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HomeMy WebLinkAbout2017-10-02 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL TRANSCRIPT Page 1 of 85 Regular Meeting October 2, 2017 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:08 P.M. Present: DuBois, Filseth, Fine, Holman, Kniss, Kou, Tanaka, Wolbach Absent: Scharff Human Relations Commission Present: Alhassani, Chen, Lee, O’Nan, Stinger Absent: Brahmbhatt, Gordon Gray Vice Mayor Kniss: Welcome. Let me start with a couple of explanations. The Mayor and City Manager are—they have left Heidelberg at this point, and they have gone on to Linkoping, which is in Sweden. They will have gone to three of our Sister Cities before they return. I went to Heidelberg, and I also did go to Enschede. Just by way of explanation, I have on this fun—I'll stand up—T- shirt that we got, which talks about building bridges. Jim and Greg got a big kick out of it because they said, "You of all people, Liz? They're not building your bridge." Maybe I should take it off. Isn't it fun? They did these, and on the back it mentions our names together, which is very nice. Also, I want to mention that this has been an unusually tragic day. Most of you woke up this morning to hear the news about Las Vegas. We send our great concern, our great hope for something to come of this that is positive for those families that were involved. Could we have just a moment of silence for them at this point? Thanks so much. It was actually fitting that we would have Human Relations Commission tonight on the same night that the tragedy happened in Las Vegas. It seemed a strange juxtaposition. Study Session 1. Joint Session of the Human Relations Commission and the City Council. Vice Mayor Kniss: Welcome to all of you. Making sure, Valerie, you are the Chair. I'm going to ask if you wanted to start out with the guideline that we have for the Study Session and say something about that. TRANSCRIPT Page 2 of 85 City Council Meeting Transcript: 10/02/17 Valerie Stinger, Human Relations Commission Chair: Thank you. I'd like to do that. Thank you very much for the opportunity to be here and have a discussion with the Council this evening. I would like to begin by introducing the Commissioners who are here. We have Commissioner Steven Lee, Commissioner Jill O'Nan, myself Chair, Teresa Chen Vice Chair, and Mehdi Alhassani Commissioner. Our plan was to go through the accomplishments since we last met with you and then go through our work plan for the year ahead. I'd like to begin by showing you our mission statement, which you can see in the slide in front of you and on the overheard to my right. I wanted to emphasize that we build on that mission by working on projects as advised by you, by the Council, projects that are suggested by the public, and our own involvement in the community. Secondly, we take on projects where the Commission believes it can have added value. That's one of our filtering mechanisms. I'm going to turn it over to Jill to begin by discussing our accomplishments for the year. Jill O’Nan, Human Relations Commissioner: Thank you. One of the HRC's core responsibilities has to do with the Human Services Resource Allocation Process known as HSRAP. Before each 2-year funding cycle for our local nonprofits, we establish a priority of needs. This year we collaborated with the Office of Human Services to establish what the priority of needs was for this funding cycle. We then formed a subcommittee to review all applications and recommend allocated funding for the applicants who applied. After that process, which was approved by Finance and Council, we discovered that due to the late withdrawal of one of our longtime agencies, Adolescent Counseling Services, we had a significant sum of money left. In addition, we got a very generous incremental increase from Council. Thank you very much. That left us with the happy task of having to allocate an additional $100,550. We are now in a second round of subcommittee review to allocate that remainder, which we will in fact be taking tonight after the Council session. Vice Mayor Kniss: That's right. ACS has moved. Correct? Ms. O'Nan: Right. A new agency has taken their place. We're reviewing applications, and in addition some other applicants stepped forward. In addition to that, HSRAP has expanded over the last few years to include an emerging needs fund. That was the result of a two-year lockdown of funding that made it difficult, if not impossible, to respond to crises and emergencies in the community. Thanks to Council, we now have an emerging needs fund. We collaborated with the Office of Human Services to develop a policy and procedures manual to define the criteria by which these grants would be allocated. We are pleased to tell you that the very first applicants for funds from the emerging needs fund were Ada's Café and Peninsula Healthcare Connection, two local nonprofits that are probably familiar to you and that do TRANSCRIPT Page 3 of 85 City Council Meeting Transcript: 10/02/17 good work in the community. In addition to HSRAP, the HRC also has been tasked with responsibility for the Community Development Block Grant allocations that come out through HUD, the Federal Housing and Urban Development agency. This year was difficult because the funding was ambiguous for some time. We weren't sure if we could get funding, if it would be cut. We had to devise multiple funding possibilities for what we would do. We are happy to say that we did in fact get the funding from the Federal Government, and the allocations went through. That process has now been completed. Vice Mayor Kniss: Congratulations. Ms. O'Nan: Thank you. I feel like I'm talking a lot. Another core responsibility is that we've had longtime oversight of the Palo Alto Mediation Program, which is a City-funded program that's free to all people who live in Palo Alto. We annually review the service report, and we also review and approve all new mediators who are put forth by the program. In addition, we have a longstanding liaison program where we appoint an HRC Commissioner to liaise to some collaborative partners in the City. They include, of course, Palo Alto Mediation Program and the Palo Alto Police Department. We also some years ago established a liaison relationship with Project Safety Net to ensure youth wellbeing. More recently, we established a liaison relationship with Avenidas to help ensure that senior services are well provided in the City as we have a growing senior population. Now, I will turn it to my colleague, Vice Chair Theresa Chen. Theresa Chen, Human Relations Commission Vice Chair: Since we last met with Council—it was 2 years before—we have held multiple forums with good outcomes. They raised awareness of sensitive issues in the community. First of all, there were four of the Being Different Together series following our earlier forum on implicit bias. We learned how to engage in difficult conversations, listen to different opinions, and practice being comfortable with our own identity in an inclusive community. Secondly, we had a Veterans Summit that resulted in enhanced housing options for homeless vets. A third item is our Domestic Violence Summit that brought awareness on various types of domestic violence, and it provided channels of seeking help. Fourth on the list is the Healthy City Healthy Community initiative. The Commissioners participate on the committee, which produced documentation so that Palo Alto could be recognized as an Age-Friendly City. Lastly, we have participate in the event on Immigration and Allies: Feeling Safe in a New Era, which provided legal assistance to immigrants in Spanish. Following this, by these events we strive to achieve our mission, to create a community with civility, respect, and responsive actions. The next slide talk about in addition to the community forums, HRC also had speakers on the agenda for our TRANSCRIPT Page 4 of 85 City Council Meeting Transcript: 10/02/17 regular meetings. Here are those items here. The first is our mental health series inform us the work of various agencies and helped us understand the mental health issues facing members of our community. There were seven speakers that included, among others, representatives from the VA Palo Alto Health System and Stanford Center for Youth Mental Health and Wellbeing. We also had guest speakers. The invited guest speakers include representatives from Senior Adults Legal Assistance or SALA and Santa Clara County Immigrant Affairs, Silicon Valley Community Foundation regarding their initiative of the On the Table project to foster communications of community members among themselves and with various private and public agencies. That's the end. Mehdi Alhassani, Human Relations Commission: Looking ahead, one of the things we've been working and was going to be a focus moving forward is supporting the Council resolution that it passed last year and developing recommendations to support the resolution committing to a diverse, supportive, inclusive, and protective community. This past summer we had an intern, who's an NYU student but grew up in Palo Alto. We formed a subcommittee to look at the resolution and see how we could best make recommendations to support it. The intern started off by doing three things. She reviewed data mainly through the survey and census. She conducted a community listening campaign and then researched model programs in other communities that we could learn from. One of the things she immediately found was that Palo Alto does pretty well. It's a very inclusive community already. We asked the question how can we continue keeping it that way and how can we continue getting it better. We came up with a lot of various ideas, and we applied a framework to them and graded them on eight main pieces of criteria. One, does it serve a vulnerable population? Two, is it in line with our statement of values? Three, is it achievable and scalable in scope? Four, does it provide an opportunity to make a different? Does it leverage programming and collaboration with state, local, and county partners? Is it informed by best practices of successful programs instituted elsewhere? Does it lie within the City's sphere of influence? I'll turn it over to the Chair to talk more in detail about these ideas and the various aspects of them. Chair Stinger: Thank you, Mehdi. Based on this assessment, we found that, even though we do well on many of these metrics, some voices are unheard, and some in our City are confronted by change and need avenues to adapt. We're good, but we can do more to extend the umbrella of inclusion. That's where the focus of our work is. We expect to return to Council later in the year with our first round of recommendations. We want our efforts to make a statement. For example, something like Palo Alto, all voices are heard. More importantly, we want to make sure that our implementations make such a statement actionable and meaningful. Our initial focus is on these seven TRANSCRIPT Page 5 of 85 City Council Meeting Transcript: 10/02/17 areas: immigration, gender identity, hate crimes, inclusive public engagement, implicit bias, gender, and Citywide learning. Within those, we are considering which policies and programs to bring forward to you. We are conducting deeper investigations into, for example—I emphasize this is a work in process and our thinking at this point. We're looking at SB 54. We're looking at a needs assessment of the LGBTQ community; that would be a study in collaboration with Mountain View and the County Gender Office. We're exploring a county hate crime reporting system to make sure that would work for Palo Alto or help us with our data collection. We're looking at Welcome America and leadership training programs. They would be conducted with local partners to help recent immigrants into the community. We're looking at a strategy for a City CEADAW ordinance that will be described more fully. That's our continuing work. I also want to have a chance to describe to you how we're moving in two new directions in the upcoming year. One is fostering community conversation. The second is fostering gender equality. Commissioner O’Nan: As Chair Stinger mentioned, we are focusing on fostering community conversations. Coming up in November is an important date, November 15, which is On The Table. This is a Silicon Valley-wide event sponsored by the Silicon Valley Community Foundation. It is a chance for people from different walks of life to sit down together and have a candid conversation about what's a difficult topic for Palo Altans, housing. The HRC has decided to collaborate with the City in sponsoring a conversation at Hobee's on this date. We're working with the City to develop a set of questions that are appropriately tailored to residents of Palo Alto, so that we can sit down together and discuss this issue. Other … Vice Mayor Kniss: Do you mean take over Hobee's or something like that? Commissioner O’Nan: We are, in fact, taking over Hobee's. We have reserved the back room at Hobee's. I believe we're going to be providing coffeecake, coffee, and tea for those who participate. We hope to get a good turnout of people who represent all walks of life. Vice Mayor Kniss: Do you know what time it will be? Commissioner O'Nan: It will be 9:00, I think, 9:00 or 8:00. Do you know? Chair Stinger: I think we said 9:00-10:00. Commissioner O'Nan: I think we have someone who's interested in being invited. Vice Mayor Kniss: Obviously, this is in the morning. TRANSCRIPT Page 6 of 85 City Council Meeting Transcript: 10/02/17 Commissioner O'Nan: Yeah. These conversations can take place throughout the day. They can be a coffee; it can be a breakfast; it can be a lunch; it can be a dinner. Because people are so busy, we thought a breakfast at Hobee's would be the ultimate Palo Alto way to have a sit-down, open table conversation about housing. In addition, my colleagues, Mehdi Alhassani, and I are considering sponsoring a community dinner, which would be an outreach to the Muslim community, and help other people who are non-Muslim become more connected and feel more inclusive, that community which has been very targeted by the Federal Government of late. There are some other community forums that are also being discussed. These things, as Valerie mentioned, are still in process. I will pass my baton to my colleague, Steve. Steven Lee, Human Relations Commissioner: Good evening. One of the initiatives the HRC is exploring is a CEADAW ordinance. CEADAW stands for the U.N. Convention to Eliminate All Discrimination Against Women. As many of you know, the U.S. is one of only a handful of countries who have not ratified the CEADAW treaty. Given how unlikely it is that this treaty would be ratified or adopted at a national level, the Cities for CEADAW project aims to place the issue of discrimination against women into a local context and to mobilize local action. This initiative came about a few months ago, when we were approached by some extraordinary women from the Peninsula United Nations Association and the Women's Intercultural Network about working on an ordinance. We thought it was especially timely given the Council's December resolution about fostering a more inclusive and diverse community and given recent current events. In 2002, the Council passed a resolution in support of CEADAW, making a powerful, symbolic gesture about the City's commitment to addressing this issue. Our current initiative hopes to continue these efforts that were begun in Palo Alto nearly 15 years ago. We thought the time was particularly ripe to take the next and to actually take concrete steps to address this issue at a local and institutional level. We are currently reaching out to other cities and counties, like San Francisco, who have implemented their own ordinances to see how they implemented them and what lessons we can learn from them. Then, we will explore how we might craft an ordinance that is uniquely Palo Alto, one that takes into consideration our size, resources, and unique characteristics. We look forward to sharing what we learn with you and proposing a draft CEADAW ordinance with you sometime soon. Chair Stinger: That sums up what we've done and what we hope to do. I want to thank you for your attention. I look forward to a rich discussion. Vice Mayor Kniss: I congratulate all of you on doing an excellent report back to the community and giving us a really good jumping off point as to where to start. I'm particularly interested in your looking for two ways to get people TRANSCRIPT Page 7 of 85 City Council Meeting Transcript: 10/02/17 together. One is, you said, at Hobee's where you can bring people together early in the morning or not as early as one might think. Secondly, Mehdi, the one that you're talking about, the community dinner, which would be a terrific idea. Both of those sound excellent. Why don't we start out with comments and questions from the Council as we go down the line. Because I won't know who's light is whose tonight, someone down there, Tom, has their light on. Council Member DuBois: First of all, thank you all for coming tonight, for your service to the City. It's much appreciated. Thinking about your 2018 work plan, I wanted to maybe suggest two areas that could be really impactful, one dealing with our seniors and one dealing with our homeless population. With our seniors, if there's anything you guys can do to help La Comida find a long- term home as soon as possible, it'll have a huge impact. Ideally, if there's a way that you can help La Comida and Avenidas both live in the same City building on Bryant Street, that would be an ideal solution. In any case, saving our low-cost nutrition program for seniors is right in your bailiwick. It would be really impactful, and it's just something that's an issue right now. We're at risk of losing this program. The second one is advancing an idea that's floated around for a long time, which is finding—basically establishing an overnight parking program for people how live in vehicles and RVs. Again, it's something that's very visible in the community right now. Any work you could do to advance that, so that there's a safe and quiet place that people could stay overnight, would be a real help to the City and help to those people. Thanks again for the things you do have in motion. Vice Mayor Kniss: Because, I think, some of those on this Commission have been involved in both those issues, do any of you who were involved in those want to say something to Tom? Commissioner O’Nan: I can jump in on a couple of those things. We are very sensitive to the needs of seniors, especially in terms of nutrition. Some of the HSRAP funding that we have allocated goes to programs that are specifically geared toward senior nutrition. We will continue to keep that on our radar as something that's very important. The parking issue is something that the late Ray Bacchetti and I had looked into a few years back. A challenge for Palo Alto is that it's simply not possible to leave the homeless population unattended all night long. Some homeless people are functioning folks who just need a place to live; other homeless have serious mental health and/or drug and alcohol problems. There's an insurance issue, and there's a safety issue. There would be some cost and impact to the City. I'm sure we could research this and work on it, but we would need the Council to have our back in terms of funding a solution because it will cost. TRANSCRIPT Page 8 of 85 City Council Meeting Transcript: 10/02/17 Council Member DuBois: I had talked to Ray about it a while ago. Maybe a managed program which dealt with responsible people and good behavior to try to avoid some of the harder issues. Thanks for that. Vice Mayor Kniss: Tom, that can also be referred, as it was before, to our Policy Committee, on which we spent, I think, about a year and a half the last time we did this. It was complicated, and it was very difficult to find exactly what you're talking about, the safe place for people to be at night or to park at night. Discouragingly, we found that most of the churches were not willing to accommodate that. It's certainly timely for it to come back again because it's currently a very visible issue in the community. Looking down, Adrian. Council Member Fine: I also want to echo Council Member DuBois and thank you all for your service and for coming here tonight. This was a great report. Just a few things come to mind. First, I do want to echo what Council Member DuBois mentioned about mobile homes and recreational vehicles. There is something (inaudible) the community, it would be nice to have a look at it and get the contours of that issue and what solutions we may be able to offer. It's actually related to but separate from another issue, which is Cubberley. I know some folks have floated maybe there would be a site at Cubberley. Broader than that, as the City and School District begin to look at Cubberley, this Commission should have a lot of input because many of the folks that you fund and work with are actually going to be based out there or are currently. One other question. I was happy to participate with a few other Council Members up here, and the whole Council did support, on additional grant funding to match a grant from the County for YCS funding. At the beginning of the report, you did mention how CDBG and HUD funds are changing and how they're being disbursed. As a City, we would like to capture as much of that money as possible because they're all good causes. I would encourage you all to think in terms of ways—what are the grants available, whether it's from the County, the State, or the Feds, that we are able to capture and match and where we can leverage different avenues of effort to capture those funds and bring them here to Palo Alto. It would be nice to get a holistic look at that. Otherwise, thank you very much for coming tonight, and thank you for the report. Vice Mayor Kniss: One thing I might add to that. If you do end up looking at the overnight parking problem and so forth, the County of Santa Barbara with the City of Santa Barbara has worked out a program that I don't think any of us was able to go and see in person. I did talk to them about it. It's a very interesting program. It's the only one I could find in California. They have very concrete guidelines. Jill, you're familiar with it? TRANSCRIPT Page 9 of 85 City Council Meeting Transcript: 10/02/17 Commissioner O’Nan: Yes. There was a talk or some sort of educational event about that some years back. I did not personally attend. Again, my late colleague Ray Bacchetti attended and did report back to the HRC on that. He was very impressed with the program. This could be something that's very much worth a second look. Obviously, we have new members, we have new Council Members. Maybe it's time for the City to swing around again and see if there's a solution that we could craft. Vice Mayor Kniss: If that's one area that you would like to explore a little more, I don't remember the name of the program. I think it can be found very easily. I know it involves, again, both the county and the city. You could call their County Board of Supervisors and find out more about it pretty easily. Who would like to speak next on this? Karen, you were next? The lights are all out of sync tonight. Karen and then Greg Tanaka. Council Member Holman: Just to jump in anywhere here. I did attend the event that was probably about 4 years ago about homeless and the Santa Barbara program. It was really well attended. It was one of the better attended pop-up event, I guess you could call it, that I've ever attended here. There was a lot of interest. Santa Barbara does have specific criteria to make it safe for everybody, not just for—let's just say if they're in—I won't name a company—some company parking lot, to make it safe for them, but also to make it safe for the other homeless people. It's not just the homeless people versus the world. The homeless people have their own networks and situations. They want to be safe too, and deserve that. It is worth a second look. There is great interest, and the need is growing. That would be well worth the time. Agree with Tom's comments about La Comida and the seniors. The YCS grant, the matching grant, I asked three colleagues—thank you all— to sign on that with me. That did pass. We found out that it did get the County match, if memory serves, through a letter from YCS. If HRC could also follow up with us on that sort of thing, just to help spread the word that it was a successful grant opportunity and that the match did happen. Agree with Council Member Fine about researching what other opportunities there might be to pursue. Also, this body, the HRC, congratulations. You do great work. You've done great work for several years now. Truly, my hats are off to you all. You're dynamite. You're terrific. You're a great resource and exemplars for this community. Thank you, thank you, thank you. That said, to quote something that's probably a misquote, you're hiding your light under a bushel, so to speak. When I go to the City's website—you had great outcomes, attendance from the forums you've done. On the City's website, for instance, there aren't captured anywhere, including the HRC's site, results and resources. For instance, the domestic violence, there was all kinds of resources available at that forum. It'd be great if those didn't just live with the people who were there, but you were able to share those in a broader way TRANSCRIPT Page 10 of 85 City Council Meeting Transcript: 10/02/17 and have them on the City's website maybe as a part of the HRC page. Maybe there are other places too. Maybe Rob and Kristen can look at some other places. Healthy Cities, they could be posted there. There may be more than one opportunity to post them. You've done such great work. It's really important and quite appropriate to share that information and research and event outcomes. The On The Table conversation, was that November 15? Commissioner O’Nan: Yes. Council Member Holman: It's a weekday morning from 9:00 to 10:00. Commissioner O’Nan: Our sponsored one will be from 9:00 to 10:00 at Hobee's here in Palo Alto. The City, I just learned from Rob de Geus, is also sponsoring, I believe, three of them at different coffee shops in the south part of the City, the north part of the City, and Downtown. The League of Women Voters is also sponsoring a conversation locally. If anyone would like to participate, there will be many opportunities to do so. Council Member Holman: The other one that's … Vice Mayor Kniss: Karen, let me interrupt a minute. I would echo what Karen is saying about get it on the website. So often people say, "I heard about a wonderful event, but I didn't know where to find information about it." If we can make sure that goes on the website, that sounds like it has great potential. Council Member Holman: Exactly. Get it on the City calendar, all of those events. I'm missing it now, but the community dinner. What a great opportunity to break bread, if you will, with other people and get people mixed up and having spontaneous conversation started. Great event. I don't know where you're thinking of having that one. I don't think I heard that. They do things like that for a specific purpose in parks and just have an extension of long picnic tables and stuff. Plan large, think big. Commissioner O’Nan: My colleague, Mehdi Alhassani, really sparked this idea. Mehdi, did you want to respond to Council Member Holman? Commissioner Alhassani: We have not ironed out our location yet, but we will think big. Council Member Holman: That's great. We have beautiful, beautiful parks. Let's take advantage of them, for instance. Thank you. Vice Mayor Kniss: It may be slightly out of order, but I have Greg next and then Lydia or you can fight it out. TRANSCRIPT Page 11 of 85 City Council Meeting Transcript: 10/02/17 Council Member Tanaka: I'll be brief. A lot of my comments have already been said. I just do want to still echo that what the HRC has done is amazing. Thank you for all your work. It's really commendable, something I hope you guys can keep up. I know it's a lot of work, but it's really great work. I'm very thankful for that as well as the community is. In terms of future priorities, definitely looking at the RV issue is really important. Several other Council Members have already talked about that. If you guys can do the heavy lifting, figure out what is the right way of handling that, that would be really great. A few years ago, the City also looked at sleeping in cars and how to deal with that as well. Those are complementary issues. How we do this in a rational, humane way is going to be really important. If anyone can figure it out, the HRC can. Thank you. Vice Mayor Kniss: Lydia. Sorry. I couldn't even see you when you had leaned back. Sorry. Council Member Kou: No worries. I just wanted to say agree with everybody that the HRC has been doing a great work. I've been very honored to be liaison to the HRC. I thank you for including me. I've a lot to learn, and I've learned a lot from all of you. I appreciate that. I do want to say again what I said at the awards and recognition day. There is a difference between interest and commitment. When one is interested in doing something, one does it when circumstances permit. When one is committed to something, no excuses are accepted, only results. You guys have really shown that. Thank you so much. I was fortunate enough to attend and to be present when you guys put together a series for Being Different Together. It was so well attended. So many people have come up to me later on, when I've met them at different social events, and said that was such a brilliant and such a great way of getting the conversation going and getting it deeper. Keep up the great work. Thank you so much. I do also want to—it's what Council Member DuBois brought up about seniors and ensuring that there is a hot, nutritious meal for them. I want to make sure that you do take a look into that because that is very important. In the recent weeks since La Comida's move to Stevenson House, I am aware that there are seniors that live in Downtown or close to Downtown, that are no longer able to go to La Comida. It does appear that there is a need for these agencies to be located close to each other or co- located. As for the camper population, that was another one that I had on my list. I do appreciate you guys looking into it and also looking at possible sites for them. Obviously, going to private individuals is not going to be an easy task. It's something that we as a City will have to take it on ourselves. It's something that we have to explore. I hope you can explore that further. Lastly, I want to ask that you do continue to keep us, as Council and as the City, accountable especially not to leave any of our constituents behind. We do depend on you for that. Please do reach out to us and let us know if we TRANSCRIPT Page 12 of 85 City Council Meeting Transcript: 10/02/17 are doing something to such. Again, thank you very much for all the work that you do. Vice Mayor Kniss: Lydia, in the middle of your discussion, you mentioned something that I wasn't familiar with, which was coming together. Did you call it that? Being Different Together, where was that? Was that actually held or was this part of a meeting? Council Member Kou: The Commission actually had a series of four meetings that had taken place. It was usually at the Art Center. It was in the evenings from 7:00 to 9:00. It was a conversation. They had a professor from Stanford who came out and was the person who brought us along to have the conversation. I think it was Chair Valerie and also Commissioner Gordon Gray who put this together. It took place last winter, I think. Chair Stinger: Thank you, Council Member Kou. That started from an initiative 2 years ago where we did a panel on Being Different Together. People appreciated the panel; it was very successful. The comment back was "we'd really like a chance to practice; we want to have that discussion." We did the series of four programs, diving into identity, conversation, listening, and relied heavily on the committee, the professor from Stanford, and some community people to help us put it together. Vice Mayor Kniss: It sounds like it was very successful. Thanks, Lydia. For all of you who are saying very kind things about the Commission, I couldn't agree more. You all work so hard as well. Cory. Teresa, do you also want to make a comment or two, perhaps after Cory? You don't have to. Council Member Wolbach: Let me start by echoing the words of praise that my colleagues have offered. You guys are doing great work and continuing the strong tradition of the HRC over the last several years as kind of the conscience of Palo Alto in government. I really appreciate the work that you guys have been doing, figuring out how we take a resolution, which we passed last year at the point of an upcoming change in the Federal Government that was creating a lot of concern in the community, at a time when we saw hate crimes on the rise even here in Palo Alto. We issued it just as a statement of here's where we are, here's where we've been, here's where we want to go. We realized let's refer this to the HRC. I really appreciate the work that you guys are doing, figuring out how we make that actionable, how we turn our values into a vision and a set of policy recommendations that Council can act on. I'm really looking forward to those coming back to us. Specifically, I've also had a chance to meet with some of the folks from the U.N. Association a couple of times over the last year and spoken to them about the convention for the elimination of all forms of discrimination against women. I'm really TRANSCRIPT Page 13 of 85 City Council Meeting Transcript: 10/02/17 excited to see that you guys are already taking a look at that. That was one thing that I was going to mention, that I thought was worth taking a peek at. You guys are already a step ahead of us. I really appreciate that one. That's an important one to look at carefully and see if we can move Palo Alto forward on building on our resolution from the early 2000s. A couple of others I just wanted to mention as maybe things to think about. One is—I noticed that even right here in City—I don't think we have gender-neutral bathrooms that are available to the public. That's an example of something we should look at. One idea a friend of mine floated, and I thought was a good notion, was what if the City will first make sure we have gender-neutral bathrooms wherever possible in our City facilities. Actually, at the Midtown Residents' Association ice cream social this weekend, I noticed that we do have gender- neutral bathrooms at least at Hoover Park. I can't remember how many of our other parks have that, but we don't have it at all our City facilities. What if someday we could have the City, the School District, and the Chamber of Commerce work together to map out where gender-neutral bathrooms are available in the City and have that in a prominent link on the City website so people could find them conveniently? Also, I know our next door neighbor, Mountain View, has become a Human Rights City. I haven't had a chance to really dig into the details of what that would mean, but they've implemented that. I'd suggest that's another one to take a peek at and at least explore. On the issue of immigrants and immigrants' rights, we had something happen this last week nationally but specifically, again, right next door in Mountain View. Immigration and Customs Enforcement did an action over several days targeting specifically cities and counties which—as ICE put it—were not cooperating with ICE detainers. Sanctuary Cities or other cities or counties which ICE felt were not sufficiently turning over people of undocumented status. I'm proud that Santa Clara County and Palo Alto does not work with ICE. We do not turn people over to ICE. I think we all know that immigration enforcement is not a local obligation; it's not a local duty. Actually, our police force understands and most law enforcement professionals know that when local law enforcement gets in the business of deporting or helping deport people, it actually harms public safety in the community because then you have a segment of your community that's afraid to go to the police. Having Santa Clara County targeted both with enforcement actions in Mountain View and in San Jose this last week suggests Palo Alto could be next. Just something to keep an eye on. As far as senior services, I would actually suggest we maybe go a step further. I'm not sure how much you guys will be able to work on this in the next year. Picking up on what Tom and Adrian and others have mentioned, when we're looking at how we can make sure we have a senior nutrition program that's robust in Palo Alto and knowing that our City shuttle—one of its prime user groups is people going from south Palo Alto to north Palo Alto when La Comida was up here, suggests to me that maybe long term we should really be looking at having senior services including a nutrition TRANSCRIPT Page 14 of 85 City Council Meeting Transcript: 10/02/17 program both in Downtown and at Cubberley. I know I'm not the only one who's thought about that, but I just wanted to mention that out loud. Again, great work. Keep working on it. The last thing I was going to say—I forgot to mention—on the immigration issue is there are a few different things that different cities have done to go one step further. Palo Alto has pretty good policies, but it might be worth just taking another look, seeing if we want to become a Sanctuary City like East Palo Alto, or also looking at the police training manual and the changes that were made to that. San Jose is another example to look at, just to make sure we have the best practices in place here in Palo Alto when it comes to undocumented immigrants living in our community. Vice Mayor Kniss: I wanted to ask Teresa if she wanted to say something, and then Eric. Commissioner Chen: Just a very short comment about this. We're very happy to be here, and we'll hear Council Members' comment on our progress. It's really a very good move. I wish this kind of conversation will continue on, happen more often so we can collaborate together and move the project along both ways. Vice Mayor Kniss: Eric Filseth. Council Member Filseth: I'll be real short because most of this has been said already. Let me also thank you folks for the work that you do. What you do is a really important role of government. You tackle problems that are, in many cases, easy to see that they're problems but very hard to solve. Thank you for working on very hard problems to solve. If I could add anything else— a couple of people have mentioned, Council Member DuBois, if we were to lose La Comida, it would be a loss to the community in the long run. I hope that doesn't happen. The more smart people thinking about how to solve this problem the better. Thank you. Vice Mayor Kniss: The Chair has asked if she could make some comments in response to some of the other comments that have been made. Chair Stinger: First of all, I just wanted to thank you all for your kind comments and the suggestions that you've made. I'm really glad that you just added that they're easy to see and hard to solve. I'm sitting with my knees shaking and thinking, "Some of the best minds in Palo Alto have tried some of these issues." I don't know how much new we can bring, but we can certainly bring some energy, and we'll try to bring some creativity. I just wanted to respond also to some of your comments. Cory, we're doing a lot of exploration of pages and pages of model programs. I hope you'll be pleased with what we come back with. We're trying to focus on a few things that we TRANSCRIPT Page 15 of 85 City Council Meeting Transcript: 10/02/17 think we can take on, that we the City can take on, and show some progress and then maybe come back in a second round. We're looking at things that we can do in collaboration with our County office and with local partners so that we can really move from values to action more quickly. Specifically under the gender-neutral policy, that was one of our lead items. We found that there is a City policy, so we're going to look at ways to enhance that and make it more visible through the City. Vice Mayor Kniss: A couple of—anybody else before I make a comment or two? A couple of things. Valerie, you just touched on it. Don't forget the County. The County has a major role in human resources. They also have a commission. You have been interactive with them. A great resource, and they also from time to time have money, usually more than we do. Secondly to go into the seniors, I've been following—I know some of the rest of you have been too—the program at Stevenson House. What's very interesting is a number of seniors at the more southerly end of town are delighted to have the program there. It has been a switch. They say how delighted they are to not have to take the bus anymore. I'm going to guess people from this end of town are maybe taking the bus in the other direction. Apparently, they're doing well. Apparently, some of the Stevenson seniors there have also started to come to the program. For all of you, if you have a chance, go by and take a look at the program at noon. I'm sure they'd be delighted to have you join them and have lunch with them and so forth and hear what's going on there. I don't know what's happening with Lytton Gardens. I know Lytton Gardens was also very interested in having a portion of that program. One of the areas that I'm involved in countywide is what's called the Seniors Agenda. Has anyone on your committee gotten involved with that? Commissioner O'Nan: I don't think so. Vice Mayor Kniss: Karen and I have gone to a couple of their meetings. They are dealing with the seniors, our whole senior population, on a countywide basis. Their latest outreach has been, in addition to being senior-friendly in your community, to also be dementia-friendly, which has been a very interesting conversation and one that I know they're going to continue. After they have done a couple of years of this, they will begin to visit in the various communities and talk more about what they have done. You probably know that Karen and I are very involved in the Healthy Cities Healthy Communities, which fits into all of that, that same box, and has been very interesting. Believe it or not, everyone in our county who's here is getting older. Needs are changing rather rapidly, and it's been fascinating. Anything else that anybody else wants to add? Commissioner Lee: Could I just make a quick comment? TRANSCRIPT Page 16 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: Yes, please. I'm sorry, Steve. Yes, please do. Commissioner Lee: I just wanted to say that I was so glad to see that there's so much support on the Council for us suggesting the RV issue. Personally, I would like to find a compassionate approach to solving this issue, that actually solves the underlying issue as opposed to just passing the buck to another city and washing our hands of it. I really want that where we take a level of ownership to resolving the underlying issue. I know the City Manager's Office has been charged thus far with looking into this matter further. If the Council thought it was appropriate, our Commission would welcome a referral of this matter to our Commission so that we could work hand in hand with the City Manager on addressing this issue. Vice Mayor Kniss: Good idea. Maybe coming at this on several fronts. If anyone happens to be going to Santa Barbara for some reason, I know there is a county office that has overseen the program. Do any of you remember what it's called? It has a name, and I just don't remember what it is. Council Member Fine: I think it's something like Safe Santa Barbara or Santa Barbara Safe. Vice Mayor Kniss: Something like that. It is and it should be all about being safe. Just what we were discussing earlier is absolutely valid. It can be very frightening, especially for women and children who end up living in their car or homeless. It's an incredibly frightening situation. I would say, unless someone else wants to add to that, that we are grateful for your service. We so appreciate your incredible dedication, this wonderful work plan you have put out so that we know exactly what you're doing. The others couldn't see, but I was following along. In addition to this, there's a whole lot of written explanation that goes along with your report as well. Would you be interested in sharing that with all of us? Commissioner Stinger: Certainly. Vice Mayor Kniss: There's a great deal of meat in there. I know it's not on this, where we just highlighted some of the things. If you'd be willing to do that, that would be great. Commissioner Stinger: Be happy to. Vice Mayor Kniss: Thank you all so much. It's now 7:00, and I'm going to suggest we break for 5 minutes while you all get a chance to say goodbye to us and we to you. You're welcome to stay for the rest of our meeting, if you'd like to. It was a pleasure to have you tonight. TRANSCRIPT Page 17 of 85 City Council Meeting Transcript: 10/02/17 Council took a break from 7:01 P.M. to 7:14 P.M. 2. 2321 Wellesley Street [17PLN-00030]: Request for a Prescreening for a Zoning Map Amendment to Change the Subject Property From R-1 to RMD (NP) to Construct a Two-family Residence. Environmental Assessment: Prescreening is not a Project. The Formal Application Will be Subject to California Environmental Quality Act (CEQA) Review. Zoning District: R-1 (Single-family Residential). Vice Mayor Kniss: We have two somewhat unusual housing issues in front of us tonight. They are both prescreenings. As you look at this, this is—no decision is being made tonight. Input is being given back to the applicant. With that, am I turning this over to you, Jonathan? Jonathan Lait, Planning and Community Environment Assistant Director: Yeah, thank you. Just to introduce … Vice Mayor Kniss: Just to identify you, this is Jonathan Lait from the City Planning Department. Mr. Lait: Thank you. Next to me is Phillip Brennan. He is an Associate Planner with the City. He's been with the City for just over a year now. He's going to present this project for you. Ed Shikada, Assistant City Manager: Jonathan forgot the most important part. This is Phillip's first appearance to the City Council. I wanted to preface it that way and acknowledge that he's hit the big time. Phillip Brennan, Associate Planner: Good evening to the members of the Council and Vice Mayor Kniss. This is a prescreening application for a proposed zone change, going from R-1 single-family residential to the RMD (NP), which is the two-unit multifamily residential with combining district. Should a formal application be submitted, an amendment to the Comp Plan would be required due to the land use designation changing from single-family residential to multifamily residential. The applicant is seeking to construct two residential units comprised of a two-story residence and a basement living unit to serve as a rental apartment. The subject site is not identified as a Housing Inventory site. This is a 6,250-square-foot parcel located in the College Terrace neighborhood. As you can see here, it's located at the north end of a large R-1 zoning district block. The subject site is located between a public facility zoning district to its left, which is the College Terrace Public Library and Mayfield Park, and to the right is the RMD (NP) zoning district. In this case, it's a small, eight-unit apartment complex. Just to provide you some perspective, again this is College Terrace Library on the left, Mayfield Park on the left. The subject site is currently vacant as it has been for the past few TRANSCRIPT Page 18 of 85 City Council Meeting Transcript: 10/02/17 decades, since the early '90s. To the right, again, is the small, eight-unit multifamily residential apartment complex. This is a west perspective. This is taken from approximately the middle of the lot. This is Mayfield Park to the west, the side of the apartment complex to the east. To the north we have additional apartment complexes along with a prominent redwood tree located in the northwest corner of the subject lot. To the south, we have Wellesley Street. The applicant is seeking to take advantage of some development standards that accompany the RMD (NP) zoning district. I know that this is a lot of information here, but the primary takeaways are that the RMD (NP) provides additional development potential in terms of lot coverage, floor area ratio in terms of 500-700 square feet, and additional daylight plane dimensions in terms of the initial height being measured at 15 feet versus 10 feet in the R-1 zoning district. In terms of process, any formal application would require public hearings before the Architectural Review Board, the Planning and Transportation Commission, and City Council. Should the applicant choose not to move forward with a formal application, there remains a viable alternative in terms of maintaining the R-1 zoning district designation and simply building an ADU, an accessory dwelling unit. He has the potential to build a 600-square-foot attached ADU or up to a 900-square-foot detached unit and has the added benefit of no additional off-street parking requirements. This is deed restricted; the owner must occupy one of the units and cannot sell the ADU separately. Staff is recommending that City Council conduct a preliminary review and provide comments regarding the applicant's proposal to rezone the subject parcel from R-1 to RMD (NP). With that said, the applicant has a brief presentation to provide the Council. Vice Mayor Kniss: We did discuss this prior to the meeting tonight. If you wish, you can take up to 10 minutes. Please let us know who you are and what your role is in this. Jack Culpepper, Property Owner: Good evening, Council Members and Honorable Vice Mayor Kniss. My name is Jack Culpepper, and I grew up in College Terrace. In the '90s, my dad purchased the vacant lot next to the library. I'd like to start by just showing a few photographs. I guess Phillip already covered most of these. Here's a panorama showing the library, the lot I own, and the apartment building that's adjacent. Here's a better view of the main wing of the library. Next to the sign is a magnolia tree planted by the neighborhood association to remember my dad. Here's a better view of the lot, the adjacent apartment building which is quite substantial. As you can imagine, this lot is a special place to me. I've known many of the neighbors in College Terrace for decades, and I have a deep appreciation for the character of the neighborhood and the families that live there. I'm here because I'd like to live where I grew up. I'd like to have my own family here in a house that can also accommodate my parents when necessary. I'd like TRANSCRIPT Page 19 of 85 City Council Meeting Transcript: 10/02/17 to have an affordable but substantial basement apartment that I can add to the City's housing stock. I'm here because this is a once-in-a-lifetime opportunity for me, and every detail of the design is important. Here's a view of the conceptual design from the street. As you can see, it's a traditional Craftsman, shingle-style home. The house is clad mainly in shingles with board and batten at the top and board-form concrete up to the window sills on the first floor. When done properly, the wood forms press a natural wood grain pattern into the concrete to make a beautiful, timeless look. This design also provides a second housing unit with an affordable basement apartment that can't be seen from the street. Here's a view from the backyard. On the right, you can see a sunken patio which is one entrance to the apartment. I've spoken to quite a few neighbors about this, and everyone seems to like it so far. The zoning for this lot is a bit odd. It's a little finger of R-1 that projects into an RMD block. When I asked the folks in the Development Center about this, they agreed it was an odd jog in the line. One Staff member I spoke to said when it comes to zoning, planners prefer straight lines to jagged ones. Others have said it's a little bit like spot zoning, and they thought it would be a good candidate for rezoning. While the differences between RMD and R-1 are not dramatic, RMD does offer minor advantages that allow for a better design. These details are important to me. I'd like to do the best possible job with this building. I'm applying to change the zone of 2321 Wellesley Street from R-1 to match the surrounding RMD (NP) to build a two- story, traditional Craftsman, shingle-style home with an affordable apartment in the basement. The high-quality design will fit with the adjacent library. It will be a passive solar design with net zero energy requirements. To put my request in context, consider the neighboring buildings. The previously pictured apartment building has eight units in it. There's another eight in the building next to it. Immediately behind my property is a building with 14 units, and across the street are single-family homes on the original 25-foot- wide lots, that is, there are two distinct homes on an area that's equivalent in size to my lot. I'm not asking for this. I'm proposing to build something where you can't even tell there's a second unit. Here's how the zoning map will be simplified by this change. If this isn't done now, it probably won't be considered again for 100 years. RMD allows an extra 500 square feet of FAR and presents possibilities to improve the building design in several ways. The first is that the RMD daylight plane allows the first floor of this house to be raised 3 feet off the ground, which is a characteristic of traditional homes and, in addition, allows windows to provide natural light into a basement apartment, making it a pleasant place to live. RMD has height limitations that exceed those of R-1, but we're only using them at the eave and not at the ridge. It's hardly noticeable and allows a roof with solar panels that's uninterrupted by dormers. Our proposed design meets RMD parking requirements, but please take note that this lot is a 15-minute walk from Caltrain and groceries are 3 blocks away at the College Terrace Market or 15 TRANSCRIPT Page 20 of 85 City Council Meeting Transcript: 10/02/17 minutes by foot at Molly Stone's. There's also a Sunday farmer's market 5 minutes away on California Avenue. It's a place you can live without a car. Here's how the height of our building relates to others nearby. Putting the apartment in the basement reduces lot coverage and perceived density and facilitates a beautiful, more spacious yard featuring a redwood tree I'd love dearly and intend to preserve cautiously, along with the pepper trees in Mayfield Park along the property line. RMD allows this apartment to be a substantial 900 square feet, which is just enough for two bedrooms. Under the R-1 ADU Code, this apartment would be limited to 600 square feet. Whereas, the customer for a 600-square-foot, one-bedroom apartment is a single professional; the customer for a two-bedroom apartment is a family. I believe that's an important distinction to make when considering the character of the neighborhood. While 900 square feet is by no means a large apartment, I believe it's enough for a small family. In summary, my request represents an opportunity to correct a minor mistake in the Zone Map and a chance for the neighborhood to be complemented by a well-designed home with an affordable basement apartment that will exemplify the city's land usage intent. The project will add two housing units in a location that's a 15-minute walk from Caltrain and groceries. The affordable basement apartment won't be the best unit in the City, but with this zone change it can be a beautiful, light-filled apartment, a comfortable place in the neighborhood for a small family. With that, I'd like to introduce architect Glen Jarvis to speak about the technical aspects of the building. Thanks very much. Vice Mayor Kniss: Thank you. Mr. Jarvis, welcome. Glen Jarvis, Jarvis Architects: Glen Jarvis. Vice Mayor Kniss: Mr. Jarvis, hang on just for a minute. I'm going to ask Molly. Molly, does he get—shall he continue the time that we discussed before or … Molly Stump, City Attorney: That's traditionally how the Council handles it. Vice Mayor Kniss: You have about 4 minutes. Mr. Jarvis: I may not need all of that. Jack's covered all the important zoning issues. We were chosen to be the architect for this house because we have extensive experience in Craftsman design. We've done a number of houses in this style over many decades. We know it quite well. This is a conceptual design, but it's pretty close to what we would like to build. The basic difference between—the design and the plans, elevations for this house that you see are designed to the RMD zone and not to the R-1. The RMD gives us another 500 square feet of floor area. Most importantly, it gives us a higher daylight plane, and we need that on the left side, adjacent to the hedge row, to get the second TRANSCRIPT Page 21 of 85 City Council Meeting Transcript: 10/02/17 story to line up with the first story but also to give us a floor on the main floor that's 3 feet above grade. That's important for historical look, a second way to make the basement unit work, and the additional height. Our eave is right on the daylight plane on the left-hand side. On the right-hand side, it could have fit into the R-1 zone. That left side is a simple plane that is good for solar planes, both photovoltaic and hot water panels. We were looking for a zero net energy house, and it would be carbon free. It'll be all electric. That's our goal here. If we design to the R-1 zone, we're allowed for the second story to go up to these heights, but the rooms have to be in dormers. That interrupts this simple plane that we need for our panels. The panels are new, and the zoning is from before. Also, the additional roof height on that side creates no shading issues. It's on the north side of the bushes, so it can't shade the bushes. The other side has two big driveways and a space big enough to put another house in there between the apartments and this house. The other part is we get a two-bedroom apartment in this zone. We would like that. We're basically looking for a very high-quality design, something that is more the quality of the library than the apartments that are adjacent, on the right and behind. We feel that this would be good neighbor, and I think it would be a good example of what you can build in the RMD zone. I'd just be available for questions. Vice Mayor Kniss: Thank you very much. I appreciate both of you being here tonight. I have no cards, David, from the public at large. Do you have any? In that case, let's bring it to Council for any questions from the applicant or from the architect or any comments you'd like to make. The first light I see is Lydia, followed by—is it by you, Cory? It's actually Tom. Sorry. Our lights are off tonight. It's Tom and then, Lydia, did you have your light on? Then, it's Cory, and then it's Karen. Council Member DuBois: I just want to make sure I understood … Vice Mayor Kniss: Then, it's Greg after that. Council Member DuBois: … from Staff the FAR numbers. How's the basement space counted? Mr. Brennan: The basement space would not be counted towards—the basement space is counted towards FAR in the RMD (NP), I believe. Council Member DuBois: But not in R-1? Mr. Brennan: Not in the R-1. Council Member DuBois: Why not just an ADU? It seemed like that would give the square foot needed. TRANSCRIPT Page 22 of 85 City Council Meeting Transcript: 10/02/17 Mr. Brennan: That option has been discussed with the applicant. He's aware of that, and he'll make a more fully informed decision after the meeting, I'm sure. Council Member DuBois: I see the applicant there. I have a couple of questions related. We got this Exhibit C which shows what the RMD zone allows, what the R-1 zone allows, and then the proposed project. I'm just trying to understand these numbers. It says you're proposing a total of 3,100 square feet, but the R-1 plus 600 square feet for an ADU would be 3,200 square feet. I'm just trying to understand. The height here says 28 feet, which is lower than the height of the R-1 zone. Are these numbers—I'm just trying to understand. Mr. Culpepper: The height is lower than the R-1 would allow. Those are the maximums, so it's below the maximum of R-1. That's true. Council Member DuBois: You guys were talking about needing the RMD height for the project. Mr. Culpepper: At the eave, not at the ridgeline. On the left side of the building, we need extra height at the eave. Council Member DuBois: We did pass a pretty new ADU ordinance. Have you guys looked at that thoroughly? I don't understand what you're prevented from doing under R-1 with an ADU with a basement. Mr. Jarvis: The daylight plane is—the regulations for the RMD are different than the R-1. The two zones in between are different yet. The RMD zone has no exceptions for overhangs or dormers. The R-1 does. Council Member DuBois: It's mainly the … Mr. Jarvis: You can basically get the same massing in both zones, except you don't get the same look or practical surface. Council Member DuBois: For Staff, is it possible to do just a design exception for slope of the roof in a project like this? Mr. Brennan: I'd have to look at the provisions of the design exception for that specific allowance. Mr. Lait: I don't think we would process a—we wouldn't support a DEE for an R-1 to encroach upon the daylight plane requirements. I don't know where you would draw the line on that. Everybody would come in for a request like this. We have a design enhancement exception process, but I don't think that TRANSCRIPT Page 23 of 85 City Council Meeting Transcript: 10/02/17 would be the applicable standard to apply in that instance. Perhaps Phil has some clarification on the other question too. Mr. Brennan: Yes. In terms of the FAR and the basement, the square footage in the basement would not count, would be exempt from the FAR total. I misspoke. Council Member DuBois: In R-1 or … Mr. Brennan: In the RMD (NP). Council Member DuBois: In both? Mr. Brennan: In both. Council Member DuBois: It seems like the real issue is just the slope of the roof and the height at the peak, where a lot of the values are below R-1 including the setbacks and things. Mr. Lait: I might distinguish the peak from—Phil will correct me, if I'm wrong on this. It's the daylight plane requirement, where you have your setback and then you go up a certain height. In the R-1, it's one standard. In the RMD, it's a higher standard, so you get a little bit more building mass near the setback line. Council Member DuBois: I would say I'm heartened that there's not a bunch of people here from the neighborhood objecting. That's a positive. Another question for Staff. When this is a project, what would be the noticing distance? Would it matter if it was a zone change versus… Mr. Brennan: It would be 600 feet from the subject site. Council Member DuBois: Is there a way we could make a zone change dependent on a project that is what's being described here tonight? Would the applicant agree to that? It would be very substantially the same as what you're describing? Mr. Culpepper: Yes. My understanding is that's required anyway. Mr. Lait: I might respond to that and say, if an application is submitted for an RMD zone change, that would come before the Council. Also what would come before the Council is the applicant's request for the discretionary entitlements that are required under that zoning. You would see the whole package. I think that's a distinction between conditioning or requiring a certain type of house development associated with the text amendment that is being sought. You'd be able to see them both at the same time. That TRANSCRIPT Page 24 of 85 City Council Meeting Transcript: 10/02/17 effectively addresses the question, but I wouldn't suggest that the text amendment change alone would support some kind of conditional approval in the future. Council Member DuBois: Just my thoughts for Council Members. This seems to be a little unusual case. Generally, spot zoning changes are difficult. We need to find logic and a reason to consider it. I would like to make sure the neighborhood's noticed. Again, a lack of concern from neighbors would also carry weight with me. I don't know if we have a process for this, but even if we could notice 1,000 feet instead of 600 feet. I don't know if that's an option. The project as you propose it also gives me comfort. Doing them together would make sense, but I wouldn't want to make this change and then have some completely different building there that's out of context with the neighborhood come forward with the zoning change. Those are my primary concerns and thoughts. I'd love to hear what my colleagues have to say. Mr. Culpepper: Thanks very much. Vice Mayor Kniss: Thank you. Cory. In order after that, I have Cory, then Karen, then Greg, then Eric, then Adrian. I think that's it. Am I missing anyone? Lydia. Council Member Wolbach: First, thank you for coming to us as a—I'm glad this is coming to us as a prescreening. I'm not ready to make a decision on this one. I think I'm not the only one. I agree with Council Member DuBois that I'd like to make sure that everybody in that neighborhood has had a chance to weigh in, get official notice from the City about the proposal. I appreciate that you've started doing some informal outreach to the neighborhood. If the responses you're getting are positive, that's great news. I think we need to go through a more formal process obviously. If this moves forward, I would look forward to seeing that. I want to pick up on this question of the two issues at stake. I'm glad Tom kicked it off. I want to pull on that thread a little bit more. There are really two issues that we're being asked to provide preliminary thoughts on. The first issue is do we feel comfortable with the zoning change. The second issue is do we feel comfortable with the proposed building that's being contemplated by the applicant. It's important to differentiate those two questions. We may say we're enthusiastic about both of them or may differentiate our response. If the zone change goes forward and this proposal also goes forward, in the future the applicant may sell the property. It doesn't sound very likely. It sounds like you're really committed to staying in the community you grew up in. I know the feeling. Mr. Culpepper: I won't sell it. TRANSCRIPT Page 25 of 85 City Council Meeting Transcript: 10/02/17 Council Member Wolbach: I understand that is not your intention. We can't legally obligate you to stay there forever. Things happen. Years down the road, we never know what might happen. Also, we need to think about how we set precedent for other cases. I just want to make sure we're really thinking this through. If we approve the zone change and approve the development, this project may happen. In the future, there is a legal possibility that that may change. Somebody else in the future, whether the current applicant or somebody else in the future, may decide to do something different, taking more full advantage of the zoning allowances permitted under RMD. I'm probably pretty comfortable with the proposal when it comes to the building. I do have some more questions about that. On the zoning change, as Council Member DuBois said, spot zoning changes are a tricky thing, to put it gently. I don't want to set a precedent that we grant that kind of zoning change when people bring that to us. If we're going to allow that, Council Member DuBois is right. We need to have a logic behind it. The best argument here is what's around it. On two sides, there is the RMD, and on the other side there's a park and a library. Across the street, it's R-1, but there's also apartment buildings on that block, etc. The argument can be made—as much as we don't like doing spot zoning, maybe we make an exception here. I'm on the fence about that one. I might be convinced. Others might be more enthusiastic. That's where I am on the zoning question. On the building question, it looks nice. You're spending a lot of time focusing on the design, making sure it's sensitive to the context that it's in. I really appreciate that you said you want to save the redwood tree in the back. That was going to be one of my first questions, but you addressed it in your comments at the beginning of this Study Session. I appreciate that you're committed to saving that redwood tree. A couple of questions for the applicant. You talk about the apartment in the basement being affordable. Is it your intention to have it truly be listed as a below market rate unit or do you intend that it would just be more reasonably priced? Mr. Culpepper: I think more reasonably priced. I don't know exactly what you're referring to. Council Member Wolbach: Sometimes apartments are relatively affordable, but there's also the term affordable housing, which usually refers around here to below market rate units that are made available to people in Palo Alto on a long wait list to rent or to purchase at one of several tiers related to the median income. I want to be clear that it's not your intention to list it as a BMR unit. Correct? Mr. Jarvis: I think the intention here is to have a reasonable rent. This type of apartment isn't going to be able to develop the rent that something that's on the first floor as a garden apartment or something can. It has a sunken TRANSCRIPT Page 26 of 85 City Council Meeting Transcript: 10/02/17 patio, but it can't draw the high rentals that something else would. It'll be very nice and livable. Council Member Wolbach: I understand that's the applicant's assertion and very well may be true. I just wanted to be very clear for us as we're considering this to differentiate between something that is expected to be reasonably priced as opposed to something that is affordable housing, which generally means listed as below market rate with a commitment to make it available to people at a certain income level. That's what I'm trying to differentiate between. It sounds like it's the former and not the latter. That's fine. Just want to make sure we're all understanding what the proposal on the table is. On the basement, it is your intention to rent it out to somebody or is it your intention to make it available to family or rent it out until there's a need for your family and then make it available. What's your vision about how it would be used? Mr. Culpepper: Rent it out ideally to a small family. Council Member Wolbach: Those are my thoughts for right now. If it moves forward, you can make a case that would be convincing, but I'd want to see it be really clear. I'm also a little bit on the fence about whether you ought not just build an ADU on the property or do an ADU. I understand that, for the design you're going for, you want the zone change. This Council and this community is not enthusiastic about zoning changes when it's not necessary. Again, I think we're going to really need to see very strong arguments and a lot of neighborhood support to be comfortable with that zoning change. Mr. Culpepper: Thank you. Mr. Lait: Vice Mayor, if I may? Over here, Jon. The term spot zoning has come up a couple of times tonight. I just wanted to take a moment; maybe the City Attorney will want to add more to this. What is being proposed here is not the traditional scary term of spot zoning that people might associate it with, taking one parcel and zoning it something completely different than any of the adjacent or surrounding parcels. In this context, there are reasonable arguments that could be made to leave it R-1 or also to change it to RMD. Those zonings are abutting this individual property. I don't think we're—you may have a policy conversation, of course, about whether it's appropriate to rezone this one individual parcel into something else. That's absolutely fair and a worthy conversation. There's not a legal concern with respect to what the application is that's before you or at least the conversation that is before you. Council Member Wolbach: I appreciate that. Just as I was trying to differentiate between affordable housing or reasonably priced housing, I was TRANSCRIPT Page 27 of 85 City Council Meeting Transcript: 10/02/17 remiss that there is a difference between spot zoning and some other changes to the Zoning Code that may only apply to a single parcel. I appreciate the clarification. Any other thoughts from Staff, City Attorney on that one just to make sure we're clear? Ms. Stump: Just one since we're on general education on this point. Council Member Wolbach: It's a Study Session; it's a good time for this. Ms. Stump: Spot zoning, you think of it as an island, where a single parcel is differentiated from parcels that are all the way around it. Courts also differentiate between spot zoning, which is technically fine, and impermissible spot zoning, which is spot zoning that is not in the public interest. Were the Council to decide that a distinct zone is appropriate and in the public interest even on a single parcel within a set of properties that were different, as long as that was in the public interest that would not be illegal. It would be permissible. Vice Mayor Kniss: Thank you, both of you, for saying that. As you look at the map, it's—no matter how you look at the map, it does look as though it practically is a portion of RMD right now. That differentiation and definition of spot zoning is very helpful. Thank you. Yes? Mr. Jarvis: When I look at this block, what I see is that this block originally was R-1. It got rezoned, but it excluded one lot. Then, it was rezoned again to RMD. Once again, that one lot was left out. I see this as a remnant; it was not purposely zoned this way. It just became a zoning remnant among its neighbors. Vice Mayor Kniss: Thanks. Karen, I think you're up next. Council Member Holman: I appreciate Staff jumping in there about the spot zoning because my colleague to the right and I were going, "The term's being misused up here." Appreciate very much the explanation of that. It's not spot zoning. If anything—it's not spot zoning, but it's very unusual. I hope this doesn't exist in very many places in town. I'm not aware of it. In a perfect world, zoning principles say you don't divide the zoning districts in the middle of the street either. You divide them mid-block, and the reason is so you have both sides of the street that marry to each other. You change at mid-block because that then changes for the next streets over. That would be what ideally would happen, but we're not looking at that tonight. Just so my colleague and I here, Council Member Fine, can have a little input on that. To be perfectly honest, when I first read this, I was not very supportive of this. While the purpose in the Staff Report just talks about RMD (NP) as being— that it requires a preservation of visual and historic character of such TRANSCRIPT Page 28 of 85 City Council Meeting Transcript: 10/02/17 designated neighborhoods, that's true. If you read the whole purpose of RMD (NP), which I would hope Staff Reports would actually always provide, it talks about the preservation of existing single-family homes to help continue the historic fabric of the neighborhood. There is no existing home here. I was having a real struggle with that. I spent a fair amount of time with this and came to saying it really is the best thing, though, to get rid of this weird anomaly here of this R-1. To do R-1 and have an ADU, there's also been conversation about would it be BMR versus affordable. Our ADU Ordinance doesn't require ADUs to be BMR units either. They're just maybe more affordable because they're smaller. I think that would be—if people are thinking about going there, it seems like that would be—I don't know. I'm not comfortable with requiring that because we don't do that for ADUs, and it's extra FAR. I also appreciate what Jonathan Lait said about exceptions. I'm not a big fan of exceptions, and I agree absolutely and appreciate your comments about this wouldn't be a situation for exceptions. I do wonder— the hard part about bringing forward a zone change—it's a little bit of a conundrum. Understanding you want to know whether the Council's basically supportive or not of the zone change to RMD (NP) or not. At the same time, I—I'll just speak for myself. I want to know that what you're going to develop here is rather like what you're proposing. I look to the City Attorney. This isn't an action item; it's a Study Session. Could we now or later condition the rezone to be requiring of two units on the site with separate entrances? Could we do something of that nature? That's the stated intention. That's the stated intention. If we go ahead and say, "Yeah, we're great with the rezone," but then something comes back that's very different, as Council Member Wolbach said—not to put you in the lump of other people who would come forward with such proposals—we could have—I don't want to set a precedent for something like this happening in the future, where we just go, "Oh, yeah. We're happy with the zone change," and then something comes back that's very, very different. I don't want to give a false indication. Jonathan, do you have comments? Mr. Lait: I'll take that and then, if Molly wants to supplement this, that's fine. I would say that it's probably unlikely that Staff would support or that the Council would consider a zone text amendment that also did not have a project accompanying it so you can see how that's being used. If the zone amendment just came forward without any project, you can have your dialog and either reject it or accept it at that time. Based on what I'm hearing from the applicant and from talking with Phillip, it seems like there is an interest to file the two applications concurrently. With a Code change that the Council made recently, where we have a project that requires Council action, we forward the entirety of the project to the Council for its review. If this project is filed, you will have an opportunity to weigh in on the text amendment and the discretionary entitlement that's associated with it. You would see TRANSCRIPT Page 29 of 85 City Council Meeting Transcript: 10/02/17 presumably something similar to what's being conceptually presented on the screen which would include, of course, the two units. Our Code has definitions of what a dwelling unit is. They need to be independent living facilities, so you would have these two separate entrances as part of that two-unit design anyway that you would be able to see as part of the project. Council Member Holman: That's good. Molly, did you have something to add or is that covered? That's very clear. Thank you so very much. Two other questions having to do with the—one is the development standards. The front page of Attachment C talks about the rear setback. There aren't page numbers on the Staff presentation. The chart there talks about a 20-foot rear setback. The carport is in the rear, so it's not a 20-foot setback. Is that allowed back there because it's greater than 75 feet from the street? Mr. Brennan: It's allowed there because it's considered an accessory structure, so it has different setback requirements. Council Member Holman: And it's 75 feet from the front. Even accessory structures, I think, to be that far back on the property line have to be 75 feet from the front. Mr. Brennan: That is correct. Council Member Holman: That's why that's okay there. Just wanted to make that clear. I had just one other question. I know what it is. The design of the house, I'm not going to get into this other than to say I appreciate that the front and the back of the house are both very appealing. I also think it's really interesting that—I don't know what the ARB will say. The back of the house is actually more inviting than the front of the house because the front of the house has the front entrance set so far back on the side it's not as street engaging as most of this neighborhood is. Take that for whatever it's worth. It is a comment. With that, if this comes back with something that's maybe a little more presenting to the street for this zone change, I would be supportive of it. I think those are my comments. Thank you very much. Thank you for bringing this forward. It's going to be nice to see something built there. If it can't be an addition to the park, which I've wanted for many, many years as someone else in your family knows, then it's going to be nice to see something there instead of just a vacant lot. Thank you. Mr. Culpepper: Thanks very much. Vice Mayor Kniss: Karen and then once again followed by Greg, then Eric, Adrian, and Lydia. TRANSCRIPT Page 30 of 85 City Council Meeting Transcript: 10/02/17 Council Member Tanaka: For me, my question to Staff is along the lines of some other Council Members'. It seems that the project could largely be accomplished with maybe just a few design exceptions. What's the pros and cons of making the zone change versus just approving the design exceptions? Mr. Brennan: What Jonathan was mentioning is we don't want to set a precedent by approving design exceptions. I think that would be the primary concern. You start a slippery slope with other R-1 development requesting similar exceptions. Council Member Tanaka: But you can point to the map and say, "It's in the middle of an RMD neighborhood, so that's why those exceptions were made." If you did start a slippery slope, some other project would have to show the same kind of findings. Mr. Brennan: Right. With this project, they're seeking an increase. If they were to maintain the R-1 designation with the applicable development standards, I think they can largely accomplish what they're wanting to do with the R-1 development standards as they are. I don't know. Do you want to speak about the … Mr. Lait: Thank you, Council Member Tanaka. The pros and cons depend on who's answering that question. The applicant may have a set of pros and cons. Somebody who might be against the project may have another set of pros and cons. I will say that the—I think Phillip's right. I would be concerned about applying a design enhancement exception or certainly a variance, which I don't see how we would be able to support that based on my understanding of the project today. You get into the question of what's being gained by the zone change. Phillip's noted a couple of the items. One is the increase in floor area. That's a gain by doing the zone change that you can't achieve otherwise. There are reduced setbacks, standards for daylight plane, which can't be achieved with the R-1 standard. You've heard the applicant speak to the size of the unit that they're interested in providing, which cannot be achieved under the ADU Ordinance as it's currently drafted. Those are some of the factors—I don't know if I'd call them pros and cons—that are being presented this evening. Vice Mayor Kniss: (inaudible) Council Member Filseth: Thank you. One of my questions was why is there a jog there. Did I understand you right that the original R-3 rezoning didn't touch that plot? Mr. Culpepper: That's true. I wrote this up. In the written statement, there's a short history of the—did you read that? TRANSCRIPT Page 31 of 85 City Council Meeting Transcript: 10/02/17 Council Member Filseth: Yeah, I did. Why was this plot left out? Do we know? Mr. Culpepper: I wish I knew. Council Member Filseth: You said that the whole area was originally R-1, and then it was rezoned to R-3, but then this plot was left out of the R-3. Is that correct? Mr. Culpepper: That's what it seems to be. I wish there were a better historical record of that. I tried digging around. There are a couple of documents available, and that's what I based my statement on. Council Member Filseth: Do you guys have any insight into that? Mr. Brennan: There was no information to substantiate that. That information was provided by the applicant and their own research. Council Member Filseth: I had a couple of comments. Council Members Wolbach and Holman touched on this a little bit before. I went back and looked at the Code for R-1 and RMD. If you look at the R-1 Code, it talks about detached dwellings and single-family living areas and ADUs and so forth as appropriate. It talks a lot about single-family living areas and residences that are consistent with that. If you go look at the RMD intent—I went back and looked at the intent of the Code. It says the intention of the RMD is to allow a second dwelling unit under the same ownership in areas designated for multifamily use. This comes towards one of the arguments that, I think, was made. You may have made it. It says it's intended to minimize incentives to replace existing single-family dwellings in multiunit areas. If you go down to that street, on one side of the street it's all small, Craftsman, single-family houses on (inaudible). On the other side of the street, it's all multiunit apartment buildings, which I think you pointed out, other than this lot. There's an apartment building next door that goes all the way down the block. There's one catty-corner behind it. There's an apartment building behind it, and there's an apartment building catty-corner behind that one. Then, there's the library. I went down and looked at it. Your side of the street looks like a multiunit neighborhood. The other side of the street looks like a single-family home, R-1 neighborhood. If you look at this, I actually think the RMD—I think your argument is correct. This seems to be more like an RMD lot. It's pretty clear. We want to allow a second dwelling unit together with a single-family dwelling in an area designated for multifamily use. The whole area looks multifamily to me. To me, the RMD thing actually seems somewhat sensible. I do have one question for Staff, and this touches on something that Council Member Wolbach brought up. Under RMD, can the next owner tear the place down and put up a concrete duplex? Is that allowed under RMD? TRANSCRIPT Page 32 of 85 City Council Meeting Transcript: 10/02/17 Mr. Brennan: The RMD would have a discretionary review process. Could they build a multifamily development there? It'd have to be supported by Architectural Review Board … Council Member Filseth: I assume they couldn't put up a ten-unit apartment building. Mr. Brennan: Correct. Council Member Filseth: It would have to be a duplex, right? Mr. Brennan: The maximum density for that lot is two units. Mr. Lait: Council Member, if your question is, if that got built, can a future owner or the same owner come by and tear it down and propose something else, yes. That's the discretionary review process that the City's review boards would consider. Council Member Filseth: Not entirely comforting. The discretionary review board has only so much latitude as well. Mr. Lait: Which is appealable to the City Council. Council Member Filseth: That's sort of my—this is a Study Session. We're not going to decide anything here. To me, the RMD thing seems—if you stand on the steps of the library and look down the street, the RMD thing seems more natural to me. That said, we up here want to be really cautious about eliminating R-1 parcels in our City. Once an R-1 goes away, it's not coming back. I know there are people in the region who are enthusiastic that the region has too much R-1 and ought to have other kind of stuff. I don't think that's a path we should generally go down. If we change the zoning for this one from R-1 to RMD, this needs to be a very narrow case and done on the basis of what the Code says and what's appropriate for that spot as opposed to a general policy that we want to move away from R-1 and move to denser designations. Thank you. Mr. Culpepper: Thank you. Vice Mayor Kniss: Either Adrian and then Lydia or vice versa. I think you were first actually, Adrian. Council Member Fine: Thank you very much. Thank you very much to Staff for the presentation. Thank you to the applicant for bringing this forward. I do want to thank Staff for pointing out the issue of spot zoning. I do tend to agree with Council Member Filseth that it seems more natural for RMD to go in here. If you just look at the map, it's a sliver of a finger. In actuality, this TRANSCRIPT Page 33 of 85 City Council Meeting Transcript: 10/02/17 is really a simplifying of our Zoning Map. It's actually more of plan zoning change. Just two quick questions. One, the applicant mentions an enhanced design review process for RMD. Can Staff walk us through that quickly versus R-1? Is it significantly—are there more hurdles for design review in RMD or … Mr. Brennan: For design exception or design review? Council Member Fine: Design review. Mr. Brennan: Design review would be effectively—they would go before the Architectural Review Board as a … Council Member Fine: Is it different from R-1 just because they're going to the ARB? Mr. Brennan: Yes. Council Member Fine: That's my only question. I did notice one little thing at the end of the report noting 200 extra square feet because of some parking changes. It seems reasonable given the site. I think this is a proper use of our zoning powers. It's cleaning up the map. I'd also note it's near services, jobs, and transit, which is the right areas where we do want to see this kind of development. Furthermore, just in response to Council Member Filseth's point, as our region and our City prioritize housing issues, these are the kind of changes we should be getting comfortable with. Going from a single-family unit to 1 1/2 or 2 right next to—I know you said this is what we shouldn't do, but where else are we going to do it is my point. Vice Mayor Kniss: Not total agreement. Council Member Fine: I'm sorry? Vice Mayor Kniss: There's not total agreement. Council Member Fine: There's not total agreement, and I recognize the community and the Council are still dealing with this issue. As we think about ways where we can begin to address our affordable and our market rate housing issues, this is a nice way to think about it in terms of it's near City services such as the library, it's right near the train station, it's right now Cal. Ave. for services. If not here, where? Anyways, I think you brought together a good project here. I wish you all the best. Thank you very much. Mr. Culpepper: Thank you. Vice Mayor Kniss: Lydia. TRANSCRIPT Page 34 of 85 City Council Meeting Transcript: 10/02/17 Council Member Kou: I don't know if disclosures are necessary over here. Just in case—no, very good. I, like Council Member Filseth, am a little bit concerned about losing R-1 zoning. It is something that, in my profession especially, I do see a lot of people moving over here because they want that backyard for their kids and so forth. However, I'm also very encouraged by your design. I see here on your calculations that your first floor is essentially 1,480 square feet plus the 400-square-foot carport. I guess your second story is 1,420 square feet. You're not really fully maximizing and using up your entire lot. That's very encouraging. I do want some help with the math. It says here on the FAR that the carport is equal to 400 minus 200. Are you essentially having one-car port or is it still that two-car port in the back? Mr. Culpepper: It's a two-car carport. Maybe Staff can clarify it, but I believe in RMD there's an allowance for 200. Mr. Jarvis: It's part of the FAR calculations under the zoning. You get charged, and then you get a credit. That's the way the zoning calculations work. Council Member Kou: I just want to know are we going to have a two-car carport there. Mr. Jarvis: It's a two-car carport and required that one side can have parking in tandem. We're parking three cars back there. Council Member Kou: For Staff, with the 930 square feet basement apartment, what is usually the necessary parking? Is there any necessary parking for that unit? Mr. Brennan: With the new ADU … Council Member Kou: No, that's not an ADU. Mr. Brennan: For the RMD (NP), they're required to provide three parking spaces off-street. That would include the … Council Member Kou: Tandem? Mr. Brennan: Yes. Two of which need to be covered. Council Member Kou: Two have to be covered, and then one not necessary … Mr. Brennan: Uncovered. Council Member Kou: It can be a tandem. TRANSCRIPT Page 35 of 85 City Council Meeting Transcript: 10/02/17 Mr. Brennan: And parked in tandem. Council Member Kou: Thanks for clarifying that. With every building, whether it's residential or commercial, it should really blend into the neighborhood and really should not impact the rest of the neighbors. I know that you've done extensive speaking to neighbors, and you've had a long history in the neighborhood. I am encouraged that it looks like a house and it does kind of fit into there. We're talking about changing the zoning today. Based on what you showed us in your existing Zoning Map, it does seem rather odd that you're the only R-1 in there. I still want to say that I really don't like losing R-1 properties. At the same time, your design is encouraging. Thank you. Mr. Culpepper: Thank you. Vice Mayor Kniss: (inaudible) on the Council want to add anything to what they have said? Council Member DuBois: If I could jump in, Liz? Vice Mayor Kniss: Tom and then Karen. Council Member DuBois: Just two quick comments since I went early and I got to hear everybody else speak. First of all, this is RMD (NP), which gives us even more discretion. The questions like Council Member Filseth asked, this would actually have to be historic and fit in even more than just a plain RMD. Is that correct? Mr. Brennan: Yes, in terms of looking at the—if there was an existing property. In this case, they would be looking at the neighborhood, the context of the neighborhood. Council Member DuBois: I just want to say, based on what I heard here tonight, I'd support the project as well. Mr. Culpepper: Thank you. Vice Mayor Kniss: Karen. Council Member Holman: Very briefly, one thing I neglected to mention earlier is if this remained R-1—I do think it's an anomaly. Council Member Fine said it's like a finger or something like that. It's very strange zoning. If it were to remain R-1 and a detached ADU be built, we'd lose permeability on the site. It's another reason why having the below-ground unit makes a lot of sense, to retain more permeability. TRANSCRIPT Page 36 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: I agree with a great deal that's been said. I have another couple of questions. Jack, did you actually say you don't know who owned this before? Mr. Culpepper: I do know who owned it. I'm not sure if that's public information. Vice Mayor Kniss: You don't have to give it out. I think what we're all struggling with is how that one R-1 finger ended up not being included with the other zoning that surrounds it. That's what seems peculiar. Mr. Culpepper: I don't know if the previous owner, who I know of, owned it during the time that R-3 came about. I believe he did own it during the time … Vice Mayor Kniss: Perhaps he asked that it stay R-1. We probably don't know without going back and looking at records. Mr. Culpepper: I'm not sure. Vice Mayor Kniss: To your knowledge, how long has the lot been empty? Mr. Culpepper: I believe early '90s. I believe Phillip sent me a document that indicated that, but we don't know for sure. Mr. Brennan: According to the records that we have on file, it appears that the property—there was a structure on the property dating back to 1991. Mr. Culpepper: I thought it was earlier originally, but Phillip sent me something that—I personally don't remember seeing a house there. Mr. Jarvis: There was a daycare. Mr. Culpepper: Sorry? Mr. Jarvis: The daycare. Mr. Culpepper: There was a daycare on it recently. Mr. Jarvis: There was a portable on the site for a while, that was a childcare facility, that belonged to the City. Vice Mayor Kniss: It's hard not to see it as an orphan, to be quite honest, especially as you look at the map. I will tell you some of the things that certainly would persuade me when you come back. I like the style. I like the way you've oriented it, and particularly you're going to be using solar. I could TRANSCRIPT Page 37 of 85 City Council Meeting Transcript: 10/02/17 see what would happen if you had to go to the traditional ADU; although, we don't have enough ADUs yet to know what a traditional will look like. This may turn out to be one of the better ways to combine with the ADU with the house at the same time and keep the maximum amount of land around the house. It's an interesting idea. Did you find any other basement apartments in that area or close by? There are a lot of developed basements in Palo Alto, but I don't know any that are actually rented out, which is interesting. Mr. Culpepper: I do know of some good examples in Berkeley. Vice Mayor Kniss: That doesn't count. We're sorry. Back to a couple of other things. Eric's comments were very good, and interesting that he had gone back and looked at the Code again. That certainly clarifies a number of things. The future, what we'd have to do when it comes back to us to protect it in whatever way we can so that we continue to stay in that same zoning. It would be a shame for it to revert to a boxy, two-unit building. I realize that's not your intent, but our job up here is always to think of what might happen in 20 or 30 years. As I heard, I think, Molly or Jonathan say, this would be woven into the final approval if and when it's made. Lastly, as I said, you're designing it in such a way that you're taking advantage of all the things we like to see, the solar, as much land around the house as you can maintain, and so forth. You're not looking for answers tonight. I realize we can't give them to you tonight. This is a prescreening. Overall, I think you're hearing a fairly positive amount of feedback from the Council. With that, Karen, did you want to add one more thing or was it your light from before? Council Member Holman: There wasn't, but since you ask. Just for the record, the portable was there for the childcare. When the College Terrace Library was redone, they had to move out. It provided a thank you for renting it to the City or allowing the City to use that parcel. That's why that portable was there. It wasn't because it was some kind of illicit use there. Vice Mayor Kniss: I would say as the final word on this I know it's tough to stay in the city you grew up in. Clearly, you're making a valiant effort to do that. Mr. Jarvis, you've been in the business a long time. If it comes to pass, you will do a very credible job. Thank you, both of you, for coming tonight. Mr. Culpepper: Thank you. Vice Mayor Kniss: It's an interesting issue. We haven't deal with this exactly in this same way before. I'm intrigued to incorporate the ADU with the actual house. Thank you for coming. Mr. Culpepper: Thanks very much for your comments. I greatly appreciate it. TRANSCRIPT Page 38 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: As we said, this is only a prescreening. I wish I could tell you, you could hold us to our comments. You really can't. I think you have a general sense of where people are heading. Thanks so much. Mr. Culpepper: Thank you. Mr. Jarvis: Thank you. Vice Mayor Kniss: Staff, do you need to add anything to this before we go on to the next item? Thank you all, those of you who came. NO ACTION TAKEN 3. 470 Olive Avenue [17PLN-00215]: Request for a Prescreening to Re- zone a Portion of the Subject Property From R-1 (Single Family Residential) to CS (Service Commercial). Environmental Assessment: Prescreening is not a Project. The Formal Application Will be Subject to California Environmental Quality Act (CEQA) Review. Vice Mayor Kniss: Our next item is another prescreening, that is quite different. You have a presentation in front of you. Jonathan, this continues to be your production? Jonathan Lait, Planning and Community Environment Assistant Director: Yes. Vice Mayor Kniss: You can tell us who is going to be speaking and so forth. Mr. Lait: Thank you. Graham Owen, an Associate Planner with our Department. I think he's been before you before. He's going to present this prescreening. Just like the other one, the comments offered by the Council are nonbinding. The applicant can choose to pursue a course of action that they want to pursue hereafter. This one is a little bit different and some of the facts surrounding it. I'll ask Graham to go ahead and take it away. Graham Owen, Associate Planner: Thanks, Jonathan. Thank you, Vice Mayor Kniss, members of the City Council. My name is Graham Owen, as Jonathan mentioned, a Planner with the City working with the applicant on the project that's here before you today. This is another prescreening, another R-1 zoned parcel that is seeking to rezone. As a little bit of background, this image right here, before I dive into the specifics, shows the project site. The building on the site was built in 1968 under the CS, service commercial zone. Ten years after the building was constructed, the City Council rezoned a portion of the site, which is the portion that you see right here, to R-1. The applicant now is seeking to revert the zoning back to its original CS zone. There's a nonconforming use on the site right now, which we'll dive into in a second. As TRANSCRIPT Page 39 of 85 City Council Meeting Transcript: 10/02/17 Jonathan was mentioning, this is a prescreening. The comments that the Council provides at this are nonbinding. The purpose is to provide early feedback to the applicant so that they can pursue an appropriate course of action. Should they elect to file a formal rezoning application, we would also want to see an amendment to the Comprehensive Land Use Designation Map, which is a component of the Comp Plan, which currently shows that the site is designated for single-family. Both of those applications—they're separate applications—would most likely be filed concurrently if they were to pursue that. That would involve Planning and Transportation Commission hearings as well as a final decision by the City Council. I'm not going to go into too much detail on this. I just want to give you a brief background on the site. 1968 is when the building was constructed. At the time, it's—there's two separate lots, and I'll show you the map in a second. At the time, the site was entirely zoned CS. Ten years later in '78, Council rezoned just a portion of it, one of the lots on the site, the 470 Olive portion of the site, to R-1, single-family residential. That mirrors the single-family uses, one and two- story homes, that are directly adjacent to the north and northeast as well as the northwest. In 1987—by the way, the rezoning action that took place in 1978 made the existing use of 470 Olive nonconforming and subject to termination within 20 years. In 1987, the Council approved an exception to this termination requirement for the existing use at the time, which was extensive retail. I believe it was a piano store at the time. That approval or that exception was subject to conditions of approval requiring that the parking lot and the landscaping on the site be brought up to Code. Unfortunately, the owner at the time did not pursue those conditioned improvements within the 60-day window that they had to file building permits for those improvements, so the exception is no longer valid. No further action since that time has taken place towards terminating the use, which is still subject to the termination requirements in the Code. A quick question I'm sure to come up is about retail preservation. The existing use on the site is office on both the 470 Olive, R- 1-zoned portion of the site and the 2951 El Camino Real section of the site. In both cases, there are office uses. They did also replace retail in both cases. However, the Retail Preservation Ordinance does not apply in either case because R-1 doesn't allow for retail or office use to begin with. In the case of the CS-zoned portion of the site, the office use predates the adoption of the Retail Preservation Ordinance in 2015. Here is an aerial photograph that shows the site. The R-1-zoned section that's the subject of this prescreening is 470 Olive in the yellow box. 2951—that's a typo there; I apologize—is zoned CS. It's all one building. It's all one parking lot that has two access points, one off El Camino Real and one off Olive Avenue. You can drive through the entire thing. As I mentioned, there are single-family homes, one and two-story, a mix, on the northern edge of the site. You have commercial uses along El Camino Real. Here is the Zoning Map, which shows where 470 Olive is in relation to the zoning districts in the area. It is in the R-1 zone. TRANSCRIPT Page 40 of 85 City Council Meeting Transcript: 10/02/17 The building is split between R-1 and CS. Directly to the north on the other side of the R-1 is ROLM, which is a manufacturing district. Here's a Google street-view image showing 470 Olive, which is the subject site in the center. The single-family home, one-story, on the right, to the north of Olive Avenue, and then to the south you have a Verizon store at 2999 El Camino Real, which is CS zone. This is 2951, which is the second lot that's owned contiguously by the owner of 470 Olive Avenue. It's zoned CS, which is what the rezoning request is for, to return the entire site to CS. This table provides the development standards for both the R-1 zone and the CS zone and then compares it to the existing condition on the site. To make a long story short, essentially the project, should it be rezoned to CS, would comply with most of the development standards in the CS district. One notable exception is the daylight planes. The building's about 19 1/2 feet in total height and has a zero lot line on the side that's facing the R-1, single-family home directly to the north. It wouldn't comply with the daylight plane requirements. Besides that, it would comply with lot coverage, FAR, and those other development standards. Again, this is a prescreening. The Council's comments are nonbinding. Given the situation, we wanted to present three options as we see them for how to look at this site. The first option is, as the applicant is requesting, to indicate interest in a rezoning and re-designation of the parcel to CS zoning. This would require formal applications for both of those entitlements. It would allow for the continued use of the site with an office site as well as the full litany of permitted uses within the CS zone. The other thing to know, of course, is that it would allow for the potential redevelopment of the site at a later date, which could incorporate both of the lots as well as, if there was an ownership change, the lot on the corner. The second option is to indicate interest in the pursuit of an exception, allowing for the relaxing of the termination requirements for this particular property. This would be consistent with Council's direction in 1987, which was the first exception, which was granted and then the owner reneged on the conditions. Should that take place, it's up to Council's determination as to which uses would be permitted with such an exception. The third option or the no option is to indicate interest in preserving the R-1 zoning designation on 470 Olive. This would involve the termination of the use. Again, it's a prescreening. We don't have a formal recommendation other than we would request that you provide comments to the applicant. I believe they have a presentation here as well. Vice Mayor Kniss: Just one question first and then would ask the applicant to begin. It's not quite clear from the report how this came to light. Mr. Owen: I can tell you that. After discussions with the applicants, we determined that they came into the Development Center, to the Planning counter. We were discussing how to go about permitting and getting a Use and Occupancy permit for the site for the office use. Once that happened, TRANSCRIPT Page 41 of 85 City Council Meeting Transcript: 10/02/17 Staff did the research to determine what's the zone and realized that it's single-family zoning. That's what triggered the applicant to then file this rezoning application or the prescreening for the rezoning. Vice Mayor Kniss: That's helpful. Thank you. The applicant is … If you want to introduce yourself, you have 10 minutes to present to us. Jessica Rose Agramonte, Property Co-owner: My name is Jessica Rose Agramonte, and I also grew up in Palo Alto long ago. I'm co-owner, and my day job is as a professor at Stanford University in the Department of Orthopedic Surgery. I run a clinic in the Children's Hospital. We analyze walking disorders. I'm a landlady, so I'm here today on that. It was actually we came about a year ago to look into getting a business permit for the tenant in 2951 El Camino Real. At that time, it was brought to our attention about 470 zoning. It was new to, and unfortunately it wasn't disclosed when we purchased it, and we didn't notice it. Here we are. We recently became aware of it. We're trying to take proactive steps to remedy the situation and would appeal to the Council for some latitude in order to find resolution and continue to operate in a way that is nonintrusive to the neighborhood. We currently do not have any plans to redevelop. We are aware of a neighboring redevelopment that's going on. Here is the map that you recently saw. Here is 470 Olive, and here's El Camino. You can see the outline of the entire building. We originally purchased the building with an SBA loan as a single building and as a business enterprise. Here's the view from El Camino and the drive-through parking lot. The view from Olive Avenue you just saw. About half of the 470 site is currently rented out in a short-term lease, which will be over in a couple of months, to a temporary tenant that has a site nearby and was in need of expanding temporarily before moving. Here is the view from 470, a dock. It has two docks and has always operated as a commercial building. That looks at the Palo Alto Square there. This is the view of the northwest side from Pepper Avenue. It's right adjacent to an auto body shop. This is looking from the auto body shop to the northwest, back side of the building. These shots are just to show that this would be 470 and this would 2951 right here. They're joined in one building. The area has commercial use, and all sides of the entire block has commercial, not just El Camino but Olive Avenue and then the street that connects Olive and Pepper Avenue. They all have some form of commercial operations happening on them. We have never had any complaints. We feel like it's operated in a way that has been nonintrusive. Back in '87 I want to say, the Council noted that its design provides noise protection to the neighborhood because of the "L" shape. Back in June, we submitted this letter, the main points being that it is a single building that spans two parcels, 470 Olive Avenue and 2951 El Camino. Both parcels were originally zoned CS. As part of the Citywide plan, it was rezoned. I don't think this particular lot was designated, but it was part of a TRANSCRIPT Page 42 of 85 City Council Meeting Transcript: 10/02/17 Comprehensive Plan zoning. We, as I said, don't have any plans to develop it at this time, but we request your consideration to allow it to continue to operate in a way that is nonintrusive. Any future development, we also would be very committed to 100 percent renewable, net zero building if it were ever to be developed and we were involved. Thank you. Vice Mayor Kniss: First of all, I'd just say it's regrettable that wasn't disclosed when you bought it. I doubt there's little you can do about it now, but … Ms. Agramonte: I forgot one point, if that's okay. Vice Mayor Kniss: Yes, you've still got time. Ms. Agramonte: Sorry; I'll make it quick. It sits over a toxic water plume, and it is the main testing well for the Superfund. Those testing wells—I can go back to those pictures—basically sit on 470. There's one on 2951 and several on 470. They are how the Superfund currently and continues to test the water quality in that area. It would, I think, make it certainly difficult for a residential use. Vice Mayor Kniss: That's an important piece of information. I'm glad you mentioned that. Does Council have any questions for the applicant while she's standing there and still has a few minutes left? Standby. Just for variety tonight, let's—I know everyone's going to want to talk to this. Why don't we start at Karen's end and just move all the way down? If somebody doesn't want to say anything, that's okay, but that would be unusual. I have no public speakers on this. We're going to start at that end and work down toward the Council Members on the right-hand side. Council Member Holman: A couple of questions for Staff. Maybe I'll focus on the last thing that was stated by the owner/applicant about the Superfund site. There's nothing in the Staff Report about that. It's only from the applicant. Vice Mayor Kniss: I noticed the same. I'm glad you mentioned it. Council Member Holman: It's only in the applicant's information. Mr. Owen: It's not that we excluded that information. It was included in the applicant's project description, so we thought it would superfluous to restate it. It wasn't an intentional thing. Council Member Holman: Is it confirmed? That's the question. Mr. Owen: It is in the COE plume, absolutely. It's one of several parcels in the area that does have groundwater testing. I don't know for a fact if it's the TRANSCRIPT Page 43 of 85 City Council Meeting Transcript: 10/02/17 sole site for the testing or not, but the plume does affect a large number of the parcels in that area including the residential parcels immediately to the north. Council Member Holman: Much to the chagrin of—I see Bob Moss is here. Other parcels have been redeveloped and allowed housing that are above. I'm not sure if Staff sees that there's a constraint there or an issue there. Mr. Owen: It's certainly more difficult, but there are mitigation measures that you can look at for ensuring that the health and safety of occupants isn't compromised. We look at all sorts of various vapor intrusion layers, active and passive infiltration systems that you can install either in below-grade areas or in crawl spaces, for example, active pressure systems to ensure that people's health isn't compromised. Council Member Holman: Thank you for that. Since Staff brought it up, 2951—I believe the applicant did too. I did a little bit of research on there because I did a site visit today and did some walking around. That site used to be three-day blinds, and it was also a—I've forgotten the name of it—sleep or mattress store. It seems like the current use got a U&O permit in November 2016, which is about a year after the Retail Preservation Ordinance was passed. I don't know why the Retail Preservation Ordinance doesn't apply. Mr. Owen: Based on our review of everything that we have in the administrative record, also looking at imagery, Google maps for example, it looks as though an office use was in there before that date. 2014 is the latest we had seen for when the use was established. Council Member Holman: I'm not convinced based on the research that I did. We won't dig into that tonight; that's not why we're here. Ms. Agramonte: It was a business, office business. Mr. Lait: The Use and Occupancy permit is one of the—every business is required to obtain a Use and Occupancy permit, as the Council knows. Not everybody does. Establishment of use is not automatically tied to when that U&O was obtained. A review of the Google maps street view shows that a commercial office, at least through signage, appears to have occupied the space prior to the adoption of the Retail Preservation Ordinance. As we go forward, we could ask for copies of lease agreements from the property owner to validate the establishment of use and track that down further. It's our belief at this point that it was not subject to the Retail Preservation Ordinance. Council Member Holman: I look forward to hearing more about that. Because I did do a site visit today and walked around the area, I concur with what the TRANSCRIPT Page 44 of 85 City Council Meeting Transcript: 10/02/17 applicant has said. There are a mix of uses around there, commercial and residential. The commercial is on the ends of the block, on Ash—is it Ash on the east end—and El Camino on the west end, if you think of Palo Alto as not being laid out on east and west but basically that. Everything in between is R-1. Ms. Agramonte: It does have business. Council Member Holman: I'll just touch on this. There does seem to be another Code enforcement issue on that block. I'll give you the address later. Vice Mayor Kniss mentioned this too. It's unfortunate, but it's also not the City's responsibility to remedy the lack of disclosure by a seller for—I hate to say the lack of diligence, but I don't know how else to state it, on the part of a buyer. That's most unfortunate, and it's not our responsibility to fix that. Our responsibility is for the public's best interest. Everything in between is zoned R-1. On the ends it's commercial, and in between everything is zoned R-1. It makes sense for this to be R-1. The bit of a challenge is that it is one building. I know of another circumstance, at least one other circumstance, in Palo Alto where a single building has different uses in it. I don't know if I should say where. It's all legal; it's a church that's attached to a house. They're attached. They're absolutely attached. They work, and they're on separate parcels. I think it could work. If you look at the design of the building—I did go out there—it's not the most attractive building. Given that there's so much interest in industrial look and everything these days and because there's a great interest in housing these days, someone could actually, quite frankly—even a decent architect could make that become a pretty fun and funky residential space—I really do—with just a little bit of creativity, and a fair amount of creativity could really make it fun and fun. The drive-through aspect doesn't seem to be necessary. Both sites seem like they could function independent of each other. As Vice Mayor Kniss mentioned earlier, our job is to look at not just the current and what your intentions are but what the long term is, just as we said for the prior applicant, who was also looking for a zone change. This is currently zoned R-1. It's been a very, very long time. Was it 19—the timeline of this, it's like the City's let it slide. It was 1978 and then 1987 or something like that, that this has been going on. It's a very long time. I don't envy your position; I have sympathy for that. It's also pretty challenging for the Council, from my perspective at least, to rezone something from R-1 to a commercial use, especially given the very long timeline where this has been identified as R-1 and the exceptions that were granted and the ignoring of the requirements. With all due respect and consideration, personally I could not support it changing from R-1 to CS. Ms. Agramonte: Can I ask a questions or should I just … TRANSCRIPT Page 45 of 85 City Council Meeting Transcript: 10/02/17 Council Member Holman: Why don't we hear the rest of the Council Members, and maybe you'll have some other questions to ask along the way. Vice Mayor Kniss: I wanted to tell you, you don't have to stand at the mic. You can have a seat and, when there's a question, just walk up. Thank you. Mr. Lait: Vice Mayor Kniss, can I interrupt for a minute? Vice Mayor Kniss: Please. That's your job, actually, Jonathan. Mr. Lait: Thank you. I'll do that. As the Council's contemplating this issue, there's a decision point in your mind that you might want to get to, maybe even before the rezoning question. Would the Council entertain the possibility of the continuation of a commercial use of the property with no change to the building or no expansion of use? If the answer to that is yes, then we've presented a couple of options for how that could be achieved. One is the applicant's preferred approach, which is to rezone the property. Another is for us to come up with another solution to amend the Code that would allow for the continuation of the use in its current form and shape. If the answer is no, then the commercial use has to be abated and restored or at least a future use would have to be a residential use. There's one other component that we've mentioned, and that has to do with the current office use of the site. That was never an authorized use of the property. It was an extensive retail use; I think it was a piano sales place. At the time it was deemed to be legal nonconforming, that extensive retail use was the last use that was grandfathered to be there. Another consideration is allow the continuation of the commercial use but also require it to be restored to this extensive retail or retail-type use. That could be something the Council considers as well. I hope I didn't make things more confusing but added a little more clarity. Council Member Holman: No. Just to wrap up here, Vice Mayor Kniss. If my comments weren't clear, I appreciate your running through that. If I my comments were not clear, I'm interested in retaining the R-1 zoning, which would mean there would be a zoning-compliant use there. If that answers all of your questions, that's my inclination. Vice Mayor Kniss: Adrian. Council Member Fine: Thank you. Thank you for the report, and thank you for the application. I don't have too many questions about this. It certainly is a little different from the last compliance and zoning issue we've seen. I am persuaded that this has been used as office space for quite some time. That may be part of our consideration. Just one question for Staff. There's a note about the site being nonconforming and subject to an amortization TRANSCRIPT Page 46 of 85 City Council Meeting Transcript: 10/02/17 schedule. Can you explain a little bit what that schedule is and what that actually means for us as a City and for the property owner? Mr. Owen: Sure. Let me pull it up really fast. The 1978 rezoning action that included rendering this particular site nonconforming established an amortization schedule for specific uses and specific sites. It was based on the type of construction; the most relevant being the type of fire rating of the structure. There's this schedule in Section 18.70 of the Municipal Code that looks at 20 years, which is what this particular site was subject to, 25 years for a different type of construction, going up to 35 years for the most fire- resistant type of construction. There were also site-specific amortization periods beyond the schedule, which essentially rendered specific sites and specific uses nonconforming by X date. This one wasn't included in one of those more specific zoning text amendments that had a specific schedule. It's just wrapped into the fire resistance schedule. Council Member Fine: Is the point of making these sites nonconforming after some number of years to try to make the buildings get upgraded? Is that the purpose of this? Mr. Owen: I would say upgraded and in compliance with the Code. Council Member Fine: Do we have any idea if it works? Mr. Owen: That's a good question. As I mentioned, there are, I think, six in the Code with a specific amortization date. The applicant's proposal wasn't one of those sites, so we're discovering anew that this is an issue beyond what the actual Code specifies. We're not quite clear. Council Member Fine: This is a little way from this one project, but are we planning a similar amortization process for our current Comp Plan in the next zoning update? Mr. Lait: I think that would be revealed when you update the Zoning Code. Amortization is a bit of a challenging effort. It works when cities stick to the schedule and they follow through on the effort. It becomes a little more problematic when we let it lapse. Council Member Fine: That's my only question here. Thank you. Vice Mayor Kniss: Thanks. Greg. Council Member Tanaka: I have a question similar to Council Member Fine. Why did the Council—can you explain to me the rationale in 1978? Why was TRANSCRIPT Page 47 of 85 City Council Meeting Transcript: 10/02/17 this portion—let me see if I understand this correctly. In 1968, the building was constructed. At that time, it was all CS zone. Right? Mr. Owen: Correct. Council Member Tanaka: Then, in 1978 the Council made a small portion of that R-1. Why did that happen? Mr. Owen: That's a good question. I looked back through the administrative record, and on this particular site there's no record at all indicating 470 Olive was rezoned. It's part of a larger effort. We were reestablishing the Zoning Code, so this is just one component of that reestablishment of the Code. Based on the record that we do have, it indicated it was part of an effort to make the Zoning Map and the Comprehensive Land Use Map consistent with each other. That's the best answer I could provide without doing a little bit more digging. Council Member Tanaka: Could it have been a mistake? Mr. Owen: Certainly. Council Member Tanaka: It just seems very odd that you would have a property, and the building was built, and it's all good. Suddenly, a portion of it gets chopped off into a different zoning. To me, it strikes me as a mistake, but I was just trying to understand more of the rationale as to—it was in the Zoning Maps. Was this particular property called out or was it just someone drew a line with a ruler and there you have it? Mr. Owen: That's exactly what I'm talking about. This is just a map change alone. Unlike some of the other sites that did have—that were called out in the Zoning Code, there was nothing indicating that 470 Olive should have a termination of 20 years. That's just based on the change in the map. Council Member Tanaka: It wasn't that this property itself had an amortization. It was more that it was part of this bigger change. It just happened to get swept into it. Mr. Owen: Correct. Council Member Tanaka: Could it be that perhaps whoever was doing this just didn't realize that that building went there, and they just drew a straight line? Mr. Owen: It's possible. It's difficult to speculate from 1978 given the record we're working off is microfiche and isn't as clean and clear as we'd all hope. We're basing our understanding of the site based on the record that is legible. TRANSCRIPT Page 48 of 85 City Council Meeting Transcript: 10/02/17 Council Member Tanaka: Today, we have the benefit of Google maps and satellite photos. It's pretty easy to see mistakes. I was wondering back then maybe they didn't quite know that. There's nothing else in the record about this, about like … Mr. Owen: What we have in the packet does have the background in terms of when the exception was granted in the '80s and just the history that's been explained in prior Staff Reports. Beyond that, there's the Record of Land Use Action that approved the rezoning back in 1978. Beyond that, no. Council Member Tanaka: Does no benefit—I'm thinking also maybe that it probably gets some sort of benefit by getting flipped to R-1. Was there some sort of—there's nothing. In 1987, what happened there? What triggered that? Mr. Owen: My understanding is that at that point the City sent out notification to property owners that were subject to an amortization, including 470 Olive, that they were indeed subject to this termination schedule. When that happened in 1987, that's when the owner at the time filed for the exception. Council Member Tanaka: I see. Since then, has those things been done, those improvement? I know it wasn't done in 60 days, but has it been done since then? Mr. Owen: Not to my understanding, no. There have been other improvements, but those specific ones I don't believe so. Council Member Tanaka: Do you have the Council Minutes as to what happened at that time in 1987? Mr. Owen: I didn't see them in the record. I can certainly look for them at a later date. Council Member Tanaka: I guess, first of all, what I wonder is do you know what specifically the changes were that were supposed to be done in 1987? Mr. Owen: Based on the Staff Reports, it was lighting, landscaping, restriping, possibly resurfacing. Council Member Tanaka: Because the owner of that failed to do that, they basically lost their exception forever. Mr. Owen: Right. When Council approved the exception, those conditioned improvements were supposed to have taken place within 60 days. The owner didn't make those improvements and ultimately did write the City indicating that they didn't want to pursue the exception and, therefore, do the TRANSCRIPT Page 49 of 85 City Council Meeting Transcript: 10/02/17 conditioned improvements anymore. They didn't take place during the 60- day period, so the exception is void. Council Member Tanaka: Why didn't the City at that time enforce this? Mr. Owen: I don't know. Council Member Tanaka: For me, just given the history and in terms of fairness, it strikes me that the City failed to enforce which previously, if we had enforced, the current owner may not have bought it or it might have been a different situation. To me, it seems like the fair thing here would be to give the current owner a chance to actually do the conditions or the things that should have been done in 1987. That's my opinion. Mr. Lait: Just to answer that one question. Graham will correct me if I'm wrong here. I think you had asked why in—let me just get back to my notes here—'87 did the City not do enforcement. It looks like the termination period had another 10 years to go. The amortization would have been 1998. That's why I don't think there was any action. Fair question as to why 1998 we didn't do anything, and we don't have an answer to that question. Council Member Tanaka: When did the current owner acquire this property? Mr. Lait: We looked into that. It was … Ms. Agramonte: In 1993, we purchased it with an SBA loan. We have resurfaced it, and we have restriped it, and we have lighting put in it. I'm not sure it's to exact specifications. Council Member Tanaka: Let me ask you this. Do you know what the specifications are? Mr. Owen: We have it in the Staff Report. I can provide the page for you in a second. Council Member Tanaka: My question is to the applicant. Does your current standard match the requirement? Ms. Agramonte: I am not sure. I can definitely find out that. Council Member Tanaka: I see. The owner bought the property before the thing actually terminated. Let me ask the applicant this. This is rollback history here. If in September 11, 1998, you learned that you had to do what's in that Staff Report, which I can see you haven't read, would you have done them? TRANSCRIPT Page 50 of 85 City Council Meeting Transcript: 10/02/17 Ms. Agramonte: Yes, absolutely. Council Member Tanaka: Would you do them now? Ms. Agramonte: Yes. Council Member Tanaka: Thank you. Ms. Agramonte: I would just want to take a quick chance to let you know that we have submitted the leases that we had in place back in 2014 related to the CS zoning. Mr. Owen: The condition that you had asked about is in Attachment B. It's one of the conditions … Council Member Tanaka: Just real quick so we don't have to all listen to this. Does the current property meet those conditions or not? Mr. Owen: It wouldn't be the exact same, no. The improvements that have taken place over the past 20 years are going to be the same exact ones that were required at the time of 1987. For example, there isn't a 20-foot-wide landscaping area from the front yard setback. It seems as though that—you have a (inaudible) coming off Olive Avenue. There's an area for trees, for example, that's immediately adjacent to the property owner to the north, the single-family residence, but then you also have a trash enclosure, for example, that's right there. Council Member Tanaka: Are you saying that they—could the current property owner meet the requirements now or not? Mr. Lait: On a quick review of the conditions here. There are four of them. It does seem that the owner would be able to meet the standards. There's a landscape buffer. There's a requirement for 21 parking spaces, shielding some lights. These things do seem doable. Council Member Tanaka: Thank you. Vice Mayor Kniss: Thank you. Eric. Council Member Filseth: First of all, thank you, folks, very much for bringing this. This one is not simple. If there were ever a project with a checkered past … It's very clear that some unfortunate stuff has happened here, and there's a sequence of things. The plume adds some complexity as well. I'm not sure what the optimal way to proceed here with this parcel. I believe there is not broad support in the community to convert R-1 parcels to other uses. Once you convert them to something else, they don't come back. To TRANSCRIPT Page 51 of 85 City Council Meeting Transcript: 10/02/17 do such a conversion, we'd have to see some compelling benefit to the community to change R-1 to CS. I don't think we've seen anything like that. At this point, it's hard for me to be enthusiastic about converting to from R-1 to something else. Vice Mayor Kniss: Continuing down the line, Cory. Council Member Wolbach: On Packet Page 60, it does a zone comparison, but it doesn't have something I was—I wish I had my laptop with me to look it up. Just as a reminder for all of us, what uses are allowed under CS zoning? Mr. Owen: Let me pull it up real quick just to give you a summary. Council Member Wolbach: Is retail one of those uses? Mr. Lait: Yes. Council Member Wolbach: Is office one of those uses? Mr. Owen: Yes. Council Member Wolbach: You've got part of the property that's in the CS, and part that's in R-1 currently. Correct? Mr. Owen: Correct. Council Member Wolbach: The office use in the CS is … Mr. Owen: Permitted. Council Member Wolbach: … kosher, permitted. This is a tricky one. Like the last one, I'm glad it's a Study Session, a prescreening. My thoughts are about trying to align what I heard from Council Members Tanaka and Filseth. There's a question of fairness, whether the City lapsed in our enforcement. There's an interest on the part of the property owner in being compliant and doing right by the City, even though they didn't know at the time of the sale exactly what their obligations were. There's also the concern about rezoning things from R-1 to anything else. We just talked about another one of those. I was actually surprised by how much comfort—I'm surprised that some Council Members who were so enthusiastic about the last one are not as enthusiastic about this, but they are different sites. I can accept that. I was just surprised by it. As with the last one, I'm on the fence. Going back to the options that are in front of us, Options 1, 2, or 3. I'm not honestly enthusiastic about Option 1. Option 2 probably is the closest to trying to find a balance between those ideas that Council Members Tanaka and Filseth articulated. Where I'd probably go is Option 2 as a preference. I don't think we should just start TRANSCRIPT Page 52 of 85 City Council Meeting Transcript: 10/02/17 with a harsh Code enforcement, which seems to be what Option 3 would be. I don't think that's the appropriate action given the history here. That's a heavy hand that would be inappropriate on the part of the City given the City's, again, lapse in enforcement in the past and the lack of knowledge on the part of the property owner and the clear expressed interest on the part of the property owner to do right by the City. Three is too tough. One's harder to argue for because that's more of a permanent change. I understand there are difficulties in redoing this as residential, and so I'd probably say something like Option 2 is the most acceptable compromise. A compromise is probably the way to go with this property. It's a prescreening. I'm open to more thoughts on this. Hopefully we get some more research. I encourage everybody, Staff and the applicant, to see if there's anything more we can dig up to get clarity about some of the questions that have been raised this evening. My inkling something close to Option 2. Vice Mayor Kniss: Lydia and then Tom. Council Member Kou: Council Member Wolbach mentioned the office use, the permitted uses under CS. What kind of offices, administrative, tech office, what type of offices? Mr. Brennan: In the CS zone, there are three different types of office uses that our Code defines. One's administrative office services that's a permitted use. Medical office, which is a conditional use, and professional and general business office, which is a permitted use as well. I think the current use of the site would most likely fall into that professional and general business office category. Council Member Kou: The office that is in 2951 right now would be administrative offices or are they … Mr. Brennan: That's what I was talking about. 2951, the CS-zoned portion of the site, would fall into that professional and general business office. Council Member Kou: The conditions that were listed from prior back when, Condition Number 3 to record a grant of easement between the parcels, do you know if that has been done? Mr. Brennan: I don't believe so, no. Council Member Kou: It's interesting because this case over here is the opposite of the last one. Whereas, we had that one little R-1 in the RMD zone. This one here is, which is clearly an R-1 area, requesting to go back to CS from what it was. I'm sure that the Council back then gave it great thought into what they were doing and why they did it. There was a reason. It seems TRANSCRIPT Page 53 of 85 City Council Meeting Transcript: 10/02/17 more consistent with the map, and their intention seemed to be correct over there. However, I do have to say that I agree with Council Member Holman that it's not upon the Council or for the City to determine the amortization and what was disclosed and not disclosed. As a realtor, I also know sellers are supposed to disclose what they know about the property. However, it is also the buyer's—the buyers are expected to perform their due diligence in terms of inspections and in terms of what restrictions there are to the property. That's something that needs to be recognized. In using signage to determine what was the last use is unreliable because the animal hospital signs are still displayed pretty prominently today even. Also, the CS zone, in looking at it, at the end of the day we have to be concerned about what is the best for the neighborhood. I'm not quite sure that CS is really the best for blending into the neighborhood. When I'm looking at the CS zone over here, mortuaries are actually permitted in that zone. Hotels are permitted in that zone. There are certain things—I realize that the current owner is not planning to have all of that. As we discussed in the last agenda item, we don't know what's in the future. If that lot is sold to someone else and given the redevelopment over there in that neighborhood, especially the Ventura neighborhood, the last thing I would want to see is for it to not benefit the neighborhood. Land use, we have to be very careful on how it impacts neighborhoods. It is in a neighborhood that is going to be seeing a lot of changes in the coming years. As I said in the previous one, I don't like to see R-1 parcels go away. I realize how difficult this is given that there were exceptions given. In terms of the three choices, I would consider an exception again to have the owners—give them time to bring it back to conforming. Also, right now with the CS, if it does get rezoned, there's no buffer to help the neighborhood. That's a very big concern for me. I'd like to explore CN maybe to help the situation. It has to not impact the neighborhood, and it has to benefit. At this point, I would say that exception to explore that and looking forward to more information when and if it comes back with different zone allowances. Again, I don't like taking away R-1 or changing zoning for R-1 parcels just to make it very clear. Thank you. Vice Mayor Kniss: Tom. Council Member DuBois: I'll try to be quick to help us get back on schedule. I'd echo the comments. This isn't simple at all. I know it was asked earlier, but I'm not sure I understood. If Council does nothing, what does amortization mean in this case? What would happen to the property? Mr. Lait: Thanks. What we've discovered is that we have a site that has no legal right to continue at this point at this location. We would proceed with a Code enforcement action. Hearing the comments that we heard from Council, TRANSCRIPT Page 54 of 85 City Council Meeting Transcript: 10/02/17 we would issue a Notice of Violation that there's illegal commercial use of the property and require it be … Council Member DuBois: Generally, Staff gives some time, so that process would take a while, I would assume, and might result in a fine. What would be the end result? Mr. Lait: Our end result—if there's no light at the end of the tunnel, the end result would be to see the commercial use abated. Council Member DuBois: Was it a technical or was it a violation to rent to the current tenants in the Olive space? Mr. Lait: Anything after 1998 was not an authorized use. Council Member DuBois: What is Staff's feeling about the Superfund issue raised in terms of residential there? Mr. Brennan: With this being a prescreening, we didn't do any sort of full- fledged environmental assessment. If there were any sort of discretionary entitlement that we were pursuing, we would certainly want to do a full CEQA analysis. That would obviously include soil reports and testing. At this point, we're not quite sure what the level of contamination is on the site. We would have to check with our colleagues over at DTSC to look into that further. Council Member DuBois: I think it is right in the heart of the Superfund area. Ms. Agramonte: Can I have a quick question on that? What about the testing? The testing goes on continually. What about having testing continue? If that were to be residential, how does that work? It's just a question. Council Member DuBois: There's residential right next door as well. R-1 to CS is tough. When I look at the historical documents you've attached, the Council (inaudible) in the past did make sense to me as well. I'm pretty familiar with Olive. It made sense to try to make the Zoning Map and the Comp Plan consistent. The intent was a layer of CS along El Camino, and then Olive was residential. That neighborhood is under assault. We had the Jay Paul project proposed a while ago at the other end of the block. I live very close to there. I see (inaudible) cut-through traffic to avoid the intersection of Oregon and Page Mill. There's a lot happening there. Overall, I would favor keeping it R-1. In fairness, I would consider extending the amortization period and making sure the City tracks and enforces it this time and giving a fairly significant amount of time to do that amortization. Thanks. TRANSCRIPT Page 55 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: What would we consider a fairly significant amount of time? I think that's important. Mr. Brennan: The exception that was granted for the previously permitted use, the extensive retail, was an indefinite extension. The maximum that we have in the nonconforming use section of the Code is 35 years for a completely fire-resistant building. It's at the Council's purview. Vice Mayor Kniss: There's no real precedent set? Mr. Brennan: I wouldn't think so. Vice Mayor Kniss: As we said—I'll come to you in a second, Karen. As we said, this is unusual in many ways. It is the flip of what we just ran into because this one looks as though, as Greg Tanaka said, somebody maybe slipped when they made the line. It's very hard to tell. The one part of this that I would like—I'd probably be the same, by the way, as Cory suggested, under pursue the exception. I'd like to know a whole lot more about the Superfund. If I were looking to put a house there, I have a feeling I'd take a look over the Superfund results. I'm not sure I'd be enthused about it even if it was cheap. Some of these areas have really been a great concern. Where I would be is on two, but at the same time we've had some very spirited discussions about this in the past. Whenever things come to zoning, we have very different viewpoints of it. Karen, you wanted to add something. Council Member Holman: This Superfund question is a good one about the testing. That said, some questions came up earlier about amortization and does it ever work and such. Not this Council but the prior Council developed an amortization schedule for CPI and for a good handful of properties in the SOFA neighborhood. They were automotive uses that were embedded in the neighborhood. Those properties were amortized, and the amortization schedule was recognized. Those properties were redeveloped as residential. Those were automotive uses, so I can't say they were Superfund. They certainly had toxic issues, and those were redeveloped after the amortization schedule was adhered to, followed, and the administration of those schedules was pursued. I'm not unsympathetic to your situation. That said, since the current owner has owned this property since 1993, that's 24 years of use of this property and seemingly noncompliant use. There's that too. Vice Mayor Kniss: That's a good way to end, to be honest. There is. We find ourselves in these very awkward situations where something comes to light. Our job is to then make that difficult decision about now that we've seen it under the light of day, what do we do with it. Clearly, this is a tough one. I think this is a tougher one that the first one was, to be quite honest. Thank TRANSCRIPT Page 56 of 85 City Council Meeting Transcript: 10/02/17 you very much for coming. You know it's a prescreening. I'm sure you're going to have more conversations with our Staff and so forth. Ms. Agramonte: Thank you all for your … Vice Mayor Kniss: I imagine we will see you again at some point. Ms. Agramonte: … valuable input. Vice Mayor Kniss: Thank you for coming. Agenda Changes, Additions and Deletions Vice Mayor Kniss: Taking a look at where we are now. Believe it or not, we are at Agenda Changes, Additions, and Deletions. What I would suggest at this point before—let's get through the Consent Calendar and take 5 minutes just to stretch and then come back down to the issue we thought might not take a long time. We didn't quite get the other two either, did we? Let's look at Agenda Changes, Additions, Deletions. There are none? Ed Shikada, Assistant City Manager: I actually do have one, Madam Vice Mayor, for the Council's consideration. Item Number 7 is the approval of an amendment related to our SP Plus valet parking services. Did determine that there's some additional financial information we'd like to put into that report. We'd like to lay that over for a week and bring it back on Consent next week. Vice Mayor Kniss: Delayed to a time certain. Mr. Shikada: Delayed to next week's Consent, yes, the 16th. Thank you. We were planning a meeting next week. Vice Mayor Kniss: It will be presented at the next official meeting. Council Member Wolbach: (inaudible) vote to make that change? Vice Mayor Kniss: We'll put that into the Consent changes. City Manager Comments Vice Mayor Kniss: City Manager Comments. Ed Shikada, Assistant City Manager: Thank you. I'll do a quick run-through of a few upcoming events and opportunities for community engagement. No particular news this week, but recognizing we have quite a number of programs ongoing. I'd like to do a quick walk-through. First, in terms of Emergency Services Volunteers, in light of recent natural and unnatural issues TRANSCRIPT Page 57 of 85 City Council Meeting Transcript: 10/02/17 that the nation is dealing with, it may be timely for us to remind ourselves that our Office of Emergency Services is constantly looking for volunteers. In particular right now, on a push to look for volunteers to help make our community safer by joining our emergency volunteers program, ESV program. With minimal time commitments, you will work with our Office of Emergency Services, Police Department, Fire Department, and other groups to learn valuable skills and be part of our network during a crisis. There is a 3-hour training class coming up on Saturday, October 28th, 1:00-4:00 p.m. To register or learn more, our website cityofpaloalto.org/emergencyvolunteers. Next a public art program. The City's Public Art program invites Palo Alto and Bay Area artists and graphic designers to submit proposals for designs for a bike and pedestrian intersection at Louis Road and Fielding Drive in Midtown. This is a public art opportunity as a pilot neighborhood beautification project and part of our City's Comprehensive Neighborhood Traffic Safety and Bicycle Boulevard project, representing a significant step toward Palo Alto's vision of a system of neighborhood bicycle and pedestrian route. Deadline for submittals is October 10th. For information, cityofpaloalto.org/publicart and click on artist opportunities. Also upcoming and not to be forgotten our 33rd annual Moonlight Run and Walk at Baylands Athletic Center on Friday, October 6th, at 7:00 p.m. at the Palo Alto Baylands Athletic Center. This event is cosponsored by the City of Palo Alto and Palo Alto Weekly. This is a popular family event benefiting local nonprofits serving kids and families. Enjoy live music by School of Rock, climbing walls for kids, food from local restaurants, and sponsor booths with lots of swag and, of course, the beautiful rising harvest moon. I understand there was a challenge posed to the Council on this as well. Harvest Festival, another fall fun event or fun fall event to announce. Lucie Stern Community Center is hosting a Harvest Festival on Sunday, October 15th, noon-3:00 p.m. Free event will have food trucks, petting zoo, bouncy houses, not to be confused with bounce houses, fall crafts, storytelling, games, and beer testing hosted by Dan Gordon's Brewery. Hope to see you there. Finally, one more fun event, Free Play Family Day. Join the Palo Alto Arts Center on Sunday, October 15th—I hope I got that right. Also Sunday, October 15th, 2:00-4:30 p.m. for Free Play Family Day, a playful afternoon of activities featuring hands-on artmaking and performances inspired by our current exhibit, Play!. The Art Center teaching artists will show how to create shadow, circle, and woven art. Outside artists include mini golf holes, bubbles, chalk, and dough. A special live performance by acrobatic chair balancer Jeremy Vick, presented by the Circus Center, will be held at 4:00 p.m. All activities are suitable for ages 5-105. That concludes my report. Thank you. Vice Mayor Kniss: Thank you very much. Thank you for sitting in for Jim. Appreciate that. TRANSCRIPT Page 58 of 85 City Council Meeting Transcript: 10/02/17 Oral Communications Vice Mayor Kniss: Under Oral communications, we have six cards right now. I'll try and read all of the names. Stephanie Munoz. Stephanie, I'm sure you're here. I don't see you at the moment. Stephanie, we'll see who gets to the mic first. Neva Yarkin, Kimberley Wong, Mary Sylvester. I said whomever got there first. Denise Pope and then Rachel Kellerman, and finally Herb Borock. Good morning. I mean, good evening. Neva Yarkin: Good evening, Vice Mayor and City Council. My name is Neva Yarkin. Regarding the trains and the community workshop that was held 2 weeks ago, it would be more helpful to the community if the City explained each grade crossing and the pros and cons of each. People are more interested in the facts, how many houses will be taken, the cost of each auction, where will this money come from, which streets will be shut down, how long construction will take, where the staging for construction equipment will be, etc. Things that really matter to our daily lives that will affect all of us in Palo Alto for years to come. People have limited times for meetings. My suggestion would be to make the meeting shorter, 2 hours instead of 4, with no lunch and snacks at the end, and no small-group discussions. The small- group discussions are very busy work and do not include everyone in the discussion. Everyone in Palo Alto should be included, young, middle-age, and seniors, because it will affect all of our lives for years to come. Also, in the small-group discussions, people could not hear each other, and some of the leaders were not educated on this topic. If you want seniors to participate, don't do a survey on phones. It is too confusing. You have a wealth of educated people in the community who worked for years on high speed rail and other transportation projects. Many experts in Palo Alto who live here could provide valuable input to the City Staff. Use them because I am sure most would volunteer their time to get this right. I would like to see the next meeting with some speakers and a full discussion with questions open to everyone in the room. Thank you so much for your time. Vice Mayor Kniss: Thank you for coming. Stephanie, are you now close to the mic? There you are. Stephanie. If those of you who are going to speak get closer to the mic, that always helps. Stephanie Munoz: Good evening, Council Members. Thank you for letting me speak. There's a Psalm in The Bible that says there's a time for every purpose under heaven. What you see in running a community is there's a time to share, and that's almost all the time. There's also a time to be selfish. In the case of the high speed rail, which was just mentioned, it's all very well to have a high speed rail to go from the Bay Area down to Los Angeles and back. The part of the high speed rail that wants to go from San Jose to San Francisco, TRANSCRIPT Page 59 of 85 City Council Meeting Transcript: 10/02/17 we should try as hard as we can to prevent because we need—you know Caltrain is asking for a raise in prices. We need all the paying passengers we can get. We shouldn't have to share the provision of that service with another set of rails competing. The way it will is it won't compete because they have the same thing in Washington, D.C., and Baltimore. They'll have to make rules that you can't go on the high speed rail part if you are starting out here. It's awkward. The main thing to remember is we need all the passengers, all of them. That's not going to do anybody any good. Those so-called San Francisco passengers don't live in San Francisco; they live in Burlingame, Hillsborough, Sunnyvale. They live in just every other place but San Francisco, which is landlocked. The time to share in transportation is with the RVs. I was really surprised and disappointed to see this complaint against the RVs parking in their places in El Camino. These people come to the City to be part of the City, to work, to make it a great City, either to be part of the workforce or be part of the consumers. It's not for recreation. They are helping themselves. We haven't provided houses for them, and we should have. We should have planned for that. They bought little houses, and they're putting them on streets that their taxes have paid for, their vehicle license taxes and their gasoline taxes. They really have a right to be there, I believe. Thank you. Bye-bye. Vice Mayor Kniss: Kimberley Wong, Mary Sylvester. Kimberley Wong. Kimberley Wong: Hi. Dear Vice Mayor and City Council Members, I'm here to speak about the expansion plans of Castilleja. If Castilleja wants to build state-of-the-art buildings, then let's modernize not monopolize. Please don't bring more cars onto the Embarcadero corridor by building a garage. Instead, increase shuttles that could ease Palo Alto congestion rather than add to it. Please do not direct more cars onto Bryant Street and introduce needless hazards to many school children and adult commuters who use the bike safety boulevard. There is a reason why it is called the Safe Route. Lastly, please do not demolish two single-family homes, move five majestic redwoods, and subject the neighborhood to years of garage construction that adds a mere net 63 spaces to the campus. Car use will change, better transportation options will become available, and car trips into the City can be reduced significantly with thoughtful organization of shuttles and satellite parking lots. A truly modern campus should reduce its carbon footprint within the walls as well as outside of them. Truly understanding the impact to the neighborhood will enable the school to come up with solutions that do not include a garage. A garage will quickly become irrelevant in the future but will leave long-lasting damage to the environment and to the City. I ask all of you on City Council and in the community to only push for projects good for the environment and ultimately good for the future of our City. Thank you. TRANSCRIPT Page 60 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: Thank you very much. Mary Sylvester. Mary Sylvester: Good evening, Vice Mayor Kniss and Council Members. Thank you for staying this evening to hear Oral Communications. I'm here tonight to paint a picture for you about the royal squeeze my small neighborhood surrounding Castilleja School is facing. We're like an accordion being squeezed on both sides, and the sound is not melodic. Currently, half a block from my house on Melville Avenue, almost become a small freeway for large parts of the day with heavy noise, particulates, and negative visual impacts as well as difficult access to residents. Then, half a block away on the other side is Castilleja School, which is planning a massive 5-year expansion campaign. Kimberley Wong just outlined some of the detriments that are associated with that project. Neva Yarkin before her outlined the high speed railroad. We are being closed in by Alma, Castilleja, the high speed railroad, and then behind us we have Embarcadero Road, which is going to now have to shoulder further impacts from Castilleja's construction project as well as possible road closures from the high speed railroad. I'd like you to consider the psychological and emotional stress these impacts are having right now on our neighborhood, not to mention in the future. Neighbors are having weekly meetings on these issues. We're at City Council meetings weekly. We attend ARB and PTC meetings, Palo Alto neighborhood association meetings, and high speed railroad study groups. We realize that the City has limited control over the high speed expansion, but Council does have latitude to require Castilleja to mitigate the impact of the project on our neighborhood. I ask you now, as we close, what future does our neighborhood have as a residential community. Thank you. Vice Mayor Kniss: Thank you. Rachel Kellerman and then Denise Pope. Is Denise Pope here? Rachel Kellerman: Good evening, everyone. Clearly there are many issues facing Castilleja and our neighborhood. I'm not going to speak specifically to those issues tonight, but offer my general support for this historic institution in our community. I've lived on Emerson between Embarcadero and Lincoln off and on since 1992. During that time, Castilleja has had a positive impact on our family, both personally and professionally. My daughter participated in Casti Camp for many years, and the experience greatly enhanced her self- esteem. Now, at almost 30 years old, she still speaks of the many ways that experience gave her confidence to try new things. I've felt truly fortunate that such an amazing resource was in my backyard. Fourteen years ago, we rented a house from Casti when we were doing work to our own house. We couldn't have asked for a better landlord. Communication was excellent, and the current head of school at the time even had us over for dinner to welcome us to the block. Professionally, I work at Paly and have benefited from the TRANSCRIPT Page 61 of 85 City Council Meeting Transcript: 10/02/17 professional relationships with our Casti neighbors, and I know many of our colleagues have benefited as well. I look forward to more partnerships in the future. My work with the Palo Alto Historical Association has helped me to realize the long history Castilleja has in our community with progressive education and development of women leaders. Working alongside our great public schools, they have developed many women into leaders since 1907. With income inequality and sex discrimination still rampant in the workplace and the open hostility shown to so-called nasty women leaders by the highest level of our government, we need women leaders now more than ever. Casti is well equipped to fill that role and has earned the opportunity to work with all stakeholders to further their mission to educate women now and in the future. Thank you. Vice Mayor Kniss: Thank you for coming. Denise Pope. Denise Pope: Good evening. My name is Dr. Denise Pope. I'm a senior lecturer at the Stanford Graduate School of Education, specializing in curriculum construction, student engagement, school reform, and qualitative research. I'm also the cofounder of Challenge Success, a nonprofit organization affiliated with Stanford that provides research-based strategies to families and schools to foster environments where students thrive both academically and emotionally. I'm also a trustee at Castilleja School and a parent of two recent alumni. My work allows me to partner with public and private schools across the United States including many schools here in Palo Alto, such as Paly and Gunn. We are really fortunate to have excellent choices here when it comes to our children's education. These choices are important because not one size fits all. Just as some families seek schools that specialize in language immersion or Montessori methods or those that specialize in learning differences, Castilleja families seek an all-girls environment to nurture the special needs of their children. This was actually the case for my family. As an alumna of an all-girls high myself, I experienced firsthand what the research shows about an all-girls education. Specifically, girls who attend all-girl schools are more likely to attend 4-year colleges compared to girls attending co-ed schools and are more likely to pursue leadership opportunities without being constrained by gender stereotypes. Girls at all-girl institutions pursue more STEM courses and more likely to speak up and participate in class discussions. They often show more confidence and willingness to take risks than their peers at co-ed schools. We have found this to be particularly true with the Castilleja students who are the first in their families to attend a 4-year college. Data from the past 10 years of Castilleja graduates who are the first generation to attend college shows that 100 percent went on to attend and graduate from highly selective 4-year colleges. That's not true in the research with the general population. Research indicates that this is lifechanging for the girls and their families. Thus, I believe it's imperative that TRANSCRIPT Page 62 of 85 City Council Meeting Transcript: 10/02/17 Castilleja be allowed to grow and change just as the other excellent schools in Palo Alto have been allowed to grow and change. I wholeheartedly believe that more girls deserve the opportunities that Castilleja provides, and I urge the Council to consider the myriad benefits of an all-girls education when determining next steps for the school. Thank you. Vice Mayor Kniss: Thank you. I'll read the last three, and this is truly the last three. Herb Borock, Elaine Meyer, and Rob Levitsky just got his card in under the wire. Hi, Herb. Herb Borock: Vice Mayor Kniss and Council Members, on Thursday the Peninsula Corridor Joint Powers Board will have a meeting, and one of their agenda items would be to reject the only bid for safety improvements on 15 grade crossings, of which four are in Palo Alto. Those safety improvements include new pedestrian gates and arms, pavements markings and markers, street medians, railing, and signage. The total engineer's estimate for the 15 grade crossing safety improvements is less than $1.7 million, and the only bid was for more than $5.1 million, or more than three times the engineer's estimate. The budget doesn't allow that to be approved. It's the intent of the staff to reissue a solicitation and eliminate the most expensive part of that, which is the trackage that's part of it. I believe this is instructive on another item, which is grade separations. The safety projects don't include any grade separations. The City is currently considering them. The first speaker indicated what the process is at the present time. Your Rail Guidelines that you adopted 6 months ago say that Palo Alto believes the California High Speed Rail Authority should fund grade separations and should not commence service until they are complete. As I understand the process that's being developed, it is for the sole purpose of getting the public to buy into a decision that the Council's already made although not in any formal vote to have grade separations. The way to do it probably would be what Caltrain staff has found. You can get approval in their case from the Board or in our case, I suppose, from the public if you give an estimate which is too low to complete the project. Then, people will say, "What a wonderful idea." You should take to hear the comments of the first speaker, Neva Yarkin, that you need a process that will develop what the actual costs are going to be so the public can give you their opinion. As I've indicated to you before, you have to offer the option of no project. Thank you. Vice Mayor Kniss: Thank you. Elaine Meyer. Elaine Meyer: Good evening, Vice Mayor Kniss and members of the Council. I'm very disappointed that the Mayor isn't here tonight because I would hope he'd be interested in what I'm about to say. However, I will tell you what I have to say and be very … TRANSCRIPT Page 63 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: Elaine, he will watch the tapes. He really will. Ms. Meyer: Thank you. There have been a number of messages on the Weekly's town square as well as people speaking to the Council from here, from this lectern, expressing concern about the conduct of recent Council meetings. As someone who's chaired a great many meetings, I find these recent events rather unsettling. Just two examples, just to be brief. Motions are being proposed before there is any discussion, which limits any Council discussion just to the content of that motion. That is improper, and it's not right. It's unfair. Sometimes the Chairman speaks first, preempting the discussion before allowing the members to speak. That is improper, and it's unfair, and it's not right. It's easy to fall back on advocacy skills that one has used in another environment. However, chairing a municipal council has its own norms, which are described clearly and briefly on the City's website. It's under Guidelines for Meeting Management on the web. I have printed off very brief—it comes to half a page from the City website on the Chair's role. I would distribute it if that's the procedure. Thank you. Vice Mayor Kniss: Thank you. Rob, the last gun tonight. Rob Levitsky: My name is Rob Levitsky, and I live next to Castilleja School. I've lived there for 25 years without any issues whatsoever. I and my neighbors who live around Castilleja don't have a problem with the quality of their education. We know they're a good school. We know they're an asset to Palo Alto, but there's a limit to the growth that they are proposing. They want to knock down houses, Lydia, R-1 houses, beautiful houses. I know you're concerned about that. They want to merge lots, Karen, violating your 10,000-foot limit lot merger. They want to cut down trees; we've already lost this big redwood. There are six more that they've got lined up to kill or move or basically almost kill. There is a limitation to the growth that you can have. If you want to grow the school, it needs to probably grow somewhere else. It can be split; 6-8th and then 9-12 would be a convenient way to do that. Understand that the neighbors are not objecting to the school. The school has been there a long time. Unfortunately, through their antics they've lost the goodwill of the neighborhood. Also, they do operate under a Conditional Use Permit or at least they're supposed to. The 2000 CUP started violating it within 2 years of that. They have more students than they're supposed to have, about 30 right now per year, which results in about 1.5 million extra money that they're taking in every year right now. I don't know what happens to that money. It's not going to the City of Palo Alto or the neighborhood. They're in violation, and they should not be rewarded with some grand expansion that messes up traffic and parking and blows out houses. They should not be rewarded by violating this CUP for the last 15 years. Thank you. TRANSCRIPT Page 64 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: Thank you. That concludes our Oral Communications tonight and takes us to Minutes Approval. Minutes Approval 4. Approval of Action Minutes for the September 5 and September 11, 2017 Council Meetings. Vice Mayor Kniss: Could I have a Motion? Council Member Wolbach: So moved. Vice Mayor Kniss: Is there a second? Council Member Filseth: Second. Vice Mayor Kniss: Second. A Motion and a second. MOTION: Council Member Wolbach moved, seconded by Council Member Filseth to approve the Action Minutes for the September 5 and September 11, 2017 Council Meetings. Vice Mayor Kniss: Do you want to vote on the board please or not? It looks like it passes unanimously with the absence of the Mayor this evening. MOTION PASSED: 8-0 Scharff absent Consent Calendar Vice Mayor Kniss: Next we need a Motion on the Consent Calendar understanding that Number 7 will be moved to October 16th. Council Member Holman: I'll move. Vice Mayor Kniss: Got a second? Council Member Kou: Second. MOTION: Council Member Holman moved, seconded by Council Member Kou to approve Agenda Item Numbers 5-6, 8. Council Member Wolbach: registered a no vote on Agenda Item Number 8- SECOND READING: Adoption of an Ordinance Establishing a Permitting Program for Tobacco… TRANSCRIPT Page 65 of 85 City Council Meeting Transcript: 10/02/17 5. Selection of Applicants to Interview on October 24, 2017 for the Architectural Review Board, the Historic Resources Board, and the Planning & Transportation Commission. 6. Approve a Budget Amendment in the Capital Improvement Fund to Recognize and Appropriate SB 1 Funding in the Amount of $385,376 to the Capital Improvement Program Project PE-86070, Street Maintenance. 7. Approval of Amendment Number Three to Contract Number C14152025 With SP Plus for Valet Parking Services to Extend the Contract Term to March 2, 2018. 8. Ordinance 5418 Entitled, “Ordinance of the Council of the City of Palo Alto Establishing a Permitting Program for Tobacco Retailers to be Administered by Santa Clara County (FIRST READING: September 18, 2017 PASSED: 7-1 Wolbach no, Kou Absent).” Council Member Wolbach: (inaudible) speak to it? Vice Mayor Kniss: I don't believe so. I think when we've removed an item— I'll ask Molly. I think normally when we remove an item, you speak to it when it returns. Council Member Wolbach: I wasn't going to speak to 7. Vice Mayor Kniss: I'm sorry. Were you speaking to something else? Council Member Filseth: (inaudible) Consent right? Council Member Wolbach: (inaudible) register a no vote (inaudible). I just wanted to speak to register a no vote on Item 8. Vice Mayor Kniss: In that case, yes, you do do that. Council Member Wolbach: I indicated prior to the vote that I want to register a no vote, and then I'll speak afterwards. Vice Mayor Kniss: After the vote, mm hmm. If you would vote on the board on that one. That passes again unanimously with Mayor Scharff absent. MOTION FOR AGENDA ITEM NUMBERS 5-6 PASSED: 8-0 Scharff absent MOTION FOR AGENDA ITEM NUMBER 8 PASSED: 7-1 Wolbach no, Scharff absent TRANSCRIPT Page 66 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: The Acting Vice Mayor tonight has a comment. Council Member Wolbach: Again, with me voting no on Item 8, it's inappropriate for City policy to be determined by our contractors. This Ordinance just missed a couple of marks, and I hope we can look to find ways to tweak it in the future. Vice Mayor Kniss: I had promised a 5-minute break. If the next item goes as quickly as it could possibly go, are you all willing to give up that quick break and push forward? There's assent. Action Items 9. PUBLIC HEARING: Adoption of an Ordinance as Recommended by the Finance Committee to Amend the Fiscal Year 2018 Municipal Fee Schedule to Reflect Development Services Cost of Services Study and a Reserve Fund Policy. Vice Mayor Kniss: That takes us to our, as I see it, one Action Item tonight, which is to adopt an ordinance as recommended by the Finance Committee to amend the fiscal year 2018 Municipal Fee Schedule to reflect Development Services Cost of Services Study and a Reserve Fund policy. I know Staff will make a presentation, and then I would like to also hear from Chair of Finance Filseth. Greetings everyone. Who's the lead on this? Ed Shikada, Assistant City Manager: Perhaps I'll just do a little bit of choreography here. Would you like to—perhaps Chair Filseth would comment before or after Staff presentation? Your preference. Council Member Filseth: After. Mr. Shikada: Very good. Let's go ahead. Vice Mayor Kniss: Don't forget to introduce yourselves when you talk please. Thank you. Peter Pirnejad, Development Services Director: Good evening. Peter Pirnejad, Development Services Director, here before you. A pleasure to present our last phase in our series of fee study updates. To my right is Mr. George Hoyt, our Chief Building Official, and Dan Epps to his right, our consultant that's been working diligently with us towards the completion of our fee study. In the crowd behind me is my Senior Management Analyst, Cash you know, as well as our Assistant Chief Building Official, Evon Ballash, also here to answer questions if those arise. Without further ado, the recommendation before you is the same that we took to the Finance TRANSCRIPT Page 67 of 85 City Council Meeting Transcript: 10/02/17 Committee. I'll really lean on Council Member Filseth to give us a quick synapse [sic] of what happened. Essentially, we're coming before you to ask for a recommendation for approval for an ordinance amending our fiscal year 2018 Municipal Fee Schedule to reflect the Development Services cost study and the Reserve policy, which is all attached to the CMR that was distributed. The objectives are twofold. First, to approve a new fee study based on the ICC methodology, which is independent and objective assessed valuation. If I may explain through the use of an example. If you have two people come to your counter, they both bring the exact same size house with the same number of bedrooms, same size kitchen, bathroom, identical homes. One has the gold-plated fixtures, and the other has the Home Depot version. It takes the same amount of time for us to do the plan review and the inspections. Therefore, we thought it was prudent to charge them the same permit fee. In the past, we would base our fees on the valuation that the applicant would provide us, which could vary depending on the fixtures and the finishes. This methodology standardizes that, equalizes that, treats everybody fairly, and allows us to base our fees on the amount of time it takes to actually do the work rather than the amount of time it takes based on their valuation. That's the first part. The second part is to—we recommend a very conservative Reserve of 25 percent of our operating budget in order to ensure that those permittees that pull the permits and submit plan checks, which is a pay-first- get-service-later model, are ensured to get the completion of their service in the event of a market fluctuation, dip, etc., unanticipated costs of any kind. This shields the General Fund from having to support those applicants, which in theory and in practice should support their own activities since they're the ones asking for that service. It also allows the General Fund Reserve to focus on their list of priorities such as pension and other higher priority service- related matters. By way of background, this item has come before you and the Finance Committee many times. This shouldn't be of any surprise. A quick rundown of all the different Committee and Council meetings this has come. If I can give you a quick narrative of the background, we started with Phase I, which was the non-valuation-based fees. If I can jar your memory, these were all of the single fees that would normally come with a fixture. A water heater has a fixed fee; the fee should be X. It was based on a time and motion study. We established that fee; the Council voted for it; we moved forward. Between that and where we are today, we had another fee adjustment based on the 6 percent across-the-board fee adjustment that we took to all fees across City of Palo Alto. We also included a tech fee surcharge and did some minor adjustments. Today, we're finishing up the valuation- based fees, which is the other set of fees, which have to do with, like I mentioned, the valuation of a project. These are complex projects that involve many different types of work, electrical, mechanical, plumbing, structural, etc. Typically, we base those permit fees on the valuation methodology. With the completion of this portion of the fee study, we'll have completed our fee TRANSCRIPT Page 68 of 85 City Council Meeting Transcript: 10/02/17 analysis, distributing the cost of the fees across all the different areas of development review, including Planning, Public Works, Fire, and Building. It'll complete our comprehensive fee study. We anticipate bringing this back through the normal fiscal year process to fine-tune and tweak these fees to ensure that our revenues and expenditures are matched and that we are a zero sum game, not having any burden to the General Fund. We talked about the valuation-based fee process. Let me move to our methodology. Quite simply, we started by collecting data. Understand that we weren't assessing fees using this methodology; we were assessing fees using our previous—the given valuation-based fee. We had to start collecting data on the building type and occupancy type of a building. After we collected 9 months of that data, we felt we had a representative sample of a full calendar year, and we did our analysis based on that data and 12 months of overhead data for the Staff people and contractors involved in actually doing the work. Using that culmination of data, we came up with the fees, and we built the fee structure. The Reserve policy is quite simply a 25 percent Reserve. We spent a lot of time reviewing this in-house. The recommendation from our consultant was 100 percent of a year's operating budget. We thought diligently about that, and we thought we'd take a more conservative approach with 25 percent. We looked at our historic revenue projections, understanding that Development Services has been a department for only 4 years. We looked at building revenues, which has been in existence with the Planning and Community Environment when that function was in their department, and looked at the cyclical trends since 2007-ish. We saw that after the recession, there was about a $7 million dip in revenues, had we just straight-lined our revenue projections from that time. Therefore, using that assessment, we determined that $3 million roughly would be enough to get us through the hump if we had another recession, barring that it be at that magnitude. That Reserve would be built over a 5-year period; a very incremental amount would be assessed to each permit and then collected and put into a Reserve. We have a Reserve Fund policy based on other reserve fund policies that we've passed in the City, ensuring that we do our due diligence before spending any of those revenues for only specific, approved types of expenditures, which again would come before the Council prior to us spending them. Again, this is to shield the General Fund and ensure that our permittees have the revenue in the bank to ensure that their permits can be reviewed and finaled. This is a foundational element of our transition finally to an Enterprise or a special revenue fund, which again creates that bubble wrap around the department to ensure that the permittees are protected as well as the General Fund. The next steps quite simply would be tonight's hearing, the second reading which would happen shortly thereafter, and then we would adjust the fees going forward. With that, I'll leave it open to questions. Council Member Filseth, you wanted to give us some bullet points from the Committee meeting or we could just move into deliberation. TRANSCRIPT Page 69 of 85 City Council Meeting Transcript: 10/02/17 Council Member Filseth: Thank you. Thank you for the summary and for doing this. The Finance Committee recommends approval of the Staff recommendation. We felt the Staff's approach made a great deal of sense really in two aspects. One is it continues this principle of full cost recovery for services. Again, if our fees are lower than the actual cost to the City, then somebody else will have to pay the difference. We didn't feel that was appropriate, so we think DSD's approach is correct. The second was, as the good roof example, this approach bases the fees on what it actually costs the City as opposed to what it costs the applicant, which is how we base some of our fees now. We felt the ICC method that Staff recommends—they have a reasonable algorithm for mapping the standard cost to the exact conditions in Palo Alto, so we thought that worked well. We recommended the Council approve that. On the subject of the Reserve, the Finance Committee was actually split 2-2 on the Reserve; although, it did ultimately end up in the motion. Just briefly, it's not a huge split actually. The affirmative case for the Reserve is it prevents, as Director Pirnejad said, the DSD from having to go to the General Fund Reserve if there is a problem. It's a couple million dollars and not a huge amount of money in the grand scheme of things. The neg case is just some of the Committee felt that it's just generally not desirable to have lots of different pots of discretionary money lying around the City. It invites a possibility of undiscipline; it generally may be marginally less transparent. Again, a pretty minor impact given the size of this. That was the discussion. Thank you very much. Vice Mayor Kniss: Thanks, and thank you, Council Member Filseth, for chairing this. I know you said there was unanimous vote on it, but there were a couple of differences. Correct? Council Member Filseth: We split on the—there was a 2-2 split on whether to include the Reserve as part of it. The Reserve is in the final recommendation, and the Finance Committee recommends approval of the whole motion. Vice Mayor Kniss: Council Member Wolbach. Council Member Wolbach: A couple of comments, but first I actually had a question. I can't remember. Who were the—I didn't check on this one. Who were the two who voted initially against? I'll just offer it in the sense of I'd be curious to hear if they had anything they wanted to add beyond what Chair Filseth had suggested about the arguments. I would just be curious in hearing a little bit more. Vice Mayor Kniss: That would be Karen or Greg or Adrian. Correct? Council Member Wolbach: You don't have to, but … TRANSCRIPT Page 70 of 85 City Council Meeting Transcript: 10/02/17 Council Member Filseth: I don't need to say anything else. That was my own impression. Council Member Fine: The Chair put it pretty well. All of us were somewhat interested that we had DSD coming to us to establish a Reserve. The question actually flowed from should every department have one of these to insulate the General Fund, and is that a good hygienic financial practice for the City. Some of us did have doubts about that. On the other hand, we do want to insulate the General Fund from pulls in a recession year. That was how we thought of it. In the end, we split on the vote, and then we just endorsed the whole thing. Council Member Wolbach: I'll be curious to hear my colleagues on that one, including the rest who were not on that Committee. I just want to mention that—I actually still feel a little uneasy about cost for service. Our libraries aren't cost for service. Police services aren't cost for service. I understand this department's a little bit different. It's a regressive policy. I remember when I was on Finance and we were looking at the Phase I. The fee for getting a sink fixture replaced was exorbitant. It was more than the sink cost, I think, just the fee to have the inspector come out and look at it. I'm actually not going to propose changes to the motion tonight to address this. I just wanted to put out there that we might want to think about whether we're going too far down the road of cost for service and without any nuance. I do feel a little uncomfortable about this change where somebody who's doing the Cadillac version, gold-plated version, whatever, of their redesign of their house gets charged the same amount as somebody who is struggling to make ends meet to stay in Palo Alto and raise their kids and take care of their aging parents and also needs to do some remodel because they've maybe had their aging parents move back in with them or something. I just feel a little uneasy about that. I'd be curious whether any of my colleagues also share that unease. Vice Mayor Kniss: Does that mean you want to change anything or you're just … Council Member Wolbach: I'm not making a Motion. Vice Mayor Kniss: You're just musing. Council Member Wolbach: I'm just putting out there that this is a broader question than we're going to tackle in-depth tonight. I was curious whether any of my colleagues feels that it's—just want to gauge interest in that as a future discussion item (crosstalk). TRANSCRIPT Page 71 of 85 City Council Meeting Transcript: 10/02/17 Mr. Pirnejad: If it's appropriate, we did do a fee study and compared it to other cities, neighboring cities. If it's appropriate, if it's helpful, I'm happy to share those results. Council Member Wolbach: Actually that would be interesting. I actually just wanted to also mention that one of the reasons why I will support this is some of these fees in the proposal will go down. There are some proposals to reduce some fees. I did notice a couple, though, that were pretty substantial. If you look in Attachment 9-A, packet page 259—could you clarify? There's one here under electrical permits. It's a motor generator. I'm sorry. If I had to install a motor generator, what would that mean? The fee for the inspection on that one is going from $75 to $441. We also had another one on that same page, service conductor switch. We're eliminating under 200 amps. For 800 amps, it's going from 181 to $367. Those are some pretty substantial increases. Same thing at the very top of Page 260, residential systems less than 10 kilowatts going from 91 to 165. I just feel a little uneasy about—especially if the customer is a residential customer, we're talking about the impact that has on a resident who, again, we know in Palo Alto sometimes makes a lot of sacrifices to afford to live here. Could you give us maybe a little more information about some of those that were the most dramatic increases? Mr. Pirnejad: I think the most appropriate way to describe these fees is they're better described in groups. The ones that you mentioned are rarely pulled in isolation. It's really designed to distribute the cost to provide the work in the whole to make sure that each part is cost recoverable. I'll give you an example. If you were to come to the City and do a kitchen remodel, very typical. We did the cost comparison with Palo Alto, Menlo Park, Los Altos, and Mountain View. At the bottom, you'll notice that the total fees for the plan check and the permit would be $325 for Palo Alto, which is right at the bottom between Menlo Park, Los Altos, and Mountain View. Mountain View is as high as $1,141. It's better to look at them in groups on what you would normally see when you do a typical remodel. Another example might be a bathroom remodel. In Palo Alto, that bathroom remodeling permit and plan check would cost you about $394. Comparatively in other cities, it could be between $700 and $350, so right at the bottom, about the middle. A 1,000- square-foot residential addition, very typical. You add a bedroom, expand the bathroom, etc., etc. In Palo Alto, that permit would cost you about $2,900 compared to a little bit more in Menlo Park, a little bit less in Los Altos, and Mountain View is about $1,000 more. Looking across the board for these typical type of constructions, it's very comparable to what you would see in other cities. A lot of the fees came down, if you noticed. Some of the fees went up. Across the board, when you typically process an application, the fees are going to be very comparable. TRANSCRIPT Page 72 of 85 City Council Meeting Transcript: 10/02/17 Council Member Wolbach: I appreciate that. I appreciate the comparisons to the other cities as well. My comments still stand that it's something we need to continually think about as a City, as an organization. What are the fees that we're imposing on our own residents? Do we impose those fees in a manner which is regressive? It hurts people who are not at the top end of the economic spectrum more than it hurts others. We should always keep those values and questions in mind as we're establishing fees. Again, a lot of these fees did go down, and we're not more expensive than Mountain View it looks like. I'm not going to oppose the motion when it comes up. I just wanted to make sure that those thoughts are out there, and we're keeping these considerations in mind. Vice Mayor Kniss: Tom. Council Member DuBois: I appreciate Council Member Wolbach's comments. I was having some of the same thoughts. I'm curious. When you do see fancy finishes or maybe you see a unique item for the first time or maybe it's a high-tech version of something, are there cases where that does take more time than something that's just off-the-shelf, standard item? How would the new fees address that? Mr. Pirnejad: I would say the best way to describe that is across the board, if you look at the entire years of revenue, we planned on being neutral. That was the goal. Not to be exactly on the money on every single permit and every single plan check, but to make sure that in totality we were cost effective and not gouging anybody and giving anybody discounts, but narrowing the divide between about what it takes. Council Member DuBois: Is there any case where it's something unique, you've never seen it before or you just charge the normal rate for that? Mr. Pirnejad: Yeah. If it's something so out of the ordinary, we always can charge our hourly rate in the event that it takes an exceptional amount of time in plan check. A more likely scenario is that the applicant fails the inspection over and over and over because they're not prepared, in which case we might charge them an additional inspection fee. Typically for the most part, they fall right in line with what we expect. Council Member DuBois: If I understand the use of the Reserve, is it primarily to pay for Staff in downturns essentially? Mr. Pirnejad: The Reserve policy dictates what we would use the Reserve for. One would be in the event of a downturn economy, 80-plus percent of our expenses are Staff-related. We have a contract budget to pay for contracted employees, but that's only a small percentage of our total cost. A lot of the TRANSCRIPT Page 73 of 85 City Council Meeting Transcript: 10/02/17 costs are associated with Staff overhead, indirects, etc. To answer your question, yes, a lot of it is to pay for Staff time. Council Member DuBois: I appreciate the other city comparisons. Are other cities using this same costing method? Mr. Pirnejad: They're across the board. A lot of cities will admit that's the right way to do it, but it's difficult to find what the escalator should be, the multiplier if you will, because every city has the ICC table. Based on your local process and how rigorous it is, you might add a multiplier. Palo Alto, as you could guess, is pretty rigorous. We needed to adjust the multiplier to account for things like our process and overhead, etc. Council Member DuBois: I'm curious what Council Member Filseth thinks about this too. I'm reading the ordinance. We're just putting this in a Reserve Fund now, but there's talk of an Enterprise Fund. Why not just keep it in a Reserve? Why would we go to an Enterprise Fund? Mr. Pirnejad: That's on the table. We're not proposing that at this time. That's ripe for a discussion for maybe the 2020 fiscal year. What we want to do is make sure that the Department can be completely cost recoverable and completely accountable for all of its expenses. Right now, we're accountable for most, and we do an accounting exercise, if you will, to account for all those other direct and indirect costs that aren't necessarily—that we're not necessarily responsible for yet in actual hard terms. Moving to an Enterprise Fund would shift those costs to our Department, and we could take advantage of also depreciation, for example. Council Member DuBois: That decision … Mr. Pirnejad: Is down the line. Council Member DuBois: Now that it's in a Reserve Fund, if things were to slow in Palo Alto, which is hard to imagine, we could use those funds in the Reserve Fund, transfer them to the General Fund, use them for other things if we needed to. Is that right? Would that be the difference? The Enterprise Fund would be a firewall, and it would be committed? Mr. Pirnejad: I'd probably feel more comfortable if our CFO answered that. Mr. Shikada: If I might (crosstalk). Council Member DuBois: A Reserve Fund is more flexible is really the question. TRANSCRIPT Page 74 of 85 City Council Meeting Transcript: 10/02/17 Mr. Shikada: I'm not sure how flexible it is. Since it's generated from fees, even in the absence of an Enterprise Fund, we would certainly recommend against using those funds for anything other than the purpose for which it was collected. Council Member DuBois: We have this range for the Reserve Fund. If we kept charging those fees and it was ballooning, would we then decrease the fees? Mr. Shikada: Decrease the fees, that would be the primary strategy. Molly Stump, City Attorney: The philosophy that needs to be complied with in terms of collecting the fees is that they're cost of service based. That can include reasonable reserves. If you find over time that your Reserve is growing, then that should be absorbed through an adjustment in the fees so that those fee dollars are used to support that activity that they were collected for. Council Member DuBois: What would be the difference in going to an Enterprise Fund? Mr. Pirnejad: The main thing is the depreciation. We'd be able to account for depreciation; whereas, now we can't. Council Member DuBois: Thanks for clarifying that. That's it. Vice Mayor Kniss: Are there any comments on this? Greg, go ahead. Council Member Tanaka: Generally, I do like the idea of cost recovery. That's actually important; we don't want to lose money. That's a good idea. I do actually share concern that my fellow Council Member made about this (inaudible) being regressive. I've been looking at the numbers really closely. I just want to make sure there aren't mistakes here. I was wondering if you could turn to Page 259, Packet Page 259. One of the ones that Council Member Wolbach brought up was motor generator. Motor goes from $75 to $58. It actually drops in price. The motor generator, which is not terribly different, somehow goes from $75 to $441. With the spirit of cost recovery in mind, is that right or is that a mistake? It seems bizarre that—a motor and a motor generator are not terribly different, to be honest, in terms of mechanically. Yet, one of them goes down to $58, and the other ones goes up 6X, 7X. I'm wondering is this a mistake. The other one that Council Member Wolbach brought up was—we have a service conductor switch less than 800 amps, less than 800 amps. It doubles in cost; it goes from $181 to $367. The same service conductor switch that is greater than 800 amps—I would think something that's greater would cost more, but no, it goes the other way around. It goes from $272 down to $209. I truly wonder. Doesn't TRANSCRIPT Page 75 of 85 City Council Meeting Transcript: 10/02/17 more amperage cost more to inspect? In this case, it's flipped the other way around. It looks like it's actually getting cheaper the more amperage you get. The less amperage you get is more expensive. I wondered did Staff make mistakes here? It seems really—like Council Member Wolbach said, it seems a bit regressive to me. The spirit of this is right but, when you look at the numbers, it's not right. It doesn't seem right. That doesn't make sense. I would imagine something that, according to this, that's going to be less than 800 amps or gas versus a commercial might be more than 800 amps. Are the fees reversed perhaps? Mr. Pirnejad: I'd like to refer to our Chief Building Official, George Hoyt. George Hoyt, Chief Building Official: Thank you for your question, Mr. Tanaka. I will start off by going with the motor generator in comparison to the motor. The motor was taken into account when we calculated that fee as a motor in a commercial building that maybe needed to be replaced, and we sent an inspector out to look at that one motor connection. Motor generator, we were thinking more of a generator aspect that's going to have multiple type of inspections, such as foundation, bolting down, tying into the existing system, have multiple inspections. That's why that fee is increased. Council Member Tanaka: What about the service conductor switch? One that's greater than 800 amps is actually cheaper than a smaller one. It seems almost reversed. Why would greater than 800 amps be less than one that's less than 800 amps? Mr. Hoyt: That's a good question. It is possible that maybe inside the model we did account for inadequate time on one of them or the inappropriate time. Council Member Tanaka: Could the numbers be reversed? Mr. Hoyt: It could be that they're reversed. Mr. Pirnejad: We could take a closer look at that. Mr. Hoyt: We can take a closer look at that. Council Member Tanaka: If you turn to Packet Page 263. I want to understand this also, certificate use and occupancy. When is this required? Mr. Pirnejad: Use and occupancy? Council Member Tanaka: Yeah, on Packet Page 263, a certificate of use and occupancy. TRANSCRIPT Page 76 of 85 City Council Meeting Transcript: 10/02/17 Mr. Pirnejad: In the previous meeting with Jonathan Lait, I overheard that this came up. For any new business coming into the City, not that every business applies for it, but it's a significant amount of time that it takes Building Staff, Planning Staff to ensure that the use and occupancy is consistent with the laws and regulations that govern those use and occupancies. Typically, they come in at the time of a building permit. Rarely, they'll come in when just an occupant is changing from one space to another. Council Member Tanaka: Does every city charge this fee? Mr. Pirnejad: A variation of this fee, yes. It might be part of their business license fee. Council Member Tanaka: Let's take Mountain View. What does Mountain View charge for this? Mr. Pirnejad: We didn't look at Mountain View for their use and occupancy on this particular … Council Member Tanaka: How about Menlo Park? Mr. Pirnejad: We didn't look at other cities. We had .. Council Member Tanaka: How about Los Altos? Mr. Pirnejad: We didn't look at the other cities for use and occupancy. Council Member Tanaka: No other cities. The thing I'm trying to understand is it's going from $287 to $1,095. The reason why I bring these fees up is I actually had office hours yesterday. I had people actually ask me about this. We want to encourage retail to come in Palo Alto. Retail is not a super high margin business. Would retail have to get this? Mr. Pirnejad: Typically, the businesses that get this are doing a tenant improvement. They're gutting the building; they're gutting the space; they're spending a significant amount of money in the alteration of that space. The use and occupancy is ensuring that prior for them, which is a lost expense, putting that money into the construction, finding out ahead of time if their use is even permissible is what the use and occupancy would pay for. It hasn't been looked at in over 10 years. Quite honestly, based on our assessment, we were losing money on that. We're very reasonable if the Council wants to subsidize that. Based on our professional opinion, that's the amount of time it takes for all of our Staff to review the use and occupancy and ensure it complies with all of our regulations. TRANSCRIPT Page 77 of 85 City Council Meeting Transcript: 10/02/17 Council Member Tanaka: It's going up. When was the last time it was adjusted? Mr. Pirnejad: Well over 10 years. It's well before my time. We don't have a record of the last time it was looked at. Council Member Tanaka: It's going from about $300 to almost $1,100. It's going up 4X. 4X in 10 years. Mr. Pirnejad: I'm guessing 10 years, but I have no record of the last time we looked at this. Council Member Tanaka: I just wonder how—does it hit small businesses pretty hard or not? Mr. Pirnejad: It'll hit HP if they come in for a … Council Member Tanaka: HP's not a small business. What about the smaller … Mr. Pirnejad: It'll hit any range of business that comes in for a tenant improvement. That's the caveat, that they're doing some improvement to the business. They're going to have other building permit fees associated with it. It's not a standalone fee that gets applied to people very often. Council Member Tanaka: The other fee I saw that was kind of—I was puzzled by it. Carnival and fairs, it used to be $189, on Packet Page 267. Now, it's $1,456. It goes up about 10X. Are we trying to tell people we don't want carnival and fairs in Palo Alto? How can a fee go up 10X? Mr. Pirnejad: I'm looking for that. Is that under fire new fees? Council Member Tanaka: It's on Page 267. Wouldn't we want to have more carnival and fairs in Palo Alto or are we trying to say we don't want it or was the cost below the cost before or is it just more getting in line with other cities? Mr. Pirnejad: This was proposed by the Fire Department. My recommendation would be that we would pull that off until we have more time to consult with them. This came up at the last meeting. What they looked at was the amount of time it takes to typically inspect these large carnivals, which generally have lots of generators, have lots of hazardous materials, have lots of tents that could blow over, other fire/life safety issues. What I would suggest is that we put that on hold until we're able to go back and talk to our Fire colleagues, which don't seem to be present tonight. TRANSCRIPT Page 78 of 85 City Council Meeting Transcript: 10/02/17 Council Member Tanaka: I also noticed that tent or air-supported structures— does that mean a bouncy house? Does that go from $307 to $734? It doubles in fees. If a parent has a bouncy house in his backyard, they now have to pay $734? Is that what it says? Mr. Hoyt: That is not include bouncy houses. That includes like special event tents. Council Member Tanaka: I have seen some bouncy houses that are more than 200 square feet. In fact, I think my kids have bounced in houses more than 200 square feet. Technically, would they have to get a permit? Would they have to pay $734 if they have a bouncy house in the backyard? Mr. Pirnejad: We wouldn't enforce it that way. Mr. Hoyt: We would not. Council Member Tanaka: That's not what it says here. Mr. Hoyt: I understand. Council Member Tanaka: That fee doubles too. I (inaudible) cost recovery. I just want to make sure this is truly cost recovery because some of them seem really not just a little bit more, not 10 percent, not 50 percent more but 10X more. It strikes me as being rather out of line. Mr. Pirnejad: If I could just harken back to some of the other fee studies that we've done in Planning and Building. It's very common that you see some of these costs get a major adjustment. Because we haven't done a fee study like this in so long, a lot of these fees were artificially low. The reassurance I would give the Council is that we plan on reviewing these every year as we collect more data, as we create more efficiencies in our process, as we insert more technology and ensure things are streamlined. We're going to adjust the fees accordingly. Council Member Tanaka: Another one I've seen here, a parade float, which I think we want in Palo Alto. It's going from $122 to $251. It's tripling. Mr. Pirnejad: Which fee was it? Mr. Hoyt: What was the title again? Mr. Pirnejad: The title of the fee? Council Member Tanaka: What did you say? TRANSCRIPT Page 79 of 85 City Council Meeting Transcript: 10/02/17 Mr. Hoyt: What was the title of the fee? Mr. Pirnejad: What was the title? Council Member Tanaka: A parade float. Let's say we're going to have May Fete, and we're having parade floats. Do we really want to triple the cost on that? Is that really what we're trying to do here in Palo Alto? Cash Alaee, Senior Management Analyst: Council Member Tanaka, sorry to interrupt the Director's presentation. Cash Alaee, Senior Management Analyst. I just slightly differ with Peter a little bit. We have reviewed these fees with the Fire Department. All of the fees you're seeing are based on the calculation of the Staff cost that it takes to apply the service. As noted in the background section, when we went through all of the meetings that this has come to Council, specifically these fees were pulled out during the Phase I and re-analyzed and brought back. The fees you're seeing before you are the cost of doing the services. In the Reserve policy, we've noted a section—I can't remember off the top of my head. It does allow for the Council to use some of the Reserve to stabilize any of the fees. A perspective for consideration would be that Council approves the fees as-is. We'll be back before the Council during the budget hearings with any potential fee adjustments. We can study all these fees if there are ones that have been highlighted tonight. We'll also begin to collect some of the Reserve. When we come back during the budget hearings, you'll have some reserve funds for the end of the fiscal year. If Council chooses to apply it to the U&O or some of the special event fees, that could be an appropriate time. Council Member Tanaka: My point is—let's take something like May Fete, which I attended. A lot of these floats aren't put together by some wealthy corporation. They're put together by Escondido School (crosstalk) volunteers. Some you're jacking up the price from $122 to $351. What is that telling the community? Mr. Alaee: I don't think the Fire Inspectors inspect the floats for the May Fete parade. I don't think that falls in the definition of a … Council Member Tanaka: What other floats do we have in Palo Alto? Mr. Alaee: That's a good point. We'd have to go pull the data to see how many floats have been inspected in the last several years. I'm almost certain that the May Fete parade floats do not get inspected. Council Member Tanaka: Council Member Filseth said it well. Are these really, truly cost recovery? Are some of these fees, as Council Member Wolbach said, regressive? Is it discouraging things that we want in our community? I think TRANSCRIPT Page 80 of 85 City Council Meeting Transcript: 10/02/17 we want people making floats, do we not? I would imagine so. Do we really want to highly discourage carnivals? I know what you said about it doesn't include bouncy houses, but it doesn't say that here. It says anything 200 square feet or larger, which is pretty much the size of a bouncy house. I'm not sure if you've ever been in one. It's about the size of a bouncy house. My kids have been to a lot of birthday parties; a lot of them had bouncy houses. Are we saying no more bouncy houses in Palo Alto? It doesn't make sense. Mr. Pirnejad: I can assure we're not going to inspect bouncy houses. Mr. Alaee: With regards to the bounce houses, if they're on private property, the City doesn't inspect them. There are only activities occurring on public right-of-way or parks. Usually that would fall under the special event application permit with also potentially a block party permit, which none of those are included in the Development Services fee study. Those are all under the regular Municipal Fee Schedule through the Police Department. Council Member Tanaka: If somebody had a bouncy house in, let's say, Mitchell Park … Mr. Shikada: We'll have one at the Harvest Festival on October 15th. We'll have to make sure that one's inspected. Mr. Pirnejad: At the last Council meeting, just to rest assured—the last time we talked about these special event-type permit fees that used to be in Policy, transitioned over to Fire at some point. The Fire Prevention team looked at all of their costs associated with them. At the last Council meeting, we agreed to just keep the existing fees the way they are and not touch them. What I would suggest as it relates to these special event fees we maintain them the way they are. We don't get enough volume of these things to be any kind of impact to our funds. I would suggest if it's causing any hesitation that we put those special event fees on hold, we maintain the current rate at whatever it is, and we'll continue to operate on a status quo basis. Council Member Tanaka: My point is when fees double, triple, quadruple, go 10X, we have to be pretty sure about it because that's a major change. Mr. Pirnejad: We are extremely sure about these fees. We've vetted them over and over. Multiple members of my team have looked at this. We've done multiple cost scenarios. Again, if at any time during the process we find a minor adjustment that needs to happen or we improve efficiencies, then we'll come back to the Council at a normal budget hearing to adjust those fee regularly. TRANSCRIPT Page 81 of 85 City Council Meeting Transcript: 10/02/17 Council Member Tanaka: Thank you. Mr. Shikada: Peter, let me ask for clarification. Are you suggesting we exclude a certain section of what's being forwarded for the Council to act on? Mr. Pirnejad: The special event fees is what I would suggest under the Fire. I don't see them in there, so I'm not sure which section Council Member Tanaka is referring to. Mr. Shikada: As Council Member Tanaka pointed out, on packet pages—what is it—267 and 68, you've got special hazard permits. If there is any confusion, I may suggest we lay this entire item over so we can get this cleared up. Mr. Pirnejad: Give us 1 minute. Fire inspection fees. It's Item Number 13.34, carnival and fairs. I would suggest we take that off. That was the one that went up substantially. Was that the … That's the one that I see, that went up from (crosstalk). Council Member Tanaka: Sorry. Which fee are you talking about? Mr. Pirnejad: The one that went up, that you mentioned. Carnivals and fairs went up to 1,193. Council Member Tanaka: It went up from $189 to $1,456. Mr. Pirnejad: The current fee is $189, correct. Council Member Tanaka: No, no. It says on—you must have a wrong packet here. It says we're up to $1,456. Mr. Pirnejad: That's the one, the carnival and fairs. That's the one that I would suggest we pull off the fee schedule, and we leave the existing fee as- is. Vice Mayor Kniss: Is that going to work for you, Greg? If not, we should put this aside for another time. Council Member Tanaka: Maybe we should, and that way the Staff has a chance to really figure this out. Vice Mayor Kniss: Normally this would be done in Finance Committee. I'm kind of puzzled. We're taking a lot of time on this for something that really should have happened in Finance. Council Member DuBois: I'd move the Staff Motion. TRANSCRIPT Page 82 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: You'd move the question? Council Member DuBois: The Staff Motion. Vice Mayor Kniss: We now need to alter the Staff Motion because you're going to drop something out of it. Mr. Pirnejad: If it pleases the Council, I would recommend that we move the fee schedule forward. We don't see any reason that would cause any hesitation. We can bring back any minor adjustments during the normal budget season, if that pleases the Council. Vice Mayor Kniss: In that case, I'm hearing from Staff to proceed ahead. From Tom, I'm about to get a motion. First, I need to open the public hearing. There appears to be nobody here who wishes to speak to us about this item. Therefore, I'm closing the public hearing and going to listen to Tom's Motion. Public Hearing opened and closed at 10:39 P.M. without public comment. Council Member DuBois: I would move the Staff's Motion with the understanding that you'll make adjustments, as you said, during the budget cycle. Council Member Kou: Second. MOTION: Council Member DuBois moved, seconded by Council Member Kou to adopt an Ordinance to adopt a reserve policy for the Development Services Department and amend the Fiscal Year 2018 Municipal Fee Schedule to adjust the Development Services Municipal Fees, based on the completion of Phase Two of a Cost of Services Study. Vice Mayor Kniss: I have a Motion and a second. If there's no more discussion, I would suggest you vote on the board. Guys, you've lit up the board again. Are you really going to want to go on? Be very brief please. Council Member Wolbach: I'll be supporting the Motion. I appreciate the comments raised by Council Member Tanaka. They echoed and elaborated on my own concerns. I think we can move forward with this motion tonight. I do think, as I said before, that we should continue to try and cut our costs so that, when we do cost recovery and we pass that onto people who are using our services, especially if they're residents, we're not charging them more than we need to and that we're really running a tight ship. I know that the Development Center has continually tried to improve efficiencies and will continue to do that. I'm really want to encourage that to continue. As far as policy discussions for the future, the question of cost recovery is an interesting TRANSCRIPT Page 83 of 85 City Council Meeting Transcript: 10/02/17 one. Whether we modify or add nuance to that policy in the future is worth having a discussion about. Whether we can differentiate between commercial customers versus residents, residents who are just doing a remodel on their house, is another question that we should leave open for future discussion. We don't need to get into detail tonight. Vice Mayor Kniss: Council Member Kou. Council Member Kou: Just speaking to my second, this has gone through Finance Committee. You said there was like four different meetings that you guys had gone through. More or less, you would have caught any kind of miscalculations that might have occurred. At the end of the day, it's about full cost recovery. If we don't recover, then somebody's going to have to subsidize it. I don't think that's something we want to do. Certainly, full recovery is good. My understanding for the Reserve, you're doing the 5 percent over the 5 years. That is actually very prudent and strategic thinking. That's why I seconded it. Vice Mayor Kniss: At this point, unless somebody has to absolutely say something, I'm going to call for the vote. Must you? Go ahead. Council Member Fine: Thank you, Staff, very much. Just one comment. Having seen this in Finance Committee, it would have been helpful to have these tables at that meeting as well. Mr. Pirnejad: This was a response from the meeting. Council Member Fine: Just going forward for this kind of action, we should have those tables at the Committee. Vice Mayor Kniss: I'll hold my comments for another time. I'm going to vote. That passes unanimously with Council Member Tanaka voting no. Maybe for the next time, we might look at this somewhat differently. I don't know where it didn't come together with the Finance Committee. Normally, if I see a 4-0 from a Committee, I pretty much figure that it's been well vetted and accepted. I'm a little surprised that we had that much discussion tonight. MOTION PASSED: 7-1 Tanaka no, Scharff absent Inter-Governmental Legislative Affairs None. Council Member Questions, Comments and Announcements TRANSCRIPT Page 84 of 85 City Council Meeting Transcript: 10/02/17 Vice Mayor Kniss: Coming to the very end of this, we have Council Member Comments or Announcements, Questions, anything. You? No? Nobody? You do. Council Member Filseth. Council Member Filseth: I'll be brief on this. Since the residents of Palo Alto paid a bunch of money for this … Assistant City Manager Shikada and I and a couple of members of the Utilities team went to the Northern California Power Agency annual meeting in Napa last week. The NCPA is a consortium of 15 or 20 municipal utilities. It is the vehicle by which our City utility buys and sells power and we get access to the State grid. Since we don't use PG&E, there's a lot of stuff we have to do ourselves in order to move power from wherever we buy it to the City. NCPA is the main intermediary for this. We also have a seat on the NCPA Governing Commission, which the Mayor is our primary representative. The buzz at the annual conference this year is that everybody thinks we're in for big changes in how power is delivered in California over the next decade or two and potentially the whole western United States. One of the main drivers is the growth of what are called CCAs or Community Choice Aggressors. You may have heard of Peninsula Clean Energy in San Mateo, which is one of these. They present themselves to customers as a green energy alternative to PG&E that's also slightly cheaper. Basically all these agencies got started as nonprofit co-ops to purchase green energy. From a certain perspective, they actually look like next generation utilities. They're cropping up all over the state. The buzz in Napa, where we were last week, was a number of projections that in the not too distant future, actually most of the electricity in California won't come from the monopoly private utilities, PG&E and SoCal Edison, anymore but from a large number of CCAs and municipal utilities instead. If that happens, then PG&E and SoCal Edison would basically become primarily transmission and billing services to the CCAs and not actually sell power themselves anymore, which would be a big change for energy in California. There's a lot of complexity in that, part of which is that PG&E doesn't really see themselves as a transmission service to other utilities. In Palo Alto, we have our own wires and billings and meters. With the CCAs like PCE, that part's still done by PG&E under contract. There's already argument between the CCAs and PG&E over how much PG&E charges them for that, which could obviously affect their viability. Another wild card is that there's momentum for greater regionalization of electricity supply and distribution, which there are really good reasons for but also some risks. The State Senate 2 weeks ago postponed a bill until next year that would have added regional oversight to the governance of the California electricity grid, which as you can imagine there's also a debate over. Finally, one of the more interesting things. It looks like some of the existing agencies are starting to think pretty strategically about where there might be new business opportunities in this emerging world, whether they can maybe reinvent themselves to some extent in some of these changing layers between the TRANSCRIPT Page 85 of 85 City Council Meeting Transcript: 10/02/17 generators and the end customers. The electricity business in California looks like it might be especially dynamic over the next several years as all this shakes out. One other thing just briefly. Several of the NCPA member cities including Palo Alto are currently engaged in litigation against the Bureau of Reclamation. Most people know we get about half our power from hydroelectricity in Palo Alto. A lot of that comes from dams operated by the Bureau. The lawsuit we're in alleges that we've been overcharged for this power for several years. The NCPA Commission had a closed session in Napa on this, and there was no reportable action. Vice Mayor Kniss: Thank you, Council Member Filseth. Anything else to add? In that case, we are adjourned. Adjournment: The meeting was adjourned at 10:48 P.M.