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HomeMy WebLinkAbout2025-09-15 City Council Summary MinutesCITY COUNCIL SUMMARY MINUTES Page 1 of 18 Regular Meeting September 15, 2025 The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M. Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Council Member Stone arrived at 5:49 P.M. Present Remotely: None Absent: None Agenda Changes, Additions and Deletions There were no agenda changes. Public Comment 1. Peter B., on behalf of self and Bill T., Miron T., Tatyana T., James K., and Quifen F., gave a presentation addressing issues at Lytton Gardens, a senior living community. Documents were handed out supporting the presentation, including a 7-page HUD inspection document. A document sent by Housing Administrator Donna Quick to residents regarding a pull cord acknowledgement was shown, which stated the pull cord in the bathroom was not monitored 24 hours a day and asked residents to sign the acknowledgement to release Lytton Gardens and CARING Housing Ministries from liability if the call was not answered by staff. Peter B. tested the pull cord 16 times over a period of several months, reporting there was no monitoring or response. Peter B. had proof in the form of photographs. Peter B. had been working with the Palo Alto Police Department and Santa Clara District Attorney’s Office for 9 months and the case was recently closed. Peter B. believes the release from liability constitutes elder financial fraud, elder abuse, elder endangerment, and elder neglect. Peter B. opined the lack of monitoring meant the call-for-aid system was not functioning, thus deeming it a life threatening (LT) issue that would fail an HUD inspection. Peter B. asked City Council to stand behind the over 400 elderly residents of Lytton Gardens and help resolve the issue. SUMMARY MINUTES Page 2 of 18 City Council Meeting Summary Minutes: 09/15/2025 2. Ward T. presented on the South Palo Alto Bike/Ped Connectivity Alternatives, noting the cost of the study was $499,491. Ward T. said that current alternatives B-F displace Palo Alto residents from their homes, while current alternatives A, G, and H require non- residential property only. Ward T. recommended only non-residential property acquisition to keep the South Palo Alto communities intact. 3. Rani F., chair of the Environmental Action Committee for the Santa Clara Valley Bird Alliance, requested Council ask staff for the first draft of the Dark Sky ordinance. Artificial light at night suppresses melatonin, which aids sleep, and long-term sleep disruption is correlated with diseases. Rani F. cited a 2020 National Institute of Health study of 24,000 women that showed those who lived in the highest quintile of artificial light had a 10 percent higher rate of breast cancer compared to those living in lowest quintile. Rani F. opined bright lights did not prevent crime, sharing that there have been car thefts at gunpoint under bright lights. 4. Diane M. encouraged Council to move forward with bird-friendly building designs and Dark Sky regulations. Diane M. noted an estimated 400 million to 1 billion birds die annually from building collisions in North America, with 44 percent to 90 percent occurring at low-rise residential structures. Diane M. asked Council to ensure ordinances were clear and comprehensive. Diane M. invited Council to the bird watching field trip on September 20. 5. Dash L., the Conservation Coordinator for the Sierra Club, Loma Prieta Chapter, briefly discussed the Dark Sky ordinance. Dash L. felt the ordinance, with Council direction, was in a great spot to be considered for a first reading and encouraged members to move urgently to bring it before Council for adoption. 6. Roger S. thanked Council for approving the new bathrooms for Magical Bridge in Mitchell Park. Roger S. noted that last Saturday, there were 8 RVs in the Mitchell Park parking lot and wondered how to ask them to leave. Roger S. asked when to expect the results of Council Member Lu’s request to know how many campers have been towed over the last 18 months. 7. Avroh S., the outreach lead at the Palo Alto Student Climate Coalition, sent a letter to Council a few months prior regarding having never seen the Milky Way Galaxy in Palo Alto. Avroh S. felt seeing the night sky has become a luxury in Palo Alto and wanted all children to grow up with that experience. Avroh S. strongly urged Council to expedite actions regarding the Dark Sky ordinance, opining it was barely dark at night due to street lights and neighbors’ lights. 8. Carol G., the founder and producer of 3rdThursday Cal Ave Music Festivals, invited everyone to the World Dance Expo led by Mosaic America. 9. Om R., a member of PASCC, referenced the temporary pause on the expansion of the Palo Alto airport. Om R. warned against restarting the airport expansion plans in 2026, SUMMARY MINUTES Page 3 of 18 City Council Meeting Summary Minutes: 09/15/2025 opining there would be disproportionate impacts on neighborhoods like East Palo Alto and Belle Haven. Om R. said neighborhoods will receive an increase in air traffic, noise pollution, and toxic emissions. The Palo Alto airport is currently the 19th most lead- intensive airport in the nation. Increased flights will result in higher emissions of dangerous particles, nitrogen oxides, and lead from aviation fuel which is directly linked to asthma, cardiovascular disease, and developmental issues in children. Noise pollution will cause sleep disruption and stress. Om R. felt that ignoring the issue of leaded fuel at the airport was a step backward for equity, public health, and the environment. Om R. suggested a focus on cleaner aviation fuels and the restoration of the Baylands. Om R. urged Council to listen to the community, honor climate commitments, and protect the Baylands for future generations. 10. Timothy L. opined light pollution affects health and education. Timothy L. was inspired to join science projects that mapped stars; however, many constellations are not visible in Palo Alto due to light pollution. Timothy L. opined that local STEM programs are directly limited by overly bright skies, thus closing doors for future astronomers, physicists, and environmental innovators. Light pollution disrupts bird migration on the Pacific Flyway, which passes through Palo Alto, and can lead to birds being drawn off course, causing fatal collisions and population decline, which gives students of biology and ecology fewer opportunities to observe natural migration patterns. Timothy L. suggested fully shielded light fixtures that direct light downward; warmer bulbs at 2700K, which reduces light glow; and motion sensors or curfews to ensure light only shines when needed. Timothy L. felt those measures save energy, cut carbon emissions, and reduce City expenses. 11. Junyan W. asked Council to expedite and approve the Dark Sky ordinance. Junyan W. noted the fall migration has already begun and wanted to welcome birds to the City responsibly by reducing light pollution. 12. Aiden M. said PASCC has been working on passing the Polluters Pay Climate Superfund Act, a bill which would make the multinational fossil fuel companies responsible for climate-related damages pay. Aiden M. encouraged Council to pass a resolution to endorse the bill on behalf of Palo Alto. The Act will direct Cal EPA to complete a comprehensive study of the cost of climate damage and ensure polluters pay. The funds, proportional to company emissions, will support urgently needed projects, development, and emergency responses to climate disasters. Of California’s biggest cities, 3 out of 4 have endorsed the bill. Emails were sent to individual Council members and the Council as a whole which included a link to sign on to support the measure. SUMMARY MINUTES Page 4 of 18 City Council Meeting Summary Minutes: 09/15/2025 Council Member Questions, Comments and Announcements Council Member Lythcott-Haims attended the Multifaith Voices for Peace picnic on 9/11 in front of City Hall. The final Cubberly Community Master Plan meeting will be held on Wednesday, September 17. Just prior to that will be Young Minds Celebrated, a youth pop up performance event held outside 414 Cal Ave. Council Member Burt drew attention to 2 bills passed by State legislature: SB63, which will allow a measure to go on the ballot in November 2026 for a potential half-cent sales tax for funding transit agencies in 5 counties, one of which is Santa Clara County; and SB79, which will allow by right high-density housing within a half mile of transit stations. In Palo Alto, high- density housing zones will extend into a number of low-density neighborhoods in addition to areas recognized as appropriate for transit-oriented development. Vice Mayor Veenker reported the recommendation for Council to approve the dispatch center audit and that there were good conversations held around recurring agenda items, agenda management, and commissioner onboarding. The NCPA general manager announced retirement. Vice Mayor Veenker will be involved on behalf of Palo Alto in selecting the new general manager. AB 825 passed, which provided an authorization for CAISO to participate in an independent governance of electricity markets, allows for the Extended Day-Ahead Market, and will enable a broader market for solar energy, access to better wind resources, and sharing of existing transmission lines. The California Cap-and-Invest bill passed. The reauthorization extends the State’s program through 2045, which provides certainty for the carbon allowance market and is a major funding source for sustainability and climate action programs. California will extend a key climate program under a bill passed that will go to Governor Newsom, who is expected to sign in response to the Administration’s environmental rollbacks. AB 1273 passed, so publicly owned utilities like Palo Alto do not need to over-procure excess renewable energy when hydro supplies are available and should save the City’s customers $2 million to $3 million per year. There will be a virtual online Town Hall called “Polarization: What should we do about it?” held Sunday, October 26 at 1:00 p.m. Pacific Time. Council Member Stone gave an update on the City Schools Committee’s discussion of the JED Foundation partnership with the City. The Committee fully endorsed to recommend Council approve the JED Foundation contract and the Committee voted to refer back to the School Board reconsideration of entering into a partnership with the JED Foundation or another similar third party. Mayor Lauing was a featured storyteller at the Children’s Library reopening on Saturday. Study Session 1. 414 California Avenue [25PLN-00140]. Request for Council Prescreening to Rezone the Subject Property from Community Commercial (2) (CC[2]) to Planned SUMMARY MINUTES Page 5 of 18 City Council Meeting Summary Minutes: 09/15/2025 Community/Planned Home Zoning and to Allow Construction of a Mixed-Use Building with 37 Units in a Six-Story Structure on a 16,231-Square-Foot (0.37 Acre) Site. CEQA Status: Not a Project. NO ACTION Senior Planner Emily Kallas presented on the required prescreening to solicit early feedback on the proposed rezoning of 414 California Avenue to allow for 14 rental and 23 condo units in a 6- story structure with below-grade parking and ground floor retail and restaurant use. The proposed building height for the project is 83 feet, whereas 60 feet is the allowed maximum under the Housing Incentive Program (HIP). There are no proposed setbacks on Mimosa Lane, whereas 5ft would be required. The building includes roof overhangs into the public right-of- way on the Cal Ave side which could require a separate encroachment permit. The project proposes closing Mimosa Lane, which would require Council approval. The proposed floor area ratio for the building is 3.57:1, whereas a maximum of 2.6 is allowed under the HIP. The project proposes 88 parking spaces, whereas 169 are required by the Palo Alto Municipal Code or 161 under the HIP. However, due to the proximity to the CalTrain station, it is eligible for reduced parking under AB 2097 but a TDM plan would be required. The project proposes one loading space for commercial use, which is consistent with code. It proposes 44 sq ft per unit of usable open space, whereas the base zoning requirement is 150 sq ft per unit. A slide showed 2 proposed renderings of the building. California Avenue had been identified for accelerated housing and the PHZ application allows for broad discretion. There are shallow balconies, less than 6 feet, and roof decks only serve adjacent units. The refuse pick-up requires redesign. There have been several letters of support from the community, which include an acknowledgement of the location and proximity to CalTrain and local retail. Community members anticipate more support of local businesses and are supportive of new housing options. Staff recommends Council conduct a prescreening and provide informal comments regarding the request to rezone. Project Architect Zoltan Pali said the project was a true mixed-use, urban project with a focus on the ground floor experience and a combination of smaller and larger units. The rooftop gardens for the top floor units were highlighted for discussion. Public Comment: 1. Deborah G. was concerned the project will take a long time and be a repeat of 660 University Avenue. Deborah G. wanted to hear what Council would do to ensure the project would be completed within a reasonable amount of time. Deborah G. hoped the comments about the building’s look will be dismissed and wondered where Mimosa Lane would be closed. 2. Steve L. felt this was a great location for a housing development. Steve L. highlighted the need for more housing and encouraged Council to positively work with the applicant and staff. SUMMARY MINUTES Page 6 of 18 City Council Meeting Summary Minutes: 09/15/2025 3. Winter D. noted the alley in the back of the building is one-way and did not understand how it would function with the increased number of people. Winter D. felt Mimosa Lane should not be closed off and that the opening onto Cambridge will be needed to accommodate increased traffic. Winter D. hoped the large mural will survive and wondered if it will be viewable with the proposed setback. Winter D. opined there was no context on Cal Ave for the architectural design and that the building will be severely under-parked. 4. Tatiana M., representing Country Sun, expressed concerns about the design for the public right-of-way to Mimosa Lane. Tatiana M. depends on Mimosa Lane being open for deliveries on Tuesdays and Fridays. Tatiana M. shared reservations about the construction being up against the property line. Tatiana M. mentioned the mural was a piece of history and a drawing point. Tatiana M. hoped Council would ask what the intent on Mimosa Lane is and said it will directly affect business. Council Member Reckdahl liked the project overall, especially the 4 retail units, and felt it would be a center point of vitality for Cal Ave. Council Member Reckdahl highlighted the building would be big and wondered what the ARB thought of the design. Council Member Reckdahl did not like the roof encroachment and did not want to lose the Mimosa Lane setback, citing fire access concerns. Council Member Reckdahl thought the private roof decks were inequitable. Council Member Reckdahl suggested expanding the valet station to incorporate a rideshare loading space. Council Member Reckdahl asked what was envisioned for the TBD amenity space, if transportation has looked at the loading and use of the back alley, and if fire has looked at the proposal to close Mimosa Lane. Project Architect Pali said the space was allocated for amenities but will require more study since it is at an early stage. The intention is to allow anyone living in the building to use it. Senior Planner Kallas said the use of the back alley would be further reviewed as part of a formal application and would need to check what comments transportation had provided. Fire had not commented on closing Mimosa Lane. Council Member Stone asked what district spaces are and confirmed the district spaces paid for by the existing building would be credited to the new building. Council Member Stone said the percentage of BMR units was at 18.9 percent and wondered if there had been discussions to get that to 20 percent. Council Member Stone queried if there would be a TDM plan. Council Member Stone liked that it was a great location for housing, provided more housing, would help out local businesses on Cal Ave, was a good activation of the space, and was mixed use. Council Member Stone suggested improving the public right-of-way on Mimosa Lane. Council Member Stone felt the building was large and out of context, but not so much as the Mollie Stone’s project. Council Member Stone was concerned about the setbacks and opined the rooftop deck open space should be for all residents. Council Member Stone thought the project was under-parked but understood that under state law, there could be zero parking. Council SUMMARY MINUTES Page 7 of 18 City Council Meeting Summary Minutes: 09/15/2025 Member Stone was concerned about having only one loading space for packages and rideshare and was mixed about the encroachment into the public right-of-way. Senior Planner Kallas said the district spaces referred to Cal Ave Parking District and were spaces the existing building paid into the local parking structures. The previous Council direction strongly encouraging 20 percent BMR units had been discussed with the applicant. Project Architect Pali agreed to meet the 20 percent BMR unit request and confirmed there would be a TDM plan. Council Member Lu asked about the current state of Mimosa Lane and thought it was de facto closed for vehicular traffic. Council Member Lu suggested adding mechanized bollards for deliveries, etc., and asked if the applicant proposed to pay for the improvements on Mimosa Lane. Council Member Lu wondered if the applicant was requesting other encroachments besides the shade canopies. Council Member Lu was not concerned about aesthetics but felt it was a great place for housing, the parking volume was okay, and closing Mimosa Lane created a more vibrant street space. Council Member Lu wanted to address the trash issue, if there was adequate bike parking, and if it would be properly accessible. Council Member Lu preferred shared and open rooftops, wanted to be at 20 percent BMR, and was concerned that all the affordable housing was located on the second floor. Planning Director Jonathan Lait said there were planters in addition to bollards on Mimosa Lane, which limits traffic. That area was flagged in the staff report as needing further examination. Planning Director Lait said the applicant would pay for any improvement made on public property. Senior Planner Kallas said the roof encroachments were on the Cal Ave side and potentially also the Mimosa Lane side. The existing parking lot would be incorporated into the building footprint. Council Member Lythcott-Haims was not concerned about the size of the building or amount of parking and did not love the exterior aesthetic but appreciated references to indigenous patterns. Council Member Lythcott-Haims asked the applicant what the plans were for the first floor and why the property owner was interested in purchasing this property. Council Member Lythcott-Haims wanted at least some portion of the roof deck space be open to all residents. Council Member Lythcott-Haims questioned what staff wanted from Council to help develop a guiding policy framework for Cal Ave. Vice Mayor Veenker felt the project will set the tone for housing on Cal Ave, so it will get more scrutiny. Vice Mayor Veenker asked about the shutters having climate benefits and wanted to hear the various options for Mimosa Lane. Project Architect Pali said the driving force for the project was to create vibrant restaurant spaces on the first floor with the above residential units to add more needed housing and finance the project. The property owner resides in Palo Alto and felt it was the perfect location SUMMARY MINUTES Page 8 of 18 City Council Meeting Summary Minutes: 09/15/2025 to be a catalyst for change and growth on Cal Ave. Project Architect Pali explained how the shutters on the façade are adjustable, which can cut down on energy levels. Planning Director Lait noted the amount of work staff had was a challenge to developing the guiding framework and that was not elevated on the objectives workplan discussion. Council Member Burt said the building was about triple the height of the others nearby and opined it was a statement piece not designed for the context of Cal Ave. Council Member Burt wanted to embrace canopies over public right-of-way as policy. Council Member Burt was concerned about balconies over the right-of-way, that the building footprint had 99 percent lot coverage, and that almost every zoning concept was proposed to be waived, including open space, parking, and setbacks. Council Member Burt liked the concept of turning Mimosa Lane into an active pedestrian space if it was not required for farmers market or Country Sun deliveries. Council Member Burt thought that, if the building were constructed, the fire lane on Cal Ave would need to be widened, which would affect the entire pedestrian design. There will be increased traffic in the Mayfield alley and there were no considerations regarding the trash uses, bike circulations, rideshare drop-offs, etc. Council Member Burt felt there needed to be bike storage on the ground floor. Planning Director Lait was unsure if the fire lane on Cal Ave would need to be widened. Mayor Lauing wanted to ensure the applicant was aware of the concerns surrounding the many touchpoints to the building, specifically the alley, which would become a big deal if Mimosa Lane were closed. Council had pushed for more housing on Cal Ave ahead of schedule and everyone unanimously agreed. Staff had said they did not have time for new master plan of Cal Ave. Mayor Lauing said the building has to be contextual but not for what is currently there. Council Member Lythcott-Haims agreed with the concern of putting all the below-market units on one floor, which tends to lead to a segregated experience. Consent Calendar 2. PUBLIC HEARING: Adoption of Voluntary Residential Electric Service Time-of-Use Rates (E-1 TOU) as Recommended by the Finance Committee; CEQA Status: Not a Project 3. Finance Committee Recommendation for City Council to Direct Staff to Follow the Reasonable-Cost Analysis Required by Proposition 26 for the Gas Cost of Service Analysis and Collaborate with the Utilities Advisory Commission to Develop Revised Gas Rate Schedules Effective January 2026, Based on Five Design Principles; CEQA – Not a Project 4. Authorization to Execute Amendment to Legal Services Agreement S25193131 with Diepenbrock Elkin Dauer McCandless to Increase Amount by $1,086,000 for Total Not- to-Exceed Amount of $1,171,000; CEQA Status – Not a Project. SUMMARY MINUTES Page 9 of 18 City Council Meeting Summary Minutes: 09/15/2025 5. Approval of Contract Amendment Number 1 to Contract C21177635B with Ingram Library Services in the amount of $255,000 for Print Materials and Services for a new not-to-exceed (NTE) of $455,000; and Contract Amendment Number 1 to Contract C21177635C with Midwest Tape in the amount of $53,000 for Media and Digital Materials and Services for a new not-to-exceed (NTE) of $753,000; CEQA Status – Not a Project. 6. Approval of 1) Amendment No. 8 to Contract No. C16163034A with Cumming Management Group, Inc. to Add $208,528, Increasing the Not-to-Exceed Amount to $10,683,771, for Additional Construction Management Services; 2) Professional Services Contract No. S26195542 with 4Leaf, Inc. in the Amount of $150,579 to Provide Inspector of Record Services; and 3) Amendment to the Fiscal Year 2026 Budget Appropriation for the Capital Improvement Fund to Support the New Public Safety Building Capital Improvement Program Project (PE-15001); CEQA Status - Environmental Impact Report for the New Public Safety Building and New California Avenue Area Parking Garage (Resolution No. 9772) 7. Approval of the Third Amended and Restated Purchase Order Number 4521000199 with Altec Industries, Inc., to Increase the Purchase Order Amount by $365,983 to a New Not-to-Exceed Amount of $1,073,075, including a Contingency Amount of $51,099, for the Purchase of Two 2025 Peterbilt 548 Hydraulic Digger Derricks; and Amend the FY 2026 Budget in the Vehicle Replacement and Maintenance Fund and the Electric Fund; CEQA Status – Exempt, Not a Project 8. FIRST READING: Adoption of Four Ordinances, as Recommended by the Retail Committee, to Amend and Reorganize Stormwater and Wastewater Management Requirements by Amending PAMC Chapter 16.09 (Sewer Use Ordinance), Amending Chapter 16.11 (Stormwater Pollution Prevention), Adding New Chapter 16.13 (Requirements for Food Facilities Related to Water Pollution Prevention and Management of Fats, Oils, and Grease), and Adding New Chapter 16.66 (Hauled Liquid Waste); Adoption of Two Resolutions Establishing Regulations to Implement PAMC Chapters 16.11 and 16.13; Adoption of a Resolution Amending and Restating the Administrative Penalty Schedule and Civil Penalty Schedules for Certain Violations of the PAMC; CEQA Status – Exempt under CEQA Guidelines Section 15308 9. QUASI-JUDICIAL. 400 Mitchell Lane [25PLN-00006]: Recommendation From the Planning and Transportation Commission to Uphold the Director’s Decision to Approve a Conditional Use Permit Allowing a Private University Educational Use Within an Existing Building. CEQA Status: Exempt in accordance with CEQA Guidelines Section 15301 (Existing Facilities). Zone District: PF. Public Comment: None. Council Members Reckdahl, Burt requested to pull Agenda Item Number 9. SUMMARY MINUTES Page 10 of 18 City Council Meeting Summary Minutes: 09/15/2025 Council Members Reckdahl, Burt registered a no vote on Agenda Item Number 9. Vice Mayor Veenker recused from Agenda Item Number 9. MOTION: Council Member Stone moved, seconded by Mayor Lauing to approve Agenda Item Numbers 2-9. MOTION PASSED ITEMS 2-8: 7-0 MOTION PASSED ITEM 9: 4-2-1, Burt and Reckdahl no, Veenker recused Council Member Reckdahl felt the PTC did not discuss the whole issue or understand the other plans going on for the station area and that it was taken out of context when approved. Council Member Burt had been working on the VTA-led planning process for the near, medium, and long-term uses for the station area. This proposal was for near and medium-term use of a 7,500 sq ft building which was an important component of that area. Council Member Burt had wanted to find a collaborative approach that met Stanford’s interests and the objectives of activating the station area and was disappointed that Stanford will use the building for storage. Council Member Burt mentioned a series of Comp Plan policies and programs that were not included in the staff report or looked at by the Planning Commission. The conditional use permit requires Comp Plan and zoning ordinance consistency. Council Member Burt noted this does not increase public access for activation and opined it was a breach of trust with Stanford. City Manager Comments City Manager Ed Shikada acknowledged the grand reopening of Children’s Library and listed upgrades done to the facility. The new Public Safety Building was awarded the Structures Award by Silicon Valley Business Journal. The next Cubberley meeting will be Wednesday, September 17 with an opportunity to hear a presentation from the architect team. City Manager Shikada listed upcoming activities and went over a slide of upcoming Council agendas. Action Items 10. Approval of a Director’s Interpretation Pursuant to PAMC Section 18.01.025 Concluding That Noncomplying Residential Gross Floor Area may not be Relocated Within a Structure; Denial of the Associated Appeal; Direction to Prepare a Future Code Amendment for Administrative De Minimis Exceptions to the Zoning Code; CEQA: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3) Planning Director Jonathan Lait briefly overviewed the question presented to Council and the Director’s conclusion, all included in the packet. SUMMARY MINUTES Page 11 of 18 City Council Meeting Summary Minutes: 09/15/2025 Appellant Joe Peterson is a homeowner appealing the Director’s rejection of a remodel to the 1948 home located in Barron Park. The project does not enlarge the building envelope or add floor area. The project is to eliminate a steep stairway leading to a small loft and convert the home into an entirely single-story residence to make it safer and allow the couple to age in place. The project was denied under Section 18.70.100 of the Municipal Code. Mr. Peterson opined that section of code only applies when a portion of a noncomplying home is damaged or destroyed and then replaced or reconstructed. Mr. Peterson felt Section 18.70.080, the enlargement provision, governed the project. Mr. Peterson noted that staff consistently permitted similar projects until 2016, when that changed without any Council action or code amendment. Mr. Peterson appreciated that staff recommended a de minimis code amendment, but the current proposal set no timeline, which could cause delay. Mr. Peterson asked Council to reverse the Director’s interpretation and direct staff to process the permit under Section 18.70.080. If Council decided an amendment was necessary, Mr. Peterson urged Council to direct staff to return with draft language on an expediated schedule, such as 90 days. Public Comment: Herb B. spoke to the proposed zoning amendment on packet page 343, where it stated staff could not identify a path forward to permit this type of project. Herb B. opined the ARB and staff should insist on an objective analysis based on the current code instead of trying to figure out how to approve a project that otherwise could not be. Mayor Lauing asked, if Council went through with the second part of the recommendation to look at a new ordinance, would someone write the ordinance and it go immediately to the PTC. Council Member Lu opined that both staff and applicant’s arguments were reasonable and that there is ambiguity to the text and intent. Council Member Lu thought the de minimis code change was a good approach. Council Member Lu wondered why this interpretation would set a precedent and why there would not be more discretion in not allowing other cases. Planning Director Lait confirmed staff would work on the ordinance and then send it to the PTC for recommendation to Council, which would take about 6 months. Planning Director Lait said the 2016 change in policy was based on Council guidance when considering the University Arts Building project, wherein Council reiterated that staff should follow the plain language of the code. Based on the plain reading of the code, staff did not see where the Director had the ability to permit this instance solely because it would not have much of an impact but be able to say no in a different context. Council Member Burt asked if a basement was exempt from the FAR calculation, noting there were not the same set of rules for commercial versus residential. Council Member Burt said, in this instance, there was no addition of floor area. Council Member Burt asked how long the prior interpretation was used by staff before 2016, suggesting that both interpretations were considered plain reading. Council Member Burt wanted an explanation of why 18.70.080 was not the most relevant chapter. The only nonconforming aspect of this project was the FAR limits, and this project does not increase the FAR noncompliance. Council Member Burt felt the SUMMARY MINUTES Page 12 of 18 City Council Meeting Summary Minutes: 09/15/2025 2 sections were not clear in consistency and intent and therefore needed code cleanup. Council Member Burt wondered why the de minimis language would take 6 months. Assistant City Attorney Albert Yang confirmed the basement counted as floor area for the University Art Building but did not count as floor area in residential developments. Planning Director Lait did not know how long the prior interpretation was used before 2016. Section 18.70.100 stated that any replacement or reconstruction that is damaged, willfully being implied, shall be accomplished in a manner so as to not reinstate the noncompliance, which staff felt was occurring with this project. Planning Director Lait said there was a lot of work assigned to the Department and a standard starting timeline was 4 months for processing an ordinance because of preparing the work, writing staff reports, going through the review process, noticing the public hearing, having the public hearing, and scheduling time to go before Council. Planning Director Lait opined crafting de minimis language would not be easy and the community would have perspectives that the Planning Commission would have to work through. Vice Mayor Veenker asked if the lot coverage would increase with the ground floor work. Vice Mayor Veenker confirmed there will be a different building footprint, different walls, different massing, and different lot coverage. Vice Mayor Veenker found staff arguments on pages 343- 33 compelling. Vice Mayor Veenker referenced Section 18.70.100(d), which did not apply but states if an act of God has altered a noncompliant area, it can be reconstructed without an increase in size, which includes more than just floor area. Vice Mayor Veenker felt Section 18.70.100 applied and concurred with the Director’s conclusion but was willing to have the code amended. Planning Director Lait was unsure if lot coverage would increase but confirmed the exterior of the building envelope changes with the addition. The architect, on behalf of Appellant Mr. Peterson, said that the existing covered porch and rumpus room count as floor area and lot coverage, therefore neither the lot coverage nor the floor area were increasing. They are becoming enclosed but not increasing in nonconformity. Council Member Lythcott-Haims opined Section 18.70.080 was the relevant portion of the code and saw the proposal as decreasing floor area by 11 square feet. Council Member Lythcott- Haims noted the house was built before Palo Alto incorporated Barron Park and the noncompliance was through no fault of the homeowners. Council Member Lythcott-Haims asked what staff wanted to see happen. Council Member Lythcott-Haims was in favor of overturning Director’s decision and include a request to create a de minimis ordinance. Planning Director Lait wanted to introduce more common sense applications of the code. Planning Director Lait agreed the project was not impactful but the team did not see that the mechanism existed to make the decision in favor of the appellant. Planning Director Lait said this matter should not take Council time or apply to City residents in this manner, thus the recommendation for a code amendment. SUMMARY MINUTES Page 13 of 18 City Council Meeting Summary Minutes: 09/15/2025 Council Member Reckdahl asked if Council had the ability to interpret the code. Council Member Reckdahl questioned if Council disagreeing with the Director would set a precedent. Council Member Reckdahl wondered if the porch could be considered an ADU. Planning Director Lait confirmed Council can interpret the code and that representatives stated the appellants were not interested in the porch being an ADU. Assistant City Attorney Yang did not think it was possible to uphold the Director’s interpretation and permit the project to proceed before an amendment was completed. Assistant City Attorney Yang confirmed that disagreeing with Director would set a precedent. Mayor Lauing clarified that staff’s interpretation of the law as it stands determined this project was not in compliance. Mayor Lauing felt expediting the code amendment to 90 days was the way to get around the problem without voting against the existing law. Council Member Burt said both attached and detached ADUs have been allowed as a bonus FAR that far exceed the additional FAR in this project even if it were not a replacement. Council Member Burt opined this matter was on the interpretation of law, not law itself. Council Member Lu thought precedents would not be set if Section 18.70.100 did not apply. Council Member Lu wanted to interpret the ordinance differently and not go forward with a de minimis text amendment. Planning Director Lait said that isolating the motion to residential only constituted a text amendment. Assistant City Attorney Yang confirmed the provisions apply citywide except for the CD district and said it would be helpful if Council had direction for how Section 18.70.100 should be applied if Section 18.70.080 is interpreted to allow these types of modifications. Council Member Lu felt Section 18.70.100 referenced damage and destruction, not a remodel. Vice Mayor Veenker said Section 18.70.100(a) referenced deconstruction, which is what was happening with this project. Vice Mayor Veenker asked if there was a waiver or other way Council could permit the appellant’s project to go forward while upholding the Director’s decision. Assistant City Attorney Yang clarified there was no way to permit the project without a broad interpretation. Council Member Reckdahl asked if allowing 90 days for the text amendment suggested by Mayor Lauing was feasible. Council Member Reckdahl was concerned about the exposure to precedent. Planning Director Lait said 90 days was only feasible if staff invoked a provision of the code that allowed staff to skip the Planning and Transportation Commission and come straight to Council. SUMMARY MINUTES Page 14 of 18 City Council Meeting Summary Minutes: 09/15/2025 ORGINAL MOTION: Council Member Lu moved, seconded by Council Member Burt to: 1. Do not uphold the Director of Planning and Development Services’ formal interpretation dated May 8, 2025, concluding that noncomplying residential gross floor area may not be removed and restored elsewhere on the property pursuant to Palo Alto Municipal Code (PAMC) Chapter 18.70, approving the associated appeal; and, 2. Direct staff to not to prepare a text amendment authorizing the Director of Planning and Development Services to consider or approve de minimis exceptions from noncomplying facility regulations and similar minor adjustments that are not impactful to adjacent properties or public realm for residential properties. COUNCIL MEMBER BURT WITHDREW HIS SECOND TO THE ORGINAL MOTION MOTION: Council Member Lu moved, seconded by Council Member Burt to: 1. Do not uphold the Director of Planning and Development Services’ formal interpretation dated May 8, 2025, concluding that noncomplying residential gross floor area may not be removed and restored elsewhere on the property pursuant to Palo Alto Municipal Code (PAMC) Chapter 18.70, approving the associated appeal; and, 2. Direct staff to prepare a text amendment authorizing the Director of Planning and Development Services to consider or approve de minimis exceptions from noncomplying facility regulations and similar minor adjustments that are not impactful to adjacent properties or public realm for residential properties. MOTION FAILED: 3-4, Lauing, Stone, Veenker, Reckdahl no MOTION: Mayor Lauing moved, seconded by Vice Mayor Veenker to 1. Uphold the Director of Planning and Development Services’ formal interpretation dated May 8, 2025, concluding that noncomplying residential gross floor area may not be removed and restored elsewhere on the property pursuant to Palo Alto Municipal Code (PAMC) Chapter 18.70, denying the associated appeal; and, 2. Direct staff to prepare a text amendment within 6-months authorizing the Director of Planning and Development Services to consider or approve de minimis exceptions from noncomplying facility regulations and similar minor adjustments that are not impactful to adjacent properties or public realm for residential properties. SUMMARY MINUTES Page 15 of 18 City Council Meeting Summary Minutes: 09/15/2025 AMENDMENTS INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER MOTION PASSED: 6-0-1, Lu abstained 11. Approval of a Third Phase Agreement with Northern California Power Agency for the Purchase of Battery Energy Storage Capacity from Trolley Pass Project LLC, over a Term of up to 20 Years for a Total Not to Exceed Amount of $161.7 Million; CEQA status: not a project under CEQA Guidelines sections 15378(a), (b)(5) Senior Resource Planner Jim Stack said staff brought an Integrated Resource Plan (IRP) to Council in 2023, which is a long-term planning document that looks over 20 years into the future, describes the anticipated load over that period, looks at the supply of resources, and addresses any gaps by bringing new resources into the portfolio. The 2023 IRP detailed significant load growths that are tracking with the forecast. There was a 12 percent growth from 2022 to 2024. Some legacy Power Purchase Agreements (PPAs) are set to expire between 2026-2034. Staff requested proposals for renewable energy and storage projects through the Northern California Power Agency (NCPA) beginning in April 2024 which resulted in about 30 proposals being submitted. The challenges in procuring new renewable energy resources are the timeline for the resource to get connected, which can take longer than 5 years, and federal policy changes that create pricing uncertainty. The Trolley Pass Project is a 400 MW BESS located in San Bernadino County. Staff recommends Palo Alto take a 50MW share. The contract will be for a 20-year term starting in 2029. The contract price is $12.71/kW-month, which costs Palo Alto about $7.6 million per year. It is becoming industry standard for developers to insist on contract provisions that allow them to raise the contract price after it is executed if they can show to an independent auditor that their costs have increased due to things like tax incentives or tariffs. That could result in a contract price increase of up to 6 percent, which must be invoked within the next year. The price of the contract is attractive compared to what is in the market for storage, which is typically in the $15 to $16 range. Storage projects provide 2 sources of value: the value of energy and resource adequacy or capacity value. Staff is projecting a net value to the City of about $4.5 million per year. Resource Adequacy is an energy market product designed to ensure the grid remains reliable during all hours of the year. The California Independent System Operator (CAISO) requires all utilities to procure a certain amount of capacity to meet peak demand plus 15 percent extra. The storage resources are grid responsive and credited with providing capacity. A graph showed capacity balance. Staff recommended a 50MW share because there is uncertainty around the largest single resource in the portfolio. SUMMARY MINUTES Page 16 of 18 City Council Meeting Summary Minutes: 09/15/2025 The NCPA approved the Trolley Pass project in June 2025; the City’s UROCC recommended approval on June 23, 2025; and the UAC recommended approval on July 9, 2025. A slide showed the recommended motion. Council Member Reckdahl asked for more detail on how the recommended 50MW suggested share was achieved and if purchasing the power was optional or required. Council Member Burt asked which specific hydro supply was at risk and if adding this storage will move the City closer to carbon neutrality and if so, by how much. Council Member Burt wanted to understand, at a later time, what the unknown variables were that contribute to the big range difference between load projections and potential current high. Council Member Burt expects to see the cost of storage decline significantly in the next few years. Senior Resource Planner Stack said the 50MW share is recommended because that is the amount of capacity anticipated to be lost within a few years from another resource. Because this is the City’s first storage contract, staff wanted to gain experience before making a bigger commitment and prices could fall in the future, so staff wanted to have room in the portfolio for lower priced projects. When signing the contract, the City is obligated to pay the capacity cost monthly. The NCPA will be cycling energy in and out to optimize the resource. The Western Base Resource Contract is at risk. Senior Resource Planner Stack said this project would balance the portfolio and move the City toward carbon neutrality on a daily basis but had not calculated by how much. Council Member Lu asked what the potential penalties would be between 2027 to 2029, assuming the project is on schedule, and what assumptions need to be true for this project to be a net financial benefit. Council Member Lu felt buying a 50MW share was reasonable. Senior Resource Planner Stack said if the City loses the RA from Western, staff would go into the market and purchase something on a one- or two-year basis so as to not face penalties. Staff has worked with consultants who do production cost modeling of the grid. Storage resources help reduce arbitrage value but there is still more solar being added to the grid than there is storage. Staff was confident the arbitrage value will remain throughout most of the contract period. Utilities Director Alan Kurotori noted there are anti-speculation guidelines for risk management portfolio and those are followed. Public Comment: Stephen R. was happy to see the project being proposed and felt the Sustainability and Climate Action Committee was critical to the discussion. Stephen R. opined working toward carbon neutrality and the partnership between solar and storage was critical to fighting climate change. Stephen R. suggested Palo Alto consider a local battery storage to provide emergency backup. Stephen R. wanted Palo Alto to be more aggressive in purchasing solar arrays that create energy sources. SUMMARY MINUTES Page 17 of 18 City Council Meeting Summary Minutes: 09/15/2025 Vice Mayor Veenker watched the NCPA go through the proposal process and was excited about getting closer to carbon neutrality and giving residents confidence that the City will have uninterrupted power. Vice Mayor Veenker thought the cost of storage declining was likely and that demand was only going to increase. Vice Mayor Veenker asked how the passage of the Pathways bill and the Extended Day-Ahead Market will affect the solar market. Senior Resource Planner Stack said the passing of the Pathways bill added uncertainty into the projections and a lot depends on which areas of the west join EDAM. There is a possibility it could decrease the arbitrage value. Council Member Burt agreed that the City should examine local storage for the additional value of resiliency. MOTION: Vice Mayor Veenker moved, seconded by Council Member Burt to: 1. Authorize the City Manager, or their designee, to execute a Third Phase Agreement (Attachment A) with the Northern California Power Agency (NCPA) to purchase the output of a 50-megawatt (MW) share of a grid-connected battery energy storage system (BESS) owned by Trolley Pass Project LLC, a subsidiary of Aypa Power Development (Aypa), over a period of 20 years, at a total cost not to exceed $161.7 million; 2. Authorize the City Manager, or their designee, to execute on behalf of the City all related documents or agreements necessary to administer the Third Phase Agreement that are consistent with the Palo Alto Municipal Code and City Council-approved policies, including, but not limited to, collateral assignment agreements; and take any and all actions as are necessary or advisable to implement and administer the Third Phase Agreement; and, 3. Authorize the City Manager, or their designee, to approve and execute amendments to the Third Phase Agreement, as may be required from time to time, so long as the contract price and length of the agreement remain unchanged. MOTION PASSED: 7-0 12. Designation of Voting Delegate and Alternate for the League of California Cities Annual 2025 Conference, to be held October 8-10, 2025, in Long Beach, California City Clerk Mahealani Ah Yun explained that each member city is entitled to one voting delegate at the general assembly where city officials vote on Cal City policy resolutions. Vice Mayor Veenker is registered to attend. Cal Cities did not receive any general resolutions by the August 9 deadline, but petitioned resolutions may be introduced during the Cal Cities Annual Conference and Expo. SUMMARY MINUTES Page 18 of 18 City Council Meeting Summary Minutes: 09/15/2025 MOTION: Mayor Lauing moved, seconded by Council Member Lythcott-Haims to designate Vice Mayor Veenker as the voting delegate for the 2025 League of California Cities Annual Conference. MOTION PASSED: 7-0 Adjournment: The meeting was adjourned at 9:49 P.M.