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HomeMy WebLinkAbout2017-09-18 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL TRANSCRIPT Page 1 of 78 Special Meeting September 18, 2017 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:04 P.M. Present: DuBois arrived at 5:40 P.M.; Filseth arrived at 5:10 P.M.; Fine, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Closed Session 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Ed Shikada, Molly Stump, Rumi Portillo, Lalo Perez) Employee Organization: Utilities Management and Professional Association of Palo Alto (UMPAPA) Authority: Government Code Section 54957.6(a). Mayor Scharff: We're going to go into a conference with labor negotiators. I need a Motion to go into Closed Session. So moved, second? MOTION: Vice Mayor Kniss moved, seconded by Council Member Holman to go into Closed Session. Mayor Scharff: All in favor, just raise your hand. That's unanimous. MOTION PASSED: 7-0 DuBois, Filseth absent Council went into Closed Session at 5:05 P.M. Council Member Kou left the meeting at 6:25 P.M. Council returned from Closed Session at 6:31 P.M. Mayor Scharff: … no reportable action. TRANSCRIPT Page 2 of 78 City Council Meeting Transcript: 09/18/17 Special Orders of the Day 2. Proclamation of the Council of the City of Palo Alto Honoring Daryl Savage for her Service to the Human Relations Commission. 3. Proclamation of the Council of the City of Palo Alto Honoring Greer Stone for his Service to the Human Relations Commission. Mayor Scharff: The first thing we have is Special Orders of the Day. We have a Proclamation of the Council of the City of Palo Alto honoring Daryl Savage for her service to the Human Relations Commission, and then we have a Proclamation of the Council of the City of Palo Alto honoring Greer Stone. I'm going to read Daryl Savage's, and I've asked Council Member Holman to read Greer Stone's. Honoring Daryl Savage. Daryl, welcome. Good to see you here. Greer, good to see you. He read the Proclamation into the record. Daryl, I did want to say that we are really going to miss you on that Commission. You have done such a wonderful and exemplary job. It's a real loss to Palo Alto that you're going off that. I don't usually wax about people like that, but I've got to say you're really special. You've done a fantastic job. You want to read Greer's, and then we'll go down and take some individual photographs and photographs together and stuff like that. Council Member Holman: Thank you. It's my pleasure to read this. She read the Proclamation into the record. I'd also like to add, I believe, while both Daryl and Greer were there, there was also a senior needs workshop that was done. That was very well attended, and a lot of really important information was garnered from that. There was also a domestic violence event that was held, that was also very well attended. You all put together a really outstanding panel for that. The loss of both of you is going to be hard shoes to fill. I'm sure we're up to it with our new Commissioners but that doesn't mean you won't be missed. Your contributions have been great. Thank you both very much. Mayor Scharff: Vice Mayor Kniss, you wanted to make some comments. Vice Mayor Kniss: Greer, not that I won't be talking about you. I think you've done a great job, but I am going to talk about Daryl. I wanted to mention how I know Daryl and how she got into community service on a very long- term basis. As happens with some people, Daryl decided several years ago she would run for the City Council. Very wisely, the next day she decided she wouldn't. We talked about it extensively. I said, "There are other ways that you could contribute your talents to our community." This is the way she has chosen for a number of years and has brought a completely different aspect, I think, to that particular body than almost anyone else has. Daryl has continued to do wonderful things out in the community. She certainly has TRANSCRIPT Page 3 of 78 City Council Meeting Transcript: 09/18/17 made a difference on the Commission. It's a great reminder of if you don't want to do this kind of job that's going to take hours and hours, then there are many other ways you can serve your community. There are usually openings on some of the Commissions. It makes a big difference to have people like Greer and Daryl serve, who do such an excellent job. Thank you both. Mayor Scharff: Council Member Holman. Council Member Holman: I think it's important to also recognize and appreciate one other thing. Both of these individuals have decided to continue their public service. Greer was appointed to the County Human Relations Commission by Supervisor Joe Simitian not long ago. Daryl has continued her community involvement by being involved with the local FBI. I think you're both to be applauded not only for your past but also your continuing and future contributions to the community. 4. Proclamation Honoring Cybersecurity Awareness Month. Mayor Scharff: I've asked Council Member Wolbach to read the Proclamation honoring Cybersecurity Awareness Month. Council Member Wolbach read the Proclamation into the record. I just wanted to add to that my personal appreciation for the work that our Staff in multiple departments does on this really important issue. Obviously, Palo Alto is the center of innovation. It's important that Palo Alto continues to be at the forefront of understanding the challenges and complexities that come with innovation. I just want to commend all of our senior City Staff and department heads for understanding that and really being leaders. Thank you. 5. Proclamation Declaring the Month of September as Emergency Preparedness Month. Mayor Scharff: I've asked Council Member Filseth to read the Proclamation declaring the month of September as Emergency Preparedness Month. Council Member Filseth read the proclamation into the record. Mayor Scharff: Thank you. Agenda Changes, Additions and Deletions Mayor Scharff: I don't think there are any Agenda Changes, Additions, or Deletions. TRANSCRIPT Page 4 of 78 City Council Meeting Transcript: 09/18/17 City Manager Comments Mayor Scharff: City Manager Comments. James Keene, City Manager: Thank you, Mr. Mayor and Council Members. A bunch of stuff to report on this evening. First of all, in regard to our Connecting Palo Alto Workshop Number 2, as many of you know we had about 110 participants last Saturday at our second community workshop on alternatives to consider for grade crossings along the rail corridor. Participants heard about potential future conditions at the crossings based on increased train traffic and then worked in smaller groups to discuss specific challenges posed at each of the four crossings. All of the materials from the day will be posted on our website at cityofpaloalto.org/connectingpaloalto. We'll be speaking more specifically with the Rail Committee in the coming weeks about next steps. The first segment of Phase 1 of the 7-mile long Neighborhood Traffic Safety and Bike Boulevard project will kick off next week starting along Ross Road between Corina Way and Talisman Drive. The whole project, which is expected to be completed in October 2018, a year from now, is being done in about half-mile segments and will include raised intersections to create safer, slower crossings, traffic circles and roundabout, slotted speed humps, raised crossings to improve visibility, wayfinding signs for bike roadway maps, and landscaped curb extensions to collect urban storm water runoff. City Staff and the firm Grant Construction, our project manager, will be doing extensive outreach throughout the project to keep neighborhoods updated as construction progresses. Those of you especially interested, if you will please pay attention to the next item, the Fry's Coordinated Area Plan. On September 7th, the VTA Board voted to award the City a planning grant to prepare a coordinated area plan for Fry's vicinity as part of the 2017 One Bay Area Priority Development Area Grant program. As you recall, we were in the running for that last year; it sort of fell by the wayside. We expected we would compete it this year. We have done that and been successful. The grant application and the award identifies the project as the North Ventura Coordinated Area Plan. In recognition of proposed plan area boundaries that are larger than the 12.5-acre parcel that Fry's is located on and in recognition of the fact that Fry's is not the only tenant on that parcel, the grant will provide the City with more than $600,000 for a public planning process to develop that coordinated area plan similar to the South of Forest Coordinated Plan (SOFA). The owner of the Fry's site, the Sobrato Organization, has offered to provide an additional $112,000 in matching funds as well as funding for environmental review since environmental review was not an eligible activity under the grant. Preparation of this coordinated area plan is one of the priority implementation programs identified in the draft Comprehensive Plan. Staff will be gearing up on this new planning effort as the Comp Plan Update is completed this fall. The next step will be to involve City Council consideration TRANSCRIPT Page 5 of 78 City Council Meeting Transcript: 09/18/17 of a grant agreement, an agreement with Sobrato Organization, and a Resolution tentatively scheduled for hopefully early November. Shortly thereafter, the City Council will be asked to initiate the coordinated area plan process in accordance with Municipal Code requirements including approval of a scope of work, confirmation of plan boundaries, and adoption of plan goals and a schedule together with appointment of a community working group. Staff will also have to issue an Request for Proposal (RFP) to secure the services of a planning team with expertise in planning, urban design, finance, and community engagement. Members of our public who are super interested in the coordinated area plan process can review Municipal Code Section 19.10, which outlines the required contents and the planning process. Finally, our Staff is putting together a webpage with a summary of the process and a copy of the grant application. Stay tuned in that regard. As most of the Council is aware and perhaps many folks in our public, the current State legislative session ended in a flurry and maybe in a fury in some ways. It ended its session around 3:00 A.M. this Saturday, September 16. We wanted to mention several bills that were passed, two that the Council supported and two that Council opposed. So we're clear, the two that we opposed also passed the State Legislature. Specifically, the Council supported these bills, SB 5 and SB 797, both of which passed. SB 5 would allow voters to approve $4 billion in funding for parks, coastal protection water projects, and the like. SB 797 is the Caltrain funding bill. Staff will prepare letters to the Governor early this week urging the signature on each of those bills. Two bills that Council opposed, SB 35 the by-right housing bill as it’s referred to, the Senator Weiner bill, did pass as did SB 649, a bill that makes significant changes to laws governing the permitting and leasing requirements for localities in regard to the deployment of small cell antennas by telecom companies. The folks in our community who have been concerned of late about potential restrictions on the City's ability to regulate those antennas will be quite upset with the passage of SB 649, which virtually reduces localities' abilities. That's still dependent upon the Governor's signature. We will be preparing letters in both of those, urging the Governor's veto of those bills, and our lobbyists will continue efforts to oppose each. We'll get those to the Mayor for his signature. On a more positive front, our Neighbors Abroad group has raised $3,500 so far toward a goal of $10,000 for our Sister City Oaxaca, which was affected by the major earthquake on September 7th, that struck the State of Oaxaca and left 96 people dead. The donations will go directly to Crecemos to build an orphanage, which was destroyed by the quake. As you know, Palo Alto and Oaxaca have been Sister Cities since the 1960s. Our City has donated several ambulances and fire trucks, just most recently having made a visit down there this summer. For folks who would like to donate, you can go to the website neighborsabroad.org/donate. For all of the youth cyclists out there, young and old, now in its eighth year Bike Palo Alto will be held on Sunday, October 1st, from 1:00 to 3:00 P.M. as part of the fall Walk and Roll TRANSCRIPT Page 6 of 78 City Council Meeting Transcript: 09/18/17 Week in Palo Alto Unified School District. This year we are featuring parks with the help of Friends of Palo Alto Parks. Registration will be at El Carmelo School at Bryant and Loma Verde. Riders can choose from three self-guided routes to get around our bike-friendly community, highlighting bike bridges, underpasses, and alternatives to busier roads. More information is on the City website. If you've never participated in it, I would encourage that you get out your bike and go for a ride. This Saturday, September 23rd, from 9:00 A.M. to 1:00 P.M. the City is partnering with the Palo Alto Family YMCA to cohost the 2017 Palo Alto Community Health Fair. This entirely free event, with the support of the Palo Alto Chinese School, Palo Alto Medical Foundation, Sutter Health, Stanford Medicine, the Woo Family Foundation, and local nonprofits, will be held at Palo Alto City Hall and on King Plaza, again September 23rd. The event will highlight 40 community health vendors and feature speaker topics on stress, a teen debate regarding teen health-related issues, and a variety of music, exercises, and interactive activities for all ages. The fair's overall mission was to forge a connection between experts in the medical field and local health services with members of the community and supports the Council's Priority of the Healthy City Healthy Community. Next, a number of Council Members were in Sacramento last week for the League of California Cities meeting. Obviously, there are lots of events, committee meetings, and the like that take place at the meeting. During the General Session on Thursday, I did want to share that our City was recognized as the first city in California to achieve a platinum-level Beacon Award, which is the highest level possible, for our efforts in leadership in addressing climate change. This is really a high honor and follows our City's 2014 silver-level award. Out of almost 500 California cities, well over 100 are on their way towards 200 who are actually actively participating in the Beacon program. We are the first city to achieve this highest recognition. We were honored with the top prize for the following achievements, which actually a number of these are outdated enough that they understate our percentages, but they included 20 percent community greenhouse gas reductions, 53 percent agency or city operations greenhouse gas reductions, 22 percent energy savings in agency facilities and operations, 35 percent natural gas savings, and sustainability best practices. Lastly, since we had achieved a number of these individual what are called spotlight awards for subsections of the overall Beacon award, the last remaining achievement was in the realm of agency energy savings, where we received the platinum-level award in 2017 for making that. If I might, I would bring this up to the Mayor, if I could present these to you, sir. Let's see. Last but not least, we have an amazing Staff here in the City. Some really creative, hardworking people, and people who never rest as far as advancing their own capacities in their job. I did want to share with the Council that on September 1st our Library Director, Monique Ziesenhenne successfully defended her dissertation and earned a Ph.D. at Simmons College School of Library and Information Studies in Boston. She worked for the past 8 years TRANSCRIPT Page 7 of 78 City Council Meeting Transcript: 09/18/17 on a combination of course work and research in a program focusing on managerial leadership in the information profession. Monique's dissertation research explores the perception of City Managers and department heads on Public Library Director's leadership characteristics. It's amazing she got the award given the topic, the material she had to work with. Seriously, it is the first of its kind and real congratulations to Monique. I don't know if she made it by here tonight. She probably didn't even know I was going to do this on the spot when I heard about it. Just another indication of some people who keep on reaching up not only to make themselves, their profession, but also our City better. Congratulations Monique. That's all I have to report. Mayor Scharff: Vice Mayor Kniss, you had something to add. Vice Mayor Kniss: Yes, I do know it's Simmons because that's where I went to college. I think I've got it right. I just wanted to mention since three of us will be there next week in Heidelberg, Heidelberg joins us, as I see it Jim, as the seventh city and Yangpu would be the eighth Sister City. I think that means that we must be one of the most belonging cities on the peninsula. Am I right? That's eight Sister Cities. Mr. Keene: I think it's pretty distinctive, yes. Vice Mayor Kniss: It'll be fascinating to have another city from Europe joining our Sister Cities. Oral Communications Mayor Scharff: Now, we move on to Oral Communications. Tony Carrasco to be followed by Neva Yarkin. You'll have 3 minutes. Tony Carrasco: Good evening, Mayor Scharff, Vice Mayor Liz Kniss, Council. My name is Tony Carrasco; I live at 583 Glenbrook Drive in Palo Alto. What I'm here for is—I'm also on the Board of the Castilleja School. I don't have a child enrolled at the school. I want to talk to you about why I've given my time to this school in my fourth quarter when there are several other things to do, as you would imagine. This school does an amazing job at educating women. When I grew up in India, I was immune and blind to poverty. When I come here and I see inequity between women and men, it grates me. In income and in schools, Castilleja gives children, girls a voice that stays with them through their lives. This is really critical because we need to change this equity difference between men and women. Castilleja refuses no child who's qualified to get into the school, none, not because of money. Castilleja now turns down hundreds of kids each year, qualified kids, and that's not a good thing. As a City, we do so many great things in this City, so, so many. We need to take a stand and educate women so that they have a voice in our TRANSCRIPT Page 8 of 78 City Council Meeting Transcript: 09/18/17 culture and our society. I have watched land use issues in this City for 40 years, over 40 years. I have not seen a project, an application, a CUP that's engendered as much anger as this one. This project does not increase the floor area ratio. It does not increase traffic beyond the 385 present enrollment. It will create an energy net zero building. Most of this issue then comes down to should we enroll 85 more girls who will have a positive change in this country and our City. I say we should do that. Thank you. Mayor Scharff: Thank you. Neva Yarkin to be followed by S. Roxanne El- Hage. Neva Yarkin: Good evening, Mayor and City Council. My name is Neva Yarkin, and I live at 133 Churchill Avenue. The Yarkin family has been in Palo Alto for 62 years. My parents raised seven children, and all went to the public schools in Palo Alto and graduated. Six of us graduated from college, which is a miracle in itself. All of us care deeply about Palo Alto, and are trying our hardest to preserve this wonderful City where we grew up. Depending on what options happen with the train and other projects, Embarcadero could end up with more traffic. Before you consider letting Castilleja expand, please look at what Palo Alto will look like in 20 years and how Castilleja increases will affect this whole neighborhood and all of Palo Alto. Thank you. Mayor Scharff: Thank you. Roxanne to be followed by Kristin Keirincky. S. Roxanne El-Hage: Good evening. This is my first time in Palo Alto. I'm not a resident of Palo Alto; I'm a resident of Menlo Park unincorporated, which is the county, specifically on Manzanita Avenue off Alameda. One of the concerns—the main reason that I'm here and finding myself more of an advocate is we have to be concerned about beautification, security, and safety in our towns. I've lived in my house 27 years, and I've noticed between Woodside Road and Sand Hill Road, if we think of the 280 exit and go all the way down to Alameda, we have about five jurisdictions. I'm here in hopes in that all of us can connect—I hear this word about cyber and communication— if we can connect on a government level, can we connect with these neighboring towns of Redwood City, Atherton, County, Menlo Park unincorporated, City of Menlo Park. If we go 2 blocks east in Sand Hill Road, that would be Palo Alto. Can we connect in the Mayor's level or Supervisor? Can we connect in police agencies? Can we connect in Public Works? What one town does affects another. There is about 22 blocks I've counted—I could be off—between Woodside Road and Sand Hill. We're finding most recently we have Las Lomitas School District which is expanding. They have converted their land into a commercial property. It's a use permit. This has high impact on all our residents. Again, it's my first time. I hope we can just communicate TRANSCRIPT Page 9 of 78 City Council Meeting Transcript: 09/18/17 at all levels and really consider the consequences of the decisions we make. Thank you. Mayor Scharff: Thank you. Kristin to be followed by Sea Reddy. Kristin Neirincky: Good evening. I'm Kristin; I am an employee of Castilleja and a Professorville resident for 3 years. I'm here to speak in support of Castilleja. The notion that you can be against Castilleja's project but support Castilleja and an all-girls education is contradictory. Castilleja is the only opportunity in all of northern California to receive an all-girls high school education in a nonreligious setting. Housed in aging buildings, Castilleja is doing its best to keep up with and even lead in 21st century teaching and learning practices. This becomes increasingly difficult with each day that passes. At the same time, all surrounding high schools have modernized. Paly has a new performing arts center, gym, library, and digital arts center. Bellarmine has a new arts center, a new theatre, and a new fitness facility. Menlo has a brand new student center, and Sacred Heart has a new science and student center building. Opposition to this proposal in an environment where co-ed and all-boys schools have been allowed to modernize evokes an age old sentiment. Women can make do. We will educate them but not afford them the opportunities available to the other half of the population. Castilleja seeks to modernize its campus to afford equal opportunity for learning in an all-girls setting. The proposal was developed based on feedback from neighbors over a 3-year period and includes many features that were only incorporated to benefit neighbors and the surrounding community, for example, a park open to the neighborhood, underground drop-off and pickup and below-grade deliveries to respond to the request to move traffic out of the neighborhood, a bike pavilion with public access located along bicycle boulevard, relocation of on-street parking to campus to respond to the request to move cars off-street. All of this has been designed within existing FAR, setbacks, zoning, and within current Code. Anyone who says otherwise has not reviewed the project carefully. We have always and will continue to be advocates of the truth, providing facts about our proposal. Please support us in keeping an all-girls education as a viable option within Palo Alto and surrounding communities. Thank you. Mayor Scharff: Thank you. Sea Reddy. Sea Reddy: Good evening, Mayor and the City Council. I did not have it on script, but I do want to say something about Castilleja. It's a great school. It does wonderful things. It's a girl’s high school—a girls school all the way to high school. I think they should consider outside the box, think outside the box and expand in a nearby community. Make it bigger and not 385 or 400; make it a 1,000-people school. We welcome that. I think there's plenty of TRANSCRIPT Page 10 of 78 City Council Meeting Transcript: 09/18/17 space that could be negotiated somewhere in the community, not necessarily right in a residential area. I think we're maxed in that area for traffic, people, residential areas. There is plenty of space somewhere else. I would welcome them to look at Peter Coates Road, Stanford, even Menlo Park for that matter. Thank you. The second item I want to talk about is the—we nourished College Terrace 2100 building, and we built a great—the community built a great facility. They have a market. The market is trying to survive. I would like the community to go to the market and give some ideas as to how they would want to come back to that market for that to thrive. We want to keep them. It's a great location for a lot of people, a lot of elderly, a lot of young people to walk through and be safe and have ice cream and things like that. There is a flyer they're putting out. If you like to, you can pick it up. They're trying to entice the Stanford students, but there's more to be earned from the community around us. The second item quickly is last week, 2 weeks ago, I had requested—there's a pothole right in front of Jack in the Box. It happens to be in Palo Alto. Our City Manager asked me to look at Palo Alto 311. I did submit, and I get a response quickly that it is not part of Palo Alto. It's county. I'd like someone to help me to prioritize that. It's been there for a long time. The last and most important thing is the Muslim community (inaudible) need to take ownership to the Rohingya—I'm not sure if I'm saying it right— massacres of (inaudible) discriminating Muslims. There are enough Muslims in the world, countries like Saudi Arabia, Pakistan, you name it. They need to take ownership and let this not happen. The reason I'm bringing it up in Palo Alto—there are very wealthy, very influential people in 18th District, 17th District. They need to take ownership and talk to the world that this cannot happen. We cannot allow this. This is absolutely absurd. Thank you. Mayor Scharff: Thank you. Consent Calendar Mayor Scharff: Now, we move on to the Consent Calendar. We have a number of speakers on the Consent Calendar. The first speaker is Bob Moss, to be followed by Julia Barba. Bob Moss is speaking to Item Number 6. Bob Moss, speaking regarding Agenda Item Number 6: Thank you, Mayor Scharff and Council Members. This is kind of interesting. I was involved when the Hamlet was first discussed and developed over 30 years ago. When the project came forward, the intent was it would be a mixed-use project with ground-floor retail and housing up above. We talked to the developer and he said, "Of course, you understand the retail also includes offices in CS zone." We said, "Yeah, but it's primarily going to be retail, right?" He said, "Yeah." When the project opened, almost all of the retail businesses on the ground floor were offices. His explanation was that, because it was on El Camino Way TRANSCRIPT Page 11 of 78 City Council Meeting Transcript: 09/18/17 and not on El Camino, when he tried to rent it to retailers, they said nobody can see it from El Camino. They don't think it's a good place for retail, so we can't lease it, so we're going to lease it to offices. That's why it became primarily a medical/dental office area, which it's been for the last 25, 30 years. This request is consistent with what is actually there in general, but it's inconsistent with what the intent of the original development was. I would suggest that you take a look at the type of occupancy we have at the Hamlet on the ground-floor retail and see if it might be possible to prioritize retail rather than offices so that, in the future when a space becomes vacant, you don't just flip it over to another medical or dental office. You say, "Even though you're the owner and you're a doctor and you're retiring and you want to give it to another doctor, we think we should make this a retail space." At least consider it, have Staff look at it, have the Planning Commission look at it, and see if it's possible. It would be nice if we had more retail and fewer offices. We don't lack for offices in Palo Alto. You took action to limit the number of office developments. You recognize that it creates a jobs/housing imbalance, and it creates traffic problems. Retail where the people who live up above and behind the project could go to shop; it would be very beneficial. I think we've got to consider over time transferring the ground-floor uses at the Hamlet from medical and dental offices to retail. Can't do it right away, but if we don't start, we'll never finish. Mayor Scharff: Thank you. Julia Barba to be followed by Nicole Coxe. Julia Barba, speaking regarding Agenda Item Number 7: Good evening, Honorable Mayor and Council Members. My name is Julia Barba; I'm from Breathe California of the Bay Area. We're a local nonprofit serving the Bay Area as the local lung health leader. We fight for lung disease in all its forms and promote lung health. Through our various tobacco prevention and cessation programs, we see the impacts that flavored-tobacco products, including menthol-flavored cigarettes, electronic smoking devices, have on our community, specifically youth, communities of color, and those specifically from low socioeconomic backgrounds. In the last year, we've seen a high rise in the use and popularity of flavored-tobacco products, thousands of e-liquids and e-juices that are on the market. When we do outreach and conduct workshops with teens and young adults, electronic cigarettes, vapes, and flavored products like sweet flavors like mint, menthol, cotton candy, and sour apple is what is around their friends, their schools and communities. The tobacco industry sells sweet candy-flavored products to entice youth and new users and to mask the harsh taste of tobacco. Just because tobacco or e- liquid cartridges are in flavors like mint or apple are not seen as a traditional cigarette does not mean that they safe, does not mean that they are healthier, and does not mean that they do not cause serious health concerns by using these products or by being exposed to secondhand smoke. When we do TRANSCRIPT Page 12 of 78 City Council Meeting Transcript: 09/18/17 community outreach and health education workshops, the attraction of shiny, colorful packages and sweet-smelling products is especially attractive to young children and teens. They're enticed; they want to see; they ask questions, what is this. The Santa Clara County Tobacco Free Coalition and hundreds of individuals and community business groups, such as the Silicon Valley Leadership Group, the Silicon Valley Black Chambers of Commerce, the American Heart Association, and countless other families and community-based organizations, understand the benefits of strong TRLs adopting tobacco density and flavor restrictions. We along with these community members believe strongly that these types of ordinance support in reducing the long- term tobacco and nicotine addiction that can happen in youth and in many community members. Thank you. Mayor Scharff: Thank you. Nicole Coxe to be followed by Lisa Henriksen. Nicole Coxe, speaking regarding Agenda Item Number 7: Hi, good evening, Mayor, Vice Mayor, and City Council. I want to thank you for your leadership on these critical tobacco prevention issues and for your consideration this evening of a tobacco retail permit program to reduce youth access and exposure to tobacco products in the City of Palo Alto. My name is Nicole Coxe, and I'm with the Santa Clara County Public Health Department. As you know, the City first approached the County in early 2016 with an innovative partnership idea, where the County would handle the administration and compliance monitoring components of the tobacco retail program for the City if the City were to enact the same requirements in the County's tobacco retail ordinance. This innovative approach not only works to create standardization of compliance monitoring; it also maximizes the public health impacts and also improves efficiency by folding responsibilities into our existing County infrastructure and reducing the workload for your City Staff. This partnership truly has the potential to become a successful model between the County and other cities throughout the county. In fact, in May 2017 the town of Los Gatos unanimously approved a tobacco retail ordinance that mirrors the County and an agreement with the County as well to handle the administration components of the ordinance. Similar requirements are also being brought forward within the City of San Jose. In addition to our County staff committing time to support implementation of the City's requirements, our program is also committed to providing support to small businesses here in the City of Palo Alto. We've committed resources to partner with the County's Small Business Development Center to do ongoing work with the businesses here, such as one-on-one business advising to broaden product merchandising and expanding business plans and support in obtaining grants or funding to improve the store infrastructure such as refrigeration and other components that can help support a broader, healthier product merchandise. I would also like to thank the Palo Alto Staff that we've worked closely with over the last 2 TRANSCRIPT Page 13 of 78 City Council Meeting Transcript: 09/18/17 years to bring this partnership forward. The County looks forward to continuing this work with the City and all of our cities across the county to implement measures that truly benefit our youth, our residents, and provide an even playing field for businesses across the county. Thank you. Mayor Scharff: Thank you. Lisa Henriksen to be followed by Jaime Rojas. Lisa Henriksen, speaking regarding Agenda Item Number 7: Good evening, Honorable Mayor, Vice Mayor, and Council Members. I'm a senior research scientist at Stanford University School of Medicine with more than 2 decades of experience studying the retail environment for tobacco. The proposed legislation is based on sound scientific evidence, and I'd like to make three points about this. My recently published research demonstrates that teens who live in neighborhoods where tobacco retailers are concentrated more highly are more likely than other peers to try smoking and believe falsely that more adults smoke too. In a previous study, I found that California schools with even a few tobacco retailers within walking distance had a significantly higher prevalence of current smoking. Both of these studies adjust for other neighborhood characteristics that are risk factors for adolescent tobacco use and, therefore, highlight the unique public health problem that is peculiar to widespread retail availability of tobacco. My second point is that concerns about this environmental exposure affect adults as well as youth. More than one in three smokers agree they would try to quit if they had to travel farther to purchase cigarettes. Greater distances between retailers increases travel time and costs to obtain tobacco and will reduce the pro-smoking cues that research shows are a deterrent to quitting. My third point is regarding the concerns about local business. The concept of tobacco products as an anchor for corner stores is a myth created by the tobacco industry and not supported by evidence. A Philadelphia study found that only 13 percent of purchases from convenience stores included tobacco and barely half of these included food and beverage as well. In addition, the purchase of tobacco was irrelevant to the amount that consumers spent on food and beverages. My final point is that it has now been more than 50 years since the 1964 Surgeon General's report concluded definitively that tobacco causes cancer and other life- threatening diseases. In those past 50 years, tobacco use has been responsible for 20 million deaths in the United States. In an atmosphere of increasing regulation, businesses should have been able to figure out long ago that relying too extensively on the sale of products that kill half of its longtime consumers is not a good long-term business strategy. It's past time to stop putting tobacco sales ahead of health. This is an important ordinance to help Palo Alto do that. Thank you for your consideration. Mayor Scharff: Thank you. Jaime Rojas to be followed by Mike Amidi. TRANSCRIPT Page 14 of 78 City Council Meeting Transcript: 09/18/17 Jaime Rojas, speaking regarding Agenda Item Number 7: Good evening, Mayor, Vice Mayor, and Council Members. My name is Jaime Rojas; I'm with the National Association of Tobacco Outlets. We're a national retail association representing over 50,000 retailers throughout the country, including here in the City of Palo Alto. We urge you not to enact the proposed tobacco ordinance and recommend amendments to a draft Ordinance that would establish tobacco retail license requirement here in the City of Palo Alto. NATO does not object to local tobacco licensing Ordinances as long as they do not impose unreasonable, high license fees and do not contain sales restrictions that create unnecessary regulatory burdens on our members. We respectfully request that the City Council make the following amendments to the current ordinance proposed. One, delete the flavored-tobacco ban. That only pushes adult consumers who enjoy flavored tobacco to other cities. Two, amend Section 4.4.03 to comply with the California State law that exempts active duty military from age 21. Lastly, point number three, add the grandfather provision under Section 4.64.030 that will allow existing tobacco retailers within 500 feet of other retailers or 1,000 feet from schools to sell through an arm's length transaction to a new owner. Currently in the county, the Cities of Gilroy and Saratoga follow this already. NATO believes that the sales restrictions in the draft ordinance go too far, especially given the State laws enacted last year related to tobacco, including raising the minimum age to 21, regulating e-cigarettes as tobacco products, and the 2017 increase of the cigarette tax by $2 per pack. Recently, the California Health Department reported since 2000 youth smoking rates have gone down over 20 percent. Our retailers follow the rules and are the frontlines in stopping youth tobacco smoking. They follow the I.D. mechanisms of checking I.D.s currently. We urge the City Council to consider our request in modifying the proposed recommendations in the ordinance. Thank you. Mayor Scharff: Thank you. Mike Amidi to be followed by Ann Sekhon. Mike Amidi, speaking regarding Agenda Item Number 7: Good evening, Mayor and the City Council. I own the Valero station on 705 San Antonio Road by Middlefield. We purchased that site about a year ago. Once you put this ordinance, I won't be able to sell my business because I would be losing a lot of income from the tobacco sale. It would affect my fuel sales as well. We barely get any kids coming to our station to buy tobacco. Most of them could buy everything they can online. They don't need to come to a local C-store to get their tobacco, even flavored tobacco. Everything you can buy online. With Uber and all these other apps that are available, anybody could get anything they want. They don't need to go to a local store. If you guys would grandfather the existing people that have been paying their taxes, bringing income to the City for years and years, you should grandfather those existing businesses so they wouldn't go through this hardship. Thank you. TRANSCRIPT Page 15 of 78 City Council Meeting Transcript: 09/18/17 Mayor Scharff: Thank you. Ann Sekhon. Ann Sekhon, speaking regarding Agenda Item Number 7: Hi. I'm Ann Sekhon. I'm the president of our 7/11 Franchise Owners Association. We have several stores here in your City. Some of the things that our owners do is card, I.D. We're very, very responsible owners. We don't want to sell to minors. Some of the things that have already gone into place, the $2 tax that went into effect this year. The tobacco charges that are now taxes that got added on July 1st are like $7 and $8 to get a pack of cigars. We're just asking you guys—there's a freedom of choice. You guys are running our adult customers, who have the right for this product, to another city. That's just not fair. A lot of our franchisees here in your City have been here for a long time. Some of have just invested in your City. Not grandfathering in their rights, you guys are telling them that overnight they've lost hundreds of thousands of dollars for their business. We're just asking you guys to think about us. We don't want to sell to minors. If you guys check the stats just from the $2 tax, every single store is down at least 15-20 percent. The cigars, the flavored cigars, it's not the minors who are using those, guys. It's the adults, and the adults do have freedom of choice. Please do not run our business to another city. It's not going to end. If you guys want to stop this, the only way it's going to stop is if the whole State of California did it. If you guys think you're going to take this piece here and this piece here, it's available to everybody. Like the gentleman before me said, all you have to do is go online. It's cheaper than any convenience store sells it right now. As retailers, we were all shocked. Go to Uber; they'll go pick it up for you. They don't check I.D. for the child or whoever's ordering it. Just please take into consideration that the product is already available. Don't have to come to our stores to buy it. Please don't punish us as retailers and take this away from us. It's not just the tobacco products they're buying from our stores; it's everything else. Why would they stop at my store? Why not go up the street to the next city? Thank you. Mayor Scharff: Thank you. Stephanie Munoz. Stephanie Munoz, speaking regarding Agenda Item Number 9: Good evening, Mayor Scharff and Council Members. I just wanted to say a word about housing. I believe the only—particularly with regard to the limit on office space. It seems to me that it doesn't really matter whether you have thousands of feet of office space or very few, whether you have thousands of houses or very few. What matters is that they be balanced, that there be enough housing for the workers who work in this town. You're responsible for that because you allow those companies to come and invite the workers. In fact, cities usually solicit jobs. They ask that jobs come because that means a lot of finance. The money means—as one of you once remarked, this is an TRANSCRIPT Page 16 of 78 City Council Meeting Transcript: 09/18/17 expensive City to run. The money means that Palo Alto can do a lot, but it really is not fair to have a job and have people come expecting that there will be someplace for them to live, maybe even a trailer that they could park on El Camino Real. Not to have enough houses, I believe the remedy for that is, when you get a company that has a lot of jobs, more than a dozen, more than a couple dozen, they then provide housing, some kind of housing for the workers. It doesn't have to be luxury housing; it doesn't have to be large. It has to conform to the City's FAR, floor allowance ratio, but that shouldn't be hard. They can do it, and it wouldn't hurt them. Just as I've been telling you week after week, it would not hurt you one bit to put housing on Cubberley for the teachers because you have a captive market, you have a need, you have the space—it's free. You could make money. The companies could make money too. I don't know why they don't want to do it. They have to have encouragement from you. I'd like to suggest that, when you're considering any 50,000-square-foot limit for the offices, you make the limits and the housing correlative, that they harmonize with each other. Otherwise, you'll have a big problem. We do have a big problem. Thank you very, very much. I know you're trying, but you've got to have more housing. I think the big companies have to provide it. Thank you. Mayor Scharff: Now, we return to the Consent Calendar. I'll move the Consent Calendar. Vice Mayor Kniss: Second. Mayor Scharff: Seconded—Council Member Wolbach, you wanted to register a no vote. Council Member Wolbach: Yes. I'd like to register a no vote on Item 7, and I'd like to speak to it afterwards. MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to approve Agenda Item Numbers 6-9. 6. 4157 El Camino Way, Unit C-3 & C-4 [17PLN-00051]: Request for a Hearing on the Director's Tentative Approval of a Conditional Use Permit (CUP) to Allow Medical Office Use (Dentist). Environmental Assessment: Exempt From the Provisions of the California Environmental Quality Act (CEQA) per Guidelines Section 15301. Zoning District: Neighborhood Commercial (CN). 7. Adoption of an Ordinance Establishing a Permitting Program for Tobacco Retailers to be Administered by Santa Clara County. TRANSCRIPT Page 17 of 78 City Council Meeting Transcript: 09/18/17 8. Request for Authorization to Increase Existing Contract for Legal Services With the Law Firm of Renne Sloan Holtzman & Sakai by an Additional $15,000 for a Total Not-to-Exceed Amount of $210,000 for Litigation Services. 9. Ordinance 5417 Entitled “Ordinance of the Council of the City of Palo Alto of the Council of the City of Palo Alto Extending Interim Ordinance No. 5357 That Added Sections 18.85.200 Through 18.85.208 to Chapter 18.85 of Title 18 Imposing an Office Annual Limit of 50,000 Square Feet in Designated Areas of the City (FIRST READING: September 5, 2017 PASSED: 9-0). Mayor Scharff: That's fine. If we could vote on the Consent Calendar. That passes unanimously with Council Member Kou absent and Council Member Wolbach registering a no vote on Item Number 7. Council Member Wolbach, would you like to speak? MOTION PASSED FOR AGENDA ITEM NUMBERS 6, 8-9: 8-0 Kou absent MOTION PASSED FOR AGENDA ITEM NUMBER 7: 7-1 Wolbach no, Kou absent Council Member Wolbach: Yeah. I've never bought a cigarette. I don't encourage people to buy cigarettes. Cigarettes have taken a number of members of my family. I certainly don't want to speak against the idea of the dangers of cigarettes. I don't want to speak and I did not want to vote against having a local ordinance because I think it's important that we have a local ordinance to regulate tobacco sales. The ordinance that we voted on here is imperfect. A couple of tweaks could have been made to it. I hope we'll have an opportunity to revisit it in the future. I also have a sense that—I just generally think also that it's bad policy to have our contractors determining our policy rather than determining our policy and then finding a contractor to implement it. I think that's a poor policy choice on any matter. I think we should have the policy decision, figure out what we want to do, and then find somebody to do it. I really want to emphasize that smoking is stupid, smoking is dangerous. I do think we should regulate it, but we're in danger of getting to a point where the regulations become so prohibitive of the activity that we are essentially prohibiting people from doing things which are stupid and dangerous only to themselves. It is a human right to do things which are stupid and dangerous only to you. If they're dangerous to other people, that's different, which is why I support our ban on smoking in multifamily dwellings and in other public places where it endangers others. I support the provision that prohibits smoking retail within 1,000 feet of schools. The 500-foot prohibition against—say, two gas stations that are 500 feet across the street TRANSCRIPT Page 18 of 78 City Council Meeting Transcript: 09/18/17 from each other, both selling tobacco, I don't understand that provision. I understand their arguments on that one. We should look to—I believe it's Gilroy and Saratoga that are more open on grandfathering to respect the investment that people have made in their businesses. I think it's important that we're moving forward with an ordinance; I just don't think this really hits the nail on the head. Mayor Scharff: Council Member Tanaka, you had your light on. Council Member Tanaka: I do support this Item 7. My grandmother died of lung cancer, so I definitely have been personally affected. With that said, I would say that—I spoke with one of the speakers during my office hours this weekend. While I do support this item, I do think we should look at—he mentioned to the effect of—actually he and one other gas station owner mentioned how difficult it was to have convenience food at the gas station. That's one of the reasons why we have high gas prices, because it's hard for gas stations to have car washes, to have convenience stores. I think that's something that we at a later time should take up and figure out how do we enable better retail here in Palo Alto. Thank you. Action Items 10. PUBLIC HEARING / QUASI-JUDICIAL 3877 El Camino Real [14PLN-00464]: Adoption of a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan and Approval of a Site and Design Review for the Demolition of the Vacant 5,860 Square-foot Commercial Building and Construction of a new Mixed-use Project. The Project Includes a 4,027 Square-foot Commercial Building and 17 Dwelling Units (Flats and Townhouses). Parking for the Project is Provided in a Basement. The Applicant Also Requests Approval of a Design Enhancement Exception to Allow the Basement to Encroach Into the Required Rear Yard Setback Below Grade. Environmental Assessment: A Mitigated Negative Declaration was Circulated Between March 6, 2017 and April 7, 2017. Both the Planning & Transportation Commission (March 8, 2017) and Architectural Review Board (May 18, 2017) Have Recommended Approval of the Project. Zoning Districts: CS and RM-30 (Continued From August 28, 2017). Mayor Scharff: Moving on to our next item, which is the public hearing on 3877 El Camino Real. The first thing I'm going to do is open the public hearing. Do we have a Staff presentation? Public Hearing opened at 7:37 P.M. TRANSCRIPT Page 19 of 78 City Council Meeting Transcript: 09/18/17 Jonathan Lait, Planning and Community Environment Assistant Director: Mayor, thank you. We'll have Sheldon Ah Sing give the presentation, and we'll go from there. Sheldon Ah Sing, Senior Planner: Thank you and good evening. This is a project overview. This is a project that's on a three-quarter-acre site with an existing vacant restaurant building and surface parking with frontage along both El Camino Real and Curtner Avenue. It's an L-shaped lot. The proposal is for a mixed-use project that includes a mixed-use building that has 1,700 square feet of retail on the first floor and approximately 1,500 square feet of retail/office space on the second floor. There's also about 900 square feet of common, kind of commercial space that's included in the gross floor area. That's for elevator shaft space, lobby, and trash areas. Also, there are six residential units in that building, and one of them is an affordable unit. For the balance of the site, which is on the latter half of the property and has frontage along Curtner, there are 11 townhouse units, and one of those units is an affordable unit. The site has a flat topography and is surrounded by a commercial development along El Camino Real, and then behind along Curtner you have the residential types of units. For the project, the entitlements include site and design, and that's reviewed by the Planning and Transportation Commission as well as the City Council. You also have the Architectural Review findings, and those are reviewed by the Architectural Review Board as well as City Council. There's a Design Enhancement Exception that is reviewed by the Architectural Review Board and the City Council for deviation of a setback for the basement that is going from 10 feet to 6 feet. The project is not subject to the Retail Preservation Ordinance because the project was submitted prior to March 2, 2015. The project is not subject to the office cap because it does not meet the thresholds. This provides a little bit of the street context along both El Camino Real, where you see the more commercial development, as well as along Curtner Avenue, which is a more residential character except when you get next to El Camino Real. This is the site plan for the project. It does demonstrate that you have two zoning districts. You have the CS district as well as the multifamily district behind it. You have some different types of development standards, and the mixed-use building also provides some different types of development standards as well. This slide shows the basement. All the parking for the project is in the basement area; there's no parking on the surface level. It includes both the commercial and the residential with the guest parking as well. This is where the applicant for the project is requesting a deviation from the setback, from 10 feet to 6 feet 2 inches. With all the parking below grade, that opens up the surface of the site for open space and other pedestrian amenities. This is just a brief project perspective. The applicant is here; they'll have more details about the architecture. Just to show a little bit of the context of the area and the surrounding. This also shows some of the TRANSCRIPT Page 20 of 78 City Council Meeting Transcript: 09/18/17 cross-sections of the project both along Curtner and El Camino Real, showing the profiles and massing, where the project is consistent with the development. The mixed-use building is here, and the applicant will go a little bit more into some of this detail, but showing the different types of materials that are used, including metal, wood. The first floor is also conducive to retail along El Camino Real. For the townhouses, they also complement the design of the mixed-use building in using very similar types of materials. This project had a number of previous meetings, including a preliminary ARB meeting in December 2013, an ARB study session in December 2015, and then this year both the Planning Commission and the ARB had meetings regarding this project. The last meeting was in May. At the Planning Commission meeting, there were public comments that included requesting review by the Historic Resources Board for historical significance as well as traffic impacts along Curtner, geological study and flooding. We'll touch on that a little bit in these other slides. There was one dissent from the Commission, and that was because the Commissioner could not make the findings for the project and thought there wasn't sufficient information for the Historic Resource Evaluation. At the ARB meeting in May, the ARB recommended approval of the project to the City Council with conditions that it return to the subcommittee. Those included revising the landscape plan, providing details about lighting on the first floor, providing some additional details on the hardscape, and making the commemorative plaque a little bit larger to acknowledge the site. In addition, there was a condition to require a security plan. That security plan will include passive and active security measures for the project site including the basement area which includes lighting, glass- backed elevator and stair towers, access control, monitored cameras, intercoms, security patrols, escort services, and signs and other gates. In addition, there were conditions of approval for construction logistics and mitigation measures. Regarding the environmental document, that was circulated between March 6 and April 7. It identified some potential significant impacts to biological resources, mitigation measures for nesting birds and potential roosting bats during construction period. The project includes a Mitigation Monitoring and Reporting Program, which you will adopt this evening if you want to do that. The Historic Resource Evaluation did not find the building to meet the specific criteria for eligibility to be listed for historic purposes. The integrity of the building was not intact sufficiently. The traffic study used standard methodology. Based on the trips generated, the trip distribution, and the proposed uses of the site, there was no impact to be found. There were a number of comments that were made regarding this environmental document. We did provide responses to those comments. Again, just reiterating that for the cultural resources, there were a number of alterations that leaves the building lacking that integrity. The traffic, there were no changes in the project that would lead to a substantial increase in the traffic to create a significant impact. For hydrology, under typical conditions TRANSCRIPT Page 21 of 78 City Council Meeting Transcript: 09/18/17 excavation depth would not encounter groundwater and, thus, dewatering is not anticipated for the site. Regarding hazards, we had a question regarding how would the Fire Department access the site. The project would be designed to have standpipes. With the recommendation, we have adopt the attached Mitigated Negative Declaration and the Mitigation Monitoring and Reporting Program, and also to adopt the Record of Land Use Action, approve the site and design and Design Enhancement Exception. The application is based on the findings and subject to the conditions of approval as recommended by both the Planning and Transportation Commission and the Architectural Review Board. That concludes our presentation. We also have the environmental consultants here this evening. Mr. Lait: Mayor, just finally, we have—if we get to a point where we're considering project approval, there's a couple of fine-tuning that we want to make on the Record of Land Use Action, which we can go over at that time. Mayor Scharff: Thanks. Now, we have the applicant here. The applicant has up to 10 minutes. Mark Wommack, EID Architects: Good evening. My name's Mark Wommack; I'm an architect with EID Architects. We're here representing the project. I have a short PowerPoint presentation that I'd like to present to you to help you understand some of the nuances of the project. First, the siting. On El Camino Real, you can see that the site, a fairly narrow site, is nestled between the Starbucks coffee shop, which is a reuse of the original Jack in the Box building on that site. It's an attractive site and a very viable business. On the other side, we have a Nine Minute oil change business in an older structure that has a vacant parking lot on the other side. What you see is a streetscape that really hasn't changed much and hasn't seen a lot of improvement. The building itself has been vacant for a number of years, has become a derelict of a building, an eyesore which has attracted vagrants, which have been difficult to keep out of the building. We're really happy to be here to show you this project and to hopefully gain your support and approval. This site shows the site in context. This is important because it demonstrates how this is a fairly unique corner in the City. We're really very high density relative to most of the single-family neighborhoods within Palo Alto. This is actually one of the few areas in your City where you do have high density. This context is important to keep in mind. You'll notice also how the site is threaded into this project. It's an incredibly difficult parcel to develop, particularly because of the narrow dimension along the Curtner frontage. At only 60 feet, it's challenging to get the vehicle traffic into the site and still maintain all of the parameters that the Planning Department requires that we adhere to. You can see how the site is broken down in scale with a higher density and a more consolidated use along El Camino Real and then breaking down into a duplex TRANSCRIPT Page 22 of 78 City Council Meeting Transcript: 09/18/17 structure, which is really more evocative of a single-family home construction and is even more open and less dense than the existing neighbors around it for the most part. This site also demonstrates the break between the commercial property in the front and the residential in the back. Sheldon addressed that, so I'll move on. This is a bird's eye view of the commercial section. You can see here its relationship with the driveway going down and the public courtyard area. Here you see that we've placed the building primarily on the north frontage, positioned it towards the north side of our property line so that we can maintain an open area along the southern property line there in which we put the public plaza. Right below that, you see a driveway ramp into the basement, which supports the retail component. Behind it, we have the six flats, one of which is on the ground floor, the balance being on the upper floors. The frontage, we maintained this massing in an effort to maintain a visual connection to the back of the property but also to be respectful of the owners of the Starbucks property. They were very concerned that we not block views to their project and perhaps maybe have a negative impact on their ability to be successful in business. This slide shows you a little bit more about how the massing allows for a visual connection between the street frontage on El Camino Real and the commercial property in the back. This is a real challenge because, again, this is a rather narrow parcel. On the other hand, we wanted to make sure that there was a strong pedestrian connection between the El Camino Real property and the residential component in the rear. Moving down into the basement. The circulation off El Camino Real was something that we added back to the project as requested by the ARB as a means of taking some of the vehicle traffic off of Curtner. We thought it was a good suggestion. It's just a one-way ramp into the parcel because it was believed that bringing vehicles out onto El Camino Real would create a dangerous situation and, in fact, would limit our ability to provide the frontage that the City wants for the continuity along the street front there. You come out of the garage on the other side, and it's also a point of ingress for the residents. The advantage to this is that traffic leaving the site has the ability to re-enter El Camino Real at a signalized intersection. This slide shows you how our project fronts along the Curtner street frontage. It gives you an idea of the massing and scale of what we're proposing relative to the existing infrastructure. The front setback along Curtner is 65 feet, which is well in excess of the 25 feet, which is the minimum and the average on that street frontage. The 11 townhomes which are the residential portion of the property, are clustered on the residential section of the site. By pulling the parking down into the basement, we've been able to really increase and enhance the setbacks along these parcels and to provide a degree of open space for each of the units. That's really kind of uncommon in multifamily development within the City. This has allowed us to significantly exceed the requirements for almost every aspect of open space as it's defined within the City ordinances. Sheldon talked about the materials that we're using. We're TRANSCRIPT Page 23 of 78 City Council Meeting Transcript: 09/18/17 trying to create an attractive architectural style. We're using high-quality materials. There was a question at one of the ARB hearings about the use of wood, so we've taken that off. What you see here are the new ceramic products that are available and that are virtually indistinguishable from wood products when viewed from a reasonable distance. They are very durable, and they don't have the negative effects of the wood and its need for constant maintenance. The common and use spaces were oriented along the southern end of the property line and pulled forward in response to comments from ARB to create a common use area that would be quickly connected to and visually connected to El Camino Real. Its southern exposure gives it good solar access. It's pulled far enough back from El Camino Real that it shouldn't be adversely impacted by traffic noise and so forth. City Staff thought this was a good solution, and we also were very happy with that. Landscaping was developed to complement the open space that we have here. We took steps to address comments from ARB to increase the planting along the Curtner property lines to protect privacy from adjacent neighbors. The common space area includes landscaping and hardscaping elements to make it an attractive and viable space for the residents to use. There's also an emphasis on the landscaping to make the pedestrian path that travels all the way through the project attractive and inviting. Finally, to address the issues and concerns raised about commemorating the historic nature of the use of the property, we are going to be providing a plaque to commemorate the artist's work, the family's work on the site. We are still looking for some feedback from the family as to the information they would like to see on that plaque. We are looking for examples of existing ironwork that we may be able to feature in that plaque. We also are incorporating some of the items that were identified in the historic analysis as being significant to the ironwork that was done onsite. That concludes our presentation. We're here to answer any questions that you might have. Thank you. Mayor Scharff: Thank you very much. We now have a couple of public speakers. Becky Sanders, you'll have 3 minutes. Judy—is it Gittelsohn? Becky Sanders: Good evening, Council Members. I'm Becky Sanders. I'm head of the Ventura Neighborhood Association. I live on Margarita Avenue in Ventura. Thank you for your service this evening. My concern is the bottom paragraph of page 6 of the Staff Report, where it talks about the density bonus application. VNA, the Ventura Neighborhood Association, supports building more housing; however, we seek transparency and adherence to Building Codes. We urge you not to approve the density bonus concession to this project. In our opinion, there is no logic or legal reason for it. In the summer, I put in a public records request to confirm that there was no mention of the concession in the original application, which is required by law for this sort of thing. Why are we even contemplating giving them the concession? It's like TRANSCRIPT Page 24 of 78 City Council Meeting Transcript: 09/18/17 asking your professor for an A when you didn't finish your final project. For me, it doesn't make sense. In any case, even if they had gotten their application in on time, the applicant has not provided us with the documentation required to demonstrate that the concession will provide an actual cost reduction and allow the applicant to provide more below market rate units, which is the intent of the Density Bonus Law. What am I missing? No documentation, no concession. As part of my public records request, I put in for the desired documentation, and I received nothing. In conclusion, as I see it, providing this concession produces no additional affordable housing. That's a bust. It will, I think, drive up the price of housing because the developer, I think, can build larger, market rate units with this density bonus and, therefore, charge more. Maybe I'm missing something. Also, I would imagine a stampede of other developers clamoring for the same double- dipping treatment, circumventing the intent of the law, will be running right here to Council. For me, if I were working for the City, I would be confused because sometimes the City Council votes from time to time to do spot zoning or provide these little enrichments or give-mes’. Finally, it encourages widespread distrust of City government because we do run at times amok over our zoning laws. It just makes us uneasy. Thank you very much for considering my recommendation that we vote no to the concession. Mayor Scharff: Judy Gittelsohn to be followed by Jeff Levinsky. Judy Gittelsohn: Hi, good evening. I'm Judy Gittelsohn, and I am basically going to focus on the exiting of the traffic onto Curtner. I addressed the Mitigated Negative Declaration, asking for a new traffic study because the previous traffic study was, I think, done in 2012. The density of Curtner has increased tremendously. I want to talk about Curtner as a street. If you compare Curtner's housing density to Ventura and the architect's overview, Curtner's a little too narrow for traffic to go in two directions. You can't pass, and it has a rolled curb. People park half on the curb. If you look at the overview of the street, it's already taxed. I don't think the traffic study was done recently enough to show how much the housing density has increased. 405 Curtner was just completed, and they have garage parking. I live next door to it, and all the cars are already on the street. They're parking outside the garage and using the garages for living spaces, which is not going to happen in this project. There's such a tax on that street. The exiting of 60- plus spaces onto Curtner just seems like you're asking for an injury. My recommendation is to redo the traffic study. I know that the architect was saying that exiting on El Camino is a danger, but I would really examine the number of cars that are there and see if they could revisit exiting on El Camino at least part of it because it's just more than Curtner's capable of taking on. I just want to check and make sure that the dewatering is accurate. I think they're going below grade 20 feet, 16 feet. That to me sounds like dewatering. TRANSCRIPT Page 25 of 78 City Council Meeting Transcript: 09/18/17 Those are my—the other thing is the concession on the setback. I don't think they should be allowed a concession on the setback even though it's in the parking. I want those three things to be looked at again. Thank you. Mayor Scharff: Thank you. Jeff Levinsky. Jeff Levinsky: Good evening, Mayor, Council Members, and Staff. Everyone across the spectrum talks about making housing more affordable, but tonight you have a project that will actually increase the price of local housing. It does this by taking State and local laws intended to lower housing costs and twisting those laws instead to raise prices and, thus, earn more profits for the developer. Here's what's happening. The project is asking for a concession to add about 2,600 square feet more than what a similar project is allowed. Both the State and our own Housing Density Bonus Laws say that for developers to get such a concession, the developer must show two things. First, they must show that the concession reduces actual costs. Second, they must show that those cost reductions then enable adding the affordable housing. It makes total sense. It encourages developers to seek concessions that create affordable housing, while blocking them from claiming other concessions that just earn them extra profits. This project has never demonstrated how it meets either requirement. It hasn't shown how those extra 2,600 square feet lead to the actual cost savings both State and local law requires. It hasn't shown how such cost savings enable the affordable housing. In fact, our City laws put in place by you and your predecessors require that they present these two arguments when they first file their application. As you've heard, they didn't do that. Requiring this up front makes sense. It gives everyone time to ensure the extra square footage truly does what it's supposed to do, namely create affordable housing. All we have right now is a puzzling argument offered well after the initial application date, but the extra square footage will go for lobbies and elevator shafts. That's in tonight's Staff Report. That argument doesn't comply with our State and local laws at all. In fact, you have to have lobbies and elevator shafts for any project with underground parking. Providing those aren't actual cost reductions. Plus, developers have to pay for affordable housing anyway under our other rules, so they aren't meeting either legal requirement. Instead, that extra 2,600 square feet are making the overall project larger, which means the market rate units are, of course, getting larger. That may raise the size of the two affordable housing units, but it certainly ups the price on the market rate housing. At $1,000 a square foot, the total sales price will go up about $2.6 million, and that was never the intent of the State law or our local law. In fact, it's the opposite of what the laws intended. That's because raising the price of market rate units raises the cost of land, making it even harder for our town to produce more affordable housing. Please turn down the concession. You can do that and still approve other parts of the project. TRANSCRIPT Page 26 of 78 City Council Meeting Transcript: 09/18/17 Turning it down will avoid creating a terrible precedent, and it will keep housing more affordable in Palo Alto, which is what we actually need. Thank you. Mayor Scharff: Thank you. Seeing no further speakers, we'll close the public hearing. What'd you say? Mr. Lait: Just an opportunity for rebuttal for the applicant. The applicant has an opportunity for rebuttal. Mayor Scharff: That's right. You have 3 minutes for rebuttal. That is correct. If you wish to use it. Stuart Welte, EID Architects: Hello. I'm Stuart Welte, an architect at EID Architects. Thank you very much for the comments from the public. Some of these items had come up through the discussion over the last 4 years. We had provided substantial written and emailed documentation to the City through the various planning phases. There are documents on file showing when we initially came to the City to discuss the planning of the project. We were asking, of course, to find out what it would require to make use of the State's Density Bonus Law. At that time, actually when we first started this project 4 years ago, the Palo Alto affordable housing ordinance was just being approved. We worked with that and the Planning Staff to see, according to the new concessions that were being approved and outlined and that would be accessible through the State Affordable Housing Act, how to go ahead and most wisely use that provision while still providing homes that would be of a size that seemed to make sense in Palo Alto. At the time and still, often the units that are being provided are too large and too expensive. Our goal was always to provide a variety of unit types but also small square footage in order to keep the price lower and provide as many units as possible knowing that the housing, as was mentioned many times this evening and is always mentioned, is in extreme shortage. That's always been our goal. We did provide a letter based on the State Affordable Housing Act. I think it's a 4 or 5-page letter. It's on file with the City. We provided the documentation as guided by the City planning process. In terms of the traffic report, it had undergone several updates through the process. As you imagine over 4 years and going to the ARB four, five, six times and really diligently working with every single department in the City, again, by email and by one-on-one physical, face-to-face meetings, we have—the project had transitioned. At one point there were less units. At one point there more units. At one point, there was more commercial. We tried all sorts of different configurations on the site. Through those processes, each time we changed the design, we would get an update from the traffic consultant, Hexagon Traffic Consultants. TRANSCRIPT Page 27 of 78 City Council Meeting Transcript: 09/18/17 There is one on file as recently as 2016, I believe mid-2016 at least, if not more recent. Thank you very much. Public Hearing closed at 8:05 P.M. Mayor Scharff: Thank you. Now, we return to Council for questions, comments, and Motions. Council Member Fine. Council Member Fine: Thank you very much, Mr. Mayor. Thank you very much for the report. Thank you for the application, and thank you all for the comments. Overall, I'm really supportive of this project, and I hope we can all move it forward tonight. Just a couple of comments, questions, and then I think I may be willing to make a motion, see if I get some support. Overall, I think this is a pretty good project. Here on this Council and out in the community, folks are talking a lot about housing, about good design, about projects that are responsive to traffic and parking woes. This is probably one of the better projects that responds to those we've seen in quite a while. We're getting 17 homes on an RM-30 property. Two of them are affordable. There's only one variance being requested, an underground garage basement setback for 10 feet to 6 feet, which I think is reasonable particularly given that this project is providing more parking than required. Just a few questions for Staff, and they may go to the applicant as well. This project is getting the extra 2,596 square feet through the Density Bonus Law because of the two deed restricted units. Correct? That's completely compliant with our Code? Mr. Lait: Yes. Our Code does provide a process by which somebody can make this request. You heard some public comments this evening about some requirements for that as well. Some information was provided in that regard from the applicant. Council Member Fine: Thank you. One other question. I noticed in the report that there are 17 units on this project, but it could host up to 22, so this might be for the applicant. Why 17? Why not 22? Are you looking for more medium- sized units? What's your thinking there? Mr. Wommack: The flats are just over 1,000 square feet, and the townhomes are about 1,288 square feet. The challenge is when you look at a parcel comprehensively within the City of Palo Alto, you may find that you have quite a generous density allotment. Then, when you begin to try to factor in FAR limitations and open space requirements and all the parking, all these factors have to be addressed together. The only way to create more dwelling units would be to decrease the size of each accordingly. You begin to get to the point where you're providing only single-family homes and then studios in order to be able to push the density up as high as you can. That frequently TRANSCRIPT Page 28 of 78 City Council Meeting Transcript: 09/18/17 means that you end up in trouble with parking. In this particular parcel, the density wasn't the challenge. The FAR was the challenge. Council Member Fine: That's what I was getting at. I don't think it's the RM- 30. That's the ceiling in a way. It's actually the density of the site. I'd point out to my colleagues there may be some opportunity for us in the future to look at that, whether we do want to move towards housing minimums or look at increasing the maximums or perhaps just going to a pure FAR system, where we leave it up to folks like this to choose how they want to allot that space including with our parking requirements. One other question around that. I noticed you're providing more parking than required. Parking's particularly expensive, especially if it's underground. Is that just because you foresee the demand for it or … Mr. Wommack: No, no. Actually, I'm optimistic and hope that the demand for parking will go down as automated vehicles and ridesharing really matures and takes off. Clearly, we can't all continue to drive ourselves around in our own car. It's becoming unmanageable. The reason we have more parking is because we ended up having to maximize the footprint of the parking in order to be able to satisfy the minimum. Having done that, we sought to provide as much parking within that footprint as we could. Council Member Fine: Thank you. Mr. Mayor, if it's okay, I'd like to make a Motion that we move the Staff recommendation. Vice Mayor Kniss: Second. MOTION: Council Member Fine moved, seconded by Vice Mayor Kniss to: A. Adopt the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program as set forth in the Record of Land Use Action; and B. Adopt the Record of Land Use Action approving Site and Design and Design Enhancement Exception applications, based on findings and subject to conditions of approval as recommended by the Planning & Transportation Commission (March 8, 2017) and Architectural Review Board (May 18, 2017) Mayor Scharff: Would you like to speak to your Motion? Council Member Fine: As I kick this off, I think overall this is a pretty good project for our City and for our community. It's gone through the wringer over four years, through PTC, ARB, and a number of other meetings. I have some questions there about the density and how many units were going to fit on this site. I don't think tonight is the night for us to explore those. As for TRANSCRIPT Page 29 of 78 City Council Meeting Transcript: 09/18/17 the one requested exception, I think that's completely reasonable. It is in service of one of our community's major issues, which is parking woes. I would encourage you all to support this project. I hope we can move it forward tonight. Thank you. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: I'm supporting the project, but I want to ask Staff a couple of questions first. So far I only remember two other projects that used density bonus. Am I right? Have there been more than that, that we haven't discussed, or have we missed them? Mr. Lait: I'm sorry. I don't have an inventory of … Vice Mayor Kniss: Maybe one of my colleagues … Mr. Lait: We've approved some in the past, though. Vice Mayor Kniss: Maybe one of my colleagues will remember it. I think that's the case. Thank you for those who came and spoke about this and your concerns. I do hear that. This is an odd parcel, and it has been vacant for a long period of time. I remember when it was Compadre's, and it was hard to park at Compadre's then. This has never been an easy spot to deal with. Secondly, when we're looking at the comment that the last speaker made regarding, I think, ingress and egress—maybe I should look at the applicant. Was there anything else that you looked at as far as—I think what she's referencing is safety. Mr. Wommack: We started out—in our initial proposal back in 2013, we did have a two-way driveway on El Camino Real. The stakeholders within the City directed us to remove it completely. They didn't feel it was appropriate to have a driveway off El Camino Real. Vice Mayor Kniss: It's us, not you? Mr. Wommack: Yes. Then, ARB when we came back requested that we put a ramp back in to at least get traffic into the site, which we could do without detrimentally impacting the objectives of the street frontage for El Camino Real and maintaining the minimum build-to line, the percentage of the frontage that has to be a facade. It's a challenge. Vice Mayor Kniss: Thank you. I think they'll appreciate that answer. I also think the way it has been stepped back, as you have designed it, was very attractive. One, a little more general question. The City Manager earlier remarked that it looks as though the by-right bill will actually pass. I would TRANSCRIPT Page 30 of 78 City Council Meeting Transcript: 09/18/17 just remind all of us, if that actually has passed, we probably won't be having discussions in quite this depth any longer. That will surprising. I hope that we do get information out to the community about that. It's a very new law, and it's going to have a great deal of impact. Maybe we could have gotten some more square footage in, Adrian. I looked at it, and it is true if they get a lot smaller, you're not going to get families. The goal in that particular area will be families. As I said, I'll be supporting it, seconding it. Thanks. Mayor Scharff: Council Member Holman. Council Member Holman: First of all, I'd like a clarification on process. Not meaning to be difficult here, but just last week I tried to make a Motion, and it was considered premature and denied. None of us have had a round of questions this week, and yet a Motion was made by the first Council Member. I would like our process to be consistent. As a matter of fact, I know my light went on before Council Member Fine's. I'm looking for some consistency in our governance. Mayor Scharff: Actually, Council Member Holman, your light did not go on before Council Member Fine's. He put his light on first. Council Member Holman: I heard him. I heard his light. At any rate … Mayor Scharff: I saw it and looked over. Second of all, Council Member Holman, the process is not consistent. Depending on how the Mayor views the evening, we either do a round of questions or I tell you beforehand that we are doing questions, comments, etc. I told you tonight we were doing questions, comments, and motions. The process is not consistent, and I don't think it should be. So that's what we're doing. Council Member Holman: I find it to be very inconsistent. I do have several questions. City of … Mayor Scharff: Council Member Holman, during our process if you are unhappy with the Motion, you are of course welcome to make a Substitute Motion. Council Member Holman: Understood. I have a question about our BMR Ordinance. The City's requirement is to provide 15 percent BMR. I'm not aware that we have ever had an issue with an applicant being able to provide the 15 percent BMR because it is a City requirement. It seems like what's happening here—you can correct me if I'm wrong—is we are allowing a density bonus to provide that required 15 percent. TRANSCRIPT Page 31 of 78 City Council Meeting Transcript: 09/18/17 Mr. Lait: Is the question about—they're asking for the concession. They're eligible for the density bonus by virtue of complying with our Code, but they're not seeking the density bonus on the project site. Is that your question? Council Member Holman: What I'm getting at is I'm not aware of a situation that has ever occurred where the density bonus was to be applied for the required units. It's when additional BMR units are being provided, not the ones that are absolutely at the baseline required. Mr. Lait: Now, I understand your question. That's not consistent with my understanding of how we've applied the BMR program to other projects. We have our local requirement. By virtue of meeting our local requirement, many projects also qualify by extension for the State density bonus provisions that we have in our Code. I believe that is consistent with how we've approached other projects as well. Council Member Holman: Maybe the Director has a comment. Hillary Gitelman, Planning and Community Environment Director: Yes, thank you, Council Member Holman. Hillary Gitelman, the Planning Director. This is an area of the law which I unfortunately have some familiarity with, having been involved in a lawsuit in a prior jurisdiction. We are required to provide the density bonus even if the below market rate units are required under our inclusionary program. The fact that they're required units doesn't take them out of the density bonus program. Council Member Holman: Thank you for that clarification. One of the speakers said that they had done a public records request and didn't get any information about the need, the communication that was indicated that was provided to the Staff. They didn't get any information about that communication. Can Staff respond to that? Mr. Lait: We get a number of public records requests. I don't know about the particular one being referenced. These are ones—when we do get a public records request, working with our City Clerks' Office we provide all documentation that we have available and that's responsive to the request. I would have to go back and see what we transmitted. I do believe it was referenced by another speaker, the letter. It's information that has been available since March of this year, I believe, when we received the applicant's response to meeting that standard—trying to address that standard, I should say. Council Member Holman: It seems like that would be a significant omission in a public records request. TRANSCRIPT Page 32 of 78 City Council Meeting Transcript: 09/18/17 Mr. Lait: Again, I don't know the timing of the public records request. I don't know what we had available at the time the request came in. I'd just have to—I'm not prepared this evening to understand all the different public records requests that come in. Council Member Holman: A question for the applicant, through the Chair. On Page 132, which is the Conditions of Approval, it's Number 44, Condition of Approval Number 44. It talks about bird-friendly building design. The condition says that the applicant should consider consulting San Francisco standards for bird-safe buildings. I'm wondering if the applicant would agree to utilize those standards. There were concerns raised at the ARB about the window designs. Mr. Wommack: Yes is the short answer. Also, in addition to the turtle glass, the use of the sunscreen, the blinds, also reduces significantly the illusion of open space. Between the two, this project should do very well in terms of responding to those issues. Council Member Holman: That'll be an Amendment to the Motion. Thank you for that. A question for Staff. The Design Enhancement Exception, can you clarify that it looks like, from reading and looking at the plans, it's actually to be able to get below ground. Is that correct? Mr. Lait: Yes. There's a driveway ramp from El Camino Real that transitions down to the subterranean garage. That portion of the subterranean garage in the RM-30 zone encroaches into the setback. It's for that subterranean garage encroachment into the setback. Council Member Holman: I'm really going to sound like Cranky Nancy tonight. That should really be a variance and not a DEE. We've gone around the horn about this a few times. It's not a Design Enhancement Exception. It's not a minor architectural feature. It's a variance. My perspective. Mr. Lait: I'm happy to comment on that if … Council Member Holman: There are a couple of corrections that need to be made. Staff hasn't come forward with the ones that you have. I have a couple. On Page 122, just so the record is clear, under Section 7, Planning Division Number 1, it's the plans dated May 4, not 2007 but 2017. The other one is a clarification, if you would please. On the top of Page 123, very much on the top of Page 123, it says also provide in-lieu fee equal to 7 1/2 percent or the greater of, the greater of the actual sale price or fair market value of each unit in accordance with the schedule. Which units is that referring to? The BMR units or the market rate units? TRANSCRIPT Page 33 of 78 City Council Meeting Transcript: 09/18/17 Mr. Lait: I believe that's the market rate units. Council Member Holman: Could we clarify that that would be market rate? Regarding the signage to recognize what was here onsite and understand you're waiting for language from the Silvestri family. As I was reading the plans, it seems like that signage would be in a courtyard area as opposed to at the front of the building. It seems like when you're denoting a site and the importance of the site, it's always on the front of the building or in the sidewalk in front of the building or something of that nature. In the courtyard doesn't— it's really going to be viewed by so few people. Mr. Wommack: I don't have the site plan to show you right now, but the intent is to incorporate it into the bench seating that's in that public courtyard area just adjacent to the front of the building. Because of the frontage along El Camino Real, there was—with the requirement for the sidewalk at 12 feet, there really is no opportunity to provide any sort of structure beyond the facade of the building. Our choices are either to mount it to the front of the building proper or to create an environment within that courtyard area, which is adjacent to the retail component, where the entrance to the retail component is. That's where we thought it would be most appropriately placed. We're certainly open to suggestion as to a better location for it. That also allowed us to incorporate some of the elements that were taken off of the building as a part of the historic evaluation, that we're going to incorporate into an overall presentation of the history of the site. It was just felt by everyone involved in the process that that courtyard area was the best place for it. It is the public courtyard area, so it's not walled off. Council Member Holman: That's more helpful to know. I'm not sure how you're going to incorporate the ironwork that you found. Mr. Wommack: They're relatively small pieces. They are essentially the plates that the seismic reinforcement bars ran through to hold them onto the wall. Each one is literally no larger than my hand right here. They're not major elements; there were no other significant elements within the building that we could utilize. This is what was identified by the process, by the City Staff and consultants as being the elements that we should make an attempt to incorporate. Council Member Holman: Just one more question for you all. If you would allow—I'm not sure whom—someone from the City or the Historical Association to go in and take photos of the original oven—there's a mural and there's signage on the side—somebody to have access to document those things. TRANSCRIPT Page 34 of 78 City Council Meeting Transcript: 09/18/17 Mr. Wommack: Yeah. First and foremost, there already have been quite a lot of photographs, but certainly any additional documentation to record what's there and what's left would be a good thing. Council Member Holman: That would be great. A question for Staff. Thank you so much. Ms. Gittelsohn mentioned that the traffic study had been done in 2012. The applicant said it had been updated several times. Can you help us understand if the baseline was still a 2012 baseline? In other words, is it current or not, understanding from the public that the conditions on the street have changed even fairly recently? Mr. Ah Sing: I'm just looking at the response because that was one of the questions that came up for the environmental document. I'm just looking for the memorandum that's actually the response to comments. It does include that. I'm just trying to find that. I can point to that and also state that into the record. Council Member Holman: I'm sorry. Could you repeat that please? Mr. Ah Sing: The question you raised actually and also by one of the public today was a question that was made towards the environmental document. We did respond to that in a memo, which is part of the packet. I'm just trying to find that so I can (crosstalk). Council Member Holman: That would be great. With that, I'll offer a couple of Amendments to the Motion. One is to … Mr. Lait: Chair, if I may interrupt. Council Member, if you're going to make some Amendments, can I offer at this time some other changes to the Record of Land Use Action that you might be able to include as part of your Amendment? Council Member Holman: Sure. Do you want me to go first or do you want to go first? I'll go then, since you're hesitating. Mr. Lait: Once I say it, you can incorporate it probably more efficiently. Council Member Holman: That sounds goods. Mr. Lait: On Condition Number 6, in addition to the clarification of the calculation of the 7.5 percent, I also wanted to make a change to the first part of that condition and change the reference to the 2.7 units to 2.55, which is the correct recalculated number. Mayor Scharff: Where is that? TRANSCRIPT Page 35 of 78 City Council Meeting Transcript: 09/18/17 Mr. Lait: That's on … Council Member Holman: Packet Page 122. Mr. Lait: Packet Page 122, Condition Number 6. Just correcting the number there. On Packet Page 127, I would like to suggest that we add a reference to Condition Number 22 with regard to the—make a specific reference to the walking and bicycle route on Curtner, so that we can take extra measures to ensure that there's no construction-related impacts to that route to school. We would make that … Council Member Holman: Is that one you're adding? Mr. Lait: Yeah. We would like to just add some language in Condition Number 22 to reference the City's walking and bicycle path that we have. I believe it's to Barron Park Elementary School, if I've got that right. There is another logistics plan condition. On Condition Number 25 on the following page, I'd like to strike that in its entirety. Condition 22 would rule. Finally, your Staff Report on Packet Page 108, the second paragraph—the first full paragraph, I should say. The last sentence there is a reference to the traffic and parking study and a suggestion that there be a red curb added to either side of the ramp along Curtner Avenue. That didn't make it into a condition of approval. That red curb would be to improve sight distances going out of the garage. We would recommend that that condition also be added. Council Member Holman: I'm looking at Packet Page 1-0 … Mr. Lait: Packet Page 108. Council Member Holman: What paragraph are you (crosstalk)? Mr. Lait: First full paragraph that starts off with "the study also evaluated." That last sentence has a reference for a recommendation for a condition to be added to improve sight line just so no cars are blocking the exiting of the … Council Member Holman: My Amendments would be to add the Staff- recommended changes, if those are accepted by the maker. There were four. Right, Jonathan? Council Member Fine: Yes, I'll accept the ones Jonathan just went through. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part B, “Change number of units on Condition Number 6 to 2.55, add a reference on Condition Number 22 to the walking bicycle route on Curtner, strike Condition Number 25 in its TRANSCRIPT Page 36 of 78 City Council Meeting Transcript: 09/18/17 entirety, and add a red-curb on either side of the ramp along Curtner Avenue to ensure adequate sight distance.” Council Member Holman: The changes I'd like to make are to correct Number 1 on Page 122 so that it is May 4, 2017. That's the plan identification. On the top of Page 123, Condition Number 6 is to change the language so it reads that "also provide in-lieu fees equal to 7.5 percent of the greater of the actual sales price or fair market value of each market rate unit." Insert the words "market rate." That was a clarification that was provided by Jonathan. Condition Number 44, I look to Staff to see how you'd like to word this. The applicant has graciously agreed to include bird-friendly building design. How would you like to reword that? Mr. Lait: I think we just strike the word—"the project should consider," strike "should" and say "the project shall utilize." Council Member Holman: That was agreed to by the applicant. Is that agreeable? I guess there should be a separate condition that the applicant has greed to allow historical photo documentation to be taken of the Adobe Ironworks building. That would be interior and exterior. It would be an additional condition. Did Staff find the—is that agreeable to the maker and seconder? INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part B, “Correct Condition Number 1 to indicate May 4, 2017, change language in Condition Number 6 to ‘actual sale price of fair market value of each market rate unit in accordance …’, change language in Condition Number 44 to state ‘… project shall use bird- safe …’, and add a condition to allow historical photography taken of interior and exterior of the adobe building.” Council Member Holman: Did Staff find the clarification about the 2012 versus later traffic study? Mr. Ah Sing: In the memorandum, which is the response to comments on the proposed MND for the project, dated May 1, 2017, on Page 7 in response to age of traffic study, it does refer to Hexagon Transportation Consultants prepared a traffic analysis in March 2016, and that's based on traffic counts taken in September 2014 and mentioned that due to the small size of the project and corresponding trip generation and distribution estimates, there's no evidence to suggest an increase that would be sufficient to alter the results of the traffic impact analysis. The level of service at the intersection of Curtner and El Camino is Level of Service A, which is the best that you can have. The City's standard is "D." To get down to, say, a Level of Service C, you would TRANSCRIPT Page 37 of 78 City Council Meeting Transcript: 09/18/17 need to have a delay of 20 and 35 seconds. You need a lot of traffic to get down to that level. This traffic analysis is still maintaining Level of Service A. Council Member Holman: I appreciate the Staff's addition of the safety. My other remaining issue is the DEE actually being a variance. Thank you. Mayor Scharff: Council Member Filseth. Council Member Filseth: Thank you. A couple of questions. The answer is probably pretty complicated to this. Given that there are two units that are going to be deed restricted affordable, what determines the maximum rent on those? Mayor Scharff: They're for sale. They're not (inaudible). Council Member Filseth: They're for sale. Sorry. Mr. Lait: We have BMR regulation that stipulates the process by which we do that calculation. These will be 120 percent or no more than 120 percent of the moderate income. Council Member Filseth: I assume a two-bedroom unit is more expensive than a one-bedroom unit under that regimen. The 120 percent of the median income, that's a fixed number. Mr. Lait: Right. You're trying to get at a threshold at which housing costs do not exceed a certain percent. I would think that a larger unit would probably command a greater rent possibly. Council Member Filseth: That's what I'm curious about. One of the speakers suggested that if you make the unit larger, then it probably costs more. On the other hand, the median income in Santa Clara County doesn't change no matter how—depending on the size. I'm wondering if he's right or not. Mr. Lait: A studio unit of 500 square feet affordable at 120 percent is probably not going to cost as much as a two-bedroom, three-bedroom. Council Member Filseth: Your 120 percent … I'll have to think about that. The next question. Does this violate the Ground-floor Retail Ordinance? Mr. Lait: This project was filed before that Ordinance was enacted, so no. It's not subject to it, I should say. Council Member Filseth: I was wondering about the height. What's the height limit supposed to be for this parcel? TRANSCRIPT Page 38 of 78 City Council Meeting Transcript: 09/18/17 Mr. Ah Sing: You have two different zoning districts. For the RM-30, your maximum building height is 35 feet. The proposed building is at just under 30 feet. For the CS district, you have 35 feet because it's within 150 feet of a residential district. We do mention here the 37 feet 6 inches. The reason for that is because there's a partial elevator shaft and then there's equipment screening. That's an exception that's allowed under the Code. Council Member Filseth: Understand. Thanks very much. Mayor Scharff: Council Member DuBois. Council Member DuBois: I just want to say I'd echo support for a consistent Council process, particularly in quasi-judicial. I find it useful to hear questions when we're making a considered decision. Just to understand some of the comments from the public, what was the date of the application? Mr. Ah Sing: It's November 20, 2014. Council Member DuBois: Do we require that the density bonus be requested at that time? Mr. Lait: I was just looking at that section. I don't believe that the Code states that it has to be filed at that time. Projects, over the course of getting comments from different City departments or Boards and Commissions—I'm not even sure if this project started off with an interest in affordable housing or doing a BMR project or not. When an application for a project is filed, we have a set of criteria that we look at to make sure that they've submitted the plans and the materials. We deem a project either complete for filing, meaning we have the information we need to process it, or incomplete for filing. I believe this is a project that was incomplete for quite some time. When we did discover—whenever it came out, there's this documentation of a brief description explaining why the concession was sought. That doesn't stall the application. That's not a fault of application processing. We got the information that we needed, and we received that from the applicant in March of this year. Council Member DuBois: When we asked about ground-floor retail, you said it was prior to the Ground-Floor Retail Ordinance. Is there some point where a project can change so much that it would fall under the Ground-Floor Retail Ordinance? Mr. Lait: If a project significantly changed that it was no longer the same project, at some point I suppose they—let's take the housing project they're proposing. If they said, "Forget it. We want to do an office building," at that point that's a new application. TRANSCRIPT Page 39 of 78 City Council Meeting Transcript: 09/18/17 Council Member DuBois: What is the mixed use? It's housing and what? Mr. Lait: I'm sorry? Council Member DuBois: This is a mixed-use project. What is the other use? Mr. Lait: There's retail on the ground floor and an opportunity for retail or office on the second floor to the tune of about 1,500 square feet, I believe. There's also housing above that or (crosstalk) level. Council Member DuBois: I got the housing part. I wasn't clear (crosstalk). Mr. Lait: Yeah, the commercial and the housing in this … Council Member DuBois: Is there retail in this project? Mr. Lait: Yeah, on the ground floor. Council Member DuBois: The project changed to ask for affordable housing, but that's not enough to trigger the retail requirement on the ground floor? Mr. Lait: Right. Again, I don't know when the affordable housing piece came in, but I would not construe adding affordable units to be a substantial change to the basic application, which is a mixed-use housing development. That some of the units would be affordable would not—it doesn't substantively change our analysis in terms of development potential or … Council Member DuBois: That retail that's planned for the ground floor does not have to be retail? Mr. Lait: There are limitations for office development, but they are proposing retail. What was it, 2,000 or 1,500 square feet of retail? Mr. Ah Sing: It's about 1,700 square feet. That's how the parking has been also assigned. Mr. Lait: If the project's approved, they've got to have the 1,700 square feet of retail. We're not going to go to office or reduce it to office because that's what's getting approved, if it gets approved. Council Member DuBois: Thanks for clarifying that. I did have some questions about the EIR. It's really about toxic chemicals in the ground. It says there's an AST site located adjacent which is, I think, the mechanic's shop next door. It says there's not documented soil contamination, so it's considered unlikely to impact the project. I'm just wondering is that the threshold, that there has TRANSCRIPT Page 40 of 78 City Council Meeting Transcript: 09/18/17 to be a known problem even though you know there's this use right next door. It's almost like we don't know that there's a problem, so there's no problem. Mr. Lait: I think there's some Phase I environmental analysis that was performed, some testing that was done. I'm going to ask our consultant from Dudek to respond to the question. Katherine Waugh, Dudek: There was a Phase I assessment done. That looks at all the various State databases and record searches. Nothing was revealed during that process to indicate that there was any adjacent or onsite contamination or uses that would warrant further review. Council Member DuBois: That's what I'm referring to. That report said that there's an auto shop next door, but there was no documented—I don't think it was inspected. I just wondered. It seemed like that was the most likely source. The standard is just a search and see if there's any past reports. Is that all that's done? Ms. Waugh: They do site surveys too and interviews. If there's any reason to believe there's a use that might have some sort of contamination, then they would recommend additional study. Through that entire process and all of those site visit record searches and interviews, nothing came up that would indicate … Council Member DuBois: It just looked like a very cursory document search, and it seems like an obvious—I think it's been an auto shop for a number of years. What is the process if an issue is found during construction? Mr. Ah Sing: The County does have some Ordinances and requirements in case workers do come in contact accidentally with those types of substances. They'd have to report that to those agencies. There's a certain set of protocols that would fall into place. Council Member DuBois: It was a big document, so I might have missed it. Again, the same question concerning noise around the auto shop. It's an ongoing business; it's been there for a number of years. Was there any concern about the noise impacting residents? Noise from the business right adjacent to the property. Mr. Lait: Is there a concern about noise from the … Council Member DuBois: From the existing auto business. Mr. Lait: To the residential? Council Member DuBois: Yeah. TRANSCRIPT Page 41 of 78 City Council Meeting Transcript: 09/18/17 Ms. Waugh: I believe the standard for review is the State's requirement for maintaining an interior noise level for residential uses. That can be done through a number of means, additional insulation, window treatments, and different building techniques. The noise study did take some noise measurements. I believe with those treatments, they indicated that that interior noise level could be met. Mr. Lait: On Page 24 of the Initial Study, which is in Attachment G, it has a more expanded analysis of how we could achieve those indoor decibel levels. Council Member DuBois: Thank you very much. Mayor Scharff: Thank you. Thank you for the presentation. I did just have one clarifying question. On the ground-floor retail, that can't be changed, right? Is it retail under our zoning or is the CS zone of what they're doing, does it allow them to do anything else but ground-floor retail? Mr. Lait: The CS zoning allows for a certain amount of office to take place onsite. I'm just trying to think about the Code section. Parking would be a consideration. Perhaps we're looking at a project here where the development plans are submitted; they're showing on the ground floor. We would construe this as a change from what the project approval was. We could also take the added step and say ground-floor retail shall remain ground-floor retail as an added condition. Mayor Scharff: We could put that in the Record of Land Use? Mr. Lait: Yes. Mayor Scharff: Would you be okay with putting that in the Record of Land Use? Council Member Fine: (inaudible) Mayor Scharff: Sure. Where would you like to put it, Jonathan? Mr. Lait: It would just be adding the condition to ensure that the ground floor is for retail or retail-like uses, I would think. Mayor Scharff: Is it retail-like uses? Isn't it just retail under our Code? Mr. Lait: We have a definition for retail-like also, which would allow for a more expanded list of retail-related uses. Those are the ones that are protected under the current retail preservation rules, retail and retail-like. Mayor Scharff: What were the retail-like? TRANSCRIPT Page 42 of 78 City Council Meeting Transcript: 09/18/17 Mr. Lait: Some personal services, like a yoga studio for instance, would qualify as retail-like. Mayor Scharff: It's the broader definition on the side streets? Mr. Lait: Yeah. Mayor Scharff: Is that acceptable? Is that acceptable to you? INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part B, “Add a condition to ensure ground floor is for retail and retail-like uses.” Mayor Scharff: Thank you and to the applicant. I think it looks like a great project. I didn't see your light, Council Member Wolbach. I'll just finish up, and then I'll let you speak, and I won't speak again. I did want to tell the applicant that I think it looks like a great project. Appreciate the project, and I think it looks good. Council Member Wolbach. Council Member Wolbach: I hit my light late. I actually have a couple of questions. I'm still not clear about a couple of things. A couple of questions for the applicant. You're proposing 17 units and not 22 units, which you could—you could do 22 units, right? Could you really clarify for us why you're doing 17 units and not 22? Mr. Wommack: Again, this is a balance of trying to satisfy all of the different parameters that are contained within the Planning Ordinance, balancing floor area ratio, parking, open space requirements. There are so many different factors that you have to take into consideration as you try to develop a working solution that doesn't violate any of these provisions. The client sought to build two-bedroom units. Based on … Council Member Wolbach: The client preferred to build larger units rather than smaller ones? Mr. Wommack: We're at the point where you get much smaller than what we're proposing, you really can't do two-bedroom units. We would have to switch to one-bedroom units. If we were to increase the density because we would not be able to increase the FAR, as a by-product of this we have a certain number of square feet that we can build on the property. It doesn't matter how many units we have; it's that set number. Council Member Wolbach: You could build smaller units, more studios, one- bedrooms … Mr. Wommack: We could build smaller units. TRANSCRIPT Page 43 of 78 City Council Meeting Transcript: 09/18/17 Council Member Wolbach: … and use that space to provide more units for … Mr. Wommack: We could have—you could build all studios. Council Member Wolbach: My question is why—you're representing the applicant. Why was the applicant in preference of building larger, for instance, two-bedroom units rather than the smaller. I'm just curious. Mr. Wommack: The perception is that this is more of what the market demands. It's more compatible with the existing neighborhood. The density on this site, if we tried to build small units, would just make for a very unattractive product type. You're right, there's always alternatives. We could have elected to have decreased the number of units and built them even larger. We're free to make these choices within the zoning regulations. This was perceived to be the correct balance, particularly inasmuch as these are the units that are going to be affordable units too. I'm not sure I have a definitive answer that I can give you as to why we chose this particular number of square-foot per unit and the number of bedroom counts, other than that was the best fit for the site, the best fit for the market, best fit for the town as we perceived it when we began this project. Council Member Wolbach: You'll forgive me if that does come across as slightly opaque. I'll accept the answer, but it's … Mr. Wommack: Is there a way I could clarify this more? Council Member Wolbach: That's what I'm asking you. It's slightly vague, but I think that's … Mr. Wommack: (crosstalk) Council Member Wolbach: I understand that there are a number of factors that go into making the decision. I was hoping we would have more clarity about the logical process and the determining factors and variables so that we could take that into consideration perhaps in future projects. Each time something comes to us, it informs our future discussions. Each conversation informs the future ones. I was hoping we might be able to elicit more information about how the decisions were made regarding this project. Mr. Wommack: We always start with the program that's brought to us by a client. They have something that they would like to do, an idea for how they would like to use their property and a market that they would like to address. If you would like to see more units, smaller units, if you think that would be something the City could really use and benefit from, then I would strongly TRANSCRIPT Page 44 of 78 City Council Meeting Transcript: 09/18/17 suggest that you look at rewriting your zoning regulations to promote that. Right now, it doesn't. Mayor Scharff: That's the question I'm getting at. What kinds of changes would have incentivized you to—representing the client here, what would have incentivized you to opt for small units rather than fewer larger units as you did? Mr. Wommack: You have a zoning regulation that quantifies everything very specifically. We must address each of these items or we have to come forward with a variance application. Variances are really hard to get if you don't have a unique characteristic of your property that would justify granting this variance when your neighbors can't have this. I would recommend that you rethink how your Zoning Ordinance is drafted to create more flexibility. A lot of the clients I work with would be more than happy to consider variations in their proposal to meet City needs if it doesn't come at a cost to them. Council Member Wolbach: In this particular project, it wasn't lack of flexibility that led to this choice. It was the preference based on market studies and the preference of the applicant. It wasn't a lack of flexibility (crosstalk) … Mr. Wommack: That's true. Council Member Wolbach: … flexibility to do more units. Mr. Wommack: I would suggest that's true of every application you've reviewed. Council Member Wolbach: Thank you. MOTION AS AMENDED RESTATED: Council Member Fine moved, seconded by Vice Mayor Kniss to: A. Adopt the attached Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program as set forth in the Record of Land Use Action; and B. Adopt the Record of Land Use Action approving Site and Design and Design Enhancement Exception applications, based on findings and subject to conditions of approval as recommended by the Planning & Transportation Commission (March 8, 2017) and Architectural Review Board (May 18, 2017) with the following changes: i. Correct Condition Number 1 to indicate May 4, 2017; and ii. Change number of units on Condition Number 6 to 2.55; and TRANSCRIPT Page 45 of 78 City Council Meeting Transcript: 09/18/17 iii. Change language in Condition Number 6 to “actual sale price of fair market value of each market rate unit in accordance…”; and iv. Add a reference on Condition Number 22 to the walking bicycle route on Curtner; and v. Strike Condition Number 25 in its entirety; and vi. Change language in Condition Number 44 to state “...project shall use bird-safe…”; and vii. Add a red-curb on either side of the ramp along Curtner Avenue to ensure adequate sight-distance; and viii. Add a condition to allow historical photography taken of interior and exterior of the adobe building; and ix. Add a condition to ensure ground floor is for retail and retail-like uses Mayor Scharff: Every Council Member has spoken. Our rule is that if I let anyone else speak, then we would have to have a full second round. I'm not going to do that. If we could vote on the board. That passes almost unanimously with Council Member Filseth absent for the vote. That passes 7 with Council Member Kou absent and Council Member Filseth not present. Thank you. MOTION AS AMENDED PASSED: 7-0 Filseth not present, Kou absent Vice Mayor Kniss left the meeting at 9:00 P.M. 11. Presentation by the Palo Alto Transportation Management Association and Approval of an Amendment to the Funding Agreement Between the City of Palo Alto, the Silicon Valley Community Foundation, and the Palo Alto Transportation Management Association to Provide $480,000 in FY2018. Mayor Scharff: Now, we're on Item Number 11, presentation by the TMA. We're ready. Philip Kamhi, Manager Transportation Planning: Good evening, Mr. Mayor and members of the City Council. I'm Philip Kamhi, Transportation Programs Manager with the City of Palo Alto. Tonight I'm joined by Hillary Gitelman, the Planning Director; Wendy Silvani, the TMA Executive Director; and Rob George, the TMA Board Chair. Tonight, we're going to be getting a presentation from the TMA, an update on where they're at with their TRANSCRIPT Page 46 of 78 City Council Meeting Transcript: 09/18/17 programs, and also on a survey that they conducted. The item before you is a funding agreement to provide the authorization to provide funding for the TMA. With that, I'm going to turn it over to Rob George for the presentation. Rob George, Palo Alto Transportation Management Association Chair: Mayor Scharff, Vice Mayor Kniss, thank you, rest of Council Members. This will officially be the fourth time that I've sat in front of you to talk about the TMA. I'm very excited to present an update to you today and share the results of the third transit survey that's been conducted and plans for the future year. Very excited and very proud to represent. Before I dive into the slides and review with you, I want to go off the slides and personally thank Wendy Silvani for her hard work and support of the TMA even before it was formed. She is truly the wizard behind the curtain to support me and this Board. I wanted to personally recognize her at this moment. Moving along with some overview of the TMA programs that at this early stage are meeting and exceeding the goals that the Board and the programs have been set. In terms of our carpooling program, specifically Scoop ridesharing, our goal as the TMA was to have 350 downloads of the app. We currently have over 1,100 apps downloaded since we started with what was our first program of Scoop, 100 unique users per month. We are 1 1/2 times that at 158. The true impact is really in the transit passes. Our goal was to have 25 transit passes at this early stage in the development of the TMA. We are currently maxed out in our budget at 100 transit passes. The breakdown is there below that 100, clearly 57 percent. The Caltrain passes are in the highest demand with the proximity of Caltrain right next to Downtown. The service workers really loving that as a benefit to get to and from work and avoid driving. The second, which was surprising to the Board, was SamTrans and not VTA as we expected with folks coming south instead of north to Palo Alto with 21 percent. VTA is close at 17 percent, and then we do have some riders that come across the Dumbarton Bridge on the Dumbarton Express, which is really the proudest accomplishment of the TMA at this early phase. We also have a Lyft goal of 25, which we're falling a bit short on. We're about to launch some additional ridesharing and first and last-mile initiatives that'll get us beyond that into the second year. We're going to move into the survey findings that we have. I think you'll be excited by the results that we have at this point. Basically, the good news is fewer employees are driving alone to work Downtown. The overall drive-alone rate has dropped from 57 percent in 2015 to 53 percent this year, a 4 percent drop. Our first survey came in at 55 percent, which was already a really impressive result for a city like Palo Alto. There wasn't much low-hanging fruit. To make a 4-percent improvement over time is something that the City can be proud of. Service workers had the largest decrease over the last year. We reduced service worker single occupancy vehicle trips by 10 percent, which is just a validation that our program is geared toward the service workers working here in Palo Alto and making Palo Alto a better place TRANSCRIPT Page 47 of 78 City Council Meeting Transcript: 09/18/17 to work, shop, live. Fewer employees are parking on the streets. That's a combination of RPP, but also our programs that are taking folks that drive alone to work and parking in the neighborhoods into the other modes of transportation to get to work. This slide just speaks to the mode share shifts that we're seeing amongst the population Downtown. Transit is up 2 percent overall and up 6 percent amongst service workers. Again, the group that is driving to work by themselves most has a significant increase in using transit to work and the benefits that it provides. Rideshare is up 2 percent, 7 percent amongst service workers, and 5 percent also amongst government and light office workers. Lyft and other modes also saw an increase even though the numbers were small of 2 percent. Walking and biking decreased 3 percent as more, especially service workers, are traveling greater distances to get to Palo Alto to work. It's not really feasible to take a 20-plus-mile bike ride from San Jose to work at a restaurant or a hotel Downtown in Palo Alto. The next few share some impacts of the results of the survey by business type. Those working in service and light office report the highest SOV rates, followed by government. Technology work sites continue to be the gold standard of companies that use transit to get to work. If you notice on the left amongst government, the SOV rate was 54 percent, but the technology sector 30 percent is driving alone. Those workers are incentivized and really have embraced using transit to get to work. Service is 70 percent, but again I'm proud to say that that was 80 percent at last year's survey and has come down 10 percent this year because of the programs that the TMA is offering. Light office close to the service worker sector at 69 percent. Mayor Scharff: Would you just clarify what light office is? Mr. George: I'll defer to Wendy on that one for specifics. James Keene, City Manager: I only had a few. It's dentist offices and those kinds of business, right? Wendy Silvani, Palo Alto Transportation Management Association Consultant: Yeah, medical office, dentist office, real estate, that kind of thing. Mr. George: This is a slide that basically indicates what we would think is obvious, mode share by parking permit ownership. Single Occupancy Vehicle (SOV) rates are much higher amongst those that have a parking permit. Drive alone rate amongst those that have a parking permit is 75 percent. The second slide is doesn't have a parking permit; that's about 65 percent. Doesn't drive to work is the obvious. They wouldn't have a parking permit if they didn't drive to work. Pretty basic information there for you. Parking permit holders overall have the highest SOV rates because they can come and park safely and stay for a long period of time. Fewer employees are parking TRANSCRIPT Page 48 of 78 City Council Meeting Transcript: 09/18/17 in the neighborhood streets. This slide just indicates that since 2015 fewer drivers are parking on the neighborhood streets. Where do they typically park? The graph indicates by color the 3 years since the TMA began formation and the numbers associated with that. One thing we were particularly interested in is that despite our programs being relatively small and mainly being in what I would call the pilot phase to test whether these programs would be received well is the awareness of the TMA. We're very excited to find out that of the survey respondents, 22 percent of the respondents knew and had a favorable opinion of the TMA, up from 11 percent last year. That's tremendous progress for word-of-mouth programs that we have initiated. 30 percent had heard of the TMA, only a slight increase from 29 percent last year. Looking forward to 2018. Here are some key things that we are excited to move forward with this year. We're in the midst of a search for a permanent Executive Director. We will be having several Board meetings over the next 30 days to vet the candidates that we have so far. We've given the process another 30 days to allow candidates to come in, and then we plan on choosing a permanent Executive Director by the end of 2017. Our IRS status of 501(c)(3) is pending. We're currently a program of the Silicon Valley Community Foundation, and this will fully make us our own freestanding entity in Palo Alto. Our goals for further reductions in the drive-alone rates for 2018 are listed below. With the additional funding that the Council's been generous to support us with, we will have programs to serve over 750 employees in 2018 and get to 14 percent reduction in the drive-alone rate. The 30 percent goal was set by the Council back in, I believe, 2014. After the end of our first full year of funding, we will have reached almost halfway to that goal in SOV reduction here in Palo Alto. Also, we plan on expanding programs too small to mid-size employers, which are about one-third of the employers Downtown. There's been discussions amongst the Board about what that might look like, but that would also involve partnership with businesses that have a smaller number of employees that also could possibly fund part of those passes back to the TMA. We have a bike program pending, where we're going to allow service workers to purchase bicycles at a low price to use to come to town at a point where they would own their bicycles in the future. Sorry, I stand corrected. We're going to give the bike to them for the first 6 months. If they use that bike, then they will be able to purchase the bike at the end of the 6 months at a much reduced rate. That is the brief recap I have for you. Thank you very much for the time. Mayor Scharff: Thank you very much. Staff's done, correct? I have no public speakers? Then, we come back to Council for questions, comments, Motions, etc. Vice Mayor Kniss. Vice Mayor Kniss: I may hesitate to make a Motion, but at least I have some comments that I'd like to make. This will sound a bit overboard, but I think TRANSCRIPT Page 49 of 78 City Council Meeting Transcript: 09/18/17 it's actually thrilling. I remember making the first trip over to the East Bay after Former Mayor Shephard had discovered this at a conference somewhere. It was incredible. Theirs was a more contained area. You know that area well, I know. We were so impressed by what they had managed to do in a relatively short amount of time. Your figures are very persuasive. You feel quite sure about them, correct? I think it's a little embarrassing that technology is so good, and we in government are not. That's regrettable. I guess one of my questions would be to not only you but to our City Manager. What are we not doing that's not motivating City employees? I'm going to guess government is primarily City as referenced here. You haven't even gotten half of them out of their cars. Rather than put you on the spot tonight, I hope that's something we'll continue to mull over and wonder about. I think we're not really setting a very good example. I know the train has become more and more popular. They've leveled off of it recently. Am I right? They're not quite as packed as they were for a while. Still Palo Alto is the second largest station. I wish you luck as you hire the new person who's going to do this. We have made so many decisions based on using the TMA. We have passed housing projects that were in front of us and required they use a TMA. We have talked about the Downtown TMA. Are we at the point where we're going to give up our garage because we've done such a good job with our TMA? That's rhetorical. Somehow we're still in love with our garages. I'm not sure we're going to change that at this point. Terrific. I know that it's still a bit of a mystery to some people, what is TMA, how does it work, what makes it happen. Greg and I two or three times at least have visited Stanford's Research Park and their TMA. Again, more contained but very successful. Thank you all. It is so nice to get good news. It really is. Congratulations for how far you've come, and good luck with hiring your new Executive Director. Is that what the person is going to be called? Thanks. Mayor Scharff: Council Member Fine. Council Member Fine: Thank you. Thank you very much for coming tonight. This is, as the Vice Mayor noted, really exciting. I've enjoyed following the TMA's progress. Tonight, you've proven yourselves, to put it simply. A 4 point reduction in single occupancy vehicles driving into town is a really, really big deal. I just want to remind all my colleagues that housing and traffic and parking are our residents' biggest concerns. This is a group that's actually addressing them and reducing folks driving to our Downtown. A few points I wanted to make. This data also shows on the parking slide that our RPP is working. 20 percent of these folks used to park in neighborhoods; now it's down to 7 percent. It's not perfect. We may have some work to do around the edges, but it's showing that RPP as one of our legs of our stool is working. One of the other slides, mode share by benefits received, is common sense, but it shows that information, pre-tax benefits and other transit benefits TRANSCRIPT Page 50 of 78 City Council Meeting Transcript: 09/18/17 actually work and get people out of their cars and into transit. It's just like us here on City Council. We can either get a Caltrain Go Pass or get a parking permit downstairs. One is socially more valuable to us actually. We want to put people on trains and buses, not necessarily driving to City Hall for their spot. A couple of questions, though, I did have just for the TMA. I'll just go through them quickly. The one thing that was a little disappointing was awareness around the TMA, just moving from 29 to 30. I'm wondering if you guys have any ideas or strategies about increasing awareness. This is both to the TMA and to the City Manager and Staff. How do we promote this program more? Ms. Silvani: If I can start by responding. Keep in mind this survey was filled out by employees, not employers. To have 30 percent of employees know who the TMA is, it's spreading from employee to employee word of mouth. If we did a survey to employers, I think the numbers would be far higher because we've been sending them monthly emails and things and making presentations through the year. Keep in mind that that is employees. That's all. Mr. George: One thing I'll add is we're just getting started. The one thing that we wanted to be cautious is we wanted the programs to work. We didn't want to have 500 people waiting for transit passes and be discouraged. What we've focused on in the last year is focusing on whether a portfolio of really diverse and unique programs could work first, really by word of mouth. Next year, we're talking about outreach strategies, social media, and many other things. Mr. Kamhi: The only thing I would add to that is that some of it plays off the same thing. The funding has constrained the programs and the growth of them as well. It'll be really telling to see what happens after the programs are really funded to the amount that they think is appropriate to achieve these reductions. You'll see a fairly significant growth in awareness. Hillary Gitelman, Planning and Community Environment Director: If I could add one thing. Hillary Gitelman, the Planning Director. We tried to make it clear in the agreement and the recitals that the City is looking for a higher profile and greater community engagement on the part of the TMA. We're hoping this significant investment in this fiscal year will help the TMA achieve that goal. Council Member Fine: I would just encourage the City to put our marketing and communications resources behind this, just to support the TMA as much as we can. Two more questions, and they're somewhat large. One is around our Downtown parking policies. Over the past few years, we've implemented TRANSCRIPT Page 51 of 78 City Council Meeting Transcript: 09/18/17 the RPP. We've also implemented the TMA, and we're looking at some funding mechanisms now to fund it and to see how it can chop away at the SOV rate. Earlier this year, the Council considered a Downtown parking study, where we're looking at pricing on-street parking with meters or some kind of technology. I'm just wondering how does that fit into the TMA's calculation? What would you like to see happen there? How do you think it would affect the folks taking the TMA or folks who are parking in Palo Alto's neighborhoods? What are some of your thoughts around that? Ms. Silvani: Statistically—I don't have the data with me tonight. Charging for parking and parking limitations in terms of parking inventory are the most powerful incentives and carrots and sticks to use to get people to use alternative transportation modes. That has been proven in just about every community across the nation and Canada, Australia over the last decade. Parking policy as a part of the stool, parking policy, the RPP, and having options and having—not only having options but having options that are affordable. What we've done in the past year by focusing on the service worker is we have made it possible for them to take transit. Taking transit, until we came along, was the most expensive way a service worker could possibly get to work. Most of our Caltrain tickets are to zone. That's $137.80 a month. If you're making $22,000 a year, that's a big hit every month. If you can drive for free, park on a neighborhood street for free, suddenly when you begin to say, "I can get a free transit pass," or hopefully as we can pressure Caltrain to sell us discount passes, we can make the price of a transit pass so much more affordable. Also on the other side, the City's policies and programs are increasing the costs of driving. It all works together. Council Member Fine: I think this is a really important piece of logic as we get later in this year and we do the Downtown parking study. Paid parking will be important, one, to funnel people into the TMA in terms of increasing the cost of parking Downtown. Two, it solves a parking intrusion problem in our neighborhoods. Three, it's actually a mechanism to fund this. I will emphasize to you all that I really think our Downtown parking study, when it comes back to us, is a keystone in relationship to the TMA. Mr. George: If I could add one thing here as well. You asked the question. We would love to have parking revenues to fund the TMA well into the future. The one thing I wrote down here is parking is a fixed asset. We want visitors and customers and visitors to the residents to use those parking. Transit is sort of unlimited. The biggest impacts I've had on my business is the RPP zones are filling up. My team is not wanting to walk 7 or 8 blocks to get to work, so they're much more interested now in being moved to transit at this point. TRANSCRIPT Page 52 of 78 City Council Meeting Transcript: 09/18/17 Council Member Fine: The parking controls move people into transit because it becomes more attractive. Just last question. This is more hypothetical. If the TMA continues to be successful and continues to work at our goal of reducing single occupancy vehicles, I would guess that the City would probably want to expand into other areas, whether it's Cal. Ave. or perhaps the entire City. I'm just wondering if you have any thoughts about what that means, what kind of timeline that could be. Mr. George: We are already getting knocks on our door from Cal. Ave. and the El Camino. We will be ready for those service workers and beyond when we can expand to those areas. Right now, we're going to focus on what our goal is, to decrease SOV trips to Downtown to make it a better place to work, live, shop. Council Member Fine: I would encourage you to keep on thinking on that. As you come back to Council, let us know what you're thinking on those expansions because (crosstalk). Ms. Silvani: The nice thing about most of the programs and the way we're setting them up is that we are setting them up for scalability. We have a database now for our Clipper card. We have a system where we send people— it's pretty laborious. We send all the recipients either a text or an email or their employer saying—I actually go through their Clipper card accounts to make sure they're using it. It's very a customer-service-oriented program right now. As we're starting to automate more parts of it, we'll be ready to scale up to go to different areas. Council Member Fine: Thank you very much. I'd be happy to support this tonight, but those are all my questions and comments. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: Can you tell us about any communication or collaboration between the Palo Alto TMA and MVgo, the Mountain View TMA? Ms. Silvani: The MVgo TMA is primarily a large employer TMA. It's Samsung and Google. There's like a $75,000 entry fee for them. People fund specifically the shuttle services. I actually am in contact with the Executive Director of the Mountain View TMA. We've talked about how we could collaborate in the future. That's something that the permanent Executive Director can certainly explore. I know there's a lot of opportunities that would be reciprocal, our Downtown workers who are coming in from Mountain View and vice versa, people coming from Palo Alto and going there. There are certainly lots of opportunities to explore. Again, we haven't wanted to get sidetracked. We want to keep our core Downtown mission so that we can TRANSCRIPT Page 53 of 78 City Council Meeting Transcript: 09/18/17 show you more results like we are showing you now. I think that's definitely something that can be explored in the future. Council Member Wolbach: What do you think are the top two or three qualities, characteristics, things that we need to have to be successful from our TMA leadership? If you had to pick the top two, three, five, things to make our TMA really strong, that the leadership and the staffing requires going forward, not just to have slow incremental change but really the transformative change that we've dreamed, hoped, and planned and might even be willing to fund on the staffing and leadership side of the TMA, whether from the Board or from the Staff side, what are the things that we can continue to encourage from you and what do you see as the things that you can continue to provide or bring others on board to bolster, can help to continue to improve and make sure we continue to have outstanding leadership? What are the qualities that we should really be looking for and encouraging? Mr. George: The first thing that comes to mind is whoever leads the TMA needs to be the face of the TMA. Wendy made the comment about being a very customer-service-focused TMA at this point. It's very laborious in a lot of ways that we can streamline, but it's important that the TMA has a face in Palo Alto and that that face doesn't just represent business, that it represents residents, it represents businesses of all sizes, and it really represents the customer that comes Downtown, that goes to the hotels and to the restaurants, that at its core is going to make this a success when your constituents are saying, "That TMA made Palo Alto a better place to be." That's a pretty global statement, but that is the type of leadership this TMA needs to catch the interest of the entire Peninsula. I also think that there are—we've created a group of programs that require some maintenance and some hands-on approach. An Executive Director that has some knowledge in forming a team that can serve the 750-plus participants is quite a big task. Those are the top two things that I can think of at this point. Ms. Silvani: I would add, as someone who's been around TMAs for 20-plus years, having product, having services to offer to people so that we have something to offer for everyone in our community is really important. We've helped a couple of large companies. Liz asked what we can do to help the City get more people on board. Those are the kinds of things that you can start to take a more targeted approach once you have your core programs. I would add that the advocacy, that the need for the TMA to be able to buy bulk transit passes and resell them is probably—it would be my number one priority. That alone will enable the TMA to grow, to serve more people, and to do what we all want, which is to get them out of their cars. If we can make taking transit affordable, if we can sell the—it would also quite streamline our month-to-month program. If we could sell somebody a pass for $450 a month TRANSCRIPT Page 54 of 78 City Council Meeting Transcript: 09/18/17 instead of it costing the TMA $150 a month and it's an annual pass, we don't have to bother with the every month. People would be happy to pay for that. There's so many financial implications. The usability of transit really depends on getting that price down for so many people. That would be my number one priority. If there is a way that we can move Caltrain a little bit faster towards that goal. That would be something that I have talked to Mountain View TMA and some others about working to form a coalition. Your permanent staff person will be in a great position to move that forward. Council Member Wolbach: I appreciate that. I just wanted to say also I think your comment about what's the goal really hit the nail on the head. We want Palo Alto residents to say the TMA has made Palo Alto a better place to live. That's the goal. I appreciate that you understand that. That understanding of the mission is one of the things I'm looking for in our leadership, both the Staff and the Board side. That gives me confidence. Thank you. When it comes to funding, how much funding right now comes from businesses in Palo Alto for our TMA? As a number or percentage, even a rough number, a rough … Mr. George: About $50,000 from membership fees and a few small grants we have at this point. Council Member Wolbach: That's $50,000 out of a total budget—remind me of … Ms. Silvani: Our current budget is $160,000 something. Council Member Wolbach: A little under a third is coming from businesses. Ms. Silvani: For this year. Mr. George: For this year. Council Member Wolbach: For this year. Based on our current policies, how do we see that changing in the future? Mr. George: There are a limited number of large companies Downtown, which are the heavy contributors in terms of the membership fees. At this point, that number is fairly capped if you and I sat down and counted small and medium-sized businesses. The goal of moving toward the mid-size business with the possibility of recouping some revenue back is a possible funding source just from an organic level separate from the City's commitment to the TMA. Council Member Fine mentioned parking revenues. I'll smile on that again to say that could be a solid source for it. In terms of the membership, TRANSCRIPT Page 55 of 78 City Council Meeting Transcript: 09/18/17 our large members are a $10,000 contributor. The medium and small members are significantly smaller and more of a token level. Council Member Wolbach: I was actually going to ask Staff if you wanted to weigh in on both the governance and leadership question and also on the business funding for the TMA question. Either one. Ms. Gitelman: Thank you, Council Member Wolbach. I just wanted to point out that the agreement that's before you does include a clause that suggests the City is looking for non-City funding sources to bear a proportionally greater percentage of the total budget over time. It's one of the last paragraphs in the agreement. It basically says if the City's funding would remain constant over the next 3 years, we want the non-City funds to be greater each year. Council Member Wolbach: Thank you for pointing that out for those who hadn't seen that. I know there may not be a unanimous view about this on this dais or in the community. Last year, we spent quite a bit of time talking about establishing a business license tax, either a head count tax or something like that, which could provide an additional and ongoing revenue stream for transportation initiatives in Palo Alto. We need to continue to move that discussion forward with potential for the 2018 ballot as a potential mechanism of raising funding for transportation initiatives in Palo Alto and possibly or probably to include the TMA as one of the target destinations for such funds. I hope on the Council and the Staff we don't lose sight of that opportunity and miss the window of opportunity. I was unclear about—there were comments on the last item about having a consistent process. I agree we should have a consistent process. My personal preference, just to save time for everybody, is to follow Robert's Rules and just have a Motion (inaudible) Staff recommendation right out of the gate. Are we in questions and comments or are we in questions, comments, and motions? Mayor Scharff: I said we were in questions, comments, and Motions. Council Member Wolbach: Just wanted to double check. With that, I will move the Staff recommendation. Council Member DuBois: I'll second. MOTION: Council Member Wolbach moved, seconded by Council Member DuBois to: A. Authorize the City Manager to execute an amended and restated Funding Agreement between the City of Palo Alto, the Silicon Valley Community Foundation (SVCF), and the Palo Alto Transportation Management Association (TMA), to: TRANSCRIPT Page 56 of 78 City Council Meeting Transcript: 09/18/17 i. Extend the term of the Agreement from December 31, 2018 to July 1, 2020; and ii. Provide $480,000 in funding in the approved FY2018 City budget for use by the Palo Alto TMA in reducing single-occupant vehicle (SOV) commute trips to and from Downtown Palo Alto; and B. Authorize the City Manager to execute future amendments to the Agreement for the purpose of providing any additional funding approved by Council and included in the City’s FY2019 and FY2020 budgets for the express purpose of supporting the TMA, and to remove the SVCF as a party to the Agreement when the TMA receives formal IRS approval as a Section 501(c)(3) organization. Council Member Wolbach: We're making progress. We're not making it as fast as I wanted to, but we're making progress. Keep it up. Keep the fire burning. I don't want to see it smoldering; I want to see it raging. Council Member DuBois: I'll speak to my second. I actually have some questions. Looking at this motion, could you explain the budget authority you're seeking here? Ms. Gitelman: Sure, I'd be happy to. If you remember in the budget that was adopted for FY '18, the Council included $480,000 for the TMA in this year. We're asking the Council for authorization of an agreement that would allow us to provide that funding to the TMA in this fiscal year. They would invoice us on a quarterly basis, and we would transfer the funds to their financial partner, the Community Foundation. In the out years of the agreement, in the next 2 years, we're asking you to give the City Manager authority to amend this agreement to provide any additional funding, if you allocate it in future budget cycles. It would be completely up to the Council whether you include the money in future budgets. If you do, the City Manager could amend the agreement as necessary to pass that on. Council Member DuBois: Wouldn't we normally do that when we approve the money in future years? Ms. Gitelman: Right now, there is no money in future years. Because this is a 3-year agreement, we're actually amending what was a 2-year agreement to extend it to 3 years. This was the way we thought to accomplish that. Council Member DuBois: I'm confused about the authority to execute future agreements for future budgets. Why don't we just do that when we do a future budget? TRANSCRIPT Page 57 of 78 City Council Meeting Transcript: 09/18/17 James Keene, City Manager: You could do it both ways or meet in the middle, just an indication that that's what the intent would be. Ideally, when you do approve the budget, you would naturally be saying the City Manager is authorized to go ahead and implement those. Even this direction on us automatically being able to do it is still dependent upon the Council actually appropriating the money in each budget year. Council Member DuBois: I may come back to that. Just so I'm clear, we approved $300,000 before, $100,000 for 3 years, and then an additional $480,000? Ms. Gitelman: There was an initial $100,000, and then there was an agreement that provided for 2 additional years at $100,000 each, but we have only thus far provided one of those $100,000. So far the City … Council Member DuBois: So $200,000 total? Ms. Gitelman: … has given $200,000 total, and this is an additional $480,000. Council Member DuBois: We'd be approving $680,000. Is the implication that we would be approving $480,000 for 3 years? It'd be $1 million-some. Mr. Keene: We have not identified obviously at all what the subsequent years' funding would be, what the funding level will be. The comments Hillary and others made—this year with the $480,000 in funding is really the key year to really demonstrate with more funding can we really leverage significant enough changes and can the ROI on that be such that we would then be able to set what the right continued funding is. As we've identified, we've got to find a—whatever it is, we've got to find an ongoing funding source. We can't continue to do it at this level, the way we did it. Council Member DuBois: I guess questions for the TMA representatives or City Staff if you guys know. What is the best that other cities have achieved in terms of single occupancy vehicle rates? Ms. Silvani: Within parts of big cities like San Francisco, it ranges anywhere from about 20 percent to 65 or 70 percent. The last numbers I saw from San Mateo County, which doesn't have—they have extensive "try transit" programs where they'll give you a pass for 10 days, which I don't think actually can change anybody's behavior because then it goes back to being very expensive for them. Their countywide drive-alone rate is around 75 percent. Council Member DuBois: Have we looked at cities comparable to us across the country? TRANSCRIPT Page 58 of 78 City Council Meeting Transcript: 09/18/17 Ms. Silvani: It depends on the availability of transit options, whether shuttles are needed, how proximate you are to major transit hubs, how many transfers it takes people to get there. It can be anywhere from—again, I can speak for Mission Bay in San Francisco because I managed their TMA and their shuttle program. Our drive-alone rate is 20 percent, which is very good. It's the second lowest in the City. The financial district is 11 percent or 8 percent. Everywhere else it's over 30, 40, 50 percent. Council Member DuBois: That's a much different urban environment. Ms. Silvani: It's a very different environment, but it's not because Mission Bay is very isolated in some ways. You need more than one leg to get there versus Downtown Palo Alto, I would submit, has the advantage of that wonderful Caltrain station within walking distance. Ms. Gitelman: Council Member Wolbach—I'm sorry, Council Member DuBois. I would just add one thought. It gets harder. Council Member DuBois: That's what I'm trying to understand. If we're doing really well, how much better can we do? Ms. Gitelman: Exactly. We're going to have this conversation when we talk about the Stanford GUP. They've achieved a drive-alone rate of 50 percent or something. To get better than that over the next 15, 20 years is going to be super hard. Council Member DuBois: That's what I'm trying to understand. Like you said, the ROI. If we're at 53 and we could get to 50, but we're saying 14 percent, which I don't know if that's realistic. How much money do we have to spend to get that kind of result? I'm curious too about the survey. When you do the breakdown—I guess this consultant does the survey. Do you compare it to our Business Registry in terms of how many businesses there are within the Downtown? Ms. Silvani: The survey company did. Council Member DuBois: They did? Ms. Silvani: Yeah. Council Member DuBois: I'd love for them to start to cross-check data. On the slides, I think it's page—let's see. I'm a little bit confused about the single occupancy vehicle calculation. I'm looking at this slide, which is rideshare by work site type. You say we hit 53 percent overall, but when I look at this data and I do a weighted average, I'm getting 56 percent. That is a pretty TRANSCRIPT Page 59 of 78 City Council Meeting Transcript: 09/18/17 important number. I just want to understand how we calculate that number. It seems to be 100 percent of the users here. If you just multiple the single occupancy vehicle by the percent of the sample and total it up, I think we're at 56 percent this year, which is no improvement over last year. Ms. Silvani: If you look at the main survey report, I believe in the key findings in the very first part of the EMC report it does go into the methodology. Council Member DuBois: Again, I'm looking at Slide 8 in the main report. It shows that 53 percent. If you go onto Slide 12, it's the same calculation I just showed you. You take the weighted average; it doesn't add up. If you just look at it, we have 70 percent of service workers, 70 percent of light office workers, and 54 percent of City workers. Ms. Silvani: If I can't find the answer for you in the next minute, we'll follow up with EMC and get clarification for you. Council Member DuBois: If you just look at it logically, it seems to be higher than 53 percent, which gets us back to this ROI discussion. It looks like we had a 1 percent improvement when we just started. Depending on the numbers, a 1-3 percent improvement this year. Are we saying we're going to get a 14-percent improvement in 2018 or by 2018 from when we started? Ms. Silvani: I'm sorry. If you look at Page 8 and you look to compare overall mode share over time for all three surveys, data sets are weighted so that work site type and work site size is held constant. I believe that answers the question. Council Member DuBois: Do you know what that means? I did see that. Does that mean—what are we weighting? Ms. Silvani: It means that a certain percent were light office, a certain percent by work site size, small, medium, and large, different size businesses as well as the types. EMC weighted so that those were constant over the 3 years so that the numbers would be (crosstalk). Council Member DuBois: That's what I'm saying. If you look at this slide and you weight it by the percent of sample, the math comes out differently for me. Ms. Silvani: I'll have to check with them about those … Council Member DuBois: It's a really important assumption. If we had this improvement of 1-3 percent, how are we going to get to 14 percent? Ms. Gitelman: If I can interject something, Council Member DuBois. We tried to make this point in the Staff Report. The TMA is using two different TRANSCRIPT Page 60 of 78 City Council Meeting Transcript: 09/18/17 methodologies to track their progress over time. One is this annual survey that's a statistically valid survey conducted by a survey firm. The other is they're tracking participation in their programs and measuring uptake on those programs against the baseline year of 2015, I think it was. It's with that latter metric that they're projecting being able to achieve the 14-percent reduction. Council Member DuBois: It's coming back to me. I think we talked about this a year ago that we could have a 14 percent of the 2015 population. As our population grows, the actual impact could be holding steady or something. Ms. Gitelman: As the population waxes and wanes, it's going to be a different percentage. That's why we think it's critical to do both, keep track of things in both ways. Council Member DuBois: I'm not trying to be anti-TMA. I'm just trying to say we need to be transparent. The first couple of Council speakers were like these are great numbers. When you look at them, I'm trying to figure out what they actually tell us. Mr. George: If you don't mind me chiming in here. The one thing that we've spent this year doing is really testing whether this number of programs can work. Next year will be the true test for us to give access to more numbers to truly move that number. I'm not going to speak to that specific number. There was a goal set by Council several years ago. This year our purpose was simple, to see if these programs would work so we could sit in front of you with confidence and say, "Here's what we promised to do. Here are the results of what we're going to do. Let us bring this to the broad community." Council Member DuBois: I do want to echo what I heard Council Member Wolbach say. We need to create a much stronger nexus between the impacts and the funding. I'm on board with kick starting the TMA and approving the amount for this year. I don't want it to be viewed as a baseline amount that we're going to fund every year and it’s going to grow over time. We need to view this as a one-time injection, and it needs to shrink. We put on hold this discussion about a business tax to fund transportation projects. We said it would come back in the fall. Do we have a timeline to have that come back? Mr. Keene: Not yet, but you guys are—actually Council Member Wolbach brought it up last month or so. Two of you are bringing it up right now. We've got to do that. We'd already said we thought if we got going by the start of the year, we could be in a good position for '18. I actually don't think it's— famous last words. I was going to say I don't think it's that complicated. In one sense, it isn't. TRANSCRIPT Page 61 of 78 City Council Meeting Transcript: 09/18/17 Council Member DuBois: My concern for my fellow Council Members is we're using general taxpayer money to fund subsidies. I would rather use General Fund money to fund public transportation available to everybody. Things like the subsidized Caltrain passes and things, we have a very clear nexus between those commuting into Palo Alto and those costs. A business tax for transportation would directly tie those together. It does appear RPP is working, to what Council Member Fine said. The question is how much of the benefit we're seeing is actually driven by RPP, which is revenue neutral, versus this investment in the TMA. Mr. Kamhi: Just one minor point of clarification. I believe the action the Council took regarding the budget was to not use general funds for this, but to increase parking permit fees for employees in Downtown. Council Member DuBois: Thank you for that clarification. Mr. Kamhi: It's actually single occupancy vehicles typically paying to fund the TMA. Council Member DuBois: Thanks for that clarification. Again, we have these potential revenue sources. We have other needs too. It'd be great to use those for other things. I just want to throw that out here because we all kind of support the TMA. We took a very harsh look at the Sustainability Implementation Plan. I feel like this plan isn't baked either. We don't really see a suggestion of how we get to a sustainable business model. There's no indication of where the additional money will be used. There's no budget here and no detail on how we get to 14 percent other than to say that 14 percent is a goal. I'd like to offer some change to my own motion. Given the uncertainty, rather than approve this for 3 years, I would like to modify Number 3. My Amendment would be to "authorize the City Manager to execute future agreements to …" and then delete all of that up to remove the SVCF as a party to the agreement. The point here is just to say as we approve future budgets to come back for approval of contract changes regarding funding. Council Member Wolbach: I don't think that's necessary, and I will not accept the change. Council Member DuBois: The purpose is to enable Staff to do what they're saying they want to do. What I heard the City Manager say was when they come with future funding, they would also come with the ability to amend the contract at that time. Given the uncertainty and the amount of money we're talking about, we should just strike approving contract changes for those '19 and '20 budget years. TRANSCRIPT Page 62 of 78 City Council Meeting Transcript: 09/18/17 Council Member Wolbach: Just to be clear, I don't think that's what we're approving. What the Staff recommendation and the main motion do is say we could approve funding in the future to do this and to make sure that could be utilized if we decide to do that. We want to bake in some flexibility in the agreement so that the City Manager could take what we direct through the budget process in future years and implement it in the agreement. Am I understanding that correctly? We still hold the power of the purse under the main motion. I'm not going to … Council Member DuBois: Also, the City Manager said we could just do that at the same time we approve the budget, the additional funds. Is that correct? Council Member Wolbach: That's what would happen with the main Motion, without the Amendment. Council Member Holman: I'll second it. AMENDMENT: Council Member DuBois moved, seconded by Council Member Holman to remove from the Motion, Part B “to the Agreement for the purpose of providing any additional funding approved by Council and included in the City’s FY2019 and FY2020 budgets for the express purpose of supporting the TMA.” Council Member DuBois: I just want to get clarification from the City Manager that I understood what you were saying correctly. Mr. Keene: Both in the interest of accuracy in making your decision during the budget and public transparency, at that time you would want to be explicit about the reasons why you would be approving a particular funding amount and the authorization, in a sense, for the City Manager to execute these. I'm sort of reading the intent here to anticipate that this is an ongoing enough program that we don't have to bring back the amendments to the agreement subsequent to the Council's approval during the budget process for the funding. Do you know what I mean? If it was over the existing City Manager authorization amount, we could still go ahead and do that without having to bring it back, assuming the Council approved it. That's what I think this is trying to do. (crosstalk) Council Member DuBois: If you look at the changes, I'm trying to accomplish that, but make it clear that we'd want it to come. We basically are approving a 1-year timeframe. Mr. Keene: I'm trying to figure out how to read it given the way the amendment is worded. TRANSCRIPT Page 63 of 78 City Council Meeting Transcript: 09/18/17 Ms. Gitelman: My reading of the Amendment is that subsequent to budget adoption, we would have to prepare another report, come back to Council, and give the City Manager authorization to allocate any funds that you had put in the budget. We were trying to avoid that step. Council Member DuBois: I think you'd do it concurrent with the budget. Isn't that the way we normally do it? Ms. Gitelman: I guess we were proposing that in the budget process the Council would identify funding. We don't typically bring agreement amendments on budget day to Council. That would be a subsequent and separate Staff Report that we were trying to avoid with our proposal. Council Member DuBois: I have one other Amendment, but if Council Member Holman wants to speak to this? Council Member Holman: I would like to speak to the Amendment. It's a prudent thing to do for reasons that Council Member DuBois has brought up. Two things. One is to perhaps address a comment that Council Member Wolbach made. There does seem to be an implication here that we're going to approve monies in the next two budget cycles. It's not clear that prior to doing that we'll have a budget, a plan, and a schedule of success to monitor those. It's prudent not to do these tonight and put out that assumption if not presumption that the budget would include funding for these. We've got what Council Member Wolbach and Council Member DuBois both brought up, the employee transportation tax and bringing that forward. We have a lot of moving parts before we just say we're going to approve money in the two years' budgets and the City Manager can allocate those funds. That's getting the cart before the horse, if you will. Mr. Keene: I don't think it really matters much either way if we're going to get in a big debate about it, to be honest with you. I wasn't focused on it. It strikes me that the Staff was trying to expedite implementation once you've made the decision in the budget and not having us then to loop back and have you redo it in the amendment to an agreement. That's really what I see that saying. If there's a way that you could clarify that if there's additional funding to be granted, the authority to execute the agreement could be authorized at the same time the Council approves the budget funding. Do you know what I mean? It clarifies that is the decision point. Council Member DuBois: Read the Amendment. It says authorize City Manager to execute future amendments to the agreement. Mr. Keene: I think that does it. TRANSCRIPT Page 64 of 78 City Council Meeting Transcript: 09/18/17 Mayor Scharff: Are you done? Mr. Keene: I think that does it. Mayor Scharff: Karen, are you done? Council Member Filseth. Council Member Filseth: One question. I'm going to have some comments. I concur with Council Member DuBois on this. This is really promising, but there's very, very little data. We need to see another year before we commit to spending large amounts of money on it. The question I want to ask on timing is the budget cycle for next year is in the spring. Are we going to be asked to make a discussion whether we want to spend another $0.5 million after this one before we see a year's worth of data from this program, which presumably would be next September? How are we going to do that? Mr. Keene: Go ahead and let me hear what you guys are thinking. Ms. Gitelman: It's true that the TMA uses a calendar year, and we use a fiscal year. They're currently in the middle of their year 2017 where they hope to achieve an 8-percent SOV reduction. With the funding we're providing in fiscal year '18, they hope to achieve the 14 percent by the end of 2018. Our budget cycle will happen halfway through that year. Council Member Filseth: How do we avoid a scenario in which the Council has to make a decision on whether to spend another $0.5 million on this before we see a year's worth of data from tonight? Ms. Gitelman: We're going to continue to receive data in two forms. We're going to have the survey that'll be done in the spring, another one similar to this survey. We'll also have the recordkeeping up until the point we do the budget of how many people they've added to their programs in terms of shifting them from SOV. Mr. Keene: Could I add to that? I share the Council's concern, and I think the TMA is right that this leap to this spending level here is a significant jump. The proof of concept is not here yet, particularly as it relates to can we accelerate the uptake. The Council comments already have been this is the big year in moving forward. We're really going to have to have demonstrable results regardless of the funding source. I think if we got a situation where we've got—what is it—6 months' worth of data, not a full year of data, we would have to—we may have to make some decisions that will advance some amount of money. It's going to be contingent upon coming when we've got the full year's results. Your fiduciary responsibility is going to be that way, unless we're just blowing things out of the water and it's so clear that we're on the right path. Then, that's a different situation. TRANSCRIPT Page 65 of 78 City Council Meeting Transcript: 09/18/17 Council Member Filseth: As I read this, I came to a different conclusion looking at this data. One of the things is that there's a difference between the data you folks presented tonight, which is 2 years, and the data in the Staff Report which is actually 3 years. All of this, there's very little data, of course, because it's new. I thought the 3-year data was actually quite a bit more interesting than the 2-year data. I made the same calculation that Tom did on the 56 percent versus 53 percent, but I thought it was actually more interesting (inaudible) that's an issue. It's actually interesting to look at the different groups of government workers, technology workers, service workers and so forth. If you look at the government workers, for 3 years of data there's been a slight decrease in—it's actually 5 percent or something like (crosstalk) driving alone. Council Member DuBois: Eric, I'm sorry to interrupt. Are we going over the amendment? I'd love to have you go into your whole thing, but I had one other amendment to propose. Mayor Scharff: We are doing this Amendment right now. Your Amendment's on the floor. Council Member Filseth: I'm arguing why I think the budget issue is even more significant than we've discussed so far. It looks to me like for government workers—bear with me a second. Transit looks pretty much flat; actually, it's slightly down from last year but slight up from the previous year. Amongst tech workers, transit looks pretty much flat for 3 years. Amongst service workers—the big chunks are service workers, light office workers and tech workers. Yes, we're up 6 percent from 2016, but we're only up 1 percent from 2015. If you look at 3 years of data, this actually doesn't look like a consistent increase. The same thing's true of light office workers. Actually, it's the reverse in light office workers. It's actually down from last year a little bit, transit of light office workers, but up a little bit from the previous year. That seems to me somewhat inconclusive. However, if you look at the rideshare data, it's flat for government workers; it's flat for—it's up a little bit for technology workers, but it's up significantly for service workers, and it's up significantly for light office workers. That suggests that the big impact, at least in those groups, has actually been on rideshare. Rideshare is not something you would expect to influence by buying transit passes. That seems to be something that's more likely to have been impacted by raising parking permit fees and potentially reducing parking as well. One thing that I wonder is—if you look at that, you go, "Are we spending"—I'm not saying we shouldn't do this. What I think the answer is—we just don't have the data. It wasn't obvious to me looking at this that there's been a huge impact in moving people to transit. It does seem like there's a material impact moving them to rideshare. I don't know how we know that we're just not going to TRANSCRIPT Page 66 of 78 City Council Meeting Transcript: 09/18/17 end up spending money on transit passes for people who are already going to take transit. I think we won't know that until we go out and buy a whole bunch of them and see what happens, which is what we're going to do next year. I thought Tom's comment is about we really need to see another year of data on this before we commit to spending large amounts of money. It's actually an important one. One of the things that I hope we're going to do and take time in this next year is for people that did switch modes—in our surveys, did we ask them why they switched? I hope we'll do that. We really need to understand this better. There's some really interesting data in here. For example, the use of bikes and pedestrians is vastly higher for tech workers than it is for anybody else, which suggests maybe those are the people that live here in Palo Alto, and other people commute from farther away. The rate of people who park in the 2-hour zones and move is vastly higher for service workers than it is anybody else including light office workers, which suggests— we know from anecdotal evidence that a lot of the retail and professional offices actually buy their parking permits for their employees. Maybe that's impact. There's a lot of stuff like that that we just don't know yet. I shudder to think about having to make a decision of are we going to spend $0.5 million, maybe $.75 million in the budget cycle next year without really understanding where we are on this. This is our year to do it. Ms. Silvani: If I can respond to one thing about the rideshare. The other big TMA program that is not just for low-income service workers but for the light office and—in fact, the building up here, the AT&T building on the corner of Cowper is the number one destination. We have capped carpooling rides at $2, which means we're paying whatever the subsidy difference is. If it costs somebody coming in from Mountain View $5, we're paying $3 to Scoop. That is a TMA expense that we see every month, and that's in our rideshare numbers. We are about to expand that program because Waze has opened up carpooling. It's automatically going to start popping up when you open up Waze for directions. We are just waiting for the Silicon Valley Foundation to sign the agreement, and then we're ready to launch. Council Member Filseth: Maybe we'll decide that that's where we should put a bigger expenditure than transit passes. I'm not saying we shouldn't do transit passes; it's just I don't see any evidence here that proves conclusively it's making a difference. Ms. Silvani: To figure out the cost per person that what we're investing in versus rideshare versus—again, it's not either/or. You have to give people a menu of options. We may reprioritize how the budget is allocated in future years. I did want to bring up that that is a very specific program that has met with a lot of very positive reception. TRANSCRIPT Page 67 of 78 City Council Meeting Transcript: 09/18/17 Council Member Filseth: All of us are going to feel a lot more comfortable doing a budget allocation next year if we've got answers to some of this kind of stuff. I worry about the timing. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: I appreciate all the comments I've heard and the discussion about the amendment, but I don't think the amendment addresses the concerns raised by those comments. Maybe I'm missing something. I see an amendment here that removes the provision that that funding, before it gets implemented in a change by the City Manager, has to get approved by Council in our budget cycles. It's important that it has to come to Council. It's important it has to get approved by Council. This amendment removed that. I urge you to vote against the amendment. Mayor Scharff: Tom, I actually think your Amendment's broader. It gives the City Manager more authority because it says authorize to execute future agreements to the amendment. To remove it takes away any limiting of purpose to providing any additional funding. It allows him to do anything he wants. That's just me. I actually think your amendment is much broader and gives the City Manager more authority. I probably would have accepted the amendment. I'm fine with it. Council Member Fine. Council Member Fine: I have some comments to respond to some of the questions I've heard. Mr. Mayor, did you want us to vote on the amendment now and then have any final comments or should I have comments? Mayor Scharff: I'd rather follow procedure a little bit here. Council Member Fine: Will you come back to me? Mayor Scharff: We'll vote on the Amendment, and then I know Tom has another Amendment, which I was going to go back to. Council Member Fine: I have some comments in response to some of the questions. Mayor Scharff: You're welcome to have any comments on this item, on this amendment. Council Member Fine: I'll just go right now. Council Member DuBois and Filseth raised some good questions about the veracity of this data and what's pointing or moving what. At the moment, it may be a little troublesome to have a survey where we're not connecting the dots. Let's go through. Maybe I'll be making an amendment later to ask Staff or the TMA to come back with TRANSCRIPT Page 68 of 78 City Council Meeting Transcript: 09/18/17 a way where we really can figure out what's the relationship here and can we actually prove the causation. TMA exists; people no longer drive; they're taking another mode. Mayor Scharff: Let's vote on the Amendment. The Amendment fails on a 4- 3 vote. AMENDMENT FAILED: 3-4 DuBois, Filseth, Holman yes, Kniss, Kou absent Council Member DuBois: My third Amendment is also building on what the City Manager just said, which would be Point C, to really have this come back to Council with a business plan before the fiscal year '19 budget request. The Motion would be to present a TMA business plan to Council prior to the FY 2019 budget request. Again, this would be hopefully a more detailed plan about where the money would go and how we're going to get to a sustainable future. Council Member Wolbach: Let's give Staff a chance to breathe three times and then respond to whether they think that is feasible. Not whether it's easy, but whether it's feasible. Beyond that, if you have any other questions or concerns about that. That's a pretty significant change. I'm interested in it. Before I accept it as a friendly amendment, I want to hear Staff's thoughts. Ms. Gitelman: I don't think we have any concerns about this. The budget requires the TMA to establish a strategic plan and to review it periodically. I don't think this will be a problem for us. Council Member Wolbach: TMA Staff and Board, any other thoughts? Ms. Silvani: We track the number of people in our programs every single month. By the time April, May comes around and we're submitting the budget for 2019, we have a very good idea. We're halfway through the year, where we are, and we can make projections based on the demand for the programs and what's working and what's not. The question about starting to tie together are you doing this because of that we can design into future surveys. We can also be talking with employers directly. I get emails and phone calls, "I've hired a new person." This turns out to be a really important service. I can speak anecdotally about a lot of the things that you raised, that says there is a direct correlation with what we're doing. We need to bake it into all of our data collection as we move forward. I have no problem with that. By halfway through the year, your new Staff person for the TMA should have a pretty good idea of where they're going for the rest of the year. Council Member Wolbach: Transportation Staff. TRANSCRIPT Page 69 of 78 City Council Meeting Transcript: 09/18/17 Mr. Kamhi: I just wanted to add that it's currently in the agreement under Section 5 that annually—under strategic and budget, it says annually thereafter the TMA shall provide a detailed, updated, strategic plan and budget to the City. It's already called for in the agreement. Council Member Wolbach: This basically just clarifies when that should happen. Mr. Kamhi: Yeah. Council Member Wolbach: I'll accept it as friendly. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion a new Part C, “To present the TMA Business Plan to Council prior to the FY 2019 Budget.” Mayor Scharff: It was accepted. Council Member DuBois: It was accepted. I just wanted to clarify that vote. You voted for it? Mayor Scharff: I did. Council Member DuBois: I thought Eric spoke in favor of it. Did you vote against it? Mayor Scharff: I convinced him. Council Member Filseth: (inaudible) Mr. Keene: (inaudible) much longer. We've got a lot of data we've got to start collecting. Mayor Scharff: It's your Motion, right? You made the Motion. I have a bunch of lights, and I'm trying to figure out who has spoken to the Motion already. Council Member Wolbach: Adrian said that he had a potential—it's not my job to call on people; that's yours. Mayor Scharff: Your light shouldn't be on. I'm just going to clear the lights. Put your light on if you want to speak to the main motion and you haven't spoken to it already. Council Member Holman. Council Member Holman: Thank you. A couple of things. This doesn't need to be in the Motion, but there does need to be a meeting of the minds about timing. You mentioned April, May should have more information, but we have TRANSCRIPT Page 70 of 78 City Council Meeting Transcript: 09/18/17 to start formulating—City Manager has to start formulating the budget February, March. May is when it's cycling through the Finance Committee. April it's pretty much fully baked by the City Manager. It requires us to think about the calendar year versus fiscal year and being on a different schedule. We need to take care of that because this is seeming like it's not very facile for either entity. I don't know if you want to respond to that. Anybody there. Should we look to changing that? Mr. Keene: Do you mean realigning the … Council Member Holman: Realigning the TMA with the City's fiscal year. Mr. Keene: I don't see why it can't be done. I just think it's a question of when we would do it. Council Member Holman: It doesn't need to be in the Motion. It seems like it's problematic. Ms. Gitelman: The only thing I'd add is that our experience this past fiscal year was really that the TMA funding got added to the budget very late in the process. As you point out, it could be that that would have to happen again, that it would have to be May and June. Mr. Keene: It's not a hard thing for me to manage the budget development with one single item. We would be looking at a range of potential funding that could be available, and then it would be dependent upon what the results show as to what we would actually recommend. It's not like we're dealing with 40 different variables in a particular department. Council Member Holman: I leave that to you, but it seems like $0.5 million or, as Council Member Filseth said, potentially more, that's a big dip, which impacts other aspects of the budget. Mr. Keene: There's a lot of magic that takes place in May. Council Member Holman: We have percentages here. The Staff Report talks about how many surveys were done. How do we extrapolate what these percentages are to number of actual drivers, number of actual people who rideshare? How many people actually come into Palo Alto? We have guestimates that the daytime population is two, sometimes people say three times higher than our nighttime population. It's really helpful if we look at this not just in percentages, but if we also look at it in terms of numbers of people, numbers of drivers. That's what's going to help influence community support for the TMA and actually where we can see—a percentage is a percentage. When you're talking about actual number of vehicles, that's TRANSCRIPT Page 71 of 78 City Council Meeting Transcript: 09/18/17 pretty significant. I suggest that you do both. Maybe not on every one, but on enough of these that it gives a pretty clear indication. The presentation didn't have numbers on the slides. The one that just says parking, I'm going to focus on that one for the moment. It says private and employer garage or parking lot. That's up—again, don't know how many cars. It's up from 26 percent last year to 29 percent. It's a curious one. If there's a parking garage or parking lot that's employer-owned, why wouldn't employees always use it? Why would there be an uptick? The other thing, is there any way to know how much more potential that is? If these people are shifted—you know what I'm saying? It's like why would I ever park in a neighborhood, for instance, when there's an employer parking lot right there. Is there any notion of what this represents? Ms. Silvani: Without digging deeper into the raw data, I can't give you a definitive answer. What I can tell you is that part of the commute mode choice—I think Rob can speak to this on behalf of his company. Younger people would prefer not to drive. Not to make a generalization, but one reason that City Staff is more reluctant to give up their car is that they're in the habit of driving versus some of the people who are working at the more high tech businesses or who can't really afford. Younger people are choosing not to own cars, not to pay for parking, and to Lyft and Uber around and take transit and rideshare. Some of it—there might be available parking because people in that company are getting a free transit pass from their employer. They're still—the free parking doesn't matter to them. That could be one reason that you see fluctuations like that. Again, I don't want to give you an answer without going back in and really looking at the raw data. Council Member Holman: This is talking about when they drive to work, they park in the parking lot. I was curious about the neighborhood streets. There were comments by I don't remember whom about the RPP working. Hopefully it is. I was struck by this also in comparison to the recent comments that several of the RPP zones—I've forgotten; is it three or four—were actually oversold. If the RPP zones were oversold, then I would have to think who bought those extra permits were the business or the employees because the neighborhood is the neighborhood. It doesn't change. How does that correlate? From 2015, 12 percent fewer parked on neighborhood streets, but yet the overselling of the RPP districts was—what—10 and 12 percent. Mr. Kamhi: If I can. I'm not sure I have the answer specifically to your question. I can tell you that the RPP regardless of—there was an allocation error with the different zones. However, total RPP employee permits was not exceeded through all the zones. There still is a control there. I think it was 1,100 permits that were sold throughout all the different Downtown zones. Fourteen hundred are actually allowed—actually 1,500 were allowed by TRANSCRIPT Page 72 of 78 City Council Meeting Transcript: 09/18/17 Council, and 100 of them are put in reserve. Fourteen hundred permits were to be allocated to employees. We didn't actually sell out of all of our employee permits; some of the zones were misallocated. There's definitely still control there through that process, which during the 6-month period did have some zones that had some oversell in them. Council Member Holman: The number that was allocated was actually not—if I remember this correctly, I think the number of permits that were allowed was more than the number that had been sold the previous year. If I remember correctly. Mr. Kamhi: I'm sorry. I don't follow that. Council Member Holman: What was allocated was—let's just say it's 1,400. The prior year only, say, 11—I'm making up numbers here—1,100 sold, but we still left the number of permits that we could sell at 1,400. I don't think we reduced it. Do I remember that correctly, Hillary? Ms. Gitelman: I think we kept the numbers constant. I'm concerned that we're getting a little off topic. I don't know that … Council Member Holman: I'm just trying to understand how these numbers make sense. That's what I'm trying to get at. Ms. Gitelman: I think we're showing pretty minor variations year to year when it comes to these parking numbers. I'm not sure I would draw significant conclusions from any one of these. Council Member Holman: Going back to the numbers. It makes sense that you're checking people when they come into town. The reason the numbers are important is—it'd be interesting if there was a poll of the people who were leaving via University Avenue. I've got to tell you, I recently had reason to come into town on University Avenue. By 2:20 P.M., traffic backed up beyond Lincoln Avenue. I don't know if, while people are sitting there idling, you could do a poll to find out where they come from or whatever. It's pretty phenomenal and not in a good way. Those are my questions and comments. Mayor Scharff: I just wanted to say I really appreciate the efforts you guys made tonight. I thought this was the best presentation so far from the TMA. I felt like it's really coming together. Giving you this money is really—you're hearing a little bit of hesitancy from Council to authorize future funding of this. We're going to have to really show clear progress. That's really important. I was a little unclear—I'm a little worried you have to come back to us too soon, frankly. I'm fine with doing the budget and all that. That's excellent to do it. You guys have to be a little clearer about when you expect to see progress, TRANSCRIPT Page 73 of 78 City Council Meeting Transcript: 09/18/17 how long that'll take. I don't want to say it failed before we gave it a chance. That's really important. You're getting this $480,000. It's now September. When would the next tranche or—when would you need that? Would it be next October or next September? If we put it in the budget, the next fiscal year starts July 1st, which seems like you would have more than a year if we gave it July 1st. I'm not going to play with the motion. I wanted you all to think about how that would work and how we can get this. I think you need the time. You obviously don't probably need more money until you've had a year to work with this money. That's how I see it. Anyway, I wanted you to think about that stuff. You guys are doing a great job. I was actually much more impressed this time. I thought we were making great progress. I know you guys are working really hard on this. I really appreciate your efforts on it. I did want to just say a couple of things. I heard some comments today. I don't think RPP is revenue neutral. I think it costs us quite a bit of money. I don't know why people would think it's revenue neutral. It's not. It costs us a fortune. I forget what it is, but in the interim at least a couple of million dollars, isn't it? Ms. Gitelman: We've been expanding like crazy, and the new programs cost money because the first roll out of them is costly. We'll have to reevaluate the costs because we did increase the employee permit pricing in this budget year. Mayor Scharff: The only reason we may actually be okay is because we're actually getting the employees to fund it in the residential neighborhoods. That's fairly clear and an important point. I heard a number of you talk about a tax on employees. I actually do think it's very complicated. What makes it really complicated is all of our big employees are in the Research Park. Since all of our big employees are in the Research Park, they're already funding a TMA in the Research Park. We're using parking revenues to fund this. I've heard no good argument as to what we need that money for. The last business tax failed. If we are going to do an employee tax, people are going to have to be really clear on what we need that money for, not just that there's a revenue stream, as Council Member DuBois said, which we need to grab. We have to be really, really thoughtful about it. That's something the voters deserve; otherwise, they'll vote no anyway. I do think it's complicated. We need to be very thoughtful in how we do it as we do that. I wanted to thank you so much for your hard work on this. I was going to ask. This is like a volunteer for—you work for Philz Coffee, right? This is like a volunteer effort, right? Mr. George: Yes, it is. TRANSCRIPT Page 74 of 78 City Council Meeting Transcript: 09/18/17 Mayor Scharff: I think we need to recognize this. It's not like we're sitting here paying you to do this. You're doing this all on your own, and your other Board Members are doing that as well. That is really a great effort on behalf of the City and your employer and yourself. I just think we should recognize that. Thank you so much. I'm ready to do TMA recognitions. Ms. Silvani: Thank you. I think the entire Board and especially Rob, who took on the leadership role as the TMA was forming, deserves a real round of applause. As the Staff person, the Board support has been invaluable. They meet as often as necessary when we have to get things done and make decisions. They've had some hard decisions to make. They've done a great job. I'll say that from the Staff end. Mayor Scharff: I think Cory is correct. We did do a Board and Commission event. I don't think we'll do an event, but I will plan on issuing some Proclamations thank you guys for your service on this. MOTION AS AMENDED RESTATED: Council Member Wolbach moved, seconded by Council Member DuBois to: A. Authorize the City Manager to execute an amended and restated Funding Agreement between the City of Palo Alto, the Silicon Valley Community Foundation (SVCF), and the Palo Alto Transportation Management Association (TMA), to: i. Extend the term of the Agreement from December 31, 2018 to July 1, 2020; and ii. Provide $480,000 in funding in the approved FY2018 City budget for use by the Palo Alto TMA in reducing single-occupant vehicle (SOV) commute trips to and from Downtown Palo Alto; and B. Authorize the City Manager to execute future amendments to the Agreement for the purpose of providing any additional funding approved by Council and included in the City’s FY2019 and FY2020 budgets for the express purpose of supporting the TMA, and to remove the SVCF as a party to the Agreement when the TMA receives formal IRS approval as a Section 501(c)(3) organization; and C. To present the TMA Business Plan to Council prior to the FY 2019 Budget. Mayor Scharff: If we could vote on the board. That passes unanimously with Council Members Kou and Kniss absent. MOTION AS AMENDED PASSED: 7-0 Kniss, Kou absent TRANSCRIPT Page 75 of 78 City Council Meeting Transcript: 09/18/17 Inter-Governmental Legislative Affairs 12. Review of the Letter From the City of Palo Alto to the Caltrain Board, VTA Board, and County Supervisors Regarding Support for SB 797 and Necessary Board Governance Changes Allowing for Fair City Representation. Mayor Scharff: We're on to our last and final item. It would be great if we could get this done by 11:00. It would be fantastic. Do we have a Staff presentation or not? Do we have any public comments? No public comments. James Keene, City Manager: We don't have a presentation, Mr. Mayor. This is really just bringing back—the real issue is the letter has been drafted and worded for the Mayor to send on to the Peninsula Corridor Joint Powers Board. The key issue really was just qualifying the Council's support for 797, which has passed and is on its way to the Governor. The key point was putting us in position to revisit this continuously or down the road with the Board as to our and others' governance concerns and other factors. We would recommend that the Council approve the letter as proposed and authorize the Mayor to sign it and send it. Mayor Scharff: The Mayor has some concerns about putting his name on this. The primary concern is, first of all, we need to say SB 797—we supported it. It's on the Governor's desk. The purpose of this is to send it to the VTA, SamTrans, and others. Those three agencies now need to vote on the ongoing process of getting this. We're looking for governance changes. We shouldn't necessarily say a Palo Alto seat at the table. I think we should say governance changes. We should temper that just by saying governance changes. You could do that in the first paragraph. The paragraph at the end, the last paragraph, our Council noted that S does not itself generate a revenue stream … Council Member Wolbach: The next to last (inaudible). Mayor Scharff: The next to last paragraph. I'm not sure what that adds and how that strengthens our position frankly. Those are my thoughts on this. I have to put my name to it, so I want it to be something that people respect and look at when they read this. I don't know if anyone—Council Member Wolbach. Council Member Wolbach: I just want to ask Staff a question. I concur with the Mayor that this needs a second draft. What is the process by which the Mayor can work with Staff to amend the language so we don't have to try and wordsmith the letter with (crosstalk) tonight? TRANSCRIPT Page 76 of 78 City Council Meeting Transcript: 09/18/17 Mr. Keene: You can make a couple of comments and authorize them to do that and just direct us to do it. Mayor Scharff: That's fine with me as a solution, if you want to make some comments. Council Member Wolbach: I'll just make a couple. In that first paragraph— actually maybe as a second paragraph, after the first one, where it's talking about our support and what the measure does, I'd add a paragraph that says something like "we also encourage governance reform of Caltrain, move forward in parallel with the establishment of stable funding, modernized governance, modernized funding and modernized service can and should develop together." I generally agree with the comments made by the Mayor. The third paragraph could use some tweaks especially. Mayor Scharff: Council Member DuBois. Council Member DuBois: Just a clarification question. We're going to send three of these letters, right? Mr. Keene: Yes. Council Member DuBois: This is just an example of one, but it would be addressed to three. Mr. Keene: That's correct. We'd send a separate letter to the VTA and to the Board of Supervisors. Council Member DuBois: I'd support a little cleanup. It's important if you delete the next to last paragraph, that the third paragraph keep some of the language about tempering our support. We really need changes to occur. We need to use the time … Mayor Scharff: I agree with you. I wasn't planning on changing that. The Motion would be to authorize me to make some changes to the letter based on your comments and then send it off. Would that be a fair statement? That's my Motion. Do I have a second? Council Member Wolbach: Second that. MOTION: Mayor Scharff moved, seconded by Council Member Wolbach to authorize the Mayor to update and send a letter from the City of Palo Alto to the Caltrain Board, the Santa Clara Valley Transportation Authority (VTA) Board, and the Santa Clara County Supervisors supporting SB 797 (Hill) and requesting governance changes on the Caltrain and VTA boards leading to fair and effective City representation. TRANSCRIPT Page 77 of 78 City Council Meeting Transcript: 09/18/17 Mayor Scharff: Any further—Council Member Holman. Council Member Holman: It's going to sound like a nit, but it's a better word. We've used twice here "effective" and "fair." I looked up earlier the word "equitable." "Equitable" is a much better word and a more appropriate word here than "fair." Equitable is more—it includes—equitable is fair and just, so "equitable" is a better, stronger word for that. That really is the only thing here. I wish it was worded a little bit differently. I didn't have a chance to come up with any different language because we repeat "effective" and "equitable." Mayor Scharff: Why don't you send me your comments? Council Member Holman: I could do that. Mayor Scharff: I thought "equitable" was a good word. If there's something else you're thinking about, why don't you … Council Member Holman: It's not a big deal. It's just cleaning it up so it reads a little better. It's not a big deal. The content's the same. Thanks for accepting "equitable." Mayor Scharff: All in favor, let's go ahead and vote on the board. That passes unanimously. MOTION PASSED: 7-0 Kniss, Kou absent Council Member Questions, Comments and Announcements Mayor Scharff: Now, we're at Council Member Comments and Questions. Council Member DuBois. Council Member DuBois: Council Member Filseth was there longer than I was, so he might want to speak to it. We went to the pension workshop at the Stanford Economics Institute. Palo Alto was well represented. I think Lalo's entire department was there. It was really good. I only went for some morning sessions. Again, there was a lot of good information. Maybe we can have Beth send it out to everybody if they post it online. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: I just want to mention I attended a very small portion of the International Women in STEM conference last week, which was held in the City at the start of the week and, of course, the League of California Cities conference up at Sacramento. I saw the Mayor there, saw the City Manager, Jim Keene. I saw Assistant City Manager Ed Shikada participate on TRANSCRIPT Page 78 of 78 City Council Meeting Transcript: 09/18/17 a panel about ethics in government, which was very intriguing. I think he did well. I wasn't able to make it to the one with our Fire Chief, Erick Nickel. I want to commend Fire Chief Nickel for his work. I've seen over the course of this year and particularly at this last meeting of the Public Safety Committee, on which I'm also a member. He did an excellent job making the case for one of the two resolutions that was passed out of the Public Safety Committee, which then became the two resolutions passed by the League. That one had to do with maintaining the ability of local government to make decisions at the city level about emergency medical response and to not see local emergency medical response decision-making preempted by county government. I just want to thank him for that. I also saw Development Director Peter Pirnejad as well. All in all, Staff and the City were well represented there and very proud of the City especially for our work on sustainability that, as the City Manager mentioned earlier, is recognized in the first ever platinum Beacon award. Mayor Scharff: Council Member Tanaka. Council Member Tanaka: Last week, I attended the Recode Commerce event, which talked about the future of retail and how there's all these different changes happening. It was actually a very good event. The who's who of retail was there. I could go on for a long time, but to sum it up in a few minutes, the future of retail, at least for Palo Alto, is really going to be about experience retail. Retail that doesn't just transact, but it's about retail that provides a compelling experience for consumers. I think that's pretty much the consensus. There's a lot of detail around there. I also attended the pension workshop as well. The (inaudible) that stuck out with me was Palo Alto has a $1.2 billion unfunded pension liability, which seems to me is a very big number. Mayor Scharff: Council Member Holman. Your light was on. Meeting's adjourned. Adjournment: The meeting was adjourned at 10:46 P.M.