Board (Caltrain) for the Connecting Palo Alto Grade Separation Projects and Authorize the City Manager to Execute the Agreement; CEQA status – not a project. RECOMMENDATION Rail Committee and Staff recommend the City Council approve the Services Agreement between the City of Palo Alto and Peninsula Corridor Joint Powers Board (PCJPB/Caltrain) in the amount of $106,677 for Caltrain to provide technical input on the conceptual designs of rail grade separations of the Connecting Palo Alto Grade Separation Project and authorize the City Manager or their designee to execute the agreement. EXECUTIVE SUMMARY The Connecting Palo Alto rail grade separation project involves working on the active railroad crossings owned and operated by Peninsula Corridor Joint Power Board (Caltrain). Therefore, the project requires coordination with Caltrain as the City undertakes the conceptual design phase for selecting preferred alternative(s). This agreement between the City of Palo Alto and Caltrain will allow for Caltrain to provide technical comments in compliance with Caltrain planning and design criteria as the City selects the preferred alternative(s), and to set up a process for developing the cooperative agreement for future project development. The Rail Committee has reviewed the proposed Service Agreement between the City of Palo Alto and Caltrain on April 26, 2023 and unanimously recommend approval of the Agreement to the City Council. BACKGROUND Rail Grade Separation at crossings in Palo Alto along the Caltrain corridor is an ongoing project. Over the past several years, the City has been working on developing conceptual plans to review various alternatives for rail grade separations at the three crossings of Churchill Avenue, Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 1  Packet Pg. 15 of 193  Meadow Drive, and Charleston Road. With the support of consultants and community input, project alternatives were developed and reviewed with the goal of selecting the preferred alternative for grade separation at these crossings. A Citizen Advisory Panel (CAP) was created in 2018 for advising staff and consultants on developing alternatives, improving community outreach, and communications efforts, and the Expanded Community Advisory Panel (XCAP) was created in 2019 for the evaluation of the Connecting Palo Alto railroad grade separation alternatives at the three crossings. In 2021 after receiving XCAP recommendations, the City Council selected the preferred alternative and backup alternative for Churchill Avenue and narrowed alternatives in consideration to the three alternatives at Meadow Drive and Charleston Road. In addition, the Council directed staff to perform additional studies to further assist the review of the alternatives in consideration for the selection of preferred alternative(s) and reinitiated the Rail Committee. Staff is currently working on the refinement of partial underpass alternative at Churchill Avenue, Underpass Alternatives at Meadow Drive and Charleston, and conducting additional studies that would assist in further review of the alternatives. DISCUSSION The Rail Grade Separation Project involves working on the active railroad crossings owned and operated by Peninsula Corridor Joints Power Board (Caltrain). Therefore, the project requires coordination with Caltrain as the City undertakes the conceptual design phase for the selection of preferred alternative(s). This coordination will support the review of the conceptual plans for compliance with Caltrain planning and design criteria and other documentation in the early phase of the project development. Additional Agreements and/or Amendments will be necessary as the City progresses towards completion of the project. These future Agreements and/or Amendments will include updated schedules and budgets as appropriate. Therefore, future Agreements and/or Amendments may include but may not limited to the following tasks: •Coordination during Advanced Conceptual Design/Preliminary Design (Up to 15% Design): Caltrain planning coordination, technical review and comments of advanced design alternatives (LPAs) further developed by the City, if needed, prior to Preliminary Engineering/Environmental Clearance phase. •Alternative Contract Delivery Analysis to recommend the optimal contract delivery method based on the selected LPAs’ unique characteristics and complexities. Document recommendations in an Alternative Project Delivery Decision Report. •Development of a Cooperative Agreement to address funding, roles and responsibilities, budgets, and schedule for the subsequent phases. Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 2  Packet Pg. 16 of 193  •Development of the Request For Proposals (RFP/s) for advancing the project to the subsequent phases in accordance with the consensus alternative delivery method recommendation. The scope of work for the RFPs will vary as necessary based on the recommended contract delivery method selected for the project. Based on the Caltrain review and comments, additional work may be required to perform changes to the project plans, profiles, renderings, studies, other associated documents, and prepare submittals required for finalizing the Local Preferred Alternative and completion of the final conceptual design phase package. The scope of work in the existing contract with AECOM Consultants does not cover this work. Therefore, staff will need to procure the services of the consultant through an amendment to the existing contract of the consultant, obtain a new consultant to perform this additional work, or integrate it into future phases of project design. Also, staff will coordinate with the Valley Transportation Authority (VTA) for an amendment to the existing agreement to include this work for funding through the 2016 Measure B Grade Separation funding. On April 26, 2023, the Rail Committee reviewed the proposed Service Agreement between the City of Palo Alto and Caltrain and unanimously recommended approval of the agreement to the City Council. Therefore, staff recommends that the City Council approves the Service Agreement with Caltrain and authorize the City Manager to execute the agreement. RESOURCE IMPACT Funding to accommodate a portion of this work through Fiscal Year 2023 is available in the Railroad Grade Separation and Safety Improvements project (PL-17001). Funding for the remaining portion of the agreement will be considered during the Fiscal Year 2024 budget process, and funding for amendments to the agreement and/or future agreements will be requested as needed or appropriated through the annual budget process. ENVIRONMENTAL REVIEW The recommendation in this report does not constitute a project in accordance with the California Environmental Quality Act and is therefore not subject to environmental review. STAKEHOLDER ENGAGEMENT This agreement will provide a formal structure for Caltrain to provide technical comments on the rail crossing alternatives as the City moves forward on selecting a preferred alternative(s). The agreement was discussed at the Rail Committee’s regular meeting on April 26, 2023 where public comment was taken. ATTACHMENTS Attachment A: Services Agreement Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 3  Packet Pg. 17 of 193  APPROVED BY: Philip Kamhi, Chief Transportation Official Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 4  Packet Pg. 18 of 193  SERVICES AGREEMENT BETWEEN PENINSULA CORRIDOR JOINT POWERS BOARD AND THE CITY OF PALO ALTO FOR THE CONNECTING PALO ALTO PROJECT THIS SERVICE AGREEMENT (“Agreement”) is made and entered into by and between the Peninsula Corridor Joint Powers Board, hereinafter referred to as “PCJPB” or “Caltrain,” and the City of Palo Alto, hereinafter referred to as “City,” as of the last date of signature set forth in the signature blocks. I. RECITALS 1. Project Description The City of Palo Alto is the project sponsor for the proposed grade separation of the Caltrain right-of- way (ROW) at Churchill Avenue, Meadow Drive, and Charleston Road, in Palo Alto. The Project envisions separating these roads from the Caltrain rail alignment at these three current at-grade crossings, respectively located at mileposts 30.88, 32.86, and 33.20. Additionally, the Project would include a new bicycle and pedestrian undercrossing at either Kellogg Avenue or Seale Avenue. (See Appendix A). The City of Palo Alto is entering into this Agreement with Caltrain. 2. Project Background The City of Palo Alto initiated the plan to consider grade separation at all four of the existing at-grade crossings in Palo Alto a decade ago. Since 2017, the City's focus has been on the three (3) grade crossings of Churchill Avenue, Meadow Drive, and Charleston Road as part of the Railroad Grade Separation and Safety Improvements Capital Improvement Project, also referred to as “Connecting Palo Alto”. The crossing at Palo Alto Avenue was separate to be integrated with the Downtown Coordinated Area plan. On May 23, 2022, the City Council approved an amendment to the City’s contract with AECOM – referred to in this Agreement as the “City’s Design Engineer” for the Railroad Grade Separation and Safety Improvements Capital Improvement Project. The amendment directs AECOM to conduct additional studies, outreach, and support to city staff to identify and develop the City’s locally preferred alternatives for the three grade separations. Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 5  Packet Pg. 19 of 193  Services Agreement pg. 2 Currently, five (5) conceptual alternatives are under consideration, either as preferred or back-up alternatives: •Churchill Avenue: -Churchill Avenue Partial Underpass. This alternative includes a pedestrian underpass at Kellogg Avenue or Seale Avenue. It was selected by the Palo Alto City Council as the locally preferred alternative in November 2021. -Churchill Avenue Closure with Mitigation. This alternative includes two (2) options and is the “back-up alternative” for Churchill Avenue. •Meadow Drive and Charleston Road: -Meadow Charleston Trench. -Meadow Charleston Hybrid. -Meadow Charleston Underpass. Since Project initiation, the Palo Alto City Council has created two (2) advisory panels to inform the alternatives analysis and decision-making processes. These advisory panels are the Citizen Advisory Panel, created in 2018 for advising staff and consultants on developing alternatives and improving community outreach and communications efforts, and the Expanded Community Advisory Panel, created in 2019, for the evaluation of the Connecting Palo Alto railroad grade separation alternatives at the three crossings. The City Council also has a Rail Committee. 3. Caltrain Processes Background Upon invitation, Caltrain presents updates on capital project efforts adjacent to the City of Palo Alto- led grade separation projects at the City’s Rail Committee. In September 2022, Caltrain staff briefed this committee on the San Francisquito Creek Bridge’s due diligence effort. Topics included: inspection methodology, bridge monitoring plan, estimated timing of bridge replacement, proposed coordination strategy with the City, and project next steps. In December 2022, Caltrain staff presented information to the Rail Committee pertaining to the Service Agreement process. Presentation topics included: update from ongoing coordination between City and Caltrain, technical guidance still needed by City, the purpose and need for service agreements, present and future City/Caltrain service agreement scope, timing for project handoff to Caltrain, and project next steps. Since about 2018, Caltrain has received correspondence from the City of Palo Alto documenting the City's desire to explore grade exceptions, requesting the elimination of the four-tracking requirements in Palo Alto, and requesting the review of several design criteria including, but not limited to, Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 6  Packet Pg. 20 of 193  Services Agreement pg. 3 increasing the maximum allowable grade design and reducing vertical clearance standards. Caltrain provided responses to the City’s inquiries on these topics in December 2018 and August 2022. In its response to the City of Palo Alto, Caltrain described how it would address the technical questions surrounding the City’s three grade separation projects. This third-party Service Agreement provides a framework for Caltrain staff to review specific technical and design related questions as they pertain to the grade separation alternatives under consideration, their specificities, and uniqueness. The questions to be addressed include the curve of the track alignment at Palo Alto Ave, the vertical clearance standard, and the thickness of the bridge deck. Regarding four track refinement, Caltrain is currently engaging in further work to refine the four-track segments through the Corridor Crossings Strategy in order to support the Board adopted service vision. This analysis will involve consideration of four-tracking along the entire Caltrain Corridor; this geographic scope is required to complete the analysis. The analysis will also include consultation with UPRR. Caltrain expects to complete this work by the end of 2023, but should note that it will require JPB action to finalize. Should the City’s timeline for advancing these projects not accommodate the timing needed to determine the limits of a future four-track segment in northern Santa Clara County, Caltrain would require the City of Palo Alto to pursue a design that does not preclude a four-track segment. In this instance, Caltrain staff would assist City staff in determining the most appropriate path forward to revise the current alternatives under consideration. 4.1 Third Party Service Agreement During Early Conceptual Design (and Selection of Locally Preferred Alternative (LPA) As the third-party project sponsor, the City is required to coordinate with Caltrain staff as the City undertakes the conceptual design phase of the capital project development process and prepares for the City Council’s selection of LPAs. This coordination is needed to verify compliance with Caltrain planning and design criteria and other documentation as mentioned above and included below in Section II. This Agreement outlines necessary Caltrain participation and technical review, as well as an associated budget and schedule for Caltrain staff time that is reflective of the level of support required during this early phase of the project. The level of Caltrain involvement is based on Caltrain’s assessment of the project’s scale, complexity, and the specific requests expressed thus far by the City of Palo Alto in previous correspondence to Caltrain. The purpose of this initial Agreement is for Caltrain to provide early coordination and technical input and expertise to inform the process, while the City manages the development of alternatives, considers tradeoffs, and ultimately selects the LPAs to advance for community input and consideration of potential environmental consequences. Typically, the conceptual design phase culminates in the production of 15% design documents that reflect the community’s LPAs and compliance with Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 7  Packet Pg. 21 of 193  Services Agreement pg. 4 Caltrain’s standards and requirements. For more information on Design Standards, see Section 4.2. However, Caltrain understands the City may reach final decisions on the LPAs before or without producing the full list of 15% design documents. Under this scenario, Caltrain will work with City staff to determine the necessary deliverables needed to advance the projects to the next design phase. This first Agreement of several provides the initial framework for Caltrain staff to assist the City as it advances development of the conceptual designs for the alternatives described above in Section I.2 (Project Background). It is assumed by the parties that multiple Agreements and/or amendments will be needed as the City progresses towards completion of the conceptual design phase. These future Agreements and/or amendments will include updated schedules and budgets as appropriate. On a broad level, it is anticipated that agreements for future work phases will include tasks such as those identified below. It is assumed by the parties that the City of Palo Alto and Caltrain will collaboratively develop future scopes of work to reach consensus on the work needed to advance the project to the next phase. It is understood that the conceptual plans being developed by the City for the selection of its LPAs will require additional design work for the Preliminary Engineering and Environmental phase of the project and that there will be significant community involvement during all phases of the project. Future Agreements and/or amendments may include but may not limited to the following tasks: •Coordination during Advanced Conceptual Design (Up to 15% Design): Caltrain planning coordination, technical review and comments of advanced design alternatives (LPAs) further developed by the City prior to Preliminary Engineering/Environmental Clearance phase. •Alternative Contract Delivery Analysis to recommend the optimal contract delivery method based on the selected LPAs’ unique characteristics and complexities. Document recommendations in an Alternative Project Delivery Decision Report. •Development of a Cooperative Agreement to address funding, roles and responsibilities, budgets, and schedule for the subsequent phases. •Development of the Request For Proposals (RFP/s) for advancing the project to the subsequent phases in accordance with the consensus alternative delivery method recommendation. The scope of work for the RFPs will vary as necessary based on the recommended contract delivery method selected for the project. The scope of work specified in the agreement may be modified by mutual written agreement of the project managers so long as the work is completed within the timeline and budget of the agreement. 4.2 Caltrain Design Standards Determination of compliance with Caltrain’s standards is typically achieved through review of Preliminary (15%) Design Submittal Checklist items (See Appendix C) and namely, the Preliminary Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 8  Packet Pg. 22 of 193  Services Agreement pg. 5 15% Design Criteria and Basis of Design. Caltrain’s Engineering Standards include design criteria, specifications, drawings, design and maintenance of structures, excavation support systems and CADD standards. Given the City-led conceptual design phase is not scoped to produce all Preliminary (15%) Design deliverables listed in the Checklist, Caltrain will assist City staff and their conceptual design consultants with interpreting Caltrain standards and incorporating them into the alternatives currently under considerations. It is understood by all parties that Caltrain’s Engineering Standards (Design Criteria, Standard Drawings and Standard Specifications) are currently being updated to accommodate for an electrified rail environment. Caltrain will work with the City to identify and communicate those standards which are currently being updated and their planned completion, as well as how best to incorporate these updated standards into project documents. Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 9  Packet Pg. 23 of 193  Services Agreement pg. 6 II. TERMS OF AGREEMENT 1. Scope of Work To support the review and coordination of the City’s initial conceptual design phase and selection of LPAs, the tasks described in this Scope of Work will be completed by Caltrain under this Agreement. It is assumed that regular coordination and document review meetings will be held between participating parties on an as-needed basis among staff for the City and Caltrain. Caltrain will provide a Project Manager who is knowledgeable about the project and Caltrain processes, and who will lead the coordination efforts among Caltrain and City staff. The City will provide a Project Manager who is knowledgeable about the project and the City’s processes, and who will be the main point of contact for Caltrain. 1.1. Coordination during early Conceptual Design and Selection of LPAs: This Agreement assumes the City will ultimately provide Caltrain with many of the deliverables listed in the Preliminary (15%) Design Submittal Checklist by the end of the early conceptual design phase. Items listed in Appendix C, are provided for the City’s information and planning purposes, as these design-related items are typically needed and, in some cases, required for Caltrain to determine the feasibility and constructability of a proposed project. As the City progresses through the conceptual design phase, Caltrain will work with the City to determine which of these items are needed to determine the presence of any fatal flaws in the proposed concept designs. Caltrain will also work with the City to determine which of these items can be provided in a subsequent work phases. The following services will be delivered by Caltrain staff as part of the Coordination during early Conceptual Design, and Selection of LPAs task: o Caltrain planning and technical review of design alternatives developed to date by the City. o This initial Agreement assumes up to 3 rounds of Caltrain review and comment of up five (5) conceptual design alternatives. This Agreement also assumes that the first round of review will be performed on the current five (5) design alternatives still under consideration and the second and third rounds of review will be performed after the City’s revision/s of the alternatives based on Caltrain comments. This technical work typically includes the following activities: ▪Identify potential impacts to PCJPB facilities and their access as well as impacts to operations and maintenance for each alternative. ▪Identify potential access impacts to PCJPB facilities as they relate to people walking, biking, and using buses or shuttles to access Caltrain for each alternative. This includes wider streets, less direct routes, or degradation of existing facilities. Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 10  Packet Pg. 24 of 193  Services Agreement pg. 7 ▪Identify specific facilities that may be affected by the various alternatives (Third- party fiber optic cable, PCJPB fiber backbone, Positive Train Control, Communications, Overhead Catenary Systems, Track, Right-of-Way access, etc.). ▪Provide any clearances that will need to be considered as part of design – separation from track (vertical and horizontal), separation from catenary, clearance to utilities, etc. ▪Consider potential environmental impacts, as well as necessary environmental clearances and resource agency permits for PCJPB to obtain at later design stages. ▪Include any considerations the City should be aware of to reduce risk/cost. ▪Review of engineer’s cost estimates for the alternatives being considered. o Caltrain review of community engagement and outreach plans and materials and attendance at community meetings as appropriate. o Ongoing project coordination between the City and Caltrain staff (planning, engineering, operations, maintenance, outreach, environmental). This coordination includes Caltrain staff assisting the third-party project sponsor with ongoing questions related to planning, engineering, delivery, operations, maintenance, and outreach. o Up to ten (10) meetings/workshops with City and Caltrain staff. o Provide technical review, input, and expertise, including participation in the City’s working meetings with their Design Engineer and public outreach meetings. 2. Project Delivery Process & Schedules 2.1 Capital Projects Delivery Caltrain has an internal capital projects delivery process that defines distinct phases and periodic check-ins after each project phase. This methodology is used as quality control oversight by Caltrain leadership to ensure that projects proceed in alignment with scope, budget, and schedule as approved in the capital budget. The span of this Agreement is included as part of Phase Gate 2. 2.2 Estimated Milestones This information is offered for reference. As project-specific schedules are developed, these check-in points will be identified as milestones in accordance with this process. For this project, the initial estimated milestone dates are: Gate 1 - Project Initiation (per Caltrain internal process)October 2022 Gate 2 - 15% Development Complete TBD Gate 3 - 35% Development Complete TBD Gate 4 - 65% Development Complete TBD Gate 5 - 100% Development Complete TBD Gate 6 - Substantial Completion TBD Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 11  Packet Pg. 25 of 193  Services Agreement pg. 8 Gate 7 - Start-Up / Turnover Complete TBD Gate 8 - Project Closeout Complete TBD As it relates to the Agreement’s Scope of Work, the estimated timelines and milestones are included below. These timelines assume concurrence from Palo Alto City Council for the selection of the LPAs. These timelines may be adjusted as circumstances require upon the written agreement of the parties, which shall not be unreasonably withheld. 2023 2024 Caltrain FY23 FY24 FY25Service Agreement Estimated Timeline A M J J A S O N D J F M A M J J A S O N D 1. Coordination during early Conceptual Design, and Selection of LPAs Ongoing project coordination between the City and Caltrain staff (planning, engineering, operations, maintenance, outreach, environmental) Up to three (3) rounds of Caltrain review of the City's five conceptual design alternatives Caltrain review of community engagement and outreach plans and materials Caltrain review of available project deliverables from the Preliminary (15%) Design Submittal Checklist by the end of the early conceptual design phase 3. Work Product Review Periods The estimated timeline above includes City and Caltrain review periods. It is understood that Caltrain will require time to perform review of five (5) municipal alternatives. The durations of these reviews will be based upon the size and complexity of the project and its deliverables, and Caltrain will endeavor to meet the established timeframes. It is understood that the City of Palo Alto will require up to three (3) weeks to review documents produced by Caltrain and Caltrain will require up to three (3) weeks to review documents produced by the City and/or its consultants, unless different review schedules are agreed upon by all parties in advance. 4. Budget, Reporting, and Payment Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 12  Packet Pg. 26 of 193  Services Agreement pg. 9 As consideration for the services provided by Caltrain under this Agreement, the City will pay the costs for Caltrain’s services, as estimated herein. Costs associated with activities described within this Agreement have been estimated based on Caltrain’s current understanding of the project to date and information provided by the City. This estimate also assumes that Caltrain staff will work with City staff to develop subsequent scopes of work for subsequent agreements and amendments. This estimate is not intended to represent final project costs or bid cost. Every effort will be made by all parties to keep the overall project’s cost as low as possible while delivering the intended scope and objectives within schedule. 4.1 Progress Reports Caltrain will provide the City with quarterly progress reports on expenditures, and the City will provide Caltrain with quarterly progress reports on work activities completed and project status. 4.2 Estimated Budget The overall estimated budget for the tasks outlined in this Agreement is estimated at: $106,676.4 which includes $17,779.4 in contingency funds (20% of the budget estimate total). See Appendix B for budget details. 4.3 Caltrain Fully Burdened Unit Cost Rates and Contingency Funds Caltrain’s billing rates are designed to ensure reimbursement of actual costs to Caltrain for services provided on third-party projects. Caltrain’s billing rates include actual salaries and fringe benefit costs, which are billed as direct labor costs. Additionally, Caltrain rates also include indirect labor costs in the form of Internal Cost Allocation Plan (ICAP) rates, which reflect actual overhead costs that are not efficient to charge directly to the project, such as financial services. Both fringe benefit costs and estimated ICAP rate are updated on a fiscal year (FY) basis. More details on the current rates applied to San Mateo County Transit District (“District”) labor including Caltrain, Consultants and Non-labor, in Appendix E. Contingency provides funds for additional hours. Contingency funds will not be utilized without prior written (via email) authorization from the City. However, the City’s authorization for the release of contingency funds will not be unreasonably withheld. It is understood that Caltrain may submit a written request to the City for annual labor rate update, no later than 30 days before the start of the succeeding fiscal year, to be effective the first day of the subsequent fiscal year, or the date of Caltrain’s request, whichever date is later. Caltrain may also submit a written request to the City for labor rate changes upon staff changes. Increases in future negotiated fully burden billing rates, if requested, shall be limited to an annually negotiated, not-to- exceed percentage, according to the Construction Cost Index from the Engineering News Record for Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 13  Packet Pg. 27 of 193  Services Agreement pg. 10 the San Francisco Bay Area. Caltrain’s requests for new rates shall be subject to approval by the City, which approval shall not be unreasonably withheld. 4.4 Payment and Invoices The PCJPB will invoice the City for work performed under this Agreement quarterly in arrears. Payment by the City is due 30 days following the date of each invoice. 5. Term of Agreement a. It is understood by all parties that this Agreement will terminate on December 31, 2024, unless Caltrain (e.g., Capital Development or Planning PM) and the City (e.g., Public Works Director) mutually agree to extend the duration of this Agreement or the Agreement is earlier terminated pursuant to paragraph (b). b. Either party may terminate this Agreement by providing 30 days prior written notice, provided that City shall reimburse Caltrain for all costs incurred by Caltrain through the termination of the Agreement. 6. Governing Law This Agreement shall be interpreted, construed, and enforced in accordance with the laws of California. 7. Amendments This Agreement may be amended at any time and from time to time, provided such amendments are in writing and executed by the Parties. 8. Entire Agreement This Agreement constitutes the entire agreement of the Parties with respect to its subject matter and supersedes any prior oral or written understanding on the same subject. Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 14  Packet Pg. 28 of 193  Services Agreement pg. 11 IN WITNESS WHEREOF, PCJPB and the City execute this Agreement as follows with the intent to be legally bound: PENINSULA CORRIDOR CITY OF PALO ALTO JOINT POWERS BOARD By: By: __________________________________ ___________________________________ Michelle Bouchard Ed Shikada Executive Director City Manager __________________________________ ___________________________________ Date Date Approved by: ___________________________________ Philip Kamhi Chief Transportation Official ___________________________________ Date Approved as to Form: Approved as to Form: __________________________________ ___________________________________ James C. Harrison Tim Shimizu General Counsel Assistant City Attorney __________________________________ ___________________________________ Date Date Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 15  Packet Pg. 29 of 193  Services Agreement pg. 12 Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 16  Packet Pg. 30 of 193  Services Agreement pg. 13 Appendix A – CONNECTING PALO ALTO PROJECT DRAWINGS Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 17  Packet Pg. 31 of 193  Appendix A.1 – CHURCHILL AVENUE PARTIAL UNDERPASS DRAWINGS Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 18  Packet Pg. 32 of 193  Services Agreement pg. 15 Appendix A.2 – CHURCHILL AVENUE CLOSURE WITH MITIGATIONS (OPTION 1) Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 19  Packet Pg. 33 of 193  Services Agreement pg. 16 Appendix A.3 – CHURCHILL AVENUE CLOSURE WITH MITIGATIONS (OPTION 2) Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 20  Packet Pg. 34 of 193  Services Agreement pg. 17 Appendix A.4 – MEADOW-CHARLESTON TRENCH Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 21  Packet Pg. 35 of 193  Services Agreement pg. 18 Appendix A.5 – MEADOW-CHARLESTON HYBRID Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 22  Packet Pg. 36 of 193  Services Agreement pg. 19 Appendix A.6 – MEADOW-CHARLESTON UNDERPASS (1 of 2) Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 23  Packet Pg. 37 of 193  Services Agreement pg. 20 Appendix A.6 – MEADOW-CHARLESTON UNDERPASS (2 of 2) Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 24  Packet Pg. 38 of 193  Appendix B – CONNECTING PALO ALTO SERVICE AGREEMENT BUDGET *These FB Unit Cost Rates are offered as placeholders. They may or may not be updated prior to this Agreement getting executed Caltrain Fully Burdened Unit Cost Rates (FY23) Position Staff Name Hours Fee Hours Fee 211.00$ Deputy Chief, Rail Development Robert Barnard 6 $ 1,266 6 $ 1,266 297.00$ Director, Capital Program Delivery Andy Robbins 6 $ 1,782 6 $ 1,782 139.00$ Senior Projec t Manager Arul Edwin 8 $ 1,112 8 $ 1,112 198.00$ Engineering Director Zouheir Farah 30 $ 5,940 30 $ 5,940 174.00$ Engineering Infrastructure Manager Bin Zhang 102 $ 17,748 102 $ 17,748 127.00$ Senior Civil Engineer Joel Pancoast 102 $ 12,954 102 $ 12,954 *233.00$ Senior Track Engineer TBD 100 $ 23,300 100 $ 23,300 203.00$ Deputy Chief, Planning Dahlia Chazan 8 $ 1,624 8 $ 1,624 135.00$ Deputy Direc tor, Capital Planning Nicole Soultanov 20 $ 2,700 20 $ 2,700 188.00$ Capital Planning Support Lindsey Kiner 35 $ 6,580 35 $ 6,580 122.00$ Princ ipal Planner, Ac cess Planning Dan Provence 8 $ 976 8 $ 976 159.00$ Dep Director, Prg Management & Env Comp Hilda Lafebre 16 $ 2,544 16 $ 2,544 *129.00$ Program Manager, Projec t Controls TBD 10 $ 1,290 10 $ 1,290 *413.00$ Legal Counsel TBD 12 $ 4,956 12 $ 4,956 95.00$ Government Affairs Officer Navdeep Dhaliwal 35 $ 3,325 35 $ 3,325 100.00$ Government Affairs Acting Manager Lori Low 8 $ 800 8 $ 800 506 $ 88,897.00 506 $ 88,897.00 20%101 17,779.40$ 106,676.40$ Total including 20% contingency Contingency Totals Projec t Delivery Task 1 Coordination during early c onceptual design, and selection of LPAs Subtotal (1074) Infrastructure Engineering Planning Projec ts Controls G&CA Environmental Planning Legal Counsel Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 25  Packet Pg. 39 of 193  Item 6 Attachment A - Service Agreement- Caltrain and Palo Alto        Item 6: Staff Report Pg. 26  Packet Pg. 40 of 193  Appendix C - Preliminary (15%) Design Submittal Checklist for Reference This list is offered for reference and describes the tasks that Caltrain would typically expect the City to perform and report on to Caltrain during the conceptual planning process. Design Development Drawings by the City’s Design Engineer: a) Title Sheet, Legend & Index of Drawings b) Key Map showing Project location c) Project Typical Sections d) Critical concept sections e) Selected Concept Plan & Profile Sheets f) Existing and Proposed Right-of-Way Information g) Existing Utilities and conceptual relocation h) Existing Drainage structures and Water shed information i) Selected concept 3D Rendering Deliverables and Submittals by the City’s Design Engineer: a) Design Basis Memorandum. b) Reports, Exhibits, & Other Documents i. Preliminary 15% Design Criteria ii. Preliminary Selected Concept drawings iii. Preliminary 15% ROW acquisitions, swaps, easements, etc. iv. Preliminary 15% Utility Matrix v. Preliminary 15% Geotechnical Report vi. Preliminary 15% Traffic Report including VMT analysis vii. Preliminary 15% Access Improvement Report viii. Preliminary 15% Environmental Assessment ix. Preliminary 15% existing drainage and project area water shed delineation x. Preliminary 15% Engineering Estimate with range of probable costs and contingency levels in current and year of expenditure values (escalated to mid-point of construction) xi. Preliminary 15% Design and Construction Schedule Review xii. Comments Resolution Matrix by Caltrain (PL, ENG, and Project Delivery) and the City’s Design Engineer xiii. Alternative Project Delivery Decision Report Coordination Tasks: a. Kickoff Meeting with Caltrain (Planning “PL”, Engineering “ENG”, Outreach, and Project Delivery) and the City’s Design Engineer b. Presentation on project design definition and objectives Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 27  Packet Pg. 41 of 193  Services Agreement pg. 24 c. Site visit with Caltrain (PL, ENG, Outreach, and Project Delivery) and the City’s Design Engineer d. Meeting with Caltrain Operations, Safety, and other stakeholders e. Review of Caltrain design criteria with PL, Outreach, and ENG f. Review of ROW and utilities with Caltrain (PL and ENG), and the City’s Design Engineer g. Topographic survey by the City’s Design Engineer h. Traffic data collection, including Vehicle Miles Traveled (VMT) analysis, by the City’s Design Engineer i. A walking audit that identifies existing access concerns and opportunities for improvement with Caltrain (PL, ENG, Outreach & Project Delivery) and the City’s Design Engineer j. Geotechnical investigation with USGS existing data by the City’s Design Engineer k. Various concept alternatives development by Caltrain (PL, ENG, and Project Delivery) and the City’s Design Engineer l. Concept evaluation and selection recommendation by Caltrain (PL, ENG, Outreach, and Project Delivery) and the City’s Design Engineer m. Final Selected Concept Value Engineering workshop with Caltrain (PL, ENG, Outreach, and Project Delivery) and the City’s Design Engineer n. Concept Design development VE implementation by Caltrain (PL, ENG, Outreach, and Project Delivery) and the City’s Design Engineer o. 15% Design Review meeting and comments resolution with Caltrain (PL, ENG, Outreach, and Project Delivery) and the City’s Design Engineer Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 28  Packet Pg. 42 of 193  Services Agreement pg. 25 Appendix D – Caltrain Phase/Gate Process Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 29  Packet Pg. 43 of 193  Services Agreement pg. 26 Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 30  Packet Pg. 44 of 193  Appendix E - Caltrain Fully Burdened Unit Cost Rates, 2023 Effective July 1, 2022 these rates should be applied to District labor, Consultants and Non-Labor for purposes of external agreements with the District. Rates will be updated annually, and the District reserves the right to update rates a maximum of one time during the year, if warranted. The District will communicate all such changes in writing. The San Mateo County Transit District (District) provides motorbus, paratransit and shuttle service in San Mateo County. The District also administers and manages the day-to-day operations of the Peninsula Corridor Joint Powers Board (PCJPB)/Caltrain; San Mateo County Transportation Authority (TA); and San Mateo County Express Lane Joint Powers Authority (JPA). The District uses cost allocation and rate setting methodologies to assign and recover costs incurred by providing services shared by all agencies. Fully Burdened Rate for Onsite Consultants and Non-Labor Items: Unit Cost + ICAP Agency Indirect Costs (AIA): Onsite consultants and non-labor items are “grossed up” to add in Agency Indirect Costs (AIA) and Capital Overhead. Taken together, these components are referred to as the Internal Cost Allocation Plan Rate, which is supported by an audited Internal Cost Allocation Plan (ICAP) using statistics appropriate to the costs allocated. AIA costs benefit all agencies and include staff in support departments such as Human Resources, Information Technology and Telecommunications, Treasury, Accounting and Budgets, Security, Facilities Maintenance and Contracts & Procurement. All staff time devoted to shared service activities are recorded to the AIA project category within the accounting system. Annually, AIA costs are allocated to the appropriate benefiting agencies through the ICAP. Capital Overhead: Capital costs associated with pooled support costs that cannot be directly attributed to a specific capital project, including labor and non-labor costs specific to each agency’s capital projects, are recorded to the Capital Overhead project within the accounting system. A rate is used to charge for the three categories of costs. The rates are calculated and updated on an annual basis. Fully Burdened Rate for Employees: Unit Cost + ICAP + Fringe Benefits The fully burdened rate for employee includes the ICAP rate shown above, and also includes Employee Fringe Benefits. Fringe benefits cover costs associated with payroll taxes, pension plan contributions, group insurance premiums (medical, dental, vision coverages), life insurance, long-term disability, unemployment insurance, and paid time off (PTO). These costs are initially paid by the District and charged to benefitting agencies through the application of a fringe benefit rate. Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 31  Packet Pg. 45 of 193  Services Agreement pg. 28 Item 6 Attachment A - Service Agreement-Caltrain and Palo Alto        Item 6: Staff Report Pg. 32  Packet Pg. 46 of 193  2 0 5 6 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Community Services Meeting Date: May 22, 2023 Report #:2304-1318 TITLE Approval of Amendment No. 1 to Contract No. S20178516 with Hohbach-Lewin, Inc. to increase compensation by $10,000 and to extend the Contract Term through March 30, 2026 for On-Call Structural Engineering Services for various Public Art Installations; CEQA Status – Not a Project. RECOMMENDATION Staff recommends that City Council approve and authorize the City Manager or designee to execute Amendment No. 1 to Contract Number S20178516 with Hohbach-Lewin, Inc. to increase compensation by $10,000, for a total not-to-exceed amount of $60,000, and to extend the contract term to March 30th, 2026 to provide On-Call Structural Engineering Services for various public art installations. BACKGROUND The City of Palo Alto’s Public Art Program manages the Public Art in Municipal Projects funds transferred annually as part of the budget cycle in accordance with Ordinance Number 5301 Municipal Code 2.26.070 (Public Art for Municipal Projects)1. The Public Art Program oversees the implementation of expanded public art programming, including permanent art installations associated with the City’s Capital Improvements Projects, temporary public art installations, Cubberley Artist Studio Program, and Code: ART. Engineered drawings and calculations are required for many temporary public art installations. Costs associated with structural engineering services are often prohibitive for the artists of such temporary public art installations as their overall budgets are limited. Therefore, the Public Art Program entered into the initial professional services agreement with Hohbach-Lewin, Inc. to provide on-call structural engineering services for various public art projects in April 2020. 1 Ordinance No 5301 of the Council of the City of Palo Alto Amending the Municipal Code to add Section 2.26.070 (Public Art for Municipal Projects) to Chapter 2.26 (Visual Art in Public Places); https://www.cityofpaloalto.org/files/assets/public/community-services/public-art-program/pap-policies-and- docs/ord-5301-public-art-for-muni-projects-2015.pdf Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 1  Packet Pg. 47 of 193  2 0 5 6 ANALYSIS In early January 2020, the Public Art Program released a Request for Proposals (RFP) for on-call engineering services for public art. The RFP was sent to multiple Engineering firms with a due date to respond of February 21, 2020. Hohbach-Lewin, Inc. was the only firm who responded. Staff is not certain why there was only one firm that responded, but suspects that it is due to the small contract amount and the unusual niche focus on public art in the field of structural engineering. Hohbach-Lewin, Inc. has been providing a range of services instrumental for the implementation of temporary public art installations for a variety of projects, including the King Artist-in-Residence program, and the Code:ART public art festival installations. The Public Art Program staff relies on the services provided by Hohbach-Lewin, Inc to ensure the installations are designed and fabricated to provide safety to the public, City staff, and surrounding structures and protection of the project from elements due to wind, seismic, or other typical potential hazards. The current contract with Hohbach-Lewin, Inc. expired on April 1, 2023. Extension of the contract will allow the Public Art Program staff to continue utilizing on-call structural engineering services by Hohbach-Lewin, Inc. essential for the successful implementation of various Public Art installations throughout Palo Alto in the next three years and the additional funds will ensue that adequate funding is available for these projects. This amendment requires Council approval as it extends the term of the contract beyond three years. FISCAL/RESOURCE IMPACT As part of the annual budget process, 1% of the Annual Capital Improvement Budget is earmarked for the purpose of commissioning public art and budgeted in the Art in Public Spaces CIP Project (AC-86017). The Fiscal Year 2023 Adopted Capital Budget Art in Public Places Capital Project has sufficient funding to absorb the cost of this contract with no additional budgetary action required. STAKEHOLDER ENGAGEMENT Staff coordinated internally with procurement staff and legal support to review and execute this amendment. ENVIRONMENTAL IMPACT Approval of this amendment is not a project under the California Environmental Quality Act. ATTACHMENTS Attachment A Contract (S20178516) HOHBACH-LEWIN, INC. Attachment B Amendment No. 1 to Contract NO. S20178516 with Hohbach-Lewin, Inc. APPROVED BY: Kristen O'Kane, Community Services Director Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 2  Packet Pg. 48 of 193  Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. S20178516 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HOHBACH-LEWIN, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 23rd day of April, 2020, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Hohbach-Lewin, Inc., a California corporation located at 260 Sheridan Avenue, Suite 150 Palo Alto, CA 94306 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY desires to engage a consultant who intends to provide On-Call Structural Engineering Services for various Public Art Installations (“Project”) and intends to contract with CONSULTANT whom will provide services in conjunction with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from April 1, 2020 through March 30, 2023 unless terminated earlier pursuant to Section 19 of this Agreement. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 3  Packet Pg. 49 of 193  Professional Services Rev. April 27, 2018 2 SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed fifty thousand Dollars ($50,000). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed fifty thousand Dollars ($50,000). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OR RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C-1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 4  Packet Pg. 50 of 193  Professional Services Rev. April 27, 2018 3 similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in regarding CONSULTANT’S 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 negligent errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for a ny compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Doug Hohbach, S.E., Email: DHohbach@hohbach-lewin.com, as the principal to have supervisory responsibility DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 5  Packet Pg. 51 of 193  Professional Services Rev. April 27, 2018 4 for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Elise DeMarzo, Email: Elise.DeMarzo@CityofPaloAlto.org, Department, Community Art and Sciences Division, 1313 Newell Road, Palo Alto, CA 94303, Telephone: (650) 617-3517. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of t his Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by applicable law including California Civil Code section 2782.8, 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 losses, , claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) to the extent that such Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, 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 DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 6  Packet Pg. 52 of 193  Professional Services Rev. April 27, 2018 5 require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. Nothing in this Section 16.2 shall be construed to require any obligations on CONSULTANT in conflict with the provisions of California Civil Code section 2782.8. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement nami ng CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrent- ly 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 materially reduces the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or material reduction within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 7  Packet Pg. 53 of 193  Professional Services Rev. April 27, 2018 6 SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. 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: Hohbach-Lewin, Inc. 260 Sheridan Ave. Ste. 150 Palo Alto, CA 94306 DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 8  Packet Pg. 54 of 193  Professional Services Rev. April 27, 2018 7 SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by 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 DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 9  Packet Pg. 55 of 193  Professional Services Rev. April 27, 2018 8 packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 10  Packet Pg. 56 of 193  Professional Services Rev. April 27, 2018 9 action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this Agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 11  Packet Pg. 57 of 193  Professional Services Rev. April 27, 2018 10 CONTRACT No. S20178516 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ Contracts Administrator or designee APPROVED AS TO FORM: __________________________ City Attorney or designee HOHBACH-LEWIN, INC. By: Name: Title: Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER (for on-call contracts only) EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Principal Douglas Hohbach Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 12  Packet Pg. 58 of 193  Professional Services Rev. April 27, 2018 11 EXHIBIT “A” SCOPE OF SERVICES The CONSULTANT will perform Services on an on-call basis, using the form included as Exhibit “A-1”, in one or more of the following areas: 1. CONSULTANT will consult with the Public Art Program and artists on artwork design to ensure compatibility and constructability for the desired location. 2. CONSULTANT will prepare calculations for public art projects for display purposes as necessary, including any structural, electrical or other disciplines associated with the project. 2.1 This could require the structural design of mounting brackets, foundations, and other combinations or means of attachment that will provide stability, both statically and dynamically for the protection of the project, the general public, City staff, surrounding structures and elements due to wind, seismic, or other typical potential hazards using prudent engineering methods and judgement. 2.2 Some projects could require design/confirmation of existing electrical circuits to prevent overloading or design of new, properly grounded circuits as needed. 2.3 Consultant shall not: (1) conduct land surveys or other fieldwork; (2) directly participate in any on-site aspects of fabrications, assembly or removal or temporary public art. Deliverables CONSULTANT’s deliverables will be determined on a task -by -task basis, as specified on a form substantially in the form of Exhibit “A-1”. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 13  Packet Pg. 59 of 193  Professional Services Rev. April 27, 2018 12 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER Consultant hereby agrees to perform the work detailed below in accordance with all the terms and conditions of t he Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5. BUDGET CODE: _______________ COST CENTER_________________ COST ELEMENT______________ WBS/CIP___ _______PHASE___ 6. CITY PROJECT MANAGER’S NAME/DEPARTMENT_________________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: ▪ WORK TO BE PERFORMED ▪ SCHEDULE OF WORK ▪ BASIS FOR PAYMENT & FEE SCHEDULE ▪ DELIVERABLES ▪ REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: ______________________ BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 14  Packet Pg. 60 of 193  Professional Services Rev. April 27, 2018 13 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each task by the end of the term of this Agreement or by a sooner date with mutual written agreement of the project managers for CONSULTANT and CITY, so long as all work is completed within the term of the Agreement. If specified in the applicable Task Order, CONSULTANT shall provide the CITY with a detailed schedule of work. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 15  Packet Pg. 61 of 193  Professional Services Rev. April 27, 2018 14 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the schedule of rates attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services, additional services, and reimbursable expenses shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services and Additional Services, including reimbursable expenses, within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: none All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $0 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 16  Packet Pg. 62 of 193  Professional Services Rev. April 27, 2018 15 EXHIBIT “C-1” SCHEDULE OF RATES Standard Structural Engineering Billing Rates: Title: Rates: Principal $220.00-$250.00 Associated Principal $200.00-$210.00 Senior Associate $180.00-$200.00 Associate $155.00-$165.00 Project Structural Engineer $150.00-$155.00 Project Engineer $130.00-$150.00 Design Engineer $100.00-$130.00 Staff Engineer $90.00-$100.00 BIM Modeler $90.00-$120.00 Senior CAD Drafter $115.00-$130.00 CAD Drafter $80.00-100.00 Engineer in training $85.00 Clerical $75.00 Plots $5.00 per sheet Automobile $0.58 per mile (federal rate) DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 17  Packet Pg. 63 of 193  Professional Services Rev. April 27, 2018 16 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 18  Packet Pg. 64 of 193  Professional Services Rev. April 27, 2018 17 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 5D2FE27C-E283-46D9-AC06-90077479B349 Item 7 Attachment A - Contract (S20178516) with Hohbach-Lewin, Inc        Item 7: Staff Report Pg. 19  Packet Pg. 65 of 193  Vers.: Aug. 5, 2019 Page 1 of 4 AMENDMENT NO. 1 TO CONTRACT NO. S20178516 BETWEEN THE CITY OF PALO ALTO AND HOHBACH-LEWIN, INC. This Amendment No. 1 (this “Amendment”) to Contract No. S20178516 (the “Contract” as defined below) is entered into as of May 22, 2023, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and HOHBACH-LEWIN, INC., a California corporation, located at 260 Sheridan Avenue, Suite 105, Palo Alto, CA 94306 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of providing On-Call Structural Engineering Services for various Public Art Installations (“Project”), as detailed therein. B. The Parties now wish to amend the Contract in order to extend the contract term for three years through March 30, 2026, increase total Not-to-Exceed Compensation by Ten Thousand Dollars ($10,000) from Fifty Thousand Dollars ($50,000) to Sixty Thousand Dollars ($60,000), and update the Schedule of Rates, 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. S20178516 between CONSULTANT and CITY, dated April 23, 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 2 “TERM” of the Contract is hereby amended to read as follows: “The term of this Agreement shall be from April 1, 2020 through March 30, 2026 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 3. Section 4 “NOT TO EXCEED COMPENSATION” of the Contract is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Sixty Thousand Dollars ($60,000). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, DocuSign Envelope ID: 5F098D37-8900-4FCF-BCF2-961F48189FA5 Item 7 Attachment B - Amendment No. 1 to Contract No. S20178516 with Hohbach-Lewin, Inc.        Item 7: Staff Report Pg. 20  Packet Pg. 66 of 193  Vers.: Aug. 5, 2019 Page 2 of 4 within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed fifty thousand Dollars ($60,000). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OR RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”.” SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “C-1” entitled “SCHEDULE OF RATES, AMENDMENT NO. 1”, AMENDED, REPLACES PREVIOUS. 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. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: 5F098D37-8900-4FCF-BCF2-961F48189FA5 Item 7 Attachment B - Amendment No. 1 to Contract No. S20178516 with Hohbach-Lewin, Inc.        Item 7: Staff Report Pg. 21  Packet Pg. 67 of 193  Vers.: Aug. 5, 2019 Page 3 of 4 SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO ______________________________ Purchasing Manager APPROVED AS TO FORM: ______________________________ City Attorney or Designee HOHBACH-LEWIN, INC. Officer 1 By:___________________________ Name:________________________ Title:_________________________ Officer 2 By:___________________________ Name:________________________ Title:__________________________ Attachments: Exhibit “C-1” entitled “SCHEDULE OF RATES, AMENDMENT NO. 1” (AMENDED, REPLACES PREVIOUS) DocuSign Envelope ID: 5F098D37-8900-4FCF-BCF2-961F48189FA5 Principal Douglas Hohbach Principal Joaquim Roberts, Treasurer Item 7 Attachment B - Amendment No. 1 to Contract No. S20178516 with Hohbach-Lewin, Inc.        Item 7: Staff Report Pg. 22  Packet Pg. 68 of 193  Vers.: Aug. 5, 2019 Page 4 of 4 EXHIBIT “C-1” SCHEDULE OF RATES, AMENDMENT NO. 1 (AMENDED, REPLACES PREVIOUS) Standard Structural Engineering Billing Rates: DocuSign Envelope ID: 5F098D37-8900-4FCF-BCF2-961F48189FA5 Item 7 Attachment B - Amendment No. 1 to Contract No. S20178516 with Hohbach-Lewin, Inc.        Item 7: Staff Report Pg. 23  Packet Pg. 69 of 193  City Council Staff Report Report Type: CONSENT CALENDAR Lead Department: City Clerk Meeting Date: May 22, 2023 Report #:2305-1419 TITLE SECOND READING: Adopt an Ordinance Continuing the Interim Parklet Program Until March 31, 2024 (FIRST READING: May 8, 2023 PASSED 6-1, Kou no) BACKGROUND This was heard by the City Council on May 8, 2023 for a first reading and was approved 6-1, Kou no. No changes were made to the ordinance; it is now before you for a second reading. ATTACHMENTS Attachment A: Interim Ordinance Temporarily Continuing Expansion of Outdoor Dining Retail and Other Activities until March 31, 2024 APPROVED BY: Lesley Milton, City Clerk Item 8 Item 8 Staff Report        Item 8: Staff Report Pg. 1  Packet Pg. 70 of 193  *NOT YET APPROVED* 268_20230426_ts24 1 Ordinance No. _____ Interim Ordinance of the Council of the City of Palo Alto Temporarily Continuing the Expansion of Outdoor Dining, Retail and Other Activities on Public and Private Property and Relaxing Regulations Regarding Onsite Parking, On-Sale of Alcohol, Design/Architectural Review, Permit Fees, and Alcohol Consumption in Public Places, All to Facilitate Such Outdoor Use The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On June 23, 2020, the City Council adopted Ordinance 5500, an emergency ordinance, in response to COVID-19 and its effects on local businesses. At that time and since then, county and state regulations related to COVID-19 have limited or curtailed many indoor activities, including dining, bars, retail, performances, and other recreational uses. B. In June 2021, the City Council adopted Ordinance 5526, which amended and restated Ordinance 5500 on a non-emergency basis (among other changes). C. On November 8, 2022, the City Council adopted Ordinance 5533, which amended and restated Ordinance 5526 with a sunset date of June 30, 2022. D. In May 2022, the City Council adopted Ordinance 5551, which amended and restated Ordinance 5533 to extend its provisions through December 31, 2022. E. In October and November 2022, the City Council adopted Ordinance 5572, which amended and restated Ordinance 5551 to extend its parklet provisions through June 30, 2023 and the remainder of its provisions through December 31, 2023. F. The City Council now desires to amend and restate Ordinance 5572 to extend the parklet provisions of this ordinance until March 31, 2024. The remainder of the ordinance will sunset on December 31, 2023 as previously adopted. SECTION 2. City Manager Authorization The City Manager or his or her designee(s) may promulgate guidelines and implementing regulations for the uses and programs described in this Ordinance as long as such regulations do not conflict with this Ordinance. // Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 2  Packet Pg. 71 of 193  *NOT YET APPROVED* 268_20230426_ts24 2 SECTION 3. Fee Waivers for Encroachment Permits and Parking Space Closures A. The permit fees set forth in the Municipal Fee Schedule are temporarily waived for applications for encroachment permits under Palo Alto Municipal Code Section 12.12.010 and Section 12.12.020, as modified by this Ordinance, to place structures and equipment in the public right-of-way (including closed streets and sidewalks) for purposes of outdoor dining and outdoor retail sales and display of wares. B. The parking space closure fee in the Municipal Fee Schedule collected by the Department of Planning and Development Services is temporarily waived for the use of a parking space(s) on-street or in a parking lot for purposes of outdoor dining and outdoor retail sales and display of wares as authorized through an encroachment permit, license, or agreement with the City. SECTION 4. Modified Review Process for Commercial Sidewalk Encroachment Permits Notwithstanding contrary provisions of PAMC Section 12.12.020, permits may be granted for commercial sidewalk encroachments for outdoor retail sales and display areas and outdoor eating areas. Permits for these purposes shall not be required to undergo and complete design review by the Planning Department described in subsection (d) of Section 12.12.020. Except as expressly modified herein, the provisions of Section 12.12.020 shall apply to commercial sidewalk encroachments. SECTION 5. Eating and Drinking Establishments Eating establishments, and drinking establishments may temporarily relocate some or all of their existing indoor seating capacity to outdoor seating capacity, as follows: A. Location. Outdoor eating areas may be placed in one or more of the following areas: 1. Public streets temporarily closed by the City of Palo Alto, through issuance of an encroachment permit under PAMC Section 12.12.010; 2. Sidewalks through issuance of an encroachment permit under PAMC Section 12.12.020, as modified by Section 4 of this Ordinance; 3. In on-street parking spaces approved for use as temporary parklets, in accordance with the Pilot Parklet Demonstration Project as first approved by Council Resolution No. 9909 and continued by subsequent resolutions; 4. Surface parking lots that currently provide required onsite parking for the eating/drinking establishment, through issuance of an approval by the Director of Planning, or his or her designee, as described in subsections C and D of this Section, below; Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 3  Packet Pg. 72 of 193  *NOT YET APPROVED* 268_20230426_ts24 3 5. Other outdoor areas on the eating/drinking establishment site not originally permitted for outdoor seating in the establishment’s approved site plan or planning entitlement (such as landscaped areas), through issuance of an approval by the Director of Planning, or his or her designee, in accordance with subsections C and D of this Section, below; and 6. In other areas that the Council identifies by resolution or ordinance. B. Use of Private Parking Lots – Temporary Reduction of Parking Requirements. 1. Notwithstanding the parking requirements applicable to eating/drinking establishments in Title 18 (Zoning) of the PAMC or in individual planning entitlements or approvals for eating/drinking establishments, an eating/drinking establishment may place outdoor eating areas in its parking lot, so long as at least half of the parking spaces on the subject site remain available for use by vehicles. If the establishment’s parking lot has ten or fewer parking spaces, up to 100 percent of the parking lot may be used for outdoor eating, subject to review and approval of the Planning Director or his or her designee. 2. Notwithstanding the parking requirements applicable to shopping centers and their tenant businesses in Title 18 (Zoning) of the PAMC or in individual planning entitlements or approvals for shopping centers or their tenant businesses, a shopping center with an eating/drinking establishment tenant(s) may place outdoor eating areas for such tenant business(es) in the shopping center parking lot, so long as at least half of the parking spaces on the subject site remain available for use by vehicles. C. Application. An application in a form approved by the Director of Planning shall be submitted to the Planning and Development Services Department to relocate some or all of an eating/drinking establishment’s permitted indoor restaurant seating to outdoor seating in privately-owned areas on the eating/drinking establishment site not originally permitted for outdoor eating. The Director of Planning is authorized to establish submittal requirements and procedures. Temporary Use Permits (TUP) under PAMC Section 18.42.050 may be utilized for this purpose. A TUP issued for this purpose may be valid for a specified period longer than 45 days, notwithstanding subsection (d) of Section 18.42.050. The Planning Director may extend a TUP issued prior to the effective date of this Ordinance to be valid beyond 45 days. D. Seating Layout Review. A Seating Layout Review is required to relocate some or all of an eating/drinking establishment’s permitted indoor seating to outdoor seating in privately- owned areas on the eating/drinking establishment site not originally permitted for outdoor eating. The Seating Layout Review shall be conducted by a transportation planner, planner, and/or fire inspector who will review and either approve or require modifications to the proposed outdoor seating layout based on the following criteria: Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 4  Packet Pg. 73 of 193  *NOT YET APPROVED* 268_20230426_ts24 4 1. Seating layout does not create a safety risk and adequate pedestrian and vehicular separation is maintained, including with movable barriers as appropriate where outdoor seating is to be placed in parking lots or on-street parking spaces. 2. Seating layout accommodates appropriate vehicle and pedestrian circulation and maintains adequate paths of travel and complies with accessibility requirements of the Americans with Disabilities Act. 3. Any tents must comply with fire codes and Palo Alto Fire Department issued standards for tents, and safety standards set forth by the National Fire Protection Association for fire-resistant tents and must include an affixed manufacturer’s label stating the tent meets NFPA requirements. A State Fire Marshal seal on the tent or a certificate is needed to prove treatment. 4. Any heaters must comply with fire codes. 5. An adequate and visible barrier is placed that clearly separates the retail area from the parking area and provides sufficient protection for patrons. Adequacy shall be defined in standards and guidelines issued by the Director of Planning. 6. Other requirements established in the standards and guidelines issued by the Director of Planning. E. Fee. No fee will be charged for submittal and review of the Application and for conducting a Seating Layout Review. F. Occupancy. Total seating occupancy (including all indoor and outdoor seating) shall not exceed the overall occupancy for which the restaurant is permitted. G. Alcohol Service. Establishments that are allowed by the City to serve alcohol for onsite consumption by issuance of a conditional use permit (“CUP”) as required by PAMC Section 18.42.090 or as a legal nonconforming use, and that both have an on-sale license from the Department of Alcoholic Beverage Control (“ABC”) and are duly authorized by ABC to serve alcohol in outdoor areas, shall be allowed to serve alcohol for onsite consumption in such outdoor areas, notwithstanding any prohibition on outdoor alcohol service or consumption in the PAMC or planning entitlement issued under Title 18 (Zoning) of the PAMC. During the effective period of this Ordinance, establishments that meet the preceding requirements may expand their footprint to outdoor areas without an amendment of the CUP, notwithstanding PAMC Section 18.42.090(c). Outdoor alcohol service shall be in full compliance with ABC regulations, as amended. Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 5  Packet Pg. 74 of 193  *NOT YET APPROVED* 268_20230426_ts24 5 H. No Architectural Review. Notwithstanding PAMC Sections 18.77.077 and 18.76.020, architectural review shall not be required for proposed outdoor eating areas or signage related to such areas during the effective period of this Ordinance. SECTION 6. Retail Establishments Retail establishments may temporarily relocate some or all of their existing customer-accessible square footage to outdoor spaces as follows: A. Location. Outdoor retail sales and display areas and outdoor eating areas may be placed in one or more of the following areas: 1. Public streets temporarily closed by the City of Palo Alto, through issuance of an encroachment permit under PAMC Section 12.12.010; 2. Sidewalks through issuance of an encroachment permit under PAMC Section 12.12.020, as modified by Section 4 of this Ordinance; 3. Surface parking lots that currently provide required onsite parking for the retail establishment, through issuance of an approval by the Director of Planning, or his or her designee, as described in subsections C and D of this Section, below; 4. Other outdoor areas on the retail establishment site not originally permitted for retail sales and display or dining in the retail establishment’s approved site plan or planning entitlement (such as landscaped areas), through issuance of an approval by the Director of Planning or his or her designee in accordance with subsections C and D of this Section, below; and 5. In other areas that the Council identifies by resolution or ordinance. B. Use of Private Parking Lots – Temporary Reduction of Parking Requirements. 1. Notwithstanding the parking requirements applicable to retail establishments in Title 18 (Zoning) of the PAMC or in individual planning entitlements or approvals for retail establishments, a retail establishment may conduct outdoor retail sales and display and may place outdoor eating areas in its parking lot, so long as at least half of the parking spaces on the subject site remain available for use by vehicles. If the establishment’s parking lot has ten or fewer parking spaces, up to 100 percent of the parking lot may be used for outdoor dining/retail, subject to review and approval of the Planning Director or his or her designee. 2. Notwithstanding the parking requirements applicable to shopping centers and their tenant businesses in Title 18 (Zoning) of the PAMC or in individual planning entitlements or approvals for shopping centers or their tenant businesses, a shopping Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 6  Packet Pg. 75 of 193  *NOT YET APPROVED* 268_20230426_ts24 6 center with a retail establishment tenant(s) may place outdoor retail sales and display areas and outdoor eating areas for such tenant business(es) in the shopping center parking lot, so long as at least half of the parking spaces on the subject site remain available for use by vehicles. C. Application. An application in a form approved by the Director of Planning shall be submitted to the Planning and Development Services Department to relocate some or all of a retail establishment’s customer-accessible square footage to outdoor retail sales and display in privately-owned areas on the retail establishment site not originally permitted for outdoor retail sales and display. The Director of Planning is authorized to establish submittal requirements and procedures. Temporary Use Permits (TUP) under PAMC Section 18.42.050 may be utilized for this purpose. A TUP issued for this purpose may be valid for a specified period longer than 45 days, notwithstanding subsection (d) of Section 18.42.050. The Planning Director may extend a TUP issued prior to the effective date of this Ordinance to be valid beyond 45 days. D. Merchandise or Seating Layout Review. A Layout Review is required to relocate some or all of an retail establishment’s permitted indoor customer-accessible square footage to privately-owned areas on the retail establishment site not originally permitted for retail. The Layout Review shall be conducted by a transportation planner, planner, and/or fire inspector who will review and either approve or require modifications to the proposed retail layout based on the following criteria: 1. The placement of the merchandise, displays, or other items does not create a safety risk and adequate pedestrian and vehicular separation is maintained, including with movable barriers as appropriate where outdoor seating is to be placed in parking lots or on-street parking spaces. 2. The layout accommodates appropriate vehicle and pedestrian circulation and maintains adequate paths of travel and complies with accessibility requirements of the Americans with Disabilities Act. 3. Any tents must comply with fire codes and Palo Alto Fire Department issued standards for tents, and safety standards set forth by the National Fire Protection Association for fire-resistant tents and must include an affixed manufacturer’s label stating the tent meets NFPA requirements. A State Fire Marshal seal on the tent or a certificate is needed to prove treatment. 4. Any heaters must comply with fire codes. 5. An adequate and visible barrier is placed that clearly separates the retail area from the parking area and provides sufficient protection for patrons. Adequacy shall be defined in standards and guidelines issued by the Director of Planning. Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 7  Packet Pg. 76 of 193  *NOT YET APPROVED* 268_20230426_ts24 7 6. Other requirements established in the standards and guidelines issued by the Director of Planning. E. Fee. No fee will be charged for submittal and review of the Application and for conducting a Layout Review. F. No Architectural Review. Notwithstanding PAMC Sections 18.77.077 and 18.76.020, architectural review shall not be required for proposed outdoor retail areas or signage related to such areas during the effective period of this Ordinance. SECTION 7. Compliance with Other Regulations, Orders and Approvals The uses of public and private property allowed in this Ordinance shall be conducted in compliance with any applicable state or county mandate (including executive orders and health orders), this Ordinance, Resolution No. 9909 and its successors, and all other local and state regulations, orders, and approvals, as applicable (collectively, “Applicable Law”). Any approval, allowance or permit to conduct such temporary outdoor use(s) shall be subject to revocation by the issuing City official if the use is conducted in violation of Applicable Law, or poses a threat to public health, safety or welfare. SECTION 8. No Vested Rights The outdoor uses of public and private property allowed in this Ordinance are temporary and shall be terminated upon the earlier of the date stated in the applicable permit/approval or the expiration of this interim Ordinance, unless earlier revoked by the City Manager or other authorized official (or their designee) or terminated by action of the City Council. The City may discontinue one or more, or all, of the allowed outdoor uses at any time if the City Manager or designee determines that the public health, safety or welfare warrant such action. Nothing in this Ordinance shall establish a vested right. SECTION 9. Suspension of Prohibition on Alcohol Consumption in Lytton Plaza and Cogswell Plaza Notwithstanding PAMC Sections 22.04.330 and 22.04.331, the City Manager is authorized to suspend the prohibition on consumption of alcoholic beverages in the parking lots adjacent to Lytton Plaza and Cogswell Plaza. SECTION 10. Use of City Parking Lots for Reopening Activities A. The City Manager, or his or her designee (“City Manager”), is authorized to permit outdoor dining, retail and other activities necessary to facilitate the reopening of businesses, in public parking lots owned by the City, subject to the City Manager’s adoption of rules, regulations, guidelines, and standards for such use (“Regulations”), and publication of such Regulations on the City’s website. Use of parking lots, or portions Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 8  Packet Pg. 77 of 193  *NOT YET APPROVED* 268_20230426_ts24 8 thereof, by a business shall require a license or other agreement, including an agreement to indemnify and hold harmless the City, and provision of insurance. B. The City Manager is authorized to waive any fee in the Municipal Fee Schedule associated with the temporary use of parking areas for the purposes identified in Section A above. C. Notwithstanding PAMC Section 9.04.020, the City Manager is authorized to suspend the prohibition on consumption of alcoholic beverages in any City owned parking lot. SECTION 11. Personal Services, Indoor Recreation and Other Uses The authorized outdoor uses of public and private spaces authorized in this Ordinance may be applied to personal services, indoor recreation and other uses. Prior to authorizing these additional activities to occur, the City Manager, or his or her designee (“City Manager”), shall adopt rules, regulations, guidelines, and standards for these uses, and publish them on the City’s website. SECTION 12. Severability 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 13. Environmental Review The Council finds that the Ordinance is categorically exempt from CEQA under CEQA Guidelines Sections 15301 (existing facilities) and 15304(e) (minor temporary use of land having negligible or no permanent effects on the environment). SECTION 14. Effective Date This Ordinance shall be effective 31 days after adoption. The provisions of this Ordinance allowing temporary parklets shall remain in effect until March 31, 2024 unless otherwise modified, repealed or extended by the City Council. The remainder of this Ordinance shall remain in effect until December 31, 2023 unless otherwise modified, repealed or extended by the City Council. SECTION 15. Uncodified This Ordinance shall not be codified. Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 9  Packet Pg. 78 of 193  *NOT YET APPROVED* 268_20230426_ts24 9 SECTION 16. Supercedes Ordinance 5572. As of the effective date of this Ordinance, this Ordinance shall supercede Ordinance 5572, and any conflict shall be resolved in favor of this Ordinance. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Public Works ____________________________ Director of Planning & Development Services Item 8 Attachment A - Draft Ordinance        Item 8: Staff Report Pg. 10  Packet Pg. 79 of 193  2 0 6 1 City Council Staff Report From: City Manager Report Type: ACTION ITEMS CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: May 22, 2023 Report #:2304-1323 TITLE Amendment to Palo Alto Municipal Code Title 18 Chapter 18.42, Standards for Special Uses, to Codify Firearms Sales Limitations Ordinance; CEQA status—exempt under CEQA Guidelines section 15061(c)(3). RECOMMENDATION Staff and the Planning and Transportation Commission (PTC) recommend Council adopt a new section 18.42.210 that would codify Ordinance 5559, the temporary, uncodified firearms ordinance Council adopted as an interim ordinance in June 2022 and extended in August 2022. EXECUTIVE SUMMARY The attached ordinance (Attachment A) is to codify the requirements of Ordinance 5559 in Title 18 of the Palo Alto Municipal Code (PAMC), Chapter 18.42 (Standards for Special Uses). In Palo Alto, a firearms dealership is considered a retail land use. Since Council adopted Ordinance 5559, this retail use has been required to obtain a Conditional Use Permit (CUP) throughout the City. The ordinance does not affect the longstanding requirement that firearms dealerships obtain a firearms permit from the Police Chief per PAMC Chapter 4.57. Regulations for the storage of firearms are set forth in PAMC 9.07. The permanent ordinance continues the requirement for approval of a Conditional Use Permit (CUP) to establish a firearms dealership. This is part of the City’s efforts to keep Palo Alto safe. BACKGROUND On June 21, 2022, City Council adopted a temporary emergency ordinance requiring a conditional use permit to establish a firearms dealership in Palo Alto. Ordinance 5559 became effective for an initial period of 45 days and Council extended it to remain in effect for an additional period of 10 months and 15 days - until June 20, 2023. Staff brought the temporary ordinance forward in part due to an inquiry received at the public planning counter regarding permissible locations for a firearms dealership in the City. On March 8, 2023, the PTC recommended Council approval of Item 9 Item 9 Staff Report        Item 9: Staff Report Pg. 1  Packet Pg. 80 of 193  2 0 6 1 the attached ordinance (Attachment A). Links to the March 8 PTC verbatim and summary meeting minutes1 and PTC staff report2 are provided in footnotes below. ANALYSIS Presently, a conditional use permit is required for firearms dealerships. The City has not received any CUP applications for firearms dealers since the passage of ordinance 5595. The proposed ordinance would require all new firearms dealers to obtain a CUP, even where retail is otherwise permitted. A CUP is a planning entitlement that would be handled via the standard staff review process. CUPs may be called up for review by the Planning and Transportation Commission in a public hearing, followed by consent calendar placement on a City Council agenda. The attached ordinance adds a new section into PAMC Chapter 18.42. The new section would: (1) incorporate by reference the various definitions used in PAMC Chapter 4.57 (Firearms Dealers); and (2) codify the requirement for approval of a Conditional Use Permit pursuant to PAMC Section 18.76 (Permits and Approvals). Firearms Dealers Permits A Conditional Use Permit (CUP) is distinct from a Firearms Dealer Permit, which is still required in Palo Alto to establish a firearms dealership in accordance with PAMC 4.57. Firearms permit issuance criteria restrict firearm dealerships within 250 feet of zoning district where housing is a principal use, or daycare centers, schools, massage establishments, and other land uses. Based on these parameters, a firearms dealership could be established in certain areas of the City in locations that are shown in Attachment B, including portions of the Stanford Research Park, which is not anticipated to be a likely location for firearms dealerships. Conditional Use Permit Findings and Process In addition to the Firearms Permit issuance criteria, the standard findings for a CUP are required for approval of a firearms dealership. To grant a CUP, the director of planning and development services or the city council (when a CUP application has been heard by the PTC) must find that the grant would (1) “[n]ot be detrimental or injurious to property or improvements in the vicinity, and will not be detrimental to the public health, safety, general welfare, or convenience,” and (2) “[b]e located and conducted in a manner in accord with the Palo Alto Comprehensive Plan and the purposes of this title (Zoning).” A CUP may also impose reasonable conditions or restrictions as needed to protect the public interest, such as to protect public health, safety and general 1 March 8 PTC verbatim meeting minutes https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/planning-and-transportation-commission/2023/ptc-3.8.2023-verbatim-minutes.pdf and summary PTC minutes https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2023/ptc-3.8.2023-summary-minutes.pdf 2 PTC staff report link: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2023/ptc-3.08-firearms.pdf Item 9 Item 9 Staff Report        Item 9: Staff Report Pg. 2  Packet Pg. 81 of 193  2 0 6 1 welfare. Note that PAMC 18.76.015 (Additional Findings for Specified Retail Uses) places additional restrictions on formula retail uses within the (R, Retail) combining zone district, which at present, only occurs in the California Avenue business district. FISCAL/RESOURCE IMPACT There are no significant fiscal or resource impacts associated with this action. ENVIRONMENTAL REVIEW Adoption of the attached ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061(c)(3), because it can be seen with certainty that there is no possibility of a significant adverse impact on the environment. ATTACHMENTS Attachment A: Draft Ordinance Firearms CUP Recommended by PTC Attachment B: Map of Firearms Business Siting APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 9 Item 9 Staff Report        Item 9: Staff Report Pg. 3  Packet Pg. 82 of 193  *NOT YET APPROVED* 0160105_20230511_ay16 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Chapter 18.42 (Standards for Special Uses) to Require a Conditional Use Permit for Firearms Dealers The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On June 21, 2022, the City Council adopted Ordinance No. 5559 on an interim, urgency basis. Ordinance No. 5559 was adopted pursuant to Palo Alto Municipal Code Section 2.04.270 based on the need to protect the public safety, health, and welfare, as set forth in the findings and declarations of that ordinance. Ordinance No. 5559 was also adopted in compliance with Government Code Section 65858, to the extent that section was applicable, as an interim urgency measure to address a current and immediate threat to the public health, safety, or welfare, for the reasons forth in the findings and declarations in that ordinance. B. On August 1, 2022 the City Council adopted Ordinance No. 5560, extending Ordinance No. 5559 for a period of 10 months and 15 days. C. The conditions that gave rise to the need for Ordinance No. 5559 still exist and the City Council now wishes to adopt a permanent ordinance to amend the zoning code in accordance with section 18.80.080 of the Palo Alto Municipal Code. SECTION 2. Section 18.42.210 (Firearms Dealers) is added to Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) of the Palo Alto Municipal Code as follows: 18.42.210 Firearms Dealers (a) Purpose The purpose of this section is to protect the public health, safety, and welfare by imposing reasonable land use regulations on the sale of firearms within the city. (b) Definitions In addition to the definitions in section 18.04.030 of this code, the definitions in section 4.57.010 of the Palo Alto Municipal Code, as may be amended from time to time, shall apply to this section, unless the context indicates otherwise. (c) Conditional Use Permit Required in Tandem with Firearms Dealer Permit A conditional use permit shall be required to operate a firearms dealer business in any district where such use is permitted. This requirement shall apply in addition to the Item 9 Attachment A - Draft Ordinance Firearms CUP Recommended by PTC        Item 9: Staff Report Pg. 4  Packet Pg. 83 of 193  *NOT YET APPROVED* 0160105_20230511_ay16 2 requirement for a firearms dealer permit issued by the chief of police in accordance with Chapter 4.57 (Firearms Dealers). SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. SECTION 5. This extension ordinance shall take on the thirty first (31st) day following its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Planning and Developmental Services ____________________________ Director of Administrative Services Item 9 Attachment A - Draft Ordinance Firearms CUP Recommended by PTC        Item 9: Staff Report Pg. 5  Packet Pg. 84 of 193  Alma Street El Camino Real Sand Hill Road Page Mill Road Arastradero Road San Antonio Road Lytton Avenue Hillview Avenue Hamilton Avenue Embarcadero Road Charleston Road Arboretum Road Quarry Road Page Mill Road Oregon Expressway Foothill Expressway Foothill Expressway Foothill Expressway Stanford Los Altos Los Altos Hills Mountain View Stanford University Menlo Park East Palo Alto Atherton Portola Valley This map is a product of City of Palo Alto GIS [ 0 0.850.425Miles Firearms Business Siting Municipal Code Analysis Scenario 2: Flexible Residential Los Altos HillsPortola Valley Los Altos StanfordWoodside Legend Firearm Sales Permitted with CUP Excluded Areas Assessor Parcels City Limit £¤101 §¨¦280 §¨¦280 Rev: June 9, 2022 Item 9 Attachment B - Map of Firearms Business Siting        Item 9: Staff Report Pg. 6  Packet Pg. 85 of 193  Item No. 10. Page 1 of 5 1 0 3 9 CITY COUNCIL STAFF REPORT From: City Manager Report Type: ACTION ITEM CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: May 22, 2023 Report #: 2211-0385 TITLE Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement State Housing Legislation from the 2021 Legislative Session, Including SB 9. Environmental Analysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b)(3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning and Transportation Commission (PTC) has recommended Council adopt the ordinance. RECOMMENDATION Staff recommends Council: 1. Adopt the attached ordinance (Attachment A) to codify the integration of Senate Bill 9 required components into the Palo Alto Municipal Code and, by reference, the previously adopted objective design standards for qualifying Senate Bill 9 projects, and provisions of Senate Bill 478. EXECUTIVE SUMMARY This report transmits an ordinance that replaces the interim ordinance1 Council adopted on January 10, 2022; the new ordinance is required to comply with state laws enacted in 2021 (SB9 and SB478). The ordinance enables Palo Alto to retain local control of planning and development decisions while complying with these state laws. Along with the ordinance, Council adopted objective standards for SB 9 lot splits2 and SB 9 developments3; these are published on the City’s webpage regarding SB 9 projects. The City’s SB 9 projects webpage includes a document of 1 Link to interim ordinance: Urgency Ordinance December 6, 2021(PDF, 300KB) 2 SB9 lot split standards link: SB 9 Urban Lot Split Objective Design Standards 3 SB9 development standards link: SB 9 Objective Design Standards(PDF, 144KB) Item 10 Item 10 Staff Report        Item 10: Staff Report Pg. 1  Packet Pg. 86 of 193  Item No. 10. Page 2 of 5 1 0 3 9 frequently asked questions,4 guidance on the preliminary review process,5 two checklists (one for lot splits,6 one for development),7 and the affidavit regarding owner occupancy.8 Since January 10, 2022, the City has processed only one SB 9 lot split application and is in pre- application discussions with five additional owners regarding potential SB 9 lot splits. Additionally, three SB 9 projects which did not include lot splits are in building permit review. Staff has been connecting with the applicants and potential applicants regarding the SB 9 standards Council previously adopted, to learn whether modifications to the adopted standards would be beneficial to the production of SB 9 housing units and lot splits. Staff met twice with the Architectural Review Board (ARB) on March 16 and April 20, 2023, in study sessions to review the adopted standards and discuss potential amendments to the standards. The ARB continued its discussion to May 18, 2023 to consider potential changes to the standards. BACKGROUND Council adopted the urgency ordinance on December 6, 2021. The December 6th CMR9 presentation10, minutes11 and video12 are available online. The Council considered an interim ordinance on December 6, 2021, and continued its review to January 10, 2022. Section 23 of the interim ordinance Council adopted on consent on January 10, 2022 reflected Council direction as well as language previously recommended by staff for urban lot splits. The January 10, 2022 CMR13 and meeting minutes14 are available online. On March 21, 2022, Council adopted the interim ordinance establishing standards for urban lot splits. 4 FAQs regarding SB9 Frequently Asked Questions about SB 9(PDF, 202KB) 5 Preliminary planning process link SB 9 Preliminary Planning Process(PDF, 132KB) 6 Checklist links: SB 9 Two Dwelling Unit Project Checklist(PDF, 203KB) SB 9 Two Lot Subdivision (Parcel Map) Project Checklist(PDF, 217KB) 7 SB9 two dwelling unit development checklist link: SB 9 Two Dwelling Unit Project Checklist(PDF, 203KB) 8 Owner occupancy affadavit link: Affidavit of Intent to Owner-Occupy Per SB 9(PDF, 137KB) 9 December 6, 2021 CMR link: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2021/12-december/20211206/20211206pccsm-amended- linked.pdf#page=198 10 Link to presentation to Council: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/item-presentations/2021/20211206/item-9-sb-9-presentation-12-06-21-final.pdf 11 Link to minutes of December 6: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2021/12-december/20211206/20211206amccs.pdf 12 Link to video: https://www.youtube.com/watch?v=caR9FCHKob8 13 Link to 1-10-22 CMR: https://www.cityofpaloalto.org/City-Hall/City-Council/Council-Agendas-Minutes 14 Meeting minutes: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/city-council-agendas-minutes/2022/20220110/20220110amccs.pdf Item 10 Item 10 Staff Report        Item 10: Staff Report Pg. 2  Packet Pg. 87 of 193  Item No. 10. Page 3 of 5 1 0 3 9 In general, the interim ordinances are largely restatements of SB 9’s basic requirements, while the detailed standards represent Palo Alto’s exercise of local regulatory authority. Council’s March 2022 action also included further refinements to the SB 9 development standards. Council adopted interim ordinance no. 5546 on March 21, 202215, with a second reading on April 11, 2022. Ordinance 5546 clarified some items in ordinance no. 5542 and authorized the Department of Public Works to adopt additional standards for off-site improvements. Council simultaneously adopted standards relating to lot design for lot splits under SB 9 (see Attachments B and C). PTC In February 2023, the PTC reviewed and recommended the attached ordinance that would replace the interim ordinances, adding to Titles 18 and 21 of the Palo Alto Municipal Code. The PTC received the Council-adopted objective standards in the packet with the draft ordinance. However, the meeting was focused on the ordinance as a separate effort to move it expeditiously to Council, with the intent to follow up with another session with the PTC regarding the standards. The PTC report16 and minutes17 are available online. ARB Staff presented the adopted objective standards to the ARB on March 16, 2023 and April 20, 2023 and the discussion was continued to May 18, 2023. Following the ARB and PTC meetings regarding the standards, staff will separately forward to Council any recommendations generated from these discussions. ANALYSIS Objective Standards Staff has separated the ordinance adoption from the consideration of refinements to the previously adopted SB 9 objective development standards. This is because the interim ordinance must be replaced by a permanent ordinance, to allow continued use of the prior approved standards. The process is longer to collect local case studies, prepare refinements to development standards with input, and consider other changes to implement 2023 state legislation that may be adopted in the fall. 15 March 21, 2022 Ordinance No. 5546: https://www.cityofpaloalto.org/files/assets/public/city- clerk/ordinances/ordinances-1909-to-present/2022/ord-5546.pdf 16 PTC Report link: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2023/ptc-2.08-sb9-ordinance.pdf 17 PTC summary minutes: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2023/ptc-3.8-approved-verbatim-minutes-2.8.23.pdf and https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/planning-and- transportation-commission/2023/ptc-2.22.2023-summary-minutes.pdf Item 10 Item 10 Staff Report        Item 10: Staff Report Pg. 3  Packet Pg. 88 of 193  Item No. 10. Page 4 of 5 1 0 3 9 Council had approved, for qualifying SB9 projects, objective standards to preserve Palo Alto’s neighborhood character and local zoning control, and urban lot split objective standards. The adopted standards are compliant with state law and the City’s use of the standards helps to minimize impacts on adjacent properties, such as privacy impacts. Potential refinements to these standards may enable the City to facilitate more compatible SB 9 dwelling units, to advance the City’s Housing Element programs to meet the City’s Regional Housing Needs Assessment (RHNA) objectives. The ARB is working through its discussions of the adopted standards, and noting potential refinements. Staff will be reviewing actual SB 9 projects to study how these adopted objective design standards have worked or may be more restrictive than necessary. SB 9 Affordability The City Council, with Item B of Motion 3 on December 6, 2021, requested an ”analysis of the feasibly of requiring a 25% or one unit inclusionary housing requirement for SB 9 projects.” Staff performed a limited amount of research regarding the City’s ability to impose affordability requirements on SB 9 projects. Generally, state law requires affordability requirements of greater than 15% to be supported by financial feasibility analysis. Staff explored an approach where the applicant could pay a fee in-lieu of providing the unit. Currently, one- and two-unit developments (and ADUs and JADUs) are exempt from the City’s affordable housing requirements. Related to this discussion is the affordability related to ADUs. The PTC started a discussion in September 2022, initially recommending Council adopt a pilot program for deed restricted, affordable Accessory Dwelling Units (ADUs). On May 15, 2023, the Council is scheduled to conduct a hearing regarding proposed modifications to the ADU ordinance. The May 15 staff report18 contains background information on the topic of ADU affordability. FISCAL/RESOURCE IMPACT There are no significant fiscal impacts associated with this action; work preparing the ordinance and community meetings has been accomplished using existing department resources. STAKEHOLDER ENGAGEMENT Staff is working with the ARB to discuss potential refinements. Staff will continue the discussion and evaluation of the standards with a local group of stakeholders following the ARB’s initial discussions. Staff will return to the ARB with any proposed refinements and will meet with the PTC prior to presenting changes to the City Council. The process of refining standards is likely to extend through 2024. 18 May 15 ADU staff report: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11318 Item 10 Item 10 Staff Report        Item 10: Staff Report Pg. 4  Packet Pg. 89 of 193  Item No. 10. Page 5 of 5 1 0 3 9 ENVIRONMENTAL REVIEW The City Council finds that this Ordinance is statutorily exempt from the requirements of the California Environmental Quality Act (CEQA) for the following reasons. Under Government Code Sections 66411.7(n) and 65852.21(j), an ordinance adopted to implement the requirements of SB 9 shall not be considered a project under CEQA. Additional sections of this ordinance implementing SB 478 are exempt pursuant to Section 15061 of the State CEQA Guidelines because they simply reflect pre-emptive state law that became effective January 1, 2022. This ordinance continues the ‘status quo’ and it therefore can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. ATTACHMENTS Attachment A: Permanent Ordinance to Implement SB 9 and SB 478 APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 10 Item 10 Staff Report        Item 10: Staff Report Pg. 5  Packet Pg. 90 of 193  *NOT YET APPROVED* 1 0160106_20230511_ay16 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Modifying Chapters 16.65 (Citywide Affordable Housing Requirements), 18.10 (Low-Density Residential, RE, R-2, and RMD Districts), 18.12 (R-1 Single-Family Residential District), 18.13 (Multiple Family Residential, RM20, RM30, RM40), 18.16 (Commercial Districts, CN, CC, CS), 18.18 (Downtown Commercial, CD-C, CD-S, CD-N), 18.40 (General Standards and Exceptions), and 18.42 (Standard for Special Uses) of Title 18 (Zoning) and Adding Chapter 21.10 (Parcel Maps for Urban Lot Splits) of the Palo Alto Municipal Code to Implement Recent State Housing Bills The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and declarations. The City Council finds and declares as follows: A. On September 16, 2021, Governor Newsom signed into law Senate Bill 9 (SB 9), which requires, among other things, that local agencies ministerially approve both two-unit construction and urban lot splits on single-family zoned lots. B. SB 9 authorizes the creation of lots as small as 1,200 square feet, and requires approval of two residential units of at least 800 square feet (for a total of 1,600 square feet) each on such lots. This represents a significant departure from existing minimum lot sizes and development standards in Palo Alto’s single-family zones. C. The increased density and intensity of development authorized by SB 9 has the potential to negatively impact privacy, access for emergency vehicles, and aesthetics of residential neighborhoods. In addition, the ministerial review required by SB 9 could result in the unintentional loss of historic resources in Palo Alto’s single family zones. D. SB 9 authorizes local jurisdictions to apply objective zoning standards, objective subdivision standards, and objective design standards, subject to certain limitations in statute. E. On September 16, 2021, Governor Newsom signed into law Senate Bill 478 (SB 478), which requires, among other things, that local agencies provide specified minimum floor area ratios for housing development projects containing 3 to 10 dwelling units. F. On January 24, 2022 and April 11, 2022, the City Council adopted interim ordinance nos. 5542 and 5546 to address SB 9 and SB 478. Following a recommendation by the Planning and Transportation Commission on February 8, 2023, the City Council now seeks to adopt a permanent ordinance. Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 6  Packet Pg. 91 of 193  *NOT YET APPROVED* 2 0160106_20230511_ay16 SECTION 2. With the exceptions of Sections 16, 17, 19 and 21, and 23, which were added in their entirety by interim ordinance no. 5542, this ordinance is formatted to show amendments to the Palo Alto Municipal Code as it would read if interim ordinances 5542 and 5546 were to expire. Additions from this baseline are shown in underline, and deletions are shown in strike- through; large portions of text that are unchanged may be omitted through use of ellipses. SECTION 3. Section 18.10.020 (Applicable Regulations) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.10.020 Applicable Regulations The specific regulations of this chapter and the additional regulations and procedures established by Chapters 18.52 to 18.80 inclusive shall apply to all low-density residential districts. Such regulations shall apply to construction of two units on an RE-zoned lot pursuant to California Government Code Section 65852.21 (SB 9, 2021), except as modified by Section 18.42.180. SECTION 4. Section 18.10.030 (Land Uses) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.10.030 Land Uses Table 1 shows the permitted and conditionally permitted uses for the low-density residential districts. TABLE 1 PERMITTED AND CONDITIONALLY PERMITTED LOW-DENSITY RESIDENTIAL USES [P = Permitted Use -- CUP = Conditional Use Permit Required] RE R-2 RMD Subject to Regulations in: [. . .] [. . .] [. . .] [. . .] [. . .] RESIDENTIAL USES Single-Family P P P Two-Family use, under one ownership P (4) P P Mobile Homes P P P 18.42.100 Residential Care Homes P P P [. . .] [. . .] [. . .] [. . .] [. . .] Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 7  Packet Pg. 92 of 193  *NOT YET APPROVED* 3 0160106_20230511_ay16 P = Permitted Use CUP = Conditional Use Permit Required Footnotes: (1) Sale of Agricultural Products: No permanent commercial structures for the sale or processing of agricultural products are permitted. (2) Accessory Dwelling Units in R-2 and RMD Zones: An accessory dwelling unit or a Junior Accessory Dwelling Unit associated with a single-family residence on a lot in the R-2 or RMD zones is permitted, subject to the provisions of Section 18.42.040, and such that no more than two units result on the lot. (3) Bed and Breakfast Inns: Bed and breakfast inns are limited to no more than 4 units (including the owner/resident's unit) in the RMD district. (4) Two Unit Development Pursuant to California Government Code Section 65852.21 (SB 9, 2021): Construction of two units is permitted on an RE-zoned lot, subject to the regulations in Section 18.42.180. SECTION 5. Section 18.10.040 (Development Standards) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.10.040 Development Standards (a) Site Specifications, Building Size, Height and Bulk, and Residential Density The development standards for the low-density residential districts are shown in Table 2: TABLE 2 LOW-DENSITY RESIDENTIAL DEVELOPMENT STANDARDS R-E (6) R-2 RMD Subject to Regulations in: [. . .] [. . .] [. . .] [. . .] [. . .] Footnotes: (1) Minimum Lot Size: Any lot less than the minimum lot size may be used in accordance with the provisions of Chapter 18.40. (2) R-2 Floodzone Heights: Provided, in a special flood hazard area as defined in Chapter 16.52, the maximum heights are increased by one-half of the increase in elevation required to reach base flood elevation, up to a maximum building height of 33 feet. (3) R-2 Floodzone Daylight Plane: Provided, if the site is in a special flood hazard area and is entitled to an increase in the maximum height, the heights for the daylight planes shall be adjusted by the same amount. (4) Exemption from Floor Area for Covered Parking Required for Two-Family Uses: In the R-2 and RMD districts, for two-family uses, floor area limits may be exceeded by a maximum of two hundred square feet, for purposes of providing one required covered parking space. Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 8  Packet Pg. 93 of 193  *NOT YET APPROVED* 4 0160106_20230511_ay16 (5) Maximum House Size: The gross floor area of attached garages and attached accessory dwelling units and junior accessory dwelling units are included in the calculation of maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. This provision applies only to single-family residences, not to duplexes allowed in the R-2 and RMD districts. (6) Two Unit Development Pursuant to California Government Code Section 65852.21 (SB 9, 2021): Construction of two units on an RE-zoned lot shall be subject to the development standards in this Section 18.10.040, except as modified by Section 18.42.180. [. . .] SECTION 6. Table 3 (PARKING REQUIREMENTS FOR R-E, R-2 AND RMD USES) of Section 18.10.060 (Parking) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: [. . .] TABLE 3 PARKING REQUIREMENTS FOR R-E, R-2 AND RMD USES Use Minimum Off-Street Parking Requirement Single-family residential use (excluding accessory dwelling units) 2 spaces per unit, of which one must be covered. Two family in the RE district, pursuant to California Government Code Section 65852.21 (SB 9, 2021) 1 space per unit. No spaces required if located within one-half mile walking distance of either a high-quality transit corridor or a major transit stop, or located within one block of a car share vehicle. Two family (R2 & RMD districts) 3 spaces total, of which at least two must be covered Accessory dwelling unit, attached or detached: No parking required Junior accessory dwelling unit No parking required Other Uses See Chapter 18.40 [. . .] // // Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 9  Packet Pg. 94 of 193  *NOT YET APPROVED* 5 0160106_20230511_ay16 SECTION 7. Section 18.10.070 (Accessory and Junior Accessory Dwelling Units) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.10.070 Accessory and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Chapter 18.09 Section 18.42.040. SECTION 8. Section 18.12.020 (Applicable Regulations) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.12.020 Applicable Regulations The specific regulations of this chapter and the additional regulations and procedures established by Chapters 18.52 to 18.80 inclusive shall apply to the R-1 district including the R-1 subdistricts. Such regulations shall apply to construction of two units on an R1-zoned lot pursuant to California Government Code Section 65852.21 (SB 9), except as modified by Section 18.42.180. SECTION 9. Section 18.12.030 (Land Uses) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.12.030 Land Uses The permitted and conditionally permitted uses for the single family residential districts are shown in Table 1: Table 1 PERMITTED AND CONDITIONAL R-1 RESIDENTIAL USES R-1 and all R-1 Subdistricts Subject to Regulations in: [. . .] [. . .] [. . .] RESIDENTIAL USES Single-Family P Two-Family use, under one ownership P 18.42.180 Mobile Homes P 18.42.100 Residential Care Homes P [. . .] [. . .] [. . .] P = Permitted Use CUP = Conditional Use Permit Required Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 10  Packet Pg. 95 of 193  *NOT YET APPROVED* 6 0160106_20230511_ay16 SECTION 10. Section 18.12.040 (Site Development Standards) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.12.040 Site Development Standards (a) Site Specifications, Building Size, Height and Bulk, and Residential Density The development standards for the R-1 district and the R-1 subdistricts are shown in Table 2, except to the extend such standards may be modified by Section 18.42.180 for two-family uses pursuant to California Government Code Section 65852.21 (SB 9, 2021): [. . .] SECTION 11. Section 18.12.060 (Parking) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.12.060 Parking Off-street parking and loading facilities shall be required for all permitted and conditional uses in accord with Chapters 18.52 and 18.54 of this title. The following parking requirements apply in the R- 1 districts. These requirements are included for reference purposes only, and in the event of a conflict between this Section 18.12.060 and any requirement of Chapters 18.52 and 18.54, Chapters 18.52 and 18.54 shall apply, except in the case of parcels created pursuant to Section 18.10.140(c) (subdivision incentive for historic preservation). (a) Parking Requirements for Specific Uses Table 4 shows the minimum off-street automobile parking requirements for specific uses within the R-1 district. Table 4 Parking Requirements for Specific R-1 Uses Use Minimum Off-Street Parking Requirement Single-family residential use (excluding accessory dwelling units) 2 spaces per unit, of which one must be covered. Two family use pursuant to California Government Code Section 65852.21 (SB 9, 2021) 1 space per unit. No spaces required if located within one-half mile walking distance of either a high-quality transit corridor or a major transit stop, or located within one block of a car share vehicle. Accessory dwelling unit, attached or detached No parking required Junior accessory dwelling unit No parking required Other Uses See Chs. 18.52 and 18.54 Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 11  Packet Pg. 96 of 193  *NOT YET APPROVED* 7 0160106_20230511_ay16 [. . .] SECTION 12. Section 18.12.070 (Accessory and Junior Accessory Dwelling Units) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.12.070 Accessory and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Chapter 18.09 Section 18.42.040. SECTION 13. Section 18.40.160 (Replacement Project or Discretionary Review Required) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.40.160 Replacement Project or Discretionary Review Required (a) No permit required under Title 2 (Administrative Code), Title 12 (Public Works and Utilities), or Title 16 (Building Regulations) shall be issued for demolition or deconstruction of a single family residence or duplex in the Low-Density Residential District (Chapter 18.10) or Single Family Residential District (Chapter 18.12), except for deconstruction pursuant to Section 16.14.130 or where necessary for health and safety purposes (as determined by the City's Building Official), unless building permit plans for a replacement project have been approved. This subsection shall also apply to demolition of a single family residence or duplex in the Multiple Family Residential District (Chapter 18.13) when the replacement project does not require discretionary review. (b) No permit required under Title 2 (Administrative Code), Title 12 (Public Works and Utilities), or Title 16 (Building Regulations) shall be issued for any project requiring discretionary review under Title 18 or Title 21, unless the application for discretionary review has been approved. SECTION 14. Section 18.52.020 (Definitions) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.52.020 Definitions For purposes of this chapter: [. . .] (h) “Within one block of a car share vehicle” means within 600 feet of a parking space permanently reserved for use by a car share vehicle. (h)(i) Definitions for other parking-related terms can be found in Section 18.04.030(a) (Definitions), including “Parking as a principal use,” “Parking facility,” and “Parking space.” Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 12  Packet Pg. 97 of 193  *NOT YET APPROVED* 8 0160106_20230511_ay16 SECTION 15. Table 1 (Minimum Off-Street Parking Requirements of Section 18.52.040 (Off- Street Parking, Loading, and Bicycle Facility Requirements) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.52.040 Off-Street Parking, Loading and Bicycle Facility Requirements [. . .] Table 1 Minimum Off-Street Parking Requirements Use Vehicle Parking Requirement (# of spaces) Bicycle Parking Requirement Spaces Class 1 Long Term (LT) and Short Term (ST) RESIDENTIAL USES [. . .] [. . .] [. . .] [. . .] Two-Family Residential (R-2 & RMD Districts) 1.5 spaces per unit, of which at least one space per unit must be covered Tandem Parking Allowed, with one tandem space per unit, associated directly with another parking space for the same unit 1 space per unit 100% - LT (R-1 and RE Districts, pursuant to Section 18.42.180) At least one space per unit. No spaces required if the unit is located within one-half mile walking distance of either a high-quality transit corridor or a major transit stop, as defined in California Public Resources Code Sections 21155 and 21064.3 respectively, or located within one block of a car share vehicle. 1 space per unit 100% - LT [. . .] [. . .] [. . .] [. . .] [. . .] // // Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 13  Packet Pg. 98 of 193  *NOT YET APPROVED* 9 0160106_20230511_ay16 SECTION 16. Section 18.42.180 (Standards for Two Units on Single Family Zoned Lots Pursuant to Senate Bill 9) of Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows: 18.42.180 Standards for Two Units on Single Family Zoned Lots Pursuant to Senate Bill 9. (a) Purpose. This section sets forth special regulations applicable to the construction of two dwelling units on single family lots in the R-1 (and R-1 subdistricts) and R-E zone districts, pursuant to California Government Code Sections 65852.21 and 66411.7 (SB 9, 2021). In the event of a conflict between the provisions of this section and the generally applicable regulations of Chapters 18.10, 18.12, and 18.52-18.80, inclusive, the provisions of this section shall prevail. (b) Definitions. As used in this section: (1) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety or physical environmental standards, policies, or conditions as they existed on the date the application was deemed complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse, impact. (2) “Sufficient to allow separate conveyance” means the two dwelling units constitute clearly defined, separate, and independent housekeeping units without interior access points to the other dwelling unit. (3) “Two dwelling units” means the development proposes two new units on a vacant lot or proposes to add one new unit to one existing unit on a lot. This does not include the development of a single dwelling unit on a vacant lot. (4) “Unit” means any dwelling unit, including, but not limited to a primary dwelling unit, an accessory dwelling unit, or a junior accessory dwelling unit. (c) Applicability. When an application is submitted that includes both (1) the construction of two dwelling units under this section and (2) other redevelopment work that is not integral to creation of a new dwelling unit and would generally require discretionary review, only the portions required for construction of dwelling units shall be reviewed ministerially. In addition, this section shall not apply in any of the following circumstances: (1) Parcels described California Government Code Section 65913.4, subdivisions (a)(6)(B) through (a)(6)(K) inclusive. Such parcels include, for example, parcels located in wetlands, in very high fire severity zones (unless the site has adopted certain fire hazard mitigation measures), and in special flood hazard areas or regulatory floodways (unless the site meets certain federal requirements for development). (2) Parcels on which an owner of residential real property has exercised the owner’s rights under state law to withdraw accommodations from rent or lease within the past 15 years. Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 14  Packet Pg. 99 of 193  *NOT YET APPROVED* 10 0160106_20230511_ay16 (3) The development would require alteration or demolition of any of the following types of housing (A) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. (B) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power. (C) Housing that has been occupied by a tenant in the last three years. (4) The development would result in the demolition of more than 25 percent of the existing exterior structural walls of a site that has been occupied by a tenant in the last three years. (5) The development is located within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory. (6) The building official finds that the development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided. (d) Application Process. (1) The Director is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for the development of dwelling units under this section. (2) The City shall ministerially approve or disapprove an application pursuant to this section. (e) Development Standards. (1) A project proposing two dwelling units on a parcel in the R-1 or RE districts shall be subject to the development standards set forth in Chapters 18.12 and 18.10, respectively except as provided herein. (2) All construction pursuant to this section shall comply with objective design standards adopted by the City Council. However, an applicant seeking to deviate from the objective design standards (except to the extent necessary to construct a unit of 800 square feet) may elect to submit an application under the base requirements of Chapters 18.10, or 18.12, including, if applicable, Single Family Individual Review. (3) If the application of any development standard or design standard would necessarily require that one or more proposed units be less than 800 square feet, such standard shall be relaxed to the minimum extent necessary to allow construction of a unit or units of at least 800 square feet. The Director may publish regulations governing the order in which objective standards shall be waived or relaxed in such circumstances. (4) Setbacks from side and rear property lines, including street-side property lines, shall be no less than four feet, except in the case of existing non-complying Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 15  Packet Pg. 100 of 193  *NOT YET APPROVED* 11 0160106_20230511_ay16 structures or structures reconstructed in the same location and to the same dimensions as an existing structure, in which case existing setbacks less than four feet may be maintained. No setback is required from an internal lot line newly created pursuant to Chapter 21.10, for adjacent or connected structures separated by the new lot line, provided that the structures meet building code safety standards and are sufficient to allow separate conveyance. (5) Off-street parking shall be provided pursuant to Chapters 18.52 and 18.54. (6) In the event that a project is proposed on a site that has been subject to an Urban Lot Split under Chapter 21.10, and the project would result in three or more detached units across the two parcels created by the urban lot split, any new units shall not exceed 800 square feet. (7) Accessory structures, such as garages and shed are permitted consistent with the provisions of the zoning district; however, no accessory structure shall have a floor area exceeding 500 square feet. (8) The Director of Public Works may promulgate standards for adjacent public improvements, such as curb cuts and sidewalks, in relation to development pursuant to this Section. (f) General Requirements. (1) A maximum of two units may be located on any parcel that is created by an Urban Lot Split under Chapter 21.10. Accessory dwelling units and junior accessory dwelling units shall not be permitted on any such parcel already containing two units. (2) On parcels that are not the result of an Urban Lot Split under Chapter 21.10, accessory dwelling units may be proposed in addition to the primary dwelling unit or units, consistent with Chapter 18.09, provided, however, that ADUs associated with projects proceeding under this Section shall not receive any exemption from Floor Area Ratio except to the minimum extent required by California Government Code Section 65852.2. (3) A rental of any unit created pursuant to this Section shall be for a term longer than 30 consecutive days. (4) For residential units connected to an onsite wastewater treatment system, a percolation test completed within the last 5 years, or, if the percolation test has been recertified, within the last 10 years. (5) Each unit shall have a permanent street address. (6) The owner and all successors in interest in the subject property shall agree to participate in any City survey of properties that have constructed dwelling units pursuant to this Section. (g) Effective Dates. This section shall remain in effect until such time as Government Code Section 65852.21 is repealed or superseded or its requirements for ministerial approval of no more than two units on a single family zoned lot are materially amended, whether by legislation or initiative, at which time this section shall become null and void. Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 16  Packet Pg. 101 of 193  *NOT YET APPROVED* 12 0160106_20230511_ay16 SECTION 17. Chapter 21.10 (Urban Lot Splits) of Title 21 (Subdivisions and Other Divisions of land) of the Palo Alto Municipal Code is added to read as follows: Chapter 21.10 PARCEL MAPS FOR URBAN LOT SPLITS IN SINGLE-FAMILY ZONES Section 21.10.010 Purpose Section 21.10.020 Definitions Section 21.10.030 Applicability Section 21.10.040 General Requirements Section 21.10.050 Application and Review of an Urban Lot Split Section 21.10.060 Effective dates Section 21.10.010 Purpose This chapter sets forth special regulations applicable to the subdivision of a single family lot in the R-1 district (and R-1 subdistricts) or R-E district into two new lots, pursuant to California Government Code Section 66411.7 (SB 9, 2021). Section 21.10.020 Definitions As used in this chapter: (a) “Acting in concert” means pursuing a shared goal to split adjacent lots pursuant to an agreement or understanding, whether formal or informal. (b) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety or physical environmental standards, policies, or conditions as they existed on the date the application was deemed complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse, impact. (c) “Unit” means any dwelling unit, including, but not limited to, a unit or units created pursuant to Section 18.42.180, a primary dwelling unit, an accessory dwelling unit, or a junior accessory dwelling unit. (d) “Urban Lot Split” means the subdivision of an existing legal parcel in the R-1 district (and R-1 subdistricts) or R-E district to create no more than two new parcels of approximately equal area, pursuant to this Chapter and California Government Code Section 66411.7. Section 21.10.030 Applicability The provisions of this chapter shall apply only to lots in the R-1 district (and R-1 subdistricts) or R-E zone district. Except as modified by this Chapter, all provisions of Title 21 shall apply to an application for urban lot split. An Urban Lot Split is not available in any of the following circumstances: (a) A parcel described California Government Code Section 65913.4, subdivisions (a)(6)(B) through (a)(6)(K) inclusive. Such parcels include, for example, parcels located in wetlands, in very high fire severity zones (unless the site has adopted certain fire hazard mitigation measures), and in special flood hazard areas or regulatory floodways (unless the site meets certain federal requirements for development). Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 17  Packet Pg. 102 of 193  *NOT YET APPROVED* 13 0160106_20230511_ay16 (b) A parcel on which an owner of residential real property has exercised the owner’s rights under state law to withdraw accommodations from rent or lease within the past 15 years. (c) A parcel that was created by prior exercise of an Urban Lot Split. (d) A parcel adjacent to a parcel that was created by prior exercise of an Urban Lot Split by the owner, or a person acting in concert with the owner of the parcel sought to be split. (e) The Urban Lot Split would require alteration or demolition of any of the following types of housing (1) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. (2) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power. (3) Housing that has been occupied by a tenant in the last three years. (f) The Urban Lot Split is located within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory. (g) The building official finds that the development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided. Section 21.10.040 General Requirements (a) The minimum size for a parcel created by an Urban Lot Split is 1,200 square feet. (b) The lots created by an Urban Lot Split must be of approximately equal area, such that no resulting parcel shall be smaller than 40 percent of the lot area of the original parcel proposed for subdivision. (c) Where existing dwelling units on the property are to remain, no lot line may be created under this Chapter in a manner that would bisect any structure or that would result in more than two dwelling units on any resulting parcel. (d) Newly created lot lines shall not render an existing structure noncomplying in any respect (e.g. floor area ratio, lot coverage, parking), nor increase the degree of noncompliance of an existing noncompliant structure. (e) Each parcel shall comply with any objective lot design standards for Urban Lot Splits adopted by the City Council. (f) Utility easements shall be shown on the parcel map, and recorded prior to, or concurrent with final parcel map recordation. (g) A covenant necessary for maintenance of stormwater treatment facilities shall be recorded prior to, or concurrent with final map recordation. (h) Existing driveways to be demolished shall follow the procedure(s) in 12.08.090 Elimination of abandoned driveway. (i) A maintenance agreement shall be recorded to ensure shared maintenance of any shared access easements, stormwater treatment, landscaping and private utilities, prior to final parcel map recordation. Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 18  Packet Pg. 103 of 193  *NOT YET APPROVED* 14 0160106_20230511_ay16 Section 21.10.050 Application and Review of an Urban Lot Split (a) The director of planning is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for a parcel map for an Urban Lot Split under this Chapter. An application shall include an affidavit from the property owner, signed under penalty of perjury under the laws of California, that: (1) The proposed urban lot split would not require or authorize demolition or alteration of any of the housing described in Section 21.10.030, subdivision (e). (2) The proposed urban lot split is not on a parcel described in Section 21.10.030. (3) The owner intends to occupy one of the housing units located on a lot created by the parcel map as their principal residence for a minimum of three years from the date of the recording of the parcel map. (4) The rental of any unit on the property shall be for a term longer than 30 consecutive days. (5) The resulting lots will be for residential uses only. (b) A parcel map for an Urban Lot Split must be prepared by a registered civil engineer or licensed land surveyor in accordance with Government Code sections 66444 – 66450 and this Chapter. Unless more specific regulations are adopted by the director of planning, the parcel map shall be in the form and include all of the information required of a Preliminary Parcel Map by Chapter 21.12, as well as any additional information required of a Parcel Map by Chapter 21.16. In addition, the face of the Parcel Map shall contain a declaration that: (1) Each lot created by the parcel map shall be used solely for residential dwellings. (2) That no more than two dwelling units may be permitted on each lot. (3) That rental of any dwelling unit on a lot created by the parcel map shall be for a term longer than 30 consecutive days. (4) A lot created by a parcel map under this Chapter shall not be further subdivided. (c) Upon receipt of a parcel map for an Urban Lot Split, the director of planning shall transmit copies to the city engineer, chief building official, director of utilities, chief of police, fire chief, director of transportation, and such other departments of the city, and any other agencies, as may be required by law or deemed appropriate. (d) The director of planning shall cause a notice of the pending application to be posted at the site of the proposed Urban Lot Split and for notice to be mailed to owners and residents of property within 600 feet of the property. (e) The director of planning shall ministerially review and approve a parcel map for Urban Lot Split if they determine that the parcel map application meets all requirements of this Chapter. The director of planning shall deny a parcel map application that does not meet any requirement of this Chapter. (f) The Director of Planning shall determine the appropriate fee required for an application for parcel map for an Urban Lot Split, which may be the fee currently established for a Preliminary Parcel Map or Parcel Map. // Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 19  Packet Pg. 104 of 193  *NOT YET APPROVED* 15 0160106_20230511_ay16 Section 21.10.060 Effective Dates. This chapter shall remain in effect until such time as Government Code Section 66411.7 is repealed or superseded or its requirements for ministerial approval of an Urban Lot Split on a single family zoned lot are materially amended, whether by legislation or initiative, at which time this chapter shall become null and void. SECTION 18. Section 18.13.040 (Development Standards) of Chapter 18.13 (Multiple Family Residential (RM-20, RM-30 and RM-40) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.13.040 Development Standards (a) Site Specifications, Building Size and Bulk, and Residential Density [. . .] Table 2 Multiple Family Residential Development Table RM-20 RM-30 RM-40 Subject to regulations in: [. . .] [. . .] [. . .] [. . .] [. . .] Maximum Floor Area Ratio (FAR)(4) 0.5:1 0.6:1 1.0:1 18.13.045 [. . .] [. . .] [. . .] [. . .] [. . .] SECTION 19. Section 18.13.045 (Increased Floor Area for Housing Developments of 3-10 Units) of Chapter 18.13 (Multiple Family Residential (RM-20, RM-30 and RM-40) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows: 18.13.045 Increased Floor Area for Housing Developments of 3-10 Units (a) A housing development project, as defined in California Government Code Section 65589.5, that is in an RM-20, RM-30 or RM-40 District shall be allowed to increase its floor area ratio as follows: (i) A housing development project of three to seven units shall have a maximum floor area ratio of 1.0:1. (ii) A housing development project of eight to ten units shall have a maximum floor area ratio of 1.25:1. (b) This section shall not apply within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory. Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 20  Packet Pg. 105 of 193  *NOT YET APPROVED* 16 0160106_20230511_ay16 SECTION 20. Section 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS)) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: (a) Exclusively Non-Residential Uses [. . .] (b) Mixed Use and Residential Table 4 specifies the development standards for new residential mixed use developments and residential developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18.16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and development services, pursuant to Section 18.76.020. Table 4 Mixed Use and Residential Development Standards CN CC CC(2) CS Subject to regulations in Section [. . .] [. . .] [. . .] [. . .] [. . .] [. . .] Maximum Residential Floor Area Ratio (FAR) 0.5:1 (4) See sub- section (e) below 0.6:1 0.6:1 18.16.065 Maximum Nonresidential Floor Area Ratio (FAR) 0.4:1 2.0:1 0.4:1 Total Mixed Use Floor Area Ratio (FAR) 0.9:1 (4) 2.0:1 1.0:1 18.16.065 [. . .] [. . .] [. . .] [. . .] [. . .] [. . .] [. . .] SECTION 21. Section 18.16.065 (Increased Floor Area for Housing Developments of 3-10 Units) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS)) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows: Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 21  Packet Pg. 106 of 193  *NOT YET APPROVED* 17 0160106_20230511_ay16 18.16.065 Increased Floor Area for Housing Developments of 3-10 Units (a) A housing development project as defined in paragraph (2) of subdivision (h) of Section 65589.5 of the Government Code of the State of California that is in a CN, CC or CS District shall be allowed to increase its floor area ratio as follows: (i) A housing development project of three to seven units shall have a maximum floor area ratio of 1.0:1. (ii) A housing development project of eight to ten units shall have a maximum floor area ratio of 1.25:1. (b) This bonus shall not apply within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code of the State of California, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. (c) For mixed use development, total mixed use floor area ratio shall be increased to the extent necessary to accommodate a non-residential floor area ratio of 0.4:1 for retail and retail-like uses only. SECTION 22. Section 18.18.060 (Development Standards) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: (a) Exclusively Non-Residential Use [. . .] (b) Mixed Use and Residential Table 3 specifies the development standards for new residential mixed use developments and residential developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlines in Section 18.18.110, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and development services, pursuant to Section 18.76.020: TABLE 3 MIXED USE AND RESIDENTIAL DEVELOPMENT STANDARDS CD-C CD-S CD-N Subject to regulations in Section: [. . .] [. . .] [. . .] [. . .] [. . .] Maximum Residential Floor Area Ratio (FAR) 1.0:1(3) 0.6:1(3) 0.5:1(3) 18.18.065, 18.18.070 Maximum Nonresidential Floor Area Ratio (FAR) 1.0:1(3) 0.4:1 0.4:1 Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 22  Packet Pg. 107 of 193  *NOT YET APPROVED* 18 0160106_20230511_ay16 Total Floor Area Ratio (FAR)(3) 2.0:1(3) 1.0:1(3) 0.9:1(3) 18.18.065, 18.18.070 [. . .] [. . .] [. . .] [. . .] [. . .] Footnotes: (1) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space except as provided below); (3) minimum private open space dimension 6; and (4) minimum common open space dimension 12 For CN and CS sites on El Camino Real, CS sites on San Antonio Road between Middlefield Road and East Charleston Road and CC(2) sites that do not abut a single- or two-family residential use or zoning district, rooftop gardens may qualify as usable open space and may count as up to 60% of the required usable open space for the residential component of a project. In order to qualify as usable open space, the rooftop garden shall meet the requirements set forth in Section 18.40.230. [. . .] (3) FAR may be increased with transfers of development, increased floor area for housing development projects with 3-10 residential units and/or bonuses for seismic and historic rehabilitation upgrades, not to exceed a total site FAR of 3.0:1 in the CD-C subdistrict or 2.0:1 in the CD-S or CD-N subdistrict. [. . .] (5) The weighted average residential unit size shall be calculated by dividing the sum of the square footage of all units by the number of units. For example, a project with ten 800- square foot 1-bedroom units, eight 1,200-square foot 2-bedroom units, and two 1,800- square foot 3-bedroom units would have a weighted average residential unit size of ((10x800)+(8x1,200)+(2x1,800)) ÷ (10+8+2) = 1,060 square feet. [. . .] SECTION 23. Section 18.18.065 (Increased Floor Area for Housing Developments of 3-10 Units) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows: 18.16.065 Increased Floor Area for Housing Developments of 3-10 Units (a) A housing development project as defined in paragraph (2) of subdivision (h) of Section 65589.5 of the Government Code of the State of California that is in a CD Districts shall be allowed to increase its floor area ratio as follows: (i) A housing development project of three to seven units shall have a maximum residential floor area ratio of 1.0:1. (ii) A housing development project of eight to ten units shall have a maximum residential floor area ratio of 1.25:1. (b) This bonus shall not apply within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 23  Packet Pg. 108 of 193  *NOT YET APPROVED* 19 0160106_20230511_ay16 of the State of California, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. (c) For mixed use development in the CD-N and CD-S subdistricts, total floor area ratio shall be increased to the extent necessary to accommodate a non-residential floor area ratio of 0.4:1 for retail and retail-like uses only. (d) In no event shall total floor area ratio exceed 3.0:1 in the CD-C subdistrict, or 2.0:1 in the CD-N and CD-S subdistricts. SECTION 24. Section 16.65.025 (Exemptions) of Chapter 16.65 (Citywide Affordable Housing Requirements) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is amended to read as follows (new text underlined and deletions struck-through; omissions are noted with [. . .] for large sections of unchanged text): 16.65.025 Exemptions. The following development projects are exempt from the provisions of this chapter: (a) Residential projects consisting of the construction of one or two units, other than accessory dwelling units and junior accessory dwelling units, unless: (1) included in a mixed use project, (2) constructed on a lot created by an Urban Lot Split under Chapter 21.10; or (3) resulting in a two-family use on a single-family zoned lot; (b) Accessory dwelling units, unless: (1) constructed on a lot created by an Urban Lot Split under Chapter 21.10; or (2) the accessory dwelling unit is constructed on a single-family zoned lot containing a two-family use; (c) Junior accessory dwelling units and, notwithstanding subsection (b), all accessory dwelling units less than 750 square feet; [. . .] SECTION 25. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 26. The City Council finds that this Ordinance is statutorily exempt from the requirements of the California Environmental Quality Act (CEQA) for the following reasons. Under Government Code Sections 66411.7(n) and 65852.21(j), an ordinance adopted to implement the requirements of SB 9 shall not be considered a project under CEQA. Additional sections of this ordinance implementing SB 478 are exempt pursuant to Section 15061 of the State CEQA Guidelines because they simply reflect pre-emptive state law that will be effective January 1, 2022. As such, this ordinance does not reflect a change from the status quo and it therefore can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. // Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 24  Packet Pg. 109 of 193  *NOT YET APPROVED* 20 0160106_20230511_ay16 SECTION 27. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Planning and Development Services Item 10 Attachment A - Permanent SB 9 and SB 478 Ordinance        Item 10: Staff Report Pg. 25  Packet Pg. 110 of 193  City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Transportation Meeting Date: May 22, 2023 Report #:2304-1356 TITLE Palo Alto Transportation Management Association 2022 Annual Report, Strategic Plan, and Commute Survey RECOMMENDATION This is an information report, and no action is required. EXECUTIVE SUMMARY The Palo Alto Transportation Management Association (TMA) implements programs to reduce single-occupancy vehicle (SOV) trips to and from Palo Alto. The funding agreement between the Palo Alto TMA and the City restricts the use of City funds to trip reduction programs in the Downtown and California Avenue areas only and requires the TMA to report on the use of these funds. The attached Annual Report covers the 2022 calendar year, detailing how public funds were spent to support SOV trip reduction in the Downtown and California Ave districts, including the results of the Fall 2022 Commute Survey. The attachment also includes the 2023 TMA Strategic Business Plan. BACKGROUND Following direction from the City Council in 2013, staff worked to develop transportation demand management (TDM) strategies to encourage alternatives to solo driving as part of a multi-faceted effort to address traffic and parking concerns in the downtown area and the city at large. The development of a TMA for Palo Alto was a key component of this approach, which the City initially funded through a $499,880 contract with consultants Moore Iacofano Goltsman, Inc.1 After the TMA was formed in January 2016, this contract continued to fund the sub-consultant services of the TMA’s part-time executive director. The TMA hired permanent part-time staff in April 2018. 1 CMR #4766: https://www.cityofpaloalto.org/civicax/filebank/documents/43344 Item 11 Item 11 Staff Report        Item 11: Staff Report Pg. 1  Packet Pg. 111 of 193  In June 2016, Council authorized the City Manager to formalize the provision of additional City funding for TMA programs by executing a funding agreement between the City of Palo Alto, the Silicon Valley Community Foundation (SVCF), and the Palo Alto TMA.2 Because the TMA was not yet an approved Section 501(c)(3) organization (its application was pending with the Internal Revenue Service), the TMA operated as a program of SVCF. SVCF held and administered a fund restricted to specific charitable purposes and had legal discretion and control over the restricted account. When the TMA received its formal 501(c)(3) status, SVCF ceased to be the organization’s program sponsor and to act as the TMA’s fiscal agent. The 2016 funding agreement approved by Council provided $100,000 to the TMA for programs to reduce single-occupancy vehicle (SOV) commute trips to and from downtown Palo Alto. Under a subsequent amendment, the City provided an additional $100,000 to support the TMA’s work in 2017. The City Council adopted a Fiscal Year 2018 budget that included $480,000 for the Palo Alto TMA to continue to support its efforts to reduce SOV commute trips using a variety of strategies. An amended and restated agreement signed in 2017 incorporated this approved funding, extended the agreement’s term and set forth the parties’ obligations over the remaining years. This 2017 funding agreement delegated authority to the City Manager to amend the agreement to add funding if the Council chose to budget additional funds for future fiscal years and to remove the SVCF as a party once the TMA received IRS section 501(c)(3) nonprofit status and no longer required SVCF to act as the TMA’s fiscal agent. In December 2018, the agreement was amended to incorporate additional funds allocated for FY 2019 and to reflect the fact that the SVCF no longer serves as the financial agent for the TMA now that the TMA is a non-profit. In April 2019, the Finance Committee received a presentation from the TMA and provided feedback on the TMA Strategic Plan.3 On May 15, 2019, the Finance Committee recommended an increase in employee parking permit rates to provide the TMA with additional funding of up to $180,000, for a total of $660,000 annually. On June 17, 2019, the Council voted to increase the FY20 budget recommendation by $90,000 from the University Avenue Parking Permit Fund for a total amount of $750,000. In July 2019, the agreement was amended to reflect the Council’s appropriation of $750,000 for FY 2020. That agreement expired on June 30, 2020. An informational report transmitted to Council on May 26, 2020, included the 2019 TMA Annual Report, comprising commute program data, results and analysis of the Fall 2019 Downtown Commute Survey, and a summary of the 2020 Strategic Business Plan4. In that month, the Council considered its annual budget during the COVID-19 pandemic. In this context, which also aligned with a lower funding request by the TMA in May, the Council voted to appropriate a reduced funding level of $453,000 for the TMA in FY 2021, and approved the use of City funds for the 2 CMR #6823: https://www.cityofpaloalto.org/civicax/filebank/documents/52687 3 Report #10198: https://www.cityofpaloalto.org/civicax/filebank/documents/70194, Presentation: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=63435.61&BlobID=70664 4 Report #11307: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=64175.41&BlobID=76770 Item 11 Item 11 Staff Report        Item 11: Staff Report Pg. 2  Packet Pg. 112 of 193  TMA’s programs in the California Avenue Business District as well as the Downtown.5 Funding was provided under the new proposed funding agreement but was reduced further based on a November 2020 TMA request for $350,000. A new funding agreement was signed in 2020 reflecting Council’s appropriation of $350,000 in FY 2021. This agreement expires in FY 2023 and again delegates authority to the City Manager to amend the agreement to add funding if Council budgets more funds. In June of 2021, Council allocated $150,000 in funds for the TMA for FY 2022. In June of 2022, Council allocated $200,000 in funds for the TMA for FY 2023. DISCUSSION Regular reports are required under the TMA’s funding agreement with the City. In the past year, the TMA has used City funds to purchase transit passes for low-income workers, supporting their use of transit, and to subsidize other programs such as carpooling, biking, and ride-share aimed at increasing all Downtown and California Avenue commuters’ use of alternative modes of transportation. The attached Annual Report covers the 2022 calendar year, detailing how public funds were spent to support SOV trip reduction in Downtown, including the results of the Fall 2022 Downtown Commute Survey. The attachment also includes a summary of the 2023-2026 TMA Strategic Business Plan. POLICY IMPLICATIONS The funding agreement between the City and the TMA requires that the TMA strategic plan be regularly updated. In addition, the transportation demand management (TDM) services provided by the TMA are consistent with the following Comprehensive Plan policies and programs: Policy T-1.1 Take a comprehensive approach to reducing single-occupant vehicle trips by involving those who live, work and shop in Palo Alto in developing strategies that make it easier and more convenient not to drive. Policy T-1.2 Collaborate with Palo Alto employers and business owners to develop, implement and expand comprehensive programs like the TMA to reduce single-occupant vehicle commute trips, including through incentives. Program T1.2.1 Create a long-term education program to change the travel habits of residents, visitors, shoppers and workers by informing them about transportation alternatives, incentives and impacts. Work with the PAUSD and with other public and private interests, such as the Chamber of Commerce and Commuter Wallet partners, to develop and implement this program. 5 Report #11376: https://www.cityofpaloalto.org/civicax/filebank/documents/76803, Action Minutes: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=48631.05&BlobID=77870 Item 11 Item 11 Staff Report        Item 11: Staff Report Pg. 3  Packet Pg. 113 of 193  Program T1.2.4 Evaluate the performance of pilot programs implemented by the Palo Alto Transportation Management Association and pursue expansion from Downtown to California Avenue and other areas of the city when appropriate. Program T1.2.6 Pursue full participation of Palo Alto employers in the TMA. Policy T-1.13 Encourage services that complement and enhance the transportation options available to help Palo Alto residents and employees make first/last mile connections and travel within the city for daily needs without using a single-occupancy vehicle, including shuttle, taxi and ridesharing services. Policy T-2.2 As part of the effort to reduce traffic congestion, seek ongoing funding and engage employers to operate and expand TMAs to address transportation and parking issues as appropriate in the City’s employment districts. Program T2.2.1 Work in partnership with the Palo Alto TMA and Stanford University to aggregate data and realize measurable reductions in single-occupant vehicle commuting to and from Downtown and in the Stanford Research Park. Policy T-5.5 Minimize the need for employees to park in and adjacent to commercial centers, employment districts and schools. Program T7.1.1 Expand transportation opportunities for transit-dependent riders by supporting discounts for taxi fares, rideshare services and transit, by coordinating transit systems to be shared by multiple senior housing developments, by maintaining a database of volunteer drivers and other transit options. FISCAL/RESOURCE IMPACT This item is an informational report and has no resource impact. Funding for the TMA is sourced from the University Avenue Parking Fund and is subject to City Council approval through the annual budget process. The current funding agreement is a three-year agreement expiring at the end of FY 2023 (June 30, 2023). Any additional funds to be paid to TMA for FY 2024 would require Council appropriation and amendment of the agreement. The City Manager is authorized to amend the agreement to incorporate any additional Council appropriated funds. The FY 2024 budget includes recommended funding for the TMA consistent with the prior year level. STAKEHOLDER ENGAGEMENT Monthly Palo Alto TMA Board of Directors meetings are open to the public and occur from 9:00 - 10:00am on the third Thursday of the month. Information about board meetings can be found at the Palo Alto TMA website: https://www.paloaltotma.org/ ATTACHMENTS Item 11 Item 11 Staff Report        Item 11: Staff Report Pg. 4  Packet Pg. 114 of 193  Attachment A: 2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey APPROVED BY: Philip Kamhi, Chief Transportation Official Item 11 Item 11 Staff Report        Item 11: Staff Report Pg. 5  Packet Pg. 115 of 193  April 20, 2023 Palo Alto City Councilmembers Subject: Three PATMA budget scenarios for FY 2024 Dear City Councilmembers, Please find below three different PATMA budget scenarios for the next fiscal year. As you know, we received a generous allocation of 216 Caltrain passes through the GoPass Donation Program for 2023. These three scenarios offer varying levels of bus passes, Bike Love incentives, refurbished bike distribution, and part-time contract labor that will further alleviate traffic congestion and demand for parking in Palo Alto. Let me know if you have any questions. Kind regards, Justine Burt Executive Director, Palo Alto Transportation Management Association Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 6  Packet Pg. 116 of 193  2022 Annual Report January 1, 2022 – December 31, 2022 Submitted to the Palo Alto City Council for the PATMA Study Session Prepared by: Palo Alto Transportation Management Association 855 El Camino Real #13A-200, Palo Alto, CA 94301 www.paloaltotma.org Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 7  Packet Pg. 117 of 193  Table of Contents Executive Summary .....................................................................................................................1 Introduction ................................................................................................................................1 PATMA Staff ................................................................................................................................2 Board of Directors .......................................................................................................................3 City of Palo Alto Priorities ............................................................................................................3 Top Five Accomplishments in 2022 .............................................................................................4 PATMA Programs ........................................................................................................................4 Benefits of PATMA Programs ......................................................................................................6 Program Results ..........................................................................................................................7 Testimonials ................................................................................................................................9 Conclusion ................................................................................................................................13 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 8  Packet Pg. 118 of 193  1 2022 Annual Report Executive Summary The past year has been a time of rebuilding for the Palo Alto Transportation Management Association (PATMA). Essential workers PATMA primarily serves figured out how to navigate the challenges of COVID while office workers settled into a hybrid schedule of commuting and telework. Throughout it all, PATMA continued supporting workers who needed to commute to their workplaces with existing programs while adding new pilot programs as well. In 2022, PATMA diverted 147 single-occupancy vehicles from city streets, avoided 887,415 vehicle miles travelled, and reduced greenhouse gases by 365 tons by providing free transit passes and after-hour Lyft rides. PATMA also rolled out two new programs to encourage active mobility commuting: a $5/day reward for biking to work and a refurbished bicycle program for essential workers. With this work, PATMA supported three of the 2022 Palo Alto City Council’s four priorities: economic recovery, climate change, and community health. Further streamlining of administrative activities and bolstering of oversight and governance happened in 2022. PATMA more than doubled the size of its board from three to seven members with expanded representation from the hospitality and technology industries as well as the residential sector. With a foundation of dedicated staff, a committed board of directors, and the generous financial support of the City of Palo Alto, PATMA looks forward to expanding pilot programs that were begun in 2022 and growing its impact among the community in 2023. Introduction The Palo Alto TMA is a non-profit working to reduce single-occupancy vehicle (SOV) trips, traffic congestion and demand for parking by delivering targeted transportation solutions to Palo Alto’s diverse range of employers, employees, visitors, and residents. Financial support for this work comes primarily from the City of Palo Alto’s University Avenue and California Avenue parking fund. This funding allows PATMA to provide free transit passes and after-hours Lyft rides chiefly to low wage service sector workers in the two main commercial districts of Palo Alto. The pandemic that hit in March 2020, dealt a blow to mass transit when more essential workers who had to be physically present to do their jobs shifted to driving to work. Figure 1 shows the precipitous drop in transit passes in early 2020 and the steady rebuilding of transit ridership since then. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 9  Packet Pg. 119 of 193  2 Figure 1: Transit Passes Purchased Q4 2019 – Q4 20221 As society learned to navigate the health and safety challenges C OVID posed, PATMA worked to rebuild mass transit ridership. At the same time workers fled mass transit, many people took up bicycling for commuting and exercise. Building on the increased interest in bicycling, the $100,000 grant PATMA secured from the Transportation Research Board allowed PATMA and the tech startup Motion to develop an app to encourage Palo Alto workers to try active mobility commuting. This work and further details about PATMA’s impacts in 2022 are provided below. PATMA Staff PATMA is a non-profit staffed with contractors from ALTRANS TMA Inc., a firm specializing in transportation demand management. Part-time staff working for PATMA include: ● Justine Burt, Executive Director, PATMA ● Sana Ahmed, Program Coordinator, PATMA ● Stephen Blaylock, President, ALTRANS TMA Inc. ● Andrew Ridley, Chief Operating Officer, ALTRANS TMA Inc. 1 Numbers do not include Caltrain passes from the GoPass Donation Program Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 10  Packet Pg. 120 of 193  3 Board of Directors In 2022, PATMA doubled the size of its board with four new members. Representatives from the hospitality, technology and residential sectors helped diversify our board whose members include: ● Cedric de la Beaujardiere, OpenGov ● Brad Ehikian, Premier Properties (Board Chair) ● Rob George, Philz Coffee (Treasurer) ● Philip Kamhi, City of Palo Alto ● Vincent Lobono, Amazon ● Sebastian Mafla, Sheraton ● Shannon Rose McEntee, retired The board meets monthly on the third Thursday at 9:00am and efficiently works through one hour of agenda items. Nearly all board members regularly attend. The public is encouraged to join these virtual meetings which happen at this link. City of Palo Alto Priorities While the original motivations for the Palo Alto City Council to create PATMA were to alleviate traffic congestion, reduce demand for parking downtown, and enhance the quality of life in Palo Alto; each year, PATMA overlays the City Council’s stated priorities for the year to guide its work. In 2022, the City Council’s stated priorities were: 1. Economic Recovery and Transition 2. Climate Change – Protection and Adaptation 3. Housing for Social and Economic Balance 4. Community Health and Safety PATMA’s work supports three of these priorities: economic recovery, community health, and climate change. Sustainability/Climate Action Plan The City of Palo Alto is a leader on climate change. In 2022, the City’s Sustainability/Climate Action Plan (S/CAP) ad hoc committee held several public meetings to develop a plan to meet the City’s overarching 80x30 goal – to reduce greenhouse gas (GHG) emissions 80% below 1990 levels by the year 2030. One goal within the S/CAP plan that PATMA programs help realize is “increasing the mode share for active transportation (walking, biking) and transit from 19% to 40% of local work trips by 2030.” As 61.9% of Palo Alto’s GHG emissions come from the transportation sector, PATMA is positioned to play a key role in facilitating GHG gas emission reductions by raising awareness about the benefits of mode shift, offering commute counseling, and providing incentives for mode shift. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 11  Packet Pg. 121 of 193  4 Top Five Accomplishments in 2022 The first year of the pandemic, the number of essential workers requesting transit passes fell dramatically. Since then PATMA has been rebuilding the program. In this spirit, the following are PATMA’s top five accomplishments in 2022. 1. Rebuilt the program from a low of 28 people in May 2020 to a high of 165 served in October 2022. 2. Further streamlined program administration of Clipper Cards: processing new requests, communicating about pass renewals, purchasing new passes, replacing lost passes, monitoring accounts, and distributing new passes. 3. Received 49 and then 75 free Caltrain passes from the GoPass Donation Program to distribute to low wage service sector workers in 2022. 4. Applied for and was accepted to receive 216 free Caltrain GoPasses to distribute in 2023 which will reduce PATMA’s transit pass costs next year. 5. Developed and tested an innovative app that provides $5/day rewards to workers who commute by active mobility mode. PATMA Programs With funding from the University Avenue Parking Fund and the California Avenue Parking Fund, PATMA provides free Clipper Cards loaded with monthly passes for Caltrain, VTA buses , SamTrans buses and Dumbarton Transbay buses and also offers after-hours Lyft rides of less than five miles. At this time, participation is limited to people who work in the University Ave Downtown and California Ave area. Service sector workers who receive transit passes work primarily in food service, retail, and accommodation. Light office workers who receive transit passes or accrue Bike Love rewards staff Palo Alto’s dentist, doctor, accounting, and law offices, and banks. Programs with income thresholds Train and bus passes Transit pass benefits are provided to employees earning less than $70,000 per year who work in the Downtown and Cal Ave areas. Figure 2: Testimonial from Oscar Gonzalez “Taking the train is a safer way to commute. I work long hours. Instead of driving home in traffic when I’m tired, I get to relax on the train.” Oscar Gonzalez, The Westin Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 12  Packet Pg. 122 of 193  5 Pilot: Refurbished bicycles In 2022, PATMA created a Memorandum of Understanding with the local non-profit Bike Exchange for a pilot program to provide refurbished bicycles and safety gear to three essential workers. This pilot is open to workers making less than $70,000/year. Figure 3 shows one Palo Alto-based hospitality worker receiving his “new” bicycle from the Executive Director of Bike Exchange, Andrew Yee. Figure 3: Essential worker Rene Rivera Rosales taking delivery of his refurbished bicycle from Palo Alto - based non-profit Bike Exchange Programs without income thresholds Lyft after-hours rides of less than five miles PATMA currently offers Lyft rides for workers commuting less than five miles early morning or late night. Pilot: Bike Love rewards With a $100,000 grant from the Transportation Research Board, funding that PATMA identified and secured, the non-profit developed and piloted a “Bike Love” mobile app. Bike Love provides daily incentives for active mode first-mile commute trips to transit and active mode commutes from home to work, up to $600 per year per commuter. Automated travel mode detection identifies bike, e-bike, e-scooter, and e-skateboard trips. Commute trips are verified to stop or start within geofences at 30 Caltrain stations and two Palo Alto job centers. Incentive dollars Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 13  Packet Pg. 123 of 193  6 are instantly redeemable at local merchants via reloadable Apple/Google Wallet Virtual Visa cards, a new type of payment card. Sixty-seven percent of incentive dollars are currently spent in Palo Alto, in support of the City Council’s 2022 priority for economic recovery. Over the next few months, the app developer Motion will continue to collect merchant identification numbers whi ch will allow the app at some point in the future to restrict reward redemptions to Palo Alto businesses only thus recycling all program reward funding back into the local economy. Initially, Bike Love incentivized active mobility habits by offering $2.50/day but then raised the reward to $5/day. This increase met with enthusiastic support from the workers the app sought to motivate. Figures 4 and 5 provide screenshots of the app’s interface and geofencing capabilities. Figure 4: Bike Love App Interface Figure 5: A Bike Love Geofenced Area For a quick overview video of the app, please visit this link: Bike Love in 80 seconds (video) Benefits of PATMA Programs While PATMA programs save service workers money on their commutes, many other benefits of these programs accrue to local businesses, workers, City government, and Palo Alto residents. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 14  Packet Pg. 124 of 193  7 Businesses For business owners and managers, PATMA’s mode shift work gives them a competitive advantage over similar businesses in nearby cities. Free transit passes help shops and restaurants attract and retain workers in competitive industries. Workers Workers who stop driving not only save money on variable personal vehicle costs such as gasoline, maintenance, and repairs, they also avoid the expense of potential parking tickets, and escape the stress of having to drive in traffic congestion. The workers who commute by active modes enjoy the benefits of exercise that allow them to arrive at work energized and refreshed. City of Palo Alto Municipal governments impact the wellbeing of residents and workers within the city’s boundaries, and PATMA’s programs on the City’s behalf reduce traffic congestion, free up parking spaces downtown, and enhance the quality of life for residents by reducing the number of cars parked in neighborhoods. Program Results The results of the TMA’s program management, outreach, and program operation labor in Figures 6 – 10 depict the number of SOV commuters shifted, number of transit passes distributed at specific businesses in Palo Alto, the cost per SOV avoided, the number of avoided vehicle miles travelled, and tons of greenhouse gas reduced. Figure 6: Number of Commuters Diverted from Single-Occupancy Vehicles Q1 2022 Q2 2022 Q3 2022 Q4 2022 Transit passes 132.7 143.0 140.0 158.3 Lyft 4.2 4.4 3.2 3.7 Total 136.9 147.4 143.2 162.0 Averaging the number of commuters diverted from single-occupancy vehicles over the four quarters yields 147, a number which does not include Caltrain GoPasses. Figure 7, however, does include transit passes purchased and GoPasses donated. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 15  Packet Pg. 125 of 193  8 Figure 7: Number of Transit Passes (174) Distributed by Employer in December 2022 Organization Transit passes Organization Transit passes Organization Transit passes Sheraton/Westin 38 Starbucks 2 MNT STUDIO 1 Nobu Hotel 10 Walgreens 2 Nidhi Pai, DMD 1 Coupa Café 9 Watercourse Way Spa 2 Nola Restaurant & Bar 1 Patagonia 8 Yayoi 2 Onigilly 1 Crepevine 5 Zola + BarZola 2 PAMF - MIDA Industries 1 Palo Alto Bicycles 5 Arya Steakhouse 1 Peninsula Creamery 1 Verve 5 Bell's Books 1 Pizz'a Chicago 1 Whole Foods Market 5 BitGo 1 RERI 1 Protege Restaurant 4 Buca di Beppo 1 Smiles By Pai 1 Rooh 4 City National Bank 1 Summit bicycles 1 West Elm 4 Coconuts Caribbean 1 The Hamilton 1 Sephora 4 Connie Ho MD 1 Oren's Hummus Shop 3 Creamery 1 Sweetgreen 3 Downtown Kindercare 1 Webster House 3 Guckenheimer: Palo Alto Club 1 Apple 3 Gong Cha 1 Ettan 2 HanaHaus 1 Joya Restaurant 2 HPS Architecture 1 Lytton Gardens 2 Lee Optometrics 1 Pastis 2 Imagina Daycare 1 Patxi's Pizza 2 Kris Hamamoto DDS, Inc. 1 Philz Coffee 2 La Bodeguita del Medio 1 Reposado 2 Lima Ruby Restaurant 1 San Agus Cocina 2 Marriott 1 Figure 8: Cost per SOV Avoided per Year Q1 2022 Q2 2022 Q3 2022 Q4 2022 Transit pass subsidy – pass outlay $742 $799 $940 $1,071 Lyft program $2,512 $2,595 $2,591 $2,599 Figure 9: Avoided Vehicle Miles Traveled (VMT) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Transit pass subsidy 204,031 219,923 215,309 243,504 Waze carpool2 955 0 0 0 Lyft 915 1,044 812 924 Total VMT reduced 205,901 220,966 216,120 244,428 Totaled for the 2022 calendar year, PATMA programs reduced vehicle miles traveled by 887,415. 2 Waze discontinued service in March 2022. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 16  Packet Pg. 126 of 193  9 Figure 10: Greenhouse Gases Reduced (tons) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Transit passes. Waze carpool, and Lyft 85 91 89 100 In CY 2022, PATMA reduced greenhouse gas emissions by 365 tons. Testimonials The following feedback from employees of local businesses show s how much PATMA’s programs mean to the community. Figures 11 – 14: Essential Worker Testimonials “I ride from Redwood City to Cal Ave daily. I love the ease, and calmness of the train. It’s fast and economical. No worries about traffic or gas prices or wear and tear on my car. I’ve convinced my coworker to use the program as well. Let’s keep helping the environment and enjoying the ride!” Kimberly Koch, Dion Health “The benefits of having a transit pass are that I can avoid traffic and it’s fast. Taking transit saves me money so I have more to take care of my family.” Geraldo Valencia, Whole Foods Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 17  Packet Pg. 127 of 193  10 “The train from San Jose is faster than driving. Not being in bumper-to-bumper traffic reduces the stress of my commute.” Alan Kayser, Palo Alto Bicycles “When I have to drive to work from Belmont I wish I was on the train. The Belmont Caltrain station is conveniently down the hill and then when I go home I get exercise biking up the hill. Plus it’s fun taking the train home on Friday afternoon because people are happy it’s the weekend.” Rene Rivera Rosales, Sheraton Budget The non-profit demonstrated program results which helped to grow its City funding allocation until 2020 when the pandemic altered commuting habits and parking fund revenues fell dramatically. Figure 15 shows the history of PATMA’s funding allocations since FY 2016. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 18  Packet Pg. 128 of 193  11 Figure 15: PATMA Funding Since Inception Since 2020, PATMA has worked hard to do more with less and build back the number of workers it supports with mode shift. Figure 16 shows income sources and expenditures in 2022. Figure 16: Detailed 2022 Income and Expenses Management tasks include program oversight, communications with stakeholders, finance and accounting activities, managing board meetings, maintaining 501c3 non -profit status, tax filing, and pursuing business development opportunities to diversify funding sources . $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 19  Packet Pg. 129 of 193  12 Program operation labor involves processing new transit pass requests, communicating about pass renewals, purchasing new passes, replacing lost passes, distributing new passes, and monitoring accounts. Figures 17 and 18 provide pie charts that show details of income and expenses. Figure 17: Overview of 2022 Income Figure 18: Overview of 2022 Expenses Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 20  Packet Pg. 130 of 193  13 Conclusion When PATMA staff drop off new transit passes for essential workers, staff regularly hear expressions of gratitude about how the transit passes improve workers’ quality of life, allow them to stay focused at work, and reduce their family’s transportation costs. Helping people is part of what makes mode shift work gratifying for the non-profit’s staff, but there is more to be done with the on-going guidance of the board of directors and the City of Palo Alto’s generous support. PATMA’s staff and board will continue to look for ways to alleviate traffic congestion, reduce demand for parking, and reduce greenhouse gas emissions while supporting and engaging local businesses, their workers, the City of Palo Alto, and residents. In 2023, an expansion of the refurbished bike pilot, growing the number of active Bike Love users, and distributing Caltrain’s substantial allocation of 216 GoPasses for 2023 are the main ways PATMA will build on its successful programs and deepen its impact next year. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 21  Packet Pg. 131 of 193  Three Year Strategic Plan July 1, 2023 – June 30, 2026 Submitted to the Palo Alto City Council for the PATMA Study Session Prepared by: Palo Alto Transportation Management Association 855 El Camino Real #13A-200, Palo Alto, CA 94301 www.paloaltotma.org Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 22  Packet Pg. 132 of 193  Table of Contents Executive Summary ................................................................................................................................. 1 Introduction ............................................................................................................................................ 1 PATMA Programs .................................................................................................................................... 2 Value of Palo Alto TMA ............................................................................................................................ 4 Three-Year Strategic Planning .................................................................................................................. 4 Workplan ................................................................................................................................................ 7 Budget Projections .................................................................................................................................. 8 Conclusion ............................................................................................................................................. 10 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 23  Packet Pg. 133 of 193  1 PATMA’s Three Year Strategic Plan July 1, 2023 – June 30, 2026 Executive Summary The Palo Alto Transportation Management Association (PATMA) supports local businesses with transportation demand management programs that help companies attract and retain workers: free transit passes, rewards for active mobility commutes, and after-hours Lyft rides less than five miles. For the past three years, PATMA has been rebuilding from a pandemic-induced 90% drop in transit pass requests in early 2020. In December 2022, PATMA’s programs resulted in a reduction of demand for 1781 parking spaces which yields benefits every day, all year. Building on this success, our strategic plan details the following goals for the next three years. • Year 1: Rebuilding to pre-pandemic ridership numbers with Caltrain’s generous allocation of equity-centered transit passes through the GoPass Donation Program; reducing the cost/single-occupancy vehicle diverted; and growing the number of bicycle commuters • Year 2: Diversifying funding sources in order to widen the geographic distribution of current programs, and expand the types of active mobility program offerings • Year 3: Tracking and supporting efforts to create a seamless, integrated low -carbon transportation system in the Bay Area With this plan in mind, PATMA requests City funding of $200,000 for Fiscal Year 2024. Introduction The Palo Alto Transportation Management Association (PATMA) is leading efforts to shape post-pandemic commute behaviors in town. As some workers settle into a new hybrid work schedule of return to office and work from home while essential workers continue to commute to their worksites, regional traffic is steadily worsening compared to early pandemic levels. To help relieve traffic congestion and demand for parking, PATMA offers information and incentives that encourage 1 Includes transit passes PATMA purchased, Caltrain GoPasses received, and Lyft Mission The Palo Alto TMA reduces single- occupancy vehicle trips, traffic congestion and demand for parking by delivering targeted transportation solutions to Palo Alto’s diverse range of employers, employees, visitors, and residents. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 24  Packet Pg. 134 of 193  2 workers to shift out of their single-occupancy vehicles (SOVs) and into low-carbon options such as trains, buses, or active commute modes. Building on the foundation of our mission, each year PATMA overlays the City Council’s strategic priorities to focus our non-profit’s efforts. In January 2023, the Palo Alto City Council set their strategic priorities for the year: 1. Economic Recovery and Transition 2. Climate Change Protection and Adaptation 3. Housing for Social and Economic Balance 4. Community Health and Safety PATMA’s programs help address three of these four priorities: economic recovery, climate change, and community health by providing essential workers – mostly in food service, retail, and accommodation – with commute counseling, access to free transit passes, rewards for bicycling to work, and early morning/late night ride-sharing services. Figure 1 shows the precipitous drop of transit pass demand in early 2020 when the pandemic hit. Since then, PATMA has worked to rebuild transit ridership, develop new programs, and diversify funding sources, while reducing the cost per SOV diverted, greenhouse gases (GHGs), and vehicle miles traveled (VMT). PATMA Programs Programs with income thresholds Transit Passes Currently, PATMA focuses on supporting essential workers in the Downtown and California Ave commercial districts who make less than $70,000 per year. These workers can receive free Caltrain, VTA, SamTrans, and Dumbarton Transbay bus passes. Figure 1: Passes Activated for PATMA Clients 19 6 22 3 24 4 25 3 27 1 25 5 37 28 46 61 62 76 78 80 65 78 84 67 93 10 1 10 5 10 5 10 2 10 3 10 8 11 9 12 9 87 97 95 96 10 7 10 2 95 98 11 0 12 6 11 9 11 5 TRANSIT PASSES ACTIVATED Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 25  Packet Pg. 135 of 193  3 Refurbished Bicycles In 2022, PATMA piloted a refurbished bicycle program with the local non-profit Bike Exchange. This program is for essential workers in Palo Alto making less than $70,000/year who would like to bike to work but do not own a bicycle. If they also need any safety equipment – helmet, lock, lights – Bike Exchange will include these for each essential worker receiving a refurbished bike. Programs without income thresholds After hours Lyft rides Workers who live less than five miles from work and who need to travel to work early morning or late night when mass transit is not running can receive a $10 Lyft credit per ride. There is no income limit for this program. Bike Love In 2022, PATMA launched the Bike Love app which provides $5/day up to $600/year to workers Downtown and on Cal Ave to encourage commuters to leave their cars at home and bike or scooter to work. Unlike the transit pass program, Bike Love does not apply income restrictions. The app was designed to provide attractive financial rewards to all workers Downtown and on Cal Ave in order to build active mobility habits. See Figure 2 for a map of the geofenced areas in which workers earn rewards. The Bike Love app also geofenced all 30 Caltrain stations for commuters who would like credit for biking to Caltrain and taking the train to work. Bike Love’s commuter location tracking confirms bike, e-bike, e-scooter, and e-skateboard trips. Within a few minutes, incentive dollars may be redeemed by the commuter at local merchants via Apple/Google Wallet electronic debit cards. As many of the 90 on-boarded Bike Love app users redeem rewards at Palo Alto businesses, app programmers at Motion collect more merchant identification numbers which will soon allow the app to restrict transaction authorization to local merchants. This is another way that PATMA supports local businesses and multiplies program impact. Single-occupancy vehicles diverted In January 2023, PATMA reduced demand for 140 parking spaces by helping service workers in Palo Alto access train and bus passes, and early morning/late night Lyft rides. Details about PATMA’s January 2023 metrics includes: Figure 2: Geofenced Areas for Bike Love Rewards Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 26  Packet Pg. 136 of 193  4 • Caltrain (50) • GoPass (only) (19) 2 • GoPass + VTA (12) • GoPass + SamTrans (3) • SamTrans (26) • VTA (22) • DBE (3) • 10 Lyft riders 3 For the 12-month period ending December 31, 2022, PATMA programs eliminated 887,415 vehicle miles traveled and avoided 365 tons of GHGs in support of the City of Palo Alto’s Sustainability/Climate Action Plan work. Value of Palo Alto TMA Competitive Advantage for Local Businesses Local businesses in the Downtown and Cal Ave areas contribute to the wonderful quality of life in Palo Alto. In turn, PATMA’s transit pass programs and active mobility programs support local businesses by giving them a competitive advantage to attract and retain staff. As the primary funder of PATMA’s cost-effective programs, the City demonstrates its leadership on equity issues as well as climate change. Supporting Palo Alto’s Sustainability/Climate Action Plan Work In 2016, the City of Palo Alto set an ambitious overall GHG emissions reduction goal: 80% below 1990 levels by 2030. As of 2022, the City has reduced emissions to 50.6% below the 1990 level mainly due to a switch to a fully carbon-free electricity portfolio. To reduce emissions further, one of Palo Alto’s Sustainability/Climate Action Plan (S/CAP) goals is to increase the mode share for active transportation modes (walking, biking, and transit) from 19% to 40% of local work trips by 2030. Since 61.9% of Palo Alto’s GHG emissions come from the transportation sector, PATMA is positioned to play a key role in facilitating GHG emission reductions by raising awareness about the benefits of mode shift, offering commute counseling, and providing incentives for mode shift. Three Year Strategic Planning At meetings in Nov. 2022 through Jan. 2023, PATMA’s Board of Directors conducted strategic planning for the next three years. Discussion started with an identification of the organization’s 2 In 2022, a large number of GoPasses were donated by a tech company and given to Caltrain to distribute to community-based organizations working on social equity issues, such as PATMA. 3 Workers who use PATMA’s Lyft service do so infrequently. Lyft rides taken by 10 riders add up a reduction in demand for 4.9 parking spaces. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 27  Packet Pg. 137 of 193  5 strengths and weaknesses (internal factors), and opportunities and threats (external factors). Highlights are listed in Figure 3. Figure 3: PATMA’s Strengths Weaknesses Opportunities Threats (SWOT) Matrix Strengths Weaknesses Opportunities Threats • Connections to small businesses • Speaks on behalf of the business community • Saves essential workers money on their commute • Accomplishes a lot with few resources • Staff retention at businesses is higher because of PATMA’s programs • Not enough awareness of PATMA • Share metrics to show funding is used well • Financial resources lacking • PATMA could do more with more resources • PATMA could raise awareness with more outreach • Use volunteers more • Potential mass transit fiscal cliff could result in service curtailment • Parking fund impacted by continued telework This shared understanding provided the foundation for planning the path forward with goals, strategies, and objectives for the next three years . Year 1 Goals • Support local businesses to speed the economic recovery • Build PATMA’s transit pass program back to pre-pandemic numbers of SOVs diverted • Reduce traffic congestion and demand for parking • Support the S/CAP goals of reducing GHG emissions from transportation and increasing the number of people commuting by public transit or active mobility Strategies • Market PATMA programs and related programs from other agencies (Palo Alto Link on- demand transit, VTA’s new Guaranteed Ride Home) to managers at local businesses • Raise awareness about and incentivize active mobility options • Expand Bike Love and refurbished bike pilots into programs • Explore interest among workers from East San Jose and Los Banos in VTA vanpools • Manage cash flow in the face of possible changing conditions • Train managers at local businesses with the highest number of transit passes about Clipper Card best practices • Encourage transit pass users to load Clipper Card onto their phone with the Clippercard.com app Objectives • Expand the number of essential workers commuting by Caltrain to meet the 216 GoPass allocation from Caltrain for 2023 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 28  Packet Pg. 138 of 193  6 • Measure the number of workers using PATMA’s programs • Reduce annual cost/SOV diverted ($1,071 in the 4th quarter of 2022) • Grow the number of active users of Bike Love that use the app at least 3x/week to 100 • Reduce administrative time spent troubleshooting and fixing the most common Clipper Card problems • Expand the number of business memberships to three Year 2 Goals • Diversify funding sources by seeking grants and service contracts • Expand PATMA services to parts of Palo Alto beyond Downtown and California Avenue that are not already covered by employer TDM plans • Widen program offerings to encourage active commuting Strategies • Apply for additional funding from new funding sources interested in supporting GHG reductions and social equity issues • Introduce new programs to raise awareness about active mobility travel options o Bike safety classes o Active commute route planning • Connect PATMA programs with S/CAP GHG reduction goals • Use additional funding sources to offer current and new programs in new markets Objectives • Increase the number of Palo Alto businesses that participate in PATMA programs • Increase the number of active commuters • Reduce additional tons of GHG emissions • Expand the number of business memberships to five Year 3 Goals • Help move society toward a seamless, integrated transportation system with abundant electrified and active mobility options • Save workers money on their transportation costs • Expand alternative commute programs and leverage other agency’s programs to the point where workers do not need to own personal vehicles to get to work quickly and efficiently Strategies • Monitor Mobility as a Service developments (new apps to plan and pay for alternative commute trips) Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 29  Packet Pg. 139 of 193  7 • Explore opportunities to develop complementary programs Objectives • Number of SOVs diverted • Cost/SOV diverted • Tons of GHGs reduced Workplan Year 1 In the next year, PATMA is planning to rebuild back to the pre-pandemic level of SOV diversion, lower the cost/SOV diverted, and diversify funding sources. The following six tasks are planned for FY 2024: • Create a marketing plan • Promote train and bus passes, the Bike Love app, and refurbished bicycle program • Provide commute counseling • Distribute train and bus passes and troubleshoot administrative problems • Expand the number of active Bike Love app users • Conduct the 2023 commute survey The timeframe for each task is shown in Figure 4. Figure 4: Year 1 Workplan 7/ 23 8/ 23 9/ 23 10/ 23 11/ 23 12/ 23 1/ 24 2/ 24 3/ 24 4/ 24 5/ 24 6/ 24 Task 1 – Marketing plan Task 2 – Program promotion Task 3 – Commute counseling Task 4 – Administer transit passes Task 5 – Expand # of Bike Love users Task 6 – Commute survey Year 2 City funds currently allocated to PATMA limit their use to the Downtown and California Avenue business districts only. In FY 2025, City funding may be available from the city-wide business tax that passed in November 2022. If the City provided PATMA with business tax funding, PATMA could expand its reach citywide to serve essential workers in Midtown, and along El Camino Real and San Antonio Rd. Both Midtown and El Camino Real are well-served by transit and offer a significant opportunity to reduce congestion and realize mode shift . We will continue to track developments of the Caltrain electrification project which will attract additional riders once it is complete and explore possible new ways to educa te and incentivize Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 30  Packet Pg. 140 of 193  8 workers about first/last mile travel options. We will also continue to monitor developments for Mobility as a Service apps that help riders more efficiently plan, pay for, and transfer between multiple commute modes, as well as the Seamless Bay Area project, and support development of the City’s Bicycle and Pedestrian Transportation Plan Update . Year 3 In FY 2026, we will identify service gaps to develop new programs and implement emerging mobility technology while continuing to expand programs that divert SOVs and reduce traffic congestion Downtown, in the Cal Ave business district, and in other parts of the city. We will expand active mobility programs for commuters who live less than 10 miles from work. Budget Projections Budget History Looking back at funding levels since the start of the Palo Alto TMA, the program grew over several years and demonstrated cost-effective successes with SOV diversion, GHG reductions, and VMT reductions until the pandemic hit. Figure 5 shows historic budget trends. Figure 5: PATMA Funding Since Inception Budget for FY 2024 As we seek to re-build program participation, PATMA’s funding request for FY 2024 is $200,000. Reasons that factor into this funding level request include: • University Ave Parking Fund revenues are down from pre-pandemic levels, and it is unclear when they will rebound. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 31  Packet Pg. 141 of 193  9 • PATMA core customer base is the frontline essential employees working in food service, retail, and hospitality with subsidies of transit passes, bicycling rewards, and early morning/late night rides outside of transit service hours. • Many tech and government agency staff have returned to office at least one or two days per week but most already have employer-provided TDM programs. With cost of living adjustments from the FY 2023 budget, the allocation of triple the number of GoPasses available from Caltrain, and income of $200,000 from the City of Palo Alto, PATMA projects the following budget for FY 2024 in Figure 6. Figure 6: FY 2024 Budget Projection As circumstances change, PATMA has the ability to adjust our income and expenses through various financial levers. ● Reducing labor costs ● Reducing program costs via throttling ● Requesting additional GoPasses from Caltrain and large employers in the area ● Increasing grant writing and philanthropic fundraising ● Growing our fee-for-TDM planning and program administration business ● Identifying the feasibility of short-term loans Compared to other TMAs in the Bay Area, PATMA’s labor costs are lower. PATMA will continue to operate in a lean manner and make effective use of our budget to maximize impact. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 32  Packet Pg. 142 of 193  10 Budget Scenarios for 2023-2024 While PATMA’s FY 2024 budget request is for $200,000, with higher levels of funding, PATMA could serve more people with transit passes, Lyft early morning/late night rides home, and bicycle incentives. Consider Figure 7 which provides the return on investment for various levels of funding that will result in a reduction of demand for 346, 401, or 456 parking spaces. Figure 7: Return on Investment for Various Levels of Funding Conclusion In support of the local economic recovery, over the next three years PATMA will look for opportunities to continue to deliver cost-effective programs for service sector and light office workers that reduce traffic congestion and demand for parking in Palo Alto. PATMA will leverage complementary programs by other agencies such as Caltrain’s GoPass Donation Program and VTA’s Guaranteed Ride Home program that enable mode shift to low-carbon commute modes. Many public and private organizations are working hard to facilitate a future seamless, integrated low- carbon transportation system in the Bay Area that will lower personal transportation costs and reduce Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 33  Packet Pg. 143 of 193  11 GHG emissions. PATMA will continue to monitor developments in these areas in support of local businesses and their employees. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 34  Packet Pg. 144 of 193  2022 COMMUTE SURVEY REPORT for December 2022 Prepared by: ALTRANS TMA Inc 302 Toyon Ave, Suite F -MS 410 San Jose, CA 95127 www.altrans.net Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 35  Packet Pg. 145 of 193  2 Table of Contents Executive Summary ................................................................................................................................. 1 Introduction ............................................................................................................................................ 2 Survey Population ................................................................................................................................... 2 Survey Methodology ............................................................................................................................... 3 Results .................................................................................................................................................... 4 Key Insights ........................................................................................................................................... 16 Conclusions ........................................................................................................................................... 17 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 36  Packet Pg. 146 of 193  1 Executive Summary In September and October 2022, the Palo Alto Transportation Management Association (PATMA) team surveyed workers at hundreds of organizations in the University Avenue Downtown (Downtown) and California Avenue (Cal Ave) areas to learn about their commute ha bits and preferences. The team conducted online and in-person surveys in English and Spanish through door-to-door canvassing, mass texting, cold calling, and email follow-up. This document provides the highlights of the survey findings. The two main objectives of the commute survey were to raise awareness of PATMA programs and determine which workers in Downtown and Cal Ave were open to shifting their commute from single occupancy vehicles to mass transit or active mobility. Among the 511 respondents, Figure 1 shows the percentage of respondents from the four main sectors Downtown and on Cal Ave: government, light office, service, and tech. Figure 2 below shows the primary mode workers use to commute each week. More than half of the workers who participated in the survey shared that their primary commute mode is a single occupancy vehicle. 26% 16%48% 10% Figure 1 -Survey Respondents by Industry Government Light Office Service Tech Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 37  Packet Pg. 147 of 193  2 Data collected in the 2022 commute survey informs opportunities to expand PATMA program offerings that will help realize the City of Palo Alto’s goals to reduce traffic congestion, reduce demand for parking, support the economic recovery, and lower greenhouse gas emissions. Introduction In 2022, the Palo Alto Transportation Management Association (PATMA) conducted their seventh annual employee commute survey according to the funding agreement with the City of Palo Alto (COPA). PATMA contracted with ALTRANS TMA Inc. to conduct the survey in-house and performed outreach in September and October 2022. The survey was designed to identify how Palo Alto employees working in the University Avenue Downtown (Downtown) and California Avenue (Cal Ave) areas commute to work, raise awareness of PATMA’s program offerings, and determine who is open to mode shift away from single occupancy vehicles. Survey Population The total worker population for the Downtown and Cal Ave areas, according to the U.S. Census OntheMap data tool, shows 16,961 workers in census tracts in Dow ntown and 3,056 workers in census tracts in the Cal Ave area. This data from OnTheMap is pre-pandemic, from 2019, but is the most recent data available. The number of workers in the two areas are split into four different employment subcategories in Figure 3. 55% 5% 26% 7%5% 2%1% 0% 10% 20% 30% 40% 50% 60% Drive alone Carpool Transit Bike Walk Telecommute (work remotely) Other Figure 2 -Primary Commute Mode Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 38  Packet Pg. 148 of 193  3 Figure 3 – Number of Workers in Two Palo Alto Commercial Areas Area PATMA Business Category Count % Share Downtown Service 6,364 37.52% Technology 7,042 41.52% Light Office 2,874 16.94% Government 681 4.02% Total 16,961 100% California Ave Service 1,296 42.41% Technology 1,092 35.73% Light Office 668 21.86% Government 0 0.00% Total 3,056 100% Source: U.S. Census OnTheMap, 2019 data Of this population, the team ended up receiving surveys from 511 people, with completed surveys from 156 service sector workers, 85 government staff, 53 light office workers, and 31 tech workers. Compare this to the number of surveys received in previous y ears: 551 respondents in 2021, 1,471 in 2019, 496 in 2018, 892 in 2017, 829 in 2016, and 1,173 surveys in 2015. Survey Methodology In fall 2022, the PATMA team reached out to hundreds of businesses and organizations to administer the survey. Questions asked about the primary travel mode workers use to commute, their city of residence, employer, income level, applicability of current PATMA programs, openness to alternative commute options, and interest in commute counseling. The survey employed skip logic and survey branching to optimize question relevance to different survey respondents. The survey was administered both online and in person, in English and Spanish, by providing subjects with QR codes which they photographed on their smartphones and that then directed them to the online survey. Respondents appreciated the availability of QR codes to facilitate access to the survey. While more people are back in the office at least a few days a week, many people still work primarily from home. This is particularly the case for tech workers, but also for light office and government workers. Amazon offices downtown, for example, report that only 5-25% of employees have returned to the office at least a few days per week since the start of the COVID- 19 pandemic. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 39  Packet Pg. 149 of 193  4 To improve the response rate at a time when many people are working from home, TMA staff laboriously undertook block-by-block, door-to-door canvassing resulting in a dataset of hundreds of businesses and organizations in the Downtown and Cal Ave areas. Survey outreach was bolstered by mass texting, cold calling, and email follow-up to business contacts originally derived from the City’s Business Registry. Despite difficulties encountered, the PATMA team was able to secure 511 responses to the survey during the pandemic, which helps us to determine where to focus the development of future PATMA programs. Results Data collected in this survey shed light on several topics: • how people commute to work; • where they are coming from; • which workers could get to work taking just one transit pipeline running into Downtown or Cal Ave; • which workers are open to a different commute mode; and • what information, equipment, incentives, or rewards could encourage them to make the shift. The following graphics show the results for each question. Q1. How do you usually travel to work? If you use more than one type of transportation, choose the one used for the longest distance of your trip. 55% 5% 26% 7%5% 2%1% 0% 10% 20% 30% 40% 50% 60% Drive alone Carpool Transit Bike Walk Telecommute (work remotely) Other Figure 4 -Primary Commute Mode Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 40  Packet Pg. 150 of 193  5 Many commuters use more than one type of transportation for commuting. To be able to compare this year’s data with previous year’s data, we asked people to answer with the main mode for the longest distance of their trip. Figure 5 sorts the data by sector – either government, light office, service, or tech. Figure 6 shows changes of commute mode over the past seven years. 0%10%20%30%40%50%60%70%80%90%100% Government Light Office Service Tech Figure 5 -Commute Mode by Sector Drive Alone Transit Carpool Bike Walk Telecommute Other 0% 10% 20% 30% 40% 50% 60% 70% Drive Alone Transit Carpool Bike/Walk Telecommute Figure 6 -Changes in Commute Modes 2015-2022 2015 2016 2017 2018 2019 2021 2022 Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 41  Packet Pg. 151 of 193  6 Q2. If you drive alone to work, what are your main reasons for doing so? (select up to 3) • Live too far or too close to work (102) • Prefer to drive my own car (83) • Might need to get home quickly for an emergency (46) • Need to pick up or drop off children before or after work (43) • Work too early or too late to take mass transit (43) • Need my car during work (5) Many people find driving their own vehicles more convenient and faster, depending on where they live, or have other obligations before or after work. Q3. If you drive alone to work, which of the following sustainable commute modes are you open to taking? Of workers who identify as single occupancy vehicle (SOV) drivers, Figure 7 shows that over two- thirds are open to a sustainable commute mode of carpooling, vanpooling, mass transit, bicycling or walking. Q4. If you drive alone to work, is your home located less than one mile from a Caltrain station, VTA 22/522 bus stop, SamTrans ECR bus stop or Dumbarton Express bus stop? Figure 7 -SOV Drivers Open to Sustainable Commute Alternatives Transit Carpool Vanpool Bicycle Walk Prefer to drive Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 42  Packet Pg. 152 of 193  7 More than one-quarter of single occupancy vehicle drivers reported that they live less than one mile from a transit pipeline that runs to Palo Alto. Q5. If you live less than 5 miles from work, are you open to switching to an active mobility mode (bicycle, electric bicycle, scooter, or electric scooter) for commuting? Yes 29% No 58% Not sure 13% Figure 8 -SOV Drivers Living Less Than One Mile from Transit Stop Yes No Not sure 36% 29% 31% 4% Figure 9 -Live Less Than Five Miles from Work Open to Active Mobility Commute Yes No I'm thinking about it I already do Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 43  Packet Pg. 153 of 193  8 Two-thirds of respondents who live less than five miles from work are open to switching to an active mobility commute. Q6. If you answered "yes" or "I'm thinking about it," do you... o Already have either a bicycle, electric bicycle, scooter, or electric scooter o Want a bicycle o Not applicable o Other Sixty-six respondents answered that they would like a bicycle. Q7. If you bike to work or would like to bike to work, do you need any bike safety equipment? o Helmet o Lights o Bike lock o No thanks One hundred and forty people answered that they would like at least one of the following: helmet, lights, and/or bike lock. Answers to the next three questions are graphically depicted in Figure 10. Q8. PATMA’s New Bike Love App: $600/year reward for biking to work, biking to Caltrain, or biking to the bus Q9. Do you qualify for and would you benefit from a free bus or train pass? Q10. If you earn less than $70,000/year, live within 5 miles of your work in Downtown Palo Alto, and your work shift starts before 8am or ends after 10pm, PATMA offers shared after-hours Lyft rides. For all three of these questions, the survey asked, “How well does this solution fit your needs?” Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 44  Packet Pg. 154 of 193  9 Q11. In which city and zip code do you live? Figure 11 shows the top three counties and top ten cities that workers responding to the survey reported living in. Figure 12, on the next page, shows the top 10 home cities for responding workers and their proximity to transit pipelines. 0 50 100 150 200 250 Bike Love Free Transit Lyft after-hours Figure 10 -Interest in PATMA Programs A great deal A lot A moderate amount A little Not at all Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 45  Packet Pg. 155 of 193  10 Figure 12 – Map of Top Ten Residential Cities Figure 13 on the next page shows home zip codes to give a sense of where respondents are commuting from. Darker shaded zip codes contain more respondents. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 46  Packet Pg. 156 of 193  11 Figure 13 – Home Zip Codes Q12. What is the name and address of your employer? (This information will help us analyze commuting patterns for the four main sectors of employers [government, light office, service, and technology] in Palo Alto.) Among the 511 respondents, Figure 14 shows the percentage of respondents from the four main sectors which includes workers in Downtown and on Cal Ave: government, light office, service, and tech. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 47  Packet Pg. 157 of 193  12 Q13. How much would you estimate you spend per month commuting? (AAA estimates the average monthly cost of owning and operating a new car in the U.S. is $894/month in 2022.) o $0–50/mo – for example, walk, bike, receive a free transit pass o $50-199/mo – for example, bus or train pass o $200-499/mo – for example, Lyft/Uber rides, used car (gas, repairs, maintenance, insurance) o $500-899/mo – for example, new car (car payments, gas, repairs, ma intenance, insurance) o More than $900/mo o I don't know To raise awareness about the fixed and variable costs people pay each month for their personal vehicle, the survey asked approximately how much people think they spend. Figure 15 shows respondents’ estimates. 26% 16%48% 10% Figure 14 -Survey Respondents by Industry Government Light Office Service Tech Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 48  Packet Pg. 158 of 193  13 Q14. What is your annual salary? (This question will help us determine eligibility for PATMA transit benefits and improve program offerings.) 21% 19% 32% 21% 7% Figure 15 -Estimated Personal Monthly Transportation Costs $0-49 $50-199 $200-499 $500-899 >$900 54% 46% Figure 16 -Income Level of Respondents Less than $70,000/year More than $70,000/year Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 49  Packet Pg. 159 of 193  14 Q15. PATMA staff is available to share information about sustainable commute options that may benefit you. Would you like information about trains, bus es, shared Lyft rides, or bicycling incentives? (no pressure, just information). PATMA staff are currently following up with the 132 people who have responded they would like information about alternative commute options. Q16. Are there any issues or concerns you would like to share about your commute? Question 16 gave respondents an opportunity to share insights and feedback related to their commute. The following comments point toward opportunities for additional mode shift through information, rewards, incentives, or new programs from PATMA. Opportunity: Need for a Guaranteed Ride Home program “I have to drive 25 miles to get to work one way, and often times taking highway 101 is my fastest route to getting to work. However, the commute can be unbearable due to extreme traffic even if I bought FasTrak. I am open to taking the train to work since there is a station close by to the office I work at, however there are limited hours from using the train and sometimes my work hours are not set, so I am afraid of using public transit since it would be inconvenient with my hours.” Opportunity: Raise awareness about the Transit app for trip planning and real time transit arrival “The schedule of VTA 40 bus is not consistent and doesn't show up on time.” “Weekends on Saturday and Sunday morning there are problems with the bus. SamTrans is sometimes a problem sometimes not.” Opportunity: Bike safety classes and route planning support “I've considered biking but I'm afraid of getting into an accident biking on El Camino.” “Palo Altans run red lights!” “I walk more than bike, specifically because I have had other bikes and cars not obeying the rules of the road, specifically stop signs, turning left or right. I feel when I bike, I am more likely to be hit by car or other bikers. Walking seems to be safer. Even though I wear bright colors I still have been hit.” Opportunity: More bike racks “More bike racks in downtown Palo Alto sorely needed. More pedestrian streets badly needed.” Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 50  Packet Pg. 160 of 193  15 Opportunity: Share online bike maps “Cycling from downtown PA to Bay Trail involves too much interactions with cars. Especially with cars always opening doors / parking in the Addison Ave / Channing Ave bike lanes. Cycling from Bol Park trail to Foothill bike lanes is also needlessly dangerous, with cyclists having to effectively run through a red light across 3 lanes of traffic due to having no way to trigger the lights.” Opportunity: Share information that PATMA’s Bike Love rewards apply to Caltrain stations as well “At Palo Alto station, especially southbound, the bike train cars are getting quite crowded. Not an issue yet, but is a concern that riders might start getting bumped.” Opportunity: Purchase refurbished bikes for service sector workers below income threshold Opportunity: Bike safety lass, Bike Love app, and Transit app “I drive from San Francisco (94115) to downtown Palo Alto on average a few days per week. The commute gets worse on a weekly basis. I spend about 3, sometimes more, hours in the car per trip to and from the office. I have been interested in exploring publi c transit but live about 2.5 miles from the nearest train station. I will need to bike to the train station and I am concerned about my safety. I am open to giving it a try though. This program is definitely an incentive and made me even more interested in commuting via public transit.” Palo Alto service sector worker Rene taking delivery of a refurbished bike for his commute from Andrew Yee at Bike Exchange “I do want to say how grateful I am for the Caltrain pass, I definitely would like to consider biking to Caltrain, but right now I don’t have a bike, but if I did, I would totally bike to Caltrain or even an electric scooter would work…anyhow, thank you again!” Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 51  Packet Pg. 161 of 193  16 Opportunity: Vanpools for super commuters “I would absolutely prefer to bike, walk or take transit to work, however, I live so far away, this would make for a much longer commute. Remote work for some of the week is the only thing that makes it feasible for me to work for a city so far from my home.” “There are no easy public transportation options for access to City Hall from the city I reside in at the moment.” “Desperate to take public transit. Not enough conveni ent bus lines to make happen.” “I commute really early in the morning, I wonder if there is any assistance for those working in Palo Alto. I live in Los Banos, and unfortunately, there is no train or bus running early around 4:00 am from Gilroy. Is there any organization that can help with the long commute?” Concerns about unhoused population “I park in a public garage with homeless people living there. Safety is a concern. I also got stuck in the garage’s elevator once. That is a concern.” “I have emailed about the state of the garage on High Street. I am not in a position to take public transit to work and this need to park in a garage. I feel unsafe parking in this garage. Please take action to make it feel clean and safe as my company pays money every quarter for me to park there. Thank you.” General compliments “Transit passes are WONDERFUL--give them to EVERYONE who wants them. or at least raise the maximum income for them. People won't abuse them. Whether you do or not, publicize them MORE.” “I'm very happy with the assistance you provide.” [translated from Spanish]: “I'm worried they will stop this program.” Key Insights When the pandemic started in early 2020, mass transit ridership plummeted. People who could work from home did, while those who had to be physically present to do their jobs fled mass Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 52  Packet Pg. 162 of 193  17 transit for single occupancy vehicles due to health and safety reasons. From pre-pandemic to fall 2021, telecommuting increased while walking and biking fell. Then in the past year, from fall 2021 to fall 2022, transit ridership, carpooling, biking, and walking numbers bounced back up; while single occupancy vehicle commuting fell and the number of survey respondents reporting that they telecommute fell. Data from this commute survey show there are significant opportunities for PATMA to reduce traffic congestion and demand for parking in the two commercial districts. While many commuters who drive single occupancy vehicles to work need their vehicles for various reasons, nearly three-quarters said they were open to a sustainable commute alternative. Over one- quarter of SOV drivers live less than one mile from a transit pipeline. And of the respondents living less than five miles from work, two-thirds are interested or open to switching to active mobility options. Conclusions Given the openness of respondents to sustainable commute modes and their proximity to transit pipelines or short commute from home, these survey results point to opportunities to mode shift more workers who commute to Palo Alto with information, equipment, incentives, and rewards. Conducting additional outreach to share information about train schedules and stations, rapid bus schedules and routes, safer bicycle routes between home and work, Bike Love rewards, and the availability of refurbished bikes in 2023 are the tools PATMA could apply to realize additional mode shift. Item 11 Attachment A -2022 Palo Alto TMA Annual Report, Strategic Plan, and Commute Survey        Item 11: Staff Report Pg. 53  Packet Pg. 163 of 193  City Council Staff Report From: City Manager Report Type: STUDY SESSION Lead Department: Administrative Services Meeting Date: May 22, 2023 Report #:2305-1453 TITLE FY 2024 Proposed Operating and Capital Budget - Finance Committee Update and Council Budget Discussion RECOMMENDATION This memorandum will be used to facilitate two discussions: 1) Update by the Finance Committee to the City Council in a study session (May 22, 2023) 2) Finance Committee budget wrap-up work. The recommendations below reflect these two bodies of work. May 22nd City Council Study Session 1) Staff recommends that the City Council: •Review the current proposed budget adjustments to the Fiscal Year 2024 Proposed Operating and Capital Budgets and Municipal Fee Schedule in alignment with the work completed by the Finance Committee on May 5, and 9, 2023; •Review the areas of focus for the City Council as identified by the Finance Committee and staff; and •Provide feedback to the Finance Committee on any areas of focus or additional deliberations to review as part of the Budget Wrap-up Meeting scheduled for May 30, 2023. May 30th Finance Committee Budget Wrap-up 1) Staff recommends the Finance Committee: a. Review and discuss: i. Additional information provided as requested by the Council, Committee, or staff ii. Summary of current budget adjustments to the Fiscal Year 2024 Proposed Operating and Capital Budgets and Municipal Fee Schedule in alignment with the work completed by the Committee May 5, and 9, 2023 and the full Council May 22, 2023; and Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 1  Packet Pg. 164 of 193  b. Recommend to the City Council: i. Adoption of the FY 2024 Proposed Operating and Capital Budgets and Municipal Fee Schedule (Staff report 2304-13860F 1), amended by the actions outlined in this report in ‘Tables1: Summary of Tentative Revisions to the FY 2024 Proposed Budget,’ with greater detail in ‘Table 2: Full List of Tentative Recommendations by Finance Committee,’ and as further amended in the wrap-up discussion; and ii. Approve the FY 2024-2028 Capital Improvement Plan, amended by the actions outlined in this report and as further amended in the wrap-up discussion. EXECUTIVE SUMMARY This memorandum follows the Finance Committee review of the FY 2024 Proposed Operating and Capital Budgets and Municipal Fee Schedule, and includes additional information and recommended changes for further review with the City Council. The proposed budget uses a two-year balancing strategy that leverages one-time surplus funding to bridge shortfalls in FY 2024 and FY 2025 while continuing to invest in priority services, infrastructure, and saving for long-term liabilities. In addition, the proposed budget recommends a measured approach to using one-time surplus, setting aside a higher BSR reserve, and limiting ongoing costs to mitigate the potential for greater future deficits. Overall, the Finance Committee spent 14 hours reviewing the budget materials and supplemental memoranda discussing the FY 2024 Proposed Operating Budget, Capital Budget, and Municipal Fee Schedule. After reviewing the $975 million proposed budgets, the committee tentatively recommended recognizing additional funding of $9.0 million in the General Fund offset by the addition of $7.8 million in expenses. This tentative recommendation reflects a 2-year budget strategy with $1.2 million in excess funds in FY 2024 and a small deficit of $300,000 in FY 2025. Adjusting for these tentatively recommended changes, the Finance Committee preliminary recommendations increase the projected FY 2026 shortfall from $6.2 to $8.8 million. In light of the additional ongoing expenditures preliminarily recommended by the Finance Committee, staff believes it important to reiterate the basis for constraining additional expenses. It was unusual for staff to recommend a budget with discretionary spending while also projecting a deficit in outer years; however, this recommendation took into consideration a number of known variables that could cushion economic volatility in the years ahead. Furthermore, the nearly $8 million in new activities (versus the $2.25 million anticipated by staff) will impact organizational capacity to accomplish already established priorities. Staff therefore recommends the Finance Committee and City Council to further prioritize their recommended focus areas. Options to support further prioritization are presented in this report. It should also be noted that a benefit of conservative budgeting for the past several years has been furthering the City’s commitment to addressing long-term infrastructure and pension liabilities. 1 https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy-2024-city- budget/proposed/municipal-fee-schedule-amendments-fy24.pdf Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 2  Packet Pg. 165 of 193  BACKGROUND AND ANALYSIS During budget deliberations on May 5 and 9, the Finance Committee completed a detailed review of the FY 2024 Operating Budget, Capital Budget, and Municipal Fee Schedule. Public comment was incorporated at each service area to provide opportunities for community input in the decision-making process. The Finance Committee reviewed individual budget sections by Department for tentative approval of the budget, potential amendments, and requests for additional information to aid in their review. This report provides the status of the Finance Committee’s review for further discussion and feedback from the full City Council focusing on the recommended amendments to the Proposed Budgets transmitted at the May 1, 2023 City Council Meeting. The Finance Committee will reconvene on May 30 (Budget Wrap-up) to finalize recommended amendments to the Proposed Operating and Capital Budgets and Municipal Fee Schedule. These amendments will be included at the June 19 City Council meeting for budget adoption. As a reminder, the FY 2024 Proposed Budget pivots from the COVID-19 pandemic recovery period and into a steadier state or “new normal”. The proposed budget uses a two-year balancing strategy that leverages one-time surplus funding to bridge shortfalls in FY 2024 and FY 2025 while continuing to invest in priority services, infrastructure, and savings for long-term liabilities. Going into FY 2024, the City continues to rebound from pandemic-related losses; however, staff remains cautious of mixed economic indicators that suggest potential economic risk. Staff sought to provide a budget that proposes a measured approach to using one-time surplus, setting aside a higher BSR reserve, and limiting ongoing costs to mitigate the potential for exacerbating future deficits. In order to balance the Council’s significant list of objectives for 2023, staff set aside $2.25 million for the City Council to prioritize and allocate as part of this budget process. This is a deviation from prior years where the proposed budget was balanced within $250,000 to $700,000 leaving little room for net new expenditures and requiring greater prioritization by the Council during the budget process. To support this significant level of funding for Council allocation, staff provided a list of options to aid in allocation of these funds. A complete list, referred to as “Tier 2” proposals, was transmitted in the FY 2024 Proposed Operating Budget Transmittal Letter Attachment C. An additional layout of this list was provided at the request of the Committee at places1F 2 and is attached to this report for ease of reference (Attachment A) indicating the status of proposals as 'Tentatively Recommended' or placed in the 'Parking Lot' for further consideration. Staff anticipated expenses totaling $2.25 million. The nearly $8 million of additional expenses tentatively recommended will require additional support resources, both administrative and programmatic. It also increases exposure to economic volatility. It was unusual for a staff to recommend a budget that reflects a deficit in the outer years – in this case -a $6.2 million deficit in FY 2026. However, this recommendation took into consideration the opportunities and challenges that may materialize ahead and managed these risks accordingly. Some variables considered include: 2https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy-24- proposed/2023-council-priorities-objectives.pdf Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 3  Packet Pg. 166 of 193  - Higher reserve levels and/or surplus funds at year end can provide cushion should economic trends reverse or serve as a bridge to stabilize volatility should deficits materialize. - Expected contract negotiations may negatively impact the forecasted deficit in FY 2026 with higher than forecasted costs. - Council could choose to change the natural gas equity transfer (measure L) in future years to help cure future deficits. As outlined in the tentative recommendations made by the Finance Committee, staff agree with the Committee that the variables outlined in their recommended adjustment to sources of funds are based in fact. However, fully allocating these funds for programs and services increases the City’s volatility risk exposure to an uncomfortable level. This works counter to a key principle of this FY 2024 Proposed Budget, to continue to stabilize the organization enabling focus on critical priorities, versus change management driven by volatility. 1) SUMMARY OF RECOMMENDED ADJUSTMENTS TO THE FY 2024 PROPOSED BUDGET Below is a comprehensive summary of recommended balancing actions either at the recommendation of the Finance Committee or additional adjustments at the behest of staff. As noted above, staff reiterates the basis for limited additional expenses through the proposed balancing strategy of $2.25 million in additional Council priority funding, recognizing limited organizational capacity, budget constraints, and continued unknows that exist. Additional options to consider include: •The Council could revisit priorities not funded as part of the FY 2024 Mid-Year Budget review and the FY 2025 budget process. •Should the Council be interested in discussing options to funding Council priorities at something greater than $2.25 million but less than $8 million, staff will be prepared to support this discussion. Scaling back would not result in these important objectives from being delivered. As noted, Council can revisit these focus areas as part of the FY 2024 Mid-Year Budget review and the FY 2025 budget process. Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 4  Packet Pg. 167 of 193  This table is followed by more detailed information for: a) Finance Committee Tentatively Recommended Adjustments and Revised Balancing Strategy, and b) Additional Staff Recommended Adjustments. Table 1: Summary of Tentative Revisions to the FY 2024 Proposed Budget $'s in thousands Proposed Revenue & Reserves:$274,944 Revenue Adjustments Finance Committee Tentative Adjustments to Proposed Budget Measure K Housing and Homeless Services 750 FY 2023 projected additional surplus funds 4,000 Gas Equity Transfer increase to 18% (from 15.5%) - Begin FY 2025, approx $1M additional revenue annually FY23 & FY24 Homekey Operations Savings (to be reallocated to CIP project gap)2,000 Finance Committee Tentative Adjustments Subtotal $6,750 Staff Additional Recommended Adjustments to Proposed Budget None Total Revenue Adjustments $6,750 $281,694 Proposed Expense:$274,944 Expense Adjustments Finance Committee Tentative Adjustments to Proposed Budget Investments from Tier 2 Organized by Council Priority - Economic Recovery and Transition 395 - Climate Change & Natural Environment: Protection & Adaptation 1,460 - Housing for Social & Economic Balance (incld. CIP gap for Homekey project)2,750 - Community Health & Safety 1,427 - Other Enhancements 1,740 Eliminate "Council Priorities Reserve"(2,250) Finance Committee Tentative Adjustments Subtotal $5,522 Staff Additional Recommended Adjustments to Proposed Budget Investments from Tier 2 Administrative Support Needs - Legal Support (staff and/or equivalent outside counsel)360 - Procurement Support (staff)200 - Recruitment Support (staff and hourly)277 Technical Adjustment Staffing realignment for S/CAP (delete 2.0 Sr. Engineer and Prin. Resource Planner, add 1.0 Assist. Director)- Staff Recommended Adjustments Subtotal $837 Total Expense Adjustments $6,359 $281,303 Revised Expense FY 2024 General Fund Revised Revenue Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 5  Packet Pg. 168 of 193  a) Finance Committee Tentatively Recommended Adjustments The summary tables below reflect the tentatively recommended adjustments and items in the Parking Lot for further consideration. Tier 2 proposals are identified with “T2” at the beginning of the title. More information and further descriptions for the recommended changes and parking lot items are outlined in this memorandum for reference. Adjusting for tentatively recommended changes, the FY 2026 shortfall is expected to increase from $6.2 million to $8.8 million. This adjusted deficit does not contemplate items in the Parking Lot, or any further investments through budget amendments approved by the City Council, or the FY 2025 Proposed Budget. For example, the Council has approved over $600,000 of budget amendments in FY 2023 in the General Fund (excluding Mid-Year Budget actions). Further, it does not contemplate costs for significant projects that are on the horizon but don’t have confirmed timelines or costs. A complete list of these “known/unknown” projects is available in the FY 2024 – FY 2033 Long Range Financial Forecast (LRFF) (CMR 2301-07532F 3, Attachment A), and includes items such as the Parks Master Plan, Racial Equity Work, Cubberley Community Center Concept Plan, and new labor agreements beginning in FY 2026. For demonstrative purposes, if the adjusted deficit of $8.8 million were resolved on a one-time basis in FY 2026 using the BSR, this would result in a BSR level of 16.9%, below the 18.5% target by $6.4 million. Using one-time reserves to fund ongoing expenses could put the City in a more unsustainable financial situation. Table 2: Full List of Tentative Recommendations by Finance Committee Dept GENERAL FUND – Tentatively Recommended Adjustments to the FY 2024 Proposed Budget FY 2024 FY 2025 Ongoing NON Beginning Balance – City Council Priorities Reserve (2 years) & LRFF (Ongoing) $2,250,000 $2,250,000 $(6,200,000) NON Measure K Housing and Homeless Services*750,000 800,000 800,000 NON FY23 Surplus Major Tax Revenues 2,500,000 -- NON FY23 Vacancy Savings ($1-2M)1,500,000 -- NON Gas Equity Transfer from 15.5% to 18.0% in FY25 -1,000,000 1,000,000 NON FY23 & FY24 HomeKey Operations Savings**2,000,000 -- Subtotal Sources (Revenue)$9,000,000 $4,050,000 $1,800,000 Economic Recovery & Transition (ERT) CMO T2: Economic Development Assistant (145,000)(145,000)(145,000) CMO T2: Car Free Streets (250,000)(250,000)(250,000) Subtotal ERT (395,000)(395,000)(395,000) 3 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1067 Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 6  Packet Pg. 169 of 193  Climate Change & The Natural Environment (CC&NE) PWD UTL T2: Sustainability & Climate Action Plan (S/CAP) Studies (inc. Electric Vehicle and Reliability/Resiliency Strategic Plans) (600,000)-- PWD UTL T2: Sea Level Rise and Adaptation Plan (200,000)(200,000)(200,000) PDS T2: Bird Safe Glass/Wildlife Protection (75,000)-- OOT T2: Transportation Modes and Staffing (185,000)(196,000)(196,000) PWD T2: Full Electric Vehicle Fleet Replacement (50%) (modified from original Tier 2 proposal) (400,000)(400,000)(400,000) Subtotal CC&NE (1,460,000)(796,000)(796,000) Housing for Social & Economic Balance (HS&EB) PDS T2: Regulate Short-term Rentals* (new program to seek fee recovery ongoing) (100,000)(100,000)(100,000) PDS T2: San Antonio Coordinated Area Plan (CAP)* (each CAP $2M, CalPoly concept draft in FY24) (Modified from original Tier 2 proposal) (50,000)(700,000)(700,000) CMO T2: LifeMoves Construction Homekey Facilities (PE- 24005)** (2,500,000)-- CMO T2: Unhoused Residence Services*(100,000)-- Subtotal HS&EB (2,750,000)(800,000)(800,000) Community Health & Safety (CH&S) CSD T2: Youth Mental Health Programs (200,000)-- PDS T2: Seismic Upgrade (additional funding)(75,000)-- PWD T2: Airport Noise Reduction (100,000)-- LIB T2: Library Hours (Modified from original Tier 2 proposal) (145,000)(145,000)(145,000) CSD T2: Eucalyptus Tree Removal (400,000)-- CSD T2: Therapeutics Recreation Program (90,000)(95,000)(95,000) POL T2: Public Safety Dispatcher Staffing (267,000)(285,000)(285,000) Subtotal CH&S (1,277,000)(525,000)(525,000) Enhance Services and Non-Tier 2 CSD T2: Art Center Visitor Staffing (113,000)(113,000)(113,000) FIR T2: Fire Utility Task Vehicle (67,000)(10,000)(10,000) PDS T2: Zoning Code Update (3 years at $1.5M)(500,000)(500,000)(500,000) PDS T2: Permitting and Inspections Operations (115,000)(115,000)(115,000) CSD HSRAP (reflects HRC max requested funding, ongoing costs contingent on potential referral) (150,000)(150,000)(150,000) CSD PWD Cubberley Facility Maintenance and Upkeep (900,000)(900,000)(900,000) NON Neighbors Abroad (20,000)(20,000)(20,000) OOT Palo Alto Transportation Management Authority (PATMA) Citywide Expansion (25,000)(25,000)(25,000) Subtotal Enhanced Services & Non-Tier 2 (1,890,000)(1,833,000)(1,833,000) Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 7  Packet Pg. 170 of 193  Subtotal Uses (Expense)$(7,772,000)$(4,349,000)$(4,349,000) Potential Fund Remaining (Deficit)/Surplus $1,228,000 $(299,000)$(8,749,000) * Measure K revenues for Housing and Homeless Services are expected at $750,000 (FY24), $1.5M (FY25), and $3.0M ongoing. These funds have been recognized to the extent that eligible expenses are recommended: San Antonio Coordinated Area Plan (CAP), short-term rentals, unhoused resident services, and partial funding for LifeMoves construction (PE-24005) ** Project Homekey operations savings in FY23 and FY24 are expected to fund related LifeMoves construction costs Through their discussions, the Finance Committee also put several items in the “Parking Lot” that were not tentatively approved as adjustments to the FY 2024 Proposed Budget – this is discussed in greater detail in section 2 of this report “Finance Committee Parking Lot Items for Further Consideration”. Additional details on the actions in Table 2 above. Tentatively Recommended Adjustments: Revenues During budget deliberations, the Finance Committee recommended several adjustments to increase revenue estimates, including recognizing unallocated Measure K (Business Tax) funds, projected surplus in FY 2023 due to excess tax revenues and vacancy savings, and unspent funding for operations in FY 2023 and FY 2024 for Project HomeKey. Additionally, the Finance Committee recommended an increase in the calculation for the Gas Equity Transfer from 15% to 18% beginning in FY 2025. Overall, these adjustments increased the starting balance from the $2.25 million assumed for the City Council Priority Reserve to $9.0 million in FY 2024. Measure K (Business Tax) for Housing and Homeless Services The Finance Committee recommended that staff recognize $750,000 for Measure K funds that remain unallocated in FY 2024 for housing and homeless services. This revenue source is recommended to offset related expenditures tentatively recommended for San Antonio Coordinated Area Plan (CAP), short-term rental regulation, unhoused residence services, and partial funding for the LifeMoves construction project. The FY 2024 Proposed Budget assumes estimates for the new business tax (Measure K) approved by voters in the November 2022 ballot to fund public safety, affordable housing and homeless services, and transportation and grade separation. The proposed tax is expected to be phased in over the next several years at approximately 30% for each focus area, reaching approximately $9.6 million in annual receipts over 35 years. FY 2024 is the first year in which this tax will be collected and assumes receipts of $750,000 in the Operating Budget for public safety services, and $750,000 in the Capital Improvement Fund for transportation and grade separation projects: Meadow Drive/Charleston Road (PL-24000) and Churchill Avenue (PL-24001). An additional $750,000 is expected for affordable housing and homeless services that remains unallocated in the proposed budget. Overall, Measure K revenues for housing and homeless services are expected to be phased-in at $750,000 in FY 2024, $1.5M in FY 2025, and $3.0M ongoing. These revenues have been recognized to the extent that the Finance Committee tentatively recommended a qualifying expense. Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 8  Packet Pg. 171 of 193  FY 2023 Projected Surplus: Excess Tax Revenues and Vacancy Savings At the Budget Overview Study Session on May 1, the City Council requested that staff provide updated financial projections. Staff provided this follow-up in the staff presentation for Item #1 and the At-Places memo on May 5. Staff estimates that major tax receipts may exceed budget estimates up to $9.0 million in FY 2023. Almost 75% of the estimated surplus ($6.5 million) is already included in the FY 2024 Proposed Balancing Strategy; this lower level of funding aligns with a moderately conservative approach to consider economic uncertainties that may impact tax receipts in the near-term. The difference of $2.5 million is recommended by the Finance Committee to be recognized as additional revenue, adjusting revenue assumptions to recognize the full $9.0 million in potential surplus. As of May 2023, the vacancy rate for the General Fund is 11.6%. Vacancy savings from Public Safety positions are typically exhausted by uses such as backfill, hire ahead programs, and overtime. Adjusting for Public Safety, the General Fund has a vacancy rate of 8.3% and budgeted vacancy savings of approximately 3%. Consistent with recent years, staff projects $1-2 million in savings above budget estimates. This amount is lower than the General Fund vacancy rate of 8.3% (excluding Public Safety) as compared to budgetary estimates of approximately 3% due to departmental uses of vacancy savings for other staffing strategies, such as filling staffing gaps by contracting for professional services, hiring ahead for technical positions to allow overlap and smooth transitions, piloting new technologies to increase efficiency in the absence of staff, and supporting a summer internship program. The use of these potential savings may impact staffing strategies in progress or expected throughout the remainder of the fiscal year. Additionally, use of these funds may reduce expense savings that would otherwise be used in accordance with the Budget Stabilization Reserve (BSR) policy to fund Capital Improvement projects and the City’s long-term pension obligations. Of the $1 to 2 million in savings projected, the Finance Committee recommends recognizing $1.5 million. Historically, the use of one-time funds has been used to support capital improvement projects and prefund long-term pension liabilities. Recognizing these funds will preempt this policy and limit the contributions to these long-term investments. - Since establishment of the Pension Trust in 2017, a total of $21.6 million ($16.4 million in the General Fund) has been made to using one-time funds, bringing expected contributions from $45.9 million to $67.5 million through FY 2024. Additional information on historical contributions to the Pension Trust is available in the May 9 At-places memo. - Over the past ten years, beginning in FY 2012, the General Fund has contributed year-end surplus savings above the 18.5% BSR level of $46.4 million to support the Capital Improvement Fund. This funding has been vital in ensuring the City is able to complete priority capital projects such as the 2014 Council Infrastructure Plan projects as well as addressing maintenance and upkeep needs to City facilities and infrastructure. Gas Equity Transfer (FY 2025 and beyond) In accordance with Measure L, the Equity Transfer from the Gas Utility Fund can be up to 18% of annual gross gas retail revenue; however, the City Council has the discretion to set the transfer at a lower percent of revenue. For FY 2024 a rate of 15.5% is recommended which generates a transfer of $7.7 million from the Gas Utility Fund to the General Fund, representing an increase of $0.5 million, or 6.9%, over prior year levels. Beginning in FY 2025, the Finance Committee tentatively recommended increasing this rate to 18%, which will increase the transfer by at least $1.0 million annually. The Equity Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 9  Packet Pg. 172 of 193  Transfer from the Gas Utility Fund will be reassessed as part of the development of the FY 2025 budget process. FY 2023 and FY 2024 Unspent Operations Funding – Project Homekey As part of the FY 2023 Adopted Budget, the City Council committed $1.0 million per year over seven years (through FY 2029) to partner with LifeMoves in developing a modular interim housing shelter to serve over 200 individuals annually with on-site support services. Once the shelter is complete, this funding is expected to offset a portion of annual operating expenses; however, since no expenses will occur in FY 2023 the Finance Committee recommended that staff proactively recognize the $1.0 million in unspent funds in FY 2023 and transfer them to the Homekey Facilities capital project (PE-24005) in FY 2024. PE-24005 will be used to fund the City’s portion of the capital costs to build the shelter, which is estimated at $4.5 million. As part of the FY 2024 Capital Budget, PE-24005 only had $2.0 million. In order to fully fund the project at $4.5 million, $1.0 million of operations saving from FY 2023, $1.0 million of operating savings from FY 2024, and $0.5 million from Measure K Revenue is recommended to be transferred to PE-24005 to relocate the GreenWaste facility and build the interim housing shelter. To maintain the City’s commitment of $1.0 million for shelter operations over seven years, staff will update the next Long Range Financial Forecast to fund the total $7.0 million with $1.0 million annually in FY 2025 through FY 2031. Tentatively Recommended Adjustments: Tier 2 Proposals During budget deliberations, the Finance Committee tentatively recommended the addition of over twenty Tier 2 proposals, adding $6.7 million ($3.3 million ongoing) to advance City Council priority objectives. The Finance Committee recommended most objectives as originally proposed in the FY 2024 Proposed Budget Transmittal Letter; therefore, this section only includes further discussion for modified proposals. A complete list is included in Attachment A, indicating the status of proposals as 'Tentatively Recommended' or placed in the 'Parking Lot' for further consideration. Full Restoration of Library Hours & Services (Library Hours Only) The Finance Committee provided direction to modify the Tier 2 proposal for “Full Restoration of Library Hours & Services” to tentatively recommend $145,000 to extend hours and place the remaining $261,000 for programming in the Parking Lot. This change will fund an additional 1.0 FTE Senior Librarian position to increase open hours at the Children’s Library branch by offering an additional sixth open day per week on Mondays. This represents an increase from five open days per week at the Children's, Downtown, and College Terrace Libraries, and seven open days per week at the Mitchell Park and Rinconada Libraries. Annual open hours are expected to increase from 12,688 to 13,104 and bring open hours closer to the pre-pandemic level of 13,520. San Antonio Coordinated Area Plan (CAP) The Finance Committee provided direction to modify the Tier 2 proposal “Construct preliminary schedule for starting new coordinated area plans for San Antonio Road, California Ave, Downtown, and El Camino Real” to begin with the San Antonio Road CAP. The committee also modified the funding strategy to begin in FY 2024 with $50,000 and directed staff to explore a potential collaboration opportunity with California Polytechnic State University students to draft a working concept of a San Antonio coordinated area plan. This initial funding will support related travel, research, consultant Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 10  Packet Pg. 173 of 193  and/or part-time staff for these efforts. The working concept is a starting point for the larger CAP process, which is still estimated at $700,000 over three to four years, although the ultimate cost of each plan will depend on size and complexity. Full Electric Vehicle Fleet Replacement (50%) The Finance Committee provided direction to modify the Tier 2 proposal for “Full Electric Vehicle Replacement” to tentatively recommend 50% implementation and place the remaining 50% in the Parking Lot for further consideration. Funding of $1.3 million ($0.4 million from the General Fund) will allow staff to replace nearly all the vehicles and equipment with electric vehicles in the Scheduled Vehicle and Equipment Replacement - FY 2024 capital project (VR-24000). Four police pursuit-rated vehicles will be replaced with hybrid vehicles rather than electric vehicles, and some vehicles will be deferred to future years to be replaced as funding for fleet electrification is phased in and electric vehicles become more widely available. Transfers from the General Fund and applicable Enterprise Funds to the Vehicle Maintenance and Replacement Fund will fund these additional costs to maintain fiscal health in the 5-year CIP. This will be an ongoing investment, with additional funding phased in, at the discretion of the City Council and availability of electric vehicles for fleet replacement needs. Art Center Visitor or Installation Staffing During budget deliberations, the Finance Committee considered funding one of two Tier 2 proposals for the Art Center: “Art Center Program Visitor Services Staffing” or “Palo Alto Art Center Exhibit Art Installation Crew”. At the May 9 meeting, the Finance Committee reviewed an alternative proposal from the Community Services Department that would partially fund both the Art Program Visitor Services Staffing and Art Center Program Installation Crew Tier 2 proposals, which was brought forward in an At Places Memo. The Committee decided to not move forward with the alternative proposal in their tentative recommendation but gave the department direction to select either initial proposal based on the greater departmental need, to Council as a part FY 2024 budget process. In response, the Community Services Department has modified its alternative proposal for further consideration to add one Program Assistant I (0.75 FTE for the Art Center Visitor Staffing, a benefitted position) and add three staff specialists (0.27 FTE for the Art Center Installation Crew) to reduce the total cost and restore funding to both service areas. This modification reduces the alternative proposal cost to approximately $124,000 annually from $171,000. In addition, the increased hours of operation for the Art Center are anticipated to generate $10,000 in additional revenue annually. Although this partial restoration for the Art Center Installation Staffing is not expected to provide support for the Public Art Program, it will enhance the quality of services for the Art Programming while efficiently managing City resources. Other Tentatively Recommended Adjustments During Budget deliberations, the Finance Committee tentatively recommended $1.1 million in FY 2024 and ongoing for several adjustments not related to Tier 2 proposals. These adjustments are discussed below. Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 11  Packet Pg. 174 of 193  Human Services Resource Allocation Process (HSRAP) (reflects Human Relations Commission (HRC) maximum requested funding) The Finance Committee tentatively recommended allocating an additional $150,000 in funding to HSRAP in addition to an increase of $50,000 which was already a part of the FY 2024 Proposed Budget. This will increase the total HSRAP allocation by $200,000 for a total of $851,035 in FY 2024 and augment HSRAP funding for FY 2025 by $200,000. The HRC has outlined spending plans (up to $200,000) if additional funds for HSRAP are appropriated during FY 2024 budget process. The contingency plan was approved on April 27, 2023, by the HRC3F 4. Neighbors Abroad A recommendation was made through public comment to add $20,000 in FY 2024 and ongoing as a reimbursable stipend for the Neighbors Abroad non-profit to support Palo Alto’s nine sister city relationships. The non-profit supports economic development through bringing delegates from the sister cities to Palo Alto, manages student exchanges, encourages diversity, equity, and inclusion (DEI) by supporting businesses in Palo Alto aligned with sister cities, and facilitates sustainability through projects like carbon offset in Oaxaca and rainwater capture in Yaxe. The Finance Committee tentatively recommended adding $20,000 annually to reimburse the non-profit for costs to host and entertain visiting delegations. Palo Alto Transportation Management Authority (PATMA) Geographic Expansion The Finance Committee requested information regarding the ability of the PATMA to provide services outside the downtown area. The FY 2024 Proposed Budget funds $200,000 in the University Avenue Parking Fund for the PATMA to reduce the number of single occupancy commuters in the downtown area by providing program administration services including but not limited to outreach, transit pass distribution, and transit pass monitoring. The University Avenue Parking Funds are limited by policy to services in the downtown business district. In order to expand the PATMA services citywide in FY 2024 and ongoing, the Finance Committee tentatively agreed with the staff recommendation to maintain the total amount of the contract with PATMA; however, $25,000 of the contract would be funded from the General Fund to cover the administrative costs for work beyond downtown. Cubberley Facility Maintenance and Upkeep The Finance Committee requested information about operating and maintenance costs that are funded in the Cubberley Property Infrastructure Fund. The FY 2024 Proposed Budget funds approximately $0.9 million for operating and maintenance related salaries and benefits and contractual services to support the 35-acre site with 180,000 square feet of building space comprised of 19 wings of classroom spaces, two gymnasiums, a pavilion, and a theater. Pursuant to Section 8 of the 7/1/2020 Cubberley lease agreement, the City’s maintenance obligations for both the Palo Alto Unified School District (PAUSD) owned and City owned portions of Cubberley include all interior and exterior work and common areas of the property. The lease requires PAUSD to reimburse their pro rata share (53.12%) of these costs to the City. Below is an abbreviated table of FY 2024 Budget allocations related to Cubberley: 4 https://cityofpaloalto.primegov.com/Portal/viewer?id=1398&type=2 Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 12  Packet Pg. 175 of 193  Table 3: Summary of FY 2024 Proposed Budget for Cubberley FY 2024 Proposed Budget $ in thousands General Fund Cubberley Infrastructure Fund - Ops Cubberley Infrastructure Fund – Capital Total Revenue Transfer from General Fund $1,864 $1,864 PAUSD Reimbursement $1,553 $1,553 Rental Income (short and long-term tenants) $2,795 $2,795 Revenue Total $2,795 $0 $3,417 $6,212 Expense Salaries & Benefits $980 $707 $47 $1,733 Contract Services $24 $118 $4,039 $4,181 Other Expense $38 $39 $76 Utilities (& allocated charges)$788 $788 Cubberley Lease $3,489 $3,489 Landscaping $59 $59 Transfer to Cubberley Infrastructure Fund $1,864 $1,864 Total Expense $7,182 $922 $4,086 $12,190 Expense net transfer to Cubberley Infrastructure Fund $10,326 As part of the FY 2018 Adopted Operating Budget, the City Council approved shifting 1.50 FTE Facilities Technician positions and associated contract and supply costs ($0.4 million) from the General Fund to the Cubberley Property Infrastructure Fund to consolidate facilities operations and maintenance activities in the Cubberley Fund. A portion of the savings from this shift ($44,000) was used to increase funding for HSRAP. These positions perform a wide range of facilities services tasks including maintenance and standard repair of plumbing, electrical, and heating and ventilation systems and equipment. In addition to maintaining these systems, these positions coordinate maintenance tasks including routine drywall installation and repair, window replacement, and painting interior and exterior finishes, as needed. Lastly, these positions manage contractors for various services such as fire alarm and sprinkler inspections, testing, and repair, elevator maintenance, parking lot sweeping, and a variety of on call needs for non-routine repairs. The remainder of the operating and maintenance costs ($0.3 million) were shifted from the General Fund to the Cubberley Maintenance Fund in FY 2019 as part of CMR 99254F 5. This implemented direction from the City Council to find $4.0 million in General Fund savings to fund a $4.0 million transfer to the Pension 115 Trust Fund in FY 2019. These positions perform a variety of daily tasks like custodial work such as sweeping, vacuuming, and polishing floors, furniture, and woodwork and cleaning restrooms, washing windows, and replenishing supplies throughout the facility. In addition, these positions assure the facilities are secured daily by turning off lights and locking doors and windows, set up rooms for 5https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager- reports-cmrs/year-archive/2018/9925.pdf Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 13  Packet Pg. 176 of 193  meetings, and maintain a log of observed facility deficiencies to prepare service call requests. This funding is also used to cover the costs of landscaping services at Cubberley. The landscaping contract for the City is managed by the Community Services Department and the costs are allocated citywide as part of the cost allocation plan. Since FY 2019, the overall operating and maintenance costs at Cubberley have increased from $0.7 million annually to $0.9 million in FY24, an average of 5% per year, mainly due to the increase of Salary and Benefit costs. The Finance Committee tentatively recommended shifting the $0.9 million for operating and maintenance related costs from the Cubberley Property Infrastructure Fund to the General Fund in FY 2024 and ongoing. This action is intended to preserve funding in the Cubberley Property Infrastructure Fund for capital related expenses at the Cubberley property. b) Additional Staff Recommended Adjustments In addition to the tentative adjustments outlined by the Finance Committee, staff recommends adjustments for several items requiring technical corrections to align the budget with anticipated activity levels and changes that occurred following the release of the FY 2024 budget: Administrative and Program Support for Finance Committee Recommended Adjustments At the May 5 and 9 meetings, the Finance Committee tentatively approved significant additions of expenses and staffing. These represent new programs, complex projects, and ambitious service enhancements. This work will require administrative support to implement and execute. Staff recommends the following adjustments to assist in the administration of services to the community as recommended for addition by the Finance Committee. It is also likely that additional program staffing may be needed to support the increased number of active projects in limited areas such as planning. Table 4: Support Staffing to Align with Tentative Recommendations Department Position/Service Adjustment General Fund Cost Administrative Services Purchasing support (1.00 FTE Contract Administrator) $200,000 City Attorney’s Office Legal support (1.25 FTE Assistant City Attorney or equivalent outside counsel resources) $360,000 Human Resources Recruitment support Tier 2 & Organization Need (1.00 Senior Human Resources Administrator and two 0.48 FTE Management Specialists) $277,000 TOTAL $837,000 The above list represents a minimum of staff’s recommended restorations of administrative and internal support functions that includes a variety of work to ensure that operations remain in compliance with state and federal regulations; the City’s Charter and Municipal Code; health and safety guidelines and directives; and, through recruitment, that staffing levels are maintained for all of these requirements to be met. Administrative support is critical in ensuring the ability to deliver frontline services across the organization. Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 14  Packet Pg. 177 of 193  -Administrative Services: The procurement team is instrumental to the beginning of most of these investments, supporting the public solicitation process for professional services and capital investment. Therefore, an additional resource of 1.00 FTE Contract Administrator will allow for capacity to address the Finance Committee‘s tentatively recommended actions. Staff already have a recruitment underway for this position classification, which would be used to fill this position more quickly, and aid in the ability to support the procurement needs related to the Tier 2 items. -City Attorney’s Office: Depending on project timelines, the proposed Tier 2 items will require an additional 1.0 to 1.25 FTE attorney or the equivalent in outside counsel resources. The Zoning Code update and San Antonio Coordinated Area Plan/Concept Plan will require significant legal support. Short Term Rental Regulations and Airport Noise will also require added resources. Tier 2 items will progress in the same timeframe as implementation of the Housing Element, which will require very significant legal support for the next 18-24 months. -Human Resources: Human Resources recommends the continuation of two 0.48 FTE Management Specialists, currently funded by full-time recruitment position vacancies. These Management Specialists will support the recruitment efforts for the Finance Committee’s tentatively recommended actions; however, once the full-time recruitment positions are filled, the Management Specialist positions will no longer be needed. Staff also acknowledges that the Committee and Council have identified a desire to increase the pace at which vacancies can be filled and a 1.00 FTE Senior Human Resources Administrator is recommended to aid this. Each recruiter can support on average 30 recruitments, and this additional staff could provide capacity to support more recruitments simultaneously. OTHER FUNDS Various Utility Funds Sustainability & Climate Action Plan Staffing Realignment Staff recommends a realignment of staffing to oversee the S/CAP staffing resources to better support this Council priority and the upcoming three-year workplan. Recently, the Council approved the addition of two staff positions, 1.0 Senior Engineer and 1.0 Principal Resource Planner in the Public Works and Utility Departments. Staff recommends the elimination of these positions offset by the addition of 1.0 Assistant Director in the Public Works Department. This will consolidate and unify resources between these departments. There is no impact to the General Fund as this staffing is funded by various utility funds and is expected to result in some savings overall. If approved, staff would adjust the Table or Organization authorized staffing levels to align with this action. Various Other Funds Several of the tentatively recommended items in the General Fund have impacts to other funds. This table outlines the adjustments needed in other funds to balance the transactions across all funds citywide that are currently tentatively recommended by the Finance Committee. Pending further adjustments, staff will make these technical adjustments to align with the direction of the Council and Committee as part of the documents for Budget adoption in June. Examples of these types of clean-up transactions will include but are not limited to: Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 15  Packet Pg. 178 of 193  - Transferring General Fund operating savings of $2.0 million to the Capital Improvement fund to reallocate for the Homekey Facilities capital project (PE-24005) - Increasing funding in the Vehicle and Maintenance Fund to fund the additional cost of electric vehicle replacement ($1.3 million) and allocating $0.9 million to funds other than the General Fund that use the vehicles Capital and Enterprise Funds Reappropriations and Technical Adjustments to Capital Projects Staff is currently working on the second round of capital reappropriations to recommend shifting unspent funds in capital projects from FY 2023 to FY 2024. These recommended reappropriations will be included as recommended adjustments to the FY 2024 Capital Budget as part of the Council Adoption staff report on June 19. In addition to the reappropriations, several technical adjustments may be needed to some capital projects based on actions that happen at the end of FY 2023. These technical adjustments, if any will also be included as recommended adjustments to the FY 2024 Capital Budget as part of the Council Adoption staff report on June 19. Stormwater Management Oversight Committee Review of the FY 2024 Stormwater Management Fund Budget On April 6, 2023, the Stormwater Management Oversight Committee met to discuss the Fiscal Year 2024 proposed Stormwater Management Fund budget and compared it with the provisions of the Storm Water Management Fee approved by Palo Alto property owners in 2017. The Committee concurred that funding generated by the Storm Water Management Fee will be applied solely to fund the capital improvement projects, green stormwater infrastructure projects, innovative stormwater projects, enhanced maintenance of storm drain system, and storm water quality protection programs specified for implementation in the ballot measure in Fiscal Year 2024. The Committee submitted a letter (Attachment B) for the Finance Committee and City Council’s review. Planning and Transportation Commission Review of the New Projects in the 2024-2028 Capital Improvement Plan On May 10, 2023, the Planning and Transportation Commission (PTC) reviewed the 22 new projects in the 2024-2028 Capital Improvement Plan for each of the project’s compliance with the City’s 2030 Comprehensive Plan. The Commission determined that all 22 projects are in compliance with the Comprehensive Plan and submitted a Letter of Conformance (Attachment C) for the Finance Committee and the City Council’s review. 2. FINANCE COMMITTEE “PARKING LOT” ITEMS FOR FURTHER CONSIDERATION During budget hearings, the Finance Committee moved items to the ‘Parking Lot’ for further consideration. This section outlines those items and provides additional information requested by the Finance Committee and/or provided at staff’s behest regarding the items in the parking lot. These items are listed below for additional consideration by the City Council as potential adjustments to the budget. Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 16  Packet Pg. 179 of 193  Table 5: Finance Committee “Parking Lot” Items Dept GENERAL FUND: Parking Lot Items for Consideration FY 2024 (Cost)/Savings Ongoing (Cost)/Saving NON Unspent City Council Contingency 125,000 - Subtotal Sources (Revenue)$125,000 - CSD HSRAP (inc. from HRC max based on GF)(150,000)(150,000) CSD T2: Volunteer Coordinator for JMZ (105,000)(110,000) LIB T2: Library Programs (261,000)(261,000) PWD T2: Cypress Lane Alley Improvements (400,000)(20,000) PWD T2: Full Electric Vehicle Fleet Replacement (100%)(400,000)(400,000) PWD T2: Community Engagement Quarterly Newsletter (100,000)(100,000) Subtotal Sources (Expense)$(1,416,000)$(1,041,000) Potential Funds Remaining (Deficit)/Surplus $(1,291,000)$(1,041,000) Unspent City Council Contingency The FY 2024 Proposed Budget includes a City Council Contingency of $125,000 for allocation at the City Council’s discretion. At the conclusion of budget hearings on May 5 and 9, this amount remains unspent and available for use. Full Restoration of Library Hours & Services (Library Programming Only) The Finance Committee provided direction to modify the Tier 2 proposal for “Full Restoration of Library Hours & Services” to tentatively recommend $145,000 to extend hours and place the remaining $261,000 for programming in the Parking Lot. The allocation of $261,000 will enable the hiring of two additional full-time Librarian positions, significantly expanding the breadth of services tailored to community needs. This investment is designed to enhance collaboration with local organizations and stakeholders, reinforcing the library's role as a community nexus. In response to urgent mental health needs, the Library Department will forge partnerships with local entities to roll out wellness initiatives for all ages, placing particular emphasis on programs for seniors and teenagers. With Palo Alto's senior population on the rise, the Department is committed to enhancing its services for this group, providing recreational activities aligned with their interests and ensuring easy access to information about other relevant resources. Moreover, this funding will facilitate increased programming at the College Terrace and Downtown branches, transforming them into vibrant community hubs that cater to families, seniors, and local businesses. The number of annual programs offered will increase by approximately 650, reaching the previous pre-pandemic level of 1,200 annual programs. JMZ Volunteer Coordinator This proposal will increase the current Volunteer Coordinator from a 0.48 FTE to a 1.00 FTE. In FY 2023, the JMZ had 15 active volunteers who will have provided approximately 3,900 hours of community service in areas such as zoo operations, maintenance, admission support, and Discovery Program Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 17  Packet Pg. 180 of 193  facilitation. The additional staffing allocation will facilitate a greater number of volunteers, up to 40, which would provide an additional 4100 hours of volunteer time. The additional volunteers would enhance current service areas as well as provide the opportunity to expand current programming and bring back successful programs such as family and teen volunteering for greater community engagement. Full Electric Vehicle Fleet Replacement (100%) The Finance Committee provided direction to modify the Tier 2 proposal for “Full Electric Vehicle Replacement” to tentatively recommend 50% implementation and place the remaining 50% in the Parking Lot for further consideration. Funding of $2.6 million ($0.8 million from the General Fund) will allow staff to replace all the vehicles and equipment with electric vehicles in the Scheduled Vehicle and Equipment Replacement - FY 2024 capital project (VR-24000). Transfers from the General Fund and applicable Enterprise Funds to the Vehicle Maintenance and Replacement Fund will fund these additional costs to maintain fiscal health in the 5-year CIP. This will be an ongoing investment, with funding increased for full electric fleet replacement, at the discretion of the City Council and availability of electric vehicles. Human Services Resource Allocation Process (HSRAP) (above Human Relations Commission (HRC) maximum requested funding) In addition to the Finance Committee’s tentative approval of $200,000 for additional HSRAP funding, they also placed in the parking lot an additional $150,000 allocation to HSRAP, effectively bringing total HSRAP funding to $1,051,035 for FY 2024. Currently, the HRC has only outlined spending plans for an additional allocation of up to $200,000. If the additional $150,000 is approved by Council, staff would need to evaluate how the additional funding would be allocated, whether it is through another RFP process or allocating additional funds to current grantees. Community Engagement Quarterly Mailed Newsletter The Finance Committee discussed this proposal and asked staff for additional information to aid in their decision. The development of a mailed newsletter acknowledges that not all residents receive information the same way and not everyone is online. The quarterly cadence is recommended to share timely information about City Council priorities, City service changes and City program details. The mailed newsletter is a new initiative this year, seeking to further the City Council’s community engagement efforts, help inform the community on City Council priorities, and offers a mix of event details, helpful phone numbers to report issues and concerns, and connect the community together. The newsletter is organized by City Council priority, reinforcing these important initiatives and focus. The anticipated cost of each newsletter is estimated at $25,000, due to printing and mailing costs. Staff continues to explore ways to reduce these costs including insertion into the Enjoy catalog, and other cost sharing ideas. As noted at the Finance Committee meeting, including the newsletter in the utility bills does not reach all households, is limited in space availability and does not allow for timely updates due to the cadence of utility bill timing. Staff leverages the newsletter work, by also sharing an online version. For reference, the inaugural mailed newsletter in digital format can be accessed online at https://www.cityofpaloalto.org/Departments/City-Manager/Latest-News/Palo-Alto-Residential- Newsletter-FallWinter-2022 Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 18  Packet Pg. 181 of 193  3. ADDITIONAL INFORMATION AT THE REQUEST OF THE FINANCE COMMITTEE (POTENTIAL REFERRALS) During budget deliberations, the Finance Committee requested a more in-depth review of summary information or topics not currently included in the FY 2024 Proposed Budget. This section outlines those items and provides additional information. Fire Paramedic Internship Fee Reimbursement As part of the Municipal Fee Schedule review, the Finance Committee requested additional information relating to the Fire Paramedic Internship fee. The Palo Alto Fire Department provides internship opportunities for paramedics as they are required to complete a field internship before obtaining their license by the State. Fees for this internship range between $1,000 - $2,500 in the area. The Fire Department is able to host up to six paramedic students for their internships each year, but typically host less than that amount due to staffing limitations. The City’s paramedic staff must agree to act as the Field Preceptor evaluating student performance. If staff and resources are spread thin, due to vacancies or reductions in budget, the Department elects not to accept interns. The Firefighter Paramedic serving as the preceptor is paid a $600 stipend, which is covered by the fee. Typically, fees are paid by the school and are incorporated into tuition for the student, although sometimes the student pays directly. As revenue is sporadic and minimal, the Department does not budget incoming revenue for this program. When fees are collected, they offset the unbudgeted expense of the stipend. The fee rate currently is low cost recovery when accounting for the staff time required to serve as the preceptor. Staff has noted the items below for the Finance Committee consideration to recommend to the City Council as potential referrals to staff. Coordinated Area Plan (CAP) Process Review On May 5, 2023, the Finance Committee referred examination of the coordinated area plan process to the newly established housing ad hoc committee. This direction was provided in an attempt to streamline the CAP process, given recent state mandates requiring significant housing creation in the near future. Staff will bring forward review of the CAP process for the housing ad hoc committee’s consideration that may ultimately improve this process. Fee Subsidy for S/CAP During the Finance Committee budget hearing on May 9, the Committee referred staff to provide additional detail on a potential electrification subsidy to discount or waive electrification permitting fees through the General Fund. As part of this discussion, the City Manager recommended that staff include information as part of the S/CAP update staff report which is anticipated in June 2023, so no additional referral to staff is needed at this time. Establish HSRAP Allocation at 1% of the General Fund During the Finance Committee budget hearing on May 5, the Committee requested to provide additional detail regarding historical funding levels for general human services (entitlements) and HSRAP. The At-Places Memo on May 9, 2023, provided that information and as a reference point Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 19  Packet Pg. 182 of 193  and total GF budgeted expenses in FY 2001 and FY 2023. This information was requested as a part of a broader discussion regarding whether funding for Human Services and HSRAP should be pegged to a benchmark such as the percentage of General Fund budgeted expenditures. The City currently increases funding to Human Services and HSRAP by a CPI adjustment annually; however, no formal policy is in place tying funding levels to a percentage of General Fund expenditures, but this topic has been discussed on numerous occasions. The additional $150,000 in HSRAP funding proposed in the parking lot, represents an attempt to move funding levels for Human Services and HSRAP closer to 1% of General Fund expenditures through a graduated process over the course of several fiscal years. Staff is recommending deferring putting a formal funding policy for Human Services and HSRAP due to an FY 2024 budget proposal to conduct a Human Needs Assessment Study. The study will comprehensively examine current community needs and trends, the current scope and breadth of services, as well as an evaluation HSRAP process itself. Once the study is completed, staff will be able to better assess community needs and the resources required to effectively address gaps in human services. FISCAL/RESOURCE IMPACT This report is a study session for the City Council to review the Finance Committee’s analysis and tentatively recommended changes to the FY 2024 Proposed Budget. No financial impacts will occur as a result of this report; however, recommendations from this study session will inform the Finance Committee’s final recommendations for adjustments to the FY 2024 Proposed Budget to the City Council for adoption on June 19, 2023. STAKEHOLDER ENGAGEMENT On May 16, 2023, the City conducted a virtual Budget Informational Session with community members to share information about the FY 2024 budget process and receive input from the community for the City Council to consider regarding priorities and service needs. ENVIRONMENTAL REVIEW This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment. ATTACHMENTS Attachment A: Council 2023 Priority Outcomes, Revised for Tier 2 Proposals & Recommended Status Attachment B: Stormwater Management Oversight Review of the FY 2024 Capital Budget Attachment C: Planning and Transportation Commission Review of the New Projects in the 2024- 2028 Capital Improvement Plan Attachment D: Reference: Finance Committee FY 2024 Proposed Budget Review (actions & references) Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 20  Packet Pg. 183 of 193  APPROVED BY: Kiely Nose, Assistant City Manager Lead Staff: Paul Harper, Budget Manager & Jessie Deschamps, Budget Manager Item AA1 Item AA1 Staff Report        Item AA1: Staff Report Pg. 21  Packet Pg. 184 of 193  Attachment A 2023 City Council Priorities and Objectives Council Priority Crossover Estimated Completion Attachment C: Tier 2 Ongoing Net #/Dept. Objective Q1 Q2 Q3 Q4 FY24 Net Cost Cost ECONOMIC RECOVERY AND TRANSITION (ER&T)$395,000 $395,000 Support Economic Recovery and Business Transition x x x x a Adopt a comprehensive Economic Development Strategy x $$145,000 $145,000 X (CMO) x x x x x x b c d Implement or upgrade electronic plan review software without interruption to the permitting process (ERT 9) Implement recommendations in Building and Permit Review Report conducted by the City Auditor Begin stakeholder engagement and implementation of new business tax (Measure K) x x x x xx $ $ N/A N/A N/A N/A Focus on Commercial Corridors, Downtown and California Ave x x x x e f g Begin implementation of next phase of parklet regulations to the community (resources added via staff report) Evaluate opportunities for New Parking Facilities in the University Ave Downtown and direct next steps (ERT 10) Align Business Improvement District (BID) priorities and investments to the Comprehensive Economic Development Strategy(ERT1) Select consultant to conduct a study that informs the development of a permanent car‐free streets ordinance (ERT 6 & 7) x x x xxh $$250,000 $250,000 X (CMO) x x x i j k Approve concept plan for University Ave streetscape and provide direction on capital project funding (ERT 5) Extend temporary closure for car free streets (ERT 6 & 7) Provide direction on citywide retail zoning code changes including retail preservation and neighborhood commercial district specific regulations and CUP thresholds (ERT 4, 12, 13) x xx 2024 CLIMATE CHANGE & THE NATURAL ENVIRONMENT (CC&NE)$ 1,930,000 $ 1,217,000 Climate Change Protection x x x l m n Implement Advanced Metering Infrastructure (AMI) through purchase of meters/equipment for installation(CCPA7) Approve consultant to update Bike and Pedestrian Transportation Plan Approve municipal code amendments for advancing S/Cap goals (specifically facilitate photovoltaic, energy storage system, electric vehicle charging station, and heat pump (water/furnace) installations) (CCPA1) x x x x x x x o p q Approve S/CAP Update and 3‐year workplan (CCPA4) Begin first phase construction for grid modernization and consultant resources to plan for gas transition Install first 1,000 heat pump water heaters through the advanced pilot program and approve expanded full‐scale program x x x x x x r s t Approve advanced pilot program for whole residential home electrification by the end of 2023 (targeted areas) Approve commercial rooftop HVAC electrification advanced pilot program Accept Electric Vehicle Strategic Plan x x xx $ $ $ $ $ $ 200,000 200,000 200,000 $ $ $ ‐ ‐ ‐ X X X (PWD/UTL) x x x x u Accept Reliability and Resiliency Strategic Plan x x (PWD/UTL) v Review preliminary draft S/CAP study discussing workplan resource needs and project funding opportunities (PWD/UTL) x x 2 7 Engage youth in implementation of climate change initiatives, objectives, and goals Discuss plans for commercial dewatering requirements x x $$50,000 $‐ (PWD) Climate Change Adaptation: Flood Protection x x x x x x w Advance the San Francisquito Creek Flood Protection capital project (Reach 2) by the end of 2023, through Council’s JPA representation and any Council approvals involved. Secure funding and approve construction for the Newell Bridge replacement project; advocacy with State legislators educating on project funding needs (CHS10) (Funded in FY 2024 Proposed CIP) x x x x $ $ N/A 200,000 N/A 200,0005Determine next steps for sea level rise and adaptation plan $$X (PWD/UTL) Natural Environment As of 5/18/2023 1 of 4 Item AA1 Attachment A - 2023 Council Priorities & Objectives        Item AA1: Staff Report Pg. 22  Packet Pg. 185 of 193  Attachment A 2023 City Council Priorities and Objectives Council Priority Crossover Estimated Completion Attachment C: Tier 2 Ongoing Net #/Dept. Objective Q1 Q2 Q3 Q4 FY24 Net Cost Cost x x y z 4 6 Approve operations and maintenance agreements with Valley Water purified water facility at LATP Area B (CCPA3) Adopt appropriate changes to the revised Tree Protection Ordinance Initiate zoning changes consistent with the Comprehensive Plan regarding creek corridor setbacks (Staff to request in FY 24 Mid‐Year) Initiate evaluation of strategies to protect natural habitats such as bird safe glass, wildlife protection from light pollution, etc x x x x x x x $ $ N/A N/A $75,000 X XN/A (OOT) S/CAP Sustainable Transportation Modes Staffing $ $ 185,000 800,000 $ $ 196,000 800,000N/A (OOT) Transition to full Electric Vehicle Replacement in FY 2024: a total of $2.6 million ($0.8 M in the General Fund) from $3.4 M to $6.0 M X X (50%)(100%) N/A (UTL) Customer Service Staffing $20,000 $21,000 HOUSING FOR SOCIAL & ECONOMIC BALANCE (HS&EB)$ 3,010,000 $800,000 Advance Renter Protection Policies x x x aa bb cc Approve access to rental units by establishing security deposit limits Provide protections to renters by considering expansion of the just cause eviction ordinance (HSEB16) Implement a rental registry to inform future renter protection policies (HSEB15) x x x x 2024 $ Advance Housing Plans x x x dd Expand housing opportunities through the initiation of a Downtown Housing Plan: approval of project funding and a consultant x $550,000 $‐ (PDS)contract (HSEB10) x x x ee ff gg (PDS) hh Advance local and state housing interests through a HCD‐compliant Housing Element (HSEB5) Advance vision for North Ventura Coordinated Area by adopting a coordinated area plan (HSEB4) Create new affordable housing opportunities through funding such as a housing land trust, in particular, CalCHA x x TBD TBD $ $ $ $ 60,000 100,000 700,000 $ $ $ ‐ x x Explore opportunities to regulate short term‐rentals with Council committee 100,000 700,000 X (PDS) 8x Construct preliminary schedule for starting new coordinated area plans for San Antonio Road, California Ave, Downtown, and El x X ($50K in FY24)(PDS)Camino Real (funding reflects the start of funding needed for ONE plan) Implement Housing Production Policies x x ii jj Codify permanent standards related to the City local SB9 implementation ordinance (HSEB 14) Approve adjusted Accessory Dwelling Unit (ADU) regulations to facilitate production and meet HCD requirements (HSEB9) x x x x x x kk ll Respond to various Grand Jury recommendations related to Housing (HSEB 6, 17, 24) Refine implementation of City’s SB9 objective development and urban lot split standards (HSEB 14) x x x x mm Adopt an ordinance amending the development standards for Stanford‐owned housing opportunity sites nn oo Rezone carryover housing opportunity sites for by‐right dev. when developed w/ 20% lower income affordable housing units x Adopt an ordinance to implement revised development standards for certain properties located in the GM/ROLM to allow for densities up to 90 units/acre x x x 9 10 Evaluate RHNA housing allocation and encourage housing production that reflects the needs of the community (no funding request) Establish an ad hoc committee on housing to review housing policies (no funding request) x x $ $ N/A N/A N/A N/A Support Unhoused Service Initiatives x x x x pp Begin construction in partnership with LifeMoves for Palo Alto Homekey project to provide transitional housing and services for x $ $ 1,500,000 100,000 $ $ ‐ ‐ X ($2.5M)(CMO) unhoused residents (HSEB13) qq Develop a citywide strategy to connect unhoused residents to housing and services x $X (CMO) As of 5/18/2023 2 of 4 Item AA1 Attachment A - 2023 Council Priorities & Objectives        Item AA1: Staff Report Pg. 23  Packet Pg. 186 of 193  Attachment A 2023 City Council Priorities and Objectives Council Priority Crossover Estimated Completion Attachment C: Tier 2 Ongoing Net #/Dept. Objective Q1 Q2 Q3 Q4 FY24 Net Cost Cost COMMUNITY HEALTH & SAFETY (CH&S)$ 1,638,500 $890,000 Mental & Physical Health and Belonging x x rr ss Complete reopening libraries to budgeted level (remains below pre‐pandemic levels) (CHS5) Approval of multi‐year agreement for provisions of animal shelter services (CHS1) (incld. in w/ CSD FY24 proposed dept bgt and CIP) x x $ $ N/A N/A N/A N/Axx x x x tt uu vv 11 (CSD) Expand and enhance community special events with focus on inclusion (linked to activities in ERT) (aligned w/ CSD event staffing request) Approve agreement with PAUSD on long term use of the Cubberley property (CHS2) Evaluate Recreation Wellness Center Feasibility (CHS14) (staffing added during FY 23 Mid‐Year Budget) Evaluate increasing HSRAP funding during the FY 2024 budget process x x x $N/A N/A x $‐$$$$ $ 50,000 $50,000 X X ($150K, HRC ($150K, 1% max)GF) x x 12 13 Facilitate a location for La Comida in North Palo Alto (no funding request at this time) Increase support and funding for youth mental health x $‐$$N/A 200,000 N/A x $‐$$$$‐X (CSD) Invest in Reliable Safety Infrastructure and Systems x x ww Support visible police presence by ensuring stable staffing (recruiting and retention) through hiring ahead program (CHS6)x $ $ N/A N/A N/A (no funding requested at this time) xx Support a diverse community through extension of the Psychiatric Emergency Response Team (PERT) program services to the community through affirmation of continued City financial support (funding in FY 24 Proposed Police Budget) Update without interruption 911 dispatch system (CAD provider) once selected through procurement process (CHS4) Begin construction of the Gas Main Replacement Project 24B x N/A x x x x x x x yy zz x x x x x x x x x aaa Approve updated Local Hazard Mitigation Plan and Community Wildfire Protection Plan (CHS15) bbb Implement Foothills Fire Management Plan (CHS3) ccc Advance final construction phase of Public Safety Building and begin preparations for move‐in (CHS9) ddd Approve next steps for the rebuild of Fire Station No. 4 project (specifically design and entitlements) (CHS17) eee Approve resources and consultant to study and develop seismic and resiliency ordinance (CHS20) Reduction of Noise and Air Quality Pollution x $$75,000 $‐X X x x x x x x fff ggg Update gas‐powered leaf blower ordinance and enforcement plan (CHS16) Implement a strategy for the provision and promotion of unleaded fuel at Palo Alto Airport (CHS12) x x xx x hhh Approval of quiet zone implementation (rail/train crossings) iii Continue engagement with San Francisco Airport on SFO's Ground Based Augmentation System (GBAS) project and other potential (PWD) opportunities to decrease SFO noise impacts on Palo Alto (CHS11) N/A (LIB) Full Restoration of Library Hours & Services TBD $ $ 100,000 406,000 $ $ ‐ 406,000 X (hours) X X (services) N/A (CSD) Eucalyptus Tree Removal N/A (CSD) Therapeutics Staffing N/A (POL) Increase Public Safety Dispatcher Staffing $ $ $ 400,000 90,000 317,500 $ $ 95,000 339,000 X X As of 5/18/2023 3 of 4 Item AA1 Attachment A - 2023 Council Priorities & Objectives        Item AA1: Staff Report Pg. 24  Packet Pg. 187 of 193  Attachment A 2023 City Council Priorities and Objectives Council Priority Crossover Estimated Completion Attachment C: Tier 2 Ongoing Net Cost#/Dept. Objective Q1 Q2 Q3 Q4 FY24 Net Cost ENHANCE SERVICES $ 1,694,500 $ 1,182,000 N/A (CMO) Community Engagement Quarterly Newsletter N/A (CSD) Junior Museum & Zoo (JMZ) Volunteer Coordinator Augmentation $ $ $ $ $ $ $ $ $ $ $ 100,000 105,000 117,000 112,500 41,000 67,000 97,000 40,000 $ $ $ $ $ $ $ $ $ $ $ 100,000 110,000 118,000 118,000 41,000 10,000 10,000 40,000 500,000 115,000 20,000 X X N/A (CSD) Palo Alto Art Center Exhibit Installation Crew N/A (CSD) Art Center Program Visitor Services Staffing N/A (FIR) Fire Services Dispatch Software Data Dashboard N/A (FIR) Fire Utility Task Vehicle (off‐road capabilities) N/A (FIR) Water Recycling Equipment N/A (ITD) Technology Innovation N/A (PDS) Zoning Code Update N/A (PDS) Permitting and Inspections Operations Restructure N/A(PWD) Cypress Lane Alley Improvement X X 500,000 115,000 400,000 X X X TOTAL $ 8,668,000 $ 4,484,000 As of 5/18/2023 4 of 4 Item AA1 Attachment A - 2023 Council Priorities & Objectives        Item AA1: Staff Report Pg. 25  Packet Pg. 188 of 193  Storm Water Management Oversight Committee MEMORANDUM Date: April 6, 2023 To: Honorable Finance Committee of the Palo Alto City Council From: Members of the Storm Water Management Oversight Committee Subject: Review of the Proposed Fiscal Year 2024 Stormwater Management Fund Budget As directed by the City Council, the Committee met to discuss the Fiscal Year 2024 proposed Stormwater Management Fund budget on Thursday, April 6, 2023. Prior to the meeting, Public Works staff provided informational materials about the approved 2017 ballot measure and the proposed budget for the Committee’s review. During the meeting, staff presented information and answered questions from the Committee members. We have reviewed the proposed budget for Fiscal Year 2024 and compared it with the provisions of the Storm Water Management Fee approved by Palo Alto property owners in 2017. We find that the attached spreadsheet describing the proposed budget for Fiscal Year 2024 fairly describes the relationship between the budget and the ballot measure. Staff and the Committee concur that funding generated by the Storm Water Management Fee will be applied solely to fund the capital improvement projects, green stormwater infrastructure projects, innovative stormwater projects, enhanced maintenance of storm drain system, and storm water quality protection programs specified for implementation in the ballot measure in Fiscal Year 2024. Because funds available for green stormwater infrastructure and innovative projects are not being utilized fully, the Committee supports efforts by staff to continue to identify and promote new projects that meet the goals associated with the ballot measure, such as the proposed Green Stormwater Infrastructure capital improvement project. Attachment: Fiscal Year 2024 Proposed Budget Attachment B Item AA1 Attachment B - Stormwater Management Oversight Review of the FY 2024 Capital Budget        Item AA1: Staff Report Pg. 26  Packet Pg. 189 of 193  STORMWATER MANAGEMENT PROGRAM Fiscal Year 2024 Proposed Budget (Amounts in 1000s, as of February 2023) Adopted Budget Adopted Budget Adopted Budget Adopted Budget Adopted Budget Adopted Budget Projection* Proposed Budget* Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 6 Year 7 2018 2019 2020 2021 2022 2023 2023 2024 Revenue Collected Fee Revenue 6,927 7,128 7,449 7,635 7,838 8,167 7,101 8,168 Interest Earnings 130 130 226 153 153 110 145 153 Development Fees, Violation Fines, Other (Includes Grant Funding)**121 120 121 121 697 1,913 1 697 Total Revenue 7,178 7,378 7,796 7,909 8,688 10,190 7,247 9,018 Base Components 4,262 4,244 6,368 6,500 7,669 9,903 3,926 5,020 Base Program (Incl. Flood Control, Engineering and Administrative Support, Water Quality, Emergency Response)2,776 2,645 4,861 4,877 6,125 8,071 2,397 3,209 Storm Drainage Maintenance 1,486 1,599 1,507 1,623 1,544 1,832 1,530 1,811 Project & Infrastructure 2,010 4,248 2,455 3,941 6,267 7,933 3,531 4,769 Capital Improvements Program**- 2,200 412 1,871 4,433 5,860 760 2,273 Recurring System Repair (SD-06101)**400 412 424 437 225 464 1,486 887 Debt Service for Past Capital Projects 947 949 949 949 949 949 949 949 Capital Program Engineering Support 158 182 165 179 155 155 155 155 Green Stormwater Infrastructure (GSI)380 380 380 380 380 380 143 380 GSI - CIP Design/Construction 330 330 340 250 150 150 - 102 GSI - Consulting Services 50 50 40 130 85 85 143 278 GSI - Other unassigned tasks - - - - 145 145 - - Innovative Project 125 125 125 125 125 125 38 125 Innovative Project - GSI Consulting Services & Outreach - 100 100 100 100 100 31 100 Innovative Project - Rebates 125 25 25 25 25 25 7 25 Total Expenses 6,272 8,492 8,823 10,441 13,936 17,836 7,457 9,789 Net Impact 906 (1,114) (1,027) (2,532) (5,248) (7,646) (211) (771) *FY 2023 Projections and FY 2024 Proposed are subject to change as the current fiscal year and budget development process is still in progress. **FY 2024 Proposed includes estimated remaining funding and grant revenue anticipated to be reappropriated from FY 2022. Attachment B Item AA1 Attachment B - Stormwater Management Oversight Review of the FY 2024 Capital Budget        Item AA1: Staff Report Pg. 27  Packet Pg. 190 of 193  May 10, 2023 Honorable City Council C/O City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 RE: Review of 2024-2028 Proposed Capital Improvement Plan (CI P) The Planning and Transportation Commission (PTC) reviewed the 2024-2028 proposed Capital Improvement Plan on Wednesday, May 10, 2023. The PTC determined that the 22 new Capital Improvement Projects included in the 2024-2028 Capital Budget are consistent with the adopted Comprehensive Plan and recommended forwarding this finding to the City Council and Finance Committee. Commissioner Bart Hechtman made the motion and it was seconded by Commissioner Bryna Chang. The motion was approved by a vote of 7-0. Respectfully submitted Doria Summa, Chair Planning and Transportation Commission DocuSign Envelope ID: DF875DD6-E6DF-4948-90A8-2B04B3671E02 Attachment C Item AA1 Attachment C - PTC Review of the New Projects in the 2024-2028 Capital Improvement Plan        Item AA1: Staff Report Pg. 28  Packet Pg. 191 of 193  Attachment D Summary of Finance Committee Review of FY 2024 Proposed Budget (Actions & References) Attachment D - 1 Action Minutes to the Finance Committee Hearings can be found on the City’s webpage here: https://www.cityofpaloalto.org/Departments/City-Clerk/City-Council-Standing-Committees/Finance- Committee. In addition, throughout the Finance Committee Budget Hearings, various memoranda were distributed “At Places” in order to respond to inquiries made by the Committee or provide additional pertinent information at staff’s behest. In addition, summary presentations were given at each hearing providing high level overviews of each item. Specific meetings and reference links to materials are outlined below. May 1, 2023 City Council Meeting Action Minutes: • https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=1456&co mpileOutputType=1 Presentations: • FY 2024 Proposed Budget Overview https://cityofpaloalto.primegov.com/meeting/attachment/1499.pdf?name=Item%204%20Prese ntation • Video: https://youtube.com/watch?v=vRDEmwM2FVE?feature=share May 5, 2023 Finance Committee Action Minutes: • Action minutes are still pending Presentations: • FY 2024 Proposed Operating and Capital Budgets: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=12590&c ompileOutputType=1 Video: https://youtube.com/watch?v=iIBi27tPZQk?feature=share May 9, 2023 Finance Committee Action Minutes: • Action minutes are still pending Presentations: • FY 2024 Proposed Operating and Capital Budgets Continuation: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=12597&c ompileOutputType=1 Video: https://youtube.com/watch?v=D9U17HXJgkU?feature=share List of Supplemental Information provided during Budget Deliberations During the Finance Committee hearings and the City Council update, staff provided additional information to Committee members to assist in the review of the Fiscal Year 2023 Proposed Budget. Below is a list of links to those memoranda: Item AA1 Attachment D - Reference Finance Committee FY 2024 Proposed Budget Review        Item AA1: Staff Report Pg. 29  Packet Pg. 192 of 193  Attachment D Summary of Finance Committee Review of FY 2024 Proposed Budget (Actions & References) Attachment D - 2 • May 5 At Places Memorandum: Capital Reappropriations, staffing & vacancies, contract spend, organization chart • May 9 At Places Memorandum: Additional Information Requested by Finance Committee Additional Information Memos from May 5 (provided at staff’s behest) In previous years, the City Council has made a variety of requests to provide context and/or additional data points of reference to aid in budget deliberations. Staff compiled and transmitted the following items at the May 5, 2023 budget meeting: • Capital Fund reappropriations list • Vacancy report, as of May 2023 • City’s list of lease information • Service provider spend report • Department organization charts • Responses to City Council questions from May 1 Study Session o Hiring status of positions added during FY 2023 o Potential cost savings due to delayed hiring in FY 2024 o Citywide General Expense Reconciliation (FY23 Adopted to FY24 Proposed) o Status of various capital projects (verbal update during Capital Fund Projects Overview) Item AA1 Attachment D - Reference Finance Committee FY 2024 Proposed Budget Review        Item AA1: Staff Report Pg. 30  Packet Pg. 193 of 193