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HomeMy WebLinkAbout2017-10-16 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL TRANSCRIPT Page 1 of 126 Special Meeting October 16, 2017 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:12 P.M. Present: DuBois, Filseth, Fine, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Study Session 1. Presentation and Discussion Regarding Santa Clara County's Review of Stanford's General Use Permit (GUP) Proposal. Mayor Scharff: Now, we have a presentation by the County. Is it on the Stanford GUP? Hillary Gitelman, Planning and Community Environment Director: Thank you, Mayor Scharff. Hillary Gitelman, the City's Planning Director. I'm joined by Meg Monroe, on our Staff. This evening's Study Session is to provide an opportunity for the County to give the Council a briefing on the draft environmental document for the Stanford GUP that's just been released. We'll be back to the Council with a draft comment letter towards the end of the comment period; we can get into much more detail at that time. We thought you would benefit from a high-level summary of the document. I want to thank Kirk Girard, the County Planning Director, for being here to provide that summary. With that, I'll turn it over to Kirk and his team. Kirk Girard, Santa Clara County Planning Development Director: Good evening. Kirk Girard, Planning and Development Director, County of Santa Clara. I'll wait for the yellow, sum-up signal to come on if you feel like I'm going too slow in any area. I'll say that our intention here is to help you review the Draft EIR that's been published for the Stanford General Use Permit and just demonstrate that we're here as a resource to help you understand the document and work with your Council and Staff at any point along the way to get your best perspective and comment and input in the process. The way we thought we would do this is briefly recap the project, introduce the Draft EIR, and talk a bit about the issues that your Council identified in the Notice TRANSCRIPT Page 2 of 126 City Council Meeting Transcript: 10/16/17 of Preparation stage by way of providing you a tour through the Draft Environmental Impact Report, and then describe the process for the review of the Environmental Impact Report and the permit application itself. That's our objective; that's what we hope to do. With me today is the Project Planner on the project, Kavitha Kumar, David Rader who is also County staff. He is the EIR Project Planner. We have Greg Glickman [phonetic] who is a representative of our traffic sub-consultant, and then we have Brian Boxer and Paul Mitchell, who are primary consultants to the County working for ESA on the EIR. If there are questions that you might have or clarifications you seek, I may be drawing on their expertise in providing answers to you. Hillary asked me to keep this to about 20-plus minutes to give you an opportunity to answer any questions or have any discussion you might like to have with us. I'll try to keep it at that duration. By way of background, I think most of you on the City Council understand this. The County governs land use on the campus through these major regulatory steps and documents. There is the University Community Plan, which is a specific plan section of our General Plan. We have issued a 2000 General Use Permit under the policies of that Community Plan. We prepared an Environmental Impact Report for the combination of the Community Plan and General Use Permit back in 2000, and that includes a Mitigation Monitoring Program that are imposed on projects developed at Stanford. Finally, in 2008, we prepared a Sustainable Development Study to look at the long-range growth of Stanford. We are here because Stanford has applied for a 2018 General Use Permit application. They're looking to entitle future development at the campus and make minor changes to the General Plan and zoning, but they're not significant changes, more housekeeping. The lion's share of the application concerns growth of the campus. This is what is requested: 2.275 million square feet of academic and academic support uses; over 3,000 net new campus housing units; some childcare facilities. This is anticipated to take place over a 17-year planning horizon. There's no new development proposed for the San Juan Development District or the Foothills. Just by point of reference, in 2015 there was approximately 9.6 million square feet of academic space on the campus. The proposed increase would be approximately 11 percent over the current development at the campus. To put it in perspective with the 2000 General Use Permit application—some of you were involved in that application— Stanford is asking for effectively an 11 percent greater entitlement over this planning horizon, from 2018 to 2035, than they did in the original 2000 GUP. In the 2000 GUP, there was 2.035 million net new square feet contrasting to 2.275, an 11 percent increase in what was proposed in the year 2000. I mentioned that this is being proposed in a regulatory framework. The Community Plan has policies in it that govern the review of individual General Use Permits. Stanford is providing applications consistent with these Community Plan policies. One, retain the academic growth boundary. There's no proposal to expand the growth area identified on the campus area as TRANSCRIPT Page 3 of 126 City Council Meeting Transcript: 10/16/17 opposed to, for example, the Foothills area. A commitment to pursue the goal of no new net commute trips; maintain the housing ratio that was included and considered as part of the 2000 General Use Permit; and then continue to pay the affordable housing impact fee at the rate of $20 per square foot, adjusted over time for inflation. That's the proposal, and that's the proposal that the Draft EIR evaluated. By way of process, you recall that the application was filed back in November 2016. We did a Notice of Preparation. We had a meeting in this room to describe the Notice of Preparation, have a workshop around it. Your Council commented in February. We just recently published the Draft EIR, opened a 60-day comment period that closes December 4th. We'll consider the comments and prepare a Final EIR that consists of response to comments and the Draft EIR. At that point, we'll be prepared to take the application to our decision-making bodies, the Planning Commission and ultimately the Board of Supervisors. We don't have a timeframe for that. We're looking at probably late spring to publish the Final EIR. Depending upon the number of issues that need to be resolved and the pace of decision- making, we're to our Planning Commission and Board sometime in mid-2018. I'll gloss over this. You know what a Draft Environmental Impact Report is intended to accomplish. I will say that this is a programmatic Draft Environmental Impact Report. As individual projects are proposed, they're reviewed for consistency with the programmatic report. If they're not covered by the analysis and the findings that were included in the Draft Environmental Impact Report, then they require supplemental environmental review. This is the content and our particular organization of the Draft Environmental Impact Report, two volumes, I and II, plus appendices. We've provided your Staff with two hard copies, and I have a third here if we had some interest in having a counter copy at your Planning Office. We're making the report available at two libraries in Palo Alto and other locations as well. I'll get more into that later. These are the environmental topics covered in the Draft EIR, which you're all familiar with. Here what I've done is extract what were considered to be the key issues of concern in the Notice of Preparation stage. I have asterisked those that were part of your comments to us in your Notice of Preparation letter. I probably could have dispensed with the asterisks because almost all of the major issues of concern were raised as part of your letter to us in the Notice of Preparation stage. No surprise the two major issues are housing and transportation. In reviewing the concerns and hearing the concerns on housing, it really came in two categories. One was really just policy issues associated with the jobs/housing balance and exacerbating what may be already a housing crisis on the Peninsula with the growth of Stanford. The other would be put into an environmental analysis, what are the environmental effects of potentially prompting the construction of new housing. I'd say the dominant issues really were the policy issues associated with housing and then transportation impacts. Both of these topics are covered extensively in the Draft Environmental Impact Report. You're familiar TRANSCRIPT Page 4 of 126 City Council Meeting Transcript: 10/16/17 with the fact that California's in the transition of analyzing the environmental effects associated with transportation impacts, between an analysis based on the number of vehicle trips generated by the project or vehicle miles traveled, and then the more traditional analysis of transportation impacts to intersections and road segments and freeways and effectively a congestion analysis. In this Environmental Impact Report, both approaches are followed. The conclusions of impacts span both approaches to analysis. Other areas of concern have to do with cumulative effects, the relationship of projects themselves to on-campus development. For example, the Redwood City campus development, office development, and then cumulative impacts association of Stanford projects with other projects that are reasonably foreseeable in the project area. I don't want to go through this in some encyclopedic area. I will say that many of the comments that you gave prompted special analysis that helped drive the EIR. For example, you had concerns of population and housing effects, and you provided a number of comments saying, "Please give us detailed information of what the implications are of this development on on-and off-campus populations. We need those data to determine effects on public utilities and services, schools, housing, transportation, etc." There's very extensive coverage of population and housing associated with the proposed development. That was one instance. A lot of very good and focused comments on transportation impact, on particular intersections of concern, the ways that transportation should be evaluated. There was a great deal of focus on the no net new trips goal and proposal. Most of those comments associated with you must establish the feasibility of that approach to traffic management. We want to determine that the programmatic approach you've taken in terms of implementing the methodology is manageable and properly addresses the impacts. I'll say to that and in talking specifics, a concern was the goal is to not exceed the cordon counts in the peak hour in the peak direction. That cordon count is done two times a year. Under the current program, Stanford has the option of staying below the baseline in the cordon count that was established in 2001 or, if they exceed the baseline for 2 of 3 years, proposing trip reductions within the project area that would have the same effect of reducing congestion of those impacted intersections or road segments. Those two elements are still in place, the cordon count and measurement system plus the option of paying for trip reduction that would occur in the impact area. There's a third option that's been added to the equation, and that is Stanford would contribute funds equal to the avoided cost of intersection and road segment improvements so that surrounding jurisdictions could invest in projects that reduce traffic demand, so by pedestrian, transit improvements. There's a third tier to the mitigation proposal for no net new trips. There was also a concern expressed of doing it retroactively. If Stanford was to exceed the cordon counts, then in a sense we're acting retroactively, trying to play a catch-up game. There was some good comments about, if we were to make meaningful investments in TRANSCRIPT Page 5 of 126 City Council Meeting Transcript: 10/16/17 traffic demand management in the impact area, we should be thinking prospectively. To that end, there is reference in the Draft Environmental Impact Report to specific projects that Stanford may pay in advance. This is still very much in development, and we welcome your comments and your insight in this area. We're actually working on a regular basis with your Staff on this project to identify those projects that you would think would have the greatest impact of reducing traffic congestion in the impact area and potentially requiring a pay-forward provision in the mitigation, so that those projects are implemented prior to Stanford exceeding the cordon count and that allowance would be available if Stanford were to exceed its cordon count. We're very much in the process of developing that right now in coordination with your Staff and staff of the local jurisdictions. There are four specific projects that are reviewed in the Draft Environmental Impact Report that would have that effect. One of them is a bike project in your jurisdiction. We are working with that framework that would really tighten up the no net new trips in that approach to traffic management. The approach that is being pursued is an explicit policy of the Community Plan, try to reduce traffic first and then improve and widen intersections and road segments second. This approach is consistent with the Community Plan policy that our Board adopted and has received support in the past from your jurisdiction. Another concern is we understand this is a programmatic Environmental Impact Report. At the same token, we expect coordination at the project-by-project level, which we do. It's also part of our land use policy framework that we're a signatory with you and Stanford under, and make sure there are explicit standards by which individual projects can be evaluated as they come along, so that the full weight of the policies and the conditions of approval of the General Use Permit are applied on a project-by-project level. Another major area that your comments drove analysis in was public transit capacity and are there going to be limitations in getting cars off the road and putting them in public transit. Some supplemental work was done, and it appears at the end of the transportation section of the document on particularly the long-term capacity of Caltrain to accept new ridership. Utilities and public service demands, I'll say that there were comments that you said, "We need to understand what impact this would have on providing services like fire, emergency response, our wastewater system, etc." I'll say that the burden under CEQA for analyzing the project's impacts to public utilities and services has changed over time. The burden of the EIR is that, if the project prompts construction-related impacts of a public service or utility, then that impact needs to be analyzed. I'll compare that with the policy implications of, if you look at a criteria like level of service, what is the current baseline level of service and what effect would this project have on the baseline level of service and how is that effect not mitigated in the CEQA sense but managed in the public policy sense. Those are two different buckets, and the concerns associated with the demand on public utilities and services are as valid now as they were before CEQA changed. It's TRANSCRIPT Page 6 of 126 City Council Meeting Transcript: 10/16/17 just now they have to be handled in two different vessels. One's a public policy issue associated with consistency of the project to our General Plan, the concerns of the local jurisdictions, and our ordinances in terms of impacts to public services and utilities. The other is construction-related impacts that are evaluated in the EIR. We make that distinction in the Draft EIR, but it isn't to say we're neglecting or that the concerns on the loading of public services are any less valid. I'm going to gloss over this. You understand the framework for an EIR and its analytical approach. What is the baseline, what is the criteria for significance. Given the trend that would be established by this project, does that impact rise above the criteria for significance for that particular environmental issue or topic? For each of the environmental topics, we draw these conclusions: what are less than significant impacts; what are significant impacts; what are possible mitigations; after mitigation, what is the level of significant impact given the criteria. This is the heart of the Draft EIR, and this is the heart of the comments that we hope to receive from the jurisdictions that are most affected by this project. What should the significance criteria be? Do we have the increment correctly analyzed? Do we have the full range of mitigations that could be feasibly applied to reduce the impact? Finally, after that is applied, where is the level of significance so that our decision-makers could ultimately be fully aware of the implications of the project and the level of environmental significance? That's the heart of the EIR. The transportation section, as you imagine, is very exhaustive. I've shown the greenhouse gases as one other environmental topic in the framework for this analytical approach. We have a table here of the conclusions by environmental topic. All the way in the right-hand column, we've concluded that construction noise and vibration will remain significant after the mitigations are applied because there are instances where sensitive receptors will be adjacent to construction. Despite what might be considered best practices and all feasible mitigations, you still might see exceedances in short-term construction and cumulative construction levels. Transportation and traffic, this analysis is associated with the also-called classic analysis of impacts associated with congestion, that is, will level of service diminish at intersections and road segments. The conclusion is, if the no new net trip goal is not achieved then, yes, there will be impacts to particular intersections on a direct and cumulative basis and to freeway segments. That's a fairly hair trigger as we all know, but that is the conclusion of the Draft Environmental Impact Report. Under VMT, the project's projected vehicle miles traveled is below the tentative measures of significance that are being considered at both the State level and the regional level in the Bay Area. Finally, impacts to historic resources on the campus could be significant and unavoidable because there is an allowance whereby a house that is considered historic based on a register of historic significance could be either modified or demolished under this project, and that would result in a significant and unavoidable impact. Another requirement of the EIR is that other projects are evaluated. We have TRANSCRIPT Page 7 of 126 City Council Meeting Transcript: 10/16/17 evaluated three main alternatives: the no project alternative, which is a default under CEQA. There's a distinction here. One is that no development is allowed at the campus, and the other is that development would be allowed on a project-by-project basis so that Stanford would have the right to apply for individual buildings, for example, or individual housing units with a project- level environmental review and use permit. The other is a reduced project alternative, which effectively is a little less than half of the proposed development over the project period. The environmental effects of that alternative are fully analyzed in the Environmental Impact Report. A historic preservation alternative that would prevent any modification or demolition of historically significant resources. A requirement of the EIR is that you compare the project alternatives to determine which one is environmentally superior. That starts with the no project alternative followed by the reduced project alternative. I'll mention that the Draft Environmental Impact Report, if you are a Stanford regulatory aficionado, you're familiar with many of these documents. This is important background reading to fully understand—I will say that the Draft Environmental Impact Report is very well written, very well communicated. To understand the entire context the project application is being made in, understanding and reviewing these reports is also critical. I'll point out in particular that on an annual basis there is a report card that was required as part of the 2000 General Use Permit. It effectively states what development was approved under the General Use Permit, and what mitigations were imposed, what problems came about, and really was intended to provide the decision-makers a review of whether or not the programmatic approach in the General Use Permit was applied appropriately. We have 16 annual development reports that summarize that over the 2000 GUP. We also have the traffic reports that analyze the cordon counts, the issues associated with trip credits, how it was done, when it was done, where it was done, etc. Those are also available on our website. Finally, the base application that Stanford submitted to us, I've gone over this. We're looking at the Final EIR in spring 2018. We'll provide public notice at that time, then go to hearings. Our Planning Commission and ultimately our Board would have to make findings, file a Notice of Determination, and then approve, deny, or modify the Stanford application. This is the period of review that we're in right now. The County is planning two public meetings. We had one earlier this last week, and we're having two more. One is in these chambers on October 19, hosted by Supervisor Simitian. Finally, we're doing a special meeting of the County Planning Commission. It's at those two meetings where we're not only going to introduce the Draft Impact Report but ask for formal input and record that formal input for preparation of the Final EIR. Here's the availability: our website, we have Mitchell Park and Rinconada Library. We've given you a few copies. This is an overview. We accept verbal comments, but written comments are absolutely the gold standard. We accept them TRANSCRIPT Page 8 of 126 City Council Meeting Transcript: 10/16/17 through December 4th at 5:00. That concludes my presentation. We'll just be available for any questions or comments you might have. Thank you. Mayor Scharff: Thank you. Vice Mayor Kniss, you had some questions or comments. Vice Mayor Kniss: Thanks. Would you just stay at the mic? If we could go back to the first slides, I have a specific question to ask you. The part that deals with the academic boundary. I don't know, were you there in '99 and 2000? Mr. Girard: No, I was not, Vice Mayor Kniss. Vice Mayor Kniss: I was. It was a time when we were very much trying to negotiate with Stanford to save the Foothills. An academic growth boundary was put into place, which is divided by JS—I'm sure you're familiar with it. Mr. Girard: Yes, absolutely. Vice Mayor Kniss: The so-called Dish is at the top of it. It's protected for the next perhaps 7 years. It had a 25-year protection on it. I have not heard it mentioned yet as being something that would be extended or a discussion about it. It was extraordinarily important to the City Council in Palo Alto at that time. Mr. Girard: Absolutely. By way of background for other Council Members, Supervisor Kniss and our Board put a requirement into the General Use Permit that to change the academic growth boundary would require a supermajority of our Board, and that supermajority would be in place until 2000—I've forgotten the date. Vice Mayor Kniss: '25, I think. Mr. Girard: '25. Stanford has not proposed to retain the supermajority requirement. That is in effect now under the current use permit. That will be a policy decision for our Board like it was for your Board in terms of what are the standards for modifying the academic growth boundary. Vice Mayor Kniss: I would hope that one of the areas that our group here will continue to advocate for—I see Peter out in the audience—would be this. It's a very important recreation aspect, not for just Palo Alto but also for the entire campus. When it was written in as to why that would become a protected area, that had great importance for us as a body but also for this entire area. Perhaps you could take that message back to the current Supervisor and indicate to him that I—is he here? We haven't had a chance to comment on TRANSCRIPT Page 9 of 126 City Council Meeting Transcript: 10/16/17 it or vote on it or whatever. I would feel pretty strongly about it. It was a tough-fought, vocal, and a rallying cry in the late '90s. It's an important view but also a great source of recreation for many of us who do choose to walk. Some of us do. Mr. Girard: Point well taken. Vice Mayor Kniss: Thank you. Mayor Scharff: Council Member DuBois. Council Member DuBois: Just a couple of quick clarification questions. In the report, it talked about some proposed parking exemptions, on packet page 14, including high-density faculty and staff housing. Can you just explain how that would work? Do you need more context or … Mr. Girard: No, I think I understand. Let me take a stab. If this isn't the right—Stanford is proposing a carryover in some of the allocated parking from the 2000 GUP. That's after the EV graduate housing would consume the allotment. It's over 1,000 spaces. There's a provision that they could apply for another 2,000 if certain standards are met and approved by the Planning Commission. Is that reference that you're speaking to? Council Member DuBois: That was my next question actually, the parking reserve. Mr. Girard: There are some parking exceptions provided for, for example, ridesharing services, I believe … Council Member DuBois: Police and fire. Mr. Girard: … EV is there, police, fire. There are categories that are called out. Council Member DuBois: In that sentence, it says "and high-density faculty and staff housing." That's what didn't seem to fit in with ridesharing and police and fire. Mr. Girard: Good comment. Thank you. I think that is considered an exception. I understand where that might be the odd man out, if you think about it from a parking allowance perspective. Council Member DuBois: The 2000 reserve, when would that come into effect? Mr. Girard: Under the proposal, they would be entitled to the 1,000 and change provided after the EV graduate housing. Beyond that, I believe there TRANSCRIPT Page 10 of 126 City Council Meeting Transcript: 10/16/17 are three conditions that they've met the no new net trips goals. They have to demonstrate that the parking would not significantly affect peak hour commute traffic. One other standard is that somehow the base assumptions have changed, that that could allow for reconsideration of the parking allotment. That would be a discretionary decision by our Planning Commission under the proposal. Council Member DuBois: This would be an additional 2,000 parking spots? Mr. Girard: That's correct. Council Member DuBois: It also says that there's—I guess it was actually in our Staff letter—some ability to have housing beyond the proposed limit. When would that happen and how? Mr. Girard: It's effectively a mechanism so that they could request an allotment beyond what was approved as a part of this General Use Permit. The requirement would be that it would have to be reviewed by our decision- making body as a standalone request. Why that allowance is made explicitly is in general, at least the policy framework around the Community Plan, more housing on campus is better than less. That effectively shows that the jurisdiction is open to increasing housing at the University, but it would still be subjected to discretionary review and environmental review, etc. It would be a discrete addition to what is proposed and what would be approved by the project. Council Member DuBois: The existing proposed housing would also be subject to review. Is this just additional housing on top of that? Mr. Girard: The distinction is that the proposed levels would have been explicitly covered in the environmental impact review and be granted authority under the General Use Permit, so that at that time that they're proposed, it may only require a building permit application. An amount beyond the allocation provided in this General Use Permit would have to go through a separate discretionary review process. Effectively, we didn't want to close that door and announce that amount. It's an analytic cap, but it's not a policy cap, if I can put it in those terms. Council Member DuBois: That's very helpful. The last question. I think it was in our Staff's letter. There was an idea of resetting the no new trip baseline. I also wanted to understand the background of that. Mr. Girard: I don't understand the origin of that comment. It's not proposed to reset the baseline in our framework. Could I get some help here? It was a comment from the City of Palo Alto. TRANSCRIPT Page 11 of 126 City Council Meeting Transcript: 10/16/17 Ms. Gitelman: Thank you, Council Member DuBois. Just quickly, in the letter, that baseline was mentioned in the context of our request to ask the County to take a hard look at how the whole no net trips program is established, including its methodology, monitoring. We threw baseline and a few other issues in there. I think at the time the Council and the community had some concerns that the no net trips promise was great, it seems to have worked really well. To envision it carrying forward into the future with this amount of additional activity on the campus was straining our believability. Council Member DuBois: A new baseline would be for that past moment in time, just … Ms. Gitelman: I think we were just talking about updating it, not to make it more or less stringent, but to reflect today's circumstances. Council Member DuBois: Thank you. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: Thank you very much for the presentation. Mr. Girard: You're welcome. Council Member Wolbach: If you'll help me go through some of the numbers that are in your presentation. If you look at slide—what is it 5 on Page 3, as we've gotten it here? 2.275 million net new square feet of academic and academic support space. Do we have a sense of how many students, how many staff, how many faculty, how many total people that equates to, even ballpark? Mr. Girard: I'm going to say a number, but I'm going to ask the Staff to substantiate it. At peak completion of this project, I believe we're looking in the vicinity of 9,000 additional people on the Stanford campus over what might be considered the conditions today. Am I close? Is that population housing number? Maybe we need to do a little digging, but I believe that's roughly it. Is that the general number you were looking for? Council Member Wolbach: I hope that's not the number we're talking about because this only calls for 3,150 new beds. If it's 9,000 new beds required, but only 3,000 new beds provided, that might be a problem unless I'm misreading this or misunderstanding that. Mr. Girard: The number that I think you're looking for would be students and potential faculty and maybe workers. The number I was talking about … Council Member Wolbach: Faculty, staff, and students all combined. TRANSCRIPT Page 12 of 126 City Council Meeting Transcript: 10/16/17 Mr. Girard: I gave a total population number, which may be different than that. I hesitate to give you those numbers off the top of my head, but we do have them in the Draft Environmental Impact Report. Council Member Wolbach: If it's comfortable with the Mayor, I'd be open to anyone from Stanford weighing in on this. If anyone wants to weigh in, if you need to look up the numbers and get back to us later in the meeting, I'd be open to that. If you don't have them tonight, I'd be happy to have that come back to us in the future. Mr. Girard: Maybe just give us a bit, and I think we can just consult our population tables and give you the answer. Mayor Scharff: I think someone from Stanford's coming up. Go ahead. Mr. Girard: I do have the numbers. This is Table 5.12-9. It's a summary of all the population growth resulting from the project across the population segments that have been developed. We have undergraduate students, graduate students, post-docs, faculty, on-campus staff, non-matriculated students, and then other workers. Undergraduate students, the total change in population is 1,700. Graduate students would be 1,200, post-doc 961, faculty 789, non-matriculated students 420, other workers—we have it under two categories. The total number of other workers is 2,101. We have a breakdown of the number of daily other workers because that figures into the traffic count of 1,074. There's nuances between part-time and full-time workers. The total increase is 9,610 under all those categories. If you discount for some people that don't go to the campus every day, like part- time workers, you reduce that 8,583. Council Member Wolbach: That's problematic to put it mildly. I am of the mind to agree with the idea that more housing on campus is a good thing. I'm very concerned about increasing the demand for housing more than double the amount of new housing provided. I hope that issue will be addressed as this plan moves forward. The next slide, Slide 6, I want to be sure I was understanding this. What is the current housing ratio? Sorry. How is it described here? Sorry. The academic growth ratio? Am I reading this right? The wording's a bit clunky. Mr. Girard: That's fine. Council Member Wolbach: This is basically the housing to people ratio, right? Mr. Girard: It's 605 beds or units per half million square feet of academic space. They can't get too far ahead of themselves. In other words, they can't TRANSCRIPT Page 13 of 126 City Council Meeting Transcript: 10/16/17 build the academic square footage unless they supply that ratio of housing in, I believe, half million increments. There are checkpoints along the way. Council Member Wolbach: It sounds like maybe we want to tighten that up and increase the amount of housing even beyond what's provided there. Mr. Girard: It absolutely is the policy issue that you're addressing. Council Member Wolbach: I think that's important. It's critically important to do that in conjunction with providing what is needed for the housing. That does mean that the TDM efforts need to be there. That does mean that close coordination with the City and also with Palo Alto Unified School District is critical to make sure that there are facilities, that we can handle the utilities, things like that as you mentioned before, that there will be classrooms available even if that means Stanford helps make more classrooms available in the future. If there's going to be that much of an increase in jobs and students, the housing and the support for the housing needs to be there. Otherwise, this is a dramatically imbalanced proposal and not in line with the direction that this community and the region has been trying to head towards, which is a greater sense of balance, also recognizing how things combine. Also, the significant and cumulative impact of traffic especially on the freeways in this area, I would just describe that as not acceptable, very simply. I know we're moving away from LOS and moving to VMT, but that doesn't mean that we're going to be okay with people—again, it ties in with the housing stuff. If people are coming to work or coming to their classrooms on the campus, but they're coming from further and further away, that's not going to be environmentally sustainable. It's going to impact their quality of life, and it's going to impact the quality of life of everybody else who has to share that transportation space, whether it's in a car, on a train. The more we can get to a balanced approach of jobs and housing on the campus through this GUP the better. I'm being very reserved in how I'm describing this. I feel very passionately about this. I know I'm not alone on this dais or in this community. In the past, Santa Clara County Roads and Airports Department has previously told us that they basically don't work on demand reduction. That's not their job. That's software, and they only do hardware. They don't do demand reduction; they only expand capacity. I'm curious if that's changed. If it has changed, if you could tell us anything about collaboration between Stanford and County Roads and Airports and an important third party, VTA, to address what I know has been a priority for Stanford. I credit Stanford for being a leader in reducing demand. I'm wondering if the County and VTA have risen as partners and particularly how those three entities are working together in considering this GUP. TRANSCRIPT Page 14 of 126 City Council Meeting Transcript: 10/16/17 Mr. Girard: We have a supplemental project that's happening in parallel to the review of the EIR in this project, where we are visiting—I alluded to this, but I wanted to expand on it. Council Member Wolbach: Please. Mr. Girard: We have our consultant, AECOM, reviewing the feasible traffic demand management projects of every jurisdiction including the County and VTA and all the local jurisdictions. We're trying to have a picture emerge of are there a number of candidate projects, like you'd have a number of candidate intersection improvements and road-widening projects, that may have a real significant effect on traffic in the impact area. We have completed our rounds of meetings with your Staff and all the other jurisdictions that are involved in this. We have a draft list of those candidate projects. We're doing analysis—actually, first we're just getting the list together; then, we're going to decide what sort of analysis is appropriate for which projects might have what effect on what intersections, establishing a tie between a specific TDM project and reduction of traffic at a particular intersection. It's very much in a state of development right now. I will say the County is considering the contributions they might make in either road design—Complete Streets is an adopted policy of our County. In that way, even though they be involved in intersection and road segment improvements, it would come with at least pedestrian and bike improvements. I don't have any conclusions to provide you now, but we're doing this as a parallel technical effort. Council Member Wolbach: What I'm really trying to get at is—my central question is has the County Roads and Airports Department changed its view of its role so that it can actually thoughtfully incorporate efforts to reduce traffic demand into its planning. Mr. Girard: May I ask are you speaking in the vicinity of Stanford or in general across the county? Council Member Wolbach: Both. Mr. Girard: I was a party to the recent update of the County Transportation Element. I will say that if that document is adopted by our Board, then it would represent a step change in our policy in terms of how we handle bike, pedestrian, and transit services in the county. While we haven't adopted the document now, I will say from a policy perspective that is a major step change that we see in our near future. I would probably defer the question rightfully to our Roads and Airports Director who is not here tonight. I'll say that from a Planning Director's perspective. TRANSCRIPT Page 15 of 126 City Council Meeting Transcript: 10/16/17 Council Member Wolbach: Perhaps you can send the message along that we're glad to hear of at least exploration if not solidified step changes when we have such a great effort recently in the Stanford Research Park and for several years on the Stanford campus. I would like to see that vision and that approach adopted more fully not only by VTA but also by County Roads and Airports. Thank you. Mayor Scharff: Thank you. Council Member Filseth. Council Member Filseth: Thanks. Council Member DuBois asked most of the things I was going to ask, but then I got interested in Council Member Wolbach's remarks too. Let me ask, if I do my arithmetic right, post-docs is 961, and faculty is plus 789. Between the two, you're looking at about 1,700. The total housing for post-docs and faculty and also some number of staff is 550. Mr. Girard: That's the proposal, yes. Council Member Filseth: That's a quarter or something like that. That's what I thought. The reigning question I wanted to ask was student generation rates for the schools. Is that part of the EIR? School impacts. Mr. Girard: I'm sorry. You said student generation rates? Council Member Filseth: Is school impacts part of the EIR? Mr. Girard: Yes, it is, absolutely. There are analyses of what number of school-aged children will be generated by the project. Council Member Filseth: If at such time as you folks came back and said, "We have conditions for more housing on campus, and we're going to house the rest of those 1,700 people," or something like that, there would be an assessment of where the kids are going to go school. That would be part of that? Mr. Girard: That's correct. Council Member Filseth: Thank you. Mayor Scharff: Council Member Holman. Council Member Holman: Thank you, and thank you for holding these series of public meetings. First off, I'd like to support—I can't speak for others, just for myself. Maintaining the urban growth boundary and protection of the Foothills is critical and key to not just this Council but the community at large. TRANSCRIPT Page 16 of 126 City Council Meeting Transcript: 10/16/17 I know that came up really early in discussions about this project. I'm hoping that commitment is there. Mr. Girard: The specific instance of the supermajority requirement would be an expression of that. One portion of the regulatory framework that I didn't describe is there are zones established on the campus that have allowable uses. The Foothill is actually zoned to prevent dense development, almost all development. Prior to any expansion of the academic growth boundary into the Foothills, it would also require a zone change which, as you know, is a discretionary decision of the Planning Commission and the Board. There is the zoning in place. The proposal is not to include that four-fifths supermajority. The proposed project doesn't contemplate an increase in the academic growth boundary. This topic is a key topic in the community and was a key topic in the Notice of Preparation. Interestingly enough, if the project doesn't propose growth in the Foothills, then the EIR doesn't have to analyze whether or not there is or isn't growth in the Foothills. It becomes a policy matter of our Board about what are the protections of the Foothills in the short term, in the midterm, and the long term. It's an issue that the Sustainable Development Study was intended to illuminate. We're in discussions with Stanford on the potential to revisit the Sustainable Development Study, looking at the long-term development of the University in terms of its allowable density, at what point might the academic growth boundary be put under pressure for expansion. That's, again, parallel work that's in progress. Council Member Holman: It's a long answer that's somewhat informative. I think what people would like to hear is we have no plans to expand into the academic growth boundary. Mr. Girard: I can say unequivocally there are no plans to expand in through year 2035 with this proposal. That is absolutely hardwired into the proposal. There's no (inaudible) review of that expansion. There's no request for it, and it will not happen as a part of this project application. Council Member Holman: I did hear there was a parallel consideration. That's what … Mr. Girard: No. It's really to look at this use permit—I'm sorry. The Sustainable Development Study looked at the timeframe beyond the use permit applications. Yes, for this particular use permit, there's no proposal for the Foothills. Once this development occurs, would there still be capacity within the academic growth boundary to accommodate, for example, the next increment of development? That's the question. The parallel review has nothing to do with this General Use Permit application. Nothing at all. It TRANSCRIPT Page 17 of 126 City Council Meeting Transcript: 10/16/17 would be a long-range planning study like the one that our Board proposed in 2008. Council Member Holman: Thank you. Separate from the EIR process, it would be also helpful for the community to understand what are the long-range plans. 2035, Stanford plans—you're wise to do so. Stanford plans way into the future. It'd be really helpful for the community to understand what are the plans beyond 2030, 2035, 2045. It would be really helpful to understand what's being contemplated. That's not what's before us tonight, but it would be most helpful and reassuring, hopefully. Hopefully reassuring. Mr. Girard: I think that's a good impact, and that is the long-term planning question that was first attempted to be answered by the 2008 Sustainability Study. Council Member Holman: Thank you. A question I had is—I can't remember exactly where I read it, somewhere. The low-income housing fund is contributing $20 a square foot of academic square footage. That's a carryover number, is it not, the $20 a square foot. What is that carried over from and when, what timeframe? Mr. Girard: It is. I'll ask some of our team to support me. The original linkage between low-income housing and development was established with the 2000 GUP. It was actually tied to the fee that the City of Palo Alto was charging for like development or commercial development, I believe, commercial office. In this $20 per square foot, Stanford is effectively proposing to de-link that payment from any actions that you might take on your housing affordability impact fee and then adjusting it for inflation over time. We are going to be presenting to our decision-makers an analysis of the impact this project would have on low-income housing in this area. Your jurisdiction is familiar with nexus studies, where you analyze the number of people that are generated by growth and what their housing needs are, whether or not that housing need is met by their salaries in relation to the cost of housing in the area. We're doing that detailed study on the Stanford proposal in particular so that, by the time we have anything in front of our decision-makers, we'll have an analysis of the exact nexus and impact fee that could be supported from a proportionality perspective in assessing that number. We know that is, again, a policy issue for our Planning Commission, ultimately our Board. Council Member Holman: The $20 right now is like a holding place? Mr. Girard: It is what's proposed by Stanford, but it is not the position of the County or the Administration. TRANSCRIPT Page 18 of 126 City Council Meeting Transcript: 10/16/17 Council Member Holman: That's actually good to hear. Inflation is different than land use costs and the construction costs in the area. Just an inflation rate adjustment won't accomplish what the intention is, which is to create the counterbalanced need for affordable housing. I want to associate my comments with those of Council Member DuBois and Council Member Wolbach, both having to do with trips and housing demand. Recreation, I'm hoping that there is a broader assessment of needs for parks and open space. When this came to us a little while back, it was relying on Palo Alto's open space. Parks and recreation are, as we all know, typically associated with those kinds of recreation spaces that are within access, half a mile or so of access to the users, and not a long drive to the Baylands or a drive to the Foothills where, unless they're living in Palo Alto, have only limited access anyway. Has that been readdressed in what's being studied now as part of the EIR? In other words, practical usage of parks and open space and recreation. Mr. Girard: Just to speak candidly, the EIR analysis associated with recreation is disappointing. It goes to this issue of what is considered to be a criteria of significance for impacts to recreation has changed over time. Now, the burden is you analyze whether or not the project would result in a deterioration of existing recreation facilities. To answer your question, was that fully analyzed in the EIR, the demand for recreation facilities of this project, not to address the issues that you're raising. Those are policy issues associated with the demand for public services and infrastructure like utilities, like recreation, parks, etc. That's going to be more fully handled in the staff analysis of those impacts outside of the EIR. All the base information is addressed in the EIR, but the criteria for determining significance under the EIR is a very narrow realm of this impact to recreation from projects. I could potentially get some background support from our consultants, if you'd like, for that statement. Council Member Holman: That would be, in one regard, a little bit of an unusual way to address it. The EIR, it seems, should address those and analyze those impacts. What you say I would agree with. Your staff, our Staff, whoever staff, the County staff could also analyze whether that's adequate or not. It seems like the EIR should also basically address that demand. Mr. Girard: That's what I referenced earlier, that there are absolutely two areas of inquiry. They're both equally valid. What I think I'm hearing is your level of concern is more effectively handled as a policy matter as opposed to an environmental impact as it's been narrowly defined under CEQA. Like I say, it's not—I'm not trying to diminish the comment. It's just how it's handled in the EIR versus how it would be handled in a public policy perspective are two different things. TRANSCRIPT Page 19 of 126 City Council Meeting Transcript: 10/16/17 Council Member Holman: They can be. You know what I'm getting at. Mr. Girard: I do, absolutely. Council Member Holman: Along those same lines, air quality and greenhouse gas reductions are both being analyzed. Is Stanford committed to going further given your long history and standards of environmental sustainability than what that analysis comes back? Our air quality is more and more challenged, and our greenhouse gas reductions are imperative that we accomplish those. Are you looking at that in a little bit of the split way that you are with the last item, the open space? Mr. Girard: The answer is yes because the Community Plan has policies associated with resource sustainability. The Sustainable Development Study looked at how Stanford was managing its consumption of resources over time. Do we have the regulatory authority, for example, to mandate certain per capita usage rates of water and energy, some of the common indicators associated with resource sustainability? We have general policies in our General Plan but not really specific regulatory holds. Stanford is committed to designing and implementing their project consistent with the greenhouse gas emission analysis that was conducted in the Draft EIR. We haven't imposed regulatory mandates beyond that scenario. While Stanford is saying they're committed, from a goal perspective it hasn't gotten down to the level of us requiring conditions of approval for certain levels of sustainability performance. Council Member Holman: These are comments for the County Supervisors, the last couple of ones if we can quickly. Slide 9 mentions two things. The next-to-the-last bullet says historic preservation alternative. Earlier it talks about there would be impacts to historic resources. The reason I'm asking about that is it's like if there are impacts on historic resources, then those should be identified. If there's an historic resources alternative, it's sort of saying there's a greenhouse gases reduction alternative. Do you know what I'm saying? It should be analyzed altogether. I'm not quite sure how this is going to be utilized. I don't want there to be an EIR that comes back and says, whether it's transportation or historic preservation or anything—it's hard to figure out how to state this. I don't want there to be an EIR that comes back and says, "Those are excused because that was the alternative over here, so there's not a finding of significant impact." Mr. Girard: I'm not sure I'm following you to be able to give you an answer. I will maybe further explain that a finding of significance for historic resources—would that help? Is that close to what you're … TRANSCRIPT Page 20 of 126 City Council Meeting Transcript: 10/16/17 Council Member Holman: Yes. It's just I don't want the baby to be split. That's what I'm trying to get at, not wanting the baby to split. Maybe Meg knows what I'm getting at here. I won't go further into that in the interest of time. The last one is the very last point on Slide 9 is reduce project alternative environmentally superior among remaining alternatives. This is comparison of impacts. If that's true and given Stanford's commitment to the environment and sustainability, would Stanford consider a reduced project based on EIR findings? Mr. Girard: That is ultimately in their court for determining if they're going to in a sense modify the proposal that was evaluated in the Draft Environmental Impact Report. Our jurisdiction as the lead agency has to make findings consistent with CEQA, which could include opting for an alternative that meets project objectives and reduces significant effects. That is within the realm of the jurisdiction and the decision-making process. Your Council's familiar with that. Stanford could tomorrow say, "We would like to modify our proposal in this way." That may or may not prompt changes in the environmental review. They could make those changes all the way until the project is approved and, thereafter, through a modification process. What you're getting at is sort of the discretionary ability of our Planning Commission and Board to accept an environmentally superior alternative that meets project alternatives. That discretion is there. Council Member Holman: I'll stop there. Thank you. Mayor Scharff: Council Member Fine. Council Member Fine: Thank you, Mr. Mayor, and thank you for the presentation very much. I'd like to associate myself with a couple of comments by my colleagues. One, around the academic growth boundary. Obviously that's an issue of great concern to Palo Altans. While I understand Stanford may not agree to that indefinitely, it would be nice to see that term extended. I think this Council has provided that feedback a number of times. On the issue of housing, I believe our community would like to see Stanford produce more housing. At the same time, I'd like to remind my colleagues that we're asking Stanford to produce more housing. A few months ago, we asked Facebook in Menlo Park to produce more housing. We should also be willing to look at ourselves and see where we're willing to produce more housing. This is a regional problem. A few questions around transportation. Is Stanford at all interested in expanding some of the TDM efforts beyond the peak hour and peak direction? Mr. Girard: The answer is yes. Council Member Fine: What would that look like? TRANSCRIPT Page 21 of 126 City Council Meeting Transcript: 10/16/17 Mr. Girard: The success criteria of a TDM does have to do with the impact on the roadway at the peak hour and the peak direction. Of course, there are spillover effects. We don't have that catalog of what we would consider high- priority TDM projects, but that could be an evaluation criteria. Does the project do—what effect does the project have on peak hour and other hours? What would be the use profile of a particular project? We're not there yet. Council Member Fine: I guess I'm asking because I see Stanford's TDM and transportation demand management efforts as quite successful actually. Were Stanford to expand them across the hours of the day and in different directions, one, I think Stanford would be able to make a better case about increased development in the academic areas. It also provides a great example for other projects in our region. I would encourage Stanford to look at those efforts. Also with interactions with transportation, has the University looked at or have any opinion on the expansions of Page Mill? Mr. Girard: I know that we've done significant analysis of that expansion because that's this particular end of the county's bailiwick. We are evaluating intersection improvements and road segment improvements to 280 as a part of the impact analysis. In answer to your question, we don't have any specific plans for improvements in that area, so I don't know what Stanford's position would be about contributing to improvements in that area. Under the framework, if the cordon count doesn't increase, then they would not be making improvements. Council Member Fine: Similar to that, I would encourage the County and the University also to take some steps to work with us here in Palo Alto on our grade separation issues. As we're looking at the four grade separations across the City, they will have quite an impact on Stanford. I would encourage those to be included in some of these analyses. Otherwise, thank you very much. Mr. Girard: Thank you. Mayor Scharff: Council Member Tanaka. Council Member Tanaka: Council Member Fine actually just said what I was going to say around the grade separations. The Go Pass has been pretty successful. It's actually mitigated a lot of the issues at Stanford. It's been a pretty big success. Electrification is going to make trains run more often, which is great, make them faster. From that perspective, from the public transit perspective, it's all good. With more frequent trains running, grade separation becomes more important, more imperative actually for the City. As those gates come down, it's going to cause more traffic jams. While I think it's really important that we use and enable public transit, we also have to look at what mitigations can be done to maybe help fund some of the grade TRANSCRIPT Page 22 of 126 City Council Meeting Transcript: 10/16/17 separations that will be needed as public transit really does start to take off. I just want to support what Council Member Fine just said. It's actually a critical piece of this puzzle. Mayor Scharff: Council Member Kou. Council Member Kou: Actually, everybody has already asked and commented on everything I wanted to say. The one main thing that I was very, very concerned about was the $20 per square foot. Council Member Holman had addressed that. I do want to—I'm encouraged that you're going to be taking another look at that and making sure it is going to be with what we are at market today. The transportation and the at-grade separations that Council Member Tanaka and Fine talked about is also a very important piece in order to ensure that we do have traffic circulation and flow. That's all. Thanks. Mayor Scharff: Every Council Member but myself has now spoken, but I have two lights from Council Members Kniss and DuBois. You did put yours on right? Council Member DuBois: I actually had comments. I just asked four quick questions because I thought we were going to do questions and comments. I wanted to see … Mayor Scharff: We don't do that in a Study Session. Every Council Member speaks, and then we … Council Member DuBois: I had some really short comments. Mayor Scharff: I was going to suggest that I'm going to let both of you speak, but if you could keep it to—we're almost at 6:30—a few minutes. Vice Mayor Kniss: Mine's going to take 1 minute. Mayor Scharff: Why don't you go first? Council Member DuBois: Thank you. I appreciate it. I had just asked questions. On the transportation mitigations, I'm really concerned that a per trip fee will not capture the real impacts. I wanted to echo the concerns about grade separations and having the EIR look at the impact if no separations are done with the additional traffic anticipated. I also wanted to point out that Stanford owns a lot of the land for the railway in—not the railway itself, but the train station at the north end of town. If we were looking at optimizing grade separations, there might be some flexibility in terms of where things are located. I think most of that land is Stanford land or adjacent to Stanford land. The other thing I'd like to throw out would be the potential for routing TRANSCRIPT Page 23 of 126 City Council Meeting Transcript: 10/16/17 Marguerite buses through campus to the Research Park to offload Page Mill and El Camino. The third one would be some kind of 280 transit center for parking, again, for people trying to get to campus or trying to get to the Research Park. I brought it up as a question, but the exemption of parking for high-density housing seemed out of place. I did want to point out that we have raised our impact fees. I think we're at $35 right now, not $20. Thanks. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: A quick question. I think this probably goes along with Council Member Holman's. Is there any long-term plan for the ultimate Stanford University build-out? Got to keep your options open. Mr. Girard: I'll say that the General Use Permit's time horizon and the time horizon of the Sustainability Study that was completed in 2008 are the only indications that our jurisdiction has of Stanford's long-range plans. Vice Mayor Kniss: Your jurisdiction and the County Board of Supervisors is the only governance that Stanford actually has. Mr. Girard: On our portion of the campus, that's true. Vice Mayor Kniss: You would agree with that. Mr. Girard: The academic growth boundary, no question. Vice Mayor Kniss: The governance is provided. What we're doing tonight is making comments, suggestions, and so forth but knowing that at the end of the day—maybe the Honorable Joe Simitian would just stand up so we all know that he's here and wish him good luck. This is a long and arduous process. Thanks, Joe, for being there for us. Appreciate it. Mayor Scharff: I had a couple of questions. First of all, I'd also like to say that it'd be really helpful—I recognize that it's the academic growth boundary, that there's nothing planned for that before 2035. It would be an easy thing to do to put it in writing and say, "Nothing is planned in 2035. We won't be doing that," just so the community knows that and gets some comfort level with that. I don't think it costs Stanford anything to do that, and they should. I have a serious issue with the EIR that I'm really concerned about, that's not addressed. There's 2-million-plus square feet of new space being planned. Stanford has no fire service. They have a short-term contract with Palo Alto; that contract may end. There could be litigation between the parties. There's no long-term plan for fire service for Stanford. I don't see how we can certify an EIR without a long-term plan for fire service. This is not like providing utilities, where we're looking at the incremental. This is if there was no water. TRANSCRIPT Page 24 of 126 City Council Meeting Transcript: 10/16/17 Right now if there is no fire service, there is no fire service. Stanford has not come up with a plan other than us providing it on a very short-term basis, and the parties are quite far apart on that issue. The EIR really needs to take a hard look at that and develop alternatives for what Stanford would do in the event the parties do not come to an agreement. I would hope we would take a really strong look at the fire service issues in the EIR before we certify the EIR. That's really my concern. Other than that, I appreciate all the comments from my colleagues. Thank you very much. We appreciate the efforts you've made. Beth Minor, City Clerk: Mayor Scharff, you have two public speakers. Mayor Scharff: We do have two public speakers. You are correct. Come on up. First is Peter Drekmeier—you'll have 3 minutes—to be followed by Sea Reddy. Peter Drekmeier: Good evening, Mayor Scharff, Vice Mayor Kniss, and esteemed Council. First, I'd like to congratulate Stanford on a very solid victory over Oregon on Saturday. Quite impressive. Second, I'd like to congratulate Stanford on a lot of progress they've made since the last GUP on green buildings, water conservation, and greenhouse gas reductions. Very impressive. My concern is something that Vice Mayor Kniss touched on. There's really no limit to growth on campus. Limitless growth is not sustainable. In Palo Alto and other cities, we have zoning, we have floor area ratio. Once you've maxed out, you're done. You might tear down a building, rebuild it. You might ask the City for an exception in special cases like the Stanford Hospital on Palo Alto lands. There isn't zoning on campus, so what happens is every 15 years they come back and say, "We want another multiple million square feet of development." I thought in the last GUP it was decided that, as part of the Sustainable Development Plan, there would be a maximum build-out study. That didn't happen. I think a ball got dropped. I might be wrong on that. That's something I would love to see the City push for that. I think you all asked a lot of great questions and very good comments. Regarding protection of the open space at Stanford Foothills, Stanford's asking for a lot of development here. This is huge. You consider that we've had a 50,000-square-foot cap on commercial development, and this is 2.275 million square feet just of the academic. We should encourage what would be a transfer of development rights from the Foothills to the core campus—it's very high density; they've already received a lot of development rights—and the permanent protection of the Foothills through that way. This project can't make the people/housing imbalance worse. It's got to make it better. I really appreciate Council addressing that. A couple of other things we might look at is as mitigations maybe Stanford helps out a little bit more with flood protection, using some land in the Stanford Foothills for flood retention basins TRANSCRIPT Page 25 of 126 City Council Meeting Transcript: 10/16/17 that have been talked about for a long time and also becoming a partner with Palo Alto and perhaps other jurisdictions on a groundwater recharge and use program. Thank you for your time on this. Many thanks to Supervisor Simitian for his leadership. Mayor Scharff: Thank you. Sea Reddy. Sea Reddy: Good evening, City Council and Stanford staff that came here as well as the County and Joe. Stanford has become the national treasure, so we cannot be so selfish and say we cannot have growth. We really need to ask Stanford to expand their horizon from 16,000, 17,000 to maybe a 30,000- people campus. Would it be done on campus, right here, making our population high and traffic and all that? They need to look beyond in a very innovative way to expand. The great University of Texas Austin is 40,000 people. Even ASU has 40,000. We need to educate more leaders in this community, and Stanford has the best opportunity for success for innovation. You're asking Stanford to limit, that means the nation is going to lose innovation. We need to get a handle on security so that countries like Russia and China cannot jump and start throwing bombs at us. This is short- sightedness if we say this, that, that. I don't see any innovation here in the 8-year plan. A couple of ideas. We have Elon Musk sitting next door. We like people, but we don't like traffic. We need to look at tunnels, light rail. We do that at airports. Frankfurt airport has all that. Switzerland has things. We need to be totally innovative to move people around. In the short term, in the next 2 years, we get 2,000 people right next to where I live, Stanford Avenue. We could conceive a bridge on top of El Camino Real and Stanford. I see a number of students going from 7:30 to 8:30. It's traffic that's unmanageable, potential for accidents. We should be more creative. Thank you. Mayor Scharff: Thank you. Stephanie Munoz. Stephanie Munoz: I'm Stephanie Munoz. My father graduated from Stanford; my son graduated from Stanford; my grandson graduated from Stanford. I love Stanford; however, Stanford is the largest landowner in two counties. I don't think the cities can allow Stanford not to use its hundreds of acres for housing its own employees. What I say to you is we should house our teachers and our City employees, and that Google and Facebook should house their employees. It's good for them, and it's good for us. It's good for Stanford too. Years ago Mrs. Stanford started Stanford as a memorial to her child, and it was a family university. If you worked for Stanford, even if you were a janitor, whatever's lower than a janitor like a sweeper or anything, and if your child qualified to go to Stanford, he or she could go free of charge. At the time, people could live on the Stanford campus. When the industrial park TRANSCRIPT Page 26 of 126 City Council Meeting Transcript: 10/16/17 came along, it was too big a temptation to use those cushy and really nice, old houses for people who were associated with Stanford in that they were tenants on Stanford industrial park land. That's not the same as being part of the University, and it's not the same as housing your employees. I've been here—who was it? It was Judy Kleinberg or—when somebody said, "Why do we have the SamTrans bus going through Palo Alto?" Because the low paid people from the Stanford Hospital—there are three shifts of them—can't live in Palo Alto and aren't offered places to live on Stanford campus. They live in East Palo Alto, and that's why the 281 bus goes from Stanford through Palo Alto to East Palo Alto. You have got to insist that Stanford house its low-paid employee in some way, dormitories, packing boxes, some way, so that they do not have to travel through Palo Alto and so that they have a place to live. I don't see that's that hard. It won't hurt them to do that. It will keep them a more stable workforce, and it'll work out really very well. I would say you really have to ask Stanford and all of us, not just Stanford but us and the companies, to house those workers where we have the land. Thank you very much. Mayor Scharff: Thank you. Supervisor Simitian, would you like to say a few words? Joe Simitian, Santa Clara County Supervisor: Thank you. For the record, County Supervisor Joe Simitian, a resident of Palo Alto. I wanted, first, to thank you for your comments tonight; second, to exhort you to help with this process in a couple of ways. You may or may not have noticed that notwithstanding the very significant nature of the proposal from the applicant, Stanford University, this is not a topic that has generated a lot of conversation thus far here in Palo Alto. A County Planning Staff-sponsored meeting at Lucie Stern just last week drew all of six local residents to comment on the item. That being the case, it will be even more important than it might otherwise be for the nine members of the Council representing the 65,000 people that I also represent in Palo Alto to make sure that the concerns of the community are articulated by you, the Council Members, and reflected in the communications that the County receives from your Staff on behalf of your Council. I really do want to exhort you to weigh in early and thoroughly. I know you have a heavy agenda, but absent your comments I fear that some of these issues may not be addressed. If you believe at any point, with respect to any portion of the Environmental Impact Report, that it is in some way inadequate, I encourage you to say so. This is not the time for timidity. If you believe that the EIR needs to be more robust, if you believe we need more work, we would like to hear that now certainly rather than at the end of the process. As you heard earlier, I think, I have a meeting in your chambers here this Thursday evening, the 19th. We'll see whether that generates a larger turnout. I do want to underscore something that our Planning and TRANSCRIPT Page 27 of 126 City Council Meeting Transcript: 10/16/17 Development Director did say. Comments made at that meeting will be considered comments on the EIR and will, therefore, as a matter of law require a response. Anyone who comes to that meeting and makes a comment can be assured that their comments will, as a matter of law, be responded to in the process. While written comments are, as our Planning Director also said, always the gold standard, anyone who simply wants to walk up to the microphone and express a concern—I hope they will be there on Thursday night. We cannot respond to the comments if we don't get them. As you know, as decision-makers in the land use arena, it's always a challenge when everyone arrives at the 12th hour because your ability to address problems early on has been lost. With respect to some of the specific issues that you have raised tonight, I will just say this. Yes, it is our responsibility at the Board of Supervisors to make sure that any applicant who comes with a development proposal mitigates the impacts of their proposed development. Whether it's transportation, whether it is housing, I fully expect that will be the case and that will be the case going through the Planning Department Staff, Planning Commission, and at the full Board. I know you know this, but I just want to remind all of you as well as the members of the public who may not be mindful of this, while there are five members of the Board of Supervisors, there is only one who represents the effected community, and that is my privilege and pleasure. That being said, we have to make the case to all five members of the Board of Supervisors, because it only takes three votes, that whatever is being proposed has been fully mitigated and is, therefore, ready for approval if that is the case. I would ask all of you to be mindful of that and keep in mind the relationships you have with the four other members of my Board of Supervisors on which I serve. If you want to reach out to them at various points, that's perfectly appropriate obviously. We have to provide a fair, quasi-judicial process at the County, and I fully expect we will. That is our obligation under law and, frankly, it's our obligation as elected officials. We will stay focused on these issues. The one other point I wanted to make is that while no proposal above Junipero Serra is a part of this application and while that land is zoned, as the Planning and Development Director indicated, I should just say it's my understanding that on any given day three votes of the Board of Supervisors could change that zoning. I'm just going to look to the Planning Director for a more vigorous nod if that is correct. Mr. Girard: (inaudible) Mr. Simitian: That's right, absent a supermajority, which is why that four out of five supermajority that you heard about is so important. Absent that four out of five supermajority, which is currently in its 17th or 18th year of the 25- year commitment, once that expires on any given day three votes, again from a Board where only one member represents this community, is enough to take TRANSCRIPT Page 28 of 126 City Council Meeting Transcript: 10/16/17 us in a different direction that, I think, would be responsive to your concerns. I'll ask you to keep that in mind as well. I don't want to overstay my welcome. Thank you, Mr. Mayor. Thank you, Council Members. Again, anything you can do to make sure the concerns of the community get voiced early and clearly, anything you can do to encourage our mutual constituents to participate in the process fully and early would be appreciated. Thank you all very much. Mayor Scharff: Thank you. Special Orders of the Day 2. Resolution 9713 Entitled, “Resolution of the Council of the City of Palo Alto Expressing Appreciation to James F. Cook Upon Completion of his Term as a Utilities Advisory Commissioner.” Mayor Scharff: Now, it is my pleasure and honor to provide a Resolution expressing appreciation to James Cook upon completion of his term as Utilities Advisory Commissioner. Come on up. First of all, I'd like to say that I spent many years on the UAC as the liaison to it, working with James. He was one of the best Commissioners we've ever had. I really think it's a huge loss to the Commission that you're moving on. I really wish you weren't, but we really do appreciate your service. You really added a lot to the Commission over the years. With that, I will read the Resolution. He read the Resolution into the record. Before we ask you to say a few words, I think we should vote on the Resolution because it may not pass. I'll make the Motion that we approve the Resolution. Vice Mayor Kniss: Second. Mayor Scharff: Seconded by Vice Mayor Kniss. MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to adopt the Resolution of appreciation to James F. Cook. Mayor Scharff: It passes unanimously. MOTION PASSED: 9-0 James Cook: It's a lot better than I managed when I applied for the Utilities Advisory Commission, so I'm happy that it worked out well in the end. I want to thank you, Mayor Scharff, for your leadership, and thanks for being involved in the Commission for so many years. I really appreciated talking to you about what we were doing and getting your guidance. Vice Mayor Kniss, you might not remember. A number of years ago, I came to you and said, "How can I TRANSCRIPT Page 29 of 126 City Council Meeting Transcript: 10/16/17 get involved in the community?" You were a big inspiration for getting me involved in the Utilities Commission. I had a great time doing it. I learned a lot from the Commissioners who were on the Commission when I joined, and I tried to uphold their good standing as various members left the Board, Commissioner Melton, Commissioner Waldfogel, Commissioner Foster, Commissioner Eglash. We've always had a great group. All I did was try and bring a citizen's perspective to assist in advising your Council and help Ed and the Staff at the Utilities Department because they're a fantastic group. I'm really glad that I could contribute something to that. The City's goals, which I feel very strongly about, for sustainability. The City Manager is a great guide for that as well. I want to thank my friends on the Commission. I want to thank my friends on the Staff a lot for bringing me up to speed and training me. I'm glad I could provide at least a little bit that would help out the City. Thank you very much. Mayor Scharff: Thank you for your service. Council Member Kou, you had your light on. Council Member Kou: (inaudible) Mayor Scharff: You pressed the wrong button. I'm going to come and give you the Resolution. Agenda Changes, Additions and Deletions None City Manager Comments Mayor Scharff: Now, we're up to City Manager Comments. James Keene, City Manager: Thank you, Mr. Mayor, members of the Council. Three or four items to report. First of all, an update on the Northern California wildfires, of course. Council, as you well know, have received regular updates on the wildfires in Northern California and the two fire engines that the City assigned to both the Tubbs fire and the Mendocino Lake Complex in the Redwood Valley fire. We've also had a number of other personnel including firefighters, dispatchers, actually folks from our Animal Services Department and Police personnel and others who have been dispatched to various areas to provide aid and assistance. It would be fair to stay that proportionately as a City from Santa Clara County we have certainly done our part in supporting our neighbors undergoing such a disaster up north. CalFire is reporting today that the Tubbs fire is about 70 percent contained, and the Redwood Valley fire is about 50 percent contained. Both good news. Our Police department has helped provide patrols in neighborhoods, emergency evacuations as needed, TRANSCRIPT Page 30 of 126 City Council Meeting Transcript: 10/16/17 as well as security at evacuation centers. As you all know, weather still remains a factor, but we hear rain may be here Wednesday or Thursday. That could certainly provide some important relief. Also, our City's Office of Emergency Services continues to monitor conditions both in the North Bay and more locally including predicted changes in weather patterns, air quality, and other events or situations that affect public safety, staffing, or readiness in public (inaudible). Again just in case for folks who are wondering, the City is reimbursed by the State of California for the direct costs of personnel actually at time and a half for every day the crews are at the fire plus the cost of fire engines and plus administrative and overhead fee in similar situations for other staffing. I know the Council is especially interested in the dangerous and lifesaving work that our firefighters and other public safety folks provide, particularly in what are now almost regular annual fire season. We will plan to recognize all of our dedicated Staff who have been working long hours once everybody has returned to Palo Alto. Members of our own community who wish to assist the North Bay are encouraged to donate money rather than goods. You can go to www.californiavolunteers.org as one recommended site. We also encourage all our Palo Alto residents and other community members to become involved in our own emergency services volunteer program or ESV. We have a class coming up on October 28. To register, you can go to the cityofpaloalto.org/emergencyvolunteers website. The Middlefield Road resurfacing project. Paving work started today on Middlefield Road and will be done in two phases. The first phase is from Forest Avenue to Kingsley Avenue. The contractor began milling the old pavement today and will continue pavement surface preparation through the week to get ready for rubberized asphalt paving on Saturday, October 21st. The following week the second phase will start from Kingsley Avenue to Lowell Avenue with milling and concrete base preparations throughout the week, and paving on Saturday, October 28th. Following the paving, the contractor will complete the landscaping for the new bio-retention areas at Kellogg Avenue, install roadway striping, and adjust utility valves and manholes. The final traffic signal improvements at the Middlefield/Embarcadero Road intersection will be done in November during the school holiday period. This paving work completes the final year of rubberized asphalt paving on Middlefield Road from the north City limit to Colorado Avenue. Council approved an additional $2.3 million over 3 years for the design and accelerated paving of Middlefield Road and Alma Street. The final section of Alma will be completed the summer of 2018. Lastly, yesterday more than 800 people came from actually all over the Bay Area to attend our first Harvest Field, hosted by the City's Recreation Division at the Lucie Stern Community Center. There were lots of happy kids who left the event with their face painted, looking like Spiderman, a unicorn, or a pumpkin. The refreshing beer garden offered by Dan Gordon was also a hit for adults while watching Sunday football on the big screen. Other activities included the ubiquitous jumpy houses and football and archery inflatables, a TRANSCRIPT Page 31 of 126 City Council Meeting Transcript: 10/16/17 fun-filled carnival game, and a petting zoo with alpacas, pigs, and bunnies, and storytelling by Palo Alto Ranger Kathleen. That's all I have to report. Mayor Scharff: Now, we come to Oral Communications. Did you put your light on? Council Member Holman: I did, and thank you. Just very briefly, some years ago when Oaxaca, our Sister City, was hit by an earthquake, the City Council— Mayor Scharff was a part of that—committed $25,000 to send to Oaxaca, our Sister City, who had suffered devastation. I hope that the City of Palo Alto will do something commensurate with that for our neighbors up north. Ask that maybe the Mayor, Vice Mayor, and perhaps Council Member Kou, who's our emergency prep person, might come up with something to bring back to the Council. Just a suggestion. Mayor Scharff: I think that's a good suggestion. Council Member Holman: Thank you. It's more complicated than just sending it to one city. Maybe you all can talk about it. Oral Communications Mayor Scharff: Now, we have Oral Communications. I understand we have 19 speakers. This is for items not on the—21—agenda. I wanted to make sure that no one's putting their card in for Oral Communications if you're going to speak on something that's on the agenda. With that, you'll have 2 minutes. Our first speaker is Sea Reddy, to be followed by Ken Horowitz. Sea Reddy: Mr. Mayor and City Council and citizens of Palo Alto, thanks for the opportunity. Quickly, the local issue. The 2800 El Camino Real pothole right in front of Jack in the Box is still a big pothole. It hasn't been addressed. I have sent requests to the County. I put the thing in the Palo Alto website. Thank you for looking into it, someone looking into it so that the hard-working works that come to Palo Alto and getting out of the Jack in the Box do not have their tires slashed or take $400 or $500 to fix their suspension system. The second things is knowing what happened in Santa Clara, it's not the time to reduce the firefighters from our payroll. Seem like we have (inaudible) 11 people reductions. Those assets, the resources, people, their commitment is highly critical for us to sustain and think about it twice before we remove them from the payroll. They're good people. It's good four our State and community. Thank you. Mayor Scharff: Thank you. Ken Horowitz to be followed by Rita Vrhel. TRANSCRIPT Page 32 of 126 City Council Meeting Transcript: 10/16/17 Ken Horowitz: Hi. Ken Horowitz, I live on Homer. Just an item that was on your agenda maybe a month ago, that was the contract to hire a consultant for studying Cubberley. I just think it's a waste of money, personally, $200,000 from you, $200,000 from the School Board. I teach at Foothill College. This has been going on, Cubberley, at least a decade now. Nothing gets resolved. They've had committees. You have a School/Council liaison. I should mention there's a meeting on Thursday. Council Member Kniss and Filseth, you're on that Committee. There's nothing on the agenda about Cubberley. My suggestion is have a plan by 2019 when the lease is up and perhaps walk away from that lease. At least have a plan for what you're going to do with Cubberley and what you're going to with the community facilities that Cubberley now serves. I don't think the School Board—I've gone to a number of their meetings. They're never going to give up Cubberley. They'll think it's a school for ad nauseum. You just let them have it, let them deal with it. Make plans by 2019 to walk away and have a plan on your own. Thank you for your time. Mayor Scharff: Thank you. Rita Vrhel to be followed by Clem Molony. Rita Vrhel: Thank you. I was at the Castilleja meeting last week, the community meeting. One of the things that was asked from the surrounding homeowners was "what is your definite plan for your long-term expansion." The homeowners in the area wanted to know what they were actually looking at. I think I heard that from people today talking about the Stanford plan. What is it you're going to accomplish over time? If you would tell us, then we can plan, and we can actually formulate our discussion around campus or Stanford expansion. The other thing I wanted to mention was when the firefighters go up north or anywhere else outside of the City, who pays their workers' compensation if they are in fact hurt or—God forbid—killed during the fire? Is that picked up by the State of California or does that continue to be shouldered by the City of Palo Alto? That is a tremendous liability. I'm not saying they shouldn't go; I'm just curious because I work with workers' comp. Thank you. Mayor Scharff: Thank you. Clem Molony to be followed by Bob Hoover. Clem Molony: Good evening. My name is Clem Molony, and I'm on the board of a youth development program, which has been supported by the Palo Alto golf course management team for almost 2 decades. I'm here tonight to thank this Council and the Parks and Rec Commission and the Community Development Staff for moving forward with two excellent investments by Palo Alto in City parks and recreation, first the Parks and Rec Master Plan and second the modernization of the golf course. Your 2012 decision to invest in upgrading the golf course was widely praised in the community not only by TRANSCRIPT Page 33 of 126 City Council Meeting Transcript: 10/16/17 golfers but also the Chamber of Commerce, business leaders, etc., and for the very smart design creating 10 acres to add to the Baylands Athletic Center. Tonight, I am here to introduce Bob Hoover, who 25 years ago founded this golf-based youth development program affiliated with the muni course. Now, sadly Bob isn't here tonight, so I brought along a fact sheet to share with everyone, if I could have that distributed later. Thank you very much. The program—by the way, he's a youngster, 83 years old, African-American fellow and has been a community leader in East Palo Alto for about 45 years after an education career. This golf program uses learning the game to teach minority youth responsible life values and the rewards of good academic performance. We hope that this Council and Staff will encourage the new management team of the golf course to include in their goals support for youth development, support for community programs, and especially support for programs that include development of young men and women. I personally live in Menlo Park, but I've been assured by our Mayor that the Mayors of East Palo Alto, Palo Alto, and Menlo Park get together and support programs that have a wide-ranging effect on the community. This is a great recreation program. It's free to you folks, yet it's part of your City recreation system. Thank you very much for your time. Mayor Scharff: Thank you. Bob Hoover to be followed by Cherrill Spencer. Bob Hoover to be followed by Cherrill Spencer. Cherrill Spencer to be followed by Stephanie Munoz. Cherrill M. Spencer: Good evening, Mr. Mayor, ladies and gentlemen of the Council, and members of the public. I'm Cherrill Spencer, a resident of Palo Alto for the past 43 years. I'm the coordinator of the Disarm and Peace Committee of the Palo Alto branch of the Women's International League for Peace and Freedom. Our branch has been working on peace and justice issues for the past 95 years. I wrote to you, the Council, on the 30th of May. I addressed you in person on the 5th of June on the topic of Palo Alto no longer belonging to Mayors for Peace. Since then, I have met with the Mayor, and he told me he stopped our City's membership in Mayors for Peace in 2013 without consulting the Council. I'm here to bring your attention to several other things pertinent to Mayors for Peace that have happened since mid-June and to ask you, the City Council, to consider overriding the Mayor's unilateral decision to stop Palo Alto's membership in Mayors for Peace. The mission of Mayors for Peace is to raise public awareness around the world regarding the need to abolish nuclear weapons, not unilaterally but as 122 nations who signed the United Nations' treaty on the prohibition of nuclear weapons on July 7th. The intention is that every one of nine countries owning these awful weapons of mass destruction dismantles them and the world ends up with none. Last month, Mayor Scharff visited three Sister Cities in Europe. I have established that Heidelberg, Germany, which he visited to sign a new TRANSCRIPT Page 34 of 126 City Council Meeting Transcript: 10/16/17 sistership, and Enschede in the Netherlands, an existing Sister City that the Mayor visited, are members of Mayors for Peace. Furthermore, the Mexican city of Oaxaca, which has been our Sister City for 54 years and which the Mayor intends to visit later this month, is also a member of Mayors for Peace. In all, four of seven Sister Cities are members of Mayors for Peace. I think this is very embarrassing. I would like to suggest that the Council consider rejoining Mayors for Peace. It is not a Mayor's membership; it is a city's membership. I've given you all a copy of my speech. There's a bunch of people here who will raise their hands, who are with me to agree with me. Thank you. Mayor Scharff: Thank you. Stephanie Munoz to be followed by Darlene Yaplee. Stephanie Munoz: Good evening, Mayor Scharff and City Council. Five little bunnies jumping on a bed. One fell off and broke his head. Sent for the doctor. The doctor said, "No more bunnies jumping on a bed." Five little bunnies lying in the bed, and the little one said, "Move over." The bunny on the outside fell out. Four little bunnies lying in a bed. The little one said, "Move over." The bunny on the outside fell out. I'll spare you the third and the second and the first little bunny. We have here in Palo Alto a whole number of little bunnies who have been pushed out of the bed by the affordable housing crisis. I'm not going to talk to you about the affordable housing crisis now, only about the unfortunate victims. If you went to high school and college and somebody told you to take a public policy course, the public policy course would surely tell you that, if you have a city, you have to have revenue. If the revenue comes from business, the business has to have workers. If the business has workers, the workers have to live someplace. This is just a matter of business organization, of order, of sensible planning. However, when it gets to the point where people have—regular people, people that intend to have jobs, they still have their jobs. They haven't been fired from their jobs, but they don't have a place to live. That's below the line. That's out of the bed. It's our responsibility to pick them up and to find a way that they're sheltered from the cold and from assault. Thank you. Mayor Scharff: Thank you. Darlene Yaplee to be followed by Roberta Alquist. Darlene Yaplee: Greetings, Council and Staff. My comments are to follow up on the action items report for the June 19th Council meeting and also based on the May 23rd P&S meeting. Action Item Number 1, I want to thank you for sending the letter from Mayor Scharff to the U.S. Department of Transportation on the Palo Alto position for airplane noise relief prior to the FAA report. Good job. Action Item Number 2, align resources to be prepared to respond to the FAA response report to the Select committee. Not so good. TRANSCRIPT Page 35 of 126 City Council Meeting Transcript: 10/16/17 In July, the FAA issued their report. August, Staff was reviewing the report. I believe no update has been given to the Council as of last week. October 10th, myself and several citizens have sent an email to Staff on the status of Palo Alto's response. A recognized industry expert provided concurrence that Palo Alto should respond directly to the FAA. Some Council Members and Staff were also informed at that meeting. Thank you for having that meeting, but hopefully we can act on that. We cannot wait until the recommendation and eventual implementation for the permanent regional committee to respond. Palo Alto needs to respond now. My question is does Council need to provide direction to Staff to proceed or what actually is needed to proceed. Action Item Number 3, has Staff been able to obtain expert opinion on aircraft noise monitoring strategy? The San Francisco Aircraft Noise Abatement Manager, Ben Ganong, was here at the Council meeting to support Palo Alto information. We should follow up. It's requested that we get raw information beyond D&L information. Again, what is needed to move this forward as it was reported in the action items. Kudos on your continued work towards the Cities Association. I would like to have you follow up on the execution of your wonderful action item report. Thank you. Mayor Scharff: Thank you. Roberta Alquist to be followed by Karen Porter. Roberta Alquist: I'm Roberta Alquist. I've lived in Palo Alto for about 45 years. I want to urge the Council to immediately have a moratorium on residential zoning in the Downtown area particularly of Palo Alto. In light of the fact that, since I have lived here, City government has segregated our community on the basis of class, SES, and race, ethnicity. We are a pretty white, upper-middle-class community unfortunately. Zoning has been the major way in which this has occurred. It continues to eradicate a large number of workers of color who would like to live here as well as work here. I noticed that the sign is only in English and—I think that's Mandarin. We have workers and we have people who live here who need to be able to have low-income housing. A moratorium until there's a better balance between jobs and housing is what we advocate. I'm a part of Women's International League for Peace and Freedom. That is one of our major priorities for the City to consider. I hope you will take this request seriously. Thank you. Mayor Scharff: Thank you. Karen Porter to be followed by Jeff Levinsky. Karen Porter: Good evening, Mr. Mayor and Council. I'm also here to speak about the jet noise problem and specifically about one of the recommendations made by a City consultant at a meeting in September organized by the City Attorney. In addition to replying to the FAA directly regarding its Phase II report, as Ms. Yaplee mentioned, the City should have its legislative consultants work with our elected representatives to insert helpful language TRANSCRIPT Page 36 of 126 City Council Meeting Transcript: 10/16/17 into pending bills in Congress. As you may know, the FAA's reauthorization was just extended to March 2018, but Congress is in the process of working on a longer-term solution. Other legislation is also pending, for example, the Airplane Impacts Mitigation Act. Palo Alto thus has a timely opportunity to weigh in on legislation language that would help NEXTGEN-impacted cities like our own. For example, cities should have more than just 60 days within which to challenge an FAA action in federal court. This effort would also provide an ideal opportunity for Palo Alto to build coalitions with other affected communities locally and nationwide towards the common goal of fixing NEXTGEN. I, therefore, respectfully ask the Council to direct Staff to work with our legislative consultants and federal representatives as soon as possible so we don't miss the boat on this opportunity. Thanks so much. Mayor Scharff: Thank you. Jeff Levinsky to be followed by Rebecca Sanders. Jeff Levinsky: Good evening, Mayor Scharff, Council Members, and Staff. A number of us from across the City are here tonight to talk about the importance of Code enforcement. I'm Jeff Levinsky, and I'm representing the Duveneck/St. Francis neighborhood, where we've been having trouble with the Edgewood Plaza Shopping Center for some time. There's a little part at the center and, though it's just a few years old, the benches and tables there have deteriorated badly. It's not a City park. Rather the shopping center owner is responsible for maintaining the park as part of the center's Planned Community agreement. The City is supposed to verify that these agreements provide what they promise, but in our town it falls to residents to report problems. We reported the bad condition of the benches and tables. The owner then partially fixed the benches, as you can see, and not the tables, so we had to complain again. Finally, that's been resolved. Another problem is the bike lane there. We pointed out for over 2 years to the City that cars, trucks, and even City vehicles were parking in the bike lane along St. Francis, which isn't legal. The bike lane is quite narrow. When someone parks there, bikes have to go into traffic, and drivers have to go into the opposing lane. It's extremely unsafe. After 2 years of complaining, Council Member Kou stepped in to help, and the City finally agreed to put up some more no parking signs and, as of today, they're painting the curb red. We hope that helps. The worst problem remains the delivery trucks that wake up residents early in the morning and late at night. Many of the trucks illegally park on the street, but even those that pull into the center are noisy enough to be heard half a block away and shine headlights into neighboring homes. We filed complaints with Code enforcement, but the problem still happens. We very much support better Code enforcement. Thank you. Mayor Scharff: Thank you. Rebecca Sanders to be followed by Paul Machado. TRANSCRIPT Page 37 of 126 City Council Meeting Transcript: 10/16/17 Rebecca Sanders: Good evening. My name is Becky Sanders. There's the beautiful front door to CCRS. We'll have a look at that in a second. I live in the Ventura neighborhood. Did you know that El Camino Real south of Page Mill is our Downtown, our walkable retail neighborhood? Our residents want to protect our neighborhood-serving businesses along El Camino. We need effective Code enforcement to protect the Retail Ordinance and uphold the Zoning Codes. Two examples in Ventura, and there are many. The ones I chose tonight are CC Restaurant Supply, CCRS. There's the beautiful front door located where a good retail tile store used to be. Under the guise of selling new and used kitchenware, CCRS' main function remains as an illegal warehouse for Coupa Café. The warehouse regularly re-supplies Coupa’s trucks and receives deliveries from Costco. There's the warehouse. Though Code enforcement complaints have been filed, CCRS remains as a front for Coupa. Retail services to Ventura are lost at this retail-protected CN zone site. We need effective Code enforcement. Next door to CCRS was a good physical therapy place. I used to go there. This building was purchased by an international corporate called (inaudible) Spring for workspace rentals and as an incubator for tech startups. There will be no services to serve our neighborhood there. Maybe it's cool to have offices there, but did you know the amount of office space planned there exceeds what's allowed in that site under our Codes? Residents in Ventura and all of Palo Alto depend on effective Code enforcement to maintain a healthy balance between serving the needs of families, people that live here, and supporting economic growth. Nobody should have to bear the brunt of success. Thank you. Mayor Scharff: Thank you. Paul Machado to be followed by Mary Sylvester. Paul Machado: Good evening, Mayor and Council. I am Paul Machado from the neighborhood of Evergreen Park. Hopefully you recall my neighborhood's long journey to securing an RPP. It took extensive community involvement. In light of this, it was most disconcerting when several residents noticed the garages at 1895, 1885, and 1865 El Camino Real appeared to be converted to offices, resulting in office workers parking in the neighborhood streets. This three-building development consists of three almost identical structures that have a small apartment, small office on the top floor, and an office and garage on the ground floor. This illegal conversion was reported to Code enforcement. Thankfully Code enforcement quickly responded and found all three buildings had indeed converted their garages to offices in violation of a City Code. The situation was corrected, requiring the garages be used for parking, and the situation will be monitored a while for ongoing compliance. This is an example of why an effective and responsible Code enforcement department is vital for continued trust in our City government and also for protection of our neighborhoods. Code enforcement deserves your enthusiastic support. Thank you. TRANSCRIPT Page 38 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Thank you. Mary Sylvester to be followed by Louis Furutsuki. Mary Sylvester: Good evening, Mayor Scharff and Council Members. I'm Mary Sylvester, a 40-year resident of Old Palo Alto, as you well know, an R-1 residential neighborhood. I'm here tonight to speak about Code enforcement in the community and most specifically conditional use permits. My two points will concentrate on the review process and approval as well as enforcement. An essential and reasonable expectation of residents, renters and homeowners, is that non-compatible uses in their neighborhood who operate under conditional use permits will have those vigorously enforced by the City. In my neighborhood, however, there are several entities that operate under conditional use permits within the letter and the spirit of the law. However, not all do. One in particular has been out of compliance with the terms of their CUP for 16 years. I've come to learn rather naively that citizens have to exercise vigilance in monitoring the City's CUPs. Several City departments are involved in zoning enforcement. We're talking about Planning; we're talking about Fire; and we're talking about Police. My key points, then, are to have a more robust review and enforcement process. We need greater consistency in the conditions that go into CUPs, and we need specific conditions. We have one case where one CUP holder is allowed to have zero events in the course of a school year, and we have another that's allowed to have 120 events in 1 year. What goes? Finally, enforcement, a centralized zoning service with a chief enforcement officer. That person and their team will be supported both by penalties from the CUPs as well as posting bonds. Thank you. Mayor Scharff: Thank you, Mary. Louis Furutsuki to be followed by Terry Holzmer. Louise Furutsuki: Good evening, Council. I'm a resident of Midtown presenting a case of persistent Code violation in our commercial neighborhood involving Asian Box Holdings, LLC, which owns Asian Box Restaurants throughout California, a catering service and the Gracie Jones' Gluten Free Bake Shop at 2706 Middlefield. Asian Box officers over the last year have communicated conflicting status to residents including myself from bakery to change in plans, headquarters, and catering use to a tray-size bakery recently. Last Wednesday, several residents including myself went into the shop. What we saw behind the partition at the entrance were desks, computers, office equipment, paperwork on the left. There is a big table that could be used as a conference table in the middle. On the right is a desk and a computer with a label for community use. The desks and computers on the left are not labeled, so they are for Asian Box use, namely their headquarters office. In the middle at the back, on the kitchen counter is the bake shop. There is a plastic case with about 1-2 dozens of baked goods as well as some cake TRANSCRIPT Page 39 of 126 City Council Meeting Transcript: 10/16/17 holders of cookies. Residents like myself remain concerned as this tiny, makeshift bake shop coexisting with desks, computers, paperwork with employees conducting Asian Box corporate business during the bake shop hours as you can see in the back. We need effective Code enforcement of permitted uses in CN-zoned Midtown shopping district. Thank you. Mayor Scharff: Thank you. Terry Holzmer followed by Winter Dellenbach. Terry Holzmer: Good evening, Council Members. Tonight, I come to you as a resident of the California Avenue and Mayfield area. I come to speak about Code enforcement and the great need for improvement in this vital City service and for increased funding for it as well. As you may recall, last June I spoke in front of you about a Code enforcement issue that directly affected me. There was a large diesel generator across the street that was making noise 24 hours a day, 7 days a week. It kept going and going and going. For more than 2 weeks, I tried the normal channels of communication, not only with the contractor onsite but the proper City officials including the 311 notification system. Nothing worked. My next step was to contact the Police Department, who repeatedly came out to the site, told me that the generator was violating the Noise Ordinance; however, their hands were tied. They could nothing to turn off the noisy generator even though it was disturbing the peace of all of us who were sleeping. It was only after I contacted several Council Members that significant action took place, and the noise was finally reduced. It hasn't gone away, by the way, all the way, but it's been reduced. That shouldn't have happened. This is not the good way that Code enforcement should work. It was a failure of what had happened. In addition, as a member of the group that is concerned with the Castilleja School expansion, I would be remiss if I didn't add the failure of the City to enforce its own rules on the school itself. For years, the school has violated its allowable limits on enrollment, and nothing has been done. That's inexcusable. I truly believe the City should review the priority that it places on Code enforcement and make it one of the key elements in City services. Thank you. Mayor Scharff: Thank you. Winter Dellenbach to be followed by Walter Bliss. Winter Dellenbach: I'm the last person tonight to speak about Code enforcement. I live in the Barron Park neighborhood where this 300-year-old protected valley oak has lived before our country was born. It is 15 feet in circumference. I want to thank Code enforcement and Staff and my determined Barron Park neighbors for going the extra mile to save this inconveniently located tree from removal by the house flippers who wanted it gone. Though we only talked about a small sample of the many issues for which Code enforcement responsible, we made these short presentations to TRANSCRIPT Page 40 of 126 City Council Meeting Transcript: 10/16/17 focus your attention—your attention—on the need for why residents, neighborhoods, and the City all need effective Code enforcement. We congratulate Staff when their difficult job is well done, but rightly insist on improvement and reform when we see it fall short. There are systemic problems with Code enforcement that are too complex to cover here tonight. The audit should help with that and reveal if more Staff, resources, or other changes are needed. We're sympathetic to that. We know that fixes are needed to the 311 intake system and with communication to the public. I hope we all agree that it makes no sense for you all to sit up there, making laws that may not get enforced, whether pertaining to ADUs, retail protection, or any other Codes or ordinances. We all want our City to work well, always toward perfection. Thank you for your time. Vice Mayor Kniss: Thank you. Our next speaker is Walter Bliss, followed by Kalpesh Kapadea. Maybe the next speaker after that—you see your names up on the board. Why don't you get close to the mic, if you would. Walter Bliss: Hi. My name is Walter Bliss; I was a principal planner here in the City for 6 years, from 1970 to 1976. For those of you youngsters, I'd like to refresh or enlighten you by passing out these documents, which I had a major part in. The open space element of the General Plan, University Avenue re-beautification, the architectural design review board, all of which I had a major part in along with the Council and the Planning Commission. In any case, I'm here to talk about housing because I did a project, when I first came, about the possibility of putting housing on the IT site in the Baylands. I don't know if that's been dedicated as open space now, but that would be one possibility where there could be housing put. Another would be in parking lots, major parking lots, like Stanford and other large areas. Another place would be along El Camino. In every case, what has to be done is that you— in order to help solve this housing problem is to make this a mixed-use development, which is to say half or slightly more than half market, but 40- 45 percent, somewhere in that range, of below market. In other words, this would help house the workers among us. This is done all the time in Europe. If you've been to any European city, you know that there are houses along just about—above just about any commercial street where there are shops below. It makes for a very pleasant environment for urban cities. I'll be talking about this in the near future. I'd like to leave these three books (inaudible). Vice Mayor Kniss: Thank you very much. Our next speaker is Kalpesh. Sorry about pronunciation. Then, it'll be Mark Mollineaux. Good evening. Kalpesh Kapadea: Good evening, Mayor Scharff and Council Members. I'm a Palo Alto resident for over a decade. Over the past few months, I have seen TRANSCRIPT Page 41 of 126 City Council Meeting Transcript: 10/16/17 more stop Castilleja signs than the stop signs in City of Palo Alto. I should mention that I don't have any formal connection to Castilleja. I'm just here as a concerned citizen. I would like to thank you for giving me a chance to speak on behalf of a silent majority of the residents who support the expansion. For some of us here today, there are concerns that the expansion of the school may be a potential inconvenience for the community. My family and I may disagree, but we must also remember that both opinions are held with the hope of a better future for our community. For all of us here today, though I stress that Castilleja strives to provide the better future, for over 100 years it has provided great opportunity and exceptional education for the bright and promising young minds of our community's daughters. Castilleja continues to be a strong example of positive learning, and the school forms a better diverse set of institution that fuel Palo Alto's continued growth as an educational hub. It is around this strong history of excellence and around schools like Castilleja and others that our residential community is built and businesses are thriving. There has been an awakening in our society as more and more of us unite around providing women with educational opportunities that they rightly deserve and more important as we unite around putting women on equal footing with men. I believe Castilleja should be held up as a shining example of this progress, and we must hold the merit and potential of providing our youth with best educational opportunity we can. We must hold this above any temporary inconvenience to some few. Vice Mayor Kniss: Thank you very much. Mr. Kapadea: Thank you very much for your time. Thanks. Mayor Scharff: Mark Mollineaux to be followed by Andrew Boone. Mark Mollineaux: Hi there. My name is Mark Mollineaux. I graduated from Stanford a few years ago. If one is to cut a cake between two people, there's a fair way you can do this. One person cuts the cake in half; the other person decides which half they want. This is going to be fair for both people. They at least agree they won't want to trade. Let's say a different situation. Let's say one person is able to cut the cake, and they get to choose what they take. They're going to take it all. They're going to take the entire cake because they can. There's a name for this; this is local control. Late this summer, a letter was written by Mayor Scharff to Kevin de Leon of the State Senate to urge them to reject SB 35, which would streamline housing approvals if a city does not keep up with the shared housing needs obligations. Mayor Scharff objected to SB 35, saying it's contrary to the principals of local democracy and public engagement. Mayor Scharff said that SB 35 will violate the rights of Palo Alto citizens. A very useful concept has been formulated by Cass Sunstein. It's called the naked preference. He defines it as when you TRANSCRIPT Page 42 of 126 City Council Meeting Transcript: 10/16/17 distribute resources or opportunities to one group rather than to another solely on the grounds of raw political power instead of any sort of fairness or rights. This is what is happening here. It's a naked preference. Palo Alto and its residents have the land; they have the ability of the land forever due to the protections of Prop 13. Prop 13 benefits Palo Alto per resident more than any other city in California. When people have these privileges, they always want more. Palo Alto residents want more and more. Mostly they want to keep other people out. They want all the land to themselves and not to share. This is, of course, why local control exists. Zoning was created to segregate. Zoning was created to segregate racially and economically. It still has that purpose today. There is no actual right here. It is simply a raw political preference given to the privileged. Would the residents of Palo Alto trade with those who are landless? Of course they wouldn't. They would rather keep their privilege. My only objection to you is to please avoid the language of rights and fairness when you reject things like SB 35. If you just want to say, "We have and we want more," that's your prerogative. It's not a matter of fairness. Thank you for your time. Mayor Scharff: Thank you. Andrew Boone to be followed by Chuck Jagoda. Andrew Boone: Good evening, Council Members. My name is Andrew Bone; I live in East Palo Alto on Woodland Avenue. I would like to thank you for approving the visionary bicycle boulevard plan to extend the concepts that are very successful on Bryant Street to really all of Palo Alto and create a base network that anybody can use, that's safe to walk and bike. This really doesn't go far enough. There are a lot of streets that remain in the City very challenging to use a bicycle on. First of all and most importantly is El Camino Real. I'm tired of El Camino Real being a compromise between that's the fastest way to go, that's convenient, that's directly what would work the best for me, it's right in the middle of the City and my personal safety. I should be able to use all the streets without thinking about which is safe and which isn't safe. I don't think you have to think about that when you're driving around. It's very important when you're bicycling or walking, that you're careful about car traffic. All the streets should be calm, all the streets should be complete. Actually, Palo Alto is behind neighboring cities in planning for a better El Camino Real. Menlo Park, Atherton, Redwood City, and Sunnyvale have all recently or are in the process of considering alternative configurations for El Camino Real, like protected bike lanes instead of parallel car parking. That's a big upgrade for all sections of El Camino Real. We're pushing hard for it to become reality in Redwood City now and Sunnyvale, which are considering the concept. Palo Alto should put this on the table. Should we have a better El Camino Real? An El Camino Real that backs up the General Plan, that does what we say we want the community to be, safe and accessible TRANSCRIPT Page 43 of 126 City Council Meeting Transcript: 10/16/17 for everyone. Please study El Camino and how we can make it better and safe for everyone. Thank you. Mayor Scharff: Thank you. Chuck Jagoda to be followed by Aram James. Chuck Jagoda: Thank you, Mayor Scharff and the City Council. There's a great divide in the country at large and in this City between wealthy people and not-so-wealthy people. I'm formerly homeless here in Palo Alto. I now reside in Sunnyvale. I'm a beneficiary of public housing. I'm very happy. For the 6 years I lived in my car behind Happy Doughnuts, I like to think of it as doing beta research on the issue of homelessness. I did a lot of thinking about housing and have spoken to City Councils and written letters to the editor. I've come to some conclusions. Mayor Scharff was recently quoted in the Mountain View voice being against taking Federal funds to designate a section along a corridor like El Camino for low-cost housing. Other cities took this money and are using it appropriate. I'll send you the reference if you wish. Mayor Scharff: Just for the record, I've got to say I didn't make any such comment. I'm not sure what you're talking about. Mr. Jagoda: I'll send you the reference. In case I've got it right, what was stated, what was quoted is a bad idea. Part of the statement was "we like it the way it is in Palo Alto; we don't want to lose control; we want to keep it the way it is." I would say it hasn't worked the way it is. There's not enough housing. It's so bad it's even bothering the wealthy people who have profited from the housing prices and the rental prices. Cubberley was a bad example. Really? We have to fix that timer. Thank you. Mayor Scharff: Thank you. Aram James. Aram James: In 2007, on a 5-4 vote by the City Council, the then City Council brought Tasers to the City of Palo Alto. It's time to shelve them. There's a lot of new information regarding the danger of Tasers. I've just provided you with a piece that Richard Condon and I wrote called "Stop Tasers from Being Introduced to our Jails." It's a separate issue from Palo Alto. I've also given you an 18-page report dated September 18, 2007, by the San Francisco Bar Association's Criminal Justice Task Force on Tasers, that really sets out the newest data on Tasers, their expense, their cost, their danger. We're now up to over 1,000 folks dying after being tased. Reuters has just come out with an extraordinarily in-depth five-part investigative series on the danger of Tasers. I don't have enough time to go over all of that tonight. Ms. Stump, I'm going to be making a public records request orally today. I'd like to know what the annual cost of Tasers are for replacements and training in the City of Palo Alto every year and how many times we've deployed Tasers over the last 36 months. I'll also put that in writing. We're going to have quite a few TRANSCRIPT Page 44 of 126 City Council Meeting Transcript: 10/16/17 times where I'm going to be coming here to talk about Tasers. At the County level, our organization, the Coalition for Justice and Accountability and Debug, met with Joe Simitian, Cindy Chavez, Jeff Rosen, the District Attorney, Molly Stump and about four other groups, trying to prevent the Sheriff who wants to now put Tasers into the County jail at great expense to everybody. Not only do I want to stop or have us shelve the Tasers in Palo Alto, it's time to move on to something more humane like talking with people and having crisis intervention rather than torturing them with a Taser. We'll be talking more about that. I hope you'll read the materials that I've provided you. I'll have more materials. Thank you very much. Mayor Scharff: Thank you. Minutes Approval 3. Approval of Action Minutes for the September 18 and October 2, 2017 Council Meetings. Mayor Scharff: Now, we're coming to—where are we on this? I need a Motion to approve the Minutes. Council Member DuBois: I'll move … Mayor Scharff: Second? Woman: Second. MOTION: Council Member Wolbach moved, seconded by Vice Mayor Kniss to approve the Action Minutes for the September 18 and October 2, 2017 Council Meetings. Mayor Scharff: If we could vote on the board. That passes with—did you mean to vote yes or abstain? Council Member Kou: I was absent. Mayor Scharff: That passes on an 8-1 vote with Council Member Kou abstaining. MOTION PASSED: 8-0 Kou abstain Consent Calendar Mayor Scharff: Now, we get to the Consent Calendar. I need a Motion on the Consent Calendar. Wait. Council Member Holman, do you have your light on? TRANSCRIPT Page 45 of 126 City Council Meeting Transcript: 10/16/17 Council Member Holman: Yes. I'd like to pull Number 7, and I believe City Manager has clarifying comments about Number 9. Mayor Scharff: Is there any support for pulling Number 7? You want to pull Number 7? Anyone else. Council Member Kou wants to pull Number 7. MOTION: Council Member Holman moved, seconded by Council Member Tanaka, third by Council Member Kou to pull Agenda Item Number 7 - Approve and Authorize the City Manager to Execute a Five-year General Services Agreement With Valley Oil Company … to be heard as Agenda Item Number 14. Mayor Scharff: That item will be pulled to a … James Keene, City Manager: Maybe we need to talk about when we do it. It was effective today. I just don't know if it's a—it's a gas purchase contract. I just need to make sure that there's not a logistical problem for us on timing. I'll let you know. Mayor Scharff: Would you like to hear it right now then? We could do it quickly, I suppose. Mr. Keene: Okay. Why don't we wait towards the end of the evening? I could see if they could take it up. Mayor Scharff: Yeah. Mr. Keene: As it relates to Item Number 9, just real quickly. This has to do with an amendment to an existing contract that we have regarding the valet services at our garage. The questions that the Council were asking really had to do with some confusion about the reference to amending the contract pertaining to a previous Amendment Number 2 that made it look like we were somehow limiting the garages that would be covered. In fact, all that this new amendment item does is extend the expiration date for the existing contract. What really was missing here in the chronology was the fact that this—we did not include specific information on the contract side related to the first amendment that had originally expanded the number of garages and the dollar amount. I'm completely satisfied that the action that the Council would take by tonight does three things. One, it will extend the expiration date to March 2, 2018. Two, it does not increase at all the existing contract amount, which is $937,652. It potentially covers Lot R, Lot CC, Lot S, and Lot CW, but our expectations right now is it will only be dealing with Lot R. One of these is also the Bryant Street garage. I would with that clarification ask that the Council include that in your approval of the Consent Calendar. TRANSCRIPT Page 46 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Excluding Item Number 7, if I could have a Motion to approve the Consent Calendar. Vice Mayor Kniss: So moved. Mayor Scharff: Second by Council Member Wolbach. Beth Minor, City Clerk: Mayor, we have a public speaker. Mayor Scharff: That's right. We do have a public speaker on Item Number 6. Bill Ross. You'll have 2 minutes. Bill Ross, speaking regarding Agenda Item Number 6: I'm going to request 3 because it deals with the matter concerning CEQA. Mayor, Council Members, members of the public, I respectfully request that you pull Item Number 6 and hold it in conjunction with Action Item 11, Fire Staffing. The basis for this is as following. It's related to issues originating with and continuing with the Napa-Sonoma Fire Complex. Through no fault of the way that the Staff Report was developed, the lack of an analysis either by the stakeholder committee or the City Staff committee of a significant issue both environmentally and in terms of fire cause and effect. That being no analysis of the 5 years of categorical drought followed by an excessive year of precipitation, the increase in fuel load, and the direct relationship to the lack of appropriate mitigation through utility line mitigation, which causes fires. The same conditions that exist in Napa and Sonoma exist along Page Mill Road and Skyline Boulevard. The Mitigated Negative Declaration and the Foothill Fire Plan from 2009 do not deal with these issues. Attachment D to the Staff Report that's dated 2017 doesn't bring it up to date either. It states that the City is going to engage in emergency responses to create any linkage between wild and structural fires. Is a 20-minute response time as proposed in Action Item Number 11 an appropriate emergency response time? I also suggest if you're going to recertify the Mitigated Negative Declaration for the 2009 Fire Plan that you consider that these are changed circumstances under which they are being carried out in addition to the change for reimbursement from 2009 to the way it exists now, which is referenced in the plan as a means to accomplishing and funding fire mitigation. Thanks. Mayor Scharff: Thank you. Now, if we could vote on the Consent Calendar without Item Number 7. Council Member Holman: Can I ask Staff to respond, through the Mayor, to the need to consider these jointly, this item and the action item later? Molly Stump, City Attorney: I guess that is me. If we're going to respond substantively to the fire and emergency planning items, we're going to need TRANSCRIPT Page 47 of 126 City Council Meeting Transcript: 10/16/17 to have those experts here, who prepared the plans. We haven't done that. This is a Consent item. Mayor Scharff: It's on the Consent Calendar. Council Member Holman: It is. This is a new question raised. I'm wondering if the MND would be impacted by the decision in our later action item, so they need to be considered jointly. It's a new question. I'm not sure how it'd best be addressed. Ms. Stump: No. The action item is a distinct item that we can explore fully tonight. It's not related to these planning items. If we want to go into the details of these particular items and reports, it's my belief and understanding that the MND is still valid and supports the adoption of these items tonight. If you want to unpack that and discuss the planning efforts in more detail, we're going to need to schedule that at a time when the Fire Chief and the OES Manager are present. Mayor Scharff: It's on the Consent item. Ms. Stump: He agrees with me that the items are distinct and can be addressed distinctly. Council Member Holman: I appreciate the response. Thank you. MOTION: Vice Mayor Kniss moved, seconded by Council Member Wolbach to approve Agenda Item Numbers 4-6, 8-9. 4. Annual Review of Williamson Act Contract Renewals Within the City of Palo Alto. 5. Approval of a Blanket Purchase Order With Granite Rock Company for $380,760 Each Year and Granite Construction Company for $90,000 Each Year, Both for a Three-year Term, From October 17, 2017 Through June 30, 2020 for Asphalt Concrete Products. 6. Resolution 9714 Entitled, “Resolution of the Council of the City of Palo Alto Approving the Local Hazard Mitigation Plan and Approval of Three Additional Emergency Management Plans.” 7. Approve and Authorize the City Manager to Execute a Five-year General Services Agreement With Valley Oil Company in an Amount Not-to- Exceed $3,256,164 for the Purchase of Unleaded and Diesel Fuels to Supply the City's Fleet. TRANSCRIPT Page 48 of 126 City Council Meeting Transcript: 10/16/17 8. Approve and Authorize the City Manager to Execute Contract Amendment Number One to Contract Number C17165053 With Salas O'Brien Adding Construction Administration to the Scope of Services and Increasing Compensation by $35,000 for the Zero Waste Office Renovation, for a Not-to-Exceed Total Contract Amount of $252,800 for the Municipal Services Center Improvements and Zero Waste Office Renovation Project (CIP PF-16006). 9. 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 (Continued From October 2, 2017). Mayor Scharff: If we could vote on the Consent Calendar. Beth Minor, City Clerk: We need a Motion. Mayor Scharff: We did; we had a Motion. All in favor. I guess Vice Mayor Kniss voted before she walked out. That passes unanimously without Item Number 7. MOTION PASSED: 9-0 Mayor Scharff: That brings us to Item 13. Before we get to Item 13, I wanted to point out that we have 60 speakers. I've been thinking about how much time. I think it's an important enough issue and you all came down here that we're going to give everyone 2 minutes. That's an hour and 20 minutes when I add it up. It always turns out to be a little bit more, so it's probably an hour and 30 or 35 minutes in reality. It's now 8:00, so we will get through—when we come back to Council somewhere around 10:00. That's right 2 hours. Somewhere around 10:00, we'll come to Council, take this item up. I don't believe we will be getting to the soft story stuff, which was Item Number 12. I don't believe we're going to get to the speed limit issue either, which is Item Number 10. We may or may not have to do Item 7 after we do the fire item. We will just have to wait and see on that. At this time, I'm going to suggest that we make Item 7 after the Fire Department issue, and that we defer Items 10 and 12 to a date uncertain. Vice Mayor Kniss: Is that a Motion? Mayor Scharff: That's a Motion. Vice Mayor Kniss: Second. Mayor Scharff: Second. TRANSCRIPT Page 49 of 126 City Council Meeting Transcript: 10/16/17 MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to hear Agenda Item Number 14 (Former Agenda Item Number 7) - Approve and Authorize the City Manager to Execute a Five-year General Services Agreement With Valley Oil Company … after Agenda Item Number 11 - Fire Department Deployment Changes and the Conclusion of Meet and Confer Negotiations With IAFF … and continue Agenda Item Numbers 10 - Adoption of an Ordinance to Increase the Posted Speed Limit on Deer Creek Road and a Segment of East Bayshore Road … and 12 - Direct Staff to Return to the Policy and Services Committee With Amendments to the Municipal Code for the Regulation of Seismic Vulnerable Buildings … to a date uncertain. Mayor Scharff: If we could just vote on that. That passes unanimously with Council Member Kou absent. MOTION PASSED: 9-0 Mayor Scharff: If you want to release Staff, whoever was here, for 12 and 10, I think that's probably the way we should go. Action Items 13. Colleagues’ Memo From Council Members DuBois, Holman, and Kou Regarding Strengthening Renter Protection for Palo Alto Residents. Mayor Scharff: Now, we're starting Item 13, which you've all been waiting for. What we're going to do is—this is a Colleagues' Memo, so there's no Staff presentation. This is a Colleagues' Memo introduced by Council Member DuBois, Council Member Kou, and Council Member Holman. What we typically do is I'm going to ask Council Member DuBois to introduce the item, speak about it. Then, I'm going to go to the public. We'll have the 60 speakers. You'll each have 2 minutes. Then, we will come back to the Council. I will come back to Council Member DuBois, who will then make a Motion on his Colleagues' Memo, which is his recommendation to Council. Assuming he gets a second, we will then discuss that proposal. Council Member DuBois, you're up. Council Member DuBois: I wasn't aware that I was going to drive it tonight, but I'm happy to do so. As is evidenced by the turnout tonight, we all know housing is an issue in Palo Alto. This Memo is really just a start of a process to look at increased renter protections. Palo Alto already has several renter protection ordinances on the book. I know it's being cast as rent control. There's nothing in the Memo that talks about rent control. There are really a variety of levers that cities use to increase renter protections. We're really just asking the Council tonight to take this up as an important issue. I think it's an important enough issue that the Council should take it up and not really TRANSCRIPT Page 50 of 126 City Council Meeting Transcript: 10/16/17 even refer it to a subcommittee. In the Memo itself, it talks about how a large percent of our population, 44 percent of Palo Altans, are renters. Many of those are long-term renters. With the kinds of boom-and-bust cycles we see in Silicon Valley, it becomes very hard to stay in a community when rent can increase at much larger levels, 10, 20, I've heard 50 percent. There are also other aspects such as mediation when evictions can occur. The real purpose tonight is not to go into any of those details. I think we want to keep it at a high level and just decide if this is an issue that Council thinks is important enough for it to take up. Mayor Scharff: Now, we'll go to the public. We have a list here. I'm just waiting for it to show up. Our first speaker is Peter Drekmeier, to be followed by Emily Hislop. You'll each have 2 minutes. Peter Drekmeier: Good evening. Again, a very interesting meeting tonight. I was fortunate enough to grow up in Palo Alto in Midtown, a pretty modest neighborhood, a lot of working class families. I went to an element school called De Anza, probably the best school I ever went to. We had a real diverse school by Palo Alto standards certainly. We had the Colorado Apartments, low-income housing. Our neighborhood wasn't wealthy, but it was a rich environment. I wouldn't change it for anything. Palo Alto's changed a lot. Actually a lot of friends have had to move away, people who were doing a lot of service work in Palo Alto, working for nonprofits. We're so successful at making Palo Alto a wonderful, desirable community that they got priced out. A lot of the people moving in are just struggling to pay rent and don't have that time and commitment to the community that's made it so special. I've looked at the Colleagues' Memo. It strikes me as quite modest. It's a first step. I encourage you to support having a bigger, greater discussion on this. Thank you. Mayor Scharff: Emily Hislop to be followed by Bob Moss. Emily Hislop: Good evening, Council. I'm Emily Hislop, and I'm here on behalf of Project Sentinel, a nonprofit housing service. An agency I imagine you're familiar with as we administer your Palo Alto Mediation Program. I'm here to tout the benefits of having a dispute resolution-based—I don't want to call it rent control, but a way to address rental issues. In addition to administering several mediation programs, we also administer the City of Hayward, Los Gatos, and now Mountain View's various binding programs. Hayward and Los Gatos have binding arbitration, and it's a two-step procedure of going first to mandatory mediation for certain rental housing issues. I am also the first point of contact for information and referral regarding Measure B and the administration of that hearing. As such, we have a lot of experience in this area. We also administer Mountain View's now-defunct rental housing dispute TRANSCRIPT Page 51 of 126 City Council Meeting Transcript: 10/16/17 resolution program. When Mountain View City Council, I believe, was in your current position a couple of years ago, this is one of the items that they did. The once suggestion we'd make is that these programs can work basically on the premise that when you have two people try to come to their own resolution, both sides rather than being opposed are much more satisfied. In addition to resolving the issue of, say, a rent increase that maybe a landlord had to do because they put a new roof on, it also keeps the relationship good rather than adversarial. The one thing we believe makes things better is if there are some teeth. Having a binding arbitration or some other step element where a decision would be made adds some more credibility to the process. Also, we've experienced a lot of tenants in some of these other programs where there was no just cause eviction … Mayor Scharff: Thank you. Bob Moss to be followed by Ruth Chippendale. Robert Moss: Thank you, Mayor Scharff and Council Members. First of all, I'm not speaking as a renter. We haven't been renters for almost 50 years. The people who do rent in Palo Alto are a lot of the people we depend upon for services and to provide the kind of community that we all enjoy. Rental costs are an issue. The letters you've been getting from landlords have a couple of errors in it. The first one is you are not talking about passing rent control tonight. What you're talking about is doing exactly what they suggest, sending it to a committee for discussion. Let's get that one out of the way. Second, they talk about how rent increases have been modest, less than 10 percent. A 10-percent increase in rents is about six times more than the cost of living increase in the last year, 2 years. It's about four times more than the increase in the average pay of most people. A 10-percent rent increase is significant. Then, they talk about how only 44 rental units have been built in Palo Alto in the last 3 years. There's a reason for that. It's called greed. Housing which is for sale in Palo Alto costs more than in any city in the United States which has both housing and commercial. The median housing price in Palo Alto is about $2.7 million, but new houses sell for over $3 million. The property owner can make more money by buying land, building a house, and selling it than renting it. That's why we have more houses built that are for sale than rentals. Mayor Scharff: Ruth Chippendale to be followed by Judy Adams. Ruth Chippendale: Good evening, City Council Members. I am Ruth Chippendale and have lived in Palo Alto for over 60 years. When we bought our home in 1957 on Santa Ana Street, there was a Maytag repairman on one end of the block, an electrician in the middle of the block, a nurse next door, and a couple of engineers. People with low or moderate incomes were able to buy homes in Palo Alto. These days are gone. We now need to provide TRANSCRIPT Page 52 of 126 City Council Meeting Transcript: 10/16/17 more low-cost and moderate housing for people below—not just below market rate. We need to protect our renters who are living here now. We need to protect them from huge increases in rent and protect them from no-cause evictions and be able to have at least 1-year lease. Without having more housing closer to where people work, we will have more and more folks living in RVs and cars parked on City streets. Thank you. Mayor Scharff: Thank you. Judy Adams to be followed by Michael Shields. Judy Adams: Thank you. I want to thank the Council Members who brought this agenda item here. I was a renter in Palo Alto for 10 years, from '75 to '85. I think that's 10 years. It's exploded, rental costs, housing costs. Many of my friends and myself are retired. Most of my friends have to move out of the area to Oregon, other places, where they'd rather stay in our town. I read an article in the San Mateo Daily Journal today, which I recommend to everyone. It's a guest opinion article. The title is "Renter's Rights Are Civil Rights." The two writers, one is an attorney and housing advocate, and the other is a community activist and represents community interests and minority interests. The title of their article is "Renters' Rights Are Civil Rights." The problem with burgeoning, growing, explosive rents is that people can't live where they work. They must travel large distances. We've lost the diversity of this community. I'm happy that diversity is mentioned at the top of the bulleted items on this memo. What you're asking in this memo is for modest protections against egregious rent increases, modest protections against eviction and displacement. It does affect the population of our City that we really rely on for our workers and our neighbors and our friends. I congratulate you on this first really modest step towards examining some of the ways of mitigating loss of our citizens who can no longer live here. I thank you for taking further steps. Mayor Scharff: Thank you. Michael Shields to be followed by Stephanie Munoz. Michael Shields: Good evening, Mayor Scharff and City Council. Thank you for the opportunity to speak this evening. My name is Michael Shields, and I am the founder and manager broker of Silicon Valley Multifamily Group. I'd like to give you the perspective tonight of broker and manager that has worked with owners, tenants, and investors for 15 years. I've sold properties in San Jose and Mountain View before and after they've passed rent control. I've seen the impact on these properties before and after. Since these ordinances have passed, I've been selling properties in primarily these two cities. That's because experienced owners are getting out of rent-controlled cities. The investors buying these properties tend to be less experienced and do not fully understand the implications. I'm sorry to say that properties in TRANSCRIPT Page 53 of 126 City Council Meeting Transcript: 10/16/17 these two cities are selling at lower values compared to just a few years ago. The first reason is lower demand. Fewer investors will buy in rent-controlled cities. One of the most common phrases I hear from an investor is "anywhere but a rent-controlled city." The second reason is that value is tied to income. The lower the income, the lower the value. Another impact of rent control is that owners will not initiate capital improvements on a property if they cannot make their money back. Hence, the properties that are not upgraded eventually become run down. This results in lower income and lower sales value. In the short term, tenants love it, but there are two problems. First, rent control has proven to make fewer tenants move. Therefore, less units come to market, making an already scarce housing market problem even worse. When those units do come to market, they do so at inflated rates because there are fewer units available. The second reason is that tenants complain that their units are not kept up to date. Thank you. Mayor Scharff: Thank you. I've clapping for both speakers on both opposites. We have a rule to not clap. The reason we have that is we don't want anyone to feel bad about it. I think it'd be better if no one clapped. That's our rule, and I think it'd be great if we stick with that. Vice Mayor Kniss like the hand wave. I happy to let her demonstrate the hand wave for the group if that's what people want to do. You don't say anything though. I think it's really important to be civil and respectful to everyone. I'm totally serious. Stephanie Munoz to be followed by Leannah Hunt. Stephanie Munoz: I'm Stephanie Munoz, as you know, Greg, Liz, everybody. When I came out, they said what we need are renter protections. It wouldn't have to be rent control, so don't mention rent control. I'm going to have to do that because of the man who was just ahead of me, who has been in the business for a long time. So have I. My living has come from rent-controlled apartments for some 75 years. I was 8 or 10 years old when the war came along, and the girl marines were moved into San Francisco. My mother took them over. It was my father's office; it was a medical office, but he was off taking care of the defense workers. The place was available to rent, and she rented them. I have to tell all you people don't worry. Yes, rent control can be a pain in the butt; it's annoying. It is not a deal breaker. Rent-controlled apartments sent me and my sisters—it sent me to three Catholic universities. It sent my sister to Sacred Heart Menlo. It took us to Europe. It's a more than adequate living. When the City makes it possible for the rents to go up, up, up, that is the City's doing. That is not individual prominence. It isn't as if we had taken some dog of a place and made it into something really great. What happened was the war came along, and people had to be housed. We were the economic beneficiaries of it. Don't worry. Don't worry. For one thing, the rent-controlled tenants never move. Thanks. TRANSCRIPT Page 54 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Leannah Hunt to be followed by Paul George. Leannah Hunt: Good evening, Mayor Scharff, members of the Council, Staff, and members of the public. My name is Leannah Hunt. I reside on Byron Street. I've been a resident for almost 50 years. Come January, I will have been a realtor for 30 years in this community. I'm coming to you as a representative of the Silicon Valley Association of Realtors. Currently, I'm on their Board, on the State Board of Real Estate, and I represent the 4,600 members of Silicon Valley Realtors on the National Board of Real Estate. Today our executive officer, Paul Cardiss, submitted a letter for your consideration. I'd like to read one segment for benefit of the public. We contend that the City of Palo Alto should prioritize meeting the housing requirements of its residents as opposed to regulating prices. It is important to look at the facts when considering a policy as impactful as rent control. In the past 3 years, only 44 apartments were built in the City. Construction of significantly more rental housing is the only way to make Palo Alto rents more affordable. This has not been the approach of the City. Now, it appears that some in the City are looking to property owners to shoulder the burden of solving the City's lack of affordable rental housing. The reality is we're talking about supply and demand. This is an issue that all the municipalities and cities across our state are facing. I've just come from a week down in San Diego with our State Board. Availability of housing is everywhere. It is not just in Palo Alto. There are measures that one can take. We are actually proposing through our lobbyist the whole issue of infill housing and taking a look at the measures that cities use for infill housing. We also just Saturday morning passed a huge measure. We are going to advocate for the portability of tax basis. We are going to invest a tremendous amount of money to have this qualified for the November 18 ballot. Mayor Scharff: Paul George to be followed by Lynn Krug. Paul George: Thank you. Paul George, Director of Peninsula Peace and Justice Center. I'll try not to take up my 2 minutes. I first wanted to thank the three Council Members who have started this important conversation. I appreciate stepping forward like that. I sent all of you a letter on Friday outlining our support of the Colleagues' Memo. That letter had the signatures of 58 Palo Alto residents, and we now have over 100. Here's an update. People put a lot of their own personal comments on here, so I hope you'll read the letter. We all know that rent stabilization and eviction protections are not enough to address our local housing crisis, but they are definitely essential steps to take. We urge you to make this a priority item and move it as quickly as you can. That's saying something in Palo Alto. Then, immediately move on to the additional even-more-difficult measures that will also be needed; in other words, make this a beginning and not an end. Thank you. TRANSCRIPT Page 55 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Lynn Krug to be followed by Kip Husty. Lynn Krug: I'm Lynn Krug. I'm Chapter Chair of the Palo Alto SEIU employees, some 550 employees, probably 97 percent who cannot afford to live here, which is endangering our City itself. When you look at things like fire, electrical issues, water and gas, we need employees who have the expertise and the professional experience that we need for this City. We have lost institutional knowledge hand over fist from this City of qualified employees who cannot afford to live here. I was one of the last employees that still lived in Palo Alto up until June. When I went to look for apartments, I found studios that were probably about 400 square feet, one room, bathroom, $2,100 plus utilities. No one in their right mind would spend half their paycheck for that space. I refused to; I now commute probably close to 2 hours a day to come to work. Now, similarly, how many employees and how long do you think you will keep them while they're commuting and hour each way to work and don't see their families? We need to be able to provide housing for all strata of economic levels to keep this City diverse and to keep our City organization healthy. You may think that you can contract out. That's not going to work. Local contractors cannot find people who want to sacrifice their lives for their job alone. They want to have families. They want to have quality of life. I believe in Palo Alto. I believe in the quality of life I shared with my daughter living here. I appreciate that very much. I think we need to turn the tides back and take a look at this and provide the housing and the reasonable rents. Thank you. Mayor Scharff: Kip Husty to be followed by Walter Bliss. Kip Husty: Good evening. I was going to read something, but I just noticed two things from the landlords. One was a broker coming into luxurious, and one was a real estate—renters' landlord representative. I'm sure there's going to be others who are going to speak about their mom and pop and their stories about how innocently they're making and how much work they put into things. Let's be really clear about something. There is an imbalance. Some of my last friends in Palo Alto just had to move out because they couldn't afford rents. The working class is nonexistent. We only lucked out because we got below market rate housing after 20 years. That's the only reason we're still in the area. We're two teachers, and we weren't able to afford a house, and our rent was getting too high. This is ridiculous. There is no economic basis, not rational economics, not ideology, false ideology, mom and pops, no. These are absentee landlords, lots of them, most of them. They're not here. They're making money off of holding the deed. I got almost evicted—I did get evicted because I reported illegal work done on our house—on our apartments. It was a 12-unit place. I reported that, and my landlord evicted me. I won not because the City helped me. He was suing me back, but I had TRANSCRIPT Page 56 of 126 City Council Meeting Transcript: 10/16/17 a piece of damaging evidence on him. That's the only reason I won my case. How many people end up going through that? Time to get real with this. Mayor Scharff: Walter Bliss to be followed by Rita Vrhel. Walter Bliss: Council Members, raise your hand if your parents were indigenous American Indians? Council Members, raise your hand if your parents didn't come here as immigrants? Council Members, raise your hands if you think the immigrants who came after your parents don't deserve the same breaks that you have gotten? Council Members, raise your hands if you think $15 an hour is a salary you could live on in this community or less? Council Members, what can you do tonight—when you go home and you're ruminating and you're looking up at the ceiling as you go to bed, think about what maybe you could do to ameliorate this situation we have in the City. Are you going to enrich the rich and drive out the poor? Is that the legacy that you want to be known by? I have a legacy. As I mentioned already, I worked for the City of Palo Alto, and I was instrumental in getting the open space district passed. This is a photo of myself and my daughter from 1972. If it wasn't for this, probably the open space district would have had a lot more trouble getting passed. I tried to do things that were helpful to the community at large. You have to live with your decision. I hope you can dreg from the depths of your being some empathy for the situation of the people who we all have to live with. They don't make what we make. They've got to find a place to live. Do they have to Gilroy? Do they have to live in Stockton or can they find a place to live here on the Peninsula? Mayor Scharff: Rita Vrhel to be followed by Steven Lee. Rita Vrhel: I'm really sorry that this is degenerating into class warfare. I am a homeowner. I'm very lucky; I saved hard and worked hard to get my home. I support rent relief, control, reasonable rents, whatever you want to call. Maybe, it might be interesting to look at property that was bought in the last 10 years versus property that was bought before the last 10 years. I know the house across from me was bought in the 1950s. It's a very large piece of property. It's about (inaudible) $4 million. That's not mine. The people charge $4,500 a month. $4,500 a month is a good return on a piece of property that was bought in the 1950s or '60s for probably about $38,000. Because there's been depreciation, everything that was put into the house was marked off on taxes. Now is the time for everybody to think about what you would want someone to do for you. There is a lot of greed here. I do not believe if you have rent control that the houses in Palo Alto will fall off the face of the Earth and become ram-shambled [sic]. There's too much outside money coming into Palo Alto. We have Stanford, which is going to expand. We have Facebook; we have Google; we have Amazon. The whole Bay Area TRANSCRIPT Page 57 of 126 City Council Meeting Transcript: 10/16/17 needs to have some sort of rent relief, whatever you want to call it, a neutral term perfectly is acceptable. It's time to really look at what is happening with absentee landlords and the unreasonable rent increases. It's nice for a family to move into a place and realize that their rent may go up 2 or 3 percent a year, not 50 percent in 5 years. Thank you. Mayor Scharff: Steven Lee to be followed by Robert Alquist. Steven Lee: Hi, good evening. My name is Steven Lee. I'm a member of the Human Relations Commission. I'm here on my own behalf to encourage the Council to refer this item to the Human Relations Commission for its consideration. As this body and this community weighs just how it will respond to the Bay Area's housing crisis, it is important to remember that this is not merely a housing or renter issue, but one that will come to define the character of this community. Last December, this body passed a Resolution affirming its commitment to a diverse and inclusive community. Being an inclusive and diverse community isn't just about how we treat folks who are here already, but who we welcome into this community and who we enable with our policies and our actions to live and stay in this community. As the Council considers this and other related issues, I hope you will empower the Human Relations Commission to engage with the public, host many and, I'm assuming, lengthy public forums on this issue, and to weigh in and be part of crafting a solution on this issue. As we work to be and not just say that we are an inclusive and diverse community. Thank you. Mayor Scharff: Robert Alquist to be followed by Curt Conroy. Roberta Alquist: It's Roberta Alquist. Thank you. In the '60s, I came here as an undergraduate and graduate student at Stanford on scholarships. I was a tenant in a Downtown neighborhood. On one side was an African-American family with three kids. On the other was a Navajo Indian family with four kids. There were Latino and Filipino families in my neighborhood, even Indian families and white, working-class neighbors. It was a community. We had block parties. We closed the street. Now my neighborhood is mostly white, wealthy, and very silent in terms of community. All the research shows that diversity, social class diversity and ethnic diversity makes for a more humane society. If you're not familiar with the spirit level, you can find research there to support that. We can change that. Our workers, especially low-income workers in the City, need housing here—a beautiful statement by the union— so that they cannot have to travel 50 miles. We have a lot of greedy—not all, but a lot—landlords and landladies. Right now, the sky's the limit. In my neighborhood, a 14-unit building 3 years ago cost $800 for a one-bedroom, unfurnished apartment. It was sold that year. Everyone went out—they were all working in the City, all workers. The rent went up that next year to $1,800. TRANSCRIPT Page 58 of 126 City Council Meeting Transcript: 10/16/17 That's not 10 percent. Figure that percent out. The next year and now, the rent for these one-bedroom, unfurnished apartments is $2,850 plus utilities. That's shameful, disgraceful. We need change. Thank you. Mayor Scharff: Curt Conroy to be followed by Jennifer Gaskin. Curt Conroy: Thank you for allowing us to speak tonight to you. First of all, we may not be talking about rent control. A year ago, Mountain View wasn't really talking about rent control, but it is now rent control. It's a slippery slope. I live in Menlo Park in a two-bedroom house five doors for the sound wall. I put my life savings into a little complex in Mountain View. On election day, I lost about 20 percent of my net worth. I don't think there's a landlord in this room that is opposed to the idea of affordable housing. It just shouldn't fall on our shoulders. Some of us have worked really hard. I owe more on my house than I paid for it now. It's just not right to shove it down our throats. Also, it's not effective. Essentially, the highest rents in the country are New York, where I'm from originally. I lived in a rent-controlled apartment originally when I got out of college in San Francisco. It helps the people that are the renters when it passes, but it is hurting all the service providers, whether it's the firemen and the teachers. Anybody moving into the community thereafter, they're going to pay more as a consequence of rent control. It is not solving your problem. Your solution is higher-density housing, small units. Have supply and demand meet. Just a small observation. You'll find that there's a lot of legal support in the community, free legal services for all the tenants. This creates a cottage industry from the conflict and the rancor that happens between landlords and tenants. I have a very good relationship with my tenants. I had one of my tenants over for Thanksgiving at my house last year. That's not going to happen again. Mayor Scharff: Jennifer Gaskin to be followed by Teri Baldwin. Jennifer Gaskin: Hi, my name is Jennifer Gaskin. I've lived here for 10 years. I'm here this evening; I could have been with my daughter at a book signing at Keppler's for a book called Wonder Girls, about girls making changes in the world. Instead, I decided to be here hoping to make a difference in her own community for people like her, for students, and for families in Palo Alto. This is a poem that I wrote 2 years ago. Since those 2 years, our rent has raised by $400 twice. It's called "Rent Raising," and it's up on the screen if you'd like read along. Wealthy families send their kids to the private school across the street with plastic sheets of grass and vinyl shade. We live here too. We pay nearly $3,000 a month, a steal we're told, for a rundown duplex with a Home Depot remodeled kitchen, but the paint doesn't stick to the walls in the bathrooms or kitchens. They skipped the primer. We're lucky though. Sorry. We're lucky though. We hold our breaths each December when the letter TRANSCRIPT Page 59 of 126 City Council Meeting Transcript: 10/16/17 comes. Rent raising $100, $400. Our paycheck holds firm, but we stay quiet and keep paying. Craigslist tells me if we move, we'll pay nearly double for a smaller space. Welcome to Palo Alto. My greatest fear in living here is the unsurety of not being able to tell my daughter that she'll be able to graduate from high school here from a wonderful program that we have here in our education. I know that I'm not the only one that has that struggle in their family. Thank you. Mayor Scharff: Thank you. Teri Baldwin: Hi, thank you. My name is Teri Baldwin. I'm a teacher, and I'm the President of the Palo Alto Educators Association. I'm here to urge you to take up this important issue of renters protection. The renting costs in Palo Alto and the region has just been rising without stop. The moderate-income workers are also being forced out of the market. Important members of our community such as teachers, nurses, shopkeepers, and many more are being priced out and driven away. I'm here representing many teachers who had to leave Palo Alto because of this issue, teachers who would love to live in or near the neighborhoods that they work in, giving them the ability to attend school function such as plays and sporting events. I personally lived in an apartment a block away from the school I worked at here in Palo Alto. I loved being a part of my school community. My building was sold, and my rent was raised 30 percent. I had to move, and that was because it was a big corporation. I went to mediation; they didn't care. I feel lucky because I was able to move to a somewhat affordable apartment in Mountain View. Not everybody in my situation has been so lucky. There are teachers here who are commuting from Gilroy, Santa Cruz, Dublin, just to name a few places. They don't want to have such long commutes, but they have been priced out of the area. There's a lot of new housing going up, but it's way high end with those high-end prices for rents to match. The moderate-income workers can't afford this. The average rent in Palo Alto has increased 50 percent in the last 6 years. The income growth has been much less than that. Teachers, police, social workers have had to leave, and there's nowhere for them to go except for further and further away, creating a less diverse community. We want to support the retention of a diverse local economy. Renter protection can help this. I urge you to support this extremely important issue. Thank you. Mayor Scharff: Alex Snyder to be followed by Harold Davis. Alex Snyder: Hello. Thank you for listening to me. Rent control makes apartment living worse. It requires landlords to keep undesirable tenants that can degrade the quality of living in the entire apartment complex. Rent control measures do not solve the housing crisis. Building more housing units solves the housing crisis. If rent increases year over year in Palo Alto, then Palo Alto TRANSCRIPT Page 60 of 126 City Council Meeting Transcript: 10/16/17 did not build enough housing units to keep up with demand. Rent control does not solve the problem. Building new units does. Instead of studying rent control tonight, the City Council should study how they can build 100,000 new housing units over the next 10 years and where Palo Alto can put these units. This is the size and scope that is required to stop the affordability crisis. Thank you. Mayor Scharff: Thank you. Harold Davis to be followed by Cybele Bhushan. Harold Davis: Good evening everyone. My name is Harold Davis. My family has owned and operated 28 apartment buildings in Palo Alto for over 50 years. We are not absentee landlords. In 1999, just days before the world was going to end with Y2K—I'm sure we may all remember that—Forbes magazine published an article called "The Dumbest Ideas of the Century," which included a list of the ten worst economic ideas of the 20th century. Rent control was second on the list. Here we have a policy initiative that has done huge damages to cities around the globe. It is very hard today to find an economist supporting rent control, the article stated. Damage to cities indeed, but damage to low and middle-income renters most of all. Rent control regulations eventually result in landlords being unable to keep up with rising maintenance costs, which over time leads to buildings becoming dilapidated. It's not like anyone is going to leave anyway. Longer resident tenures means fewer affordable units for people who need them. Let's take for example two cities who have had strict rent control for many years. The average market rent in San Francisco is one of the highest in the nation. 30 percent of those living in rent-controlled apartments have incomes above $150,000 a year. In Berkeley between 1978 and 1990 alone, the actual rental supply decreased by 14 percent. The shortage of supply gives low-income families less opportunity to live in the areas. Reduction in tenant turnover for rent- controlled apartments puts upward pressure on all other dwellings. Investors have little reason to provide low-income housing. They would much rather supply high-income housing unshackled from the chains of rent control. Instead of rent control, the City should focus on the Planning Commission's recent report on affordable housing. Adding housing through accessory dwelling units, streamlining and speeding the process for approval of new apartment developments, and removing the 50-foot height limit so it's a lot more density and more units to be built. Please reject the idea of rent control. It is a step backward. Mayor Scharff: Thank you. Cybele, right? Cybele LoBuolo-Bhushan: Pardon? Mayor Scharff: I was mispronouncing your name. TRANSCRIPT Page 61 of 126 City Council Meeting Transcript: 10/16/17 Ms. LoBuolo-Bhushan: Don't worry about that. Mayor Scharff: To be followed by Drew Hudacek. Ms. LoBuolo-Bhushan: That's the least of our troubles here tonight. I want to thank Bob Moss for being clear that it's not really rent control. It's stabilization as the right term. I'm sure you all want to do the right thing, and I'm sure you will do the right thing. This is a community. I'm a homeowner of 35 years, and I'm here just like many, many, many homeowners and other members of our community, not investors. We didn't buy our home as an investment. We bought our home to live in a community. We are a community. I heard Joe Simitian just the other day at a homeless shelter fundraiser saying that we're a community. I believe we are; I believe you'll do the right thing; I believe you'll put the protections in place. Renters do have civil rights. A suggestion that there's no unjust eviction without cause, that if someone wants to move in for a good reason, a landlord, that there is relocation assistance, and that there are limits on how much rents can increase in 1 year. Finally, if you can possibly build more affordable and low- cost housing on El Camino, that seems an appropriate place for more. Good luck. Mayor Scharff: Drew Hudacek to be followed by Winter Dellenbach. Drew Hudacek: Good evening, Mayor and members of the Council. Thank you for hearing us all tonight. My name is Drew Hudacek; I live at 109 Coleridge. I've been a Palo Alto resident for quite some time and very happy to be lucky enough to raise my family in Palo Alto. I was trying to think of analogy that people in Palo Alto would understand about how bad rent control is. It's like when you're taking your bike out of the garage after a while and the chain's a little bit sticky, and you put Elmer's glue on the chain, and you expect it to work better. Rent control is something that sounds good on its face to a lot of folks, but it bogs down the system. To get to the punchline, I was having a conversation with somebody who is an apartment investor in the area. They have apartments in Palo Alto; they have apartments all over the Bay Area and all over the western states. We were talking about the housing affordability crisis. It is a crisis, and we all recognize that. We do need to do things to fix it. This investor said, "In my 30-year career investing in apartments, my best investments have been buying apartments in communities that include rent control." He's not buying the rent-controlled apartments; he's buying the market rate apartments because every town that has rent control, the rents spike in the other apartments that are left. It bogs down the system. It makes it worse. I invite you to talk about it for as long as you wish, but I hope you come to the conclusion that it's a bad idea. Thank you. TRANSCRIPT Page 62 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Winter Dellenbach to be followed by Eddie Keating. Winter Dellenbach: I strongly support more renter protections of the kind represented in this Colleagues' Memo. The City should continue the momentum it gained when it addressed displacement of Buena Vista. We decided losing residents there was unacceptable. Losing Palo Alto renters anywhere in town is unacceptable. Nearly 20 years ago, I was asked to be part of a small group of attorneys and housing advocates to fashion Palo Alto's first renter protections, the protections our City now has and mentioned in this Memo. Opponents predicted dire consequences as they do now, of course, and they never materialized. They won't materialize now as a consequence of these new renter protections. If some renter housing owners depend on rent gouging, then let's make them fold that flag now. Other rental owners will continue to adhere to their high standards that Palo Altans expect. We have Code enforcement that will be effective to ensure that housing habitability remains up to snuff. This is Palo Alto; it's not other towns. This is Palo Alto. It's Palo Alto. I urge protection to be given to all market rate renters regardless of their economic status including higher-income renters. Don't assume older housing is cheaper housing. Places like Landing, the Chateau, and many other splendid buildings are pricey. Don't codify needless economic divisions into market rate housing if this should become part of any discussion in the future. It is interesting to note that Santa Monica, a town very much like Palo Alto, has had renter protections since 1979. It's fantastic housing, a town that I go to visit often. It's doing just fine under renter protection as do many other towns in California. Town benefit from renter protection, and calamity does not ensue. I wish we would have done something like this much sooner. Thank you, Council Member DuBois, Holman, and Kou. Thank you very much. Let's get on with this and make some progress. Do not be afraid. No fear. Mayor Scharff: Eddie Keating to be followed by Mary Gallagher. Edie Keating: Edie Keating. You're hearing a lot of information from both sides. I am absolutely certain that some of the emails you have received are based on a lack of information about California rental housing law. For example, some economists—if limits on rents are applied to new construction, then that's a deterrent. For the people saying that rent control is so bad, have they read Costa Hawkins or are they conveniently forgetting about it? Are they conveniently forgetting that by State law you cannot rent stabilization to new apartments? That's not a deterrent. There are so many things that are nuances to the rent stabilization that's allowed in California. You really need to consider who to trust as you're reading all the emails that you're getting. The possibility of rent stabilization is housing security. The area really has already become a dystopia. It is really difficult to live here if you're a renter, TRANSCRIPT Page 63 of 126 City Council Meeting Transcript: 10/16/17 if you haven't already bought your home. People work it out. People have jobs here, and they have reasons to stay here. They have family here. When people work it out, even though they're paying a very high rent, make it safe for them so they aren't priced out by the very next year. People don't want to move every year. Children don't want to change schools every year. You all benefit—not all, but those of you who are homeowners benefit from housing security. You have very predictable housing costs. You can give that same gift to renters. If you aren't sure about it, then keep your doubts, but don't say not to study this. This should move forward at least to be studied so that you can do more to make all of your residents have housing security. It's possible. You need to study it. Thank you. Mayor Scharff: Mary Gallagher to be followed by Nevil Batliwala. Mary Gallagher: My name is—first of all, good evening, Mayor Scharff, Council Members, and the community. I speak as a 25-year renter of the City of Palo Alto, an educator, former landlord, property manager, and member of the chorus advocating renter protections. An ounce of prevention can be a pound of cure. The problem of housing is not unique to Palo Alto. Housing affects and will affect communities everywhere for decades to come. I support rent protections to prevent homelessness, to prevent residents from living in inadequate, crowded, unsafe housing conditions, to help residents maintain healthy social relations, and to support their work lives, to prevent high levels of stress that can exacerbate or cause health issues such as high blood pressure, anxiety, or other negative health conditions. Stable housing provides a foundation, which can build a diverse community, who can thrive in our community. May the Council and the community bridle the galloping greed, inspire more employers to house employees, and be the architect of creative, environmentally conscious housing solutions for the abled and differently abled residents. Thank you for hearing me. Mayor Scharff: Nevil Batliwala to be followed by William Choutka. Nevil Batliwala: Hi. Mayor and Council Members, I would like to address the possible loss in tax revenue for Palo Alto from rent control. As I understand City expenses for Palo Alto are going up 6-7 percent per year, and the City has to monitor its budget very carefully. Property values will go down because of lower rents. The stigma of City having rent control, and the increase in crime. With rent control, landlords will not have the funds and the incentive to keep their buildings and landscaping in good condition. Tenants will sublease or increase the number of tenants in their units rather than moving out. This will result in increased traffic and parking issues. Just cause eviction will bring in drug dealers and other bad elements as tenants as they know it will be difficult to evict them. This will lead to increased crime in all parts of TRANSCRIPT Page 64 of 126 City Council Meeting Transcript: 10/16/17 the City like it has in East Palo Alto and other rent-controlled cities. The pride of ownership and the global status of Palo Alto will be lost. Is this the legacy this City Council wants to leave for our children? The solution, as you know, is more housing. Thank you. Mayor Scharff: William Choutka to be followed by Nancy Whelan. William Choutka: Mayor Scharff, Council Members, I'm William Choutka representing Gerson Baker & Associates for the Oak Creek Apartments on Sand Hill Road right here in Palo Alto. Palo Alto, one of our most desired communities in all of American, we didn't get this way with policies like rent control. We attained this status through the genius and the entrepreneurial spirit and the system that our economy flourishes and rallies around. Growth, developing new ideas to generate a thriving community with new housing developments, with a variety of housing including low-income housing, not with rent control, which will discourage rental property owners from maintaining their properties. Strong anecdotal evidence exists throughout San Francisco and Berkeley. In San Francisco, I recently read that 38,000 units are being held off the market strictly because of the rent control issue. A house in San Francisco with a tenant occupying it, that goes on the market for sale, is discounted by 20 percent off the price that would otherwise be asked for that unit. Rent control is a multimillion dollar unnecessary bureaucracy requiring hiring new employees, Staff resources, and exposure to costly litigation, wasting money, taxpayer dollar money. Rent control is expensive. Mountain View has already spent over $1 million from the city's general fund to implement their law. This was the invoice for less than half a year. Rent control is littered with serious unintended consequences that have serious ramifications on the city's fiscal budget, economic development opportunities, and the residents' quality of life. The two cities in San Mateo County, San Mateo and Burlingame, it cost them over $1 million just to run the elections. Studying the issue is a huge distraction; it will impede the Staff from focusing on the City Council's priorities to create jobs and attract businesses to Palo Alto and build more housing, which we contend is the best solution. Build more housing including low-income housing. Thank you. Mayor Scharff: Thank you. Nancy Whelan to be followed by Heather Sirk. Nancy Whelan: Good evening, Mayor Scharff and Council Members. I'd just like to state the obvious. Rent moderation is rent control. Our region has authorized millions of square feet of office space and very little housing. Now, you may be asking apartment owners to subsidize housing costs. Yes, rents have increased because labor costs, utilities, and taxes are driving up operators' costs greatly. The only solution is to build more housing. If you make Palo Alto rent controlled, it will discourage building and investment in TRANSCRIPT Page 65 of 126 City Council Meeting Transcript: 10/16/17 this community. We have heard from teachers, and we all are very interested in housing teachers and workers of all sorts. I manage a property in the local region that partners with Facebook, who is subsidizing teacher housing at our project, and it's working beautifully. I really would like to suggest that there be more creative partnerships with the employers who are bringing in the thousands of employees to help with the problem, and not put the problem strictly on the backs of apartment owners. Thank you. Mayor Scharff: Thank you. Heather Sirk to be followed by Carol Lamont. Heather Sirk: Hello, City Council Members. I do not envy you tonight. My name's Heather Sirk. I'll start by saying I am a tenant. Despite the sticker I'm wearing, I am a tenant, and I am also a huge social liberal. I believe strongly in social welfare programs that promote diversity. I am in the rare situation where the universe has allowed me to actually experience firsthand both sides of this issue because I am also a property manager. I mange rental property for mom and pops, for individual people who own a single-family home or maybe a small duplex or triplex. I manage property in Mountain View, and I managed for many years in San Francisco. While I wish rent control worked to do all the things we want to do to address affordable housing, it does not. You'll hear a lot of arguments about why it doesn't work, so I'm not going to spend a lot of time on that. It's a long conversation. I have seen it firsthand, and I want you to know that that's not just hyperbole that you're hearing from people. What I do want to address is if you do decide to look at this issue, we all want a silver bullet for affordable housing. Obviously, we all care about it. Like most complicated problems, there is no silver bullet. We always end up talking about rent control because it seems so clean and easy. It's not. Please look at more creative solutions. I'll give you two examples. I manage a building in San Mateo that works with the city. The city subsidizes a program for teachers, firefighters, policemen. They subsidize the rent. It's really easy. They're prequalified; we move them in; the city subsidizes it. It works great. I manage another building in Redwood City that a nonprofit bought from the City of Redwood City with the understanding that it would be reserved for affordable housing. Works great. Not only is there affordable housing in Redwood City, but you have money going back to a nonprofit that's giving back to that community. There are other ways to do this. I think it's great that you're considering it. Please look at those other ways first. Thank you. Mayor Scharff: Thank you very much. Carol Lamont to be followed by Meb Steiner. Carol Lamont: I first moved to Palo Alto in 1976 as a renter. I moved back in 1990 as a homeowner. Whether you're a renter or a homeowner, you're a TRANSCRIPT Page 66 of 126 City Council Meeting Transcript: 10/16/17 resident. Residents should have stability. A house is not just an investment. A house is a home. I happen to have a lot of experience in housing. I was housing director for the City of Fremont when it adopted the rent mediation ordinance. I chaired the city's task force on landlord and tenants that came up with this. I could offer you some input on how well that has worked over the years. I also have been an administrator of a rent stabilization ordinance. I can tell you that once you get it implemented, it does work well. It creates stability for people, for residents in the community. It prevents displacement, and it stabilizes the community, people who work in the community, people who live in the community, students, elderly, others. There are bad landlords who don't want to maintain the property, but rent stabilization ordinances can provide for tenants to file petitions when their landlord doesn't properly maintain the unit for the rent to go down, so that there's no economic incentive for a landlord to abuse the tenant and the property. As this moves forward, I can offer you some input on what works and what doesn't. Remember, renters are residents too. This City Council and your predecessors have created the housing crisis here by not having a jobs-housing balance. You need to take action now to deal with the problem that you've created. Mayor Scharff: Meb Steiner to be followed by Keith Suddjian. Meb Steiner: Good evening. My name is Meb Steiner, and I am President of the Palo Alto chapter of CSEA, Classified School Employees Association. I represent all of the staff in the Palo Alto Unified School District other than teachers and administrators. These are staff members who do vital jobs, contributing to the functioning of our schools, maintaining the extraordinary facilities we have, and supporting our students. They range from food service workers to custodians to bus drivers, to tech support, secretaries, aides, and even mental health therapists. The cost of housing has a very dramatic impact on our employees. Many of these jobs are lower salaried jobs; the majority of them are part-time jobs. Even for our full-time folks, it is a challenge in this housing market to find something that is affordable and doesn't eat up their entire paycheck. I'm noticing folks moving further and further away. I know of a custodian and a bus driver who are commuting from the Central Valley. Their shifts start at 6:00, 6:30 in the morning, and then they're working with our students. It's harder for employees to be a part of the school community, to attend events or to support the extra activities happening at the schools. That one custodian was actually waiting to work a football game and took a nap before she did it. It is becoming increasingly difficult to recruit and retain employees. We had an excellent position where the gentleman rethought his decision when he found out what it would mean to relocate his family here. Our School District is not alone in facing these challenges. Many other employers are in the same boat. I urge the City Council to take leadership on this issue and to conduct a thoughtful review and have TRANSCRIPT Page 67 of 126 City Council Meeting Transcript: 10/16/17 conversations with the community to help us address these challenges and help our community be a diverse and vibrant one, and supportive of those providing essential services and to come up with solutions that balance and meet the needs of Palo Alto. Thank you. Mayor Scharff: Keith Suddjian to be followed by Susan Leech. Keith Suddjian: Hi, Mayor and Council Members, Keith Suddjian. I am a real estate broker here in Palo Alto. I appreciate the time here to give a few comments. Palo Alto did have a lot of rent growth obviously the first half of this decade. A lot of jobs, not much supply was the cause of it. The last year or so, it's tempered where rents have generally been flat the last year. That's been a slowdown in jobs and an increase of supply in the region. Currently, rent control is a band-aid. It's not a long-term solution. We've been talking about it here tonight. Increasing the number of housing units relative to jobs is the solution. Please make land use and zoning decisions to address this. We do need more supply. In the early 2000s after the dot-com telecommunication bust, we had 35 percent rent drops in Santa Clara County, 25 percent in San Mateo, definitely double digits here in Palo Alto. Economics do work. We do need the supply. Rent control, as others have mentioned, will discourage investment capital from coming into Palo Alto. It'll put downward pressure on values and tax revenues, property tax revenues. Even the pass-through provisions of capital improvements are very difficult to get through in the communities that do have that. Most owners don't go through that process, so it's hard to pass through improvements. Thus, people will not put in the capital typically into their buildings as they would in a non-rent- control environment. We all want affordable housing. Please don't punish those that provide the housing and especially those that have voluntarily kept their rents low by hundreds of dollars for years in the case of some of the owners locally. If affordable housing is a goal for our community, let's find a way for our whole community and society to work to contribute to the solution whether it be through the issuance of bonds to go towards the development of housing programs like Section 8 where we can increase the supply of housing. Thank you very much. Mayor Scharff: Thank you. Susan Leech to be followed by Anil Babbar. Susan Leech: Good evening, Mayor and Council Members. Thank you for giving me the chance to speak tonight. I'm a renter; I've lived here for 6 years. My rent is now over $5,500 a month for a modest, 1,800-square-foot, somewhat rundown Eichler in the Fairmeadow community. I love my house, but it is rundown. I just wanted to point out that the Palo Alto that I live in feels like a resort community because nobody who works here can afford to live here. We have two incomes in our house, and we can barely afford to live TRANSCRIPT Page 68 of 126 City Council Meeting Transcript: 10/16/17 here. Many of the entrepreneurs that I know, who built this community or at least were part of the taking off of this community, can't afford to live here. In terms of maintenance in rundown units, I know many renters who don't bring up maintenance issues with their landlords because they don't want their rent to go up. Seriously, they do their own caulking, they fix the plumbing because they don't want their rent to go up. I want to say I'm really strongly in favor of Palo Alto exploring options to protect renters. I see the benefits in other communities. I'm a landlord in a community that has rent control in a completely different way than what I've heard about from other people tonight, complete rent control for all units. We don't suffer for it; we make money from our house. We look after it because it's our investment. Some of the people who are speaking out against renter protections are concerned about how rent control has been implemented in other communities. I urge you to listen to those concerns. There's ways of addressing them and still implementing some protection for renters here in Palo Alto. Thank you. Mayor Scharff: Anil Babbar to be followed by Dan Phan. Anil Babbar: Good evening. My name is Anil Babbar. Excuse me; my throat's pretty much gone by now. I'm with the California Apartment Association. I wanted to come and talk to you today about why we're in opposition to the discussion about whether you call it rent control or rent stabilization. Many words for the same thing. Rents are high because there's a lack of housing. It's plain and simple. We need to build more, and we haven't done a good enough job in many cases of building smarter, building in the right places. We need to build more. When you impose controls on price, you're limiting the ability of an owner to probably maintain their building because you're restricting their operating income. With the vast majority of properties in Palo Alto being 50-100 years old, these are the buildings that are going to need a lot of maintenance over time, and they're going to need the ability to conduct that maintenance. When you impose policies such as rent control, you're going to lose at that building. Look at any city with it, and it's clear evidence of that fact. Lastly, rent control doesn't actually guarantee that families who need housing get it. Rent control doesn't make housing cheaper. It doesn't make housing more available. It just simply gives those who are in the units at the time that benefit. It doesn't add to the supply. I'm asking you today to say no to rent control, to say no to just cause, and let's move forward with talking about supply. Thank you. Mayor Scharff: Thank you. Dan Phan to be followed by Lubow. Dan Phan: Hi. My name is Dan. We're here to solve the housing crisis. Unfortunately, rental control is not the answer. No matter if you like housing providers a lot. They're the ones to provide housing for renters in Palo Alto. TRANSCRIPT Page 69 of 126 City Council Meeting Transcript: 10/16/17 Don't be wrong; we're not rich people. Majority of housing providers in Palo Alto are mom-and-pop small business. We're financially equal to renters. We also have to work many jobs to feed our children, to provide living space for our family. Dear renters, housing providers are not your enemy. Do you still remember how many times you call your landlord, not your relatives during the meal time, weekends, holidays, or even Christmas to ask them to fix your stuck toilets, leaking water, or broken oven? Housing providers and renters are naturally bonded together. They should work together instead of fighting each other. Housing providers don't have enough profit to maintain the property, not enough motivation to maintain housing, not even bankrupt. Dear renters, not Council Members, not housing stock, not even tenant advocate, but is you who is going to suffer. You will have slum rooms to live or even lose your home. Rent control is destroying housing providers' business, but you are the one to take the result. We are not here to kill all landlords. Don't let rental control kill all housing providers. Let them to have motivation to maintain the home for you and clean the toilet for you. Rent this year is decreased from last year. Adjust in the market already, so no need rental control. Thank you. Mayor Scharff: Thank you. Lubow to be followed by Jackie Safier. Cheryl Lubow: Hi. My name is Cheryl Lubow. I'm here opposed to studying rent control because I don't think it's the answer. It hasn't worked, San Francisco, Berkeley. Just look at it. Has it worked? No, it hasn't fixed the problem. Unless we look at supplying more housing, it's never ever going to work. You could flatten everybody's rent who's here right now, and it still isn't going to work. Unless you take advantage of Assembly Bill 1505, figure out a way to study something different, which means if you've got to have more housing, and if you keep looking at job growth and increasing the jobs and not having housing—it's any commodity in this world. If there's less of it, the price goes up. That's what needs to be studied, some way to increase the housing, get some high-density housing, whether people like it or not, and quit focusing on the job growth. It's just too unbalanced. If that doesn't get looked at, how's the problem ever going to get solved? It just seems it's basic economics. Supply and demand is the real problem. Mayor Scharff: Thank you. Jackie Safier to be followed by Casper Leung. Jackie Safier: Good evening, Mayor Scharff and Council Members. My name's Jackie Safier. I am President of Prometheus Real Estate Group. We're an apartment developer based in the Bay Area, family owned since 1965. We have two apartment properties in Palo Alto. I'd like to echo the previous speaker that the way to win the affordable housing challenge is really to build more housing. It's a supply and demand problem. We've had a major TRANSCRIPT Page 70 of 126 City Council Meeting Transcript: 10/16/17 increase in jobs and only 44 new apartments in Palo Alto over the past 3 years. That's the policy we need to focus on, encouraging land use and densities to allow more apartments. Five quick reasons why rent control is a lose-lose. First, virtually every economist believes that rent control reduces the quality and quantity of housing, from Milton Friedman to Paul Krugman to Tom Sole of Stanford to Tom Means of San Jose State to Ken Rosen at Berkeley. Second, rent control doesn't have any means testing. That means that the housing that you put under rent control can go to folks that don't necessarily need it. That's a disincentive. Further, people stay in these rent-controlled units for a long time, taking the supply off the market. Three, it leads to deterioration in the existing housing stock because there's no incentive to invest. Fourth, it takes millions of dollars to administer rent control. Fifth, price controls discourage housing supply, and that's the thing we need to focus most on. Thank you. Mayor Scharff: Thank you. Casper Leung to be followed by Karen Marincovich. Casper Leung: Hello. Some people put all of the responsibility to landlord. They think landlord make all of the problems. It's not true. Take a look at San Francisco. Because unfair rent control there, more than 40,000 houses withdraw from the rental market as we saw. The rent in San Francisco is much, much higher. Take another look at other cities. It's only one street away from San Francisco, that is Daly City. Because Daly City has no rent control, so the rent in Daly City is much, much lower than San Francisco. If you don't want Palo Alto's housing as bad as San Francisco, please don't put rent control here. All of the rent control city in the Bay Area their rent are much higher. Rent control can hurt both sides, hurt landlord and tenants. Rent control is only good for lawyers. Please no rent control. Thank you. Mayor Scharff: Thank you. Karen Marincovich to be followed by Gloria Leung. Karen Marincovich: Good evening, Mayor and Council Members. I would like to address the fact that I do believe, as others, zoning and more affordable housing is an issue. It should be followed up. It should be looked into more closely. That will provide more housing. I've seen what happens in the communities where rent control comes in. It does destabilize. It creates volatility. What it does is remove rental units from the marketplace. It works in reverse of what it's meant to be. It will create a higher demand and a lesser lower supply. This will not solve the problems of a community. We have an influx of great—what would I say—business efforts here. We have the tech industry that is not going away anytime soon. They are driving the business; they are driving the economy up. It is only going to stay up and is going to get worse. It's a matter of looking into better housing issues. I hope that TRANSCRIPT Page 71 of 126 City Council Meeting Transcript: 10/16/17 please we can look into doing that. Don't rob people of the marketplace either. If you set standards and you control issues, you confiscate. You in essence don't compensate, but you confiscate, and you take away the trade, a natural trade, from the marketplace. Please, please, look into a better housing. That's really going to be the just for the community. Thank you for your time. Mayor Scharff: Thank you. Gloria Leung to be followed by Meina Young. Gloria Leung: Good evening, everyone. Rent control is one of the worst things in Bay Area. Please look (inaudible) Oakland, Berkeley, and San Francisco. Because of the unfair laws (inaudible) from the rent control always (inaudible) to the tenant's side and protects them. Only a little bit to protect the property owners. It is totally unfair. If the rent control passed, there will be more rental units (inaudible) of the rental markets, and the rent will be higher because has rent control. That's why not enough houses, rental units for rent on the market. Please, please, no rent control in Palo Alto. Thank you. Mayor Scharff: Thank you. Meina Young to be followed by Tiffany Pan. Meina Young: Good evening. My name is Meina Young. The economists say rent control is the best way to kill housing other than bombing. There's a reason for that. A lot of people have said that you do a study and it won't hurt, but look at San Mateo, Alameda. They all did the study last year, last couple of years. They rejected it. That's your study. In San Francisco, as somebody mentioned, have lost 40,000 units so far and still going on at the rate of 2,000 units eroded per year. Why? For my own family, I have a single- family house, and my dad has a single-family house. My dad has dementia; I have to take care of him. There's no way that I—we could rent out one of our houses. Because it's San Francisco, there's no way that I can risk losing my house to a renter, and later on I need it back, and I have to pay the renter hundreds of thousand dollars on top of legal fees and the horrible process and also fix the damages. I don't have that kind of cash. There's no way I'm going to rent it. I'm going to keep it for my kids when they grow up in a couple of years. That's the reason why. I have a friend who had a building with four bedrooms per unit for four units. It's only at $900 because of the low rent increases in San Francisco. The tenant sublet it without her knowing, making a lot of money. Only when the house went on fire, she found out the tenant had the other (inaudible). Please, no rent control. Mayor Scharff: Tiffany Pan to be followed by Linda Zu. Tiffany Pan: Hi. I think first I want to say actually it's much City Council causes rising rent price. It is a new problem. It's not the only problem that Palo Alto facing. Our City probably should have the more creative way to solve the problems. I don't want when City bring this rental control. Now, I TRANSCRIPT Page 72 of 126 City Council Meeting Transcript: 10/16/17 see the community splitting to two. I hear somebody say there's a greedy landlord. It's very bad we split the community. We really need to think about a good way to solve this problem. It is not just the Palo Alto problem. The rent control actually is because—I know City want to solve the rising rent problems, but it's not that simple. Using the control the price actually is not fair to the renter also. The people now rent the Palo Alto house can probably benefit with the rental control. What about people that come in later? They have no place to live also. I actually also rent house. The good things about rent house, you can just (inaudible) to your job. You can move around. Now you fix your low rate, you really don't want to move. You cause more problems. It's about supply and demand. If we cannot increase the supply, we can try to decrease the demand. We can try invest more on the public transportation. We can connect the affordable areas; then people can easily commute. We also can ask the big companies; they probably can set up the campers in somewhere like Morgan Hill or something. Not everybody just stuck on the Palo Alto. The resource is limited. You actually say you commute 2 hours to work. Lots of people also commute 2 hours because Palo Alto just cannot fit so many people. We should be just more creative to try to figure out the new problems. Thank you. Mayor Scharff: Thank you. Linda Zu to be followed by Kristen Liu. Linda Zu: Good evening, everyone. My name is Linda Zu; I'm a realtor. I've lived in Palo Alto for about 15 years. I also help my buyers rent their units out. I don't think rent control is the solution to (inaudible) price. If you look at—everything in the Bay Area has gone up, the contracting and even the (inaudible) has gone 30, 40 percent. I talk to my buyers about rent control. They said if there is rent control, they will keep their housing empty because it's a lot of trouble to deal with the legal process and the lawyers. I also heard from all the other previous renters. They talk about the greedy landlord. I don't think they're greedy. If we look at 101, look at 85, everywhere so many people, people from all over the world come to Bay Area. In this situation, how could you expect (inaudible) stay in $1,000, $2,000 for one-bedroom apartment? That's impossible. Rent control will not be a solution for Palo Alto housing. Actually, I don't think rent control will be a solution for the whole Bay Area housing market. It's just too many people and not enough house for people to live. Thank you. Vice Mayor Kniss: Thank you. Our next speaker is Kristen Liu, followed by Ling Ma, and then Kitty Cheng. You can come closer if you'd like to. Kristen Liu: Hi. My name is Kristen Liu. I'm an electrical engineer in the semi-conductor industry. Dear Council Member, thanks for the opportunity. I came to U.S. as a student, worked part-time with $3 per hour. Rent cost TRANSCRIPT Page 73 of 126 City Council Meeting Transcript: 10/16/17 $200 back then. Time passes. I came to Palo Alto as a renter. I would not deny rent was expensive, very. Rather, everything is expensive, not just rental. Instead, I took as I grew up opportunity, which made me work harder until I bought a house in Palo Alto. At the same time, I establish as a role model for my kids. Please study as an example in San Francisco. That has rent control for very long time. What is the results? More vacant houses, higher spike of the rents. Rent control only our house rents. With control inflation, house price rising, property tax rising, won't balance the market. I would urge the Council Members to search for better solution. Please do not punish the house providers, which will only hurt Palo Alto community. I have two senior friends who bought houses in '50s. Their rent are half of the market values. What happen if the rent control would have passed? One would withdraw from the rental market as she could not deal with the (inaudible) consequences. The other would have raised her rent to close to the market price. Please do not consider rent control because it will hurt Palo Alto community. Thank you. Mayor Scharff: Thank you. Ling Ma to be followed by Kitty Cheng. Kitty Cheng: Good evening, City Council. My name is Kitty Cheng. Tonight I would like to share a good intention but bad results sample in San Francisco here. A lot of people already mentioned we have 40,000 vacant property in San Francisco. Yes, it is a serious problem, so I have to address that again here. A lot of landlord don't want to rent their property in San Francisco because there's so many abused by tenants due to the unfair rental law in San Francisco. A friend of mine has to rent a room in his property. The tenant did not pay rent after the six month, and he claimed he has no money. It turns out my friend has to hire an attorney, and it takes him almost 2 years to have that tenant move out. It is a really stressful journey, not even talking about the attorney fee and also the lost rent. We our mom-and-pop landlord, and sometimes we have to work two jobs or three jobs to support the mortgage. The law always protect the tenants even though they abuse bad tenants. As a result, the unfair law in San Francisco create supply and demand issue. Therefore, the rent continue to climb up every year, higher and higher. The city thought if they control or set rent control on the landlord, it would help the housing market. In fact, it is the other way around. If the rental law is set as more fair to the landlord, I believe there will be vacant property released back to the market, and then it would solve the rental shortage housing market, and the rent would be also adjust to a more affordable rate. Please, rent control and just cause should not be the solution. Thank you. Thank you. You were Kitty Cheng, so Ling Ma is not here, I guess. We'll move on to Wendy Wong. TRANSCRIPT Page 74 of 126 City Council Meeting Transcript: 10/16/17 Wendy Wong: Good evening, Mayor, Vice Mayor, and Council Members. I'm coming from San Francisco. I've been living in San Francisco for 27 years. For those rent control in San Francisco, we haven't seen any improvement in the housing crisis at all. First of all, my initial is WW, win-win situation. How are we going to find the win-win situation? We have a lot of members have been telling us that we need to inject more supply so that we can balance the market. First of all, we have to know that the rent control is counterproductive to the housing crisis. As we can see, protect tenants signs everywhere, most of them here on the right-hand side. I have to share with you that the protect the tenants in San Francisco has been proven failure. First of all, 60 years old who has been living in a unit for 10 years, they are under-protected; 65 years old, they are under-protected groups. Guess what? Those people are the ones who are not able to find any rental places at all because they are so protected. Let the market adjust by itself. I would like to share with you that, if you can see that San Francisco housing has been resolved, please use the rent control. We haven't seen any solution yet. In fact, the city has been pretty divisive from landlord and tenants. Our lease that signed with the tenants are not legally bind except that they all at the tenant side because we are labeled as greedy landlords. We are small property owners, and we are the owners who work hard to acquire the property and make reasonable rate of return. Thank you. Don't put rent control in this beautiful City of Palo Alto. Thank you. Mayor Scharff: Diane Sun to be followed by Howard Demroff. Diane Sun: Good evening, everyone. I think everybody comes in good intention to solve the housing crisis. What is the solution? Is rent control the solution we should pursue? My answer is no, it's not. Rent follows economics. It is supply and demand. Once rent goes up, we have less supply. What would solution to be? (inaudible) supply and demand. Is rent control actually protect the renters? The answer is no. is the rent going to solve the crisis? The answer is no. Why should we adopt it? Look at San Francisco. It's rent control for so many years. Does that solve the housing crisis? It's actually less supply, and more people are demand but they could not get it. That's the answer. That's a very good example. I'm a Palo Alto resident. I'm also a two-kids mom. When you put this rent control to this society, my immediate response is I'm worried. I'm worried about the future safety of this community. I'm worried about you put one group of people this community against another group of community. You put like probably one group on right up against (inaudible) another group (inaudible) right. Is that equal? Supply over demand. We have many solutions. That's the right way to do to solve this housing crisis. We also want to have more workers to be able to live in this community, like teachers, firefighters. I know government has some TRANSCRIPT Page 75 of 126 City Council Meeting Transcript: 10/16/17 sponsor program, good neighborhood program. Why don't we adopt that to provide more people that can afford to live in this community. Thank you. Mayor Scharff: Thank you. Howard Demroff to be followed by Kathy Edholm. Howard Demroff: Good evening. My name's Howard Demroff. I'm a Palo Alto resident; I'm neither renter nor landlord. Rental prices in Palo Alto reached a peak in June and have dropped in the last 4 months according to Zillow and apartments.com. This market correction and stabilization has occurred without any government intervention. Hundreds of units have opened for business along El Camino in our neighboring cities in the last few months, and rents have decreased. As the supply of apartments increases, the prices become more competitive. There's a current Palo Alto Building Code to promote the building of new housing units. If you drive north on El Camino from Sunnyvale up through Mountain View, you'll see many three-story apartment buildings that are now leasing. However, once you cross into Palo Alto, there are few if any new apartments being built on El Camino Real. In fact, building commercial property in Palo Alto is so much more profitable than building housing that the six-story building at 2600 El Camino Real is being demolished to build a new four-story commercial building. We need to find a way to encourage the building of additional housing, not less. We need to find a balance between all of the commercial permits that have been granted and the few residential permits that have been granted. We ask that you do not suppress an already meager investment in new housing, and we also ask that you protect renters by increasing the supply of housing, not by imposing rent control. Thank you. Mayor Scharff: Thank you. Kathy Edholm to be followed by Mariel Block. Kathy Edholm: Good evening, Honorable Mayor and Council. Just now, a lady with a sign of support renters passed through and told me, "Don't worry. There's a lot of money." Is that true? No. I came to United States 20 years ago with $50 in my pocket, $50 only. China then was damn poor, damn poor. I have been a tenant myself for many, many years. I worked very hard and look now. I'm a proud homeowner of Palo Alto. I come here to tell you rent control is a very dangerous experiment, social experiment. It's a dangerous social experiment. Look in United States, Massachusetts, a place very similar to California and Palo Alto. In the '80s, they started rent control, and what's the result? The economy damaged. The crime rate increased. In 1995, the voters there voted to ban the rent control. Back in China 60 years ago, we had rent control, land control, sugar control, meat control, clothes control, whatever control. What's the result? The economy collapsed, and people are divided into Communist and Capitalist. Millions of property owners got killed; that's true. Millions of property owners got killed. That's a result when you TRANSCRIPT Page 76 of 126 City Council Meeting Transcript: 10/16/17 divide the people and generate hate among people. My end words. I beg you be responsible and don't put us, the voters and the (inaudible) of Palo Alto as experimental, and you the mouse. We are not. Cherish the responsibility we, the voters, have given you. Thank you very much. Mayor Scharff: Thank you. Mariel Block: Good evening. My name's Mariel Block, and I'm a senior attorney with the Law Foundation of Silicon Valley. We provide free legal services to low-income and disabled residents of Santa Clara County. In preserving the Buena Vista Mobile Home Park, the City of Palo Alto showed that it valued diversity, inclusivity, and continued access to opportunity for all of its residents. Despite this recent victory to preserve the housing of nearly 400 low-income residents of Buena Vista, there continues to be a housing crisis that threatens the displacement of so many low and moderate-income members of our community. This includes the low-wage workers that perform the vital labor to keep our society running, teachers, nurses, families, senior citizens, disabled members of our community, and many more. At the Law Foundation, we represent these individuals and families in eviction proceedings, and we have firsthand knowledge of how few legal protections these renters have, even with access to a lawyer. We see how quickly and easily tenants can be evicted from their homes and ultimately displaced from the surrounding area. The City Council now has a chance to prioritize the study of strengthened renter protections including a just cause for eviction ordinance that would provide crucial protections to these moderate and lower- income individuals, members of our community and preserve the health and diversity of the City of Palo Alto as a whole. Just cause for evictions would allow tenants the basic fairness of being afforded a legal reason for why they're being displaced from their homes and would help to prevent retaliatory and discriminatory evictions. We ask you members of the Council to continue your commitment to providing safe and affordable housing to all members of the Palo Alto community as you did with the Buena Vista Mobile Home Park and immediately prioritize a study of increased renter protections including a just cause for eviction protection for all renters and not just renters in projects with five or more units. Mayor Scharff: Sally Lieber to be followed by Richard Yuan. Sally Lieber: Good afternoon. I'm Sally Lieber; I live in Mountain View. I think we're definitely in the zone of everything has been said, but not everyone has said it. I wanted to add a little bit of my viewpoint. Looking at what's actually in the Memo, it's some very mild options. Someone who was speaking, one of the landlords, said, "We were suddenly struck by what happened in Mountain View; we didn't expect it," etc. That's what happens TRANSCRIPT Page 77 of 126 City Council Meeting Transcript: 10/16/17 frankly when the pot is left on the stove and none of the pressure is released. I'd really encourage everyone who's spoken tonight to continue working with Council. I hope the Council will move this forward because the economic changes that have come to our area are really impacting our quality of life and will do so even more in the future. It's not foreseeable that we're going to pay someone enough to live anywhere in our area, anywhere within 50 miles of our area to do the really essential workforce jobs that need to happen, to work in healthcare, to work in our schools, to do the essential things that we can't get through our day without. I hope Council will move this forward and give it a chance to really be worked through in a lot of community discussions. Thanks so much. Mayor Scharff: Richard Yuan to be followed by Paul Morris. Richard Yuan: Good evening. My name is Richard Yuan. I've been a homeowner in Midtown for about 10 years. Many of the previous speakers have already—my point is I'm against rent control. Today, I just want to make one point because many of the previous speakers have already made a lot of the good points against rent control. Landlords—by the way, I'm not a landlord in Palo Alto. Landlords provide housing to renters, but landlords don't really compete with renters. Renters compete with other renters. Sometimes it causes confusion that rent control is a war between landlords and renters. That is really not true. With rent control, it creates two different classes of renters, those who are currently here versus those who are going to be here in the future. Every housing unit that's taken up by a rent-controlled tenant is going to meant that there will be one fewer unit left for the future newcomers. There is no reason whoever currently live here should enjoy such a privilege over future residents. It is unfair to anyone who is not currently locked into an existing lease agreement, who are going to have to pay a higher rent just because others have gained the protection from rent control. In essence, the future tenants will be subsidizing for those who enjoy below market rents just because of rent control. In the end, it is renters against renters. Rent control artificially creates bias for one group of renters versus another. It is unfair. We should not manipulate the market, and we should let it be a fair competition. Thank you. Mayor Scharff: Thank you. Paul Morris to be followed by Jing Quan. Paul Morris: Good evening, Mr. Mayor, Council Members. My name is Paul Morris. I own an apartment house on Ventura Avenue, south Palo Alto. We haven't heard anybody speak about from Page Mill Road going south. Everyone who's been running has been in the north. They should come down and visit us and see that we have reasonable rents, and we make improvements. I do have nurses; I do have school teachers; and I have other TRANSCRIPT Page 78 of 126 City Council Meeting Transcript: 10/16/17 public employees staying at my apartment complex. I'm curious to know how many of you on the Council own apartments here in Palo Alto. Any hands. None of you are landlords or owners of apartments, incorporations. Interesting. Nobody, interesting. You should consider going into business, see what it's like. My mother and I took over the business in '70 because it was so slow. She managed it, and I commuted to San Francisco, working for the Federal Government and going to law school at night. I know the hours I put in. I put in sweat labor painting. I took care of the swimming pool back then. This has improved, so we were able to get a manager in the '80s and '90s. Then, the business collapsed in the year 2000, 2004 up to 2008. We were offering one free month rent back then, 6 months tenancy and 9 months tenancy. This year, the apartment that I lived in back in the '70s is vacant. I put in over $7,500 in improvements, and I can't rent it for $100 more than I was getting last year. If anyone here needs an apartment, 800, 900 square feet, come down and see us at the Park Terrace Apartments. We'd be happy to take care of you. See what a wonderful place it is. I think this is a foregone conclusion, and you're going through the motions here of having some type of rent control, management, setting up a bureaucracy like they did in Mountain View. You're going to charge us per unit, and then you're going to have the attorneys who have spoken here come and sue us. That's what I'm seeing. I may go back to law school; it might be more profitable if that's going to happen and take the bar. Mayor Scharff: Thank you very much. Mr. Morris: Thank you very much, Mr. Mayor and Council Members. Mayor Scharff: Jing Quan to be followed by Penelope Huang. Jing Quan: Good evening. My name is Jing Quan. I have been living Palo Alto for 15 years. I against rent control. Last several years, the economy in Bay Area is booming, so a lot of high-tech company hiring a lot of people. We have many people moving to this area. That's caused the rent unit shortage. Also, we know the living cost increase not only for the renter; they also increase for the landlord as well. I'm an architect, and my work is related to the construction. Only in June, if you compared the lumber cost to last year, it's increased 17 percent. That's a lot. Also, in the meantime all kinds of material increase, and also the labor fee increase a lot. It's a big burden for the landlord to do the maintenance work. Also, I also went through the 2009 and the 2010 housing crisis. At that time, so many houses on the market cannot be sold, and also apartment units are vacant for many months. At that time, some of the landlord have to go through the foreclosure process. At that time, nobody come out to speak to the landlord. We need the market TRANSCRIPT Page 79 of 126 City Council Meeting Transcript: 10/16/17 to adjust by itself, not the rent control. Please no rent control in Palo Alto. Thank you. Mayor Scharff: Penelope Huang to be followed by Quan He. Penelope Huang: Good evening, Council Members. My name is Penelope Huang, and I'm a local realtor of almost 30 years now. It's hard to top Mr. Morris, but I'll try. I know that you're looking at the ADU units. I just want to make a comment that if you build 100 ADU units, that's the equivalent of a 100-unit apartment building. That will take care of an immediate supply problem that you have. It's quicker and easier to build an ADU than it is to build and get approval for a 100-unit apartment building. I don't know about the people who are here, who spoke, who were tenants. If they are currently living in a single-family home, like the lady in Fairmeadow, or in a newer apartment building, then under Costa Hawkins they will not be protected by any level of rent control or rent modification. I think there has not been brought up here in this forum tonight sufficiently, so I just want you to make a note of the whole Costa Hawkins provisions. I did want to say much of what's been said before. I'm actually just going to leave it. I am going to say that rents are stabilizing. We manage several units, some condos, some single-family homes, and it has been harder to rent this year for the same amount of money as we rented for previously. I've had a vacancy, which I just filled, in Barron Park, that has been vacant since August. We just got it filled now for an October 15 start. We took $1,000 a month less than what we had taken this time last year. Rents are definitely stabilizing. I would just urge you to let the economy take care of itself. I think you'll be fine. One thing I would just like to say as an aside, we've heard lots of people who can't afford to live here, can't afford to rent here. You would never suggest putting a cap on what somebody could sell their home for, so that somebody could afford to buy it. I want you to think about the flip side. Thank you. Mayor Scharff: Thank you. Quan He to be followed by Bruce Chen. Quan He: Hi. My name's Quan He. I'm a small landlord in the Bay Area. I do have a house in San Francisco; it's a duplex. The tenant upstairs doesn't work, and she doesn't sleep the daytime, and she hold parties at midnight 'til morning. The downstairs tenant complained so many times, and the police came on the girl 30 times per year. Finally, I decide to evict her. I thought it should be easy job because I got so many evidence of so many police reports. However, is very difficult, and it cost me $16,000 and took me like 4 months to evict her. Also, the neighbor downstairs was (inaudible) two times until I evict her. The third one stayed. With the just cause eviction in place, the neighborhood will be turn to bad because the good tenants will move away while the bad ones stay. The second thing I want to talk about is TRANSCRIPT Page 80 of 126 City Council Meeting Transcript: 10/16/17 the rent right now is turning south and is not increasing anymore. I don't think we need to put the rent control in place in beautiful Palo Alto. Please don't put in RC and just cause in place. Thank you so much. Mayor Scharff: Thank you. Bruce Chen to be followed by Tom Thompson. Bruce Chen: Good evening. My name is Bruce Chen. I have been Palo Alto resident for 10 years. I love the City, and I love everyone living in the City whether you're a landlord or you're a renter. I am here trying to get together to solve this problem. I'm strongly against rent control. A couple of weeks back, the Nobel Prize in economics—market also has a dynamic. There is a supply, and there is demand. In the past 50 years of the establishment of this Nobel Prize in economics, no single medal has been awarded to any economics in support of heavy government regulation. There are only two; one is in France, and one is in the University of Chicago. Because of their regulation on heavy monopoly utility industry, they win the prize but not any others. Market has a way to solve this. We have seen the price becoming soft in the last year, and we have also trying—sorry. What I want to say is the rent control is only one-sided protection. It is protecting the renter in a soft market, but it's not protecting the landlord in the downside market. It's unfair. I also want the City member to consider two (inaudible) fact. One is on the financial impact on the City. We all agree rent control will be destructive. It will bring down the property value, bring down the City revenues. Someone mentioned Santa Monica, and I did the research. In Santa Monica, every year it bring $120 million financial loss to the City and to the landlord. I think rent control bring hatred rather than love to the City and bring division rather than unity to our City. I urge you to be careful and to vote no. Mayor Scharff: Thank you. Tom Thompson to be followed by Randy Popp. Tom Thompson: Honorable Council Members, the Clerk has copies of my comments for you. The paradox of rent control, helping by making it worse. Two local examples of how rent, eviction, and relocation controls make our housing shortage worse. East Palo Alto became the murder capital of the world in 1992 and remains dangerous. Why? Gang members and drug dealers are nearly impossible remove with rent, eviction, and relocation controls. There are about 30 percent fewer—I said fewer—rental units in East Palo Alto now than in 1984 when rent, eviction, relocation controls were implemented. Apartments were demolished because over time maintenance costs and other costs far exceed rents after rent, eviction, relocation controls were implemented. The same thing happened to over 330,000 apartments in New York City. About a third of a million apartments demolished due to rent controls. There are 36,000-plus vacant rental units in San Francisco. Official TRANSCRIPT Page 81 of 126 City Council Meeting Transcript: 10/16/17 U.S. Census verification is attached. That's 15 percent of all rentals that owners refuse to even rent all because of rent, eviction, relocation controls in San Francisco. We could instantly solve our housing shortage overnight by adding 36,000-plus rentals by ending rent control in San Francisco. Eviction, rent, and relocation controls are failed gimmicks. Paradoxically, they are universally proven to be serious failures and make housing shortages worse. Don't let emotions override common sense. There's a common sense solution for the shortage, more housing. I'll end with this comment. You can't encourage housing by punishing housing providers. Thank you. Mayor Scharff: Thank you. Randy Popp to be followed by Shah Yu. Randy Popp: Good evening, Council. To the authors of the Memo, respectfully rent control is not the tool our community needs to fix the issues we grapple with every week in this room and Citywide. Understand what Costa Hawkins is about or read really almost any piece published by economists on this issue. Just leave this behind. It's divisive and ineffective. What we do need is to address the issues that have caused residential development to grind to a halt. This Council has the opportunity to repair the damage recent iterations of the Council have caused. Here's what we should be focusing our energy and money on. Let's get the ball rolling on dense residential development because the only solution is to build more housing, lots more housing. Please coordinate that with the appropriate infrastructure improvements. It's time to take significant action in the right way. Most of you have talked about it being a priority. I'm ready to see you all be the innovative leaders we need you to be. That's the Council memo I'd like to see. Here's what I'd suggest we set as goals. Have a market with enough supply so that prices are not artificially driven to the sky. Allow enough density and height in the right places to create new and convenient opportunities for families and individuals building and improving our community. Have enough variety to incentivize people to move at the right time from small to large or large to small. What we need is to create balance and stability for all who want to be part of our beautiful and thriving Palo Alto. Just please use the right tool. Mayor Scharff: Thank you. Shah Yu to be followed by Joshua Howard. We're missing Shah Yu. Joshua Howard. Joshua Howard: Good evening, Mayor and Council. Joshua Howard with the California Apartment Association. What I think is missing from this conversation tonight is there's been no recognition of what has worked well or what you currently have in place with regard to the requirements that all property owners are required to offer a 1-year lease. All property owners are required to give their residents an opportunity to go to mediation when they receive a rent increase or receive a termination notice. There's been no TRANSCRIPT Page 82 of 126 City Council Meeting Transcript: 10/16/17 analysis of how that that program is working. In fact, several years ago the Apartment Association partnered with the City to enhance that program and to provide greater disclosure and greater awareness and greater protections for residents and property owners through enhancing the mediation program. There's been no recognition of whether or not that's working or not working. I think an analysis of that is important before deciding to throw it all out and then begin to talk about the most controversial housing policy there is, rent control. Rent control, you've heard from many owners and residents tonight, is extremely expensive. In Mountain View, it's cost $2.5 million in the first year. In Pacific, if the voters approve the ballot measure on the November ballot, it will cost the city over $2 million a year to regulate the rental housing stock in Pacifica. Let's recognize what rent control doesn't do. It doesn't build one new unit of housing. Rent control does not bring housing costs down, and it is not going to help low-income renters stay in Palo Alto. There's no guarantee that low-income renters will receive the rent subsidies from their landlords that rent control provides. What's also interesting tonight is many of the speakers who were supporting rent control talked about how expensive housing is in Palo Alto. Rent control is not going to change the sticker price on a Craigslist ad. The only thing that will bring rents down is increasing the supply of housing in Palo Alto. There are people here tonight, many rental property owners, developers, and managers who are in the business of building and providing housing. It's time to work with them to find the solutions to build the housing that's necessary to stabilize rents in Palo Alto. Thank you. Mayor Scharff: Thank you. Ying Qing Zhao to be followed by Haluk Konuk. Yingqing Zhao: Good evening, everybody. My name is. I'm a Palo Alto resident. Tonight I'm here against the rent control Yingqing and any act. The reason is very simple. Just look at the results of San Francisco. It does not solve any problem. A lot of people already talk about that. Just look at the news. There are better ways to do that. It will just make Palo Alto no longer a prosperous City. Just look at East Palo Alto. The reason is very simple. The house owner will have no incentive to maintain the house given this. I just ask the City Council Members just to find other, feasible ways, which can really solve the problem instead of rent control, which has been proved many, many times cannot work, will not work in Palo Alto. Thank you very much. Mayor Scharff: Thank you. Haluk Konuk to be followed by Dong Li. Haluk Konuk: Hello. I'd like to take your attention to an article published by National Bureau of Economic Research this month, October, 2017. The authors are, I believe, from MIT, professors from MIT. This article shows that in Cambridge, when the rent control was banned how the crime rates dropped. TRANSCRIPT Page 83 of 126 City Council Meeting Transcript: 10/16/17 It's a research article, which demonstrates the positive effect of removing rent control in Cambridge by decreasing crime rates. You can Google it and read it for yourself. Another point I want to make is I am a property owner, an apartment owner. I once went to a conference held by—not a conference, but a meeting held by a bank. One of the speakers was a landlord in San Francisco who owns thousands of units, only in San Francisco. They don't do business anywhere else. I asked them how come. San Francisco is rent controlled. Why only San Francisco? They said they love rent control because they buy depressed price properties from mom and pops like you saw here. Many of them are immigrants, myself an immigrant. We are not greedy, big corporation landlords. We work very hard. Like the other person said, $50 in our pocket, came to this country to make a dream. These corporations buy depressed price due to rent control properties, and they have creative ways to make the tenants move out. The rent double, triple prices at the expense of newcomers. Now, think about rich becoming more rich thanks to rent control. Mayor Scharff: Dong Li to be followed by Chuck Jagoda. Dong Li: Hi. My name is Dong Li. I'm here against rent control. It's unfair to the property owner, also most of the tenants. First of all, rent control is only for the building before '79. Most of the rental property was built after '79. There are only a small portion of the rent properties under rent control. This rent control policy won't solve the problem. Second of all, for most of the tenants, they cannot benefit from this rent control policy because amount of the rent control units is not many. Most of them was occupied. Only a few of the tenants who live in the rent controlled units going to move out because of this low rent. Most of the tenants still have to pay the market rate rent to find an apartment or someplace to live. That means the rent control does not work. Since the units on rent control, the owner of the units won't be able to benefit from the rent control policy. Instead, they may lose money if they want to improve or maintenance the property. Since this, the owner will not be able to repair the units or do more things about the property. If this happen, it will make the environment worse and worse, real bad for the community. Thank you. Mayor Scharff: Thank you. Chuck Jagoda to be followed by Aram James. Chuck Jagoda: Good evening. We heard a lot of debate about rent control. I'd like to point out in the Memo the suggestion that Tom DuBois and Council Members Kou and Holman have presented. The only place that rent control would apply is to apartments, not houses, just apartments. Also, I'd like to mention something that I've heard about San Francisco, just anecdotal but I think it's true. You make up your own mind. The rents in San Francisco have TRANSCRIPT Page 84 of 126 City Council Meeting Transcript: 10/16/17 gone up and up. Many, many people have moved there because it's so attractive. One of the things that attracted them was the schools, fine schools, fine teachers. Rents have gone up so much that the teachers who used to teach in those schools can no longer afford to live in San Francisco. They had to move elsewhere and commute. That long commute makes it impossible for them to have an early morning soccer program for the children of these parents who want the great schools and to have an afterschool tutoring program. In other words, Palo Alto is a wonderful, wonderful place. The people who have the money and the power are in danger of screwing it up and killing the golden goose. Unfortunately like many other parts of the American experience, the poorest of the poor have to save the richest of the rich from themselves before they destroy the whole thing. Everybody who's talked tonight was pro and con rent control. What I'd like to hear is other suggestions. Rent control is a good idea, but it's only a band aid. When you're bleeding to death, a band aid can be good. What about other suggestions? I would really respect if this Council explored other—there are at least a dozen. Wilf has them. We'll be glad to share them with you. There are many, many other solutions besides rent control. Don't just put down one solution; come up with a good solution that you think is better than rent control. We need more positivity. Thank you. Aram James: My starting position would be that a lot of what's going to be important is how we draft a rent control statute. I'm a former resident of Palo Alto and now a landlord in Palo Alto because I rent out my house so that I'm able to rent a safe place in Palo Alto for one of my sons. I'm both a landlord, and I have my name on a lease. I helped manage properties for my mother, who's now 95 years old and worked with Tom Foy in the real estate business many, many years ago. Now, we've benefited tremendously from that. Now that my mom has 24-hour care and lives in an Eichler, we use the monies that she made to pay the very expensive costs to do that. My mother taught me something. Always maintain your properties for your tenants at a very, very high level, and do not gouge. I'm asking other landlords in Palo Alto to voluntarily sign onto a proposal that we limit rent increases to 2 or 3 percent a year. I can tell you also as a landlord by maintaining my properties at the top level for tenants, I write all of that off. I hear all these mom and pops, that's what we are. Mom-and-pop landlords in the City of Palo Alto have done very, very well by keeping the rents low, lower than proposed by the rent control, collaborating with the tenants, keeping them for years and years. I suggest that it's going to be—it's got to be just the first of many conversations here. A lot of what it's going to come down to is how we draft an initiative for rent control. We need it desperately. We need to keep diversity in this Palo Alto community. That's all I'm going to say this evening. Thank you very much. TRANSCRIPT Page 85 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Thank you very much. Mona He to be followed by John Hyser. Mona He: Hi. My name is Mona. I am a homeowner in Palo Alto. I urge the Council and Mayor vote against the rent control. Rent control does not solve the problem of affordable housing or even the housing in Palo Alto. Our neighbors—we have Google, we have Facebook and they're all expanding. They're a tremendous workforce moving in this area. If you put rent control, it does not solve all these young people, workers from all over the place try to work in this area. That is the reason the rent control will not solve the problem. I like that lately the City passed the new ordinance to provide new accessory buildings. Those are positive solutions to try to resolve. Instead of do this rent control thing not provide anything. Please find something else instead of the rent control and waste everyone's money. Thank you. Mayor Scharff: Thank you. John Hyser to be followed by Faith Brigel. John Hyer: Good evening, Council. It's been a long night. I'm John Hyer, and I work with an institutional housing provider. We provide homes for people all over the country. We have affordable, and we have market rate properties. You can't put the burden on your housing providers to make up for years of failed policy. There needs to be more housing built. There needs to be affordable units created. Affordable units, for those who don't know, are the ones that are affordable in perpetuity. A typical percentage that's being applied to developers is 12-15 percent. Those units are affordable in perpetuity. If a couple walked into Safeway, loaded up the grocery cart, walked up to the stand, went to pay for it, they said, "We don't have any money to pay for this." Would you go to Safeway and say, "Safeway, you have to pay a percentage of the food in their cart"? No, that's not reasonable. There are programs to take care of that. There are Federal program; there are State programs that will help those people in need. I would encourage you to think about how those types of programs can be implemented on a city, state, regional that doesn't put the burden on those people that are actually helping you. These people that own, the mom-and-pops, the developers that would like to build new, they want continuity in the marketplace. They want to know, when they invest in your community, the rules aren't going to change, there's stability, and you can have housing for all the people, affordable and market rate. Please be careful in your considerations. Thank you very much. Mayor Scharff: Thank you. Our final speaker, Faith Brigel. Ruth Brigel: Good evening. Thanks for listening to all of us. It's seems to me from what I've heard so far that most people are against rent control. I hope you do represent us, and I hope you'll go by that. I am against rent TRANSCRIPT Page 86 of 126 City Council Meeting Transcript: 10/16/17 control for a lot of reasons. I can't go into all of them. I know several apartment owners in San Francisco, and I have heard horror stories about how abusive rent control can be. I think it doesn't work. I think it's not going to solve the problems that we have as most people here have said. I've noticed that the owners like myself adjust their rent to the market. We have to, or we're not going to have anyone in. This year, I've lowered my rents by about $800 because no one was taking them. I think a lot of people have found that. I own several older buildings, and I take good care of them. I love them; I'm proud of them. I feel it's part of my business. I do take good care of them. I've noticed that when you put rent control in, there's an animosity that starts to develop between owners and tenants and buildings are not take care of quite as well. I'm hoping that you will not go with rent control. I think it's complicated, confusing and, I think, it doesn't work. I hope you will get back to the business of doing other things that our community needs. Thank you very much. Mayor Scharff: Thank you. Thank you all very much to all of you who have stayed for this item and spoke and participated. Now, we'll come back to Council Member DuBois, if you want to make the ask in the form of a motion. Council Member DuBois: Sure. I'd like to speak to it a little bit first. Mayor Scharff: Absolutely. You have the floor. Council Member DuBois: First of all, I want to thank everybody who spoke, those who left, those that are still here, on both sides. Property owners clearly want a regulation that doesn't go too far. Long-term residents who are renting don't want to be forced out of the community. When you read the Memo, it was attempting to be pretty balanced. Why do we need rent protections? It's not rent control, but why do we need renter protections. We really live in a unique part of the country. We live in a Peninsula. It's home of Silicon Valley. We have immense economic forces that are disruptive. It's no coincidence that most of the rent stabilization ordinances in California are in the Bay Area. That's not a coincidence at all. The only thing that we need to decide tonight is what I said before. Is this an issue worth further discussion? I hope all of you on Council will say yes to that. I brought this to Council, along with Council Member Kou and Holman, in the hope that regardless of where you are on the spectrum—Liz, I'm talking to you. Vice Mayor Kniss: We're working out how long you're going to be talking. (inaudible) Council Member DuBois: That's what I'm saying. This is an unusual thing for us to consider. Regardless of where we are on this spectrum of property TRANSCRIPT Page 87 of 126 City Council Meeting Transcript: 10/16/17 rights, I hope we can at least agree that this deserves some analysis and some consideration. Vice Mayor Kniss: That was our discussion, Tom. We want to give it plenty of time. Council Member DuBois: It's okay. It's my turn. Just a few more expanding on a few points in the Memo itself. Since 2011, the average rent in Palo Alto has increased 50 percent, while the average median income has increased about 5 percent, about ten times. There's been some talk about rents are stabilizing. We see booms and busts all the time. This is a long-term trend that's just not sustainable. There have been a lot of reports out there that for every tech job there's four or five support jobs. We've heard from people tonight that teachers, janitors, service workers, all of those are needed for the functioning community. Increasing rental protections, we're making it possible to have long-term members of the community remain here and really have some stability. Forty percent of our residents are renters; 55 percent of those are multiunit buildings of above four units. A lot of speakers said this isn't the solution, and I think they're right. This is not the solution. This isn't an either/or decision. We need to do multiple things. Just because we work on rental protections doesn't mean we solve all of our housing woes. Just because this doesn't solve everything doesn't make it wrong or unneeded. Yes, new developments can provide market rate housing for high-income tech workers. That part of the solution. Affordable housing, we increase fees on new development to pay for below market rate housing projects. We set those fees at a lesser rate than I think is necessary, but we did raise those fees. We had a City office cap because office rents trump housing and retail. We should be enabling new housing Downtown; we talk about that. This Council voted to remove the office cap. In the Comp Plan, we weakened our annual growth limit. Again, we've got to think for every job we add, that's support jobs that need housing. Increasing renter protections is one of the biggest ways we can impact middle-income housing. By considering some protections for buildings older than 1995, we focus on that middle market, we focus on middle income. That's a critical segment of the community that's really been squeezed. The goals of this ordinance are really about social and economic diversity. A lot of the speakers have been talking about housing supply and demand, letting the market do what it will. Too many people are being pushed out by Adam Smith's invisible hand. We need to recognize the distortions to the free market causes. We have over-development of office. We have unregulated office densities. That's driving housing to a demand level that can't be met. I've seen some reports recently that it's going to take 14-30 years in the Bay Area to build enough housing. That's the kind of environment where it's so explosive that some kind of rent stabilization is needed. In terms of economics, maybe more appropriate than Adam Smith is Shumpeter, who TRANSCRIPT Page 88 of 126 City Council Meeting Transcript: 10/16/17 talks about creative destruction. We live in the heart of the creative destruction industry, Silicon Valley. Entire industries are disrupted. When it comes to housing, it's an appropriate role for government to provide a social safety net and smooth out those extreme swings. Minimizing speculation in the market is a good thing when you're talking about homes. Sticking with the economics theme. Economists are fond of saying that everything works out in the long term. The old rejoinder is in the long term we'll all be dead. The situation here is in the long term, if you're a renter, you'll be priced out of Palo Alto. We need to help people absorb the change by limiting the impacts from year to year. I think we're talking about extreme swings, nothing as extreme as some of the other cities. The goals here are to support retention of a healthy, diverse community; to provide protections from unjust evictions; and to continue to promote the construction of new housing rental units. We should consider an annual percentage cap on rent increases for multiunit residences. We should really think hard about the process and having a Council-proposed ordinance rather than a voter initiative that will allow us to tweak the ordinance over time. I want to talk a little bit about process. I've changed since I wrote the Memo with Council Member Holman and Kou. It's an important issue; it should be done at Council. It's likely to be controversial, and it needs exposure and public debate. Rather than send it to Policy and Services or subcommittee, I'd actually propose that Staff does some work and we have one or two Council sessions. Staff gave us two great reports in the packet of what's possible and the range of options. Just quickly to respond to some of the things some of the speakers brought up. People talked about people moving into an apartment and never leaving until they pass away. We could define an ordinance that doesn't do that. That's very old school. Rates are already very high. We're not talking about starting at a low point in the market. There's a concern that small landlords will be hurt. Small landlords are typically exempted. This doesn't apply to single-family homes or anything with less than five units. There's a concern that it will degrade the quality of housing. Any ordinance has to provide a fair rate of return to landlords. We can allow pass-through for improvements such as seismic upgrades, which we were supposed to talk about later today. There are ways to deal with improvements to buildings. Ultimately, there's a feeling that landlords are going to be harmed. I'm really looking for balance. I'm looking for the benefit of a stable community with reasonable rent increases. For landlords who are planning modest rent increases, this won't really have any impact. We're trying to discourage speculation. That's a good thing. It's not the average rent increases that harm people; it's the extremes. That's what we need to talk about and look at, extreme rent changes. I know I've talked a bit, and it's been a long night. Just to summarize, I think we have a moral imperative to smooth out rent increases. A large part of our population are renters. This is a problem that's not going to go away. We can say that rents are flat this year, but it's going to be here 10 years from now. The markets go up and TRANSCRIPT Page 89 of 126 City Council Meeting Transcript: 10/16/17 down. This is a matter of economic necessity for Palo Alto. We rely on our retail and our restaurants, our hotels. If the employees can't live close by— we're already seeing a lot of the impacts to our City. A fourth point is this would be a Council-managed process. There can definitely be unintended consequences. Other cities have made mistakes. A Council Ordinance will allow us to tweak it over time. I hope we'll take the time. I definitely think this is an appropriate role for the Council. I did send a Motion to the Clerk, which is essentially the Motion that's in the Memo itself. The Motion is that we refer this to Staff to bring it back to Council for one or more discussions; that we would discuss an annual percentage cap on rent increases for buildings of five or more units and built before February 1, 1995; that we would discuss measures to protect against termination without just cause; that we would consider other updates to our existing renter protections; and that we would include our Human Relations Commission as part of the review process. Council Member Holman: Second MOTION: Council Member DuBois moved, seconded by Council Member Holman to refer this proposal to Staff to bring back to Council for one or more discussions of an Ordinance to increase renter protections that considers the following: A. An annual percentage cap on rent increases for buildings of 5 or more housing units built before February 1, 1995 (to remove any disincentive for new construction); and B. Measures to protect residents against termination without just cause while protecting the fair rights of property owners; and C. Other updates to our existing renter protections as needed to continue a healthy community; and D. Include the Human Relations Commission as part of the review process. Council Member DuBois: That's it. I've spoken to it. Mayor Scharff: Council Member Holman, would you like to speak to your second? Council Member Holman: I won't repeat all the quite appropriate and on point comments that Council Member DuBois made. I'd just point out it is the role of this body, of any government, to work in the public's best interest. It is our role to take on difficult topics, to make difficult decisions. We have done other things in the last couple or three years such as put in ground-floor retail protections. That's because retail is very important to our community, both TRANSCRIPT Page 90 of 126 City Council Meeting Transcript: 10/16/17 from the public services—that's retail and retail-like—not only because of the services and goods that those provide to our residents. It's to keep people shopping here, not driving someplace else. It's also to help provide sales tax dollars and goods that support our economic base as a City, so we can provide services to residents. It's a matter of balancing all of these needs. As Tom said, it's an economic necessity, and it's a social need. All you have to do is walk up and down University Avenue, California Avenue. There are "help wanted" and "now hiring" signs in the vast majority of the windows of these retail establishments. I've been talking to a number of employees and saying, "Why is that? What is the driver behind that?" High rents are part of the cause. That definitely gets mentioned and mentioned early on. People are making decisions—this is from personal conversations I've had with employees—about whether they're going to live here if they can afford it or if they can live close enough that they can still commute to Palo Alto to work in our retail establishments. If they can't, if they don't want to bear up under the transit time and the transit expense, they're going to move someplace else and take up some other line of work. We really need to do something. This is, as Tom said, one measure, not the only measure. For those who said that we ought to be building more housing, this does nothing to preclude that. New housing units won't even be covered by these renter protections. It's only the older, before 1995, housing units. We're doing nothing that is going to curtail new housing production. For those reasons, this is a moderate step to take. It's one of a multi-pronged approach we need to take to help support residency in Palo Alto. I hope colleagues will support this coming back to Council for a longer discussion. Tonight is just getting it agendized. Thank you. Mayor Scharff: Council Member Fine. Council Member Fine: Thank you, Mr. Mayor. First of all, thank you to Council Member DuBois, Council Member Kou, and Council Member Holman for bringing this up. This will be a good discussion for us. As a renter, I appreciate the opportunity to have this discussion with all eight of you and with our community at large. Especially thank you to all of our speakers on all sides of this issue. I don't think there are two sides here. I think it's a multi-factor problem that we're looking at tonight. I would encourage us to all think of it in that way, not as one side versus another. I would just mention one thing. There have been a number of exaggerations tonight, which misrepresent different people and different interests. I would encourage all of us including the members of our public to have a civil discussion and demonstrate the behavior we'd like to see in others. That said, I have a few points to make and many questions to my colleagues, the authors. A few points before I get into the questions. First, fundamentally the housing crisis in this region is an issue of supply and demand. That's inarguable. Second, the community has TRANSCRIPT Page 91 of 126 City Council Meeting Transcript: 10/16/17 clearly stated its dissatisfaction with increased commercial growth in this region. Our Council has responded to that. The community has also expressed its desire for more housing, which I don't think we've responded to. I haven't heard much of a desire from our community except tonight of a desire for rent control. Third, we have a number of tools in our housing toolbox. I don't believe we have properly explored or exercised them to achieve our housing goals. One thing that does worry me is that an issue such as rent control or even exploring this issue will crowd out other solutions. Finally, the academic research is quite clear on this. Rent control doesn't solve affordability. It reduces the availability of housing. It pulls rentals off the market. It decreases housing quality and housing mobility, increases demand for non-rental units, and it increases inequality. I used to teach urban economics in grad school. One of the first questions my students would always ask is what about rent control and why don't more cities do this. I would try to explain to them that rent control may be one solution in the toolbox. It's part of a housing package. I would also challenge their perceptions about rent control. Tonight, I'm going to respectfully challenge all of you on this Memo because I want to learn more about its intent, what you think the goals are. As always, I'm open to persuasion. Our role tonight, as I see it, is to do the most good for the most residents and that means today and tomorrow. With the permission of the Mayor, I'd like to ask the Council Members submitting this Memo a number of questions. Mayor Scharff: Yes, absolutely. We don't have Staff. This is a Colleagues' Memo so (crosstalk). Council Member Fine: Thank you. I may have some questions for Staff as well. I was a little worried that—rent control is a big issue. There are many different ways—as you've said, Council Member DuBois, there's a spectrum of ways we could go about solving this and putting it forth in the City. I was hoping you'd be a little bit more specific about the problem you're trying to solve. Is it the swings in rents? Is it preserving folks who live here currently? Is it making easier for folks to move into our City in the future? I was hoping specific about the problem you're trying to solve. This is for any and all of you. Council Member DuBois: We heard from the School District about—really to me it's about stability in a community and having people have the ability know that they're going to have a place to live and put down roots. Even though 45 percent of the people are renters, they're residents. They should be able to not live in fear that their rent is going to go up 50 percent in a year. Social and income diversity is part of the goal. Again, I'm not prescribing a specific solution. If you have that kind of question, I'm not proposing particular types of protections or numbers or anything like that. TRANSCRIPT Page 92 of 126 City Council Meeting Transcript: 10/16/17 Council Member Holman: I moved here in 1975. Palo Alto was, at that point in time, considered expensive. It's always been expensive. We moved here and paid—I don't remember; I'd have to stop and think about the numbers. We paid quite a lot more for a comparable house here to rent than when we were living in Dallas, considerably more. We'd set a price point that was higher, and we had to go way beyond that to be able to afford a house here to rent. We're not going to roll the clock back. That's not the intention of this. It's going to be expensive to live in Palo Alto. It just is. What you heard from Council Member DuBois and what hopefully you could take from the Colleagues' Memo is we're trying to moderate the spikes, so that people don't just "I'm paying $4,000 a month now for rent, and next month somebody could knock on my door and say, 'I'm giving you a 10-30 percent rent increase.'" We're trying to avoid that kind of displacement. It's disruptive not just to the family. It's disruptive to the community. It's disruptive to our teachers, our retails. It's just a disruptive thing. All economies have spikes. All economies have ups and downs. What we're trying to do is moderate so those spikes don't have such negative and profound impact in negative ways on our community. Council Member Fine: Thank you for that. Just to share a personal story actually on that. After last year when I was elected and my landlord realized I was suddenly captive in Palo Alto, I got a 30-percent rent increase. I had to move across town. That happens here in Palo Alto. I get that, and I feel folks who see that. That's a real issue. I have a bunch of follow-up questions, but I'm going to go through my main ones. Hopefully that'll light some ideas among the rest of you all. Council Member Kou: If I may just answer you also? Council Member Fine: Please. Thank you. Council Member Kou: In the report that we have over here, it does state— I'm sorry? Was somebody speaking … Mayor Scharff: Go on. Council Member Fine: Somebody was asking me to speak slower. Council Member Kou: In the Staff Report, the Fremont study actually does have tables that show the increase and the spikes that have taken place in a 1-year period. There was one at 29 percent. It follows what you said yourself. Both Council Member DuBois as well as Council Member Holman have basically said this is a protection in order to help during the spikes. We have adjustment now, which is super. It shouldn't even affect the landlords at this point. It is, when we have the spikes, to ensure that we do have a mechanism TRANSCRIPT Page 93 of 126 City Council Meeting Transcript: 10/16/17 in order to keep people who are living here already, such as yourself, here. This actually goes to helping and protecting you in a manner of speaking. There's the letter from Silicon Valley Association of Realtors, who said this is the bluntest instrument that only works for incumbent residents. What's wrong with helping incumbent residents? That's what I'm going to say. Normally, this is not something that I would even support. Having been here and knowing the problems that we face where there are spikes during the years, when economic growth is going very well, and with the jobs and housing imbalance that we have, at the end of the day we have to look at what kind of past policies we've had. In looking into it, this is an extraordinary situation. It makes me think we need to have extraordinary measures. Fixing the problem is not easy, nor is it going to be quick. Like I said, normally I wouldn't be doing this. I am a realtor. I am a property manager. I see the ins and outs of both sides. I've seen the dealings of increases in rents. I've seen the landlords who don't want to fix a roof or take care of plumbing. Yet, I've also seen those that have taken care of their tenants and have worked very well in order to ensure that their tenants have a stable level and reassurances that they are here in this City with us. Council Member Fine: Thank you. I'll just go on to the next one. Why did you choose these rent control measures and tenant protections among others? Specifically, I'm wondering why not include issues like binding arbitration, increased dispute resolution, a register of all rental properties and prices, eviction relocation compensation, landlord requirements to notify tenants of protections. These are all along the spectrum of what we might do to strengthen renters and their rents. I'm wondering why these ones. Council Member DuBois: We already have mediation. We already have the 1-year lease. "C" is really meant to capture those, to let Staff look at the whole range of options. If we want to go from mediation to arbitration, that's something we can discuss. It wasn't meant to be limiting in any way. Council Member Fine: Why not something like vacancy control? Council Member DuBois: I think vacancy control is illegal. Council Member Fine: We could still propose it here, right? (crosstalk) Council Member DuBois: It's illegal in the State of California. Again, there were a lot of reports … Council Member Fine: We could do vacancy de-control. I know it's illegal. I'm wondering why those aren't on here. TRANSCRIPT Page 94 of 126 City Council Meeting Transcript: 10/16/17 Council Member Holman: Can I just add that a Colleagues' Memo is to get an issue out to set a platform and an arena for discussion. It's not to put a fine point on everything to be discussed. That's when this comes back to the Council hopefully for a discussion. That's when we'll be able to have the larger discussion about perhaps some other ways to approach these. A Colleagues' Memo's purpose isn't to list 14 different ways—I don't know how many you have. It's not to vet all of those issues; it's to set a parameter and establish goals. That's the primary purpose of a Colleagues' Memo, to establish the goals and set the parameter for getting—not the parameters but the basis for having the discussion. Does that help? Council Member Fine: Yeah. It actually leads a little bit to my next question. If we get this out into the arena of discussion, what happens in the interim? Would landlords in the City raise rents? Would that worry you? Council Member DuBois: Council Member Holman's comments are well taken. We're not here to answer every question. Staff is going to have to consider. Mountain View considered that, and they set a date when they started their conversation. Council Member Kou: Also, they can raise the rents. The thing is their property is going to stay on the market unrented because there is competition out there. That's another factor of what they talked about. Many of the commenters talked about economic forces and market forces. Certainly, the landlords can raise it right now, but there are other properties that are at a reasonable rate, and they can go for those as well. Council Member Fine: If they're at a reasonable rate, what problem are we trying to solve here? I'll move on to the next question. Council Member Kou: Spikes. Council Member Fine: What do you expect to happen to property tax revenues, which fund this City? If you rent control a property, it's property price likely decreases or doesn't rise at the same rate that we've been experiencing. Do you foresee any effects on our property tax base? I'm just wondering your thoughts around that? I'm trying to be respectful here, but this is a big issue and these are hard questions. Council Member DuBois: If we rent stabilized, it's going to depend on the details of what the ordinance was. It could have no impact. If we said, "You can never increase your rents," it'll have a severe impact. We're not going to say that, so I expect it's not going to have much impact at all. TRANSCRIPT Page 95 of 126 City Council Meeting Transcript: 10/16/17 Council Member Kou: This is a rather moderate rent protection. As Council Member Holman said, we're here to study this and to explore the measures. You can talk about the tax consequences and so forth, but it's a very moderate rent protection. Council Member Fine: I understand that. Just as something the Mayor said, every dollar counts in terms of our public trust. I think we should be considering those. Council Member Holman: Can I just add? Council Member DuBois and I have both added that we're also reliant on our sales tax base. If we don't do something to help support the workers who work in our retail sector, we're going to lower our tax base in that arena. I don't anticipate—we'll see when this comes back for discussion—any significant property tax base reduction. If we don't support our retail, personal services, we are going to see a tax base decline. Mayor Scharff: Council Member Fine, this is devolving into a debate between you and them. That's really not the intention of this item. You should make comments. If you have particular questions that are not debatable—you should make your comments. Council Member Fine: Thank you, Mr. Mayor, for that feedback. I'll just say I'm quite skeptical here. I'm not sure we completely as a Council understand the exact problem we're trying to solve. I fundamentally believe our housing issues are a matter of supply. Until tonight, this is not something I've been hearing from the community. Last year when I was campaigning, everybody was talking about housing; so was I. Rent control wasn't coming up. I have a lot of worries across the spectrum for our City in terms of this, whether it is the tax base, whether it is housing mobility, whether it is housing quality, whether it is the rights of property owners. I also do worry about putting this football out there and just seeing what happens as we kick it around for a few months. Other updates to our existing renter protections could include things that are more severe than the moderate proposal here, as you put it. I would have liked to have seen a bit more work around some of these issues. Maybe I should have sent you guys these questions beforehand. I'll leave the mic for now to others. Mayor Scharff: I think I'll speak next. In thinking about this, the quote that comes to my mind is the road to hell is paved with good intentions. I have no doubt that there are good intentions behind this Memo. The issue becomes, though, as many of the speakers point out, it has the perverse effect of accomplishing the opposite of what the speakers want. First of all, we just have to be clear. This doesn't lower rents in anyway. There are no retail TRANSCRIPT Page 96 of 126 City Council Meeting Transcript: 10/16/17 workers who don't currently have an apartment that will ever be able to get an apartment in Palo Alto if we pass this. What we will do is take the entire supply before 1995 off the market. There will be no way that anybody will be able to get into those apartments. Then because there is such a short supply, we will raise rents for all apartments above 1995. This will have the perverse effect of doing the opposite of what you want to achieve. You will get a small group of people who get to stay in their apartments. I think of the woman who read the poem. I was thinking she's talking about living in an apartment where the paint's peeling. She could be locked into that for the rest of her life. That's what we will achieve. We will achieve that people will not be able to move. We complain about this with Prop 13, that people can't move. We rail against it all the time. What we're going to do is have a small group of people who will not be able to move. This will increase traffic congestion. This will decrease their job abilities. This will make them poor. This is not what you want. Even studying this has huge negative consequences. When I listened to all the speakers out there, I listened to people being concerned about renting. The first thing that will happen is people will not lower their rents. Even though they should, they will keep their property vacant as we debate this because they will not want to have a lower base to start with. There will also be real concerns as we talk about unjust eviction. Unjust eviction is also one of those things where it sounds really good. Remember, all landlords want to keep their property rented. When your property is unrented, you lose money. Turnover costs are the biggest problem for mom- and-pop landlords. If you have ten units, say, and it costs you $2,000 or $3,000 to turn your unit, you don't want to do that. Vacancy, think of every month you lose. If you start with a premise that landlords want to keep their properties rented, which I fully believe they do, then the issue with unjust eviction is what are we trying to do. What happens is—people have alluded to this. If you have a tenant that has wild parties all the time, you can't get rid of them. You're not going to spend the money to go through the process. If you have tenants that have friends that are gang members, frankly, or that sell drugs or that do any sort of illegal activity, to go through the process—if they're not the one doing it, it's just their friends doing it, you can't evict them. What you end up with is tenants get to stay, who cause problems for all the other tenants in the building. What I'm saying is there are rare reasons—I'm not saying it's 100 percent. There are always outliers. The majority of landlords want to keep their tenants. The other people that get punished on this is—there are a lot of landlords in Palo Alto—I know a lot of them; I know a lot of their tenants—where they keep the rent low. It's $300, $400, $500, $1,000 under market. The reason they do that is because they want to keep those particular tenants. They like those tenants. What's going to happen if we start studying this is they're going to start panicking. They're going to start saying, "Our rents are really low, and we can't lock ourselves into this." People will start sending out eviction notices. They'll start doing things that TRANSCRIPT Page 97 of 126 City Council Meeting Transcript: 10/16/17 we don't want them to do. Studying this in itself is dangerous. I appreciate the clapping, but I also wanted to say—now you've got me all flustered. I wanted to say that it's not just—I did lose my train of thought on that. No clapping; it makes me lose my train of thought. I wanted to say that we talk about janitors, teachers, retail workers. There's no indication that those are the people we'll be helping. There really aren't. It's just a political statement. You're just as likely to have young tech workers in these pre-1995 apartments as you are janitors, etc. We should be honest with ourselves. If we are interested—there are tools to do this, where we target certain groups of people. We should focus on doing that if that's what we want in our community. I realize the realtors said it's a blunt instrument. It is a blunt instrument. What we're doing is saying anyone in an apartment before 1995, if you're there, you get to stay there regardless of your income, regardless of your job. Given all of that, I don't think we should study this. I'm glad it was brought up. What we should do is simply turn this down tonight and be done with it. Please don't clap. I appreciate it, but please don't. I really appreciate the fact that you guys brought it up. It's a good discussion to have, but it segues into the next thing of, if we spend our time doing this, we're not spending our time—we hear from our City Manager all the time that we have limited bandwidth in Planning. We have limited bandwidth in Council. Tonight, for instance—I'm glad we had this discussion, but we really are not going to get to any of the other items—we have to do—we're going to be here 'til midnight at least, maybe 1:00 in the morning. We have to do the fire thing tonight. It takes away Staff time from working on things like how do we increase housing, how do we provide teacher housing, how do we provide housing for retail workers, how do we target what we're actually trying to achieve here. I don't think we should do this. What we need to do is focus with a laser focus on what we're trying to achieve and move forward on those items. What we need to do is really have that laser focus. With that, I'll turn it over to Vice Mayor Kniss. Vice Mayor Kniss: My comments aren't going to end up in a different spot than the Mayor's did. I want to go back over a few things. This says this is for a discussion; I heard the three of you. It's very precise. An annual percentage cap on rent increases is very precise. I don't know who would decide that or how it would be decided. I'm not going to concentrate on the motion. I want to concentrate, instead, on something quite different. I want to go back over the last year, year and a half. A year and a half ago, we did a Citywide poll, and it said that 76 percent of the people in Palo Alto believed that affordable housing was our most important issue. No question. That fall, several of us ran for office. You know who we are up here. Everybody ran on affordable housing. I have everybody's brochures. I can guarantee you they all said this is about affordable housing. We now are 3 years into the last time period with 44 units built. We are not proving that we really are all about TRANSCRIPT Page 98 of 126 City Council Meeting Transcript: 10/16/17 affordable housing. We haven't put any more affordable housing in place as yet. If we go ahead with something like this, we put Staff time into this and not Staff time into getting us into affordable housing. While you don't have this to look at tonight, today Cory Wolbach and Adrian Fine and I put forth a memo about housing that we think will get us to the affordable housing point faster than we've been able to get there so far. That's where I'd like to spend my time. I don't think rent control is an effective tool for addressing the housing issue. The memo that we put in will be a very effective memo for addressing the housing issue. When I talked to a variety of people today, they said very much what we've heard tonight. They said ask people who have tried this in their community did it work. You heard from many, many people tonight, certainly from San Francisco, which surpassed even what I would have guessed. We've watched this happen many places. I didn't know about Cambridge. I presume that's Massachusetts. That was fascinating. We would be kidding ourselves to think that rent control can improve and resolve a regional problem that now affects the entire Bay Area. We're only 67,000 people. This is a big Bay Area. I would like to say that we make a huge difference; I know we think we do. We're still part of an enormous Bay Area of nine Bay Area counties. What I'd like us to do is look at what our real issue is, which is housing. Many of you couldn't have said that any better tonight. I don't think we have our priorities straight if we're going to look at rent control first and then affordable housing second. To wind up on this, I think rent control is an expensive program. I also think I'm very concerned about what bureaucracy it would take on this. You've heard about Mountain View already up to 2 million a year to run their program. That's going to be a long-term issue for them. They're already running into huge problems with it. I would also echo what Adrian said earlier. I haven't heard about this as a problem; whereas, I've heard about affordable housing now for a year and a half, over and over again. I wish I could tell you that we had a bunch of stuff that's coming forward that we're voting for, and we don't as yet. I don't see this as solving the problem. I know that I had close to 100 emails asking us to vote no, but lots of people showed up tonight that said yes. This is a split issue. When you have a split issue, you're probably going to have a split Council. it's much more fun when we can all work together. This is an issue that has such importance to me that I really don't feel that I can support this tonight without having taken up the real issue, which is affordable housing. Thank you. Mayor Scharff: Council Member Filseth. Council Member Filseth: I may ramble a bit, for which I apologize upfront. Actually, the first thing I want to say is I'm really glad we moved this up tonight so that we could have this last 2 1/2 hours of discussion. This was actually really helpful for me thinking about this. Yes, we got lots of emails, TRANSCRIPT Page 99 of 126 City Council Meeting Transcript: 10/16/17 a lot of them from out-of-town property owners I noticed. I'm glad we did this. First of all, what I really like about the Colleagues' Memo is it targets the right group. It's the first time we've hit the bull's eye on one of these programs. That's in two directions. One is it's actual current potential residents that this is intended to benefit as opposed to people who don't live here yet but might like to move here such as the vast majority of Facebook's future 6,000 engineers, who are not going to be able to find housing in Menlo Park. Second, it focused bull's eye on the right problem, which is the cost. Most of the proposals that come before us, if you dig in, are really for market rate housing for high-income earners. There's some argument about maybe there will be a trickle down to a lower cost. Most people who really are serious about this don't think that will happen unless you do what one speaker from the public actually said, which is build 100,000 new units. In fact, people saw there was a UCLA study a couple of weeks ago that came out, that suggested if you built a massive amount of housing in the Bay Area, then you might lower prices 10 percent. 10 percent off—somebody described a $2,850 one- bedroom unit—is not going to help. In fact, there was one lady that talked about Palo Alto School District not just teachers but the staff that go along with that. 10 percent off a $2,850 one-bedroom unit is not going to do much for those kinds of folks. Those folks are the target. The thing that I really like about this Memo is it gets the goal right. That may sound like motherhood, but actually it's not. There are other kinds of housing problems we talk about that actually have other goals. In fact, there was one speaker who said don't do rent control because it'll raise the price of market rate units. Actually, that might be an okay tradeoff if you think this is the goal. I think that's the right goal. The challenge with rent control—I know we're using a lot of other words for it, stabilization and spikes, and so forth—as everybody knows is there's a tendency for all kinds of unintended consequences, which have been widely documented. It has a strong tendency to help a few people right away and hurt a lot more in the long run, as somebody pointed out. As we talk about what we're talking about tonight, you've got this exercise of how do I do just enough rent control to make things better off but not so much that we trigger all the ills of real rent control. That's a really tricky balance to pull off. Many, many cities have tried that with the best of intentions. The root issue is if you're going to have housing, the rents for lower than market rates, which is what we're talking about with rent control or rent stabilization or whatever, then somebody is going to have to pay for it. Rent control inherently means below market rate housing. How to pay for below market rate housing is the whole idea behind things like development fees, for example, where you're trying to put the cost at the origin of the problem. In the long run, really focusing on the below market rate problem—I'm getting very specific to say below market rate and not affordable. Some people say a 400-square-foot, $2,000 micro unit is affordable. That's not affordable to PAUSD staff. That's really the solution, how do we fund below market rate TRANSCRIPT Page 100 of 126 City Council Meeting Transcript: 10/16/17 housing, and targeting is probably part of that, as the Mayor said. With rent control, the idea is—the cost is still there, but the idea is to put it on the property owners. The theory is that the property owner is making so much money on the real estate that they might just absorb the cost and not trigger all the ills of real rent control, which is what we're talking about. That's the tricky straddle with rent control. In my view, the question before us is do we want to wade into this and see if we can find that tricky balance through the process that we're describing or should we put our effort into really getting serious and strategic about real less than market rate housing including expanding the category to nontraditional groups such as middle-income residents and community workers. I'm particularly intrigued by some of the comments made by—I think it was Ms. Sirk, who was up here before. I think that's the right direction we ought to look at. As far as this motion in front of us, it's interesting. It actually looks very vague to me. To me, this says go off and study the whole thing, which is very vague. Even the Number 1 seems to me very vague too because it's talking about an annual percentage cap. If we're talking about an annual percentage cap of 30 percent a year to lop off the spikes, to me that's much different than an annual percentage cap of 5 percent a year, which is real rent control. My discomfort with this is I don't really understand what we're going to spend a lot of time digging into and studying. If it was we're going to ban 30 percent per year rent hikes, I might vote for that tonight. I don't know what we're voting for here. That gives me some pause on this. Thanks. Mayor Scharff: Council Member Kou. Council Member Kou: Tonight we just went through a Study Session for Stanford University's growth, which is going to add 2,000,275 square feet of academic space and only 3,150 housing units. It doesn't say that it's going to include housing for Stanford's moderate nor their low-income employees. In fact, upcoming next week the review of the draft Comprehensive Plan as proposed will also dig us deeper into a hole by planning for more growth that has more jobs than housing. It perpetuates the problem, and I want to emphasize the word perpetuate. By saying that we have a housing crisis and being repetitive about it doesn't solidify that we do have a housing crisis. What we have is an affordability crisis as noted in the County of San Mateo's inter-department correspondence as well as many of the Council colleagues that I have here and many here in the public. I am very glad that you guys are all here tonight and that this topic has grabbed your attention. Thank you for all who have written to Council and also asked to meet with me last week. Again, I say I'm not unfamiliar with the downside of renter protection, and definitely we have several models not to follow. There's the letter from many people as well as Silicon Valley Association of Realtors and speakers and my colleagues that believe we should focus our efforts on building more housing, TRANSCRIPT Page 101 of 126 City Council Meeting Transcript: 10/16/17 densifying and stacking and packing, and that it should solve our problems. It does very little when it doesn't address the traffic congestion problems that we have and that we're creating and taxing and making residents actually pay for the TMAs and TDMs and will suffer through the TDMs. Then, we have our parking problems. We have two garages that are going to be built from the General Fund money, which is taxpayer money. Those are going to have a lot of businesses that are going to be buying permits in order to park in there. I don't know if you residents are going to have a chance to get the parking or go to these places Downtown that we have for lunch or dinner. Of course, there's the school enrollment. How are we going to handle that? Some Council Members say that we do have an enrollment drop. Is that meaning it's going to be forever, that we're going to have a drop, or have we seen the ups and downs through the years? There's also City services. How are we going to up that City service in order to ensure that all residents have the sufficient City services that we're providing or should we cut City services because we don't have enough funding now? Is that going to take away from us? Of course, the overuse of our open space and parks was mentioned earlier somewhere, whether one of our Council colleagues mentioned it or not. San Francisco has been referenced a lot tonight, and they have—in addition to their rent control, they also have built tremendous amount of housing. What has that done? What has that done? It has only displaced and taken away neighborhoods, its character, caused more parking issues. Now we want to model after San Francisco so that we can build more housing over here and also have more employment here. One speaker also commented that as we build more housing we need to ensure our infrastructure is upgraded. Who's building the infrastructure, and who is paying for the infrastructure? As it is, we're going into next year taking out money from our Reserve Fund in order to be able to keep up with building our infrastructure or maintaining it. When I look at this—Council Members are talking about building affordable housing. I want to ensure, going along with Council Member Filseth has said, that we're building affordable housing for the below market because that's exactly what we need. In the campaigns, that's what we've been talking about. Why did we reduce our development impact fees so that we are slower on building these affordable housing units, BMRs? I really think there's a backward way of thinking and not looking down the line of all the people that we're going to be displacing, that we're going to miss out on because we don't want to have our incumbent residents be protected. When it comes down to talking about building and densifying, all the advocacy for building more is actually putting more money in the developers' pockets rather than taking care of the residents that are living over here. I'm also going to mention that, while we're talking about the expenses and the costs for how much it is costing Mountain View, Mountain View actually had an initiative, a ballot measure that went out for voters to vote on. We're doing a renter protection that is by the Council. We're putting together an ordinance here that is by the Council. We're saying TRANSCRIPT Page 102 of 126 City Council Meeting Transcript: 10/16/17 that we want to explore this, not so much to—and to have it come back. If in the long run prices are lowered for renters, this is another action that Council Members can review. If it's a ballot measure, you're going to have put it back to the voters for them to vote on. Lastly, we reference Facebook and Google that are going to increase their jobs and all that. That's fine and dandy, but they're not coming up with enough housing for anybody here. They're going to impede on our—they're going to actually invade our housing supply for people who are living here, who want to come in. As a matter of fact, over the week I met with somebody who said that she loves tech workers. She loves renting to tech workers because they're high earning. The City is not providing her stability with these renters because, once they get a new job, they move. She can never complete her 1 year. When I listen to these kind of comments, you have to think about what are we all about. Just build more, impact more, and maybe it'll go away if we don't address it? I want you to know for the residents who are living here we see you, we hear you. That's why we have brought this Colleagues' Memo forward for discussion in front of the public. I'm going to say I appreciate everybody who has said it, who have come and spoken, either side. You have a point. As I said, this is not going to be an easy fix or a quick fix. I see some of my colleagues have already decided one way. Building more housing, you're not linking it to all the cumulative impacts that are going to come along with it. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: When I heard this Memo was being worked on, I offered one of the authors the chance—whether it was available for me to participate as a co-author. That was turned down; that's fine. I totally respect that. I wish I had had the chance to be an author on this. Looking at most of the Memo, I've got to be honest. I could have written it. People say imitation is the sincerest form of flattery, and I'm flattered. A lot of this looks like my stump speeches from 2014. To have it coming from the authors it came from, I really want to give benefit of the doubt that they're sincere, that they've had a real change of heart, that we have come around in Palo Alto in understanding the affordable housing crisis, knowing where a couple of the authors' positions have been in the past, leading the charge against an affordable senior housing complex on Maybell Avenue in 2013, and then supporting the thing that replaced it, which is just a handful of expensive market rate housing. If there's been a real change of heart, that people who have led the charge against affordable housing in Palo Alto are saying we need to tackle the affordable housing crisis, I welcome that. I want to offer the benefit of the doubt. Listening to Council Member Kou's comments right now suggests to me that offering that benefit of the doubt is unfounded. It sounds like her tweet—was it back in April—that there's plenty of housing. You just need a superb realtor like me. I don't think this Memo is drafted to really TRANSCRIPT Page 103 of 126 City Council Meeting Transcript: 10/16/17 address the issue. That's unfortunate because I like a lot of it. I don't think this is sincerely being offered as part of a comprehensive solution. I'd like to just take a second to paint what I see as a comprehensive solution, a comprehensive approach to our affordable housing crisis. It cannot be done by any city on its own. It is a classic, collective action problem where every city needs to do its part. What I propose is a three-legged stool, as I've said for years, a three-legged stool approach. If you have two legs of a stool, it's going to fall over. You need three legs to be stable. Leg Number 1, renter protections. Those can come in a lot of forms. I really like the title here; it's great. There's a lot of things you can do for renter protections. Council Member Fine listed several of the ones, which are not identified in this Memo. Leg Number 2, targeted units. That includes BMR units, senior units, veteran units, disabled units, public employee units, units that are targeted to specific populations. Those are expensive to fund, but it's worth the investment. That's necessary because the market rate—even if we bring down market rate, it'll take time to get there. That's why renter protections and BMR units are important as two legs of the stool. The third leg is the one that addresses the underlying cause of the crisis in the first place, which is a fundamental supply and demand problem. Yes, it's supply and demand. We are addressing the demand issue. We have an annual office cap. It was described as being weakened earlier; I think that's an exaggeration and misrepresentation. We've made it permanent. We are committed to our office cap. We are committed to slowing down on office growth and job growth in Palo Alto. The flip side of supply and demand is you need supply. As we try and ramp down on the demand for housing in Palo Alto, we need to add more supply, particularly within the range of the market that sort of supply which is more reasonably priced. Council Member Filseth is right. We shouldn't call it affordable housing if it's market rate because affordable housing really means low market rate or BMR housing. As was mentioned before, today—we've been working on it for months. This Colleagues' Memo put a little fire under our rears to finish it. Council Member Filseth, Vice Mayor Kniss, and myself introduced a Colleagues' Memo to look at how we can reduce some of our impediments to housing, especially that more reasonably priced market rate as well as below market rate housing in places where it will have the least impact on our traffic and in ways which will have the least negative consequences, as alluded to by Council Member Kou. There are a couple of major problems I have with the motion on the table. I was hoping I would be able to come in here and maybe offer a couple of amendments to this, that we could get something where we'd actually have consensus and we could pass something tonight. I'm looking at this motion, and I don't know how to amend this without just completely undoing it. This is suggesting we do something radically different from our usual process for something like this. Like the Memo suggested, it should go to Policy and Services or the Human Relations Commission or maybe Planning and Transportation Commission. To TRANSCRIPT Page 104 of 126 City Council Meeting Transcript: 10/16/17 say we're just going to have a couple of Council meetings about it really does a major disservice to the severity of this problem, the complexity of this problem. I can't support it for that reasons. Council Member DuBois: You can propose some amendments. Council Member Wolbach: Secondly, Council Member DuBois, lead author of this, assured us again and again that this was not rent control or not rent stabilization, which are often used interchangeably even though they mean slightly different things. Number A here is definitely rent stabilization. Council Member DuBois: (inaudible) Council Member Wolbach: No, it is rent stabilization. This is rent stabilization. "B" is definitely just cause. There are definitely strong arguments in favor, and there are strong arguments against. Again, this is very specific. If this said we're going to launch a discussion, a deep and thoughtful discussion, about how to improve our tenant protections, I would have supported that. I've heard from tenants in Palo Alto who say, "I'm scared to go to my landlord. I'm scared to address what's already happening." You already have some landlords—not most but some—who aren't keeping up their buildings. One of the biggest fears of rent control is landlords won't keep up their buildings. There are already landlords doing that because they know they could just jack up the rents. Tenants are already scared to go sometimes to their landlords. How do we improve our current mediation program? How do we invest in what's already on the books but make it stronger? I look forward to a future discussion about renter protections that is sincere, that is thoughtful, and moves forward in a process, which is appropriate for our process in Palo Alto. If the authors want to rewrite this and bring it back or offer radical amendments to this, I'll consider that. I cannot support this Motion. I'm sorry to say that. Mayor Scharff: Council Member Holman. Council Member Holman: I'm a little bit confused; I'm perplexed by the comments of the last speaker. When you started out it was that you could have written this Memo. This Motion is taken pretty much—it's a lift from the Memo. Council Member Wolbach: Except for the recommendations section. Council Member Holman: Let me finish please. The Motion is pretty much a lift from the Memo. That's a little perplexing. Council Member DuBois suggested, if you have Amendments you want to make—please don't. I'm sorry. This became personal, and that's not okay. It's not okay. It became TRANSCRIPT Page 105 of 126 City Council Meeting Transcript: 10/16/17 personal, and it shouldn't be that. We can have difference of opinions, but please don't question the sincerity of people who bring forward a Memo. That implies that we are intentionally wasting Staff time, wasting the public's time, wasting our time. Please don't do that. I am making that comment directly to you, Council Member Wolbach. It's upsetting to me personally because this is sincere. If you want to offer some Amendments, as Council Member DuBois suggested, then they would be entertained. I'm confident in that as the seconder of the Motion. The purpose of this coming back to the Council instead of Policy and Services is because it is such a big issue. Look at the attendance we've had tonight. That's why that ultimately we thought it should be heard by the Council rather than going to Policy and Services. It wasn't to disrupt the procedure that we usually have in place. It was because it's such a big issue. That's why. If you want to suggest it goes to Policy and Services, make that amendment. That's fine. We're sincere in bringing this forward. I think I understood the comments to be that there's a lot of things in the Memo that we can all support. I had some confusion by some of the comments that were made by the Mayor. I was trying to follow them and maybe I misheard them. It seemed like there were some—there were some things I just didn't track. As Council Member Filseth said, this is for current residents. It is certainly partially for them and greatly for them. We need to do something for our current residents. I don't understand how renter protections are going to increase traffic as I thought I heard. I'm trying to understand because— those are some of the things I thought I heard that I didn't track those comments. I'm open to amendments if someone has them to offer. Please don't question the sincerity of us bringing this forward. Thank you. Mayor Scharff: Council Member Tanaka. Council Member Tanaka: First, I wanted to thank all of you guys for coming out to speak on this topic. I know it's late; it's 11:17. A lot of people came to my office hours as well. I want to thank everyone for doing that. And my colleagues. It seems like everyone really put a big effort in trying to understand this issue and figure out what's best for Palo Alto. That's appreciated, and that's very admirable. The big question I had when I was thinking about this is what problem are we trying to solve. Council Member Fine asked it well. What are we trying to solve here? Are we trying to create more affordable housing? Are we trying to create more diversity in the community? Are we trying to create more opportunity? That's the thing I was thinking about as I listened to all the different arguments. I got a lot of different papers on this topic as well. The main problem with this is maybe short term it sounds like a really good idea. Long term, the problem is there's a lot of adverse consequences. As a result, I largely—I could say a lot more, but it's late. I'll keep my comments short. I largely align to the Mayor's thoughts on this. I'll give a quick anecdote. Through the Catholic Alumni TRANSCRIPT Page 106 of 126 City Council Meeting Transcript: 10/16/17 Association, I am friends with this guy who works at Google. He gets paid very, very well. He happens to live in a trailer park right across from Google, not because he can't afford more than a trailer park but because it's across the street. I'm thinking does this guy need rent control, is this a person we're trying to help. The problem with rent control is it that it's not necessarily helping the people that need the help. It's like a lotto system. If you happen to have a house before '95, you've won the lotto. If you are struggling and barely can make it, if you happen to live in a house that's '96, too bad. It doesn't seem to be—I've been thinking about this. I truly think there's a need. There's a lot of interest in this. So many of you people came out, and we got a lot of letters on this. However you think about it, there doesn't seem to be a way that this really solves the problem that we're trying to solve. The other thing to me that's more concerning is it does tie up supply. The Mayor talked about how the houses '95 and earlier will basically get tied up. The houses after that will get spiked, and prices will increase. It will actually hurt the situation. This is a worthy topic for us to have. Unfortunately, it does take time away from things that we should be talking about. We should focus on the crux of the issue, which I really think is the supply issue. It's already been said, so I'm not going to belabor it. Thank you. Mayor Scharff: Thank you. It's 11:20. Everyone's spoken once. I'm calling the question. Let's vote. Council Member Kou: Actually, I did want to address … Mayor Scharff: No. Everyone's spoken once. I'm not allowing another round of questions. Council Member Kou: Before you go to (inaudible). Mayor Scharff: I'm not allowing another round of questions. We're just not doing it. Council Member Kou: You quoted me, but … Mayor Scharff: Just not doing it. Council Member Kou: … that was very childish. Mayor Scharff: Let's vote on the board. That fails on a 6-3 vote with Council Members DuBois, Kou, and Holman voting yes and Vice Mayor Kniss, for the record, voting no. MOTION FAILED: 3-6 DuBois, Holman, Kou yes TRANSCRIPT Page 107 of 126 City Council Meeting Transcript: 10/16/17 Mayor Scharff: Thank you very much for coming. We'll take a 2-minute break. Are we moving forward with Item 7? James Keene, City Manager: (inaudible) fire first (inaudible) Mayor Scharff: Yes, we can do the fire first. Council took a break from 11:23 P.M. to 11:28 P.M. 10. Adoption of an Ordinance to Increase the Posted Speed Limit on Deer Creek Road and a Segment of East Bayshore Road to Enable Radar Enforcement and to Reduce the Posted Speed Limit in School Zones Consistent With State Law; and Adoption of a Resolution Establishing Target Speeds for Certain Arterials and Residential Arterials. Environmental Assessment: Exempt Under CEQA (California Environmental Quality Act) Guidelines Section 15301. 11. Fire Department Deployment Changes and the Conclusion of Meet and Confer Negotiations With IAFF (International Association of Firefighters, Local 1319) Related to Impacts From the Stanford Fire Contract Revenue Reduction; Approve a Budget Amendment in the General Fund; and Approve an Amendment to the Table of Organization by Eliminating 7.0 Firefighter and 4.0 Apparatus Operator Positions. Mayor Scharff: Chief, take it away. Eric Nickel, Fire Chief: Good evening. Eric Nickel, Fire Chief. I've got a brief presentation that I will take you through. The Staff recommendation that we're making this evening to amend the Table of Organization by eliminating 4 FTE Apparatus Operators and 7 FTE Firefighter/Paramedic Positions, amend the fiscal year 2018 Appropriation Ordinance to the General Fund with the amounts listed there, 70,000, and then acknowledge the completion of the meet and confer process with IAFF over impacts related to the reduction in the Stanford Fire Contract revenue. Just briefly by way of background, I want to provide just a couple of cogent points here. The Stanford contract. They contracted with the City in 1976. It was a 50-year agreement, and they paid approximately 30 percent of the Fire budget. May 2012, SLAC closed, and that protection was contracted out to the Menlo Park Fire District. Stanford initiated a process of negotiations to reduce their existing contract. The contract was canceled, and we've been through a series of short-term arrangements that currently are paying the City approximately $2 million less. Labor/management. We have been with them in a very lengthy and detailed meet and confer process that they are allowed to do under State law. We've met with them 14 times since July 2016. We made it very clear that we were seeking to reduce costs while maintaining our service levels. Just as a TRANSCRIPT Page 108 of 126 City Council Meeting Transcript: 10/16/17 reminder, we are in labor contract with the IAFF through June 30, 2018. We couldn't go back and reopen the contract. In terms of efficiency, we discussed with them a range of options and opportunities to find efficiencies. The one that we landed on is the one we're presenting tonight. In terms of the quantitative modeling, we've brought this to you before. Imagine the software product is SimCity for the Fire Department. It's very cutting edge. It's innovative. It quantifies our deployment options. We literally have modeled hundreds of different deployment options, and we've studied in detail 16 different options, many of which were presented to IAFF. This quantitative modeling is in alignment with the Fire Department's Number 1 value, which is innovation, as well as the City's Smart City initiative. In terms of those last two bullet points, what we're presenting to you this evening results in some long-term savings as well as some pension liability. Obviously, it's no secret that Fire's pension has gone up 39 percent since fiscal year 2015, while our funding ratio has dropped to 63.6 percent. These are the goals of the deployment changes. We wanted to keep every fire station open and staffed 24 hours a day with a minimum of one Paramedic on every unit, fire engine, ladder truck, ambulance. We wanted it to be consistent with our performance standards. Some agencies define performance standards by number of bodies on duty. We define it by how quickly we can get a crew in the urban and suburban areas from the time of call to the time of arrival with that first crew, 8 minutes or less 90 percent of the time. In the rural response zones, which would be in the Palo Alto Foothills, because of the lack of density that's 20 minutes or less 90 percent of the time, even though we're averaging about a 14-minute response time. We wanted to balance the workload between busy and slow units. We have some units that work in excess of 8 hours per 24- hour shift on emergency calls, which is very busy by national standards. We also have some units that, if you look at a 24-hour work period, they've only worked about 1 hour on emergency calls. We wanted to balance that workload to make the busier units a little slower and the slower units a little busier. We also wanted to plan for strategic growth. We know the fire business is getting smaller, many fewer fires. We also know that the emergency medical services business is getting larger, continues to grow. We still continue to miss 500- 600 ambulance calls a year because our ambulances are not available because they're committed to other calls. We call that turfage, and you'll see that term later on in one of the slides. It's important for me to real quick give you a primer on what cross-staffing is. It's using existing personnel from one staffed apparatus to staff a second apparatus. In the case that I'm showing you right now, the engine crew of three staffs the engine as well as the ambulance. We've identified multiple units to cross-staff. Cross-staffing is not anything that's new with the potential Fire Department. We've been doing it for years. It was identified in the 2012 Fire Utilization Study and subsequent follow-ups. In fact, in researching to prepare for this there was a presentation about a month before I got here 5 years ago where we came to Policy and Services TRANSCRIPT Page 109 of 126 City Council Meeting Transcript: 10/16/17 Committee and talked about the efficiencies that were achieved by the cross- staffing. I understand there have been some concerns about units being too committed because they're cross-staffed. Let me share with you some facts and some data. As we go through our analysis of the system, one of the things we look at is how reliable is the system. Now, reliability means how available are the resources. The first thing that we look at is call concurrency, how often are we running multiple calls. Only 4.45 percent of the time do we have three or more calls occurring at the same time. We also look at ambulance drawdown. 2.85 percent of the time in a given year do we have three or ambulances committed to calls. For fire engines, that number is 2 percent of the time that we have three or more fire engines committed to calls. As a fire chief with numbers like that, that low—usually when it's around 10 percent, we say maybe the system isn't reliable if you have that many units committed that often. This rarely happens to us. I'm very confident that, even though we have some cross-staffed units that may be slightly busier than before, the system historically performs well within national standards. We also did something that's new out of this concern of cross- staffing. We evaluated when we have significant incidents going on, a large structure fire, a large vehicle accident on the freeway, how does the system perform in the 3 hours after that large incident. Do we see a drop off in our performance? We don't. We still perform within 8 minutes or less 90 percent of the time. This next slide is highlighting our current deployment. As you can see, we've been effectively using cross-staffed units to meet the risk and needs of the community. Where you see italics, that indicates a cross-staffed company. In the case of Station 2 on that second line down, the breathing support unit which is cross-staffed 24 hours a day is cross-staffed by the fire engine. Station 4, the ambulance is cross-staffed 24 hours a day. Station 5, the wildland engine. Station 6, the ladder truck cross-staffs the wildland engine and a patrol vehicle. What this chart does not show but what is very important to point out, especially in light of what's occurred over the last week, Foothills Fire Station 8 while not shown in the chart has dedicated staffing, not cross-staffing, for a minimum of 12 hours on high-fire-danger days. Staffing can be extended for the entire 24-hour period based upon the fire danger. Just to give you a snapshot of the last week, the Foothills Fire Station was staffed for 24 hours on October 8, Sunday; October 9, Monday; October 12; and then it was staffed for 12 hours this weekend, October 14 and 15. This is the proposed deployment. What's interesting about this and what was really valuable—I do have to give credit to the IAFF through the meet and confer process. They actually made these suggestions in one of their counterproposals back in January to cross-staff a second ambulance. That was their idea. That was to ensure that all stations were covered by a fire engine. This deployment is very innovative because we're doing what's called peak call time staffing. We're staffing differently for the daytime, when we have two-thirds of our calls, and fewer staffing for the nighttime, when TRANSCRIPT Page 110 of 126 City Council Meeting Transcript: 10/16/17 most of the community as well as the firefighters are likely asleep, where we have one-third of our calls. We have more firefighters on duty when the population is greater during the day and fewer on duty at night. This still allows us to meet our response performance. As I said, we've modeled this system. It allows us to meet our mutual and automatic aid needs. We have a Master Mutual Aid Agreement. We have two engine companies in the North Bay right now. This will not decrease that. When we send these crews out, we immediately start recalling personnel from home. We would do that anyway whether we had 27 or 24. We also have an automatic aid agreement with Mountain View Fire. One of the things we are looking at, myself and the Mountain View Fire Chief, is we're a little bit out of alignment. We're actually giving them more aid than they're giving us. In the last 2 years, we've responded to them almost 1,000 times, and they've come to us about 800 times. We want to try to even that up. Again, this chart does not show Station 8, but I do want to re-emphasize we do staff Station 8 on high-fire-danger days for a minimum of 12 hours. That's concludes my presentation. This is the Staff recommendation again. I'm available to answer any questions. Mayor Scharff: Thank you very much. Before we do that, I am impressed with the four dedicated public speakers, who have stuck it out. I am going to suggest that—is Bob Moss still here? Bob didn't stick it out. Neva Yarkin. Neva, come on in. Neva Yarkin: Good evening, Mayor and City Council. My name is Neva Yarkin. Regarding reduction of firefighters, in the last week we have all watched with horror what a major fire did to Northern California. December 2016, we watched with the same horror the devastation of the Ghost Ship fire in Oakland. Palo Alto or any of our neighbors can be faced with the same major disasters. Major disasters could include earthquake fires, train derailment, fire in the Palo Alto hills, chemical explosion at Stanford, a company fire and will require emergency services for all of us. Major disasters don't follow computer models. They can happen at any hour, any time of day or night. We need to be prepared. I plead, I appeal to the City Council to find other ways to save money in Palo Alto so we can keep our fire personnel for any kind of major disaster that might affect us all. Thank you so much for your time. Mayor Scharff: Thank you. Now, Bill Ross to be followed by Fred Balin. Bill Ross: Mayor and Council, Chief, Staff, members of the public, don't confuse past response history with projections for adequacy of response on fire and life safety issues to meet the worst case scenario. Simply buying ambulances—let me go on the ALS side first. Simply having more ambulances available doesn't address the critical question before you. What's in the best TRANSCRIPT Page 111 of 126 City Council Meeting Transcript: 10/16/17 interests of the residents and businesses of Palo Alto for not an adequate response time but for a response time that saves lives and property? I'd like to circulate a redacted fire incident response report that involves a fully staffed and cross-trained apparatus and a fully staffed ambulance with two of the three cross-trained EMTs in that ambulance capable of performing the highest EMT function, meaning they are capable of administering drugs under the direction of a physician. Briefly, the facts are there was an incident at a medical office. It involved a 5-year-old boy. The apparatus got there first with fully trained Firefighter/Paramedics. They assessed the situation. They were followed within a minute by the fully staffed and fully trained Firefighters/Paramedics. The two highest trained Firefighter/Paramedics stayed in the rear of the ambulance, while the 5-year-old was transported under physician direction to an emergency hospital where the boy's life was saved. My question is, under this staffing model, if there's only going to be one paramedic in even a multiple number of ambulances, how is the like result of a save guaranteed. There are protocol after protocol where it is necessary to have two of the most highly trained paramedics in the ambulance. For example, one to weigh the prospective patient, and the other one to administer the drugs under physician direction. That's not dealt with in this plan. Respectfully, I think there needs to be more integration and analysis of this plan, both by the County LIMSA, the local emergency medical services authority, and in conjunction with the assumption that's raised by Mr. Stebol, the last speaker, and all of us. If there are multiple demands, where is the backup going to come from? If it's going to be by way of ambulance from a County agency, this issues has been raised before. AMR, Rural Metro, they're bankrupt. Others have questioned the quality of their medical services. This needs more study. I also find it unique that in the emergency medical and fire response to the Napa-Sonoma Fire Complex both the apparatus and the ambulance were fully staffed, fully staffed, whether Type I, Type II, Type III. Why should the citizens and property owners of Palo Alto accept anything less? Why shouldn't we be entitled to fully staffed apparatus and ambulances to response to a fire and life safety situation? Finally, I'd like to ask—you just adopted a hazardous plan under a Consent item. I forget whether it was six or seven. There's an implementation program in there that says the mitigation measures will be implemented because of rapid emergency response. Rapid emergency response. I submit that's not 20 minutes into the Foothill area. Finally, I'd say what's missing from this assessment is a risk assessment for liability purposes. I think that's essential to any analysis and would encourage the Council to ask for more analysis from the other agencies that I've mentioned. Thank you. Mayor Scharff: Fred Balin. TRANSCRIPT Page 112 of 126 City Council Meeting Transcript: 10/16/17 Fred Balin: First, I'm going to contest the description of cross-staffing under the current deployment. There was one engine that's fully cross-staffed with an ambulance. There is another engine that is cross-staffed with the vehicle that goes up on fire days, which is may be 10 in all. There's one cross-staffed vehicle full-time now. We're moving to 2.5. Good evening. This plan extends the current elevated risk and service reductions in the Foothills down into the flats. It rests on a premise that a financial obligation that impacts all City departments should be disproportionately addressed in of all places Public Safety. Meet and confer between the union and City Hall has concluded. Now, this body, our elected representatives, represents the public interest. What is clearly wrong? One, a 20-minute fire response time standard into the Foothills. Two, a big increase in fire engine cross-staffing along with its new potential for concurrent unavailability of up to three of our six fire engines day or night. Three at night, two plus the other cross-staffed vehicle with the wildland vehicle. Three, lowering our EMS staffing standard below two Paramedics. What's going on here? Four, any disconnect with our mutual and automatic aid neighbors over the proposed service reductions. What to do? My take. Restore dedicated, daytime, fire season wildland engine service to the Foothills without cross-staffing from another engine, as was the practice in previous years. Two, add just one additional half-day cross-staffing of ambulance and engine rather than three half-days. I hope you'll allow me to continue. Don't let overenthusiasm for increased transportation reimbursements compromise fire safety. Proceed with caution. Monitor results. Three, continue to require two Paramedics on an ambulance. A key differentiator between us and County services. Four, if Stanford with its quad of ten-story graduate student units going up is okay with taking the fourth Firefighter off the new ladder truck, do it and see how it goes. Thank you. Mayor Scharff: Thank you. Now, we return to Council for motions, questions, comments, etc. Vice Mayor Kniss. Vice Mayor Kniss: I am going to move the Staff recommendation as you see it before you with the attractive dog on the right-hand side. This is to amend the Table of Organization by eliminating 4.0 FTE Apparatus Operators, 7.0 FTE Firefighter/Paramedic positions, amend the 2018 appropriation ordinance for the General Fund by increasing the Fire Department appropriation in the amount of $70,000, decreasing the General Fund Budget Stabilization Reserve in the amount of $70,000, and to acknowledge completion of the meet and confer process with IAFF over impacts related to the reduction in Stanford's fire contract review. I'll speak to it if there's a second. Mayor Scharff: Second. MOTION: Vice Mayor Kniss moved, seconded by Mayor Scharff to: TRANSCRIPT Page 113 of 126 City Council Meeting Transcript: 10/16/17 A. Amend the Table of Organization by eliminating 4.0 FTE Apparatus Operators and 7.0 FTE Firefighter (Paramedics) positions; and B. Amend the FY 2018 Appropriation Ordinance for the General Fund by: i. Increasing the Fire Department appropriation in the amount of $70,000; and ii. Decreasing the General Fund Budget Stabilization Reserve in the amount of $70,000; and C. Acknowledge completion of the meet and confer process with IAFF over impacts related to the reduction in Stanford Fire Contract revenue. Vice Mayor Kniss: My comment on this is—I realize there can be many comments about a whole variety of things. The cross-staffing is very effective. Eric, I really appreciate your talking about how to balance the workload. I know that we have talked for a number of years about how can you deploy your firefighters in a different fashion such that we will have the same coverage but not have to use as many firefighters. Having said that, let me take the advantage of this period of time to thank all you guys for going up to Santa Rosa. You must have been exhausted. I realize that's what you do for a living. No matter what, that was a very tough job to have to do. We knew friends who have lost their houses where you were. Very difficult time. I've spoken. Mayor Scharff: I'll just add I know you worked really hard on this, and I know you worked really hard with our firefighters. The fact that none of them are here complaining about it, telling us it's unsafe, gives me great comfort. I really appreciate all the efforts you put into this. A more efficient use of resources is clearly something that's very helpful to us. Thank you. I do have one question. I've never seen a Dalmatian at the fire houses. Do we have any? James Keene, City Manager: That's not actually a real Dalmatian. Mr. Nickel: No Dalmatians at the fire house. Mayor Scharff: Maybe I could donate one to the City. Council Member Fine. Council Member Fine: Thank you, Mr. Mayor, and thank you, Chief, for this report and all the work in a difficult situation with our ongoing negotiations with Stanford. A couple of questions, and I may have one amendment if it suits the maker and the seconder. First, how often do we report on service levels for the Department? Is it monthly, weekly, yearly? TRANSCRIPT Page 114 of 126 City Council Meeting Transcript: 10/16/17 Mr. Nickel: Every quarter, you get a quarterly performance report. It's been included—I believe we've done it now for 3 years. We're having discussions internally about maybe doing it twice a year instead of every quarter. The other thing that we're doing, that was brought up with one of the speakers in terms of a community risk assessment, is we've done a very detailed, extensive, objective, data-oriented community risk assessment. It has to be done and built into our standards of coverage and deployment plan. That document is there. We are going through international accreditation, so we will be coming back to this body to share that success spring of next year. We've done that document. Council Member Fine: If we move forward with this motion tonight, I would encourage you to keep the reporting at quarterly levels. I think there's going to be a lot of interest on this Council and the community about do these changes really affect that service level agreement. One quick question about time scheduling. I remember when your Department moved to 48-hour shifts. There were some issues with time scheduling and pay and HR stuff. Will there be any issues here with these changes internally? Mr. Nickel: No issues related to that. The only issue is the union has asked us—one of the last meet and confer items—could we rebid assignments starting in early January. That won't change any of the pay or the pay schedule. Council Member Fine: That seems fair to them. Just the last questions are around cross-staffing. Two things there. Is there a change-up penalty if a cross-staffed group comes back in an apparatus and then has to switch to the ambulance or vice versa? Is there a change-up penalty there? The second part and, I guess, the bigger question, have we seen a different service level for the cross-staffed vehicles right now? Mr. Nickel: It's a great question. Two answers, two parts to that answer. The reason you see the $70,000 ask as one of the motions is we are asking to outfit our crews on the cross-staffed company with two full sets of personal protective equipment. No matter what the call, they don't have to move the gear from one unit to the other unit. That right there saves 30-45 seconds. When we're talking about performance, that one small investment of not grabbing my gear off the ambulance and putting it on the engine is going to save 30 seconds in response time. That's why we're asking for that one-time amount, to outfit all of our crews with an extra helmet and an extra set of boots. They already have two turnout coats and pants. We're very conscientious about that time. We'll be continuing to monitor that. We fully expect there may be a slight tradeoff of 5-10 seconds, but we're going to keep a very close eye on that. The other item that we had brought in front of the TRANSCRIPT Page 115 of 126 City Council Meeting Transcript: 10/16/17 Council during the Budget process was our station ring-down system. We're getting a new, state-of-the-art alerting system that we know will reduce the time that it takes us to get alerted and get out of the station. We get way down in the weeds counting seconds to make that 8 minutes or less 90 percent of the time. The second part of your question, is there a different service level with our cross-staffed companies. Right now, our cross-staffed companies sometimes are running with two Paramedics on the ambulance and sometimes one Paramedic and one EMT. What we're proposing—again it was brought up—I believe Mr. Balin brought it up. We still will deliver two Firefighter/Paramedics to the scene of every emergency medical services call. They're just going to get there on two different vehicles. That's the service level that we had had with the cross-staffed company sometimes. Council Member Fine: I guess my question was more is that cross-staffed company delivering services, whichever service it might be, in the same or similar amount of time to a non-cross-staffed company. Mr. Nickel: It would be very close in time, and it would depend on—because we're stopping the clock with that first arrival of the first unit, chances are when it's cross-staffed it's coming in the ambulance. The Paramedic engine company has already gotten there first to stop the clock. Council Member Fine: I guess that's the information I would be interested in particularly going forward if we do this. We would want to see are these cross- staffed companies responding at a different level. If there is a way for us to track that, that would be essential. Mr. Nickel: Sure. We do track what's called an effective response force. In that case, on a medical call an effective response force would be the arrival of one fire engine and one ambulance for a total of five personnel. We absolutely track that, and we track that average, 90th percentile. We can certainly … Council Member Fine: We can break out the cross-staffed companies from that? Mr. Nickel: We can. That would be a bit more data analysis, but we can certainly do that. Council Member Fine: Thank you. Mayor Scharff: Council Member Filseth. Council Member Filseth: I have about 20 minutes of discussion here that I— no, just kidding. Job zero here, above everything we want all our men and women to get back from Marin County safe. That's the overarching thing. I TRANSCRIPT Page 116 of 126 City Council Meeting Transcript: 10/16/17 just wanted to comment on the Stanford contract a little bit, which is a significant dislocation. We looked at this in Finance. The underlying issue goes beyond that. The general trend is the escalation in cost of services and not just in fire services. There are a lot of agencies across the City that we have issue with. The fire cost including this action is still a $2.8 million increase this year over last year, which represents about a 10-percent increase. That includes this action. Whereas, the long-term revenue growth rate of the General Fund is 4-5 percent. It was a little higher last year, 6 percent. The fact is costs are rising significantly faster than City revenues. Again, it's not just Fire. It's other agencies as well. The context for that is if costs are going up $2 million or $2.8 million a year, then Stanford is—even if we reverse the 2 million at Stanford, we're just delaying the problem a year. A year from now, we're going to be in the same spot. The year after that, we're going to be in the same spot again. Stanford is the focal point right now, but it's broader than that. Just to reiterate—again, I don't mean just Fire here. As many of our City services are currently structured, we're not going to be able to continue to afford the level of services that we've become accustomed to without some optimizations. If we're going to preserve our services in general, we need to find a way to deliver them more efficiently. One of the things is that means optimizing for conditions. In this case, there are two major conditions to look at. One is the long-term shift from putting out fires to medical emergencies. The other is the increasing—as the dynamics in our City have increased, the increasing demand in the daytime because there are so many more people here than in the nighttime. The fire plan—this is best practices, what you folks have done here. It moves us in the right direction because it takes advantage of those shifts. I just want to say I'm really glad you guys did this. Thank you very much. The alternative isn't sustainable in the long term. In the real world, actually what this does is protects Fire Services rather than degrades them. Thanks. Mayor Scharff: Council Member Tanaka. Council Member Tanaka: Thank you for your work on this. I like how you've tried to optimize this. A few questions. First of all, do you take into account different traffic, like at night versus the day, in terms of how long it takes to respond to items? Mr. Nickel: That's a great question. A couple of years ago, we did some analysis around the morning and evening commute patterns. They were averaging between 30 and 45 seconds added response time for us in the 3- hour morning commute and the 3-hour evening commute. TRANSCRIPT Page 117 of 126 City Council Meeting Transcript: 10/16/17 Council Member Tanaka: That's what I would expect. Traffic probably at 2:00 in the morning is not much versus, let's say, 4:00, 5:00 in the afternoon there's probably lots of traffic. Mr. Nickel: Correct. One of the nice things about the community being so compact is, at night when there's no traffic, we're going to make our response times. It's close, and there's no traffic. Council Member Tanaka: I was looking at Slide 6 and 7 that you had in terms of the before and after. I was looking at Packet Page 293 with the graph of the different calls. The new proposed schedule makes a lot more sense because it's having higher staffing during the day versus night, which makes sense. The thing that really surprised me was—if you look at the peak during the day, it's like 2,500. At night, it goes down to like 700. We're talking about 3X difference almost. There's a 3X difference between a day and a night. In the night, like you said, there's a decreased response time because of less traffic. It's probably even more difference than that. If I look at the numbers on the proposed, it only goes from 26 to 24. I would have expected a bigger delta between the night and day given the fact that—if you look at the workload, the workload is drastically different between night and day. Why is the staffing not also reflecting that? Mr. Nickel: Again, an excellent question. Not to get into a very detailed analysis of what we call an effective response force, as part of our community risk analysis we've looked at all the risks in the community, buildings, small buildings, a house, large building, a high rise. We know that we're going to need a different response force for a house fire than we do for a fire up on the sixth or seventh floor of one of the high rises in Downtown Palo Alto. We want to make sure that we can still deliver that effective response force with support from our mutual and automatic aid agencies to the biggest hazard the community could throw at us 24 hours a day. That's why we lock into some of these numbers in the mid-twenties. For a high rise fire, we might need 27 or 30 firefighters. We clearly don't have that many on duty, nor do our adjoining agencies if they had something large like that. That's why we have these automatic aid agreements. This is really in response to the community's risk. We want to make sure we have enough personnel on duty to handle anything that the community could throw at us 24 hours a day. Council Member Tanaka: My only reaction is there's a 3X workload difference; yet, there's only a 10-percent staffing difference. I would have expected a 3X staffing difference. I might have expected more than a 10-percent staffing difference. Like you said, during the day people are working here in City Hall. This is a tall building, so it's a much harder workload, I would imagine, than during the evening when it's mainly residents at home. TRANSCRIPT Page 118 of 126 City Council Meeting Transcript: 10/16/17 Mr. Nickel: Then it goes back to we wouldn't be able to meet our response times, and we'd be missing calls. The system reliability would drop off. Mr. Keene: Let's leave that for a future conversation. This is the agreement we've been able to reach as we've worked through the meet and confer process. We'll see how we perform at this level. Council Member Tanaka: Back to Council Member Filseth's comment about the fact that more and more of what we're doing now is not fires; it's emergencies. Are the 7 FTEs—it says Firefighters (Paramedics). Who's getting eliminated, paramedics or firefighters? On page 2 of the slides, it says 7 FTEs Firefighters/Paramedics. It seems like we need more paramedics given the trend. Mr. Nickel: We still have enough paramedics. I'd have to go back and look at my table. Kylie, is here. She could tell me how paramedics we're budgeted for. I don't have that number in front of me right now. We will still have sufficient paramedics to staff all of our apparatus with a minimum of one paramedic. Council Member Tanaka: Just to the point of Council Member Filseth was saying. There's a long-term trend towards more medical emergencies versus fires. You would think that the staffing would align to that as well. Mr. Nickel: If that continues to be the case, then we will through the budget process reallocate the Firefighter/EMT positions to Firefighter/Paramedic. Council Member Tanaka: That's the only comments I have. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: Just a couple of questions. I just want to make sure I'm clear. Our neighboring cities and jurisdictions that we work with, we do cross-border work with, Mountain View, Menlo Park Fire, Santa Clara County Fire, are they okay with these changes? Mr. Nickel: I've not had conversation with County Fire. I've had conversation with Mountain View Fire. Our IAFF group went to their IAFF group when we were in meet and confer and said these changes might impact you. I've had conversations with their Fire Chiefs saying it may mean you're running one call or two calls more a week to us, but we're still running 75-80 more a year to you, so it would balance it out more. What may happen with that is Mountain View may choose—this is their decision—not based on data but based on politics not to come up here on EMS calls. We both know that we still need each other for structure fires and the larger incidents. If that's the TRANSCRIPT Page 119 of 126 City Council Meeting Transcript: 10/16/17 case, that they don't run up here, we're actually going to be more available because we're not running down into Mountain View. Our Engine 65 covers that San Antonio and El Camino Real corridor where they're just building big building after big building. We run almost 300 calls a year down into there. That's almost as much as we're running into Palo Alto. If that's the case, that we back off that automatic aid agreement, it just makes us more available for our calls. Mr. Keene: Just so you know, this staffing reduction that we made on the ladder truck and that was pointed out, is bringing it to the same standard that Mountain View and the other agencies around us use. Council Member Wolbach: If those changes do happen, we'd probably want to at least get a heads up about it. I don't know if that's something we need to put in the motion or if that's something we can have Staff's guarantee (crosstalk). Mr. Nickel: It'll probably show up in the quarterly report. You'll see a difference in the mutual aid numbers. You may see a difference in the response times. Council Member Wolbach: That was my next question. Make sure that your quarterly report will make clear to us what kind of changes we see as a result of the changes that we're going to be authorizing tonight. Mr. Nickel: You've always got the comparison from Quarter 4 this year to Quarter 4 last year. You'll have that comparison for at least the next year going forward to get a good year-to-year comparison by quarter. Council Member Wolbach: I think that'll be helpful for us. It's mentioned in the Staff Report that IAFF was not necessarily enthusiastic about this, but Staff thinks we should move forward on it. I'm willing to give it a shot. We obviously have some people who work in the Department. We have some people in the community who have some concerns. As long as we're keeping an eye on it and we're open to making modifications back, I'm willing to indulge this. Mr. Keene: It would be a mistake to think, if we were to look back in time, that we had this very static, even performance level. We're always going to have some ups and downs and differences. I personally have no doubt that this is—I do not think you're going to see any diminution in service. We will be providing you with all of the information to be able to let you see how that tracks over time. TRANSCRIPT Page 120 of 126 City Council Meeting Transcript: 10/16/17 Council Member Wolbach: I'm going to give Staff the opportunity to test their case. Mr. Nickel: We're obsessed the daily performance of the system. Mr. Keene: The flip side to all of this, we could say we could have even faster response times if we added ten more Firefighters. The same logic holds. We're really making one reduction daytime, three reductions nighttime per shift. That is the scale of the change. It's effectively a marginal change with the way the Chief has made these other deployment adjustments. Council Member Wolbach: Which is why I'm willing to go forward. If it was any more drastic, it might still have eight other votes. I won't make any amendments to that point. Mayor Scharff: Council Member Holman. Council Member Holman: I've a question, and I'm sure we're all sensitized to the events of the last week up north. How does this affect or potentially affect response to the changing world of, if we have the same pattern going forward, having heavy rainy seasons, creating a lot more fuel stock, and then hot, dry times when we have fires that are out of control? How this affect our ability to address with longer lead times incidents such as that in the Foothills, given the increased fuel stock, again, if these patterns continue? Mr. Nickel: I think it's important to draw some distinctions between the fire that occurred last week and the potential for something similar to occur here. That was a very unique weather pattern that's unique for that part of California. The way the canyons are aligned with the north wind blew that fire just like you'd see the fires in Southern California come down onto Malibu. That was a Southern California-type, wind-driven fire. What was also unique about that weather pattern is—we get these Diablo or Santa Ana-type winds every fire. What was unique about this phenomenon was it surfaced. The last time it surfaced to that magnitude was in 1964. You look at that area up there, and you compare it to here. When we go red flag here, our red flags here are for elevation 1,000 feet and up, really the very top of the Palo Alto Foothills, up towards Skyline. Rarely do those winds get down to sea level. It did in this case, but only in that immediate area of Napa and Sonoma County. If that occurred here, whether I had six fire engines, whether I had the Foothill Fire Station staffed, if I couldn't get 500 fire engines within the first 10 hours, you're going to get the same result. There's nothing anybody could do to plan for an event of that magnitude. When that fire took off, 90 percent of the damage was done by sunrise. Lots of differences there. We would need literally hundreds of staffed fire companies here on duty for that type of wind event that so rarely occurs and would cost so much that it's TRANSCRIPT Page 121 of 126 City Council Meeting Transcript: 10/16/17 impossible for any agency to staff up for something like that. Now, the other thing we do is we put a lot of emphasis on prevention. We work very closely with the Mid-Peninsula Fire Safe Council to do brush clearance, to do vegetation clearance. That's the only part of the community that every home gets a visit by the Fire Department every spring with a door hanger that says, "You need defensible space." The one thing that saved a lot of those homes up there was defensible space. We really put emphasis on prevention, prevention, prevention. I hope that answered your question. Council Member Holman: It does. Let me take just a moment here because, as I watched a fair amount of news about this, just glued to the tragedy if you will, I heard over and over and over again about the failure of notification. Too many opt-in requirements, cell towers down. I've brought up several times before—Ken Dueker isn't here right now—about how we need a low- tech notification system like sirens, for instance. I heard from a few people actually that when they were leaving neighborhoods—I know several people that had to evacuate. I heard them say that—more than one of them say— when they were leaving their neighborhoods and firefighters were knocking on the doors rather than fighting the fires because it was about saving lives, people were leaving their neighborhoods in their cars, just laying on their horns to get people to wake up. It's not a way to live. It's not a situation that you want to have ever facing your community, reliant on something that isn't reliable in those kinds of emergencies. I will leave it at that. Ken Dueker isn't here right now. I know he supports also doing something like sirens. Stanford has a siren. We have no alternative to high tech which isn't the end all in all situations. Mayor Scharff: Council Member Kou. Council Member Kou: Will the reduction in Staff cause any liability issues for the City for response times or saving lives and property? Mr. Nickel: No additional liability than what we currently face day to day. Council Member Kou: it can't be brought forward that you only had that number? Is there a required number? Mr. Nickel: No. We're still well within national standards and performance standards. Again, we look at the system performance. Mayor Scharff: Are you done? I wasn't sure. I see no other lights, so let's vote on the board. That passes unanimously. MOTION PASSED: 9-0 TRANSCRIPT Page 122 of 126 City Council Meeting Transcript: 10/16/17 12. Direct Staff to Return to the Policy and Services Committee With Amendments to the Municipal Code for the Regulation of Seismic Vulnerable Buildings and Receive a Summary Presentation of the Vulnerable Buildings Seismic Risk Assessment Study Previously Transmitted to the City Council on April 17, 2017. 14. (Former Agenda Item Number 7) Approve and Authorize the City Manager to Execute a Five-year General Services Agreement With Valley Oil Company in an Amount Not-to-Exceed $3,256,164 for the Purchase of Unleaded and Diesel Fuels to Supply the City's Fleet. Mayor Scharff: Back to Item—was it … James Keene, City Manager: Item Number 7, a general services fuel contract, which is basically requesting approval and authorization for the City Manager to execute a 5-year general services agreement with a not-to-exceed amount of $3.2 million over that period of time. If I understood correctly, there was concerns in particular about entering into a long-term contract for the City's fleet with the fact that we have objectives of reducing the gasoline-powered, traditional gas-powered vehicles in our fleet over time. That, therefore, makes sense. I think that was the main thought. Council Member Holman: Is that why you pulled it Council Member Holman? Council Member Holman: Yes. I was trying to understand and did not from the response why we would use the same baseline as we had used—that was the actual consumption for 2017. Over the last 3 years, that number has gone down. There was reference in the response that one of those reductions was the golf course being out of service. That's only been out of service the 1 year. We have separately added into the amounts—on Packet Page 203, we have separately added back in golf store, golf course—it is late; I apologize; golf course fuel usage. It's not a small contract. It's over $3 million when we're spending $20 million for vehicle replacement over the next 5 years. It's in the budget. Mr. Keene: $20 million in total. Council Member Holman: Over the next 5 years for vehicle replacement. The response, if I understood this correctly—let me see if I can find it for a second. It says something about—although Staff are replacing tens of vehicles and equipment each year with more fuel-efficient models, the number of CNG and electric replacements is not as great due to operational needs and availability resulting in decreases. I didn't understand what that meant, operational needs and availability. What does that mean? TRANSCRIPT Page 123 of 126 City Council Meeting Transcript: 10/16/17 Mr. Keene: I think what the Staff means is that, first of all, the total amount of vehicle replacement that we would do over the 5-year period is for the entire fleet regardless of the type of vehicles. We certainly have an effort to try to replace our gasoline-powered vehicles with alternative fuels as much as possible. We are in a good position to project 5 years ahead about what that changeover rate would be and the fact that the technology changes. Some of you might have seen a little notice from Phil Bobel this past week with excitement that we've heard about the first potentially electric-powered refuse truck on the market. We're all excited about it. That was this availability issue. To what extent do these vehicles become available for us looking at changing them out? Here's the important thing to remember. All this contract does is set the ceiling for how much we could spend. It is a not-to-exceed basis that is only based upon how much gasoline we actually buy and use, number one. Each year when we go through the budget and we discuss in detail with the Council how much changeout of our fleet we can make, I'd be more than happy to be sure we're telling Finance we would anticipate that we would use roughly $X of fuel less that we will never spend now, even under the authority in this contract. Secondly, the contract itself has a 10-day cancelation without cause by the City Manager. I'm just saying. If your concern was are we still committing to too much fuel, we always have this out. You've got these two trains of why are we still planning to maybe buy so much gas; whereas, over time we're going to see our need for gas go down. We'll be able to reconcile that by saying as our fleet changes we're not going to use as much of the—we're not going to be buying as much gas. We're not obligated to buy the amount of gas. This is just a not-to-exceed contract. Council Member Holman: I apologize for that. I didn't find it as a not-to- exceed. Mr. Keene: No, it's very clear. It's very clear that that's the case. Council Member Holman: I didn't find that. Mr. Keene: The last thing I would just say is we've been out of contract since September 24th. We're still buying gas right now and paying the old price. I'd rather get this slightly reduced price that this contract has. Council Member Holman: Always better to do that. I notice we have had some issues, though, with our contracts coming forward when they're going to expire that day or have expired 2 weeks ago or something. That seems to be a consistent pattern here of late. I appreciate the explanation. I did look— I'm not sure when we're going to get our budgets. I did go back and look at the proposed budgets. Of the vehicle replacement, potential at least is there for quite significant fuel reduction because we have a lot of sedans. You would TRANSCRIPT Page 124 of 126 City Council Meeting Transcript: 10/16/17 think those would be pretty easily replaced. I appreciate colleagues' support in helping to pull this to get some more clarification around this. Like I say, I didn't read it as an "up to." That's helpful too. I don't know if colleagues who pulled it with me have other questions. Those were mine. Mayor Scharff: Council Member Filseth. Council Member Filseth: Move to approve. Mayor Scharff: Second. MOTION: Council Member Filseth moved, seconded by Mayor Scharff to approve and authorize the City Manager or his designee to execute a General Services Agreement in an amount not-to-exceed $3,256,164 with Valley Oil Company for the purchase of unleaded and diesel fuels to supply the City’s fleet for a term of five years effective October 16, 2017; including a total of $500,124 for AB 398 price increases for the 5-year contract term, $29,380 annually for SB 1 price increases, $17,252 annually for Golf Course operations, and $53,899 annually for fluctuating fuel costs; subject to the annual appropriation of funds. Council Member Filseth: A quick question. This is a standard VPA, so is there any danger that this contract is going to get us stuck buying a lot of gas we don't need? Mr. Keene: No, no danger at all. Council Member Filseth: Thank you. Mayor Scharff: Council Member Tanaka. Council Member Tanaka: A couple of quick questions. Why don't we just buy gas at the local gas station? Mr. Keene: First of all, we use a lot of gas. We have a lot of vehicles. We have our own fueling station (crosstalk). Mayor Scharff: Now they can't sell flavored tobacco, they probably need the business. Mr. Keene: If you look at the price that we're basically paying for the gas itself under this contract, it's about $2 a gallon. We were hedging our costs much, much better than if we were to somehow want to go out into the marketplace. Council Member Tanaka: The main motivation is it's cheaper then? TRANSCRIPT Page 125 of 126 City Council Meeting Transcript: 10/16/17 Mr. Keene: Yeah, it's cheaper and the idea of us being able to supply. We'll do a tour this next year down at the MSC and see the range of vehicles we have and how much they're fueling up and how we do that. I think the logistics of that, if we actually charted out going to a gas station—actually there are hardly any gas stations in Palo Alto. Council Member Tanaka: I was actually trying to calculate the price per gallon. I couldn't get the $2. I got like $3.20, so I was trying to figure out how you guys got that $2, but that's probably … Mr. Keene: (inaudible) charge itself, and then there are some delivery and other pricing pieces to it. We'll be happy to send you the follow-up on that. Council Member Tanaka: It's not actually $2; it's more than that. I got $3.28. Mr. Keene: (inaudible) to speak to the exact cost. Council Member Tanaka: That's what I was asking. It didn't seem a lot cheaper than the local gas station. That's why I was asking why are we doing it then. Mr. Keene: I thought I gave some really good answers. Those big vapo- rooter trucks pulling it up in the gas—I think the logistics—if we had nothing but some sedans out there, your point would be better. Again, we have this whole range of equipment. Some of it look like an old Soviet parade that they have on May Day (crosstalk). Council Member Tanaka: (crosstalk) but pricing seemed to be reason, at least when I calculated it. That's why I was curious. It could be for logistical reasons, which makes sense, but not price. Mr. Keene: I can't speak to that right now. Clearly what we're bringing you is the best price that we got in the marketplace for putting this out. I'm presuming that we have the—do you have a problem with that? Council Member Tanaka: I just couldn't calculate that. That's why I was asking. If the rationale is because it's (inaudible) logistically efficient. I get that. The first answer you gave me was because of price. At least when I calculated the price, it didn't seem to be right. Mr. Keene: I can't be sure of that, but I was really responding to the fact that there was a concern about the relationship with this thing being pulled on the vehicles in our fleet and our usage of gasoline and the fact that this is a not- to-exceed price contract. That gives us lots of flexibility over the next few TRANSCRIPT Page 126 of 126 City Council Meeting Transcript: 10/16/17 years if there are policy directions to look at how we change the volume of gas that we use. We have outs to be able to reduce our costs. Mayor Scharff: Let's vote on the board. That passes unanimously. MOTION PASSED: 9-0 Inter-Governmental Legislative Affairs None. Council Member Questions, Comments and Announcements Mayor Scharff: Council Member Questions and Comments. Council Member Wolbach. Council Member Wolbach: Briefly, VTA Policy Advisory Board meeting last week, I was able to attend in Council Member Kniss' place when she was unavailable. Several cities, myself representing Palo Alto, Mountain View, Cupertino, Morgan Hill in particular, tried to hold VTA's fee to the fire about making sure that cities outside of San Jose get some attention and that VTA is really working to improve mobility across the entire county. It's an uphill battle, though. Vice Mayor Kniss left the meeting at 12:26 A.M. Mayor Scharff: Council Member Kou. Council Member Kou: I took one for all of us, did the Moonlight Walk and Run, 5K, taking up Commissioner Gardias' challenge. I don't know what he ran. Just to let you guys know I don't know who else ran it here. Mayor Scharff: Just because I'm competitive, I have to say I ran the half marathon in Heidelberg when we were there. We'll talk more about the Heidelberg thing, but we have the Mayor coming on the 30th. We'll have a reception an hour before. We hope as many of you can make it as possible. James Keene, City Manager: Starting at 4:00 p.m., 4:00-5:00 p.m. we'll have the Mayor and a delegation from Heidelberg here and will address the Council that evening also. Mayor Scharff: The meeting's adjourned. Adjournment: The meeting was adjourned at 12:27 A.M.