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2010-11-22 City Council Agenda Packet
This Agenda/Notice is Posted in Accordance with Government Code Section 549.2(A) or Section 54956 11/22/10 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is available in the Council Chambers on the Thursday preceding the meeting. Special Meeting Council Chambers November 22, 2010 6:00 PM ROLL CALL CLOSED SESSION Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. THE FOLLOWING CLOSED SESSION WILL BE HELD WITH THE CITY LABOR NEGOTIATORS. 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Dennis Burns, Lalo Perez, Joe Saccio, Russ Carlsen, Sandra Blanch, Marcie Scott, Darrell Murray) Employee Organization: Police Managers Association Authority: Government Code Section 54957.6(a) CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Dennis Burns, Lalo Perez, Joe Saccio, Russ Carlsen, Sandra Blanch, Marcie Scott, Darrell Murray) Employee Organization: Palo Alto Police Officers Association Authority: Government Code Section 54957.6(a) CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Lalo Perez, Joe Saccio, Russ Carlsen, Sandra Blanch, Marcie Scott, Darrell Murray) Unrepresented Employee Group: Management, Professional and Confidential Employees Authority: Government Code Section 54957.6(a) CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Dennis Burns, Lalo Perez, Joe Saccio, Russ Carlsen, Sandra Blanch, Marcie Scott, Roger Bloom, Darrell Murray) Employee Organization: International Association of Fire Fighters, Local 1319 Authority: Government Code Section 54957.6(a) 2 11/22/10 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Dennis Burns, Lalo Perez, Joe Saccio, Russ Carlsen, Sandra Blanch, Marcie Scott, Roger Bloom, Darrell Murray) Employee Organization: Palo Alto Fire Chiefs’ Association Authority: Government Code Section 54957.6(a) CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Lalo Perez, Joe Saccio, Russ Carlsen, Sandra Blanch, Marcie Scott, Darrell Murray) Employee Organization: Service Employees International Union, Local 521 Authority: Government Code Section 54957.6(a) 7:30 PM or as near as possible thereafter CITY MANAGER COMMENTS ORAL COMMUNICATIONS Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration or Oral Communications period to 30 minutes. APPROVAL OF MINUTES October 04, 2010 October 18, 2010 CONSENT CALENDAR Items will be voted on in one motion unless removed from the calendar by two Council Members. 2. Adoption of a Resolution for Marc Dela Cruz Upon His Retirement ATTACHMENT 3. Adoption of a Resolution for Terry Condon Upon His Retirement ATTACHMENT 4. Approval and Authorization for the City Manager or His Designee to Execute the Attached Contract With HortScience, Inc. (Attachment A) in the Amount of $159,604 for the Development of an Urban Forest Master Plan CMR 415:10 and ATTACHMENT 3 11/22/10 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 5. Approval of Contract With Pacific Technologies Incorporated (PTI) in the Amount of $99,698 for Preparation of an Information Technology Strategic Plan CMR 411:10 and ATTACHMENT 6. Approval of a Contract With Spencon Construction, Inc. in the Amount of $447,431 for FY 2010-11 Sidewalk Replacement Project – Capital Improvement Program, Sidewalk Replacement Project PO-89003 CMR 406:10 and ATTACHMENT 7. Recommendation From the Finance Committee for Adoption of Refuse Enterprise Fund Budget Amendment Ordinance and Recommendation From Finance Committee to Accept Landfill Operations Alternative No. 1 to Quickly Fill the Remaining Landfill Capacity While Retaining Existing Composting Operations and, Thereafter, Convert the Area to Parkland (Open Space) as Fast as Possible CMR 421:10 and ATTACHMENT 8. Approval of a Purchase Order With Leotek Electronics USA Corp. in an Amount Not to Exceed $355,281 for a One Time Purchase of Six Hundred LED Street Lighting Luminaires in Support of the Utility Department CMR 412:10 and ATTACHMENT 9. Approval of Increase in R. A. Wiedemann & Associates Contract With the City of Palo Alto From $105,000 to $110,000 for a Presentation to the Council of the “Palo Alto Airport Business Plan” Plus a Contingency of Up to $14,100 for Any Additional Work After Receiving Council Direction CMR 417:10 and ATTACHMENT 10. Approval of Banking Services Contract Extension With Wells Fargo and Union Bank for Three Years CMR 409:10 and ATTACHMENT 11. Recommendation From the Finance Committee to Accept the Audit of Citywide Cash Handling and Travel Expenses ATTACHMENT 4 11/22/10 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 12. Adoption of a Budget Amendment Ordinance to Create Capital Improvement Program (CIP) Project VR-11000 (Scheduled Vehicle and Equipment Replacements) and Transfer the Remaining Unused Appropriation From CIP Projects VR-07800 and VR-08000 to VR-110000 in the Total Amount of $222,205 and Approval of a Purchase Order With Downtown Ford Sales in an Amount Not to Exceed $152,030 for the Purchase of Six Police Patrol Vehicles CMR 422:10 and ATTACHMENT 13. 2nd Reading Adoption of Five Ordinances Amending Title 16 of the Palo Alto Municipal Code: (1) Repealing Chapter 16.04 of the Palo Alto Municipal Code and Amending Title 16 to Adopt a New Chapter 16.04, California Building Code, California Historical Building Code, and California Existing Building Code, 2010 Editions, and Local Amendments and Related Findings; (2) Repealing Chapter 16.05 of the Palo Alto Municipal Code and Amending Title 16 to Adopt a New Chapter 16.05, California Mechanical Code, 2010 Edition, and Local Amendments and Related Findings; (3) Adopting a New Chapter 16.06 of the Palo Alto Municipal Code, California Residential Code, 2010 Edition, and Local Amendments and Related Findings; (4) Repealing Chapter 16.08 of the Palo Alto Municipal Code and Amending Title 16 to Adopt a New Chapter 16.08, California Plumbing Code, 2010 Edition, and Local Amendments and Related Findings; and (5) Repealing Chapter 16.16 of the Palo Alto Municipal Code and Amending Title 16 to Adopt a New Chapter 16.16, California Electrical Code, 2010 Edition, and Local Amendments and Related Findings (First reading November 8, 2010 – Passed 9-0) ATTACHMENT PUBLIC COMMENT 14. 2nd Reading Adoption of an Ordinance Repealing and Reenacting Title 15 of the Palo Alto Municipal Code to Adopt the 2009 Edition of the International Fire Code, as Amended By the State of California, Also Known as the 2010 Edition of the California Fire Code, With Local Amendments and Related Findings (Chapter 15 of the Palo Alto Municipal Code) (First reading November 8, 2010 – Passed 9-0) ATTACHMENT AGENDA CHANGES, ADDITIONS, AND DELETIONS HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. 5 11/22/10 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. ACTION ITEMS Include: Public Hearings, Reports of Committees/Commissions, Ordinances and Resolutions, Reports of Officials, Unfinished Business and Council Matters 15. Public Hearing: Consider Approval of a Mitigated Negative Declaration and Adoption of an Ordinance Amending the Zoning Map to Apply the Pedestrian and Transit Oriented Development (PTOD) Combining District to a ½ -Acre Site Zoned Multiple Family Residential (RM-40) to Allow Eight Residential Condominiums Above Ground Floor Office Space, a Below Grade Parking Garage, and Related Site Improvements at 305 Grant, 2640 and 2650 Birch Street and 306 and 320 Sheridan Avenue CMR 413:10 and ATTACHMENT 16. Recommendation From the Policy & Services Committee to the City Council on Proposed Changes to the City Council Procedures and Protocols ATTACHMENT COUNCIL MEMBER QUESTIONS, COMMENTS, AND ANNOUNCEMENTS Members of the public may not speak to the item(s). ADJOURNMENT Persons with disabilities who require auxiliary aids or services in using City facilities, services, or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact 650-329-2550 (Voice) 24 hours in advance. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO MARC DELA CRUZ UPON HIS RETIREMENT WHEREAS, Marc Dela Cruz has served the City of Palo Alto from September 3, 1980 to December 30, 2010 as an Auto Service Mechanic, Tech I, and Maintenance Mechanic; and WHEREAS, Marc Dela Cruz has enhanced the quality of life and protected the public health of the citizens of Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University by maintaining the Regional Water Quality Control Plant; and WHEREAS, Marc Dela Cruz, in his 30 years of service has safeguarded and enhanced the water quality of the Palo Alto Baylands and San Francisco Bay through careful and expert maintenance of plant machinery and treatment systems; and WHEREAS, Marc Dela Cruz has invaluably and willingly responded to the need for after-hour emergency repairs; and WHEREAS, Marc Dela Cruz has received numerous commendations including his service in continuing maintenance of the treatment plant after the 1989 Loma Prieta Earthquake and winning Mechanical Technician of the Year award in 1998 from the California Water Environment Association Santa Clara Valley Section; and WHEREAS, Marc Dela Cruz has maintained numerous complex wastewater treatment equipment, sewage sludge incinerators, ash handling systems, and air pollution control equipment; and WHEREAS, the City of Palo Alto desires to recognize the meritorious service of Marc Dela Cruz. NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of Palo Alto hereby commends the outstanding public service of Marc Dela Cruz and records its appreciation as well as the appreciation of the citizens of the area served by the Regional Water Quality Control Plant for the service and contribution rendered during his 30 years of employment with the City of Palo Alto. INTRODUCED AND PASSED: November 22, 2010 ATTEST: APPROVED: _______________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: _______________________ _______________________ City Attorney City Manager RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO TERRY CONDON UPON HIS RETIREMENT WHEREAS, Terry Condon has served the City of Palo Alto from November 7, 1983 to December 28, 2010 as a Mechanical Unit Repairer and a Maintenance Mechanic; and WHEREAS, Terry Condon has enhanced the quality of life and protected the public health of the citizens of Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University by maintaining the Regional Water Quality Control Plant; and WHEREAS, Terry Condon, in his 27 years of service has safeguarded and enhanced the water quality of the Palo Alto Baylands and San Francisco Bay through careful maintenance of plant machinery and treatment systems; and WHEREAS, Terry Condon has maintained numerous water valves, natural gas valves, water pumps, wastewater pumps, complex wastewater treatment equipment, sewage sludge incinerators, ash handling systems, and air pollution control equipment; and WHEREAS, the City of Palo Alto desires to recognize the meritorious service of Terry Condon. NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of Palo Alto hereby commends the outstanding public service of Terry Condon and records its appreciation as well as the appreciation of the citizens of the area served by the Regional Water Quality Control Plant for the service and contribution rendered during his 27 years of employment with the City of Palo Alto. INTRODUCED AND PASSED: November 22, 2010 ATTEST: APPROVED: ____________________ ______________________ City Clerk Mayor APPROVED AS TO FORM: ____________________ ______________________ City Attorney City Manager TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: NOVEMBER 22, 2010 REPORT TYPE: CONSENT DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT CMR: 415:10 SUBJECT: Approval and Authorization for the City Manager or his Designee to Execute the Attached Contract with HortScience, Inc. (Attachment A) in the Amount of $159,604 for the Development of an Urban Forest Master Plan EXECUTIVE SUMMARY In 2008, the City received a $66,000 grant from the State (CaIFire) to provide partial funding for preparation of an Urban Forest Master Plan for the City. Staff issued a Request for Proposals (RFP) for the preparation ofthe plan in 2010. Staff is recommending selection of HortScience to prepare the master plan at a cost not to exceed $159,604, based on a work program developed by staff, Canopy, and the consultants. Staff requests that the City Council authorize the City Manager to execute the attached contract. RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with HortScience, Inc. (Attachment A) in the amount of $159,604 for the development of an Urban Forest Master Plan. 2. Approve the use of $93,604 from the City Manager's Contingency Account to fund the amount not covered by the grant to be replenished by the Public Works, Utilities, Community Services, and Planning and Community Environment Depmtments during the FY 2011 mid-year budget review process. BACKGROUND The Palo Alto community has long been aware of the need to proactively preserve and enhance the city's urban forest. In 1993, the City Council appointed a Tree Task Force to make recommendations and in 1995 the Council adopted their recommendations including: • The creation of a non-profit tree group. In 1996 Canopy was established to serve as the community's resource on tree-related matters as well as act as the City's advisor and partner for tree planting and tree care activities. CMR: 415:10 Page 1 of5 • The development of a Tree Protection Ordinance. In 1996, the Council adopted the Tree Protection Ordinance which established criteria for "protected" trees, which cannot be removed without City approval. In 1998, the cun'ent Comprehensive Plan was adopted, including several goals, policies, and programs to preserve, maintain, and enhance the city's urban forest. On Ealth Day 2006, Council directed staff to create a new Street Tree Management Plan to implement the Comprehensive Plan goals and policies. . In 2007, the City collaborated with Canopy to apply for a grant from CALFIRE to help flilld the development of the Master Plan. In August of 2008, the grant was awarded; however, due to staffing reductions and state budget constraints, the preparation of the master plan was delayed. In late 2009, the removal of the street trees on California Avenue fUlther underscored the need for a master plan. In the spring of2010, the City assembled a team, including staff as well as Canopy, to oversee the preparation of the master plan. DISCUSSION The Urban Forest Master Plan is an important component of the City's Sustainability Program that will establish the urban forest as an asset that must be preserved and renewed; it will provide a road map to accomplish that goal. The future of Palo AltQ' s urban forest is seriously threatened by many factors, such as water restrictions, the installation of fiber optics, and on-going development that affect Palo Alto's tree canopy every day. A master plan is needed to help the City conserve, renew, and monitor its urban forest and will identify how to minimize conflicts between retention of the urban forest and construction of development and infrastructure projects, as well as the City's continued maintenance and operational needs. In late July, a Request for Proposals (RFP) was circulated for the preparation of the Urban Forest Master Plan with the following objectives: 1. Ensure that the City has an accurate and complete picture of its urban forest 2. Establish the urban forest as an asset 3. Establish the importance of the urban forest to the City's sustainability goals 4. Provide a road map for effective and efficient management that employs best practices and latest advancements 5. Consolidate resources (internal and external) 6. Engage the community as stewards of the urban forest 7. Provide a monitoring plan Nrnnber of proposals received 4 Nrnnber of firms interviewed 3 Range of proposal amounts $69,000 to $239,000 Proposed length of project 9 months The review panel for the proposals was composed of the City's Public Works and Planning arborists and the Executive Director of Canopy. The panel evaluated four proposals and interviewed three of the bidders. At the interviews, the panel reinforced its expectations that the docrnnent will provide for inter-departmental protocols as a resource for staff, a thorough understanding of probable-future-water-conservation mandates, and a flexible response to such CMR: 415:10 Page 2 of5 environmental changes-including the role of the City's recycled water program. The interviews established that some components of the Palo Alto Urban Forest Master Plan would be unprecedented based on the consultants' previous experiences. Based on their proposal, experience, and interview, HortScience was determined by the panel to be uniquely qualified to help the City develop a plan for sustaining the urban forest. In the tree industry, HortScience stands out as one of the world's premier academic and technically advanced consulting firms. Staff believes that HortScience brings the needed level of arboricultural expertise to all aspects ofthe project. The panel believes that use of any of the other consultants would result in City staff needing to prepare at least some components of the Urban Forest Master Plan, e.g., the urban forest sustainability program and an adaptive management program for our recycled water program. HOltScience publications illustrate a match between their expertise and the objectives ofthe Master Plan. Two pmticularly significant projects completed by Ms. Matheny mld Mr. Clark, principals of the firm, are: I. Development of a model for the assessment of urban forest sustainability through a grant from the USDA Forest Service (Attachment B). Implementing the model for Palo Alto will provide: a. A community-specific template for managing the City's urban forest and monitoring its sustainability b. A sustainability scorecard that can be used throughout the community to continually assess progress towards attaining specified goals 2. Development ofthe Water Use Classification of Landscape Species. The proposed work plan includes a comprehensive analysis of the water use and salt tolerance of tree species. Using this classification system will provide the City with state-of-the-art information to meet state goals for water conservation. Additionally, HortScience is currently under contract with the Utilities and Public Works Depmtments to provide expertise in the use of recycled water for landscape irrigation. HortScience's expertise regarding Palo Alto's recycled water challenges will streamline permitting, alleviate conflicts between depaltments and guide the process to avoid costly mistakes. Finally, staffs expeltise will be enhanced by working with HortScience on the project. Staff has negotiated the attached contract (Attachment A) with HortScience for the development of an Urban Forest Master Plan that will cost $159,604. The project will also include: I. Inter-departmental interviews by the consultant. 2. Significant public outreach, including: • A community-wide survey to gather input • A City Council Study Session early in the process to provide broad policy direction CMR: 415:10 Page 3 of5 • A City Council Study Session at the end ofthe process to discuss the draft Master Plan • Two community meetings to discuss the draft Urban Forest Master Plan RESOURCE IMPACTS Funding for the project is provided by: I. A $66,000 CALFlRE grant; and 2. $93,604 from the City Manager's Contingency Account to be replenished by the Public Works, Utilities, Community Services, and the Planning and Community Environment Depmtments during the FY 2011 mid-yearbudget review process. POLICY IMPLICATIONS This project is consistent with the City's sustainability policies and numerous goals, policies and programs in the Natural Environment and Land Use chapters of the Comprehensive Plan, including but not limited to: GOAL N-3: A Thriving "Urban Forest" That Provides Ecological, Economic, and Aesthetic Benefits for Palo Alto. POLICY N-14: Protect, revitalize, and expand Palo Alto's urban forest through public education, sensitive regulation, and a long-term financial commitment that is adequate to protect this resource. PROGRAM N-16: Continue to require replacement of trees, including street trees lost to new development, and establish a program to have replacement trees planted offsite when it is impractical to locate them onsite. PROGRAM N-19: Establish one or more tree planting programs that seek to achieve the following objectives: • A 50 percent tree canopy for streets, parks, and parking lots; and • The annual tree planting goals recommended by the Tree Task Force and adopted by the City CounCil. PROGRAM N-20: Establish procedures to coordinate City review, pmticularly by the Planning, Utilities, and Public Works Departments, of projects that might impact the urban forest. POLICY N-17: Preserve and protect heritage trees, including native oaks and other significant trees, on public and private property. POLICY L-70: Enhance the appearance of streets and other public spaces by expanding and maintaining Palo Alto's street tree system. POLICY L-76: Require trees and other landscaping within parking lots. ENVIRONMENTAL REVIEW Approval of this contract is not considered a project subject to the requirements of the California Environmental Quality Act (CEQA). CMR: 415:10 Page 4·of5 PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: ATTACHMENTS: Attachment A: Contract CURTIS WILLIAMS, Director Planning and Community Environment \~w.ck&.p c..( JAMES KEENE 'I ~ City Manager Attachment B: Model for the assessment of urban forest sustainability COURTESY COPIES Catherine Martineau, Canopy CMR: 415:10 Page 5 of5 CITY OF PALO ALTO CONTRACT NO. Cl1137721 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND HORTSCIENCE, INC. FOR PROFESSIONAL SERVICES PROVIDE URBAN FOREST MASTER PLAN This Agreement is entered into on this 23rd day of November, 2010, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and HORTSCIENCE, INC., a California Corporation, located at 2150 Rheem Drive, Suite A, Pleasanton, CA 94566, (PH) (925) 484-0211 ("CONSULTANT"). RECITALS The following recitals are a substantive portion ofthis Agreement. A. CITY intends to implement an Urban Forest Master Plan in conjunction with other environmental initiatives ("Project") and desires to engage a consultant to provide an Urban Forest Master Plan for this Project. ("Services"). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit "A", attached to and made a part of this Agreement. NOW, THEREFORE, in consideration ofthe recitals, covenants, tenns, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perfonn the Services described in Exhibit "A" in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The tenn of this Agreement shall be from the date of its full execution through August 30, 2011, unless tenninated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the perfonnance of Services under this Agreement. CONSULTANT shall complete the Services within the tenn of this Agreement and in accordance with the schedule set forth in Exhibit "B", attached to and made a part of this Agreement. Any Services for which times for perfonnance are not specified in this Agreement 1 Professional Services Rev. June 2, 2010 S :IASDIPURCH\SOLICITA TIONSICURRENT BUYER-CM FOLDERSIKATHYlContra ctsICII13772I-Hort SciencelContract CI I 137721 - HORTSClENCE. Inc. doc shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY's agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay ifthe extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance ofthe Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed One Hundred Fifty Nine 1Ihousand Six Hundred Four Dollars ($159,604.00). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed One Hundred Fifty Nine Thousand Six Hundred Four Dollars ($159,604.00). The applicable rates and schedule of payment are set out in Exhibit "C-l ", entitled "FEE and RATE SCHEDULE," which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services descril:>ed in Exhibit "A". SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT's billing rates (set forth in Exhibit "C-I "). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT's payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City's project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. OUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT's supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform 2 Professional Services Rev. June 2, 2010 S:IASD\PURCH\SOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHYlContra ctsICll137721-Hort SciencelContract Cll13772I - HORTSCIENCE, Inc.doc Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) ofthe CITY's stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT's obligations hereunder without the prior written consent ofthe city manager. Consent to one assigrrment will not be deemed to be consent to any subsequent assigrrment. Any assigrrment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. DOption A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. (gJOption B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: CirclePoint, Inc. CONSULT ANT shall be responsible for directing the work of any subconsultants and f0f any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. Professional Services 3 Rev. June 2, 2010 S:IASD\PURCH\SOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHY\Contra etslCI 1137721-Hort SciencelContraet Cll137721 - HORTSCIENCE,Ine.doe SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Jim Clark, Vice President, as Project Manager, to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the project. If circumstances cause the substitution of the project manager, or any other key persormel for any reason, the appointment of a substitute project manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY's project manager. CONSULTANT, at CITY's request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City'S Project Manager is Gloria Humble, Planning and Community Environment Department, 250 Hamilton Avenue, Palo Alto, CA 94301, Telephone: (650) 329-2596. The Project Manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULT ANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT's records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [2J[Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements ("Claims") that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct ofthe CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. Professional Services 4 Rev. June 2, 2010 S:IASDIPURCH\SOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHYlContra e!sICl I I3772l-Hort ScieneelContraet Cll137721 - HORTSClENCE,lne.doe D [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.) 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnity, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements ("Claims") resulting from, arising out of or in any marmer related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnity an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT's services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best's Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution ofthis Agreement. The certificates will be subject to the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY's Purchasing Manager during the entire term ofthis Agreement. 5 Professional Services Rev. June 2, 2010 S:IASDIPURCHISOLICITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra ctslCII 13772I-Hor! SciencelContract CII137721 - HORTSClENCE, Inc.doc 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19 .2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT's services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise ofhislher discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4,20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 6 Professional Services Rev. June 2, 2010 S:IASDIPURCHISOLICITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra e!sICI I I37721-Hort SciencelContract Cll137721 - HORTSClENCE, Ine.doe With a copy to the Purchasing Manager To CONSULTANT: Attention ofJim Clark, Vice President, at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Govermnent Code of the State ofCalifomia. 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Conunission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REOUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the City's Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements ofthe City's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum 000% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional 7 Professional Services Rev. June 2, 2010 S:IASD\PURCHISOLICITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra ctslCII 137721-Hort SciencelContract CII137721 - HORTSClENCE,Inc.doc printing company shall be a minimum 0[30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 8 Professional Services Rev. June 2, 2010 S:IASDIPURCHISOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHYlContra ctslCI I I3772I·Hort SciencelContract CII137721 • HORTSCIENCE, Inc. doc 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5( d) about a California resident ("Personal Information"), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security ofthe Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City's express written consent. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. 9 Professional Services Rev. June 2, 2010 S:IASDIPURCH\SOLICITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra ctslCI I 13772I-Horl SciencelContract CIIlJ772l _ HORTSClENCE. Inc. doc NOV·Nov. 10. LU 1 U5 11: 49AMJRCHfHo r t Sc i en ce, Inc. 03292302 CITY OF PALO A JTO City M!II1ager (RCqu'red on contracts oVer $85,000) Pumhasing Managel' (Required on contracts over $25,000) Contracts Administr tor (Requirod un contraclq under $25, 00) APl'ROVRO AS TO FORM: Senior Ass!. City AU mey (Required on ContrQ ts over $25,000) Attachments~ EXHIHrr "1\": EXH1I3lT "B": EXHJBIT "C": EXHIBIT "C·1": EXHIBIT "D": SCOPE OF WO\U( SCHEDULE OF PERFORMANCE COMPENSATION SCHEDULE OF RATES TNStJ RANCE llliQUIRBMENTS To:91925484~No. 1815 P. 2.e:2/2 Professional Services 1 0 Rev June 2, 2010 S:IASO\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\KATHy\Contra cts\Cl1 137721-Hort Science\Contract Cll137721 _ HORTSCIENCE. Inc.doc EXHIBIT "A" 1. SCOPE OF SERVICES The key element of the work plan is urban forest sustainability. CONSULTANT shall use the model for sustainable urban forests developed by HortScience, Inc. as the starting point, modifYing it to provide Palo Alto with a community specific template for managing its urban forest and monitoring its sustainability. In so doing, CONSULTANT shall meet all of the project's objectives, respond to the each of the requested services and provide the project deliverable. The model of urban forest sustainability arose from a national project that HortScience prepared for the USDA Forest Service National Urban and Community Forestry Advisory Council. The model describes 20 criteria essential to a sustainable urban forest. These criteria fall into three broad categories (Table I, below): characteristics of the vegetation in the community, the community framework, and resource management. For each criterion, the model describes levels of performance -indicators that can be used to assess the current condition. The model was tested for over 20 cities in the U.S., and has been adapted for use in a number of countries, states and communities. For example, the model is one of the foundational elements of Sacramento Tree Foundation's Greenprint Initiative. CONSULTANT's project approach is based on adapting the model of urban forest sustainability to Palo Alto, using the following steps: 1. Compile policies and information about Palo Alto's urban forest, leading to analysis of the current status, challenges and opportunities. 1.1 City Policies & Documents • Comprehensive Plan (relevant sections). • Municipal Code (tree & zoning sections). • Tree Technical Manual. • Climate Protection Plan. • USDA N. Calif. Coast Community Tree Guide. • Cal Green. • California PUC Section 4799.06-4799.12. • Utilities Department tree management program. • Palo Alto Sustainability plan. IdentifY the key connections to the City's urban forest and its management. • Tree management (public, private, utility) funding status and history. • Other City policies, procedures, agreements that relate to tree and urban forest management. • Evaluate current and proposed use of recycled water for landscape irrigation. • Summarize findings (including where modifications / changes may be required). • California PUC Section 4799.06-4799.12. • Utilities Department tree management program. • Palo Alto Sustainability plan. IdentifY the key connections to the City's urban forest and its management. Professional Services 11 Rev June 2, 2010 S:IASDlPURCH\SOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHYlContra e!SICI I I3772I·Hort SeiencelContract CI I 1J7721 • HORTSCIENCE.lne.doe • Tree management (public, private, utility) funding status and history. • Other City policies, procedures, agreements that relate to tree and urban forest management. • Evaluate current and proposed use of recycled water for landscape Irrigation. • Summarize findings (including where modifications / changes may be required). California PUC Section 4799.06-4799.12. • Utilities Department tree management program. • Palo Alto Sustainability plan. IdentifY the key connections to the City's urban forest and its management. • Tree management (public, private, utility) funding status and history. • Other City policies, procedures, agreements that relate to tree and urban forest management. • Evaluate current and proposed use of recycled water for landscape irrigation. • Summarize findings (including where modifications / changes may be required). 1.2 Department interviews • Working with the project team, identifY participants to interview, prepare background information related to urban forest and tree management. Prep (id participants, prepare script). • Summarize findings in the context of several questions. Who manages / interacts with trees in Palo Alto? What conflicts exist between public agencies with respect to tree management? What opportunities exist? • Develop recommendations, using relevant examples, for improvement. 1.3 Public Tree Inventory • Confer with the city's urban forestry staff to review the current tree management effort, how the inventory is used, strengths and weaknesses of the existing information, and any needed changes. • Review current status of TreeKeeper. Evaluate and analyze results. • Review plan for STRATUM / iTree Streets analysis of existing public trees. Evaluate and analyze results. • Review California Urban Forest Council Urban Forest Master Plan Toolkit for ways to incorporate into Palo Alto's plan. 1.4 Preferred Tree Species list • Evaluate existing list with reference to tolerance to drought & recycled water. • ModifY existing list to reflect changes including expansion of criteria for use. • Prepare revised / expanded list. 1.5 Urban forest assessment • Research methods to assess existing and historical tree canopy coverage in Palo Alto. • Research cost and requirements to undertake UFORE / iTree Eco Professional Services 12 Rev June 2, 2010 S,IASDIPURCHISOLlCITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra ctslCl1 137721-Hort SciencelContract Cl 1 137721 - HORTSCIENCE. Inc.doc analysis in Palo Alto. • Summarize findings with a goal of providing a historical comparison of existing tree 2. Create Urban Forest Sustainability tool for Palo Alto. . • Assess the existing model in the context of Palo Alto's specific situation. Identify current research and tools applicable to a sustainable urban forest in Palo Alto such as LEED programs, the Sustainable Sites Initiative, and California's 20x2020 Water Conservation Plan. Incorporate into the model. Discuss changes with City staff to assess practicality. • Create a revised model of urban forest sustainability specific to the City of Palo Alto. Modify the model's criteria and performance indicators to reflect the local conditions. Verify revisions with the project team. • Test the Palo Alto model to establish the current state of sustainability. To the extent possible, reflect on the process by which Palo Alto reached this condition. Identify opportunities and constraints for enhancing urban forest sustainability in the short-and long-term. • Review findings with the project team. Revise model as needed. Provide examples of the model's use in urban forest management (as noted in the Project Deliverable section ofthe RFP). • Provide the sustainability tool in a format that can be updated/modified by the City of Palo Alto. 3. Enhance Public and Private Tree Management • Identify key issues with project team, based on the analysis of City-wide policies and procedures. • Project team to provide situations/topics where inter-department protocols are needed. • Develop draft protocols to address existing challenges. • Review current draft of Public Tree Management Plan and current edition of Tree Technical Manual. Suggest new topics based on results from Task #1.1 and 1.2. 4. Public Outreach and Coordination • Working with the project team, develop outreach strategy, identify stakeholders and plan for meetings. • Develop Fact Sheet(s) / Information Brochure(s) regarding managing a sustainable urban forest. Possible target audiences include citizens, institutional land-owners, retail nursery and garden centers, and the development community. • Consult with City's sustainability manager re: incorporating findings into City policies & website. • Create two web pages dedicated to the Urban Forest Management Plan and regarding trees in Palo Alto in general (species, numbers, history, with information on how community members can support it). • Prepare a template and draft powerpoint presentation for the project team's review. Professional Services 13 Rev June 2, 2010 S:IASDIPURCHISOLICITATlONSICURRENT BUYER·CM FOLDERSIKATHYlContra ctslCII I3772I·Hort SciencelContract C11137721 • HORTSCIENCE, Inc. doc • Undertake two study sessions with the Palo Alto's City Council 5. Develop Urban Forest Master Plan • Prepare a detailed summary of Palo Alto's Sustainable Urban Forest model with criteria and performance indicators specific to the community and practical in nature. The final model will be one that can be modified over time, utilizing new information as well as results of management decisions. • IndentifY the sustainable urban forest "scorecard" as the monitoring model to be used by City departments and stakeholders with respect to urban forest management. The scorecard serves as a tool for assessing how decisions influence urban forest sustainability. • Finalize Preferred Species List. • Incorporate the findings into a draft report to be enhanced by CirclePoint who will: 1) translate/modify technical text to a non-technical form, 2) standardize text with the City's Sustainability Plan, 3) enhance plan layout and design and 4) copyedit the document. • Incorporate cotnments from the Palo Alto project team (prior to further circulation). • Incorporate comments from City departments, elected officials and other stakeholders (distribution to be determined by project team). • Finalize document. Provide an electronic copy in a format that can be used by the City. 6. Manage the project • Attend a kick-off meeting with project team. • Attend progress meetings with City of Palo Alto team (10 over the courseofthe project). • Conduct internal team meetings (4 over the course of project). • Provide for internal management. The model incorporates the project's objectives and deliverable in a direct and comprehensive manner. At the end of the project, the City of Palo Alto will possess to well-founded, locally- adapted tool to assess the current state of its urban forest, provide steps to move forward, and allow re-assessment in the future. Table 1: Table 1. Criteria for a Sustainable Urban Forest. Professional Services 14 Rev June 2, 2010 S:IASDIPURCHISOLIC1TATlONSICURRENT BUYER·CM FOLDERSIKATHYlContra ctslCI1 137721-Hort SciencelContract C11137721 - HORTSClENCE, Inc.doc Vegetation Resource. Canopy cover Age -distribution of trees Species mix Native vegetation Community Framework Public agency cooperation Private and institutional land owners Green industry cooperation Neighborhood action Citizen -government - business General awareness of trees Regional cooperation Resource Management City-wide management plan City-wide Funding City Staffing Assessment Tools Protection of Existing Trees Achieve climate-appropriate tree cover, community-wide. Pro.vide for uneven age distribution. Provide for species diversity. Maintain the biological integrity of native remnant forests. Maintain wildlife corridors to and from the city. Insure all city departments operate with common goals and objectives. Large private landholders embrace city- wide goals and objectives through specific resource management plans. The green industry operates with high professional standards and commits to city-wide goals and objectives. At the neighborhood level, citizens understand and participate in urban forest management. All constituencies in the community interact for the benefit of the urban forest. The general public understands the value of trees to the community. Provide for cooperation and interaction among neighboring communities and regional groups. Develop and implement a management plan for trees on public and private property. Develop and maintain adequate funding to implement a city-wide management plan. Employ and train adequate staff to implement a city-wide management plan. Develop methods to collect information about the urban forest on a routine basis. Develop methods to collect information about the urban forest on a routine basis. Species and Site selection Provide guidelines and specifications for species use, on a context-defined basis. Standards for Tree Care Adopt and adhere to professional standards for tree care. Citizen Safety Maximize public safety with respect to trees. Recycling Create a closed system for tree waste. Professional Services 15 Rev June 2, 2010 S:IASDIPURCHISOLICITATlONSICURRENT BUYER·CM FOLDERSIKATHYlContra ctsICll137721·Hort SciencelContract Cll137721 . HORTSClENCE, Inc. doc November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 EXHIBITB SCHEDULE OF PERFORMANCE Project team assembles background documents. Project team consults with City staff and elected leaders regarding the project, interviews, protocol topics, web page design, and study sessions. Project approved by Council. Kick-off meeting (week of November 29). Review documents. Priority to be determined by project team. Develop survey draft. Prepare first inter- department protocol. Schedule interviews. Research urban forest assessment information. Conduct inter-department interviews (after January 12). Use draft protocol as point of departure. Summarize findings. Create list of recommendations including protocol topics. Initial review of Tree Technical Manual & Public Tree Management Plan. Summarize analysis and recommendations. Present draft sustainability model for project team review. Review urban forest assessment findings. Determine next steps. First study session with Council. Review project and scope. Discuss urban forest sustainability model and protocols. Send protocols for inter-department review. Present draft Urban Forest Management Plan to project team for review. Includes Tree Species list. Present revised draft Urban Forest Management Plan for review. Present draft brochure/ information sheet. Finalize Urban Forest Management Plan. Second study session with Council. Present Plan. Professional Services 1 6 Rev June 2, 2010 S:IASD\PURCHlSOLICITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra ctslCII 13772I-Hort SciencelContract CII137721 - HORTSCIENCE,Inc.doc EXHIBIT "C" COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services perfonned in accordance with the tenns and conditions of this Agreement, and completed to the reasonable satisfaction of the CITY, as described in Exhibit A, Scope of Services, a fixed, not-ta-exceed price for professional services of One Hundred Fifty Nine Thousand Six Hundred Four Dollars ($159,604.00). The budget is based on the following task costs: 1. Compile policies and information about Palo Alto's urban forest, leading to analysis of the current status, challenges and opportunities. $43,940 1.1 City Policies & Documents 1.2 Department interviews 1.3 Public Tree Inventory 1.4 Preferred Tree Species list 1.5 Urban forest assessment 2. Urban Forest Sustainability tool for Palo Alto. 3. Inter-department protocols for tree management. 4. Public Outreach and Coordination. 5. Urban Forest Master Plan. 6. Project management. Sub-total, labor Estimated expenses (10%) Budget Total $ 7,520 $15,770 $33,530 $32,230 $21,640 $154,630 $4,974 $159,604 Fee of$I,200 per meeting is based on attendance by Jim Clark, project manager and lead consultant. CITY reserves the right, at its option, to move budgeted money from one task to another Task, as the City's Project Manager deems necessary. CONSULTANT can only reallocate Funds from one task to another upon receiving approval from City's Project Manager. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Reimbursables Reimbursables shall include, but are not limited to, the cost of copying plans, outreach materials, postage, signage or other items not included herein. Travel, computer and phone charges shall be considered as included in the CONSULTANT overhead costs. Any needed office spaces or related supplies shall be provided by CONSULTANT and shall be considered to be included in the Scope of Services above. Professional Services 1 7 Rev June 2, 2010 S:IASDIPURCHlSOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHYlContra e!sICI I I3772I·Hort SciencelContract CI I I37721 • HORTSCIENCE, Inc.doc EXHIBIT "C-l" SCHEDULE OF RATES The following hourly rates are effective through December 31, 2010 and subject to escalation in January 2011. FIRM HortScience, Inc. CirclePoint POSITION Professionals Principal Consultant Arborist Technician Clerk Principal Senior Project Manager Project Manager Senior Associate Associate Assistant/Coordinator Clerical Creative & supportive services Creative Service Director Art Director Senior Graphic Designer Graphic Designer CopywriterlEditor IT Director IT Support Accounting Manager Accounting Clerk Related Services & Reimbursables Copies In House $0.10 per page HOURLY RATES $165 $140 $85 $85 $40 $240 $180 $140 $120 $95 $75 $60 $200 $150 $85 $70 $100 $175 $75 $130 $70 Color PrintslTransparencies Duplication - In House $1.50-$1.75 per copy Outsourced at cost Faxes Postage at cost Phone at cost Mileage Per IRS Allowable Vendor & Sub-consultant Services $0.60 per page 10% mark up for administration Professional Services 18 Rev June 2. 2010 S:IASD\PURCH\SOLICITATIONSICURRENT BUYER-CM FOLDERSIKATHYlContra c!SICI I 137721-Hort SciencelContract CII137721 - HORTSCIENCE, Inc.doc EXHIBIT "D" INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WI11I AM BEST'S KEY RATING OF A·:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA, AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS AS SPECIFIED BELOW' MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH YES YES YES YES NO YES OCCURRENCE AGGREGATE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000 LIABILITY COMBINED. 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NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Professional Services 2 0 Rev June 2, 2010 S:IASD\PURCH\SOLICITATIONSICURRENT BUYER·CM FOLDERSIKATHYlContra ctsICll137721-Hort SciencelContract C11137721 - HORTSCIENCE, Inc.doc Journal of Arboriculture 23(1): January 1997 Attachment B17 A MODEL OF URBAN FOREST SUSTAINABILITY by James R. Clark, Nelda P. Matheny, Genni Cross and Victoria Wake Abstract. We present a model for the development of sustainable urban forests. The model applies general principles of sustainablilly to urban trees and forests. The central tenet of the model is that sustainable urban forests require a healthy tree and forest resource, community-wide support and a comprehensive management approach. For each of these components, we present criteria and Indicators for assessing their status at a given point in time. The most significant outcome of a sustainable urban forest is to maintain a maximum level of net environmental, ecological, social, and economic benefits over time. Creation and management of urban forests to achieve sustalnabllity is the long-term goal of urban foresters. The notion of sustainabllity in urban forests is poorly defined in both scope and application. Indeed, the question of how to define sustainabillty, and even whether it can be defined, is an open one (9, 12). At a simple level, "a sustainable system is one which survives or persists" (5). In the context of urban forests, such a system would have continuity over time in a way that provides maximum benefits from the functioning of that forest. Since there is no defined end point for sustainabillty, we assess sustainability by looking backwards, in a comparative manner (5). In urban forests, we measure the number of trees removed against those replanted or regenerated naturally. In so dOing, we assess progress towards a system that "survives or persists." Therefore, our ideas of sustainability are "really predictions about the future or about systems ... (5)." This paper presents a working model of sustainability for urban forests. We describe specific criteria that can be used to evaluate sustainability, as well as measurable indicators that allow assessment of those criteria. In so doing, we accept sustainabllity as a process rather than a goal. As suggested by Kaufmann and Cleveland (12) and Goodland (5), we consider social and economic factors as well as natural science. Goodland believed that "general sustainability will come to be based on all three aspects" (social, economic and environmental). Maser (14) described sustainability as the "overlap between what is ecologically possible and what is societally desired by the current generation", recognizing that both will change over time. Therefore, our approach integrates the resource (forests and their component trees) with the people who benefit from them. In so doing, we acknowledge the complexity of both the resource itself and the management programs that influence il. We also recognize that communities will vary In both the ecological possibilities and societal desires. Defining Sustain ability In developing a model of sustainable urban forests, we first examined how other sustainable systems were defined and described. Although we have concentrated on forest systems, other examples were considered. While some principles of sustainable systems were directly applicable to urban forests, others require modification or were in conflict with the nature of urban forests and forestry. The Brundtland Commission Report (21) has generally served as the starting point for discussion about sustainable systems. It defined sustainable forestry as: "Sustainable forestry means managing our forests to meet the needs of the present without compromising the ability of future generations to meet their own needs by practicing a land stewardship ethic which integrates the growing, nurturing and harvesting of trees for useful products with the conservation of soli, air, and water quality, and wildlife and fish habital." Both Webster (22) and Wiersum (23) examined this definition from the perspective of forest management. They recognized that issues of what is to be sustained and how sustainability is to be implemented are unresolved. Wiersum ( 23) 18 acknowledged the historical focus on sustaining yield and its recent broadening to sustainable management. Webster (22) suggested a need for focus on the issue of scale: the size of the area or space to be included. Further refinements in the Brundtland Commission's definition of sustainability were made by Salwasser (16) and Sample (17). Salwasser (16) described sustainability as: "Sustainability means the ability to produce andl or maintain a desired set of conditions or things for some time into the future, not necessarily forever." Salwasser (16) included environmental, economic and community based components, acknowledging that sustainability is not simply a resource matter. He also stressed that the goals and objectives for forest management cannot exceed the biological capacity of the resource, now and into the future. Sample (17) focused more closely on forest management, emphasizing the need for shared vision among diverse property owners. iii a workshop on ecosystem management, Sample described sustainable forestry as: "Management and practices which are simultaneously environmentally sound, economically viable and socially responsible." Some definitions of sustainable forests are not directly applicable to urban settings. For example, the description presented at the conference on Sustainable Forestry (18) included comments about capacity for self-renewal. Since regeneration of urban forests must occur in a directed, location- specific manner, use of such a definition is inappropriate. Other definitions consider the goal of sustainable forests in a manner inconsistent with our concept of urban forests. Thompson et al. (20) described sustainability as "programs that yield desired environmental and economic benefits without wasteful, inefficient design and practices." While these authors were interested in urban settings, their approach was limited to municipal forestry programs rather than city-wide processes or results. Dehgi et al. (6) focused on California's native Monterey pine forest and restricted their definition of sustainability to that system. Clark et al.: Urban Forest Sustainability Moreover, their interest was limited to sustaining the "natural dynamic genetic process." In another approach, the American Forest and Paper Association's Sustainable Forestry Initiative (1) is largely aimed at industrial forest practice and products. This focus on industrial forestry seems largely incompatible with urban environments. Given the examples noted above, the role of humans in sustainable systems (including forests) is generally accepted. However, Botkin and Talbot (2) (as criticized by Webster) argued that sustainable development of tropical forests requires non-disturbance by humans. Again, this idea is incompatible with urban forests. Applying Concepts of Sustainable Forests to Urban Forests In moving the concepts of sustainable development of forests towards implementation and practice, Webster (22) raised several significant questions. We have considered these questions from the urban forest perspective: What objects, conditions, and values are to be sustained? In urban areas, we focus on sustaining net benefits of trees and forests at the broadest level. We are sustaining environmental quality, resource conservation, economic development, psychological health, wildlife habitat, and social well,being. What is the range of forest activities that contribute to sustainable development? Simply put, urban forests require a broad set of activities, from management of both Single trees and large stands to education of the community about urban forests and development of comprehensive management plans. What is the geographic scale at which sustainable development can be most usefully applied? Political borders do not respect biology (and vice versa). Principles of ecosystem management argue for a scale based on ecological boundaries such as watersheds. However, cities form discrete pOlitical, economic and SOCial units. We must respect the reality that political borders may be more significant to management than ecological boundaries. Urban forestry programs work within Journal of Arboriculture 23(1): January 1997 this geographical framework. For this project and model, we have chosen to focus on the city and its geographic limits. While this approach may violate some of the biological realities of forest stands, it logically reflects the jurisdictional boundaries and typical management units found in cities. The more common alternative approach, working with ecosystems, is not without problems of definition and scale (7). What is the relationship of sustainable development for (urban forests) to new technology, effectively applied research and investment in forest management? Urban forests stand to benefit tremendously from new technology, information and investment. Not only will the ability to select and grow trees in cities be enhanced, but the ability to quantify the benefits accrued by their presence will expand. Wlersum (23) provided an in-depth look at sustainability in forest systems, noting the long hist6ry of the concept in forest practice. Many . would argue that the concept of sustained yield is not equivalent to sustainable development. Gatto (9) discusses this fact at length. However, Wiersum (23) observed the evolution of forest sustainability towards multiple use, biological diversity, mitigating climate change and socioeconomic dimensions. Wiersum summarized four concepts involved with sustainable forest management as maintenance or sustenance of: • forest ecological characteristics • yields of useful forest products and services for human benefit • human institutions that are forest- dependent • human institutions that ensure forests are protected against negative external Institutions. A similar perspective on sustainable forest management (13) described the measurable criteria as: • desired future condition (the vision of the forest in the future) • sustained yield • ecosystem maintenance • community (city) stability 19 Keene (13) also noted that these principles can be practiced in traditional forest management. Products derived from forests in which sustainable forest management is practiced may receive a third-party certification as such, in a manner similar to certification of organically-grown produce. Maser, (14), Wiersum (23) and Charles (4) all argued that a sustainable forest would include biological, social and economic issues. For example, from the perspective of a fishery resource, sustainability is the simultaneous pursuit of ecological, socioeconomic, community and institutional goals (4). In Maser's view of ecological sustainability, the goals and needs of society must reflect the potential of the resource to meet them. This idea may be universal for sustainable development and must certainly be for urban forests. This approach can be directly applied to cities, for we want urban forests to contribute to environmental, economic and social well-being . We need not sacrifice one goal in pursuit of another. Trees reduce atmospheric contaminants at the same time that they enhance commuhity well-being. While there may be conflicts in specific situations (eg. planting trees under utility lines or using invasive species), in general, all of the broad goals for urban forest sustainability are compatible with the others. In this sense, when we focus on appropriate management of trees and urban forests, where management activities take place with community-supported goals and objectives, we focus on sustaining a broad range of values. We also concur with Charles' (4) conclusion that sustainability can only be achieved when: • Control is local (for fisheries, community and region-wide) • Management is adaptive, recognizing the dynamic resource and its complexity • Property rights are respected In summary, a wide range of definitions for sustainable development have been derived from the original concept of the Brundtland Commission. No universally accepted derivation has arisen for forestry. Despite this problem, progress has been made in identifying criteria and markers for success. 20 Characteristics of Urban Forest Sustalnability Given the general characteristics of sustainable systems and the specific nature of urban forests, we identified 4 principles to which any model of sustainability must adhere. 1. Sustainablllty is a broad, general goal. While we may be able to describe the desired functions of a sustainable urban forest, we cannot yet design the forest to optimize them. Although we know that urban forests act to reduce atmospheric contaminants, we do not yet know how to design those forests to maximize that function. However, we accept that existing urban forests provide these functions to some degree. Trees in cities serve to improve community well· being, reduce the urban heat island, eliminate contaminants from the atmosphere, etc. While there are costs involved in planting, maintaining and removing trees in cities, in a sustainable urban forest the net benefits provided by these functions are greater than the costs associated with caring forthe forest. A sustainable urban forest provides continuity of these net benefits over time and through space. We therefore have decided to recognize the general character of sustainable systems and develop steps that form such a system in urban areas. 2. Urban forests primarily provide services rather than goods. Descriptions of sustainable systems usually focus on the goods that system provides, i.e. sustained yield. Forests provide fuel and fiber, agronomic systems provide food and fiber, fisheries provide food, etc. In such examples, goods are the primary output. . In contrast, goods comprise a rather limited output of the urban forests. The most Important outputs are services, such as reducing environmental contamination (from removing atmospheric gases to moderating storm water runoff), improving water quality, reducing energy consumption, providing social and psychological well-being, providing for wildlife habitat, etc. These services, or benefits, are provided in two ways: 1) direct (shading an individual home, raising the value of a residential property) and 2) indirect (enhancing the well-being of community residents). In planting and maintaining sustainable urban Clark et al.: Urban Forest Sustainability forests, we should strive for a balance among all benefits and not maximize the output of one service at the expense of all others. For example, one of the benefits that urban forests provide is wildlife habitat. Maintaining the largest wildlife habitat possible could conflict with other services, such as limiting economic development from property development or creating conflicts with humans. 3. Sustainable urban forests require human Intervention. One of the wonderful characteristics of natural systems is their capacity for self- maintenance. Sustainable forests, farms and fisheries take advanlage of this fact by harvesting some limited segment of the resource, often with a period of rest to allow renewal and replacement. The Brundtland Commission Report (21), Maser (14) and Charles (4) emphasized this critical aspect of the resource to be sustained. For example, Goodland (10) defined environmental sustainability as "maintenance of natural capital." Maser noted that a biologically sustainable forest is the foundation for all other aspects of a sustainable system. In forestry, there can be no sustainable yield, sustainable industry, sustainable community or sustainable society without a biologically sustainable resource. As Charles put it (for fisheries), "If the resource goes extinct, nothing else matters." Many (but not all) urban forests are a mosaic of native forest remnants and planted trees. The native remnants may have some capacity for self- renewal and maintenance, particularly in greenbelts and other intact stands. However, the planted trees have essentially no ability to regenerate in place. Therefore, we must accept, acknowledge and act on the fact that urban forests (particularly in the United States) may have a limited ability to retain or replace biological capital (to use Maser's term). This is particularly the case when we desire that regeneration occur in a manner appropriate for human benefits. Indeed, unwanted tree reproduction may actually have a net cost for control and eradication programs. Sustainable urban forests cannot be separated from the activities of humans. Such activity can be both positive and negative. In the latter case, creation and maintenance of urban Infrastructure Journal of Arboriculture 23(1): January 1997 can be extremely destructive and disruptive. In essence, we superimpose cities atop forests. The greater the imposition, the less natural the forests appear and function (D. Nowak, personal communication). The adverse impacts of humans can be mitigated by positive actions such as planning, planting, and management; all occurring with common commitment and shared vision. We cannot separate sustainable urban forests from the people who live in and .around them. In fact, we want to meld the two as much as possible. The implications of this principle are far- reaching. First, urban forests require active, consistent, continuing management. The accrual of net benefits can only occur when adequate and reasonable care is provided. Second, tree managers (both public and private) must involve the surrounding community in decisions and actions regarding urban forests. We do not suggest abdicating responsibility on the part of tree managers; we advocate sharing it. 4. Trees growing on private lands compose the majority of urban forests. While publicly - owned trees (primarily in parks and along streets and other rights-of-way) have been the long- standing focus of urban forestry, they comprise only a portion of the urban forest. An estimated 60 -90% of the trees in urban forests in the United States are found on privately owned land (see 19; also G. McPherson, pers. communication). Therefore, sustainable urban forests depend to a large degree on sustainable private forests. If we consider further that trees probably are not evenly distributed among all private land- holders, then we may also conclude that a small number of land owners and managers may be responsible for a large fraction of urban trees. For example, universities, business parks, corporate campuses, commercial real estate, autonomous semi-public agencies, utilities, etc. may manage large numbers of trees. The success of any effort at sustainability must include their participatibn and commitment. However, small private landholdings, particularly residential properties, may also constitute a Significant fraction of community trees. Their contribution to the urban forest must be 21 considered in any effort towards sustainability. Defining Sustainable Urban Forests. Applying these 4 principles leads to the following definition of a sustainable urban forest: "The naturally occurring and planted trees in cities which are managed to provide the inhabitants with a continuing level of economic, social, environmental and ecological benefits today and into the future." Applying this definition in urban areas requires accepting 3 ideas: 1. Communities must acknowledge that city trees provide a wide range of net benefits. Planting, preserving and maintaining trees is neither simply a good thing nor an exercise. Rather, urban forests are essential to the current and future health of cities and their inhabitants. 2. Given the goal of maintaining net benefits over time, the regeneration of urban forests requires Intervention and management by humans. To quote David Nowak, "people want and need to direct the renewal process because natural regeneration does not meet most urban needs." Therefore, urban forests cannot be sustained by nature, but by people. 3. Sustainable urban forests exist within defined geographic and political boundaries: those of cities. Moreover, sustainable urban forests are composed of all trees in the community, regardless of ownerShip. A Model of Urban Forest Sustainability Given the 3 premises listed above, we developed a model of urban forest sustainability which is founded on three components: 1) vegetation resource, 2) a strong community framework and 3) appropriate management of the resource. Within each component are a number of specific criteria for sustainability (see Tables 1, 2 and 3). 1. Vegetation resource. The vegetation resource is the engine that drives urban forests. Its composition, extent, distribution, and health define the limit of benefits provided and costs accrued. As dynamic organisms, urban forests (and the trees that form them) change over time as they grow, mature and die. Therefore, sustainable urban forests must possess a mix of 22 Clark et al.: Urban Forest Sustainability Table 1. Criteria of urban forest sustainability lor the Vegetation Resource. Canopy cover Age distribution Species mix Native vegetation Achieve climate- appropriate tree cover, community-wide. Provide for uneven age distribution. Provide for species diversity. Though the Ideal amount of canopy cover will vary by climate and region (and perhaps by location within the community, there Is an optimal degree of cover for every city. A mix of young and mature trees Is essential If canopy cover is to remain relatively constant over time. To insure sustain ability, an on-going planting program should go hand in hand with the removal of senescent trees. Some level of tree inventorywill make monitoring for this indicator easier. Small privately owned properties pose the biggest challenge for inclusion in a broad monitoring program. Species diversity is an important element in the long-term health of urban forests. Experience with species-specific peSts has shown the folly of depending upon one species. Unusual weather patterns and pests may take a heavy toll in trees In a city. It Is often recommended that no more than 10% of a clty's tree population consist of one species. Preserve and manage Where appropriate, preserving native trees in a regional biodiversity. community adds to the sustalnability 6f the urban Maintain the biological forest. Native trees are well-adapted to the integrity of native climate and support native wildlife. Replanting remnant forests. with nursery stock grown from native Maintain wildlife stock is an alternative strategy. Planting non- corridors to and from the native, invasive species can threaten the ability city. of native trees to regenerate in greenbelts and other remnant forests. Invasive species may require active control programs. species, sizes and ages that allows for continuity of benefits while trees are planted and removed (Table 1). forest is one that provides a continuous high level of net benefits including energy conservation, reduction of atmospheric contaminants, enhanced property values, reduction in storm water run-off, The vegetation resource of a sustainable urban Journal of Arboriculture 23(1): January 1997 23 Table 2. Criteria of urban forest sustainability for the Community Framework. Public agency cooperation Involvement of large private and institutional landholders Green industry cooperation Insure all city departments operate with common goals and objectives. Departments such as parks, public works, fi re, planning, school districts and (public) utilities should operate with cornmon goals and objectives regarding the city's trees. Achieving this cooperation, requires involvement of the city council and city commissions. Large private' Private landholders own and manage most of the landholders embrace city urban forest. Their interest in, and adherence to, wide goals and resource management plans is most likely to objectives through result from a community-wide understanding and specific resource valuing of the urban forest. In all likelihood, their management plans. their cooperation and involvement cannot be mandated. The green industry From commercial growers to garden centers and operates with high from landscape contractors to engineering professional standards professionals, the green industry has a and commits to city-wide tremendous impact on the health of a city's urban goals and forest. The commitment of each segment objectives. of this industry to high professional standards and their support for city-wide goals and objectives is necessary to ensure appropriate planning and implementation. Neighborhood Action At the neighborhood level, citizens understand and partiCipate In urban forest management. Neighborhoods are the building blocks of cities. They are often the arena where individuals feel their actions can make the biggest difference in their quality of life. Since the many urban trees are on private property (residential or commercial), neighborhood action is a key to urban forest sustainabillty. Citizen -government -All constituencies In the business interaction community interact for the benefit of the urban forest. Having public agenCies, private landholders, the green industry and neighborhood groups all share the same vision of the City's urban forest is a crucial part of sustainability. This condition is not likely to result from legislation. It will only result from a shared understanding of the urban forest's value to the community and commitment to dialogue and cooperation among the stakeholders. 24 Clark et al.: Urban Forest Sustainability Table 2. Criteria of urban forest sustainability for the Community Framework (continued) General awareness of The general public Fundamental to the sustainabllity of a city's urban trees as a community understands the value of forest is the general public's understanding of the resource trees to the community. value of its trees. People who value trees elect officials who value trees. In tum, officials who value trees are more likely to require the agencies they oversee to maintain high standards for management and provide adequate funds for implementation. Regional cooperation Provide for cooperation Urban forests do not recognize geographic and interaction among boundaries. Linking city's efforts to those of neighboring communities neighboring communities allows for consideration. and regional groups. and action on larger geographic and ecological issues (such as water quality and air quality). and social well-being. There are costs associated with the accrual of these benefits. Dead, dying and defective trees may fail and injure citizens or damage property. Some species may pose a health risk from allergenic responses. Others may compete with native vegetation and limit the function of naturally occurring fragments and systems. 2. Community framework. A sustainable urban forest is one in which the all parts of the community share a vision for their forest and act to realize that vision through specific goals and objectives (Table 2). It is based in neighborhoods, public spaces and private lands; At one level, this requires that a community agree on the benefits of trees and act to maximize them. On another level, this cooperation requires that private landowners acknowledge the key role of their trees to community health. Finally, in an era of reduced government service, cooperation means sharing the financial burden of caring for the urban landscape, 3. Resource management. In many ways, this component is not simply management of the resource but the philosophy of management as well (Table 3). On one hand, specific policy vehicles to protect existing trees, manage species selection, train staff and apply standards of care focus on the tree resource itself. In contrast, acceptance of a comprehensive management plan and funding program by city government and its constituents allows shared vision to develop. Cities must recognize that management approaches will vary as a function of the resource and its extent. A goal of maintaining native wildlife habitat may best be achieved. where there is a strong native forest resource. For some cities, this is simply not attainable. Similarly, management of the urban forest must exist in connection to the larger landscape (such as adjacent forests). For example, maintenance of intact riparian corridors requires the cooperation of the managing agency of the stream. Achieving Sustainable Urban Forests. A sustainable urban forest is founded upon community cooperation, quality care, continued funding and personal involvement. It is created and maintained through shared vision and cooperation with an ever-present focus on maximizing benefits and minimizing costs. Taken together, they acknowledge the need for shared vision and responsibility, for direct intervention with the resource and for programs of care that are on-going and responsive. The implementation of Journal of Arboriculture 23(1): January 1997 Table 3. Criteria of urban forest sustalnabllity for Resource Management. City-wide management Develop and implement plan a management plan for trees on public and private\ property. A city-wide management plan will add to an urban forest's sUstainabllity by addressing Important issues and creating a shared vision for the future of the community's urban forest. Elements may Include: species and planting Funding Staffing Assessment tools Protection of existing trees Species and site selection Develop and maintain adequate funding to implement a city-wide management plan. Employ and train adequate staff to implement a city-wide management plan. Develop methods to collect Infor!l1ation about the urban forest on a routine basis. Conserve existing resources, planted and natural, to ensure maximum function. guidelines; performance goals and standards for tree care; requirements for new development (tree preservation and planning); and specifications for managing natural and open space areas. Since urban forests exist on both public and private land, funding must be both public and private. The amount of funding available from both sources is often a reflection of the level of education and awareness within a community for the value of its urban forest. An urban forest's sustainability is Increased when all city tree staff, utility and commercial tree workers and arborists are adequately trained. Continuing education in addition to initial minimum skills and/or certifications desirable. Using canopy cover assessment, tree inventories, aerial mapping, geographic information systems and other tools, It Is possible to monitor trends in a city's urban forest resource over time. Protection of existing trees and replacement of those that are removed is most often accomplished through policy vehicles. Ordinances that specify pruning standards and/or place restrictions on the removal of large or other types of trees on public and private property and during development are examples. Provide guidelines and Providing good planting sites and appropriate specifications for species trees to fill themis crucial to sustalnability. use, on a context-Allowing adequate space for trees to grow and defined basis. selecting trees that a~e compatible with the site will reduce the long-and short-term maintenance requirements and enhance their longevity. Avoiding species known to cause allergenic responses is also important in some areas. 25 26 Clark et al.: Urban Forest Sustainability Table 3. Criteria of urban forest sustalnabillty for Resource Management (continued) Standards for tree care Adopt and adhere to professional standards for tree care. Sustainablllty will be enhanced by adhering to the professional standards such as the Tree Pruning Guidelines (ISA) and ANSI Z133 publications. Citizen safety Recycling Maximize public safety with respect to trees. Create a closed system for tree waste. In designing parks and other public spaces, public safety should be a key factor in placement, s'eleclion, and management of trees. Regular inspections for potential tree hazards is an important element in the management program. A sustainable urban forest Is one that recycles Its products by compost/ng, reusing chips as mulch and/or fuel and using wood products as firewood and lumber. Table 4. Criteria and performance Indicators for the Vegetation Resource. Criteria Performance indicators Key Objective Low Moderate Good Oplimal Canopy cover No assessment Visual assessment Sampling cftree Information on Achieve climate-appropriate degree of tree (I.e. photographic) cover using aerial urban forests cover, community-wide. photographs. included In crty- wide geographic Infonnallon system (GIS), Age '. distribution of trees No as,sessment Street tree public -private Included In clty-Provide for uneven age distribution. in community Inventory ssmplJng wide geographic (complete or Information sample) system (GIS), Species mix No assessment Street tree Clty·wlde Included In clty~ Provide tor species diversity. Inventory assessment of wide geographic species mix infonnatfon system (GIS), Native vegetation No program of Voluntary use on Requirements for Preservation of Pres9Ne end manage regional biodiversity. Integration publlo projects use of natlva regional Maintain the blologloallnlegrlty of native species on a biodiversity remant forests. Maintain wildlife corridors 10 project· and from the city. appropriate basis Journal of Arboriculture 23(1): January 1997 27 Table 5. Criteria and performance indicators for the Community Framework. Criteria Public agency cooperation Involvement of large private and Institutional land holders Green Industry cooperation Neighborhood action Citizen -government· bUsiness interacllon General awareness of trees as community resource Regional cooperation Performance Indicators Key Objective Low Moderate Good Optimal Conflicting goals No cooperation Informal working Formal working Insure all city departments operate with among teams teams wI staff common goals and objectives, departments coordination ignorance of issue No cooperation among'segments of Induslry (nursery, contractor, arborlst). No adherence to Industry standards. No action ConfHctlng goals among constituencIes Low --trees as problems; a drain on budgets Communities operate independently Education materials and advice available to land~holders General cooperation among nurseries- contractors ~ arborists, etc. Isolated and/or limited no. of active groups No Interaction among constituencies Model1'lte --trees as Important to community Communities share similar policy vehicles Clear goals for Land-holders Large private landholders embrace city-wide tree resource by develop goats and objectives through speCific private land-comp(ehensive resource management plans. hOlders; incentives tree management for preservation of plans (Including private trees funding) Specific Shared vision and The green Industry operates with high cooperative goals including the professional standards and commits to clty- arrangements use of wide goals and objectives. such as purchase professional certificates for standards. right tree, right place City-wide All neighborhoods At the neighborhood level, citizens coverage and organized and understand and participate in urban forest Interaction cooperating management. Informal and lor Formal AU constitUencies in the community interact general interaction, e,g .. for the benefit of the urban forest. cooperation tree board wI staff coordination High --trees Very high -. trees The general public understands the value of acknowledged to as vital trees to the community. provide components of environmental economy and services environment Regional planning Regional planning Provide for cooperation and Interaclton coordination among neighboring communities and andlor regional groups. management plans a model for urban forest sustainability would further redirect the traditional orientation of urban forest management away from municipal trees to the mix of public and private trees. in this task, we have described indicators of success for each criteria (Tables 4, 5, and 6). A city that meels the highest level of each indicator for each criteria would have the best lools and resources to achieve.sustainabillty. Achieving suslainability for urban forests involves meeting each of these criteria. To assist Our approach of developing criteria and 28 Clark et al.: Urban Forest Sustainability Table 6. Criteria and performance indicators for Resource Management. Criteria Performance Indicators Key Objective Low Moderate Good Optimal City-wide management plan No plan ExIsting plan limited In scope and implementation Government Mwlde Citizen -Develop and implement a management plan plan, accepted government -for trees and forests on public and private and implemented business resource property. management plan, accepted and Implemented City-wide funding Funding by crisiS management Funding to optimize exIsting population Adequate funding Adequate funding, Develop and maIntain adequate funding to to provide for net private and public. Implement a clly-wlde management plan. Increase In to sustain popl,llatlon and maximum care potential benefits City staffing No staff No training Certified arborisls Professional tree Employ and train adequate staff 10 on staff care staff Implement city-wide management platl. Assessment tools No on-going Partial Inventory program of Complete Inventory . Information on Develop methods to collect information urban forests about the urban forest on a rouli(1e basis. assessment indicators is patterned after that found in the Santiago Agreement (11 ) which suggested criteria and indicators for the conservation and sustainability of temperate and boreal forests. It recognized that both quantitative and qualitative (descriptive) indicators were needed, for not all criteria could be accurately measured. Conclusions· Maser suggested that ecological sustainability encompasses 4 ideals: 1. Providing a long-term balance between society and the resource, today and in the future. 2. Seeking to increase the overlap between societal desires and ecological possibilities. 3. Developing assessment tools for both the resource and its outputs (benefits, services). 4. Restoring ecosystems. Our model for urban forest sustainability adheres to these 4 ideals, placing them in an urban Included In cHy~ wide GIS context. It recognizes the nature of society in cities and encourages partiCipation at the broadest level. The model also acknowledges the need to foster regeneration, to provide for the continuity of the resource. Management of a sustainable urban forest is based upon a shared vision for the resource, in which goals and needs are balanced. Since sustainability is a general goal, we must be able to assess our progress relative to defined standards. Finally, we recognize that our actions, through such activities as development, will damage forests and their function. We accept the responsibility of restoration. Urban trees and forests are considered integral to the sustainability of cities as a whole (3, 8). Yet, sustainable urban forests are not born, they are made. They do not arise at random, but result from a community-wide commitment to their creation and management. Obtaining the commitment of a broad community, of numerous .constituencies, cannot be dictated or legislated. It must arise out of compromise and respect. While policy vehicles such as ordinances playa role in managing the Journal of Arboriculture 23(1): January 1997 29 Table 6. Criteria and performance Indicators for Resource Management (continued) Protection of existing trees No policy vehicle or policy not enforced Tree preservation Tree preservation ordinance present plan required for Integrated Conserve existing resources, planted and planning program nahnal. to ensure maximum function. and enforced all for conservation projects .... public, private, commercial, residential and development Species and site selection Arbitrary species prohibitions No consideration Identlfication/prohl On·golng use of Provide guidelines and specifications for adapted. hfgh~ species use, Including a mechanism for of undesirable bltian of species undesirable performing evaiuallng the site. species species with good. site -species match Standards for tree care None Standards for Standards for Standards part of Adopt and adhere to professional standards public tree care pruning, stOCk, community -wide for tree care. etc. for all trees vision Citizen safety Crisis Informal Comprehensive Safety part of cost Maximize public safety with respect to trees. management Inspectfons hazard (tallure, -benefit program tripping, etc.) program Recycling Simple disposal Green waste Green and wood Closed system --Creale a closed system tor tree waste. (i.e. land filling) of recycling waste recycllng-no outside green waste urban forest, developing cornmitrnent is probably rnore a function of education, awareness and positive incentives. This may represent our most significant challenge: to provide information that creates cornrnitrnent and guides action. This is not to Ignore the budgetary requirements for sustainable urban forests. It has long been our belief that if education were adequate, funding would soon follow. Despite the current state of funding, we must hold to this perspective. Finally, sustainable urban forests also require a viable resource base. While urban foresters and arborists have long felt confident in their ability to sustain the resource, we rnust acknowledge our limitations as well as our strengths. The optimal structure of urban forests, i.e. the arrangement of trees in a city, remains the subject of research. Our industry must strive to resolve conflicts such as quality of nursery stock, appropriate cultural practices and the match between site considerations and species selection. reuse disposal Literature Cited 1. American Forest and Paper Association. 1995. Sustainable Forestry Initiative. American Forest and Paper Association. Washington D.C. 2. Botkin, D. and L. Talbot. 1992. Biological diversity and forests. N.P. Sharma (Ed.), pp 47-74. In Managing the world's forests: Looking for balance between conservation and development. Kendall! Hall Publishing Co. 3. Center for the Study of Law and Politics. 1991. Urban Forestry. The Global Cities Project. San FranciSCO, CA. 112 pp. 4. Charles, A. 1994. Towards sustainabllity: The fishery experience. Ecological Economics 11 :201 -211. 5. Costanza, R. and B. Patten. 1995. Defining and predicting sustainability. Ecological Economics. 15:193-196. 6. Dehgl, D., T. Huffman and J. Culver. 1994. California's native Monterey pine popUlations: Potential for sustainability. Fremontia 23(1 ):14-23. 30 Forestry 7. Fitzsimmons, A. 1996. Stop the parade. BioScience 46 (2). 8. Gangloff, D. 1995. The sustainable city. American Forests. May/June 30-34, 38. 9. Gatto, M. 1995. Sustainabllity: Is it a well-defined concept? Ecologia (Soc. Italian a di Ecollgla) 16: 235-240. 10. Goodland, R. 1995. The concept of environmental sustainablllty. Annu. Rev. Ecology Systematics 26: 1-24. 11. Journal of Forestry. 1995. Sustaining the World's Forests -The Santiago Agreement. Criteria and indicators for the conservation and sustainable management of temperate and boreal forests. Journal of Forestry 93 (4):18-21. 12. Kaufmann, R. and C. Cleveland. 1995. Measuring sustalnability: needed -an Interdisciplinary approach to an interdisciplinary concept. Ecological Economics. 15: 1 09-112. 13. Keene, R. 1995. A dlrt-forester's perspective. American Forests. May/June 18, 60-61. 14. Maser, C. 1994. Sustainable Forestry - Philosophy, science and economics. St. Lucie Press. Delray Beach, FL. 373 pp. 15. Nowak, D., R. Rowntree, E. McPherson, S. Slslnnl, E. Kerkmann and J. Stevens. In preparation. Urban tree cover analysis. Submitted to Landscape and Urban Planning. 16. Salwasser, H. 1993. Perspectives on modeling sustainable urban forest ecosystems. D. LeMaster and R. Sedjo (ed.). pp 176-181. In: Modeling Sustainable Forest Ecosystems. Forest Policy Center. Washington D.C. 17. Sample, V. A 1993a. Building partnerships for ecosystem management on forest and range lands In mixed ownerships. Workshop synthesis. Forest Polley Center. American Forests. Washington D.C. 17 pp. 18. Sample, V. A (editor). 1993b. Defining sustainable forestry: Conference summary. Forest Policy Center. American Forests. Washington D.C. 17 pp. 19. Sampson, N., G. Moll and J. Kielbaso. 1992. Opportunities to increase urban forests and the potential impacts on carbon storage and conservation. R. N. Sampson and D. Hair (ed.). In: Forests and Global Change. Volume 1. Opportunities for Increasing Forest Cover. American Forests. Washington D.C: 20. Thompson, R., N. Pillsbury and R. Hanna. 1994. The elements of sustainability in urban forestry. California Department of Forestry and Fire Protection. Riverside, CA. 56 pp. Clark et al.: Urban Forest Sustalnability 21.wCED. 1987. Our common future. (The Brundtland Commission Report). Oxford University Press. Oxford England. 22. Webster, H. 1993. Some thoughts on sustainable development as a concept, and as applied to forests. Forestry Chron. 69:531-533. 23. Wlersum, K. F. 1995. 200 Years of sustalnabllity in forestry: Lessons from history. Environmental Management. 19(3):321-329. Acknowledgments. Thanks to Greg McPherson, Dave Nowak, Richard Rideout, Paul Rles, Ed Macie, and Ray Tretheway for their comments and suggestions. Funding for this project was provided by a grant from the National Urban and Community Forestry Advisory Council through the U.S.D.A. Forest Service Urban and Community Forestry Challenge Cost-share Program (No. G-5-94-20-095). HortSclence, Inc. P.O. Box 754 Pleasanton, CA 94566 and California ReLeaffThe Trust for Public Land 3001 Redhill Avenue Costa Mesa, CA 92626 Zussammenfassung. Das Modell des slch selbsterhaltenden Stadtwaldes wendet allqemeine Prinzipien der Selbsterhaltung auf stil.dtische Bil.ume und Wil.lder an. Sich selbst erhaltende Stadtwil.lder erfordern eine qesunde Herkunft der Pflanzen, kommunale UntarstOtzung und ain umfassendes Management. Die Kriterien und Indikatoren, um diesen Status zu OberprOfen werden hler vorgestellt. Dasdeutllchste Resultat eines sich selbst erhaltenden Stadtwaldes bestehl darin, einen maxirnalen Grad an umwellbezogenen, iikologischen, sozialen und okonomischen VorzOgen zu erreichen. TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: NOVEMBER 22, 2010 REPORT TYPE: CONSENT DEPARTMENT: ADMINISTRATIVE SERVICES CMR:411:10 SUBJECT: Approval of Contract with Pacific Technologies Incorporated (PTI) in the Amount of $99,698 for Preparation of an Information Technology Strategic Plan RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager to execute the attached contract with Pacific Technologies Inc, (PTI) in an amount not to exceed $90,698 for preparing an updated strategic plan for the City of Palo Alto's Information Technology Services, 2, Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Pacific Technologies Incorporated for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $9,000, DISCUSSION Background The City of Palo Alto, located in the global center of innovation and technology, strives to be a leader in technology in government. Palo Alto would like to take advantage of current and future technological advancements to improve its role as both a service provider and a community builder, Palo Alto citizens are technically savvy, expressing an interest in utilizing technology to improve communication with City Hall, stay engaged in Civic issues, and expedite and simplify transactions related to the services that the City provides, These desires must be examined in light of staffing limitations and budgetary constraints, and investments in technology must be strategically plauned, An initial IT Strategic Plan was developed for Palo Alto over ten years ago. That plan included the areas of hardware, software, networks, and the IT organizational structure, and has served as a reference guide as technology decisions were made. Due to technology advances as well as changing City priorities, an updated Strategic Plan is needed to establish a broad overview of CMR: 411:10 PAGE 1 0,'4 : Palo Alto's IT goals over the next three to five years, along with a plan for implementing prioritized initiatives. Scope of Services Description The scope of work to be performed under the contract is for preparation of such an Information Technology Strategic Plan. PTI will perform an assessment of the City's current technology position, work with key stal,eholders to develop a strategy for future IT direetion, and propose a three-to five-year strategic plan for IT projects to guide the City in allocating available resources to achieve teehnology objectives. Staff and PTI will present the Strategic Plan to the City Council for a discussion about the direction of future technology projects. Please see Exhibit A of Attachment A for the complete scope of services. Summary of Solicitation Process P"ofessional ServiceslRFP #135684 Update the Strategic Plan for tile City of Palo Alto's Information Technology Services Proposed Length ofProiect 4-6 months Number of Proposals Mailed 20 Total Da}'s to Res~ond t~Proposal 33 ,)'re-proposal Meeting Date None i Number of Company Attendees at Pre-NA :.J>l'<'J"'~~1 Meeting Number of Proposals Received: 17 Company Name. Location (City, State) Selected for oral . . interview? I. Networld Solutions San DicllO, CA No 2. Plante and Moran Southfield, MI Yes 3. Blueeran~, Inc. I Redondo Beach, CA No 4. ThirdW~ve Corporation Los Angeles, CA Yes 5. System~ Tecbnology Associates Tustin, CA No ! 6. Moss Adams Seattle,. W A Yes 7. ClientFirst Consultimg Group Corona,CA No 8. LBL Technology Partners Minneapolis, MN No 9. Pacific Technologies Inc. Bellevue, W A Yes 10. Elert & Associates Stillwater, MN No II, The CIO Collaborative LasVegas, NV No 12. PROVISTA Software International Fremont, CA No ~!leny, Dunn, McNeil &_Parker Portland, ME Yes , 14. PA Consulting Group Los Angeles, CA No 15. NexLevel Information Technology Carmichael, CA Yes 16. RNR ConSUlting Cleveland, OH No 17. Solec San Diego, CA No ' , Range of Proposal Arllounts $59,110 -$276,343 I Submitted . CMR: 411:10 PAGE 2 GF4 I I " i I I I[ !i I I! The RFP process allows the City to negotiate the price of the work upon selection of the successful firm. An evaluation committee consisting _ of staff from the Administrative Services Department, Information Technology, Police Communications, Library Services, Utilities Department, and City Manager's Office reviewed the proposals. Six firms were invited to participate in oral interviews on June 23 and June 29, 2010. Tbe committee carefully reviewed each firm's qualifications and submittal in response to the criteria identified in the RFP, focusing on the qualifications and experience of the teams, the completeness of their proposals, and the soundness of their described methodologies for effectively completing the work. The list of firms was narrowed down to three, who participated in oral interviews with the Director of Administrative Services and the Assistant City Manager on August 4, 5 and 9. Pacific Technologies Incorporated (PTI) was selected because their proposed team is highly qualified to provide the services requested by the City. The film focuses only on Infol1nation Technology for govemment entities, and has extensive experience in preparing similar strategic plans for other cities. Their proposal was well-written, showing a good understanding of the assigmnent, and their methodology appears appropriate for working with Palo Alto. References from fonner clients were good. Contract negotiations were held to clarify requirements of some of the tasks and to ensure that the consultant would be available to present the findings to Council. The contract amount for providing the-requested services is $90,698, including expenses. Additional services in an amount not to exceed $9,000, which equals approximately 10 percent of the total contract, are requested to allow potential additional interviews of stakeholders, or other related work that may prove necessary. RESOURCE IMPACT Funding for the agreement to prepare an InfOlmation Technology Strategic Plan is included in the Information Technology budget for this fiscal year. However, the plan will encompass projects across all City Fund centers (General Fund, Enterprise, and Internal Service Funds). As individual initiatives are selected for implementation, funding must be identified for each project, and will be requested for Council approval as appropriate in future budgets. POLICY IMPLICA TlONS The recommendation is consistent with CutTent City policies. ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA) PREPARED BY: CMR: 411:10 PAGE 3 OP'4 DEPARTMENT HEAD: CITY MANAGER APPROVAL: ATTACHMENTS ATTACHMENT A: Contract CMR:411:10 Dire(;tol' of Administrative ServiceR PAGE 4 OF 4 CITY OF PALO ALTO CONTRACT NO. Cl1135684 AGREEMENT BETWEEN THE CITY OJ!' PALO ALTO AND PACIFIC TECHNOLOGIES, INC. J!'OR PROFESSIONAL SERVICES UPDATE TIlE STRATEGIC TECHNOLOGY PLAN This Agreement is entered into on this 9TH day of November, 2010, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and PACIFIC TECHNOLOGIES, INC., a California Corporation, located at 14711 NE 29th Place, Suite 216, Bellevue, WA 98007 (PH) (425) 881-3991 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to update its, cuttent Technology Strategic Plan ("Project") and desires to engage a consultant to provide CONSULTANT Services for this Plan ("Services"). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSUr;r ANT to provide the Services as more fhlly described in Exhihit "A", attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall pcrform the Services described in Exhibit "A" in accordance with the terms and conditions contained in thi~ Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date ofits full execution through June 30, 2011, unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OJ!' PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULT ANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit "B", artached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY's 1 Professional Services Rev. J"no2. 2010 IICc·te"alsharedlASDIPURCH\SOLlCIT ATIONSICURRENT BUYER -eM FOLDERSIKA THy\Contra c',\C111356M·PTllContrnct CI1lJ56114 Pacific Technologies, Inc. doc agreement to extend the tenn or the schedule for perfonnance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT fol' perfonnance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed Ninety Thousand Six Hundred Ninety Eight Dollars ($90,698.00). Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "COO, and shan not cxceed a total additional amount of $9,000. CONSULT ANT shall not receive any compensation for Additional Services perfonned without the prior written authorization of CITY. Additional Services shall mean any work that is detennincd by CITY to be necessary for the proper completion of the Projeet, but which is not included within the Scope of Services described in Exhibit "A". SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services perfomled and the applicable charges (including an identification of personnel who perfonned the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT's billing rates. If applicable, the invoice shall also describe the percentage of completion of each task. The infonnation in CONSULTANT's payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City's proj ect manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be perfonned by CONSULTANT or under CONSULT ANT's supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perfonn the Services required by this Agreement and that the persolll1el have sufficient skill and experience to perfonn the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, pennits, qualifications, insurance and approvals of whatever nature that are legally required to perfonn the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itselfinfonnedof and I in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all pennits and licenses, pay all charges and fees, and give all notices required by law in the perfonnance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, 2 Professional Services Rev. June 2, 2010 \\Ce-terra\shnredIASDIPURCH\SOLICITATIONSICURRENT BUYER-CM FOLDERSIJ<A THY\Contra ctslCII 135684·pmCuntract CI1135684 Pacific Technologies, Inc.doc omissions or ambiguities discovered prior to and during the course of construction of the Project, This obligation shall survive termination of the Agreement. SECfION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction cost~ at each phase of design submittal .. If the total estimated construction cost at any submittal exceeds ten percent (1 0%) of the CfrY's stated construction budget, CONSULTANT shall make recommendations to the CfrY for aligning the PROJECI' design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY, SECfION 10. INDEPENDENT CONTRACfOR. It is understood and agreed that in perfomling the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and bc an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the perfom1aoce of any of CONSUL TANT' s obligations hereunder without the prior written conscnt of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Dan Borgen, CEO, as Principal in Charge (Projeet Manager), to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-daywork on the Project. If circumstances cause the substitution of the project manager, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY's project manager. CONSULTANT, at CITY's request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable marmer, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City's Project Manager is Libby Dame, Administrative Services Department, 250 Hamilton Avenue, Palo Alto, CA 94301, Telephone: 650-329-2213. Ihc Project Manager will be CONSULTANT's point of contact with respect to performance, progress and exceution of the 3 Professional Services Rev. )uo.2,2010 \\Cc-terra\$hared\ASDIPURCH\SOLICIT ATIONSICURRENT BUYER·CM FOIDERS\KATHY\Con~a cts\C11135684·PTl\Con~.ct C11135684 Pacific Technologies, Inc.doc Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction Of limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. CONSULTANT reserves right; title and interest in the methodologies, trade secrets, software tools, and know-how employed by CONSULTANT to conceptualize and produce all work products and deliverables. CITY may modify these work products for intemal, non-commereial use and may distribute the draft and final reports internally without restriction. CITY shall not distribute CONSULTANT's copyrighted material to third parties, including parties undercontractto CITY, for their commercial use, without written consent from CONSULTANT. All records submitted by CITY to CONSULTANT will be safeguarded by CONSULTANT. SECTION 15. AUDITS. CONSULT ANT will permit CITY to audit, at any reaqonable time during the term ofthis Agreement and for three (3) years thereafter, CONSULTANT's records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years aftcr the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Couacil members, officers, employees and agents (each an "Indenmified Party") from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements ("Claims") that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an hldemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indenmified Party. 16.3. The acceptance of CONSULTANT's services and duties by CITY shall not operate as a waiver ofthe -right of indenrnification. The provisions of this Section 16 shall survive the expiration or early telmination of this Agreement. SECTION 17. W AlVERS. The waiver by either party of any breach or violation of any covenant, 4 Professional Services Rev. June 2. 2010 IICc-teITllI,haredlASDIPURCHISOLlCIT A TI0NSICURRENT BUYER·CM FOLDERSIKA lliY\Contm ctsICll135684·PTlIContrllCt Cl lB5684 Pacific Technologies, fnc.doc term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "Do. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best's Key RatingOuide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the tcrm of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subjectto the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing tbe insurance are provided to CITY's Purchasing Manager during the entire term of this Agreement. 18.4. The pmcuring of sueh required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemuification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the Professional Services 5 Rev.lune2,2010 \\Cc-te"alsharedIASD\PURCH\SOLIOTA T10NSICURRENT BUYER-CM FOLDERllIKA THYlContr. ct,\Cll1356&4-pmConlract C11135684 Pacific Technologies, lnc.doo City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, 01' given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSUL TANT's services wbich are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise ofbis/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14,15,16,19.4,20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Officc of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention ofthe project manager at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting tbis Agreement, CONSULTANT covenants that it presently has no interest, and wiIl not acquire any interest, direct or indireet, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT finther covenants that, in the performance ofthis Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who ha~ or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be intcrpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code ofthe State of California, 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT Professional Services 6 Rev. June 2, 2010 IICc·terralsharedIASD\PURCII\SOLICITATIONSlCURRENT BUYER·CM FOLDERSIKATHYlCon". ctsICII13S684·PTIIContract CI I 135684 Pacific Technologies, Inc.doc shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminatc in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements ofSeetion 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REOUIREMENTS. CONSULTANT shall comply with the City'S Environmentally Preferred Purchasing policies which are available at the City's Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Commltant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the C"harter of the City of Palo Alto and the Palo Alto Municipal Code. TIus Agreement will terminate without any penalty (a) 'It the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. Professional Services 7 Rov. luno2, 2010 l\Cc-IerralsharedIASDlPURCHlSOLlCllATIONSIClJRRENT BlJYER-CM FOLDERSIKATHYlCuntra clsICll135684·PTl\Cuntract C1113S684 Pacific Technologies, Inc.doc 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforee the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, whieh is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind,< the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference ihcorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5( d) about a California resident ("Personal Information"), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULT ANT shall not use Personal Information for direct marketing . purposes without City's express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.1 0 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. IN WITNESS < WHEREOF, the parties hereto have by their dilly authorized representatives executed this Agreement on the date first above written. Professional Services 8 Rev. June 2, 2010 \\Cc·terralsharedIASDIPURCH\SOLlClTATIONSICURRENT BUYER·CM FOLDERS\KA THy\Contta c!SIClI135684·PTnContract CIIlJ5684 Pacific Technologiesj Ine.ooc IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO PACIFIC TECHNOLOGIES, INC. City Manager (Required on contracts over $85,000) Purchasing Manager (Required on contracts over $25,000) Contracts Administrator (Required on . contracts under $25,000) APPROVED AS TO FORM: Senior Ass!. City Attorney (Required on Contracts over $25,000) Attachments: EXHIBIT "An: SCOPE OF WORK EXHIBIT "B": EXHIBIT "C": SCHEDULE OF PERFORMANCE COMPENSATION EXHIBIT "D": INSURANCE REQUIREMENTS 9 Professional Services Rev. June 2, 20lO C:\Uscrs\bmcbr1de\AppData\LQcal\Mlerosoft\ Windows\Tempornry Internet Fites\Ctmtent Outlook\W2VXIVRO\Contract C 11135684 PacifIC T echnmoglC5 Inc.doc Scope of Work EXHIBIT" A" SCOPE OF SERVICES Detailed Task Descriptio-'-n...:...s _____ -:-___ --: ____ _ • Project Management + Phase 1: Assessment + Phase 2: Strategy Development • Phase 3: IT Strategic Plan Development Project Management Task 1. Manage Project Project Phases This task incorporates the effort required for PTI to manage the assessment and planning work across the three phases, and to perform quality assurance for each task. PTI's project manager will meet with the City's project steering team as needed to 12 Professional Services Rev. June 2, 2010 C:\Uscrs\bmcbride\A ppData\l.ocal\M" k:tusof\\ Windows \T emporary Internet Files\CMtent Outlook\ W2 VX[VRO\Contrt1Ct C 11135684 Pactfic Tecbnologies Inc.doc /-~----"(;'oQ(dinate work tasks, review progress, and discuss current findings and issues. In ( // addition, PTI's project manager will submit monthly status reports. Task ~ evelop and Distribute Information Request . ___ ."._c .. ,,~~~ __ .~._ ---tlpon··th prcrject'start;-P'fI-will-develop,md-distribute-8I6ql:restfonalienteit}r---·-·~--~----·- \ informati n -including our proprietary tools used to collect and analyze IT labor, invento and spending data. In addition, we will ask for germane documentation, such , as kay, ity performance indicators, organization charts, IT service backlog, and related ",,-. items. PTI will employ this information throughout Phase 1. ',,,-----~ following graphic depicts PTI's sample IT staffing matrix from a similar client engagement. @PTI City 01 P.loAlto. CA. Scope ofWor!<' October 13, 2010. © 2010 Pacific Technologies. Inc. 13 Sample IT Staffing Matrix @PTI City of Palo Allo, CA· Scope of Work • October 13, 2010' ©2010 Pacific Technologies, Inc. 14 /''''''''-'''-" '-"~~~~"" ( / T~\COnduct Project Kickoff PTI will f~cilitate a project kickoff to introduce key project participants, confirm project ..... ···_-If._._, .. _--'_ .. , .-~objectjv.ef,-and..establi$h.the.deci$ion.making.$tructureJor-the.pr.oject.andtharole.of.the .. City project steering team in reviewing and approving project deliver ables, We also will \ facilitatela discussion of key business drivers and strategic priorities for information \ technol6gy (see task 4), ."., ... --~ 1: Assessment @PTI Task 4. Review Documentation PTI will review the documentation provided by the City in response to task 2, This task familiarizes the PTI team with the City business environment, service delivery goals, and policy objectives, as well as current technology environment. The City is responsible for providing PTI the requested documentation within a reasonable timeframe, according to the project schedule, Task 5. Develop and Validate Business Function Model PTI will develop a model of the City's major business activities and validate the model with selected stakeholders, The resulting model will be used to assess the City's current level of automation in support of these business functions, and in developing a model of the City's "ideal" application architecture (task 14), We've included a sample bUsiness function model on the following page, Task 6. Develop Ideal Application Architecture Based on the validated business function model (task 5), PTI will develop an ideal application architecture to illustrate how the City might automate its business functions and services, without regard for existing solutions or cost. This will facilitate the gap analysis to be performed in task 14, Task 7. Conduct Interviews and Focus Groups We will conduct up to ten (10) one-on-one interviews with senior management and facilitate up to ten (10) focus groups comprised of 10 to 15 stakeholders, We will provide interview guides and focus group agendas in advance so that interviewees and participants can familiarize themselves with the likely content of these discussions, and prepare their thoughts and responses if they so desire, The interviews and focus groups will address the City's internal and external bUSiness environment, as well as how those environments affect and influence information technology in the City. We also will ask interviewees and focus group participants to identify the strengths and weaknesses of the City's current technology environment in the four IT focus areas of: software applications, IT service delivery, IT decision making, and technical infrastructure, We will also surface attendant concerns related to key bUSiness process. Please note that the proposed number of interviews and focus groups will involve over 100 City stakeholders. The City may wish to consider expanding this task to involve more staff or other stakeholders, Our work plan is flexible in this area, City olP.lo Alto, CA' Scope of Work • October 13, 2010' © 2010 Pacific Technologies, Inc, 15 @PTI Sample Business Function Model Task 8. Identify Business Drivers and Strategic Priorities A business- based approach to IT planning PTI will facilitate a work session with the project steering team during the project kickoff (task 3) to identify key business drivers and strategic priorities for information technology at the City. We will use this information, together with findings from our document review (task 4) and interviews and focus groups (task 7), to establish a more thorough understanding of the business context for this IT planning work. This will help ensure that the final information technology strategic plan aligns well with the City's core business needs and strategic vision. Task 9. Assess Technical Configuration Based on a completed IT inventory and other technical documentation from the City (task 4), PTI will review the City's IT portfolio, including servers, firewalls, workstations, networks, telephone systems, radios, and associated infrastructure. PTI staff also will conduct a walkthrough of the City's data center andtor other networking closets to assess Clly 01 Palo Allo, CA· Scope 01 Work • October 13, 2010' © 2010 Pacific Technologies, Inc. 16 / /-"""" ""'--thei.( maturity in the areas of security, environmental controls, power, space allocation, and a ministrative monitoring. ""-""--"[-"~~--" "-""i~;:~ It~~I~~tm~,~~~~~~ltr;~~~~%;~~~~;;;~~;"~!k;;;;;~;a~n~~r~;~ai:~;!~ .. --."" : r rlS ana SIS WI Inrorm our recommenua,lons relateu 10 optimizing an consOrl atlng \ key com, onenls of the City's current technical architecture. '\" The illy trations below provide samples of PTI's infrastructure analysis from a similar , c~engagement. -~. "".-Sample PTI Metrics A fact·based analysis of your IT Inventory ®PTI PC to Email/Calendaring Server Ratio Sample 103:1 Target Ratto for PCs 10 EmalllCaJandaring: Servers ~~\ PC to File/Print Server Ratio Target Rallo for PCs to FlIeiPrinl Servers sample 223: t Task 10. Assess IT Organization and Service Delivery At the core of our methodology, PTI models the staffing levels and organizational structures that currently support delivery of IT-related services. This provides a baseline to assess future staffing requirements and allows analysis of the alignment of staffing patterns with strategic objectives. Based on a completed IT staffing matrix and other IT organization-related documentation from the City (task 4), we will analyze all aspects of IT service delivery -including customer services, application and infrastructure services, and IT planning and administration. Employing modeling tools unique to PTI, we quantitatively examine total labor effort provided by the central IT department as well as any non-IT titled staff and outsourced providers. Using this data and our extensive database of IT staffing benchmarks (collected from dozens of public sector organizations), we will help the City understand how it compares to similar organizations and industry best practices in key labor efficiency metrics, such City of Palo Alto, CA· Scope of Work • Oclober 13,2010' ©2010 Pacific Technologie •. Inc. 17 @PTI City of Palo Alto. CA. Scope afWork' October 13, 2010'@2010PaclficTechnologles,lnc, 18 @PTI Sample IT Staffing Levels and Support o:;~!~Cf~E~;~ ~E$~"~"'-~-'''-'' PCs to PC Support FTEs '"-""-""~-- Task 11. Conduct Budget Analysis Based on a completed workbook and other budget-related documents from the City (task 4), we will analyze the City's current IT budget. We will review operations and maintenance spending from a variety of perspectives, including: • Comparing IT operations and • • • • maintenance (O&M) spending as a percentage of overall City operating budget to the IT spending of other, similar agencies Reviewing labor costs of specific IT activities Reviewing alignment of spending with strategic priorities Assessing whether the level of financial investment is capable of supporting the City's current and future needs Identifying areas of under-investment IT O&M Spending as a % ofTotal City O&M Spending This will also include an analysis of current funding sources, such as the general fund, capital project funding, interdepartmental chargeback, and grants. We will also assess the City's current IT cost allocation model, including its alignment with city strategic priorities, service cost accuracy, and inherent incentives and disincentives. The exhibit shown above provides a sample of PTI's summary IT spending analysis for a similar engagement. Task 12. Assess Application Architecture PTI will conduct application reviews with city users to determine their strengths and weaknesses, helping us ascertain where Significant investment might be needed. We will assess selected applications for their ability to meet business needs, usability, data access integration, and interfaces. We will examine up to 20 applications. This will include core enterprise applications (e.g., the finance and human resources management systems) and department-specific applications (e.g., the Utilities Department systems for utility billing). Clly of Palo Alto, CA' Scope of Work' Octobe, 13. 2010· © 2010 Pacific Technologies, inc. 19 --"~. "-'---.,... ~, ."" / TaS~~DeveIOP Findings We will ynthesize our assessment findings in each of the four IT focus areas - ., ...... (. •... __ .. ,_., .. ", __ hi9hli9hll, g.lheiujsks.and_impacts~apd.defil'le.techl'lology~related.issues,thatneed.,to."., .. . \ be addre,ssed for the City to meet its business objectives, We will review and validale \ Ihese fi?l:iings wilh the City's Project Steering Team in a strategy workshop (task 16). \'''-,._!'}laie 2: Strategy Development --. .... -.- Task 14. Develop Candidate IT Vision and Goal State Based on our findings from interviews and focus groups (task 7) the City's strategic priorities identified in task 8, and other assessment findings, we will draft a candidate IT vision and goal state for the City. After reviewing the C,ity's current IT position, we will work closely with City stakeholders during the IT strategy workshop (task 16) to review and refine these vision and goals. We will use the SMART criteria to ensure that the City's IT goals are Specific, Measurable, Agreed-upon, Realistic, and Timely. @PTI We will facilitate consensus around the IT vision and goal state -putting a strategic "stake in the ground" for the City's short-and long·term IT direction, Task 15. Perform Gap Analysis Using our interview and focus group findings, and findings from the application reviews (task 12), we will compare gaps between the City's existing application portfolio and the ideal application architecture defined in task 6, We will categorize current applications as having a severe, moderate, or minimal gap. Those applications with a severe gap become candidates for investment. We've included a sample ideal application architecture and gap analysis on the following page. Task 16. Conduct IT Strategy Workshop PTI will facilitate a workshop with the City's project steering team to collaboratively define a vision for IT at the City, reviewing our assessment findings (tasks 4 through 13) and the candidate IT vision and goal state from task 14, We will distribute the materials in advance to facilitate thoughtful discussion. During this workshop, we also will prioritize potential application investments in light of the application gap analysis and curren! business needs. We will review the gap analysis and facilitate participants through a normative voting process to force-rank the applications. Finally, we will work with the steering committee to review and refine a candidate IT governance model, with associated roles and responsibilities. The resulting model will address issues with existing governance processes, facilitate alignment between the City's technology objectives and its mission and business goals, and define mechanisms for keeping the IT strategic plan current. The workshop approach ensures that city staff has "ownership" over the resulting work products. We've included a sample IT decision making model on page 30. Cily of Palo ARo, CA' Scope of Work • OClober 13, 2010' © 2010 Pacific Technologies, Inc, 20 , i I /~, / J '-f / \~ Specialized Applications Common Applications ®PTI Sample Ideal Application Architecture and Gap Analysis o Project Accounting Decision Support DocumentIRecords Management Emergency Management Financial Management Minimal OVerall Gap Moderate Assessment Severe Not RevieWed Management o Prosecution ea • ., Manag.,ment o Public Safety Scheduling Grant/Contract Management Human Resources Management Internet 3 3 7 Intranet PersonalProducUvHy Timekeeping 9 City of Palo Alto, CA· scope of Work· October 13. 2010.0,2010 Pacific Technologies, Inc. A business- oriented view of your application portfolio 21 ®PTI Sample IT Decision-Making Model1 Aggrega.."1liS small projed:S with similar purposes for priOlitizatioo 1 In this diagram. PRe is the Project Review Committee and OBIS is the Office of Budget and Infonmation Systems. City of P~lo ~to, CA • Scope of work· October 13, 2010 • e 2010 Pacific Technologies, Inc. assessmem of IT support impacts 22 /'" '-"'''-" /' Ta~'lr Develop Recommendations I Based ~~on our assessment findings in phase 1, and the outcome of the IT strategy """,,"_\l,,,,~,,,,,_,_, ___ ,::~~:~~ '. ~~~:!d~:~,~:~;ii~i~:~:~~~:~v!~~~~~~t,~~~,rn~,~~re~,~~~~~~~o~:t~,_,_",_"" We will etermine the needed staffing, skill sets, and organizational structure(s) to suppor;! the City's technology priorities, including staffing and structures for customer • servjp~ and support, application support, infrastructure operations, and IT planning and "'''' ydrtlinistration, Other recommendations will include strategies for making improvements -" .. -to the City's application portfolio, as well as technical recommendations (e.g" hardware, networks, databases) to improve efficiency, address unmet demands, and anticipate future system requirements. We will recommend modifications, as appropriate, to the city's current IT cost allocation model and consider recommendations surrounding emerging and enabling technologies such as mobile/wireless computing, e-Government, and others, Our recommendations will consider best practices and address IT funding strategies. ®PTI Phase 3: IT StrategiC Plan Development Task 18. Align IT Projects with Business Priorities PTI will define specific tactical projects resulting from the recommendations developed in task 17 and align these projects with the business priorities and strategic objectives identified in task 8. This will ensure each recommended project supports the City's business needs, strategic direction, and future vision. IT projects will encompass each of the four strategiC IT focus areas: applications, IT service delivery, IT decision making, and technical infrastructure, Task 19. Develop Implementation Plan and Timeline PTI will develop a preliminary implementation plan with proposed durations, and start and completion dates for eGtch of the IT projects identified in task 17. We will work with the City's steering committee to review and finalize this implementation plan in task 21. The following Gantt chart illustrates a project implementation timeline from a similar engagement. City Of Palo Alto eA. scope of wark * October 13 201Q. @ 2010 pacjfic TechnOlogies 23 • 1 @PTI Sample Project Implementation Plan and Timeline III 1 • ( ! . Task 20. Perform Cost Analysis We will develop one-time and recurring cost estimates for each of the implementation projects. We will conduct market research and verify cost projections with vendors to ensure that our estimates are valid for City budgeting purposes, and are practical to implement. Please note that although we will identify the attendant benefits of each of the projects, we will not conduct a formal return on investment (ROI) analysis as part of this work. We've included a sample project cost summary below. Note that these costs are not high level numbers "picked from air." We build them up by looking at software . purchase and license costs, hardware purchase and replacement costs, external labor, and internal labor as appropriate. Citl' Of Palo AJto CA. Scope of Wprk • October 11 30]0' C 2010 Pacific TecbpplogJes Inc. 24 ®PTI Sample Project Cost Summary In addition to providing a list of implementation projects and cost estimates, we will also align these projects with the City's strategic priorities. The following graphic depicts a sample implementation project alignment with the City's goals from a similar client engagement. City Of PalO Alto en. scope of WOrk October 13 2Q10. © 2010 PaCifiC reChDQJQ~jes Inc. 25 @PTI Sample Alignment with Strategic Priorities Task 21. Conduct Implementation Planning Workshop PTI will facilitate a workshop with the City's steering committee to refine and validate the implementation plan, timeline, and project costs. Task 22. Prepare Draft IT Strategic Plan PTI will distill, synthesize, and document our work from all three phases in a draft IT Strategic Plan for the City. Before writing the report, we will review the table of contents with the City for approval. We will submit the draft report to the steering committee for review and comment. Task 23. Prepare Final IT Strategic Plan Working from a set of consolidated comments from the City, we will conduct a page-by- page walkthrough of the draft report. We will then incorporate any necessary revisions into the final IT Strategic Plan. Task 24. Deliver Final Presentation PTI will prepare and deliver a presentation of our findings and recommendations. We typically target this presentation for an executive audience, although we can tailor it for other audiences should the City prefer. Deliverables CONSULTANT will culminate work in the following formal deliverables: City of palo Alto CA' Scope Of work • Octoher 13 201Q' Q 2010 Pacific TechnolOgies Inc, 26 .,."..--~-~--, , '~. A draft and final Information Technology Strategic Plan, including: @PTI • Meaningful local government IT benchmark data • An implementation plan, including definition of recommended projects, high- level one-time and recurring cost estimates for each project (valid for budgeting) and a recommended project schedule • Related appendices and supporting documentation • A final presentation that summarizes key findings and recommendations City of palO altg CA. Scwle of Work • october 13 201Q· (1 2010 pacific Technologjps Inc. 27 EXHIBITB SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete the required Services according to the following schedule: Project Schedule This section presents the schedule for the project. CONSULTANT understands the City's desire to complete the IT strategic plan within 90 days. That said, based on our past experience with organizations on similar projects, CONSULTANT believes that the desired timeline is quite aggressive if the City of Palo Alto expects effective results. With the above in mind, CONSULTANT has developed a project schedule culminating in the creation of a draft report in approximately 120 business days. CONSULTANT and CITY agree thatthe work plan and timeline are not "carved in stone." CITY may wish to shift the emphasis of our work, or include additional activities. CONSULTANT shall welcome the opportunity to discuss these alternatives with the City and make related adjustments to the work plan. The following Gantt chart outlines the tentative schedule, and estimated start and finish dates of each task in our work plan. ~mofi1-T Project Schedule -Iii ill !iii lID ..,.--+_. III iii !iii '-""""" • ""'" , .. ,,, .. ,, ...... ""''' , ......... "" .~" • L_ ~~ __ J __ ®-~ I!mm I m EXHIBIT "C" COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and completed to the reasonable satisfaction of the CITY, as described in Exhibit A, Scope of Services, a fixed, not-to-exceed price for professional services of $78,048. This fixed price includes a 20% discount from PTI's standard professional services cost. PTI will progress bill for their work on a monthly . basis. In addition, PTI will bill for travel and related costs (such as mileage and parking) as incurred, with a 1.8% markup which reflects the current Washington State Business and Occupational Tax on PTI's gross receipts. PTI estimates travel expenses at $12,650. The final, not-to-exceed priee for professional services is $90,698.00. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Per RFP 135684, the following tables present PTI costs for our the scope of services. I-s-c::--'-~·~ '------,.II:-~-·~-~-~~~u~~~~~~ies~··T;1 ~~~r:-l-~1~~~g:J,L. E-xt-en-d-ed Rat. I Consultant, etc.) , I hour~~ ~:::e-:-:a:a~:~:~~pe-:n-ts-e-s -.~_--.-.. -t---=~:-,~-~-:::~-~~:~~er_ ~.~ j 40 $124 __ ~~~ i:~~o TOTAL NOT TO EXCEED, I --$4-,9-6-0-1 TASK 1 .~~ ___ i---c.---.----l-------+-----._.,. __ ---1 Task 2: Develop and distribute information request 1, Dan Borgen -, 2 ~pr-?i"<'tMana.ll.'!L--~--$124 $248 __ _ MIke Stlverman -. 2 $124 I $248 Lead Consultant . ---1 i ~~~;7~~;~~;n-=-,2._. __ . $II;=---==-t $:24 ___ ---1 ~-:::------.~i: ~:.::~;!;lane.--,LI 6_··fl.04,-_._-..... 1$$602 .. 4 .. ,,,_--- Travel and Livin,,,gL::E::;x":pe"'us="=es:---__ :-. _ . _ .. TOTAL NOT TO EXCEED, i 'I· I TASK 2 -+_.__ . .1 . r---__ Sj,344 , Dan Borgen ---i 8 ! $124 ·1· $992 Project Mana~.. ~--. . . "-I Mike Silvennan -~ Lead Consultant 8 I $124 $992 J \-""<====----+----f---.-.-. '--'-" : NicoleSimpkinson-10 ' $]]2 $1,120 I Task 3: Conduct project Idckoff I Senior Consultant L ~_~~.~~~ _______ .... .,II:,~_O_:_:_li_:_; .... I_a_n .... e .... ~-.... ~_=""-_=.:t:I=_1=_O= __ ~=~~=~-~~~'=$_I-O.=4=-_ .•• _-_=._=.~--.--·t'-'-~$$~51~,'.oO~,,§4~OO~~~~~~~ ~rravel and Living..!'xpenses. . I i~~~_~ N_O~_TO_EX~_E~D, --'-_._._._. __ ---'__ l..... ____ I __ ._$9_.2_0~ 18 Professional Services Rev JUlle 2, 20 10 C:\ Users\bmebride\AppData\Local\Microsoft\ Windows\ Temporary Internet F iles\Content, Oullook\ W2VXIVR O\Contract C1113 5684 Pacific Techoologies ine.doe I 1 Scope ~ : Review documentation Travel TOTA TASK and Livin» Expenses L NOT TO EXCEED, 4 Task 5: Develop and validate business function model ·~··-·T.·~·~·---'-·~·~····-·~-··--I I Labor Categories : Hourly rate I Est ' (N r Rat reflect a i (e,g., Consultant, Sr. ! Hours 20~e~jSCo~<ed ~ Extended Rate I ' Consultant, etc.) 1 .~~ou'lyrateL....... . _~~_~. '.~-'. Senior Consultant ,8 . $112 $896 I Consultant '4 . $104 $416. $0 , I .1 $1,312 : , .. 1 DanBorgen~ 12 $124 $248 Project Manager I \ --~,,~ --~-------'-~-, Mike Silvennan .. I I Lead Consultant .2 $124 I Nicole Simpkins on -'4 .. --~~-'-'-, $112 : $448 1 Senior Consultant ..L... ~ithSlane .. I $104 : $208 I ,2 L~;--;-;-:-, i Travel and Living Consultant -.,.-.,~~". Expenses L~~-. .. 1$0' ~ , TOTAL NOT TO TASK 5 EXCEED, Task 6: Develop ideal application archit.eln re LivinJDl.'<.Jl"llses ~ 01' TO EXCEED, Task 7: Co focus grou nduct interviews and ps Living Expenses '-~. ., bravel and , TOTAL N01 TO EXCEED, I TASK 7 [""" '''''''' ... '" ,. "',," I and strategic priorities I '''~-r-''--. $1,152 Dan Borgen Project Manager Mike Silvennan- Lead Consultant Nicole Simpkinson ... Senior Consultant Meredith Slane - Consultant .. - '-.~~.~------~-------Dan Borgen .. Proj ect Manager -.~ Mike Silverman .. Lead Consultant .-Nicole Simpkinson - ~r..c:ol1sultant Meredith Slane .. Consultant , 2 $124 E , . ..~-~ .. -- -----~----" --~-------.. --I $22;-'--' 2 1$112 J $124 J!248 , I """~" I ' r-'~" _~ __ ._. $O-=--__ ~ $1,136 : .. --.-~ .. ' 12 $124 $1,488 '1 1 -.-.--~.--.-.- 12 ' $124 , $1,488 f-- 1$112 , 10 .. -fe,,, 10 $104 $1,040 ,_._--I .. , $0 , .-.~~~--~--'._-'. I --+--__ ....L_ .. __ ~fO-$5,13ij Dan Borgen.. I t J' Protect Manager _+-2_~_._._ t=~--' $248 .. ~ Mike Silvennan - 2 I' $124 I, $248 ' Lead Consultant '-', N=iCO"'l-"e"'S""im~p"'k'"in'!s-on----+-, -2----+'-·$·-1-12---··---'1$22;- I Semor Consult"lli..... ... L-.. ~,. I f--------·· I Meredith Slane R~;~t"~~~v~"~-;~;;-:~~pc-e~-l~-e~~,--==t=s~u~lta~n~t _'~~~_'..J:'-.. ~-_-~~ .. -';" _$ .. 1 O4~'~= ___ jj :: 16_~$~I-'1-3-6-1I' , TASKS LtiSk 9: AssessteCbniClll .. 1 Dan Borgen :,~~"=rl_.·, $124---~: $248 19 Pf(lfcssional Services Rev June 2,2010 C:\U sers\bmcbr ide\AppDa ta\Local\tv1ierosoft\ Win dows\Tetnporary Internet F iles\CQntent Outlook\ W2VXIVRO\Conttact eli 135684 Pacific Technologies Inc.doc ~cope - ; eonllguration ! i -; Travel and Living Expenses TOTAL NOT TO EXCEED, TASK 9 I Task 10: Assess IT organization and servIce delivery - i I Travel and Living Expenses • TOTAL NOT TO EXCEED, I TASK 10 i Task 11: Conduct budget analysis Travel and Living Expenses TOTAL NOT TO EXCEED, TASK II Task 12: Assess application architecture ...."..---.. -Travel and L,VID Ex enses TOTAL NOT TO EXCEED, TASK 12 Task 13: Develop findings ._---~--I Labor Categories ; Hourly rate (e.g", Consultant. Sr. Est. (Note: Rates reflect n Extended Rate Hours , 20% discounted ! Consultant, etc.) ; hourlv rute) . -Froject Matllll!er Mike Silvennan-2 $124 i $248 _ Lead Consultant i Nicole Simpkinson -4 $112 i $448 ; Senior Consultant __ -I $1,66~ Meredith Slane -16 1$104 Consultant -.--~-- $0 ---~~ !--'---~--.--- $2,608 1 Dan Borgen-.2 $124 $248 Project Manager 12 -Mike Silvennan - -Lead Consultant $124 $248 ~NiCOle Simpkinson - ----~--~ __ Senior Consultant 16 $112 $1,792 i Meredith Slane ~~.-------~ : Consultant 2 $104 ~ $0 ______ l L $2,496 -----_. -~ .. ---; Dan Borgen- ! Project Manager 2 I $124 -$248 -Mike Silvennan -2 i $124 $248 Lead Consultant --- ; Nicole Simpkinson-I 6 $112 $672 ~enior Consultan'---__ __~ __ -~ Meredith Slane -20 $104 i $2,080 ! Consultant --~--.-----~ r---$0 -i $3,248 I $124 Dan Borgen-I $248 --- 2 Pmj ect Manager --~- I $124 1$248 --• Mike Silverman -2 ! Lead Consultant ___ -I------------Nicole Slmpkinson -_ 8 i $112 $896 Senior Consultant ----~---~--Meredith Slane 8 $104 $832 Consultant .-~ $0 ------ $2,224 Dan Borgen -6 Pro 'eet Man"'a=er!.-__ f-__ _ i Mike Silverman -6 ~C~o~ns~ul-tan-t--~J.-- Nicole Slmpkinson -8 SeniorC::~on~su1!.atlt ___ -+-;:-___ t-:;:=:--___ ...L-=-;:-___ -l Meredith Slane -8 $124 $744 • $124 $744 [$112 $896 $104 i $832 .. --~--- Professional Serviees Rev June 2, 2010 20 C:\Us ers\bmcbride\AppDa ta \Local\M icrosoft\ Windows\T emporary Internet FUes\Conlcnt Outlook\ W2 VXIVR O\Contract C t 1135684 PacifIC Technologies Tnc.doc Scope Labor Categories (c.g., Consultant, Sf. : Consultant, clo.) Consultant Est. Hours ; Hourly rate (Note: Rates refl",t a Extended Rate 20% discounted houri rate , Travel and Livirtg.;cE~x;;e:;n;;:ses~---t--------t__ ___ ._._1-_ .. ___ . __ --+1...,$""0:....... ___ ---1 TOTAL NOT TO EXCEED, , TASKJ3 Task 14: Develop candidate IT vision and goal state : Travel and Living Expenses r TOTAL NOT TO EXCEED, TASK 14 , ! Task 15: Perform gap analysis I Travel and Living Expenses : TOTAL NOT TO EXCEED, ill§I<.I5 I ! ; Task 16: Conduct IT Strategy Worl<shop 1 Travel and Living Expenses TOTAL NOT TO EXCEED, TASK 16 , Task 11; Develop , recommendations ! I $3,216 ' "--"---4-----.----_...J, UDanBorgen-~ 2 i $124 Project Manager -i-----· Mike Silverman-f--$-IZ-4----+--------, Lead Consnltant i $248 $248 M ____ .. .. _------1 $0 ! 1 $1,152 12 ,,~ .. · Dan Borgen -1 $124 $248 I Project Man.'lB~ ~ike Silverman -2 1 $124 $248 · Lead Consultant 1 Nicole Slmpkmson -1$112 ; Senior Consultant 6 $672 1 Meredith Slane -:6 $104 1$624 Consultant ! '-1-------.. --1 $0 I $1,792 .-------_._- Han Borgen-16 $124 $1,984 Proiec! Manager Mike Silverman -116 $124 $1,984 Lead Consultant __ r--' ._. Nicole Simpkinson -16 $112 $1,792 Senior Consultant ----~----.-d ; Meredith Slane -16 I $104 : $1,664 I Consultant.. .. ~. I $3,105 .1--- I .. -----.. -~~---- :i I $10,529 Dan Borgen-6 $124 1$744 Pmiect Manager ---Mike Silverman -1$744 , Lead Consultant 6 $124 M ___ ' __ ! Nicole Simpkinsoll -10 $112 $1,120 • Senior Consultant Meredith Slane -I $1,248 .. - Consultant 12 1$104 : Travel and Idving Expenses..... ----'---_ .. $0 TOTAL NOT TO EXCEED, ! TASK 11 Task 18; Align IT projects with Dan Borgen- ..J:Ittsi~ess ~rlorities Project Manager 21 I Iz ! $124 i .. _,--- $3,856 $248 Pl'ofessiotlfll Service,q Rev JI.lI1C 2, 2010 C :\Use.rs\bmcbride\App Data\Loo-a l\Microsoft\ Windows\ T elllporary Jnternet Files\Content. Out!ook\W2VXfVRO\Contract C 11135634 Pacific Technologies Inc.doc Labor Categories (e.g'l Consll!tant. Sf, COllSul!ant, etc.) Est. Hours Hourly rate , (Nure:Rare,reflccta i Extended Rate 200/0 dJScounted , i------~~~~.~---'----_t_;_;:;__=;__--_+~ .. -Mike Silverman- , Lead Consultant ;~U!l'!~te) : $24~~---1 ! Nicole Simpkinson ~ , Senior Consultant Meredith Slane- Consultant 2 2 4 $112 $224 "l . $104 $416 ~6;~~~;~v::6 ~~'2c::;e~",~;o~;:-,---+--··-~~~·-~··~-+~-~··~-..I--~-----i-11 $"'O'---"'_~~~"--'I TASK ,.,18'--_______ b--c::-____ -+ ___ -+_ ... ___ .. _-t. ____ $1_,136 i ~a~ B~~en , 2 i $124 ' $248 ---.-J Task 19: Develop implementation plan and timeline -;;:;--, _reavel and 1iving. Expenses , TOTAL NOT TO EXCEED, ' TASK 19 ~-.. ---... Task 20: Perform cost analysis I i Travel an'£! LivIng Expenses I TOTAL NOT TO EXCEED, TASK 20 I i Task 21: ConductImplementation . Planning WOI"I",hop Travel and LivIng llXlJenses I TOTAL NOT TO EXCEED, ; TASK 21 i Task 22: Prepare draft Strategic Technology Plall rOlec anager .. --~----+---... i Mike Silve!1nan-! I Lead Consultant 2 i $124 i $248 ! Nicole Simpkinson-I --- ; Senior Consultant 2 $112 ' $224 Meredith Slane -I 4 Consultant i ~~~r---~-$0 , --1-------- , $1,136 1 1 Da~ Borgen -Pro' eel. Manager 2 $124 $248 Mike Silverman -2 $124 $248 ' Lead Consultant .-~----.-Nicole Simpkinson ,., ! 16 $112 $1,792 Senior Consultant --Meredith Slane-16 $104 $1,664 Consultant ... -i-------~' -~--~ $0 I i -.. -~------~--.. Dan Borgen-12 , ProieetManager .. --~-.. I Mike Silverman- 112 ; Lead Consultant Nicole Simpkinson - i 12 Senior COllsultant -~ ~ .. Meredith Slane -16 Consultant ; Dan Borgen -8 Proiect Manager , Mike Silverman -. ! 8 Lead Consultant , NICole Sllllpkmson 32 Senior Consultant ~ --+- Meredith Slane -I 32 • Consultant ' 22 $3,952 ' $124 $1,488 $124 $1,488 1$112 ' $1,344 ~---"- 1$104 $1,664 -.. -~~ .--~ I $3.JilL ! 59,089 I , i $124 $992 I $124 .. - $992 , ~,- $112 $3,584 __ .. +-____ ....J. $104 $3,328 Professiollfl.l Serviees Revlune2,2010 C:\Users\bmcbride\AppData\Local\Microsoft\ Wil1dows\Temporary Internet Files\Content. Outlook\W2VXIVRO\Contract Cl1135684 Paeific Technologies Ine.doc ! Scope Labor Categories (e.g" Consultant, Sr. Cons_dtal'll. etc,) ES:~ I ~~=r~L~:!~:' a Hours 20% discounted Extended Rate _~_ .. ~ , hOllr!y"ra"'te,,-__ +::-:-__ ~ ___ , , Travel and lAving E;;:,x2';';ell;::8Se;os __ -j_~ ______ ---.J!--... ___ .+ __ . __ ~ _ __+-"$"'O--~-.. --- i TOTAL NOT TO EXCEED, I TASK22 Dan Borgen- Pro'ect Mana .... e.-r . Mike Silverman- i Task 23: Prepare final Strategic Lead Consultant ; Technology Plan Nicole Simpkinson - ~eniorCollsultant Meredith Siane- Consultant Travel and Livin" Expenses TOTAL NOT TO EXCEED, ,-TASK 23 i ' Dan Borgen lJ;roject Manager i Mike Silverman- Task 24: Deliver final : Lead Consultant .. __ .. presentation Nicole Simpkinson - rJ'tiillior Consultant Meredith Slane - Consultant Travel and Living Expenses TOTAL NOT TO EXCEED, TASK 24 23 4 $124 4 $124 , 16 $112 -~-.~ 1-.... _ .... i 16 $104 I I 12 $124 4 $124 12 ! $112 '--"-,... .. & $104 $8,896 i . $496 $496 I--.- $1,792 . $1,664 i $0 $4,448 $1,488 ------.-~---- $496 .. -~ .. $1,344 , --~832 ):1 380 '-"- I $5.S~Oj Professionlll Services Rev June 2, 2010 C: \U:wrs\bmebride\AppData\Loeal\Microsoft\ W indows\T empon\ry Internet Files\Content. Otl flook\ W2VXfVRO\Con tract C 1113 5684 Pilei tie Technologies Inc. doc EXHIBIT "D" INSURANCE REQUIREMENTS CONTRACTORS TO THECITY OF PALO ALTO (CITY). AT THEIR SOLE EXPENSE, SIIALLFOR THE TERM OF 11m CONTRACTOBT AIN AND MAlNfAIN INSURANCE IN THE AMOUNTS FOR TIm COVERAGESPECIFIEDBEWW, AFFORDED RY COMPANIES WITH AM REST'S KEY RATING OF A-:VII, OR IIIGIlER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN TilE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS AS SPEClFlED BEWW' I '=. MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH YES YES -. YES YES i • NO YES OCCURRENCE AGGREGATE WORKER'S COMPBNSATrON i STATUTORY EMPWYER'S LIABILITY I STATUTORY : BODILY INJURY $'(000,000-$1,000,000 GENERAL LIABILITY, INCLUDING ! PERSONAL INJURY, BROAD FOR.\1 • PROPERTY DAMAOE $1,000,000 I $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY lNJUR Y & PROPERTY DAMAGE $1,000,000 $1,000,000 LIAIlILITY COMBINED. BODILY iNJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 SI,OOO,OOO -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBn,E LIABll,ITY, INCLUDING , ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE • $1,000,000 $1,000,000 i BODILY INJURY AND PROPERTY $1,000,000 . $1,000,000 J DAMAGE, COMBINED .. _ .. _ .. _._ .... L_ .. __ ~~_ . PROFESSIONAL LlABILn"Y, INCLUDING, i ERRORS AND OMISSIONS, MALPRACTICE (WI'IEN APPLlCAllLE), ! , AND NEGLIGENT PBRFORMANCE ALL DAMAGES $1,000,000 .. _------ TIlE CITY OF PALO ALTO IS TO liE NAMED AS AN ADDITIONAL INSURED: CONTRACroR, AT ITS SOLE COST AND EXPENSE, . . SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFPBCT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, .. THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACfOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATrON, EMPWVER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES, I. lNSURANCE COVERAGE MUST INCLUDE: A A PROVISION FOR A WRITfEN TIllRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY .. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" A PRIMARY COVERAGE 24 Profession!'!1 Services Rev June 2, 2010 C:\Users\bmcbride\AppData\Local\Microsofi\ Windows\T emporary Internet Files\Content OuHook\W2 VXlVRO\Conlract Cll135684 PacJfic Technologies [ne,doe Wfrn RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONfRIBUTING wrrn ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS, B, CROSS LI~!lJJ:Y THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS tJNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THlS ENDORSEMENI, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. I. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUINGCOMPANY SHALL PROVIDE CITY AT LEAST A l1llRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR TIlli NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALOALTO,CA 94303 25 Professiollsl Serviees Rev Junc2, 2010 C:\Uscrs\bmebride\AppData\Local\Microsoft\ Windows\TcmpQrary Internet Fiies\ContentOlltlook\ W2VXIVRO\Contract Ci I l35684 Pacific Technologies Inc,doe TO: HONORABLE CITY COUNCIL .,. FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: NOVEMBER 22, 2010 CMR:406:10 REPORT TYPE: CONSENT SUBJECT: Approval of a Contract with Spencon Construction, Inc. in the Amount of $447,431 for FY 2010-11 Sidewalk Replacement Project -Capital Improvement Program, Sidewalk Replacement Project PO-89003 RECOMMENDATION Staff recommends that-Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with Spencon Construction, Inc. (Attachment A) in the amount of $447,431 for FY 2010- 2011 Sidewalk Replacement Project -Capital Improvement Project PO-89003; and 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Spencon Construction, Inc. for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $45,000. ' DISCUSSION Project Description The work to be performed under this contract is for sidewalk, curb, gutter, and asphalt pavement replacements; and Portland cement concrete and asphalt recycling. The sidewalk· replacement locations are shown on Location Maps 1 and 2 (Attachment B). The project ,ncludes sidewalk replacements in intensive-use areas in the University Avenue downtown area and on EI Camino Real; The project also includes tree-well grate installations in the University A venue downtown area, on EI Camino Real and Cambridge A venue as shown on Location Map t (Attachment B). Work in downtown and other intensive use areas will be stopped during lunch hours to minimize inconvenience to merchants and the public. This contract also includes the construction of twenty curb ramps with detectable warning surface in compliance with the American with Disabilities Act (ADA). A detectable warning surface is a standardized surface feature built in or applied to walking surfaces or other elements to warn visually impaired people of potential hazards in their path of travel. Detectable warning surfaces used in this project will consist of a surface of truncated domes aligned in a square grid pattern, are yellow in color and comply with Federal Highway Administration requirements enforcing the use of truncated domes on Federal, State and local level projects and additionally are in accordance with the 2007 Public Works Standard Drawings and Specifications CMR:406:10 Page 1 of3 Bid Process On October 19,2010, a notice inviting formal bids for the FY 2010·11 Sidewalk Replacement Project was posted at City Hall, and sent to 6 builder's exchanges and 9 contractors. The bidding period was twenty· six days. Bids were received from 9 qualified contractors on October 19, 2010, as listed on the attached Bid Summary (Attachment C). ummaryo I S fB·d P rocess Bid NameINumber 2010-11 Sidewalk Replacement / IFB #138321 Proposed Length of Project 170 calendar days Number of Bids Mailed to 13 Contractors Number of Bids Mailed to Builder's 12 Exchanges Total Days to Respond to Bid 27 Pre-Bid Meeting? No Number of Company Attendees at NA Pre-Bid Meeting Number of Bids Received: 9 Bid Price Range From a low of $447,430.30 to a high of $646,255.36 Bids ranged from a high of $646,255.36 to a low bid of $447,430.30. The low bid is 18 percent below the engineer's estimate of $548,970, while the high bid is 18 percent above· the engineer's estimate. It is likely that bidder speculation on the price of Portland Cement Concrete (PCC) accounts for the wide variation of bid prices. Staff has reviewed all bids submitted and recommends that the bid of $447,430.30 submitted by Spencon Construction, Inc. be accepted and that Spencon Construction, Inc. be declared the lowest responsible bidder. The change order amount of $45,000, which equals 10 percent of the total contract, is requested for related, additional but unforeseen work which may develop during the project. Staff checked references supplied by the contractor for previous work performed and found no significant complaints. Staff also checked with the Contractor's State License Board and found that the contractor has an active license on file and has no outstanding complaints. Project Coordination The work included in this contract was coordinated with other capital projects at the monthly UtilitieslPublic Works department street work coordination meetings and by use of the GIS project coordination program. The purpose of the monthly street work coordination meeting is to coordinate the installation, replacement, and repairs of city's subsurface infrastructure and street and sidewalk improvements with the street maintenance plan. The 2010-11 Sidewalk Replacement Project has no conflicts with the other upcoming Public Works and Utility projects. RESOURCE IMPACT Funds for this project are included in the FY 2011 Capital Improvement Program Sidewalk Replacement Project, PO-89003. Any excess funds remaining will return to their respective Capital Improvement Program budgets. CMR:406:10 Page 2 of3 ATTACHMENT A CONSTRUCTION CONTRACT Contract No. C11138321 City of Palo Alto and Spencon Construction, Inc .. PROJECT: 2010-11 Sidewalk Replacement Project Rev. August 3, 2010 SECTION 1. CONSTRUCTION CONTRACT TABLE OF CONTENTS INCORPORATION OF RECITALS AND DEFINITIONS .................................... 1 1.1 Recitals .............................. ; ................................................................................................. 1 1.2 Definitions ........................................................................................................................... 1 SECTION 2. THE PROJECT ................................................................................................... 1 SECTION 3. THE CONTRACT DOCUMENTS ......................................... ; ............................. ,1 LIST OF DOCUMENTS .................................................................................................................... 1 3.2 ORDER OF PRECEDENCE ............................................................................... 2 SECTION 4. THE WORK ........................................................................................................ 2 SECTION 5. PROJECT TEAM ................................................................................................ 2 SECTION 6. TIME OF COMPLETION .................................................................................... 2 6.1 Time Is of Essence ............................................................................................................. 3 6.2 Commencement of Work ................................................................................................... 3 6.3 Contract Time ..................................................................................................................... 3 6.4 Liquidated Damages .......................................................................................................... 3 6.4.1 Entitlement. ............................................................................................... : .................. 3, 6.4.2 Daily Amount ............................................................................................................... 3 6.4.3 Exclusive Remedy ....................................................................................................... 3 6.4.4 Other Remedies .......................................................................................................... 3 6.5 Adjustments to Contract Time .......................................................................................... 3 SECTION 7. COMPENSATION TO CONTRACTOR .............................................................. 3 7.1 Contract Sum ...................................................................................................................... 3 7.2 Full Compensation ............................................................................................................. 4 7.3 Compensation for Extra or Deleted Work ........................................................................ 4 7.3.1 Self Performed Work ................................................................................................... 4 7.3.2 Subcontractors ............................................................................................................ 4 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC SECTION 8. STANDARD OF CARE ..............................................................................•........ 4 SECTION 9. INDEMNIFiCATION ...................................•........................................................ 4 9.1 Hold Harmless ...................................................................... ; ............................................• 4 9.2 Survival .....................................................................................................•.........•............... 5 SECTION 10 NONDISCRIMINATION .....................................................•................................ 5 SECTION 11. INSURANCE AND BONDS ................................................................................ 5 SECTION 12. PROHIBITION AGAINST TRANSFERS ............................................................ 5 SECTION 13. NOTiCES .........................................•..........................•...•............................•...... 6 13.1 Method of Notice ..•............................................................................................................. 6 13.2 Notice Recipients .............................................................................................................•• 6 13.3 Change of Address ...............................•...•..•..........•.•.........•...............................•.....•.•••...• 7 14.1 Resolution of Contract Disputes .....•......................•........•........•...•..•......•......................... 7 14.2 Resolution of Other Disputes ...........•.....•......................................................................... 7 14.2.1 Non-Contract Disputes ................................................................................................ 7 14.2.2 Litigation, City Election ................................................................................................. 7 14.3 Submission of Contract Dispute ...................................................................................... 8 14.3.1 By Contractor ............................................................................................................... 8 14.3.2 By City .......................................................................................................................... 8 14.4 Contract Dispute Resolution Process .............................................................................. 8 14.4.1 Direct Negotiations .................................................................... ; ................................. 8 14.4.2 Deferral of Contract-Disputes .................................................................................. : ... 9 14.4.3 Mediation ..................................................................................................................... 9 14.4.4 Binding Arbitration ....................................................................................................... 9 14.5 Non-Waiver ....................................................................................................................... 10 SECTION 15. DEFAULT ......................................................................................................... 11 15.1 Notice of Default ............................................................................................................... 11 15.2 Opportunity to Cure Default ............................................................................................ 11 SECTION 16. CITY'S RIGHTS AND REMEDIES ................................................................... 11 16.1 Remedies Upon Default ................................................................................................... 11 16.1.1 Delete Certain Services ............................................................................................. 11 16.1.2 Perform and Withhold ................................................................................................ 11 ii Rev. August 3, 2010 Contract C11138321 SPENCON.DOC 16.1.3 Suspend The Construction Contract ......................................................................... 11 16.1.4 Terminate the Construction Contract for DefauIL ..................................................... 11 16.1.5 Invoke the Performance Bond ................................................................................... 11 16.1.6 Additional Provisions ...................................................................................... ; .......... 12 16.2 Delays by Sureties ........................................................................................................... 12 16.3 Damages to City ............................................................................................................... 12 16.3.1 For Contractor's Default ............................................................................................ 12 16.3.2 Compensation for Losses .......................................................................................... 12 16.5 Suspension by City for Convenience ............................................................................. 12 16.6 Termination Without Cause ............................................................................................ 13 16.6.1 Compensation ........................................................................................................... 13 16.6.2 Subcontractors .......................................................................................................... 13 16.7 Contractor's Duties Upon Termination .......................................................................... 13 SECTION 17. CONTRACTOR'S RIGHTS AND REMEDIES .................................................. 14 17.1 Contractor's Remedies .................................................................................................... 14 17.1.1 --ForWorkStoppage ................................................................................................... 14 17.1.2. For City's Non-Payment. ............................................................................................ 14 17.2 Damages to Contractor ................................................................................................... 14 SECTION 18. ACCOUNTING RECORDS ............................................................................... 14 18.1 Financial Management and City Access ........................................................................ 14 18.2 Compliance with City Requests ...................................................................................... 14 SECTION 19. INDEPENDENT PARTIES ................................................................................ 14 SECTION 20. NUISANCE ........................................................................................................ 15 SECTION 21. PERMITS AND-LICENSES .............................................................................. 15 SECTION 22. WAiVER ............................................................................................................ 15 SECTION 23 GOVERNING LAW ........................................................................................... 15 SECTION 24 COMPLETE AGREEMENT .............................................................................. 15 SECTION 25 SURVIVAL OF CONTRACT ............................................................................. 15 SECTION 26 PREVAILING WAGES ....................................................................................... 15- iii Rev. August 3, 2010 Contract C11138321 SPENCON.DOC SECTION 27 SECTION 28 SECTION 29 SECTION 30 NON APPROPRIATION ................................................................................... 16 GOVERNMENTAL POWERS .......................................................................... 16 ATTORNEY FEES ............................................................................................. 16 SEVERABILITY ................................................................................................ 16 iv Rev. August 3, 2010 Contract C11138321 SPENCON.DOC CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on ("Execution Date") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and SPENCON CONSTRUCTION, INC. ("Contractor"), is made with reference to the following: RECITALS: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a corporation duly organized and in good standing in the State of California, Contractor's License Number 820205. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. . C. On September 22,2010, City issued an Invitation for Bids (IFB) to contractors for the 2010-11 Sidewalk Replacement Project ("Projecf'). In response to the IFB, Contractor submitted a bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Bid Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. Ifthere is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the construction of the 2010-11 Sidewalk Replacement Project ("Project"). SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as "Agreement" or "Bid Documents") consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders 2) Field Change Orders 3) Contract 4) Project Plans and Drawings 5) Technical Specifications 1 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC 6) Special Provisions 7) Notice Inviting Bids 8) . Instructions to Bidders 9) General Conditions 10) Bidding Addenda 11) Invitation for Bids 12) Contractor's Bid/Non-Collusion Affidavit 13) Reports listed in the Bidding Documents 14) Public Works Department's Standard Drawings and Specifications dated 2007 and updated from time to time 15) Utilities Department's Water, Gas, Wastewater, Electric Utilities Standards dated 2005 and updated from time to time 1 fi)~_ City of Palo Alto Traffic£DIltrol Requirements 17) City of Palo Alto Truck Route Map and Regulations 18) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 19) Performance and Payment Bonds 20) Insurance Forms 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. SECTION 4 THE WORK. The Work includes all labor, materials, equipment, services, permits, fees, licenses and taxes, and all other things necessary for Contractor to perform its obligations and complete the Project, including, without limitation, any Changes approved by City, in accordance with the Contract Documents and all Applicable Code Requirements. SECTION 5 PROJECT TEAM. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Project requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. 2 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City's Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City's Notice to Proceed and shall be completed D not later than ~ within one hundred seventy (170) calendar days after the commencement date specified in City's Notice to Proceed. 6.4 Liquidated Damages. 6.4.1 Entitlement. City and Contractor acknowledge and agree that if Contractor fails to fully and satisfactorily complete the Work within the Contract Time, City will suffer, as a result of Contractor's failure, substantial damages which are both extremely difficult and impracticable to ascertain. Such damages may include, but are not limited to: (i) Loss of public confidence in City and its contractors and conSUltants. (ii) Loss of public use of public facilities. ~---c-cQii) Extenc!~cI~isruptiol1 !()J~ut?lic. 6.4.2 Daily Amount. City and Contractor have reasonably endeavored, but failed, to ascertain the actual damage that City will incur if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time. Therefore, the parties agree that in addition to all other damages to which City may be entitled other than delay damages, in the event Contractor shall fail to achieve Substantial Completion of the entire Work within the Contract Time, Contractor shall pay City as liquidated damages the amount of $500 per day for each Day occurring after the expiration of the Contract Time until Contractor achieves Substantial Completion of the entire Work. The liquidated damages amount is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. 6.4.3 Exclusive Remedy. City and Contractor acknowledge and agree that this.liquidated damages provision shall be City's only remedy for delay damages caused by Contractor's failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.4.4 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City's Losses are caused by any reason other than Contractor's failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and agreed to by Change Order executed by City and Contractor in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of Four Hundred Forty-seven Thousand Four Hundred Thirty and 30/100 Dollars ($447,430.30). D [This amount includes the Base Bid and Add Alternates .] 3 Rev.August3,2010 Contract C11138321 SPENCON.DOC 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements, or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work. The Contract Sum may only be adjusted for Change Orders issued, executed and satisfactorily performed in accordance with the requirements of the Contract Documents. 7.3 Compensation for Extra or Deleted Work. The Contract Sum shall be adjusted (either by addition or credit) for Changes in the Work involving Extra Work or Deleted Work based on one or more of the following methods to be selected by City: 1. Unit prices stated in the Contract Documents or agreed upon by City and Contractor, which unit prices shall be deemed to include Contractor Markup and Subcontractor/Sub-subcontractor Markups permitted by this Section. 2. A lump sum agreed upon by City and Contractor, based on the estimated Allowable Costs and Contractor Markup and Subcontractor Markup computed in accordance with this Section. __ 3.__ Contractor's Allowable Costs, plus Contractor Markup and Subcontractor Markups applicable to such Extra Work computed in accordance with this Section. Contractor Markup and Subcontractor/Sub-subcontractor Markups set forth herein are the full amount of compensation to be added for Extra Work or to be subtracted for Deleted Work that is attributable to overhead (direct and indirect) and profit of Contractor and of its Subcontractors and Sub-subcontractors, of every Tier. When using this payment methodology, Contractor Markup and Subcontractor/Sub-subcontractor Markups, which shall not be compounded, shall be computed as follows: 7.3.1 Markup Self-Performed Work. 10% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by Contractor with its own forces. 7.3.2 Markup for Work Performed by Subcontractors. 15% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by a'first Tier Subcontractor. ' SECTION 8 STANDARD OF CARE. Contractor agrees that the Work shall be performed, by qualified, experienced and well-supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and all Losses arising directly or indirectly from, or in any manner relating to any of, the following: (i) Performance or nonperformance of the Work by Contractor or its Subcontractors or Sub-subcontractors, of any tier; 4 Rev, August 3, 2010 Contract C11138321 SPENCON.DOC (ii) Performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of any of the obligations under the Contract Documents; (iii) The construction activities of Contractor or its Subcontractors or Sub-subcontractors, of any tier, either on the Site or on other properties; (iv) The payment or nonpayment by Contractor to any of its employees, Subcontractors or Sub-subcontractors of any tier, for Work performed on or off the Site for the Project; and (v) Any personal injury, property damage or economic loss to third persons associated with the performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of th~ Work. However, nothing herein shall obligate Contractor to indemnify any Indemnitee for Losses resulting from the sole or active negligence or willful misconductofthe Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. ~~-.---~ ~ ~ As set-forthinPalo-AitoMunicipal Code section 2.30.510, Contractor certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Contractor acknowledges that it has read and understands the provisions of Section 2.30.510 ofJhe Palo Alto Municipal Cede relating to Nondiscrimination Requirements and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. On or before the Execution Date, Contractor shall provide City with evidence that it has obtained insurance and Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Failure to do so shall be deemed a material breach of this Construction Contract. SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract based upon the stated experience and qualifications of the Contractor and its subcontractors set forth in Contractor's Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co-tenancy shall result in changing the control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. 5 Rev. August3,2010 Contract C11138321 SPENCON.DOC SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed serv~d on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (iv) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copyto:~ City of Palo Alto Public Works Operations 3201 East Bayshore Road Palo Alto, CA 94303 Attn: Matt Raschke Or o City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney's Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be delivered personally or sent by certified mail. 6 Contract C11138321 SPENCON.DOC Rev. August 3, 2010 All notices, demands, requests or approvals from City to Contractor shall be addressed to: Spencon Construction, Inc. P.O. Box 1220 Danville, CA 94526 Attn: Steve Stahl 13.3 Change of Address. In the event of any change of address, the moving party shall notify the other party of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. ~ SECTION 14 DISPUTE RESOLUTION. 14.1 Resolution of Contract Disputes. Contract Disputes shall be resolved by the parties in accordance with the provisions of this Section 14, in lieu of any and all rights under the law that either party have its rights adjudged by a trial court or jury. All Contract Disputes shall be subject to the Contract Dispute Resolution Process set forth in this Section 14, which shall be the exclusive recourse of Contractor and City for such Contract Disputes. 14.2 Resolution of Other Disputes. 14.2.1 Non-Contract Disputes. Contract Disputes shall not include any of the following: (i) Penalties or forfeitures prescribed by statute or regulation imposed by a governmental agency; (ii) Third party tort claims for personal injury, property damage or death relating to any Work performed by Contractor or its Subcontractors or Sub- subcontractors of any tier,; (iii) False claims liability under California Government Code Section 12650, et. seq.; (iv) Defects in the Work first discovered by City after Final Payment by City to Contractor; (v) Stop notices; or (vi) The right of City to. specific performance or injunctive relief to compel performance of any provision of the Contract Documents. 14.2.2 Litigation, City Election. Matters that do not constitute Contract Disputes shall be resolved by way of an action filed in the Superior Court of the State Of California, County of Santa Clara, and shall not be subject to the Contract Dispute Resolution Process. However, the City reserves the right, in its sole and absolute discretion, to treat such disputes as Contract Disputes. Upon written notice by City of its election as provided in the preceding sentence, such dispute shall be submitted by the parties and finally decided pursuant to the Contract Dispute Resolution Process in the manner as required for Contract Disputes, including, without limitation, City's right under Paragraph 14.4.2 to defer resolution and final determination until after Final Completion of the Work. 7 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC 14.3 Submission of Contract Dispute. 14.3.1 By Contractor. Contractors may commence the Contract Dispute Resolution Process upon City's written response denying all or part of a Claim pursuant to Paragraph 4.2.9 or 4.2.1 0 of the General Conditions. Contractor shall submit a written Statement of Contract Dispute (as set forth below) to City within seven (7) Days after City rejects all or a portion of Contractor's Claim. Failure by Contractor to submit its Statement of Contract Dispute in a timely manner shall result in City's decision by City on the Claim becoming final and binding. Contractor's Statement of Contract Dispute shall be signed under penalty of perjury and shall state with specificity the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the asserted effect on the Contract Sum and the Contract Time. The Statement of Contract Dispute shall include adequate supporting data to substantiate the disputed Claim. Adequate supporting data for a Contract Dispute relating to an adjustment of the Contract Time shall include both of the following: (i) All of the scheduling data required to be submitted by Contractor under the (ii) . Contract Documents to obtain extensions of time and adjustments to. the Contract Time and A detailed, event-by-event description of the impact of each event on completion of Work. Adequate data to support a Statement of Contract Dispute involving an adjustment of the Contract Sum must include both of the following: (a) A detailed cost breakdown and (b) Supporting cost data in such form and including such information and other supporting data as required under the Contract Documents for submission of Change Order Requests and Claims. 14.3.2 By City. City's right to commence the Contract Dispute Resolution Process shall arise at any time following City's actual discovery of the circumstances giving rise to the Contract Dispute. City asserts Contract Disputes in response to a Contract Dispute asserted by Contractor. A Statement of Contract Dispute submitted by City shall state the . events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the damages or other relief claimed by City as a result of such events. 14.4 Co '"'tract Dispute Resolution Process. . The parties shall utilize each of the following steps in the Contract Dispute Resolution Process in the sequence they appear below. Each party shall participate fully and in good faith in each step in the Contract Dispute Resolution Process, and good faith effort shall be a condition precedent to the right of each party to proceed to the next step in the process. 14.4.1 Direct Negotiations. DeSignated representatives of City and Contractor shall meet as soon as possible (but not later than ten (10) Days after receipt ofthe Statement of Contract Dispute) in a good faith effort to negotiate a resolution to the Contract Dispute. Each party shall be represented in such negotiations by an authorized representative with full knowledge of the details of the Claims or defenses being asserted by such party in the negotiations, and with full authority to resolve such Contract Dispute then and there, subject only to City's obligation to obtain administrative and/or City Council approval of any agreed settlement or resolution. If the Contract Dispute involves the assertion of a right or claim by a Subcontractor or Sub-subcontractor, of any tier, against Contractor that is in turn being asserted by Contractor against City ("Pass- Through Claim"), then the Subcontractor or Sub-Subcontractor shall also have a 8 Rev. August 3, 2010 ContractC11138321 SPENCON.DOC representative attend the negotiations, with the same authority and knowledge as described above. Upon completion of the meeting, if the Contract Dispute is not resolved, the parties may either continue the negotiations or any party may declare negotiations ended. All discussions that occur during such negotiations and all documents prepared solely for the purpose of such negotiations shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.2 Deferral of Contract Disp!Jtes. 14.4.3 Following the completion of the negotiations required by Paragraph 14.4.1, all unresolved Contract Disputes shall be deferred pending Final Completion of the Project, subject to City's right, in its sole and absolute discretion, to require that the Contract Dispute Resolution Process proceed prior to Final Completion. All Contract Disputes that have been deferred until Final Completion shall be consolidated within a reasonable time after Final Completion and thereafter pursued to resolution pursuant to this Contract Dispute Resolution Proce~s. The parties can continue informal negotiations of Contract Disputes; provided, however, that such informal negotiations shall not be alter the provisions of the Agreement deferring final determination and resolution of unresolved Contract Disputes until after Final Completion. Mediation. If the Contract Dispute remains unresolved after negotiations pursuant to Paragraph 14.4.1, the parties shall submit the Contract Dispute to non-binding mediation before a mutually acceptable third party mediator . . 1 Qualifications of Mediator. The parties shall endeavor to select a mediator who is a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in mediating public works construction disputes. In addition, the mediator shall have at least twenty (20) hours of formal training in mediation skills . . 2 Submission to Mediation and Selection of Mediator. The party initiating mediation of a Contract Dispute shall provide written notice to the other party of its decision to mediate. In the event the parties are unable to agree upon a mediator within fifteen (15) Days after the receipt of such written notice, then the parties shall submit the matter to the American Arbitration Association (AAA) at its San Francisco Regional Office for selection of a mediator in accordance with the AAA Construction Industry Mediation Rules . . 3 Mediation Process. The location of the mediation shall be at the offices of City. The costs of mediation shall be shared equally by both parties. The mediator shall provide an independent assessment on the merits of the Contract Dispute and recommendations for resolution. All discussions that occur during the mediation and all documents prepared solely for the purpose of the mediation shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.4 Binding Arbitration. If the Contract Dispute is not resolved by mediation, then any party may submit the Contract Dispute for final and binding arbitration pursuant to the provisions of California Public Contract Code Sections 10240, et seq. The award of the arbitrator therein shall be final and may be entered as a judgment by any court of competent jurisdiction. Such arbitration shall be conducted in accordance with the following: .1 Arbitration Initiation. The arbitration shall be initiated by filing a complaint in arbitration in accordance with the regulations promulgated pursuant to California Public Contract Code Section 10240.5. 9 Rev.August3,2010 Contract C11138321 SPENCON.DOC .2 Qualifications of the Arbitrator. The arbitrator shall be approved by all parties. The arbitrator shall be a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in arbitrating public works construction disputes. In addition, the arbitrator shall have at least twenty (20) hours of formal training in arbitration skills. In the event the parties cannot agree upon an arbitrator, the provisions of California Public Contract Code Section 10240.3 shall be followed in selecting an arbitrator possessing the qualifications required herein . . 3 Hearing Days and Location. Arbitration hearings shall be held at the offices of City and shall, except for good cause shown to and determined by the arbitrator, be conducted on consecutive business days, without interruption or continuance . . 4 Hearing Delays. Arbitration hearings shall not be delayed except upon good cause shown . . 5 Recording Hearings. All hearings to receive evidence shall be recorded by a certified stenographic reporter, with the costs thereof borne equally by City and Contractor and allocated by the arbitrator in the final award . . 6 Limitation of Depositions. The parties may conduct discovery in accordance with the provisions of section 10240.11 of the Public Contract Code; provided, however, that depositions shall be limited to both of the following: (i) Ten (10) percipient witnesses for each party and 5 expert witnesses per party. Upon a showing of good cause, the arbitrator may increase-the number of permitted depositions. An individual who is both percipient and expert shall, for purposes of applying the foregoing numerical limitation only, be deemed an expert. Expert reports shall be exchanged prior to receipt of evidence, in accordance with the direction of the arbitrator, and expert reports (including i"nitial and rebuttal reports) not so submitted shall not be admissible as evidence . . 7 Authori,ty of the Arbitrator. The arbitrator shall have the authority tQ hear dispositive motions and issue interim orders and interim or executory awards . . 8 Waiver of Jury Trial. Contractor and City each voluntarily waives its right to a jury trial with respect to any Contract Dispute that is subject to binding arbitration in accordance with the provisions of this Paragraph 14.4.4. Contractor shall include this provision in its contracts with its Subcontractors who provide any portion of the Work. 14.5 Non-Waiver. Participation in the Contract Dispute Resolution Process shall not waive, release or compromise any defense of City, including, without limitation, any defense based on the assertion that the rights or Claims of Contractor that are the basis of a Contract Dispute were previously waived by Contractor due to Contractor's failure to comply with the Contract Documents, including, without limitation, Contractor's failure to comply with any time periods for providing notice of requests for adjustments of the Contract Sum or Contract Time or for submission of Claims or supporting documentation of Claims. 10 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC SECTION 15 DEFAULT. 15.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract. 15.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be.later than ten (10) Days after receipt of such written notice. SECTION 16 CITY'S RIGHTS AND REMEDIES. 16.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 15, then City may pursue any remedies available under law or equity, .. -.. -·including, without limitation;-the following: 16.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 16.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 16.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto,suspend all or any portion of this Construction Contract for as long a per.iod of time as City determines, in its sole discretion, appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 16.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 15. City's election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. 16.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. 11 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC 16.1.6 Additional Provisions. All of City's rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall .not waive the City's authority to designate other breaches as material nor limit City's right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City's determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 16.2 Delays by Sureties. Without limiting to any of City's other rights or remedies, City has the right to suspend the performance of the Work by Contractor's sureties in the event of any of the following: (i) The sureties' failure to begin Work within a reasonable time in such manner as to insure full compliance with the Construction Contract within the Contract Time; (ii) The sureties' abandonment of the Work; (iii) If at any time City is of the opinion the sureties' Work is unnecessarily or unreasonably delaying the Work; ~~~(iv~}-c-cc The sureties' violatior:l~of any terms of the Construction Contract; (v) The sureties' failure to perform according to the Contract Documents; or (vi) The sureties' failure to follow City's instructions for completion of the Work within the Contract Time. 16.3 Damages to City. 16.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor's default under the Contract Documents. 16.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor's default under the Contract Documents, City shall be entitled to withhold monies otherwise payable to Contractor until Final Completion of the Project. If City incurs Losses due to Contractor's default, then the amount of Losses shall be dequcted from the amounts withheld. Should the amount withheld exceed the amount deducted, the balance will be paid to Contractor or its designee upon Final Completion of the Project. If the Losses incurred by City exceed the amount withheld, Contractor shall be liable to City for the difference and shall promptly remit same to City. 16.4 Suspension by City for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City's expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. 12 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC 16.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole by giving thirty {30} Days written notice to Contractor. The compensation allowed under this Paragraph 16.5 shall be the Contractor's sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. 16.5.1 Compensation. Following such termination and within forty-five {45} Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 16.5, City shall pay the following to Contractor as Contractor's sole compensation for performance of the Work: .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors and Sub-subcontractors for: {i} Demobilizing and {ii} Aeministering the close-out of its participation in the Project {including, without limitation, all billing and accounting functions, not including attorney or expert fees} for a period of no longer than thirty {30} Days after receipt of the notice of termination . . 3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. 16.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. 16.6 Contractor's Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: {i} Immediately discontinue the Work to the extent specified in the notice; {ii} Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; {iii} Provide to City a description, in writing no later than fifteen {15} days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; {iv} Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and {v} Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. 13 Rev. August3,2010 Contract C11138321 SPENCON.DOC SECTION 17 CONTRACTOR'S RIGHTS AND REMEDIES. 17.1 Contractor's Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 17.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of govemment, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City's issuance of a suspension notice issued either for cause or for convenience. 17.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor's intention to terminate the Construction Contract. -------17 .2~gamagescto-Gentractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 16.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 18 ACCOUNTING RECORDS. 18.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) final payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. 18.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 18 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many, enforce Contractor's obligation to provide access to City of its business and other records referred to in Section 18.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 19 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint venturers of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. 14 Rev. August 3, 2010 Contract C11138321 SPENCON.DOC SECTION 20 NUISANCE. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 21 PERMITS AND LICENSES. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 22 WAIVER. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. SECTION 23 GOVERNING LAW. --------This Gc:mstl'uction Contract shall be construed inaGcordance with and governed by the laws of the State of California. SECTION 24 COMPLETE AGREEMENT. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 25 SURVIVAL OF CONTRACT. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City's right to audit Contractor's books and records, shall remain in full force and effect after Final CQmpletion or any termination of the Construction Contract. SECTION 26 PREVAILING WAGES. ~ This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is funded one hundred percent (100%) by the City of Palo Alto. Or o The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations. Copies of these rates may be obtained at cost at the Purchasing office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 15 Rev. August3,2010 Contract C11138321 SPENCON.DOC 1777.5, 1810, and 1813 of the Labor Code. SECTION 27 NON APPROPRIATION. \ This Agreement 'is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take.precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 28 AUTHORITY. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. SECTION 29 ATTORNEY FEES. Each Party shall bear its own costs, including attorney's fees through the completion of mediation. If the claim or dispute is not resolved through mediation and in any dispute described in Paragraph 14.2, the prevailing party in any action brought to enforce the provision of this Agreement may recover its reasonable costs and attorney's fees expended in connection with that action. The prevailing party ----·-·-·shall b&ceRt~tled to recover an amount-equal to the fair market value of legal services provided by attorneys employed by it as well as any attorney's' fees paid to third parties. SECTION 30 SEVERABILITY. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. 16 Rev.August3,2010 Contract C11138321 SPENCON.DOC IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO D Purchasing Manager IZI City Manager APPROVED AS TO FORM: Senior Asst. City Attorney APPROVED: Public Works Director Contract C11138321 SPENCON.DOC 17 CONTRACTOR: SPENCON CONSTRUCTION, INC. By:, ___________ _ Name:, ______________________ ___ Title: ___________ _ Rev. August 3, 2010 BID DESCRIPTION ITEM 1 Sidewalk, 4" thick 2 Driveway, 6" thick 3 Integral sidewalk & curb & gutter 4 Integral driveway & curb & gutter 5 New ramp w\ detectable warning surface 6 Detectable warning surface only 7 Curb 8 Gutter 9 Asphalt pavement 10 Special saw cutting 11 Tree well frames & grates 12 Recycle concrete & asphalt 13 Traffic control 2010 -11 SIDEWALK REPLACE~ENT PROJECT BID QTY UNIT 23,450 SF 12,400 SF 860 LF 200 LF 20 EA 21 EA 510 LF 3,700 SF 2,410 SF 2,990 LF 10 EA 2,030 Ton 1 LS I IFB NO. 138321 BID SUMMARY Engineer's SPENCONI Estimate CONSTRUCTION, INC UNIT BID UNIT BID , , PRICE AMOUNT PRICE AMOUNT $9 $211,050 $7.50 $175;875.00 $10 $124,000 $8.20 $101,680.00 $70 $60,200 $63.00 $54;180.00 $74 $14,800 $64.00 $12;800.00 $1,800 $36,000 $1,700 $34,000.00 $400 $8,400 $285.00 $5,985.00 $22 $11,220 $25.00 $12,750.00 $10 $37,000 $8.00 $29,600.00 $8 $19,280 $5.00 $12,050.00 $4 $11,960 $1.00 $2,990.00 $500 $5,000 $500.00 $5,000.00 $2 $4,060 $0.01 $20.30 $6,000 $6,000 $500.00 $500.00 BASE BID TOTAL: $548,970 $447,430.30 JJR CONSTRUCTION, INC. UNIT BID PRICE AMOUNT $6.95 $162,977.5() $9.00 $111,600.00 $61.00 $52,460.00 $74.50 $14,900.00 $1,200 $24,000.00 $300.00 $6,300.00 $16.00 $8,160.00 $9.00 $33,300.00 $8.00 $19,280.00 $3.50 $10,465.00 $400.00 $4,000.00 $0.01 $20.30 $500.20 $500.20 $447,963.00 ATTACHMENT C STAR GOLDEN BAY CONSTRUCTION, INC. CONSTRUCTION, INC. UNIT BID UNIT BID PRICE AMOUNT PRICE AMOUNT $7.50 $175,875.00 $7.50 $175,875.00 $8.00 $99,200.00 $8.50 $105,400.00 $64.00 $55,040.00 $59.00 $50,740.00 $65.00 $13,000.00 $65.00 $13,000.00 $1,500 $30,000,00 $1,725 $34,500.00 $300.00 $6,300.00 $350.00 $7,350.00 $18.00 $9,180.00 $22.25 $11,347.50 $8.00 $29,600.00 $8.50 $31,450.00 $7.00 $16,870.00 $9.75 $23,497.50 $2.00 $5,980.00 $3.50 $10,465.00 $400.00 $4,000.00 $350.00 $3,500.00i $1.00 $2,030.00 $0.01 $20.301 $3,000 $3,000.00 $3,244 $3,244.00! $450,075.00 $470,389.30 page 1 of2 BID DESCRIPTION ITEM 1 Sidewalk, 4" thick 2 Driveway, 6" thick 3 Integral sidewalk & curb & gutter 4 Integral driveway & curb & gutter 5 New ramp w\ detectable warning surface 6 Detectable warning surface only 7 Curb 8 Gutter 9 Asphalt pavement 10 Special saw cutting 11 Tree well frames & grates 12 Recycle concrete & asphalt 13 Traffic control 2010 -11 SIDEWALK REPLACEMENT PROJECT BID QTY UNIT 23,450 SF 12,400 SF 860 LF 200 LF 20 EA 21 EA 510 LF 3,700 SF 2,410 SF 2,990 LF 10 EA 2,030 Ton 1 LS IFB NO. 138321 BID SUMMARY I NOR-CAL SPOSETO I CONCRETE ENGINEERING, INC. UNIT BID UNIT BID PRICE AMOUNT PRICE· AMOUNiI" $6.30 $147,735.00 $9.10 $213,395.00 $7.30 $90,520.00 $10.40 $128,960.00 $66.15 $56,889.00 $78.00 $67,080.00 $77.15 $15,430.00 $88.00 $17,600.00 $1,380 $27,600.00 $1,540 $30,800.00 $595.00 $12,495.00 $460.00 $9,660.00 $25.35 $12,928.50 $22.00 $11,220.00 $10.50 $38,850.00 $11.30 $41,810.00 $13.00 $31,330.00 $9.10 $21,931.00 $3.75 $11,212.50 $3.50 $10,465.00 $2,095 $20,950.00 $460.00 $4,600.00 $13.25 $26,897.50 $1.00 $2,030.00 $12,675 $12,675.00 $6,800 $6,800.00 BASE BID TOTAL: $505,512..50 $566,351.00 FBD VANGUARD CONSTRUCTION, INC. UNIT BID PRICE AMOUNT $8.70 $204,015.00 $9.70 $120,280.00 $82.00 $70,520.00 $87.00 $17,400.00 $2,345 $46,900.00 $332.00 $6,972.00 $30.00 $15,300.00 $9.70 $35,890.00 $9.50 $22,895.00 $4.00 $11,960.00 $505.00 $5,050.00 $2.00 $4,060.00 $16,000 $16,000.00 $577,2.42..00 ATTACHMENT C SUAREZ & MUNOZ BCI CONSTRUCTION, INC. BUILDERS, INC. UNIT BID UNIT BID PRICE AMOUNT: PRICE AMOUNT $8.50 $199,325.00 $7.79 $182,675.50 $11.50 $142,600.00 $8.50 $105,400.00 $82.00 $70,520.00 $7o.a3 $60,741.80 $99.00 $19,800;00 $108.50 $21,700.00 $1,150 $23,000.00 $1,400 $28,000.00 $350.00 $7,350.00 $904.76 $18,999.96 $20.00 $10,200.00 $44.31 $22,598.10 $12.50 $46,250.00 $28.80 $106,560.00 $11.50 $27,715.00 $8.00 $19,280.00 $3.00 $8,970.00 $6.00 $17,940.00 $700.00 $7,000.00 $1,000 $10,000.00 $20.00 $40,600.00 $12.00 $24,360.00 $15,000 $15,000.00 $28,000 $28,000.00 $618,330.00 $646,2.55.36 page 2 of2 TO: HONORABLE CITY COUNCIL 7 FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS ,DATE: NOVEMBER 22, 2010 CMR:421:10 REPORT TYPE: CONSENT SUBJECT: Recommendation from the Finance Committee for Adoption of Refuse Enterprise Fund Budget Amendment Ordinance and Recommendation from Finance Committee to Accept Landfill Operations Alternative No. 1 to Quickly Fill the Remaining Landfill Capacity While Retaining Existing Composting Operations and, Thereafter, Convert the Area to Parkland (Open Space) as Fast as Possible EXECUTIVE SUMMARY On October 19, 2010, the Finance Committee unanimously recommended a "Fast Fill" option (Option 1) for the Palo Alto Landfill. Option 1 includes lifting the existing ban on commercial refuse disposal and temporarily sending Palo Alto's curbside collected garbage to the landfill instead of the Sunnyvale Materials Recovery and Transfer (SMaRT®) Station. The result of these actions will exhaust the remaining capacity at the landfill as quickly as possible. The primary purposes of the "Fast Fill" are to rapidly eliminate the ongoing cost burden oflandfill operations on refuse collection rates and to allow the landfill to be converted to public park/open space sooner. Staff expects "Fast Fill" Option I to completely fill the remaining landfill capacity by the end of 2011.1 The issue of funding future park improvements on the closed landfill open space is no being addressed in this report and will be discussed in a larger policy framework relating to the overall General Fund infrastructure budget and funding backlog. RECOMMENDATIONS Staff recommends that Council approve the attached Budget Amendment Ordinance (BAO) (Attachment C) for the Refuse Enterprise Fund and accept the Finance Committee's recommendation to quickly fill the remaining landfill capacity and remove the current ban on commercial refuse disposal, while retaining existing composting operations, and thereafter convert the area to parkland/open space as fast as possible. On July 20, 2010, the Finance Committee discussed and recommended approval of a reduction of landfill operating days from 7 days per week to 5 days per week. This proposed schedule was I Final Landfill airspace depletion is not a date-certain event. It is only estimated based on aerial surveys, previous depletion rates, and expected tonnages from curbside collection. CMR:421:10 Page 1 of4 estimated to reduce landfill operating expenses by approximately $250,000 per year by elimination of two FTE's. Staff action on the proposed schedule change was placed on hold following Council's August 5, 2010 directive to prepare comprehensive recommendations on landfill and composting operations for October. However, the Refuse Fund BAD approved on September 20, 2010 did include the expense reduction for the landfill schedule change. That expense reduction, along with other adjustments, must now be reversed with a new BAD included for approval as Attachment C. DISCUSSION Four options for landfill closure are presented in Attachment A (CMR.:38I:I0). Staff and the Finance Committee recommended Option No.1, the "Fast Fill" option. "Fast Fill" has several benefits. First, it most effectively advances current Council policy of expeditiously returning the landfill to parkland as reflected in the Baylands Master Plan and the State-approved closure grading plan. Further, it is most cost effective and does not require any modification to the existing landfill rent and' amortization schedule. Finally, it has the least impact on current operations, such as windrow composting, use of landfill by City crews and use of landfill by the . public. The major downside associated with Option 1 is that by diverting the curbside g~bage from the SMaRT® Station to the landfill, there will be a temporary drop in the City's overall diversion rat~. This is due to the fact that SMaRT® Station is able to recover additional recyclables from the curbside refuse stream that the City's landfill operations are unable to recover. Notwithstanding this anticipated dip, the City's overall diversion rate is still expected to be well above the 50% rate required by AB 939 for 2010 and 2011. However, it may fall below the Zero Waste Operational Plan goal of 73% diversion by 2011. Last year, Palo Alto already achieved that goal with a 74% diversion rate. In order to implement the "Fast Fill" option, landfill operations must continue on a 7-day per week schedule because curbside collection is operated 6 days per week, and because the goal of this option is to fill the landfill as soon as possible. Therefore, the proposed expense reduction of $250,000 will not be realized by eliminating two positions. However, it is offset by an equal amount related to savings from not sending curbside waste to the SMaRT® Station. A secondary way of achieving "Fast Fill" is to lift the current ban on receipt of commercial refuse at the Palo Alto landfill. Staff estimates that lifting the ban on commercial refuse disposal at the landfill will generate additional revenue of approximately $300,000 for fiscal year (FY) 2011. This additional revenue will allow the funding for construction of CIP RF -10003 (Drying Beds, Material Storage and Transfer Area) to be reinstated for FY 2011. The attached BAD therefore reverses the changes to CIP RF-10003 made on September 20,2010. The facility to be created under CIP RF-I0003 will be needed as soon as the landfill ceases accepting all refuse for disposal. Therefore, the new facility will be needed sooner than previously anticipated with the "Fast Fill" option. It is important to note that the 9-acre area for a potential Anaerobic Digestion (AD) Facility is already very close to the permitted final grading plan. It is nearly already filled with garbage that would need to be excavated and relocated to provide a level pad for the facility. Staff anticipates that the fast fill option would not have a major impact on the amount of waste that would need to be moved if Palo Alto elects to move ahead with a new AD Facility. Costs associated with removal of the added waste would be a very small percentage of the overall project cost. CMR:421:1O Page2of4 The existing composting facility will continue to operate using contracted grinding services and the existing City-owned grinding machine. The existing City-owned grinder will not be completely refurbished as previously planned (CMR 304: 10). Fleet Services will attempt to make minimal in-house repairs to the existing grinder so that it may be operational again and further reduce the need for contract grinding services. , Acceptance of compostable waste materials will cease when the landfill stops accepting refuse for burial. The final windrows of compost will require processing for approximately six months beyond that date. At the September 20, 2010 Council meeting, Council approved reducing the Zero Waste outreach budget by $246,000, to offset revenue that would not be realized by enacting the Hard- to-Serve rate, or the six percent rate increase for the 20-gallon minican. Upon review, the remaining Zero Waste budget is already encumbered in contractual services for the remainder of FY 2010 (a list of encumbered contracts is included as Attachment D). Therefore, staff is t;ecommending an additional $100,000 reduction in the SMaRT® Station budget, and $146,000 in solid waste permitting contractual services. These changes are reflected in the attached BAO. Finally, the Refuse Fund cost of service study is in its final stages of completion. Staff anticipates returning to the Finance Committee in late January 2011 or early February 2011 to begin a comprehensive discussion on the health of the fund, and stabilizing revenue and rates. Changes to the Municipal Fee Schedule in the attached BAO are necessary to restore the acceptance of commercial refuse disposal at the landfill. These fees are the first municipal fees to be imposed since the passage of Proposition 26, which places additional requirements on certain types of State and local fees and charges. Staff has reviewed the proposed fees and charges and concluded that the updated fees do not constitute a tax as defined in Proposition 26. A finding that these fees are in compliance with the newly passed Proposition 26 has been included in the BAO. RESOURCE IMPACT The recommended actions reduce the operational costs of the landfill and minimize the cost of processing curbside yard waste. The recommended actions also minimize the costs over a 5-year budget forecast. As a result of the proposed budget amendments, the Refuse Fund Rate Stabilization Reserve (RSR) is expected to increase by $389,648. The Rate Stabilization Reserve is projected to remain in a deficit position of $5,174,493. As previously reported,. the deficit position is primarily due to the recognition of the landfill postclosure liability as required by accounting rules, and operating losses incurred over the past two years. It is anticipated that the Rate Stabilization Reserve will return to a positive balance in future years under a subsequent rate structure to be determined after a cost of service study (currently in progress) is conducted and an analysis of the refuse rate structure is completed. State regulations require the Refuse Fund to provide financial assurance for landfill closure, maintenance, and corrective action costs. Consequently, the Refuse Fund is required to maintain a cash balance of $6.7 million. As of November 15,2010, the Refuse Fund cash balance is $9.2 million. Staff projects that the cash balance in FY 2011 will be sufficient to cover the State CMR:421:10 Page 3 of4 landfill closure funding requirements. Staff will be seeking permission from the State to use a portion of the cash reserve for the landfill closure CIP. The Refuse Fund will receive $590,648 from the Vehicle Replacement and Maintenance Fund for a refund of replacement charges previously paid from the Refuse Fund to the Vehicle Replacement and Maintenance Fund for landftll and compo sting equipment that will not be replaced. This figure is reflected in the RSR discussed above. As a result, the undesignated, unreserved portion of fund balance of the Vehicle Replacethent and Maintenance Fund will decrease by $590,648 to $2,616,352. POLICY IMPLICATIONS The recommended actions are consistent with existing Council policies set forth in the Baylands - Master Plan. The recommended action may result in a temporary decrease in the City's waste diversion goals, but the City is not expected to fall below the 50% goal required by AB 939. ENVIRONMENTAL REVIEW The recommended actions are related to the ongoing operation of existing facilities and do not constitute a project under the California Environmental Quality Act (CEQA). Traffic impacts to t4~ existing lan<l:til! were previously analyzed in the Mitigated Negative Declaration approved for the new Green Waste contract. ATTACHMENTS Attachment A: CMR:381: 1 0 Attachment B: Finance Committee Meeting Minutes from October 19, 2010 Attachment C: Budget Amendment Ordinance Attachment D: List of Existing Encumbered Zero Waste Outreach Contracts PREPARED BY: .. ~ ~RASCHKE Senior Engineer . DEPARTMENT HEAD: CITY MANAGER APPROVAL: (;..(}A ENE '~/ City Manager . CMR:421:10 Page 4 of4 TO: ATTN: FROM: DATE: ATTACHMENT A City of Palo Alto '" City Manager's Report HONORABLE CITY COUNCIL FINANCE COMMITTEE CITY MANAGER OCTOBER 19, 2010 DEI> ARfMENT: PUBLIC WORKS CMR:381:10 REPORT TYPE: ACTION SUBJECT: Report on Options. for the Future of Landfill and Composting Operations in Palo Alto and Staff Recommendation to Accept Landfill Operations Option No. Ito Quickly Fill the Remaining Landf'Ill Capacity While Retaining Existing Composting Operations and, Thereafter, Convert the Area to Parkland as Fast as Possible EXECUTrvES~Y On August 5, 2010, Council directed staff to return to Council with a comprehensive cost analysis and timeframe for closing the Byxbee Park landfill and converting the area to parkland. In addition, Council directed staff to report back on the financial viability of the current windrow composting operation sited on the landfill. Lastly, this year the Refuse Fund has been particularly impacted resulting in a projected Rate Stabilization Reserve deficit of approximately $5.6 million This deficit is offset by the reserve for landfill closure but that reserve is required by State law to be kept at a sufficient level to fund the landfill's eventual closure. While part of this impact is due to the recession and reduces revenues due to increased waste stream diversion rates, it is also largely driven by legacy costs associated with maintaining two parallel waste disposal operations: the City's own landfill operations on the one hand, and the SMaRT Station and Kirby Canyon landfill contractual commitments on the other hand. Given the complexity of these issues, on October 4,2010, the Council voted to refer the matter to the Finance Committee for initial discussion. This report presents four options for closing the landfill and analyzes the associated cost impacts to the Refuse Fund. Staff concludes that the most cost ~ffective manner of closing the landfill is a "fast fill" option (Option 1) which would completely fill the remaining landfill capacity by the end of 2011. This report also presents updated compost facility cost information that shows the compo sting operation at our landfill, though not profitable, is less expensive than the option of sending curbside collected yard trimmings to SMaRT. This report does not address the issue of funding future park improvements to the closed landfill open space as that is best discussed in a larger policy framework relating to the overall General Fund infrastructure budget and funding backlog. CMR:381:10 Page 1 of8 RECOMMENDATIONS Staff recommends that the Finance Committee recommend to the full Council to accept "Landfill Operations Option No.1 to quickly fill the remaining landfill capacity, while retaining existing compo sting operations and thereafter convert the area to parkland as fast as possible. BACKGROUND At the meeting on August 5, 2010, Council passed the following motion: Staff to return in October 2010 with all options on com pasting and include all options until the close of the landfill in 2012 and to advise Council if selling compost is profitable and to include Staff costs in the total costs Later in the meeting on August 5, 2010 after awarding a contract to Alternative Resources, Inc. for an Energy/Compost Feasibility Study, Council made the following related motion: Staff to return in October 2010 with afirst cut analysis of Refuse Fund costs, closure and rent, and a final cut by January 24, 2011 with a report on a timeframe for closing of the landfill and rebuilding of the park with costs. Background on Commercial Refuse Ban - A commercial garbage ban was implemented by Council on January 12,2009 when a motion passed containing the following provision: "The City shall suspend accepting commercial garbage at the Palo Alto dump while awaiting City Council action on the recommendations of the Blue Ribbon Task Force on Composting (BRTF). " The landfill ban was implemented on March 1, 2009. The recommendations from the BRTF were presented to Council on October 19, 2009 (CMR:402:09). Council did not lift the commercial waste ban at that time. Staff returned to Council on AprilS, 2010 (CMR: 165: 10) with a recommendation that included the resumption of commercial garbage acceptance at the landfill. Council elected to keep the ban in place pending additional discussion regarding the feasibility of an anaerobic digestion facility at the landfill. Background on Landfill Closure Date -On September 20, 2010 Staff presented a landfill capacity update report (CMR 349:10) that indicated that the landfill will reach capacity in mid 2015 assuming that the commercial ban remains in place during the life of the landfill and that the landfill would also change operations to only 5 days per week. CMR 349: 1 0 ,further discussed that because of the commerCial ban, meant to preserve options for a potential anaerobic digestion facility, the rate of refuse filling has slowed considerably within the last year and a half. Based on this slower rate of fill, the landfill capacity could last until mid-2015. The landfill is currently entering a status commonly referred to as ''trickling closure". Trickling closure is defined in California Code of Regulations (CCR) Title 27 with the following text. If the average annual waste disposal rate to a solid waste landfill is reduced for two consecutive years to a rate equal to or less than thirty (30) percent of the average annual tonnqge rate during the previous ten years (exclusive of the minimum and maximum CMR.:381:10 Page 2 of8 tonnage years), the operator shall begin closure activities in accordance with the time frames specified in the closure plan unless granted an extension pursuant to {Title 27, Section 21110} (b) (3). The landfill's approved final closure plan estimated a refuse capacity depletion date of between March 2011 and September 2011 (estimated before the commercial ban was implemented). Therefore, in order to continue accepting refuse after 2011 the City would need to apply to the County and State for an -extension to the 2011 closure plan date. Background on Landfill Rent -In January 2007, followjng a recommendation from former City Auditor Sharon Erickson, Council approved a landfill rent schedule through 2021 for Phases IIA, , Band C (CMR 104:07).' The rent schedule contained the following components: back rent for closed landfill Phases ITA and IIB from 2004-2007; reduced rent for Phases IIA and liB through 2011 (the projected landfill closure date); full market value rent for Phase IIC through 2011 and a smoothing schedule that would minimize dramatic rate increases attributable solely to rent charges. Staff is currently preparing the closed phases for public access under approved Capital Improvement Program (CIP) project RF-llOOl (Landfill Closure). Additional rent beyond the existing smoothing schedule for Phases IIA and IIB would not be appropriate once these portions ofByxbee Park:. are opened to public access in summer 2011. DISCUSSION Composting -An updated cost analysis was prepared for the City's compo sting facility for fiscal year 2010 and is included in Table 1 below. Table 1 compares the cost of maintaining the compost option on site for a one year period with ,the costs of transporting the City's yard trimmings to SMaRT where they are then shipped to the compo sting facility at Z-Best. Remaining compost after landfill closure will be incorporated into to the landfill cap as vegetative cover material. Land rent to the General Fund ,at $100,000 per acre was not considered in the scenarios because the rent would be consistent with both scenarios (because the landfill has not closed). It should also be noted that the rent is a fixed cost that would be charged by the General Fund regardless if the Compo sting Facility were open or not. In addition, the cost that SMaR T® charges the City to process yard trimmings is the current rate based on the nominal amount of yard trimmings currently delivered by the City to SMaRT. This rate will likely increase if the City were to substantially increase delivery of yard trimmings tonnages. Therefore the costs in scenario 2 are subject to increase. Based on gate fees at Z-Best and transportation the actual costs to SMaRT for processing this quantity of yard trimmings would be, approximately $400,000 per year. ' CMR:381:10 Page 3 of8 T bl 1 C a e f F TtyC tC ompos mg aCII os ompanson Yard Yard Trimmings Option: Trimmings Scenario 2 Scenario 1 Continue Composting I " (based on Close composting and Description: actual FY 2010 send curbside yard trimmings to SMaRT Palo Alto Compost (current contract prices) Facility Data) Revenues Compost Sales $ 88,531 Yard Trimmings Gate Fees $388,256 Total Revenue $476,787 $0 Expenses Salaries and Benefits -(One full-time Heavy $ 110,000 Equipment Operator) Disability / Workers Comp (per SAP report) $ 23,104 Vehicle Equipment Maintenance $ 201,774 Vehicle Equipment Replacement Allocation $ 176,750 Screener Rental (PO 4610000075) $ 28,560 Wood Grinder Rental (PO 4610000079) $ 72,150 Compost Testing $ 2,500 SMaRT Gate rate at $14 per ton (current $170,478 contract) * Additional Transportation Costs to SMaRT $ 24,354 ($2.00/ton) Total Expenses $ 614,838 $194,832 Net Annual Operating Profit/(Loss) ($138,051) ($194,832) *This rate is the same rate charged to Mountain View and Sunnyvale and is a reduced rate that is subsidized by credit for recyclables delivered to SMaRT. As Palo Alto does not deliver recyclables there, it is expected that SMaRT would raise fees to Palo Alto in order to balance revenues and expenses for processing the additional yard trimmings. In the short term, considering that rent is fixed, the least expensive option to the City is to continue operating the City's compo sting facility in conjunction with the ongoing landfill operations. Overall, the operation does not generate a profit, but it minimizes cost to the Refuse Fund. CMR:381:1O Page 4 of8 Compost Grinder Engine Refurbish -On August 5, Council also deferred action on a contract with Peterson Power Systems to refurbish the composting grinder engine (CMR:304: 1 0) to permit a more thorough discussion on the economics of the existing compo sting operation on the Palo Alto landfill. The table above indicates that closing the compo sting operation on the Palo Alto landfill would result in greater costs to the Refuse Fund if the overall landfill rent is not considered part of the compo sting operational cost. Assuming that grinding services will only be required for 12 more months (the estimated landfill closure timeline under the "fast fill" option), refurbishing the grinder engine does not appear to be the most ecorlomical option to maintain the grinding operations for the compo sting program. Table 2 included as Attachment A illustrates the costs of the options analyzed in CMR 304:10. The table includes an updated cost for contract grinding services. Previous contract grinding service cost approximately $30,000 per month. The monthly cost has now dropped to under $18,000 since a recent contract award with a different vender and a more efficient grinder. Option 2 (contracting with a'private vendor) is clearly the lowest cost even if it took only 3 months to complete the refurbishment. Therefore, staff is no longer seeking approval of the Peterson Power Systems contract that was recommended in CMR:304: 10. Landfill Closure Timing Options .,.-Under current State regulations for landfills, staff has identified three feasible options that can affect when the landfill would cease accepting waste and close. A fourth option may also be viable, however, permits may be more difficult to obtain. Additionally, the fourth option is also not compatible with the recent Council decision to defer funding for ClP RF-10003 (Drying Beds, Material Storage and Transfer Area). The four options are shown in the table below. A timeline with decision pathways for each of these options is included as Attachment B, and a matrix of pros and cons for the four options is provided as Attachment C. CMR:381:10 Page 5 of8 Options No. 1 -Close the landfill ASAP. No.2....:: Continue current practices with interim decision points. No.3-Close Operations to the Public with interim decision points. No.4- Temporarily suspend all waste acceptance until a decision is made on the AD Facility. Date When Waste Acceptance would cease Mid to late 2011 2012-2015 2012-2015 2012-2015 Description Immediately lift commercial ban and divert curbside garbage from SMaRT to fill the landfill ASAP. '¥ . Continue current operations including the coriunercial ban until landfill capacity IS reached, then fill rapidly using diverted curbside garbage from SMaRT to complete the landfill if neede_4. Cease waste acceptance from all sources except internal City operations (Utilities, CSD, Public Works, etc.) then fill rapidly using diverted curbside garbage from SMaRT to complete the landfill if needed. Temporarily cease all waste acceptance, then fill rapidly usmg diverted curbside garbage from SMaRT to complete the landfill if needed. Estimated Impact to FY 2011 Refuse Fund Budget Savings of $750,000 Extra Cost of $250,0001. / Extra Cost of$100,000 Extra Cost of $300,000 1. Option 2 is the baseline FY 2011 landfill budget without the cost savings that were to be realized by reducing operations to only 5 days per week. . Conclusion on Landfill Options: As shown on Attachment B, all options keep the landfill site open long enough to complete the AD Feasibility Study scheduled for September 2011. Option No.1, staffs recommendation, has several benefits. First, it most effectively advances current Council policy of expeditiously returning the landfill to parkland as reflected in the Baylands Master Plan and the State-approved closure grading plan. Further, it is most cost effective and does not require any modification to the existing landfill rent and amortization schedule. Finally, it has the least impact on current operations, such as windrow compo sting, use of landfill by city crews and use of landfill by the pUblic. Additionally, in the short term, over the next year, this option both reduces expenses and provides some additional revenue to the refuse fund. The major downside associated with Option 1 is that by diverting the curbside garbage from SMaRT to the landfill, there will be a temporary drop in the City's overall diversion rate. This is due to the fact that SMaRT is able to recover additional recyclables from the curbside refuse stream that the City's landfill operations are unable to recover. Notwithstanding this anticipated dip, the City's overall diversion rate is CMR:381:10 Page 6 of8 still expected to be well above the rate required by AB 939 for 2010 and 2011. However, it may fall below the Zero Waste Operational Plan goalof73% diversion by 2011. Last year, Palo Alto already achieved that goal with a 74% diversion rate. It is important to note that the 9-acre area for a potential AD Facility is already very close to the permitted final grading plan. It is nearly already filled with garbage that would need to be excavated and relocated to provide a level pad for the facility. Staff anticipates that the fast fill option would not have a significant impact on the amount of waste that would need to be moved if Palo Alto elects to move ahead with a new Anaerobic Digestion Facility. OPTIONS TO STAFF RECOMMENDATION If the staff recommendation is not approved and disposal tonnages remain low through the end of 2010, then the Local Enforcement Agency (LEA) would likely issue a stipulated order to the City to either apply for a closure extension or follow the existing closure schedule contained within the approved Final Closure Plan. This could require the City to implement closure activities regardless of the grading plan status if a closure timeline extension is not obtained. Closing the landfill before the grading plan is completely filled will result in a deviation from the Landscape Architect's design (Hargreaves Associates) of Byxbee Park and will not be in .cQmpliance with the Baylands Master Plan. To properly allow any of the options that do not fill the remaining landfill capacity by the end of 20 11, Council would need to approve an application to extend the landfill closure date and reevaluate the land rent payments from the Refuse Fund to the General Fund. If closure date is not extended before the landfill has been fully filled then the City would need to contract with a consultant to redesign the landfill's final grading plan and verify that the new design would be seismically stable and could accommodate drainage to regulatory standards. The environmental control systems (gas and leachate collection systems) would also need to be reconfigured to accommodate the modifications. These changes would need to be incorporated in a revised closure plan that would need approvals from the County and State. A landscape architect would also need to review and approve the suitability of the altered plan for the parkland design and the Baylands Master Plan would also need to be amended. A CEQA analyses would also probably be needed. Close compo sting facility early -Closing the compo sting facility early is also an option for the City. Staff does not recommend this action because diverting the curbside collected yard trimmings would cost the City an additional $56,781 based on 2010 revenues, costs and tonnages (see Table 1 above). Closing the compo sting facility early may require a permit revision and would also require the purchase and importation of 15,000 to 20,000 cubic yards of compost for closure at an estimated one time cost of $200,000. RESOURCE IMPACT The recommended actions reduce the operational costs of the landfill and minimize the cost of processing curbside yard waste. The recommended actions also minimize the costs over a 5-year budget forecast CMR:381:10 Page 7 of8 POLICY IMPLICATIONS The recommended actions are consistent with existing Council policies. set forth in the Baylands Master Plan. The recommended action may result in a temporary decrease in the City's waste diversion goals, but the City is not expected to fall below the 50% goal required by AB 939. ENVIRONMENTAL REVIEW The recommended actions are related to the ongoing operation of existing facilities and do not constitute a project under the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A: Financial Analysis of Options for Continued Grinding Operations Timeline and Decision Pathways for the Four Landfill Options Matrix Showing Pros and Cons of the Four Landfill Options Attachment B: Attachment C: Ji[);;e~ PREPARED BY: MATTHEW A. RASCHKE Senior Engineer DEPARTMENT HEAD: ~CI CITY MANAGER APPROVAL: CMR:XXX:lO Page 8 of8 Grinder Option: Contract Costs Repair Cost Purchase Cost Lease Cost In-house maintenance Cost subtotal Estimated Salvage Value Total Cost Table 2 Financial Analysis of Options for Continued Grinding Ope~ations 1a 1b 2 3 Refurbish Refurbish Grinder Grinder Continue to New Engine Best Case: Worst Case: Contract Out 6 months to 3 months to fix 6 months to fix until Closure fix and permit $54,000 $108,000 $216,000 $108,000 $201,853 $201',853 $0 $237,179 $0 $0 $0 $0 $0 $0 $0 $0 $78,000 $78,000 $0 $78,000 $333,853 $387,853 $216,000 $423,179 ($150,000) ($150,000) ($40,000) ($150,000) $183,853 $237,853 $176,000 $273,179 4 New Grinder 6 months to obtain permit $108,000 $0 $400,000 $0 $36,000 $544,000 ($250,000) $294,000 Current Monthly Contract Cost: $18,000 Months needed for Contract Grinder Services 3 6 12 6 6 1. Assumes that grinding operations end when landfill ceases accepting waste. 2. Assumes that landfill life is shortened by diverting curbside collecte waste into the landfill. 10/19/2010 5 Used Grinder 6 months to obtain permit $108,000 $0 $250,000 $0 $36,000 $394,000 ($150,000) $244,000. 6 :iir Attachment A 6 Lease Grinder 6 months to obtain permit $108,000 $0 $0 $234,000 $36,000 $342,000 ($40,000) $302,000 6 Page 1 of 1 ~ ~ ~ > Landfill Operations Options ATTACHMENT B Timeline October 2010 May 2011 * Sept. 2011 Mid 2012 NO Immediately Divert waste from SMaRT ® Station lowering the overall AS 939 waste diversion rate slightly by 4to 5% r--....L_-." Mid to Lale ,-_-,-_-,2011 ~s lnitiale Grading Plan Revision. balot measure, CECA & permilling Develop plans for AD Fadlity. Project EIR. . amend Baylallds Master Plan, amend Comprehensive Plan, obtain revised landfill closure p'Jan approval , , r ' 2~\~ l I rl !, l.a1e ! I 1 :rl ~~I Mid 1 ! 2015 , , j 1 , .! ! :.' ~, ; ; \. } \" ........ _---------------------_ .. /./ Closure Extension Approved Initiale Grading Plan Revision, ballot measure, CECA & permilling Develop plans for AD Facilily. Projact EIR, amend Baylands Master Plan, amend Comprehensive Plan. obtain revised landfill closure plan approval Landfill dosur, construction inhograted with NJ Fadlity Development Option 3 Option 4 .. /'-"'-'-'D-;~~iof!;;;;-"'--'--'., //._. ___ .:§~~~;9.~"""'_'_<. .. , ,: Accepting Self-haul \ ;' Suspend \ Waste from 1he Public. \ ; Landfimng and \ Accept City ; ; lenninale City ! Operations Waste & 1 I Operations f =~ 'I ~-=-1 , ; i i , I 1 , ; , i ..----1_-, , ! , i L---,-_.....l i ! 1 1 , ; ~ .. Initiate Gracing I Plan Revision, ballot measure, CEQA & permilling ! i 1 I 1 i ! I. i t ! t i i " I ! j I 1 j ! i i Develop plans for NJ Facility. Project EIR. amend Baytands Hire contract setvicesto complete landfill using curbside garbage diverted fromSMaRTe 1 Inhiate Grading Plan Revision, bdot measure, CECA & permilling Develop plans for PJ:J Facility, Project ElR, amend Baylands i I, '.!. :.:. l I Master Plan, amend Comprehensive Plan, o obtait revised landfiU cIosw-e plan approval Master Plan, amend Comprehensive Plan, obtain revised landfill closure plan approval i,i II i , ! ! l, ' 1 l ! 1 i t i ! 1 1 ! ! ! f 1 ! 1 ! 1 1 ! ~ ! ! !, : 1 l " I, Lan~ ctosure construction integra"'" willi NJ F8cility Development Landfin closure consInrotion integrated with NJ Facility Development ,1 II ! ThiSi~:~~:~:::n~:s an .... ,1 i .. ", ThiSi~:i!~~:;:~~:n~S an i,; I. ThiSi~~!~~:;::::=S an .1.1 \.. ' additional landfill rent additional landfill rent additional landfill rent ....... _ .. _._ .... _ ..... _ ..... __ ._./ , ........ ______ ... _. __ ._ ..... _ ... _ .... ___ /i \ .. ,. _____ ..... __ .... _. _________ // Footnotes * Fmal N:J Facility Feasibility Study and DrattCECA Workplan Released Abbreviations AD -Anaerobic Digestion CEOA -California Environmental Quality Act EIR -Environmental Impact Report GHG -Greenhouse Gases LEA -Local Enforcement Agency LANDFILL OPERATIONS ALTERNATIVES for October 19,2010 Option: 1 2 I 3 4 Description: I Fast Fill (divert SMaRT waste) A Closure Extension NO 1 Request Needed 1-------------------------------------------- B Landfill Rent Schedule No change required I-;::FYu-:2~01 .. 1~E::-:s-;;tl~m:-:'a-:-:te-:;d-::C;-:o':"st=-+l· -------------------------------------------- C to Refuse Fund (only Landfill related revenues $3.6M 1 and costs) 1 ___________________________________________ _ D Aff t City 0 ti Provides only minimal time for transfer ec on pera ons facility development 1--::-----,--,-----:----:----1--------------------------------------------- E Regulatory Approval No permit revision required Time ___________________________________________ _ Continue As-Is (7-days per week) until Cllpilclty Is reached. YES Close Operations to the Public (City operations waste and curbside yardwaste onM YES Temporary Suspension of landfill Operations YES ------Needs-eiideiisiori-&-new------]-------Need's-eideiiision&-iiew------r------NeedseXiensioii-&:-riew------ _____________ !i..9!~~!!!~n!. ___________________________ ~.gE~!!_'!!.~!l_L _________________________ ~9!~~!!'~!:'L __________ _ $4.1 M Provides time for transfer facility development $4.4M $4.6M Provides time for transfer facility I Transfer facility for City operations development will not be ready in time ~i~~;~~:J.~;:.;.~:~~;.~:i~~I~~~~~~~~~~~~~~~~~~~t~~~~~~~~~I~-~~~~~~~~~~~~~~~~~~~~~~~~~~~ F Layoffs after regulatory None untit filling is complete None untit filling is complete 11/3rd layoff untit filling is complete I All except post-closure staff approval : !::::l~~~o~p~~~~g ~~~~~~~~~~~~~~~~~~;~~~~~~;~;r::~~~~!~:.;l~~~~~~~~~~:~~:::I:::~~~~~:~~~~:!~i:~:~~~~~:l~~~~~~~~~!~~~f!.~~~~~~~~ Grinder. Refurbishment Not recommended Recommended Recommended Not recommended Contract -CMR 304:10 ___________________________________________ _ J Estimated ti~eframe to Capacity filled by mid-late 2011 reach ca aCI ___________________________________________ _ ---2012-2(i1-5-depeiiding-OnA5---]----2(i12:261-5~de-pe-ridiiig-Oii-AO---r---201-2:2015deperidirig-Ori-AD--" _______________ ~!!.<2Lt!.ip.!.) ______________________________ .!!~P.!!!l!?n ______________________________ ~_E!!?l~~Q!l _____ " ________ _ Estimated timeframe K when parkland construction could begin Relative Impact on L potential 9 acre AD 2013 Highest Impact 1 Facility Site 1 ___________________________________________ _ Oplion-speclfic Comments: More landfill operational constraints due·10 more tonnage and more vehicles in last remaining (more limited) fill area. Mid 2013 at the earliest Medium Impact Variations: 1) Lift Commercial Ban or 2) apply for permit revision to reduce operations to 5 days per week that was approved by Finance Committee on 7/20/2010 Mid 2013 at the earliest Low Impact Mid 2013 at the earliest Lowest Impact Jt~ Regulatory approval may be difficult to obtain L-____________ ...L' ..... ________ ....... _ ... __ ...... ____ ........... ____ .. ___ ....... _ ...... .L. _______ ........... ---------.. --...... --...... --.... --...... ---.. --...... -----............ -........... ---.. -.. ----------.. --------... --.. -.. -.. -........... -..... ----~------.. --- Assumptions: . 1. All options assume that landfill would be filled to capacity as planned in the current Baylands Master Plan if an AD Facility is not feasible. 2. Options 3 and 4 would eventually require the diversion of SMaRT waste to complete grading plan per the current Baytands Master Plan. 3. Option 4 requires a contracted labor force and equipment to complete grading plan per the current Baylands Master Plan. 4. Operational changes that require a permit revision cannot be made until regulatory approval is obtained. Option 1 can be implemented at any time. 5. Option 2 uses a 7-day operation schedule to allow for an easier transition into a fast fill scenario with SMaRT waste if desired. 6. As of May 2010, approximately 100,000 cubic yards of waste would need to be excavated and relocated to prepare a 9 acre pad for an AD Facility 7. Based on the approved final landfill grading plan, if an AD facility is approved after closure then 122,000 cubic yards of waste would need to be excavated and relocated. Attachment C 8. Costs to prepare a site for a potential AD Facility are not included in any of the cost estimates shown (i.e. the cost to excavate and relocate covered and compacted garbage. 10/19/2010 Page 1 of 1 ~ ~ ~ ~ n FINANCE COMMITTEE ATTACHMENT B Regular Meeting October 19, 2010 Chairperson Chair Schmid called the meeting to order at 7:04 p.m. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California .. Present: Schmid (Chair), Espinosa, Klein, Scharff Absent: none 1. Oral Communications None. 2. Presentation and Discussion of R.A. Mr. Wiedemann & Associates City of Palo Alto Airport Business Plan Options and Community Valuation Analysis; Request for Council Input and Direction on Options; and Formation of an Airport Advisory Committee. Deputy City Manager, Steve Emslie said the Council directed Staff to explore and develop a business plan to take over the Santa Clara County (SCCo) airport lease prior to its termination in 2017. The first step was to review different business plan models and the economics of the plans. He introduced Randal Wiedemann of R.A Wiedemann & Associates, City Staff members Lalo Perez and Joe Saccio, and noted that members of the Joint Community Relations Committee (JCRC) who were involved in issues of the airport (PAO) were present. Randal Wiedemann qf R.A. Wiedemann & Associates gave a presentation on the City of P~lo Alto Business Plan Options and Community Valuation Analysis. He said the plan started in late 2008 and into 2009. 2008 was the base year used in the study that included a review of the SCCo management structure, the current facilities and services at the PAO, a baseline financial analysis, and different operating structures th,at were narrowed down to two options. He said a lease agreement would expire in 2017 between the City and scto along with two Fixed Based Operators' (FBO) leases that handled the operations and selling of fuel at 10119110 FIN 1 / selling of fuel at the PAD. All improvements made at the PAD in the past 50 years would be acquired by the City when the leases expired. The question was whether or not to accelerate the lease expiration prior to 2017 due to capital expenditures. The report included financial feasibility options and environment-sensitivity issues with the Baylands, National Wild Life Refuge issues, Byxbee Park and endangered species. The viewshed was important to the community in keeping the Bayland's view. There was a construction prohibition that stated "no additional fqcilities that would intensify the use of the PAD or significantly intrude into the open space." The City and users needed to consider whether to continue reinvesting in the facilities when repayments on investments would likely not happen. Leaseholders would make fewer improvements as 2017 drew closer. SCCo's tie-down rates and fuel flowage fees were higher than other airports which contributed to vacancies. The City did not have the expertise to run an airport and needed to examine different management structures used at other airports. There were economic impacts related to jobs, income, output, taxes, and the PAD's assets. The City had concerns of taking on a financial drain and needed a feasibility analysis to see if the PAD would have a financial impact on City resources. Airports generated strong reactions and the City wanted to foster good community relations with neighboring jurisdictions. Council Member Klein asked what changes had had transpired in the last year since the report was finalized. Mr. Wiedemann said there was a change in the projected inflation rate. The report used 4 percent that was projected over revenues and expenses and was closer to 2.5 percent, at this pOint. The increase in vacancy rate was consistent across the country whkh had SCCo concerned. He said aviation was first to get hit and the last to recover during economic crises. The deterioration of the facilities was also a concern. SCCo had planned to do an overlay on the runway in 2012 but was unsure if that was still on track. Chair Schmid asked if usage rates in activities had changed due to airport accidents and the recession. Mr. Wiedemann said airport accidents had no affect but there was a 30 percent drop in 2008-09 due to the economic climate. The FAA reported an 8.3 percent drop in aviation operations throughout certain airports Nationwide. Chair Schmid asked Mr. Wiedemann if he had rates for 2009-10. Mr. Wiedemann said 2009-10 rates were available but did not have them with him this evening. There was a decrease in 2008 from 2007. He said a single runway generally had an operation capacity of 200,000. PAD was in the 190's and 10119110 FIN2 ( and declined to 160's when the study was done. The PAO was opened 74 hours per week and operated by 2.5 people. Council Member Klein asked what SCCo annual overhead cost was versus the City's. Mr. Wiedemann said from a conservative side there was no difference and felt it could be done cheaper. Council Member Klein asked for figures. Mr. Wiedemann said the survey used lower numbers but the City Staff felt it would cost more. He said private operators had indicated the operating cost could be done cheaper than SCCo and would have greater savings in the labor. Council Member Klein asked if it was 5 percent or 95 percent cheaper. Mr. Wiedemann said it was closer to 35 to 40 percent due to not having a redundancy in private operations versus the public arena. sceo controlled 355 tie-downs and the FBO's controlled 85 hangers and 86 tie-downs. He said the PAO was at full capacity. Vice. Mayor Espinosa asked what the market would call for if changes were made in the construction prohibition. Mr. Wiedemann said hangers were in great demand and neighboring airports had a 2-year waiting list. Chair Schmid asked if it was possible to store half the amount of airplanes in hangers than in an equivalent area for tie-downs. . Mr. Wiedemann said yes, it was a compromise. Council Member Scharff asked where the new hangers would be placed. Mr. Wiedemann referred to the presentation's overhead map and pOinted to the lower area of where current hangers existed. Council Member Scharff asked if there would be a loss in tie-downs. Mr. Wiedemann said there would be. Administrative Services Division Deputy Director Joe Saccio asked how many additional hangers would fit in the area. 10119110 FIN3 Mr. Wiedemann said he thought 20 hangers but would need to verify the number. Council Member Scharff asked if tie-downs or hangers made more financial sense. Mr. Wiedemann said hangers were higher producers per square foot. He said in addition to the two master leases there were spaces subleased to other companies, flight schools, and flight clubs. The Capital Improvement Program (CIP) identified at the time was $3.5 million through 2013 for the FAA funding portion and $200,000 from local funding. Other related expenses were runway overlay, pavement maintenance, location of te'rminal building issues and taxiway modifications .. Council Member Klein said it was crucial to have a good runway and asked what the status of its repairs in 2012. ~ Mr. Wiedemann said it was being planned at the time of the report but did not know if that was still the case. Assistant Public Works Director Mike Sartor said SCCo's .5-year CIP anticipated starting the runway in 2012 but had indicated -in the last two-months they were unsuccessful in obtaining an FAA Grant and would be detained for another year. The earliest start date would be in 2013. Council Member Klein asked Mr. Wiedemann if he was aware of how FAA Grants were distributed. Mr. Wiedemann said the FAA had a certain amount of monies and grants were distributed according to a facility's priority needs. Council Member Klein asked if there would be an issue with the PAD getting a grant. . Mr. Wiedemann said he did not foresee a problem and it was a matter of the FAA coming up with the funds. The FAA paid 95 percent of the cost and responsible for safety issues. The PAD had an FAA tower with FAA people directly involved in the operations and knowledgeable of safety issues. SCCo Airports Assistant Director, Eric Petersen said an FFA Grant was moving forward for pavement management and repairs. He anticipated getting the grant next fall or early spring and construction would be underway by 2012 and would continue throughout the remainder of SCCo running the PAD. 10/19/10 FIN4 Mr. Wiedemann said aircraft storage was the largest revenue generator and the $506,728 was from tie-down space. FBO's had the least revenues. He said due to an upcoming reappraisal, an increase could begin in 2014-15. The study did not anticipate an increase in activities and kept the fuel flowage the same. SCCo currently charged 20 cent per gallon on fuel flowage. No change in transient revenue. A rental car agency terminated its services at the PAO causing a drop in other facility revenues. The total operating expense was $1,030,052 through 201.7, with a slight net operating income instituted a local share capital cost of $50,000. There was a negative total in net revenues of -$25,524. Council Member Klein said if expenditures remained the same, what would the difference be in cost to sign up the FBO operators for a 20 to 30-year lease instead of the estimated $134,000. Mr. Wiedemann said the hangers would be owned by the City in 2017. Leasing to FBQs would essentially be putting a middle mar) at the PAO, when the City could do all the leasing. The difference relative to the $134,000 was an estimate accrual .of $1.2 million in revenues from leases. Mr. Saccio said it was news to some Staff members that the FBO leases terminated along with the County leases earlier than 2017. The City, County, or FBO's could not merely walk away if early termination occurred. There could be a request to explore the FBO's outstanding depreciations or investments. Council Member Klein asked the City Attorney what could legally transpire with early termination of the leases. Senior Assistant City Attorney Grant KOlling said the FBOs could seek consideration from the County for the value in capital investments on premature opportunities in earning prophets earlier than 2017. The FBOs would take the issue up with the County and the County with the City which would fit into the equation. Chair Schmid needed clarification on base operating revenues regarding lease revenues from FBO's. Mr. Wiedemann said it was a ground lease or square footage lease for the acreage required for operation and not for the hangers. Chair Schmid asked what the difference was between lease revenue and aircraft storage. 10/19/10 FINS - Mr. Wiedemann said aircraft storage revenues were from aircraft owners that rented tie-down spi;3ces . . Chair Schmid said the PAO map was divided by a portion leased by FBOs and a portion by SCCo. Mr. Wiedemann said there would be no division when the leases expired. The City would own the PAO and its operation. Council Member Scharff needed clarification from legal and asked if the junior leases would expire upon termination of the lease. Mr. Kolling said yes, in terms of real estate bill. He said the 50-year contract did not have an interment provision and would have an affect on how the City negotiated options with the County. The FBO's had expectations of having investments through 2017 and early termination would affect their ground lease. FBOs would need to take up financial implications with the County. Council Member Scharff asked what legal rights would they have and the outcome. Mr. Kolling said it would affect all parties concern and would affect how the City managed the transition. Council Member Klein said the worse case scenario would be to allow the FBOs to stay until 2017 and the City may have to pay FBOs for the value of their improvements for the remainder of their stay until the takeover date in 2017. Mr. Wiedemann said the Long Term Baseline Forecasts results into 2018 reflected the operating revenues of $2.2million, expenses $1.2 million with total net revenues in the $700,000 range for the City. He said the capital expenses were matched by federal funds. The hangers would not be matched when the City took over because they were revenue producing and their maintenance would need to come from City funds. Council Member Klein asked about the FAA regulations and how the City could only use the profits for the PAO. The optimistic side plows the money back into the PAO. He asked if there were other ways the owners of the PAO was able to extract portions of the profits and stay on the good side of the FAA. Mr. Wiedemann said in keeping with the policy and revenue diversion, only costs could be extracted. A City employee could be working on airport things and charge it to the PAO and be paid back out of that. 10119110 FIN6 Chair Schmid asked if rental fees could be included. Mr. Wiedemann said typically not, unless every city-owned property paid rental fees. The FAA would need to' weigh in 'on that. He also stated that heis aware of one airport in Texas that was a franchise pays a franchise fee to the General Fund. Council Member Klein said one of the downside was Municipal airports could not go out of business. Mr. Wiedemann said that was dictated by FAA. Council Member Klein asked what would happen if the City started to lose money. Mr. Wiedemann said the City was committed. It was a legal issue and communities have tried to make that change. Council Member Klein asked if the FAA would require a city to continue running an airport that was losing $1 million a year from their general fund. Mr. Wiedemann said yes. It resulted from signing a grant assurance and a guarantee to fulfill an obligation. There was no end date for land purchases and 20-years for anything else. ' Council Member Klein questioned taking land out of the PAO for other uses. Mr. Wiedemann said it would require the FAA's approval. He said the PAO was full and did not see any revenue producing possibility. Council Member Klein asked about the 7.5 acres along Embarcadero Road. Mr. Wiedemann said the FAA would only grant permission if the City could show it would not be used for aeronautical purposes. Council Member Klein said he understood the theory, was not proposing anything, but questioned placing soccer fields on that land. Mr. Wiedemann said if there was any possibility for aeronautical use it would not be allowed. Administrative Services Department Director Lalo Perez said the FAA had a restriction reimbursement timetable of 6 years. If the City fronted monies from 10119110 FIN7 the General Fund, the monies would need to be recovered from the airport's operating profits within a 6-year period. Mr. Wiedemann said that was a relatively new proposition. He said every FAA regionoperated differently and everything needed to be verified with the FFA. He said there was a 691-page guide book, entitled: "Airport Compliance Manual," that covered the requirements for the FAA Grant. Mr. Wiedemann said the study included four different options regarding the financial production. He said they ran the figures on what the City would be giving up if the hangers were not developed. It was to look at cost only and not as a viable option. There would be a savings in labor in the City plus FBO management option. The 3rd Party Management Option was a hands-off option where the City did not want to be bothered in running the airport. Chair Schmid asked to project the City plus FBO management option. Mr. Wiedemann said there was not an option between 2012 and 2017 because there were two contracted FBOs through 2017. Chair Schmid questioned the $22 million in 2018. Mr. Wiedemann said it was due to the City's takeover and gaining ownership of the entire PAO. The City would be getting revenues from the facilities plus an FBO managing the facility. Council Member Scharff needed clarification on the $20 million. Mr. Wiedemann said the net for 2018 to 2037 was $20 million which included debt service. Mr. Saccio said the existing operations plus additional hangers was reflected in the net result of $20 million over time. Mr. Wiedemann said that was correct and the construction of cost of the hangers would be paid off. Council Member Scharff asked where was the additional money reflected in the construction of new hangers. Mr. Wiedemann said it was in post 2037 when the City no longer paid for the debt service. 10119110 FIN8 Council Member Klein said he could not see where that was an incentive for the City. It could be a benefit to the airport but not cover the downside for the City. , Mr. Wiedemann reviewed the Pros and Cons for each option. None of the options would benefit the General Fund because of the FAA policy. The City would absorb all the pros and cons, income and losses, if they were running it. There would be limited liability in FBO's options. SCCo woutdaccrue all the money if they were running it. Council Member Klein wanted to know how many airports across the country used the various options. 'I Mr. Wiedemann said there were several. The 3rd Party Option was limited. It would fulfill the management portion but not operate the entire airport. Some airports were run by a' company with investments provisions. The City had a no build policy and most likely be under a management contract. The 3rd Party Option was rare because airports generally do not make money. Council Member Klein said the PAO was an exception. Mr. Wiedemann concurred and said 90 percent of airports were not. / Council Member Klein asked what the bases were for that. Mr. Wiedemann said it was due to the higher fees plus the demand. The most common option was Municipal airport either owned by a city or county and with an airport director. Smaller airports tend to go with the FBO management to avoid redundancy of employee use. The FBO wou1d be at the airport during business hours and would report back to the agency. Staffing would be required to manage compliance, funding, and marketing issues as an airport became more complex. The options were narrowed down to the City Management Option and the 3rd Party Option. The FBO option would be where the City took control, accrued all the revenues, and FBOs earned their own. Once the decision was made and negotiations completed, the City option would require a manager, staffing, office space and furniture. The 3rd Party Option required negotiations, all parties , satisfied, and early termination of the lease would occur. The estimate used without getting into issues was for the City to keep the same FBOs through 2017, have a third party run the airport, which would be a cost-savings to the City since City employees would not have to run the airport and the FBO's leases would terminate in 2017. Council Member Chair Schmid said to move forward with discussions on issues regarding the Budget Amendment Ordinance and Airport Commissions. 10119110 FIN9 Administrative Services Department Director Lalo Perez said Staff was comfortable with the "Palo Alto Airport Business Plan." The City lacked in-house airport operation skills and needed the resources and expertise in staffing in order to move forward quicker. There were concerns on maintenance and oversight of the transfer, issues with the environment assessment, FBO's subleases, the City's capital expenditures to put up front regarding safety concerns, the need for outside expertise, the 6-year reimbursement timetable, and the formation of an advisory group which needed dedicated resources along with pOints of contact. The Council had directed Staff to bring the airport's operations under the City's control and part of that was a business plan. Staff needed the Finance Committee's confirmation that this was the right course of direction. Council Member Klein said the report was written as if the City had an option and did not see where the City had a choice. The City would own the airport either in 2017 or sooner and would need a business plan for 2013-14 or 2017. , Chair Schmid said do we recommend immediate action or first recommend the formation of committees to make decisions. Council Member Klein said timing could be discussed but if the decision was to not move forward, the Council would not have any options in a few years. There was the need to start doing something in taking over the airport because there was not a choice to not take over the airport. Council Member Scharff said his understanding was that the City would assume the airport in 2017 and would not be allowed to go out of business. Mr. Wiedemann said that was a fair statement. Council Member Scharff said the choice would be to takeover the airport now and start the process in managing the airport correctly or be stuck with the airport in 2017. The City would need to use monies from the General Fund on losses incurred. JCRC Chair David Creemer, said the group wanted to help with the Council's decision on the airport. He said the PAO was the least favorable airport to keep aircrafts in the area. Operations had decreased by 5 percent. Half was due to economy and others were taking their aircrafts elsewhere due to higher fuel rate. JCRC received about 12 complaints a year. The group outreached to the community to let them know that they were volunteering to help the City run the airport and to help with issues. He expressed a desire to offer his time and efforts toward the betterment of the airport. West Valley Flying Club should not be 1011911 0 FINIO be discounted. They are the largest non~profit flying club in the country and based atPAO and responsible for half of the flight operations. They trained airline captains to astronauts at the PAD and that the City should take advantage of the vibrancy of the club. Council Member Klein said Staff report CMR: 379: 1.0 stated Staff was looking to hire experts at $500,000 and would take a minimum of 2-3 years, assuming the Council worked out a deal with County Board of Supervisors with' 60 to 90 days. Mr. Wiedemann said environmental issues and staff resources pushed the time line. Vice Mayor Espinosa asked Mr. Wiedemann if the timeline sound unreasonable. Mr. Wiedemann said it was not unrealistic and could be done in a year with resources put into it and the process moved quickly. It could have an affect on people's comfort zone with the amount of expertise required to run the airport. Mr. Perez said the two areas of concern were environmental issues and FBO negotiation. He recommended moving quickly in adding staff because there was the need for dedicated 'resource." The City Manager had agreed to place the leadership under another department and not with the Administrative Services Director due to other pressing obligations such as the budget. A Budget Amendment Ordinance (BAD) was needed for the staffing. Council Member Klein said the 2-3 year minimum could likely be four years taking the process into 2014-15. He asked what advantage the City would have with two years remaining on the lease Mr. Wiedemann said if you wanted to add maintenance to a deteriorating facility, you could and save a few years. He/said pavement management index increased over time and the payoff on leases would be less. Vice Mayor Espinosa asked if there was ever a situation where an airport changed models under the 3rd Party Option. Mr. Wiedemann said Stewart Airport in New York was under the 3rd Party Option. The Port Authority of New York took it over due to a decrease in the airport's activity and was losing money. No tax base was drawn during that time and services suffered. He said the PAD was a successful "cash cow" airport with lots of 'working principals that made the grade of a good investment. 10/19/10 FIN 1 1 Vice Mayor Espinosa asked Mr. Wiedemann if there were any foreseen factures to help the Council decide on an option to take. Mr. Perez recommended getting the stakeholders involved early on. There was the option of running the PAO in-house and would require a cost-benefit analysis in moving forward. Staff would need to work jointly with a formed committee in reporting the findings back to Finance Committee. Mr. Emslie said he felt the City was off to a good start with the framework but there were uncertainties Mr. Wiedemann could not predict such as the uncertainty on the age of the airport, its activity and how to deal with the environmental issues in negotiating with SCCo. A subsurface test needed to be done on the pollution and the responsibility on its clean up. Vice Mayor Espinosa raised concern regarding the timing. The community had concerns if the airport would have other uses. PAO was a resource the City was committed to and made sense to improve in a couple of scenarios that the City runs the airport profitably. He felt the need to move forward quickly in staffing and to come to some decision-making because 2017 was right around the corner. Council Member Scharff agreed on moving forward quickly in hiring staff. He was unclear if the Staff was looking for direction at this evening's meeting on which option to choose. He said there were three and was unclear on why the Committee needed to narrow it down to two. Mr. Perez said Staff was looking for input or additional direction to pursue and he wanted to review all three options. Council Member Scharff asked which two options it was being narrowed down to. Mr. Wiedemann said the complete City Operations Option and the 3rd Party Option. Mr. Perez said to focus on the two but not lose track on the FBO option. Council Member Scharff said we need to also look at the City Plus FBO option. Mr. Wiedemann said the FBO option could also be looked at once the FBO entanglement was resolved. Council Member Scharff needed clarification on the Pros & Cons listed in Staff report CMR:379:10, page 6 of 11. He was confused between the City Plus FBO 1011911 0 FIN12 Management option with "higher net revenues relative to 3rd Party Management and Baseline Projections" and the 3rd Party Option with "Airport operates as a profit center, providing periodic payment to City." He asked if under the 3 rd Party Option if it implied taking money from the General Fund where as in the City plus FBO, you could not. He said there was no indication of that. Mr. Weidemann said no. Council Member Scharff said both could operate under the profit center. Mr. Weidemann said it could if it was an Enterprise Fund. Council Member Klein raised concerns regarding a statement in Staff report, CMR:379:10, page 1 where it stated, "to begin the complex process of pursuing any of the airport options in the Report, there will be a need for expertise to evaluate each -option further and to chart a prudent course of action." He agreed with Mr. Emslie regarding the environmental issue because the City would need to negotiate environmental harm with SCCo, but did not see the need for a consultant on the three issues which could cause a 6 months to a year delay. Council Member Scharff concurred. Council Member Klein said it would be the City's responsibility to negotiate with SCCo on environmental matters. Mr. Emslie said FBOs would need to get involved since they could have contributed to the environmental issues. Mr. Sartor said Phase I of the environmental site investigation was done by a consultant and would require a Request for Proposal (RFP) to bring the person back to do a soil and gravel sampling. It would take six months to get the preliminary results on a sampling plan. . Council Member Klein suggested not to wait and to move forward on the other issues while the environmental issue was taking place. Mr. Perez said it was scheduled for December 6, 2010, to bring back to the full Council to request for a BAD for staffing resources and monies for Phase II of an environmental site investigation. Chair Schmid said he was not clear regarding the staffing and asked who would be running the experts and responsible for the commission. 10119110 FIN13 Mr. Perez said it still needed to be worked out internally. Mr. ,Emslie said the City Manager would have the ability to make that assignment. Mr. Perez said we can get it started and Mr. Sartor could move forward on the Phase II processing. Chair SChmid for clarification said we have a deadline of 2017 and the sooner we get started the better it would be. The FBO option seemed to be the preferable option and was unclear to why it was and was dropped off. Mr. Wiedemann said it was not a near-term option and not available between 2012 -2017 and would happen starting in 2018. Chair Schmid said in-summary, voting of the money and the layout would begin immediately to be accomplished in six years. Revenues would be small and would be taking a risk on the General Fund. Franchise or rental fees needed to be looked -at.-Building the Reserve Fund was critical on the investment risk and a critical point the Council would be looking at in assuming the investment. The City had a vested interest in controlling the tie-downs and cost and cost-comparison would need to be reviewed which could be an argument against a 3rd Party contract. Experience with FBOs might also indicate the 3rd Party Option may not be an interest to the City given its location in the midst of the Baylands. MOTION: Council Member Klein moved, seconded by Vice Mayor Espinosa to 1) to accept the Palo Alto Business Plan and Airport Community Value reports by R.A. Wiedermann & Associates, 2) (which was #3 in Staff Report) direct Staff to return to Council with a Budget Amendment Ordinance that establishes a new Airport Enterprise Fund and the resources necessary to progress with finalizing a business plan and a takeover of the Palo Alto airport. The BAO would reflect a loan from the General Fund to the New Enterprise Fund, 3) direct Staff to return on December 6, 2010 meeting with precise timetable of events with a schedule as accelerated as reasonably as pOSSible, 4) to provide the Council with the means of creating an Airport Commission, 5) to advice the City on these matters including which of the 3 models to move forward with, 6) direct Staff to explore the methodology for the maximum charges the City's General Fund may legally make to the Airport Enterprise Fund, 7) direct Staff to provide -an organizational chart as to who will be doing the Staff work and reporting to whom, and 8) to authorize moving forward expeditiously with Phase II on the Environmental Report on the airport. (1:54) 10119110 FIN14 Council Member Scharff asked if it was possible to have a timeline on the Phase II . Environmental Report by December 6, 2010. .. Council Member Klein said it would require the Council's authorization. INCORPO.RATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to get a preliminary timeline on Phase II of an Environmental Report by December 6, 2010. Mr. Sartor said he would need to check on the RFP for Phase I to see if follow-up services were included. The City would need to go out for another RFP to do Phase II if follow-up services were not included. MOTION PASSED 4-0. 3. Report on Alternatives for the Future of Landfill and Composting Operations in Palo Alto and Staff Recommendation to Accept Landfill Operations Alternative No. 1 to Quickly Fill the Remaining Landfill Capacity While Retaining Existing Composting Operations and, Thereafter, Convert Area to Parkland as Fast as Possible. Assistant Public Works Director Mike Sartor said the presentation would consist of the Landfill and Composting Operations options, Staff recommendation, alternatives to a recoLmmendation, the economics of composting in Palo Alto, and on to the next steps. He said Staff wanted to achieve a balance between Zero Waste, the Refuse Fund, and Parkland Goals in the future operations and composting. Staff looked at the least impacts on the Refuse Fund, options consistent with the Baylands Master Plan, and Byxbee Park's open access into the landfill area, and options compatible with the future Energy/Compost Facility. Senior Engineer Matthew Raschke said the following would be addressed during the presentati.on: 1) operational changes needed at the landfill, 2) should the existing composting program continue at the landfill until closure, and 3) if composting continues, what would be the best option for continued green material grinding operations. The four options that were analyzed to continue the landfill operations were: 1) "Fast Fill" with curbside waste, 2) Continue "As-Is", 3) "Slow Fill", for City operations only, and 4) Temporarily Halt Operations. The recommendation was to go with the "Fast Fill" option and have a savings of $750K during Fiscal Year (FY) 2011, the operations costs would be reduced in FY 2012 and beyond. This option was within the City's permit compliance and could be implemented immediately. It would close the landfill on schedule and provide the quickest public access to the parkland, consistent with the BaylandsMaster Plan, and it would not have significant impact on the potential future of future 10119110 FIN1S future Energy/Compost Site. Council Member Scharff asked if the commercial refuse disposal ban could be lifted and how quickly could the landfill be closed and if more money would be made. Initially, he was told that if the commercial ban was lifted, theCity would recover . $1 million. Mr. Raschke said the Fast Fill option would lift the commercial ban. If it was lifted in the current year the City would recoup $300,000 to $500,000 of revenues. Council Member Scharff said it was being filled with non-commercial waste that is not being charged for and asked if this was the optimal way to maximize the revenue. Public Works Solid Waste Manager Rene Eyerly said it was and included lifting the ban and maximized the commercial revenue at the landfilL It was filling the landfill quickly and adhered to all the benefits at the same time. Mr. Raschke referred to an overhead map which contained the Plan View of the 9- Acre, Energy/Compost Feasibility Study area and noted that the yellow outlined area was designated for the proposed Anaerobic Digestion Facility (AD). In the cross-section view, there was a considerable amount of refuse under the green line that would need to be relocated if the AD project moved forward. The blue hatched area above the green line had 90,000 cubic yards and would increase up to 122,000 cubic yards of refuse that would be in the way of the proposed AD facility. We would need to request an extension from the State and County for the 2011 closure plan. The approved schedule calls for cap installation in 2012 and it would be bumped to 2013 or beyond if curbside garbage was not diverted. Just lifting the commercial ban would probably extend the life of the landfill to 2014 or later. Another downside would be to require a decision on additional land rent for the landfill. The agreement between the General Fund and the Refuse Fund was the landfill operations would end in 2011. Other concerns would be a delay and availability of the future parkland and would add operations cost to the Refuse Fund beyond 2011. The economics of the current composting operation were better than sending the curbside yard waste to the SMaRT Station. While the landfill is still operating, there would be a savings of $56K a year, and it will provide the soil amendment needed to create the final vegetative cover over the finished landfill. This would save $200,000 that would otherwise be needed to import compost to make a suitable planting base. Option 1 would also allow dropping the requirement to refurbish the existing grinder due to the shortened timeline. 1011911 0 FIN16 Mr. Sartor said the next steps were with this evening's Finance Committee's review and recommendations. Staff was prepared to go back to the Council in November 2010 to present the recommendations on the Landfill and Compost operations. In January 2011, cost of service study and rate structure recommendation will be brought to the Finance Committee. In March 2011, the preliminary AD Facility study and financial analysis would be presented to the Council and in September 2011, the final AD Feasibility study would be presented to the Council. Vice Mayor Espinosa asked 'why the grinder was not included in the additional savings. Mr. Sartor said it was a soft cost and not included in any of the options. It was part of the Vehicle Replacement Fund and funded by the Refuse Fund through the years. Vice Mayor Espinosa said it was a significant savings when you are looking at options and cost savings. Mr. Sartor said he agreed and that was the reason for not recommending the refurbishment. It made more sense to refurbish if the landfill time were extended rather than contracting out or to lease. Council Member Scharff said the yard trimming gate fees were $388,256 and asked who paid those fees. Mr. Raschke said aside from the curbside yard trimmings, self-haul landscaping waste was accepted and was charged a per-yard fee. Council Mem'ber Scharff asked where yard trimmings would be taken if composting operations stopped. Mr. Sartor said there was free GreenWaste curbside pickup with the use of the 96- gallon containers for Palo Alto residents. The gate fee came from outside landscape contractors or truckloads of excess yard trimmings from local residents. Council Member Scharff asked what the sensitivity on the $388,000 was. Mr. Raschke said that was the actual revenue in 2010. Council Member Scharff asked if there was any reason to believe that wquld fall. 10119110 FIN17 Mr. Raschke said he did not foresee that number dropping in the near future due to other options opening up for yard waste. Council Member Scharff said there was the issue of opening Byxbee Park and the Windrow composting blowing into the park. He asked if.it was an issue and did it degrade the experience of the park. Mr. Raschke said with the timing in Option 1, the grinding operations would be done by next September and hoped to open up Phases 2a and 2b in July. There would be very little' overlap. Mr. Sartor said stock piling would be done for future use and only would be to mix with the last layer of soi I. Council Member Scharff asked if the grinder would stop in July. Mr. Raschke said probably in September with a 3~month overlap where Phase 2a and 2b would open up to the public and still have grinder operations. Vice Mayor Espinosa referred to Staff report CMR:381: 10, page 7. He said the two most important sentences in the report stated: "The 9-acre area for a potential AD . Facility is already very close to the permitted final grading plan. It is nearly already filled with garbage that would need\ to be excavated and relocated to provide a level pad for the facility. Staff anticipates that the fast fill option would not have a significant impact on the amount of waste that would need to be moved if Palo Alto elects to move ahead with a new Anaerobic Digestion Facility." He said he needed a clear understanding that Staff was finding the Fast Fill option would not have a significant impact on the amount of waste that needed to be moved if we went forward with the AD facility and there would not be a cost that would outweigh that minimal amount of moving. Public Works Environmental Compliance Manager Phil Bobel referred to the overhead presentation and noted the area that contained the material to be placed on the 9-acre site. He said a rough estimate showed an increase in the overall cost to the AD Facility of 1 to 3 percent. Staff concluded that it was not significant compared to all the other variabilities in the data for costing out the AD Facility. Following up on Vice Mayor Espinosa's statement, Council Member Klein questioned why the option changed since July. Mr. Sartor said after the September 20th Council Meeting when Staff got into the Refuse Fund and into costs associated with the rates, they realized the landfill operations had a great impact on the Refuse Fund and refuse rates. After a 10119110 FINI8 After a reevaluation and with the balancing of the Zero Waste, Refuse Fund, and Parkland Goals, Option 1 was better than the "As-Is" option to continue. Council Member Klein said it was his understanding that the idea of filling the 9- acres would preclude the AD option. Mr. Bobel said Council's direction was to study the 9-acres and felt it was inconsistent to add more waste to an area to be studied making it more difficult to do. It was clear aftercosting out that it did not have the material impact that Staff initially thought it would. Council Member Scharff said to following up on Council Member Klein's comments, it was probably a $600,000 error and that if we had continued to collect commercial waste we would have the $600,000. Chair Schmid referred to Attachment B, under 2013 landfill cap and close, and asked if that was the official time when the Refuse Fund would turn the landfill over or when rental payments expired. Mr. Raschke said for Option 1, the cap and close would be in mid 2012 but landfill operations would cease in mid to late 2011. Chair Schmid asked if that would be the expiration of rental payments due under the City's contract. Mr. Sartor said the rent was tied to the landfill being opened. The landfill activities of installing the cap and the closure infrastructure maintenance would go on for years. Mr. Raschke said when the landfill ceases to take in new waste it would no longer be a profit center or a potential profit center. Mr. Perez asked if Chair Schmid was asking to modify the rent schedule approved by the Council. Chair Schmid said that it seems it would be required for Options 2, 3 or 4. Mr. Bobel said it was not required in Option 1 and was one of the benefits. Chair Schmid referred to Table 1 on page 4 and said there was not a difference in rental fees between Composting Scenario 1 and 2. 10119110 FIN19 Mr. Raschke said that was correct because the composting operation is currently located top of the active landfill area. The rent would paid even if local composting was terminated. Chair Schmid then asked for public comment. Bob Wenzlaw said he was a proponent for the AD Facility and asked that composting continue in Palo Alto. Composting was part of Palo Alto and good revenue. Emily Renzel said she was in favor of Option 1. It was the best option for economical alternative and best for the rate payers and can join the Cities of Mountain View and Menlo Park with completed parks fashioned from old landfills and connected by the Trail Around the Bay. She asked the Committee to approve Staff's recommendations. MOTION: Vice Mayor Espinosa moved, seconded by Council Member Scharff that the Finance Committee recommends to the City Council to accept Landfill Operations Option No. 1 to quickly fill the remaining landfill capacity, while retaining existing composting operations and thereafter convert the area to parkland as fast as possible. Council Member Scharff asked it was necessary to move the item forward to the Council for discussion. He suggested placing it on Consent. Council Member Klein said it was his understanding that unanimous recommendations go on Consent. Senior Assistant City Attorney Cara Silver said you would be reversing prior Council's direction on the commercial ban that would need to go to Council on that issue, but Consent would be fine. MOTION PASSED 4-0. 4. Follow-up to Finance Committee Discussion of Long Range Finance Forecast on October 5,2010. Administrative Services Department Director Lalo Perez said there was good feedback from the Finance Committee on the first go-around of the report. He asked which percentage scenario should Staff be working on when the item returns in December 2010. Chair Schmid said the goal was not to have further discussion but to get input from each of the Council Members. 10119110 FIN20 Mr. Perez said that was correct. The two scenarios were restricting salary growth to the growth of revenue, and the restricted salaries to a 2 percent flat line. Vice Mayor Espinosa said another scenario was the infrastructure modeling. Mr. Perez said that could be included. Council Member Klein said he would like the public to know about the information. Council Member Scharff said he had given the information to the Chamber/of Commerce. Mr. Perez said Staff would work on meetings to help the business community, residents, and the Infrastructure Blue Ribbon Task Force (IBRTF.) He said the IBRTF was given briefing material that included the original Long Range Financial Forecast (LRFF) and the supple!l1ent from the second round. Chair Schmid said the revenue had set a cap on expenses and ended up with a deficit in the some year. Larger portions of monies were put into benefits instead of salaries and focused on the rapid increase in benefit-cost. He felt Scenario 1 was a good tool in working with the community to show the consequences of the rapid increase in benefit cost. It was an effective way in dealing with all groups. There was a G~neral Fund transfer to infrastructure that was not equivalent to what was being spent on infrastructure. Large sums of monies were included in Staff's salaries and contractors' cost which was independent of that. He said it . would be good to have an estimate on what was currently being spent on infrastructure. Mr. Perez suggested including actual expenditure and what was expected in the future. Chair Schmid he suggested doing a definition of what was being included such as Cubberley, airport issues and golf course'changes, and other critical decision the City was facing prior to showing it to the IBRTF. Mr. Perez said it would be important to include the Kitchell Report in the event of moving forward to a bonding scenario; Council Member Klein felt it would be important to review all scenarios. The airport issued did not change the balance sheet or the profit and loss statement. 10/19/10 FIN21 5. Discussion for Future Meeting Schedules and Agendas Mr. Perez said the November 2nd meeting will begin at 6 P.M. All items will be Utilities Department related. November 16th agenda will have the First Quarter Fiscal 2011 financial results and a presentation of the Library Bond Oversight Committee Quarterly Report. The December 7th agenda will consist of the Final Financial Report and Year-end Capital Program and Utilities items regarding the Long Range Term Acquisition Plan and the G-10 and G-3 Rate adjustments. He asked to consider a Special meeting on December 21 st if December 7th was not doable. Council Member Scharff requested starting at 7:30 p.m. for the December 7 meeting. Chair Schmid ask if 6 p. m. was a good time to start the November 16th meeting. Mr. Perez said he would need to check the City Manager's schedule. ADJOURNMENT: Meeting adjourned at 9:59 p.m. 10119/10 FIN22 4\ttachment C ORDINANCE NO. XXXX ADOPTION OF A REFUSE ENTERPRISE FUND BUDGET AMENDMENT ORDINANCE AND RECOMMENDATION FROM FINANCE COMMITTEE TO ACCEPT LANDFILL OPERATIONS ALTERNATIVE NO. 1 TO QUICKLY FILL THE REMAINING LANDFILL . CAPACITY WHILE RETAINING EXISTING COMPOSTING OPERATIONS AND, THEREAFTER, CONVERT THE AREA TO PARKLAND (OPEN SPACE) AS FAST AS POSSIBLE The City Council of the City of Palo Al to does ordain as follows: SECTION 1. The City Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 28, 2010 did adopt a budget for fiscal year 2011, including a Table of Organization describing the staffing for each department and a Municipal Fee Schedule; and B. On August 5, 2010, Council directed staff to return to Council with a comprehensive cost analysis and timeframe for closing the Palo Alto landfill and converting the area to parkland; and C. On October 19, 2010, the Finance Committee recommended that Council approve staff's recommendation to quickly fill the remaining landfill capacity, while retaining existing composting operations and' thereafter ,converting the area to parkland as fast as possible; and D. Council's decision to lift the suspension of the commercial garbage ban at the landfill is required to quickly fill the remaining landfill capacity; and E. Additional revenue and expenditure changes are needed to facilitate the quick filling of the remaining landfill capacity as described in Exhibit Ai and F. The fiscal year 2011 Adopted Municipal Fee Schedule requires amendment to reinstate and change· certain commercial refuse disposal fees related to the Palo Alto landfill as reflected in Exhibit C; and G. City Council authorization is needed to amend the fiscal year 2011 budget as hereinafter set forth. Page 1 of3 SECTION 2. The Rate Stabilization Reserve in the Refuse Fund is hereby increased by the sum of Three Hundred Eighty-Nine Thousand Six Hundred Forty-Eight Dollars ($389,648) as described in Exhibit A. As a result of this change, the Rate Stabilization Reserve in the Refuse Fund will increase to a deficit of ($5,174,493). SECTION 3. The Rate Stabilization Reserve in the Wastewater Collection Fund is hereby decreased by the sum of Three Hundred Seventy-Five Thousand Dollars ($375,000) as described in Exhibit A. As a result of this crange, the Rate Stabilization Reserve in the wastewater Collection Fund will decrease to $6,395,947. SSCTION 4. The fund balance of the Vehicle Replacement and Maintenance Fund is hereby decreased by the sum of Five Hundred Ninety Thousand Six Hundred Forty-Eight Dollars ($590,648) as described in Exhibit A. As a result of this change, the undesignated, unreserved portion of fund balance will decrease to $2,616,352. SECTION 5. Adjustments to move expenditures from fiscal year 2012 to fiscal year 2011 for· Capital Improvement Project -RF-10003 -Drying Beds, Material Storage and Transfer Area are made as shown in Exhibit B. The increase in fiscal year 2011 is reflected in the adjustments as shown in Exhibit A. SECTION 6. The Municipal Fee Schedule is hereby amended to reflect the changes shown in Exhibit C, which is attached hereto and incorporated herein by reference. To the extent these fees are subject to Proposition 26, the amount of the fee is no more than necessary to cover the reasonable costs of the governmental activity and the manner in which the costs are allocated to a payer bear a fair or reasonable relationship to the payer's burdens on, or benefits received from, the governmental activity. SECTION 7. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 8. The Council of the City of Palo Al to hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. SECTION 9. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this Ordinance shall become effective upon adoption. Page 2 of3 INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Sr. Asst. City Attorney Mayor APPROVED: City Manager Director of Admin. Services Page 3 of3 FY 2011 Category Amount Description ENTERPRISE FUNDS REFUSE FUND Revenue $ 300,000 Increase in disposal fee revenue from lifting commercial refuse ban at the Palo Alto landfill Revenue 590,648 Payment from Vehicle Fund for refund of replacement charges previously paid from the Refuse Fund to the Vehicle Fund for landfill and composting equipment that will not be replaced Revenue Changes 890,648 Salary and Benefits $ 250,000 Reinstate salary and benefits- landfill operations; this reverses Council action of 9/20/2010 when it was proposed that the landfill would close two days per week Non-salary (250,000) Decrease contract services- Smart Station contract; due to diversion of waste from Smart Station to Palo Alto landfill Non-salary 375,000 Reinstate CIP RF-10003 Drying Beds, Material Storage and Transfer Area (CIP RF-10003 totaling $750,000 has $375,000 in funding from the Wastewater Collection Fund; for SAP financial entries, a reinstatement of the transfer between funds will be reflected) Non-salary 246,000 Reinstate Zero Waste outreach expense; offset by $100,000 decrease in Smart Station contract and $146,000 in solid waste permitting Non-salary (146,000) Decrease contract services- solid waste permitting Non-salary (100,000) Decrease additional contract services- Smart Station contract Non-salary 126,000 Increase equipment rental for compost grinder (December 2010 to June 2011) Use Changes 501,000 Net Changes To (From) Reserves $ 389,648 Fund Balancing Entries 389,648 Change in Fund Balance Total Refuse Fund $ 389,648 CITY OF PALO ALTO AMENDMENTS TO THE FY 2011 ADOPTED BUDGET Exhibit A Page 1 of 2 FY 2011 Category Amount Description CITY OF PALO ALTO AMENDMENTS TO THE FY 2011 ADOPTED BUDGET Exhibit A WASTEWATER COLLECTION FUND Non-salary $ 375,000 Reinstate reimbursement to Refuse Fund for CIP RF-10003 Drying Beds, Material Storage and Transfer Area (project reinstated for FY 2011) Use Changes 375,000 Net Changes To (From) Reserves $ (375,000) Fund Balancing Entries $ (375,000) Change in Fund Balance Total Wastewater Collection Fund $ (375,000) INTERNAL SERVICE FUNDS Non-salary $ 590,648 Payment to Refuse Fund for refund of replacement charges previously paid from the Refuse Fund to the Vehicle Fund for landfill and composting equipment that will not be replaced Use Changes 590,648 Net Changes To (From) Reserves $ (590,648) Fund Balancing Entries (590,648) Change in Fund Balance Total Vehicle Replacement & Maintenance Fund $ (590,648) VEHICLE REPLACEMENT & MAINTENANCE FUND Page 2 of 2 Capital Budget FY 2011 City of Palo Alto 245 RF-10003Drying Beds, Material Storage and Transfer Area DRYING BEDS, MATERIAL STORAGE AND TRANSFER AREA (RF-10003) CIP FACTS: • Continuing • Project Status: Construction • Timeline: FY 2010-2011 • Overall Project Completion: 0% • Percent Spent: 31.27% • Managing Department: Public Works • Comprehensive Plan: Policy N-37 • Potential Board/Commission Review: ARB IMPACT ANALYSIS: • Environmental: Possible exemption. • Design Elements: This project may be subject to ARB review. • Operating: None • Telecommunications: None Description: This project includes designing and implementing two bunker storage-transfer systems for dry and wet materials. The project will also evaluate potential non-park land sites for these activities. The dry system will be used to store inert solids and leaves from municipal operation construction projects and street sweeping. The wet system will be used for storm drain and sanitary sewer debris from Vac-con trucks. Justification: This project will be developed in anticipation of the landfill closure in 2012. Supplemental Information: Feasibility of processing other wet construction materials and allowing contractors to use the systems will be considered during the design phase. Refuse and Wastewater Collection Funds will share equally the construction costs. PRIOR YEARS PY Budget $125,000 PY Actuals as of 12/31/2009 $39,087 FUTURE FINANCIAL REQUIREMENTS FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Funding Pre-Design Costs Design Costs Construction Costs $750,000 $750,000 Other Total Budget Request $750,000 $750,000 Revenues: $375,000 $375,000 Source of Funds:Refuse Fund with the following reimbursements: Wastewater Collection Fund($375,000) Exhibit C Refuse Disposal Area Resident Commercial Resident Commercial Classification of Vehicles Passenger Car or Station Wagon $15.00 (Less than one cubic yard) SUSPENDED- $25.00 (less than one cubic yard) $20.00 (Less than one cubic yard) $20.00 (less than one cubic yard) (minimum charge) (minimum charge) (minimum charge) (minimum charge) $25.00/cy (one cubic yard or more) SUSPENDED- $25.00/cubic yard (1 cubic yard or more) $30.00/cy (one cubic yard or more) $30.00/cubic yard (1 cubic yard or more) Other Two-Axle Vehicle or Trailer Load less than 0.5 cubic yard $15.00 SUSPENDED- $15.00 $20.00 (minimun charge) $20.00 (minimun charge) Load 1 cubic yard $25.00 SUSPENDED- $25.00 $30.00/cubic yard $30.00/cubic yard Load 1 cubic yard or more $25.00 each cubic yard plus $10.00 for fractions greater than 0.5 cubic yard SUSPENDED- $25.00 each cubic yard plus $15.00 for fractions greater than 0.5 cubic yard $30.00/cubic yard plus $15.00 for fractions greater than 0.5 cubic yard $30.00 each cubic yard plus $15.00 for fractions greater than 0.5 cubic yard Three or More Axle Vehicles Load less than 1 cubic yard $30.00 SUSPENDED- $35.00 $30.00 $30.00 Load 1 cubic yard or more $30.00 each cubic yard plus $15.00 for fractions greater than 0.5 cubic yard SUSPENDED- $35.00 each cubic yard plus $18.00 for fractions greater than 0.5 cubic yard $30.00/cubic yard plus $15.00 for fractions greater than 0.5 cubic yard $30.00/cubic yard plus $15.00 for fractions greater than 0.5 cubic yard Materials Resident Commercial Resident Commercial Compostable Materials (per landfill acceptance list) $15.00/cubic yard $25.00/cubic yard (non-residents only allowed to bring compostable materials) $20.00/cubic yard plus $10.00 for fractions greater than 0.5 cubic yard $20.00/cubic yard plus $10.00 for fractions greater than 0.5 cubic yard Finished compost (bagged)$2.00 $2.00 Finished compost (yard) <10 yards >10 yards $13.00/yard $11.00/yard $13.00/yard $11.00/yard 2010 FEE 2011 FEE 2010 FEE 2011 FEE PUBLIC WORKS DEPARTMENT Refuse City of Palo Alto 2011 Adopted Municipal Fee Schedule 21-3 ZeRO WASTE BUDGET FY 2011 Contractual Services -Encumbered RHDG -Consultant providing design services and marketing strategy for $41,258 all print material, ads, and web content. SEI -Consultant providing assistance to school Green Teams and $13,590 facilitating Green Teams Conference November 2011. Cascadia -Consultant providing technical assistance for Green Businesses, school waste audits, and City facility waste diversion program, so we may $55,695 continue these services even with vacant ZW Coordinator position. C-Way -Additional contract for janitorial services to collect food waste at $7,562 City Facilities. , Advertising -Weekly, Daily News ads to promote zero waste activities, $45,423 compost and Bay Friendly classes. Office remodel-General Contractor to create work space at MSC for staff $25,232 currendy located at landfill. $3,267 Office remodel-Wiring $2,500 Office remodel-Contingency $194,527 SubTotal Supplies and Materials $4,746 Encumbered for office supplies, compost bins, and outreach materials $11,049· Unencumbered ~ intended for City Facility public area waste stations $15,795 SubTotal $210,322 Total Zero Waste Budget FY 2011 ATIACHMENTD TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: NOVEMBER 22, 2010 REPORT TYPE: CONSENT DEPARTMENT: ADMINISTRATIVE SERVICES CMR: 412:10 SUBJECT: Approval of a Purchase Order with Leotek Electronics USA Corp. in an Amount Not to Exceed $355,281 for a One Time Purchase of Six Hundred LED Stroot Lighting Luminaires in Support of the Utility Department RECOMMENDATION Staff recommends that Council: I. Approve and authorize the City Manager or his designee to execute a Purchasc Order with Leotek Electronics USA Corporation in an amount not to exceed $355,281. DISCUSSION To meet the Utilities Department's request for light-emitting diode (LED) street lighting luminaires, the Purchasing Division solicited for six hundred LED cobra head 250-watt high- pressure sodium lighting luminaires. Utility engineering will replace the existing 250-watt high- pressure sodium street lighting fixtures with new LED street lighting fixtures at the following locations, between San Antonio Road & University A venue on El Camino Real and at a second location between San Antonio Road & University Avenue on Alma Street. Utility engineeIing has plans to replace the remaining 5400 existing street lighting fixtures with energy efficient LED lighting fixtures within the next 5 years. ' Through this process, a competitive solicitation was issued to award a purchase order that will be used on an as needed basis with the maximum dollar amount that can be ordered under this purehase order of $355,281 dollal's, The LED street lighting luminaires have state-of-the-art technology with excellent thermal management and weather resistance capabilities. The LED street lighting luminaires will be installed on the existing street lighting, utility or traffic signal poles in residential or commercial areas. The luminaires are manufactured to comply with City of Palo Alto specifications and industry standards. CMR:412:10 Page I of2 A Request for Quotation (RFQ) for the LED street lighting luminaire was sent to seven suppliers as well as advertised on the City'S Purchasing Solicitations Web Site. Twenty suppliers responded with quotes (see attachment A). The RFQ for the luminaire requested a unit price based on the quantity of six hundred luminaires for purposes of making an award determination. The Leotek Electronics USA Corporation submitted the lowest responsive bid for the bid item requested. RESOURCE IMPACT There will be no new resource impact on the Electric Fund as a consequence of implementing this purchase order. Electric Fund projects requiring new or retrofitted luminaires have budgets sufficient to cover CIP costs. Thc funds for this purchase come from the Energy Effieiency and Community Block Grants. When the luminaires are purehased through the purchase order, they will become part Qf the City'S Store's inventory replacing the current specified Street Light Luminaries. As the luminaires are installed, inventory is reduced and the cost of the lurninaire is charged to an Electric Fund budgeted project or to budgeted operating expense. POLICY IMPLICATIONS Authorization of this Purchase Order does not represent any change to the existing policy. ENVIRONMENTAL REVIEW The approval of this Purchase Order is categorically exempt from the California Environmental Quality Act, pursuant to Section 15301 of the CEQA Guidelines (repair, maintenance or minor alteration of existing facilities). PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: ATTACHMENTS Attachment A: Bid Summary Attachment B: PictlU"e CMR:412:10 PlU"chasing an.agel' Director of Administrative Services Page 2 of2 ATfACHMENT A Subtotal (Oty x Unit Price) $325.200 $333.840.001 $344,400 $346.000 $353.550 $373,800.00 $378,000 $405.360 $407.370 $410.400::::_. f.-_...",Tax(925%) 1110.0925 $30,061 $30.660.20 $31,857 $32.190 $32.703 $34,578.50 $34,985 $37,49611 $37,682 $37,962 D=~~Cla~2~_~, __ ~ __ $_3_~_~_:_:~_:_6_~_~~.~ __ $_3_R_~~~=r~ ___ $_~_0=~=:~O~ ___ H_a_6_~~~+ __ $_~_8_'3_7_:_:,I ___ $_4_'2_~_~_:+. ___ $_U_~_~_e~._I_$_U_5_~_:_:~ __ M_·_:_N:_20S~ .. _ .... _.~-~ FO;;;0:;;3=1~W:""arranty '" 7 Years (Yes/No) I Yes Yes Ya< No/5·Va.rWarr NoIS·Va.rWarr Ves Yes ___ Y_e:..:s~v.s+$70/ea, Yes Fo,;,049~W~arranty 10 Years '(Ves/No) I _+ __ +_ .. _ .... _v_e-ts ___ ._N_O~ __ ~-ve~.~-=--_-_-. -... :;:N;-0t====:_ ..c_~ N~O~====~=== N~O~=======N~O~~_ .. __ .:.:N=jO ___ .:.:N=j0 ---...::::.t Delivery ARC <1 Ow .. e::::e::.k:;::s __ +-_-+ ._t-__ ._ ..... 9:=t-____ .. .....:I.j6 "._ . __ .::.6: __ . ___ . .::;8 , ___ ... _...:.:I.j 10..... __ • ____ 1O::jl, ____ :l.:1.j0 1._ _-.::.8t-._..1.Of--_..:.l.:1.j0 ___ --ii 1 005 +---.--~-. -:-::. --1-.--:.:---+-.. 'C=-..... +-.--:-::-. '-.... ---.--.... --:::--t-11 12 I 13 14 15 16 17 18 19 20 1=+r===:==:======;ir==~=~~~=r.=§=-4==::~"",=9===:=.~=f===:~=="'1F==~:=:==+=~~==l=::=~:=+==:=.~=j=~~=+ .. -.... --I BID ~_. __ -=D==E=-SCRIPTION ~IBiDl ONE SOURC§,: f-_=JA..;M-,,-. __ +--,W..;,E;;.;S:..;C;..;O..;-4:_. __ ~E~CO.6 ENERGYTECH II GEO HONN JAM~ .. _ WESCO·l WESCO-2 JTEM C .... ~~ UNIT 10~YRWarr '; 1~YearWarr BETA : LED Roadway 1I'-·L~E:::D:'::R:":o':':a:':dw:':.'-y--i-1-0--Y:-': •• "'r::'w-.·rr~-YOUNG&CO 7~YearWarr' 10~YearWart ~~~==========Ii~9F;;;;;;;'+=~~~I~~~=i'"-~~~'-'--'~'-'~'--:--F;;;;;;;;;=~=li==;;;;;;"~;;;f,=4=;;;';;;~9~~;;:=+~~9=~~9----I 1===lrIM;;";;;O;;;Uf;,;;aC;;lu;;re='==;=======::=:,,=!!j ===l~_-t __ =GE I C.,.R..,E:::E_i==,,;;,C,;;;OO;;;,;PE;;;R==t Beta LED-120 HOLoPHANE .Iumen GE I COOPER CREE COOPER COOPER LED streelight luminaire equlvafenl to a 250 ; 001 i Watt HPS lummalre 600 EA $697.31 1 ----···----·····--·--····--+--f---'-- ! ---+-_. _ ..... ___ ..... _--t-__ +-T-l-· ...•• _ ... :c----+- -+-_ .... - $634 $945.00 $805.00. $815 $754 $781.00 $789,00 $826 $862.50 II ,:Subtotal (Qty x Unit Price) $418,386 $452,100 $466,600.00 $473.400,00 $463,000.00 $488.970 $495,390 $500,250 $517,500.00 $567,000.00 Tax (9.25%) 0.0925 $36,7011 $41.619 $43,345.50 $43,769.50 $44,677,50 $45.230 $45,824 $46,273 $47,866.75 $52.447.50 Total $457.087 $493,919 $511,945.50 $517,189.50 $527.677.50 $534,200 $541,214 $546,523 $565,368.75 $619,447.50 ATTACHMENT B liThe l,teader In @ectro-«ptics ~olo8Y" 1)\~~~fJ &~~'41l €I~,')il ~0 C8 .....---.... a ,ub,ldla,y company of LITE(') ~ r ~. GCAl Series The LED Street Light With The Features Cities Wantl Daytime Form with Proven Market Acceptance Based on shape of traaitional roadway luminaire · Non-controversial HID retrofit · Low profile -virtually disappears in silhouette Full Cutoff Optics with Performance of Drop Lens · Recessed LEDs and optics are fully shielded at 900 · Precision micro-lenses provide uniform illumination Reduced Maintenance 74,000+ hour LED life eliminates lamp ~hanges · Tool-less access to electrical housing · Driver mounted to safety power door Sustainable Design · 50% energy savings reduces greenhouse gases · 100% mercury and lead free Ordering Information I GCAl 40C MV I I NW I I I I 2M I I I GCA1-LED Number! Voltage Nominal LED Light Distribution Street Light Correlated Color Type ofLEDs MV -120-277V 2M -Typ~ 2 Medium I I Temperature' GCAD1-LED 20C 2X -Type 2 Extra Wide HV'-347 -480V NW-4000K St,eet Light 40C 3M -Type 3 Medium with dimming 60C Footnotes: soc 1. Available with 350mA and 700mA drive current only 2. NW standard. Consult factory for other LED color temperatures. 3. Light gray standard. Consult factbry for other fjnishes. 4. Flush mounted shield easily field lhstalled. Cuts light off YI mountrhg height behind luminaire. S. Non-field adjustable drive current. SpeciFy setting of 350mA, 530mA, or 700mA. Wattage Replacement Chart • System HID Replacement Lamp Wattage Watts (Typical HID System Wattage) Leotek Se ries GCAl-20C-530mA* 37 70W MV (88W) GCAl-20C-700mA* 51 70W HPS (95W), lOOW MH (128W) GCAl-40C-350mA* 46 70W HPS (95W), 100W MH (128W) GCAl-40C-530mA * 68 lOOW HPS (130W) GCAl-60C-350mA * 71 lOOW HPS (130W) GCAl-60C-530mA* 105 150W HPS (190W), 175W MH (208W) GCAl-60C-700mA* 145 200W HPS (240W), 250W MH (295W) GCAl-80C-530mA* 131 250W HPS (2~5W), 400W MH (465W) GCAl-80C-700mA* 183 3lOW HPS (365W) ·Designates power supply drive current Note: Actual HID wattage equivalents will depend on specific application characteristics, design criteria, and distribution type, Consult your Leotek Representative to select the appropriate /uminaire, 'J GY I BSK I I I I , Finish' Accessories/Options GY -Gray BSK -Bi,d Spide, Kit SPB -Squa'e Pole B'acket RPB -Round Pole Bracket PTB -Pole-Top Bracket WB -Wall Bracket HSS'-House Side Shield 350 -Factory set 350mA . Drive Current 700 -Factocy set 700mA Drive Current FDC5-Fixed Drive CUrrent WL -Utility Wattage Label GreenCobra1'" street lights are a simple replacement for traditional HID cobra head style fixtures, mounting directly to the exIsting mast arm. TO: ATTN: FROM: DATE: HONORABLE CITY COUNCIL FINANCE COMMITTEE CITY MANAGER NOVEMBER 22, 2010 DEPARTMENT: ADMINISTRATIVE SERVICES CMR: 417:10 SUBJECT: Approval of Increase in R. A. Wiedemann & Associates Contract with the City of Palo Alto from $105,000 to $110,000 for a Presentation to the Council of the "Palo Alto Airport Business Plan" Plus a Contingency of Up to $14,100 for Any Additional Work after Receiving Council Direction RECOMMENDATION Staff recommends that the Council: approve an increase of $5,000 or from $105,000 to $110,000 in the contract of R.A. Wiedemann & Associates to present the "Palo Alto Airport Business Plan" report to Council on December 6, 20 I O. In addition, staff recommends approval of contingency funding of an additional $14, I 00 should Council direct staff on December 6, 20 I 0 to move forward with transition of airport operations to the City of Palo Alto. BACKGROUND The Council directed staff and provided the resources to develop business plan options for tennination of the Palo Alto Airport (PAO) lease prior to 2017, the time at which the County's 50 year lease expires. The intent was for the City to have operational control of PAO earlier than 2017. On October 19, 2010, R.A. Wiedemann and Associates presented the City of Palo Alto AirpOlt Business Plan and Community Value Analysis (CMR: 379:10, Attachment B) to the City's Finance Committee. The options developed in the business plan showed potential, solid net revenues over the long-term. The Finance Committee reviewed the repOlt and recommended forwarding it to the full Council for consideration. The Committee's motion included direction to come back to the Council with a Budget Amendment Ordinance (BAa) to request the necessary resources to: transition the Airport from County to City control as expeditiously as possible; to return with a timeline to establish an AirpOlt Advisory Group; recommend an option that maximizes airport profit; and provide an organizational chart showing airport staff reporting relationships. CMR:417:10 Page I of3 DISCUSSION· . In order for R.A. Wiedemann and Associates to present the Business Plan to the full Council on December 6, the current contract with the company must be increased to accommodate the presentation, travel, an overnight stay, and other associated expenses. Since the current contract of $105,000 has been fuJly expended, staff recommends inereasing the current contract by $5,000 to $110,000 (Attachment A). Funding for the contract increase is available in a Capital Improvement Project (CIP) created for the airport transition. There is $19,100 remaining in this CIP, so by adding $5,000 to the consultant's contract a balance of $14,100 will remain in, the project. Depending on Council's direction, staff will retum on December 6, 2010 with a Budget Amendment Ordinance, deliverables requested by the Finance Committee on October 19, and a request to utilize $14,100 in contingency funding for tasks the Council deems appropriate for the consultant to cOlilplete. Wiedemann and Associates have identified the following work that would be of value in the airport transition process: • updated financials for the airport (County financial statement data used in Business Plan were through June 30, 2008) •. expertise on the implementation of the airport takeover • information on allowable charges (franchise fees, etc.) for the enterprise fund. This would include discussions with the Federal Aviation Administration • information on the formation and make up of Airport Commission • additional analysis of the performance options or new variables within any option Again, remaining funding in the CIP could be utilized for the above work. Providing Council gives approval to move forward, staff would return on Decenlber 6 with a BAO to fund: • a Phase II Hazardous Material Analysis estimated at $150,000 • estimated legal expenses of $50,000 • expert support estimated at $100,000 either through a consultant or a temporary stafI person to guide the City through the transition process to City control ofthe airport The total of the BAO would be $300,000 with funds being advanced by the General Fund to be repaid if sufficient profits are generated within 6 years of the date of expenditures. As stated in the CMR to the Finance Committee, extensive, existing staff time and resources that would otherwise be devoted to existing priorities will be required to facilitate this transition. Staff recommends that the Council approve a $5,000 increase in the contract of R.A. Wiedemann and. Associates from $105,000 to $110,000 for the December 6, 2010 presentation. In addition, staff recommends contingency funding of $14,100 for potential work by the consultant that Council believes important. CMR:417:10 Page 2 00 RESOURCE IMPACT Funding for a $5,000 increase in the R.A. Wiedemann and Associates contract is available in a City CIP. An additional $14,100 is available in the City ClP, but staff would not expend these funds without explicit direction from Council POLICY IMPLICATIONS Aetions recommended in this report are consistent with previous Council direction. ENVIRONMENTAL REVIEW This contract amendment is exempt from the California Environmental Quality Act (CEQA) pW'suan! to section 15262 of the CEQA Guidelines. ATTACHMENTS Attachment A: Amendment No.1 to Contract No. C09128288 Between the City of Palo Alto and R.A. Wiedemann & Associates Attachment B: CMR:379:10 "Presentation and Discussion of R.A. Wiedemann and Associates, Inc .... (Excluding Wiedemann Business Plan. For plan please see this link http://www.cityofpaJoalto.orglciviealfilebanklblobdload.asp?BlobID=24916 ) PREPARED BY CITY MANAGER APPROVAL: CMR:417:10 s>='r;;~~ {;tJAMES KEENE ~ity Manager Page 3 of3 ATTACHMENT A AMENDMEN~ NO. 1 TO CONTRACT NO. C0912B2BB BETWEEN THE CITY OF PALO ALTO AND R;A. WIEDEMANN & ASSOCIATES This Amendment No. 1 to Contract No. C0912B2BB ("Contract") is entered into November 23, 2010, by and between the CITY OF PALO ALTO, a charter city and a municipal corporation of the state of California ("CITY"), and R.A. Wiedemann & Associates, Inc., located at P.O. Box 621 ! Georgetown, KY 40324 (502) 535-6570 ("CONTRACTOR"). R E CIT A L S: WHEREAS, the Contract was entered into between the parties for the provision of Airport Consulting Services; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parti~s agree: SECTION 1. Section 1. SCOPE OF SERVICES, is amended to read as follows: CONSULTANT shall perform the Services described in Exhibit "A" and 'in "Exhibit A-l", in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. Section 4 NOT TO EXCEED COMPENSATION, paragraphs I and 2~'are hereby amended to read as follows: "The compensation to be paid to CONTRACTOR for performance of the Services described in Exhibit "A" and "Exhibit A-l", including both payment for professional services and reimbursable expenses, shall not exceed One Hundred Ten Thousand Dollars ($110,000.00). Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C" and shall not exceed a total of $14,100. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit "AU or "Exhibit A-I". 1 101116 sm 010 SECTION 3. The following exh,ibi t (s) to the .Contract i.s/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibi t "c,r entitled "Compensation". Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain i.n full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on ·the date first above written. CITY OF PALO ALTO . R.A. WIEDEMANN ~ ~SOCIATES By: 14JJ ~~~_ APPROVED AS TO FORM: --.. -~ ...... :---... ~~~ ... ~~~ Senior Assistant City Attorney Name: __ R_an_d_al Wiedemann __ _ Title: Presidec:.n:.:t,--_ ... _~ .. _ ... ~_ -;----;---;-;--.. --.--... ~ ..• Purchasing Manager Attachments: EXHIBIT "A-I": SCOPE OF SERVICES EXHIBIT "e": Cm1PENSATION 2 101116 sm 010 EXHIBIT "A-1" Scope of Work Randal Wiedemann will prepare for a presentation to the Palo Alto City Council for December 6th,2010. The presentation will cover the Airport Business Plan and any questions regarding the recommendations therein. It is anticipated that up to 25 hours could be expended for the preparation" presentation, and travel for this trip. In addition, actual travel costs were estimated to total up to $1,250. Therefore, the total cost of this work effort is estimated at $5,000. Signed:~, ____ ~ __________ ~~~ __ ~ __ ~~~ ________ _ Title: President Date: November 10, 2010 Company: R.A. Wiedemann & Associates, Inc. 3 101116 sm 010 EXHIBIT "c" COMPENSATION (REVISED) The CITY agrees to compensate the CONSUI,TANT· for professional services performed in accordance with the terms and conditions of Agreement, and completed to the reasonable satisfaction of the CITY. The compensation to be paid to CONSur,TANT under this Agreement for all services described in Exhibit "A" and. Exhibit "A-l" ("Basic Services") and reimbursable expenses shall not exceed $110,000.00. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximwn amount of compensation set forth herein shall be at no cost to the CITY. REIMBURSABLE EXPENSES The admiriistrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto's policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone cellular phone, facsimile transmission and postage charges are reimbursable at actual cost. All requests payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY's project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY's project manager's request, shall submit a detailed written proposal including a description of the scope of services, schedule, of effort, and CONSULTANT's proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth below. The additional services scope, schedule and maximum compensation shall be 4 101116 om 010 negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement SCHEDULE OF FEES HOURLY Rate Schedule ~--------...... ~~------ Person/Title Hourly Rate Principal/Officer $143.94 Senior Associate $104.78 Associate $43.62 to $64.73 5 IOll16smOlD TO: ATTN: FROM: DATE: ATTACHMENTB City of Palo Alto City Manager's Report HONORABLE CITY COUNCIL FINANCE COMMITTEE CITY MANAGER OCTOBER 19,2010 DEPARTMENT: ADMINISTRATIVE SERVICES CMR: 379:10 SUBJECT: Presentation and Discussion of R. A. Wiedemann & Associates City of Palo Alto Airport Business Plan Options and Community Valuation Analysis; Request for Council Input and Direction on Options; and Formation of all Air[lort Advisory Committee EXECUTIVE SUMMARY The Council directed staff and provided the resources to develop business plan options for termination of the Palo Alto Airport (PAO) lease prior to 2017, the time at which the Co'unty's 50 year lease expires. The intent is for the City to have operational control of P AO earlier than 2017. The attached report from R. A Wiedemann and Associates (Report) Jays out several management options as well as pro-formas showing their results. Overall, each option shows solid net revenues over the long-term. The results show the potential to pay back some or all of General Fund "seed" money necessary to transition the airport from county control and to reinvest in the airport's infrastructure.' Staff continues moving forward with the Council direction of assuming control overPAO operations earlier than 2017, but before the City can proceed it is important to fully understand the costs and implications of each option before deciding which option to pursue. On a fundamental policy level, does the City want any direct role in operating the airport either by hiring all airport management and operations staff or by managing a Fixed Base Operator who operates the airport? Or, does the City desire to contract with a Third Party Operator who, with minimal City oversight, basically runs the airport? This is a critical question which staff wants to explore further and for which Council input is requested. To begin the complex process of pursuing any of the airport options in the Report, there will be a need for expertise to evaluate each option further and to chart a prudent course of action. At this time, it is estimated roughly that $500,000 in resourees are needed to hire such expelts. In addition, considerable in-house staff time is required to set the process in motion and to guid~ it to fruition. Based on Council input, staff proposes to return with a Budget Amendment CMR:379:10 Page I ofll Ordinance (BAO) for funding and to establish an Airport Enterprise Fund. Among other costs, . the BAO will fund an environmental site investigation to determine if there is any contaminated soil or groundwater at the Airport that requires clean-up prior to the County and FBO lease expirations. In addition, establishment of an Airport Advisory Committee is recommended as the City moves toward managing the airport. Staff estimates that the process could take a minimum of two to three years based on discussions with other agencies and feedback from R. A. Wiedemann and Associates. RECOMMENDATION Staff recommends that the Council: I) Provide input on and accept the "Palo Alto Airport Business Plan" and "Airport Community Value" reports by R.A. Wiedemann & Associates 2) Provide input on airport management options outlined in the Business Plan and direction on which options to further evaluate in order to continue with Council direction to take over the airport early. 3) Direct staff to return to Council with a Budget Amendment Ordinance that establishes a new Airport Enterprise Fund and the resources necessary to progress with finalizing a business plan and a takeover of the Palo Alto airport. The BAO would reflect a loan from the General Fund to the new Enterprise Fund. 4) Begin exploration of forming an Airport Commission comprised of users, businesspeople, and other appropriate members to advise Council. BACKGROUNJ> In 1967 the City and the County entered into a 50-year lease for management of the Palo Alto Airport (PAO). The lease agreement both with the County and the current Fixed Base Operators (FBO) expires in 2017, In 2006, a County consultant recommended returning airport management back to the City before the lease expired in 2017. At that time, it was believed the PAO was a drain on County resources and the County was not recouping the costs of its capital investments. Indications from the County that it would only perform basic, safety related maintenance improvements was of considerable concern given the condition of the Airport's aging infrastructure. Following reports by the City Auditor and the Palo Alto Airp0I1 Working Group (PAA WG), which contested the financial and other conclusions by the County, Council directed staff to begin negotiations with the County of Santa Clara (County) to terminate its lease earlier than 2017 and to commence work on the action and information items raised by Council on November 13, 2007. These included: • Preparation of an airport husiness plan or evaluation of City options for operating the airport • Preparation of a community valuation analysis to determine economic value of airport to the City and community CMR:379: I 0 Page 2 of II • Preparation of semi-annual progress reports on negotiation status with County On December 8, 2008 (CMR: 440:08), the Council adopted a PAO Mission Statement proposed by the Palo Alto Airport Joint Community Relations Committee (PAAJCRC) and reviewed and accepted a proposal from R.A. Wiedemann & Associates for preparation of a Palo Alto Airport Business Plan and Community Value Analysis. Council passed a Budget Amendment Ordinance which, together with a prior appropriation, authorized the City Manager 10 execute a $105,000 contract with R.A. Wiedemann to develop a PAO business plan and community valuation analysis. DISCUSSION The primary objectives of this City Manager Report (CMR) is to: summarize the business plan options in the Wiedemann report (Rep0l1); outline the airport community valuation analysis; provide staffs recommendation on next steps; obtain Council feedback and direction both on next steps and airport management options; and to update Council on any other progress on negotiations with the County since the last progress reporl. As staff continues to follow Council direction on an early takeover of the airport, it has identified preliminary and substantial financial and staffing commitments for this proj eel. These costs would be advanced by a financially challenged General Fund. Although staff believes advanced funds can be repaid, outside legal advice will be required to determine which costs can be reimbursed as the airport operation generates net revenues over time. The transition and startup expenses identified thus far include: I. Phase II Environmental Site Investigation estimated at $150,000 2. Airport, legal and other expert support at an estimated cost of$350,000 3. Potential expenses to address unknown but urgent airport operational or capital needs In addition to the above, extensive staff time and resources that would otherwise be devoted to existing priorities will be required. Efforts and involvement from the City Manager, Deputy City Manager, Economic Development Manager, City Attorney staff, ASD Director, Deputy ASD Director, a Senior Financial Analyst, Public Works Director, Assistant Public Director, other Public Works staff, and other administrative support are needed to implement a takeover. The City staff has no expertise in this arena, so knowledgeable support to staff is a necessity both to evaluate the managemcnt options in this report and to start a transition process. It is staffs intent to return to Council with a BAO that establishes an Airport Enterprise Fund and provides funding to move forward with control of airport operations. Wiedemann Business Plan Options Report The Report examines the feasibility and potential options for transferring the direct control, management, and operation of P AO from the County to the City early or upon expiration of the airport lease in 2017. Understanding the City's concern about potentially assuming an asset that could absorb significant City resources, the report considers potential management structure options and their projected pro-forma financial performance prior to and following the lease expiration in 2017. Key issues are addressed including: potential financial outcomes, a lack of City staff resources and expertise to operate PAO, the environmental sensitivity of the airport's CMR:379:10 Page 3 of II location, construction constraints due to the Baylands Master Plan, existing subleases, aging facilities, Palo Alto community relations and economic impact, and the competitive market position of P AO relative to other airports in the area. The Report's financial projections verifies, to varying extents, the conclusions in both the City Auditor and PAA WG reports that the PAO has the potential to support itself financially over the long-term, presuming that all assumptions or variables in the report come to fruition. R. A. Wiedemann and Associates .(WiedemmID) was asked to determine the financial viability of the airport from 2012 to 2017 and to determine if it could remain profitable, under varying management. structures, for 20 years thereafter. Using historical revenue and expense information dating back to 2000, the consultant developed several "baseline" forecasts for operation of the airport through 2017. These forecasts assume staffing levels that are consistent with those currently maintained by the county. The report then builds upon these "baseline forecasts" to evaluate alternative business models for operating the airport. Because there are multiple and detailed scenarios that build on a previous scenario, readers of this CMR are encouraged to examine the consultant report (Attachment A). A brief synopsis of each relevant scenario follows. It is important to note that the "seed" expenses cited above is not included in the models or forecasts in the report nor is there any consideration of potential payback of the County's outstanding advance. It should be noted, however, that the City does not recognize the advance as a City obligation. Naturally, these expenses would offset the net revenues shown in the report's pro-formas and the results discussed below. Baseline Forecast for City or County Operation of PAO -through 2017 (p. 35 of Report, Table 11) Based on relatively conservative revenue and expense growth assumptions (page 35) as well as continuing current FBO leases, the report concludes that between 2012 and 2017, the County or City would have a net deficit of $129,200. The report shows that operating income would be positive over this period, but that after an annual $50,000 contribution to matching capital or other capital needs a cumulative deficit would result. The author states, "This projection can be considered the worst case scenario for the City or County operation of the Airport -continually increasing costs and very slow revenue growth." The report then goes on to assess a takeover by the City by July 2011 and concludes that the City could perform "slightly better" than the County since it would not have to pay for all of the overhead personnel the County cun'ently allocates. For example, the County currently allocates and recoups the cost of noise management staff that Wiedemann states the City would not need to support. Baseline Forecast for City Operation ofPAO from 2018 -2037 (page 36-37, Table 12) Addressing the 20 year period following 2017, the report finds potentially more robust net revenues, especially as a consequence of the FBO leases expiring. In 2008, the current, two FBO's only paid $134,900 in annual rent, but it is estimated, based on the revenue and expenses of FBO's at other airports, that the FBO's netted more than $1 million in revenue from their subtenants. WiedemaJID confirms this estimate by including revenue streams from FBO tie- down spaces and hangar and office rentals as income to the City. The Report does recognize additional City costs to take the place of current FBO workload. For this scenario, the report CMR:379:IO Page 4 of II projects that from 2018 through 2037, the PAO could generate $13.7 million in surplus revenues after accounting for capital matching and other necessary capital improvements. The Federal Aviation Administration (FAA) has indicated verbally that the old 50 year lease with the current FBOs is inappropriate and borders on a gift of public funds. They recommend that leases of shorter duration, e.g., 15-20 years, be implemented and the FAA intends to monitor these contracts. Once again, the financial projections above do not incorporate "seed" expenses, consideration of County capital "advances," or any exceptional or unexpected major capital expenses. Although this scenario portrays healthy surpluses that could cover the "seed" loan and other unanticipated expenses, it is critical to note that as a condition of having accepted FAA grants that all revenue generated at PAO must be fUllleled back into the PAO with the exception of paying City overhead and other appropriate expenses (e.g., legal, payroll, and human resource). Hence, the General Fund carmot "profit" from airport operations .. This guideline applies to all of the options discussed below. This option basically represents the City and its staff nUlling the airport. It presumes City staff will have future managerial, fixed base opcrator, and maintenance expertise to run the airport personnel. The alternatives that follow are variations on the assumptions for this model or substitutions for part or the entire City staffing model. Discussion and Analysis of Alternative Operational and Management Options After evalnating the City run "baseline" scenarios pre and post 2017, the report considers several different operational and management structures for PAO. Although the report does discuss a scenario where the County continues to manage the airport after 2017 that could result in additional City revenues, this CMR focuses on those alternatives where the City takes a proactive role in managing or hiring management for the airport. These options include: A. City Operation of the Airport In order for the City to operate the airport, the consultant recommends hiring an airport manager several months in advance of taking possession. Then, an assistant manager and a part-time City worker would be hircd whcn thc City assumes control. The airport operation would become an Enterprise Fund and an Advisory Group, comprised of knowledgeable users, business leaders and community members to the Council, would be formed B. Joint FBO and City Operation of the Airport In this scenario, the City would contract with a Fixed Base Operator to provide day-to- day management of the. airport. Duties would include daily inspections, minor maintenance, apron and ramp managemcnt, reports to Council, and interaction with FAA Control Tower operations. Basically, the Operator would substitute for some of the staff hired by the City under Scenario A (above). C. Third Party Management This option could take a variety of forms, but essentially the City would completely turn over operations and management to a third, for profit party. The City would retain II fundamental ownership of the land and would provide, for example, a long-term lease so that the third party could invest in and profit from operations. The City would have minimal control over operations other than to ensure quality service to airport users and make sure the Third Pm1y is performing as expected. The consultant says the four main benefits of this option include: capital infusion, efficieney gains, revenue gains for the Airport Enterprise Fund, and an opportunity to reinvent the airport. In addition, the City would require "measureable performance requirements that can be specified, with appropriate penalties for failure to meet them." The Report provides the pros and cons of each option as follows: 1--c __ . _______ TabJe 18 -Summary of Pros and Cons for All O=tc:.io;;.;n:;:;s'--______ --I Pros mmmm_ •••••••••••••••••• I Cons mmm _ c:--... -.... -..... -... -::--:--:--------I Ci Baseline Cit Manag~lt1ellt Options) 1) Greater control of all factors, relative to I) Responsibility for all finances and management of County control of AirpOlt the Airport 2) Positive net revenues over long term 2) Must deal with all staffing issues. 3) Monitor and control investment in capital i 3) Airport can become political issue assets. I 4) Potential financial risk 4) ~~;~:t :~i~~:~~d to __ ~~rport u:~r:c-a_n_d--,--I =c_---c--------------............. -i ~c_------_=_~-~Ad:::d:.:.it:.:.jo::;n:::a:--l--:H"'a"'I .. lg"e"'r!'-AC"P"r-"o ... n---=-c-c----:---:---:--__ ----..J 1) H· h fill) P . I I f A I d lll.l est revenue stream 0 a options 1 •........... ()tentJa C lange 0 Ir~ort VieW s 1e ------~ CitYI'llls FHO Management I ) Lower labor costs I) Less control of day-to-day operation and 2) Higher net revenues relative to 3ed Party management of Airport. Management and Baseline Projections 3) FBO responsibility for technical aviation issues Third Party Management I) Indirect responsibility for operating the I} Least amount of control over day·ta·day operation Airport. and management of Airport. 2) Airport operates as a profit center, 2} Dependent upon financial stability and strength of providing periodic payments to City. 3,d Party Operator. 3} May represent lowest financial risk of all ---{)ptions. ----~~ ... City management ofPAO with additional hangars/apron from 2012 -2017 and from 2018- 2037 (Tables 13 and 14 on pages 43 and 44, respectively) Moving on to the projected financial results for each option, the Report considers building incremental or new hangars. Wiedemann is acutely aware of the restrictions of the Baylunds Master Plan on intensification of use and includes this scenario only to assess the "economic value" future operations could yield. The additional hangars could be built in areas that are not environmentally sensitive. This model builds upon tbe "Baseline Forecast for City Operation of P AO from 2018 through 2037" described above, but adds additional revenue and expense associated with building and maintaining new hangars. CMR:3?9:IO Page 6 oft 1 To add new tie-downs and hangars in this "Iandside" option, the Enterprise Fund would issue $4.55 million in revenue bonds for 20 years at an estimated 5% interest rate. Once again using conservative revenue and expense assumptions, the Report presents pro-formas for the periods 2012 through 2017 and for 2018 through 2037. For the period 2012 through 2017, the projection shows cumulative net results of negative $43,800, but for the period 2018 through 2037 the cumulative net results show a robust $20.5 million. This option departs from the Baylands Master Plan because it assumes additional hangars. The Master Plan specifically prohibits any intensification of use and would need to be amended to allow this option to be implemented. City Plus FBO Management Option: 2018 -2037 (page 45, Table 15) For this option the Report states it "is only slightly different from the complete City management of the Airport." Day-to-day operation of the airport would fall to the FBO and the City would have overall control of the airport and supply the legal and other administrative services that complement those of the FBO. This scenario does not contain any new tie-downs or hangars and includes the estimated cost of an FBO. One assumption for this scenario that will require further analysis is that the FBO flat management fee is less. than the assumed salaries and benefits for a City run operation. The author acknowledges that an RFP process and eventual FBO contract could change the assumed FBO costs. For the period 2018-2037, the pro-forma for this option shows cumulative net revenues of $22.6 million. Based on the financial results of this scenario, staff believes currently that further investigation is merited. Third Party Operation of PAO Option: 2012 -2017 and 2018 -2037 (pages 46-47, Table 16) There are a number of formats for third party operation of the airport and they can range from "either management only or an all-inclusive master lease of the entire airport." In the Report, the former is assumed for the 2012-17 period. The third party would manage airport operations and procedures, manage property and assets, do maintenance and repairs, do tenant administration, and other operational tasks. The City would be responsible for making all policy and leasing decisions. For their work, the third party would likely be paid for their costs as well as a percentage of gross airport revenues. The percentage, per the RepOli, is likely to be in the 5-10% range. In this option, the Report estimates that for the years 2012-2018, the cumulative net revenues would equal $816,200. For the period 2018-2037, the Report assumes in its forecast a third party master lease for the entire Airport which translates into very little involvement by the City. Building upon the City plus FBO pro forma, the consultant's third party lease scenario assumes that the Airport Enterprise Fund could expect between 70 to 80% of net revenues. By assuming a 75% return, the pro-forma results in total third party payments to the City'S Enterprise Fund of $16.98 million during 2018-2037. The Report states that a lease of around 25 years would be expected by the third party in order to recoup its investments in the airport. The lease would have to be approved by the FAA and State Aeronautics. The length of the lease could be an issue for the FAA given its reservations about long-term leases so this options merits further investigation. CMR:379:10 Page 7 of II Summary of Pro-Formas and Consultant Conclusions Table 17 from the Report (page 48) summarizes the financial forecasts for each of the options discussed above: Table 17 -Summary of Financial Performance Options: Total Net Revenues MANAGEMENT 2012-2017 . 2018-2037 Total Net Revenues OPTION Baseline City -$129,200 $13,678,500 $13,549,300 Management Additional -$43,800 $20,500,700 $20,456,900 Hangar/Apron City Plus FBO N/A $22,646,400 $22,646,400 Management Third Party $816,200 $16,984,800 $17,801,000 Management The Report concludes that the "City Plus FBO Management Option produces the greatest surplus of net revenues over the entire period" while "the Baseline City Management Option has the lowest total net revenues of the four options. The reason for the significant revenue differences between the City Management and City Plus FBO option is that the Consultant projects considerably less labor cost under the FBO scenario over time. Differences in outcomes between the FBO and Third Party options result from the Third Party taking a greater share of revenues to compensate them for costs and risks for assuming the entire airport operation. The variance between City and Third Party results from lower Third Party labor costs over time. From the pro-fonmas, it would appear that all options have sufficient revenues to cover the General Fund "seed" funding/loan as well as any other moderate, unanticipated operating or capital expenses. In the "Recommended Options" section, the Rep0l1 proposes two options: City and Third Party Management. These scenarios provide clear paths: either the City maintains complete control or delegates responsibility to a third party with relatively minimal oversight. Of the two options recommended in the report, the Third Party option results in better financial returns than the City run option. It should be noted that in all scenarios, the City is ultimately held responsible by the FAA for conditions at the airport. The FBO option was not recommended because of potential FBO conflict of interest issues and the fact that the City would be responsible for all capital improvements while the FBO operated the airport. In addition, this model could lead to overlapping management and potential discord unless roles and responsibilities were clearly defined. Nonetheless, because this option yields the highest financial results, staff believes it is worthy of further analysis. After making the recommendations, the Report describes the implementation steps for each of the two options. This is important information that sets the stage for a timetable with tasks to achieve the City'S goal. CMR:379:10 Page 8 of II Airport Community Value In Appendix B of the Report, the consultant goes beyond incomestatcment projections for the airport management options and studies the economic benefit of the PAO. Using a software model, IMP LAN, to assess the impacts of expenditures by Airport employees, users, travelers an estimate of economic value is generated. Using a variety of "inputs" or data such as user spending onairpJanes and employment at PAO, the IMPLAN model calculates direct and "induced" economic impacts. It is estimated that the Airport produces $64.3 million (including $22.4 million in wage income) in economic benefits to Palo Alto and surrounding communities. The model calculates that the airport supports 307 jobs. The $64.3 million does not include income, personal property and possessory interest taxes that are paid to the State, County and local jurisdictions. The Report states that over $3.7 million in State and local taxes is generated annually. Semi-annual Progress Report on Negotiation Status with County City and County staff have had periodic meetings to discuss the transition to City control. Discussions will continue to a more productive level after the completion of this report and Council direction is given. StaffRecommendalion and Comments Moving toward a takeover of the airport will require a significant effort by staff and reliance on numerous outside experts such as outside legal counsel. This is the case whether the City assumes control prior to or when the County lease expires. It also will be the case if the City hires an FBO or Third Party. A most preliminary and perhaps aggressive estimate is that it will take a minimum of 2-3 years to implement City oversight. Staffs understanding is that this process must be thought through carefully and sequentially so as to facilitate the process, work through existing relationships, and maximize financial return to the Airpolt Enterprise. Negotiations and a contract with an FBO or a Third Party Operator will take considerable time and due diligence. It is recommended that an expert staff member Or consultant be hired to work through the options in the RepOl1 and to guide the City toward an eventual takeover. In all of the above scenarios, the City will be responsible for submitting funding req uests to the FAA. This CMR has primarily concentrated on thc financial results of the Consultant's report. There are non-financial issues that arc important to consider and address. A fundamental policy question is how much involvement in and control of the airport does the City want, particularly since it lacks expertise in this arena and since any net revenues, after paying for any City overhead support, must be invested in airport improvements? Unless the City is prepared to repay FAA grant monies and decouple fi'om FAA support (which a complicated process), there does not appear to be a direct return to the General Fund. The essential question is which management model is most efficient and effective in serving users, maintaining an important asset, and minimizing any impact on the General Fund? A subsidiary question to City staff numing the airport is how nimble and entrepreneurial will they be in contrast to an FBO or Third Party Manager who is familiar with facility maintenance, dealing with the FAA, accustomed to delivering a unique customer service, and who has the incentives to perform well? On the other hand, it should be noted that most California ail]lOl'ts are managed by public agencies with a few exceptions in southern California that have third CMR:379:JO Page 9 of II party management. In fact, there has been one instance in which a public agency had to revoke third party management of the airport due to performance issues. The challenge in third party management is that strict specifications, performance measures, and oversight would be necessary if Palo Alto decides on this course. The City would likely need to hire a manager to keep vigil over the contract and service to the airport users. Although the Report recommends two options, a City run airport or Third Party management, al this time staff believes the Council should also review and comment on the FBO option. Given the projected net revenues for an FBO model that are higher than the other options, this alternative merits further consideration and analysis. In addition, it provides the expertise the City needs to operate the'airport ifit chooses to have a management role short offull control. To assist with the analysis of management options and a transition to City control, staff recommends the formation of an advisory body to Council. Based on Council direction, staffwill return with a Budget Amendment Ordinance (BAO) for required resources and the establishment of an Airport Enterprise Fund. A specific timeline (see below) for hiring the expertise and perfOlming the required tasks to move forward would be provided along with the BAO. In addition to the issue of a management model, there are concerns over the physical condition and vacancy rate at the airport. The former is a consequence of minimal County work in this area and the latter is a result of higher fees implemented by the County to recover its prior capital investments. These are important issues that affect the viability of the airport. In addition, there is significant community and economic value (see Appendix B) that should be recognized. TlMELINE Taking control of the airport will be a complex, step by step process that involves a host of entities and considerations. Multiple meetings with the County, the FAA, State, and East Palo Alto will occur over time. Legal, eontractual, and operational issues will need to be worked through. Depending on Council input and questions, staff envisions returning to Council with a BAO for additional resources and a more finalized Business Plan. At that time a more detailed timeline can be provided. Staff envisions the following, high-level timeline for next steps: December, 2010 Return to Council with BAO February, 2011 Formation of Airport Advisory Body May, 201 I Advisory Board and Staff recommend, jointly or independently, Airport Management Option and Timeline Steps to Implement AhJlort Transition. RESOURCE IMPACT The preliminary costs of taking the first ~ieps toward City control of PAO are $500,000. This estimate includes: Phase II Environmental Site Investigation Airport Manager (annual eost) CMR:379:IO $150,000 $220,000 Page 10 of II Other Expert or Consultant advice . Legal advice (first year) Total $100,000 $ 30,00Q $500,000 The above costs arc rough estimates and could vary depending on Council input and direction. Legal costs would be ongoing and would increase· as negotiations with an FBO or Third Party ensue. In addition to an Airport Manager to help with the transition, other expert or consultant advice may be required. These expenses would be funded from the Budget Stabilization Reserve in the General Fund as a loan and repaid by the Airport Enterprise Fund once sufficient funds are accumulated. POLICY IMPLICATIONS This progress report and recommended actions are consistent with previous Council direction. ENVIRONMENTAL REVIEW A Phase I Environmental Site Assessment has been conducted and is attached to this CMR (Attachment C). The assessment was done to determine if any hazardous material spills have . impacted soil andlor groundwater at PAD. The report concludes that there is sufficient cause to recommend a Phase II site investigation to evaluate potential soil and groundwater contamination at the PAD. A TTACHM.ENTS Attachment A: Wiedemann and Associates Business Plan and Community Value Analysis Appendix A: Survey of Airport Users Appendix B: PAO's Community Value Attachment B: Environmental Site Assessment PREPARED BY: Depu Director,;jA~~~ .~-~ i ve Services LAL ~~~_-.-~ Director, Administrative Services CITY MANAGER APPROVAL: cc: County of Santa Clara Palo Alto Airport Joint Community Relations Committee Chair of the P AA WG CMR:379:JO Page II of II · I I I I I I I I I I I I I I I I I I I I I I I TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: November 22, 2010 REPORT TYPE: CONSENT DEPARTMENT: ADMINISTRATIVE SERVICES CMR: 409:10 SUBJECT: Approval of Banking Services Contract Extension with Wells Fargo and Union Bank for Three Years RECOMMENDATION Staff recommends that Council approve extending banking services contracts with Wells Fargo Bank (Attachments A) for three additional years. The contract would be effective from January 1, 2011 through December 31, 2013. BACKGROUND In 2005, the City conducted a Request for Proposal (RFP) process for banking services. After reviewing the proposals from a number of banks, the City selected Wells Fargo (Wells) for general banking services and Union Bank (Union) for custodial services (safekeeping of City investments in securities). The selection of Wells ended a long-telm relationship with Bank of America, the prior banking services provider. The agreement with Wells and Union consisted of a three year contract plus an additional two years based on satisfactory performance which Wells and Union has more than exceeded. The five year service contracts end December 31, 2010. DISCUSSION Staff is requesting that Council extend the existing contract with Wells for three additional years. Because of the cost of the existing contract, where annual fees are now exceeding $117,000, City policy requires City Council approval for a contract extension. Union Bank's fees are under the threshold for Council approval, but for transparency purposes, staff is calling this contract to Council's attention. It is important to note that the annual costs of the banking contracts depend on the volume and mix of fees or services used, so annual costs must be estimated. NOimally, a RFP would have been initiated by staff, but due to workload and other factors one has not been conducted to date. Moreover, there are a series of important considerations that prompt this request for extended Wells and Union contracts. These include: • During the past six months, the City has worked toward and completed the outsourcing of the Utility Payment (Bill) Processing activity. A cost benefit analysis was conducted CMR: 409:10 Page 1 of3 for this operation and it showed solid savings for the Utilities. The savings primarily resulted from not having to purchasc or lease a new process machine (capital cost was between $120,000 to 180,000 plus an annual maintenance fee of around $30,000). This project took considerable effort to implement because of information system and process issues. By moving to another vendor much of the work and many of the system issues . will be duplicated, thereby absorbing additional and significant resources. • Wells service and teehnology have been excellent. While strict technology comparisons with other vendors have not been made, periodic discussions with other vendors over the past 5 years has led staff to believe that Wells' technology and process improvements will be difficult to exceed. Wells' on-line portal offers simple, easy, and fast single point of access for all cash management services (e.g., online security and fraud control, wires, reports, data file transmission and reeeipts, self-administration tools). In addition to Utility Payment (Bill) Processing, Wells has made improvements in Internet Bill Pay and check and electronic fraud prevention. The City is also exploring adding Wells' Commercial Card Expense Reporting (CCER) AP Control service. • During the eeonomic downturn and the City's budget challenges, Wells was asked to review their fee structure with the goal of reducing costs to the City. In June 2009, Wells made fee or price concessions that reduced the City'S annual costs by an estimated $8,000 or 10.8 percent. Wells guaranteed these priees, with one relatively minor exception, through the end of their contract with the City or Deeember 31, 2010. • In preparation for a recommendation to Council, staff contacted Wells Fargo to determine if further and future pricing concessions could be provided. Wells has agreed to reduce fees resulting in estimated annual savings of $15,500. Attachment A shows the new and lower fees oi1ered by Wells Fargo which would take effect January 1,2011 and stay fixed until December 31, 2013. o Implementing a change in banking service vendors takes slaff and the vendor nearly 4-6 months to implement. Approximately, a dozen staff members would be engaged in this time consuming process reducing their ability to tend to other City business. With the outsourcing of Utility Bill Processing operations, annual fees are estimated at around $117,000 (previous annual fees were around $75,000). While this is not a small expenditure, staff believes the contract with Wells is eompetitive and serves the City's long-telm interests in efficient and effcctivc service and in further automating manual time consuming processes. On an annual basis, Wells' proposal in the 2005 RFP was lower by approximately $18,600 or 10 percent compared to the second least expensive vendor. Staff will be also entering into a new contract with Union for custodial services for City investments. Per City policy, Council action is not required for Union's contract (less then $85,000 and not greater than three years). Since the custodial services has been and wi![ remain part of the future banking services RFP, the new Union contract will be for the samc duration as the Council selects for the banking services contract. In the 2005 RFP process no vendor could approach the low cost service Union provides. Union's fees to the City have not changed in the last twelve years and annual costs are arOlmd $5,700. Union has made price concessions for the new contract that will reduce the City's annual costs by an estimated $668 or 11.7 pereent. CMR:409:10 Page200 Union has guaranteed to fix these lower rates for the duration of the new contract or through December 31, 2013. Thc City holds some 168 federal agency and other securities with Union with an estimated 65 securities maturing each year. This service is extraordinarily cost effective. In conclusion, staff recommends that Council extend the Wells banking services contract for three more years. At the end of whatever extension Council approves, staff will conduct a formal RFP process for banking and custodial services. At this time, staff believes that continuity in banking services is in the City's best financial and service interests. RESOURCE IMPACT The estimated annual cost for regular banking services is $117,000 and for custodial services is $5,000. Funds for these services have been appropriated in the City's budget. ENVIRONMENTAL REVIEW This is not a projcet for the purposes of the California Environmental Quality Act. ATTACHMENTS Attachment A: Three Year Contract Extension with Wells Fargo Bank (with Amendment to Fee Structure in Existing Wells Fargo Contract) ::~::nn:mfug W,l1'F~g, ~ 2010) DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: TARUNNARAYAN Senior Financial Anal t, Administrative Servi s LALOPE . Director, Administrative Services i~~LMtlAp ~AMESKEENE . • City Manager CMR: 409:10 Page 3 of3 ATTACHMENT A AMENDMENT NO. 1 TO. CONTRACT NO. C05109043 BETWEEN THE CITY OF PALO ALTO AND WELLS FARGO BANK This Amendment No. 1 to Contract No. C09128288 (ftContract") is entered into November 23, 2010, by and between the CITY OF PALO ALTO, a charter city and a municipal corporation of the State of California (ftCITY"), and Wells Fargo Bank, located at 550 California Street, San Francisco, CA 94063 PH(415) 396-7485 (ftCONTRACTOR"). R E CIT A L S: WHEREAS, the Contract was entered into between the parties for the provision of Banking Services; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 3, TERM. is hereby amended to read as follows: ftTERM. The services provided under this agreement shall commence on January I, 2005 and shall be completed on or before December 31, 2011, with an option to renew for up to two additional one year periods through December 31, 2013." SECTION 2. Section 4, COMPENSATION. is hereby amended to read as follows: ftCOMPENSATION. CITY shall pay CONTRACTOR as compensation for full performance of this Contract: A sum in accordance with the Fee Schedule set forth in Exhibit ftB", attached herein. SECTION 3. The following exhibit (s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit ftB" entitled ftCompensation". Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. 1 101116 sm OlD IN WITNESS WHEREOF, the parties have by their dul y authorized representatives executed this Amendme on the date first above written. CITY OF PALO ALTO WELLS APPROVED AS TO FORM: Senior Assistant City Attorney Tit 1 e : _-'-'-'" Purchasing Manager Attachments: EXHIBIT "B": COMPENSATION ATTACHMENT 1: CONTRACTOR's Letter of proposal, Addendum No.2 2 EXHIBIT "Bn COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Contract, and completed to the reasonable satisfaction of the CITY. The compensation to be paid to CONSULTANT under this Contract for all services described in Exhibit "A" "Basic Services") and reimbursable shall be based on the Schedule of Fees for Services listed below, reflecting the prices contained in CONTRACTOR's Letter of Proposal, Addendum No.2 to Palo Alto's RFP No. 109043 dated November 10, 2010, attached herein as Attachment 1 to this Amendment. 1OI1l6smOlO SCHEDULE OF FEES for SERVICES General Account Services ACH Monthly Base ACH Ret Item·lnfo Reporting Advice ACH NO·lnfo Reporting Advice Disbursement Recon Servo ARP Optional Reports Lockbox Services RLBX Transmission Base WLBX Monthly Base WLBX Image Storage WLBX Data Capture SF WLBX Document Scanned WLBX Item Processed Image Information Services CEO Intraday Subscription Monthly Base CEO Intraday Subscription -Item Lockbox CEO Subscription -Monthly Base 3 $30.000 $ 2.000 $ 2.000 $ 5.000 $ 75.000 $100.000 $ 0.030 $ 0.010 $ 0.050 $ 0.040 $ 50.000 $ 0.010 $ 75.000 November 9, 2010 Tarun Narayan Senior Financial Analyst City of Palo Alto 250 Hamilton Ave, 4~ floor Palo Alto, CA 94301 Dear Tarun: ATTACHMENT No. 1 The City of Palo Alto has been a valued Wells Fargo Bank client since 2005. In appreciation of this, I would like to offer the city the attached price concession in addition to the first price concession dated on June 1, 2009. These proposed reductions, found in the enclosed attachment, along with all the City's pricing would remain in effect and guaranteed until December 31, 2013. The net effect of these price changes shows an additional savings of approximately 6%, from the original savings of 10% last year. The city may terminate this agreement at its convenience and without cause upon thirty (30) days written notice to the Bank. Please acknowledge acceptance of these terms by signing and returning an original copy of this letter. Thank you for your business and continued partnership with Wells Fargo Bank. We look forward to continuing to provide banking services to the city and will strive to meet or exceed your expectations with regard to products and customer service. Sincerely, Mary Lou Lopez Vice President Relationship Manager Cc: Joe Saccio, Deputy Director of Administrative Services ACCEPTED BY: 4 101116 sm 010 Lockbox CEO Subscription ·Monthly Base 120.0000 75.0000 6 IOll16smOIO ATTACHMENT B SERVICES CONTRACT No. CO,,-1 M 043 THlSACREEMENTmade andenteredin!QQntheJR'dayOf ;J;;!AU hIM ... · 2005 by and between theCITYOF PALO ALTO{hereina~ referred to as CITY). and WELLS FARGO BANK. 550 Califo~~ 81m Francisco, CA 94063, {41SwJ96-7485) (hereinafter referred to as <''QNTRACTOR). In consideralion oftheirmutuai cQvenanu, the pAflies hereto agree as follows: L SERVICES. CONTRACroRshall provirltl or furnish the services described in the ScopeofWork, attached hereto as Exhibit "A,\'nnd incorporated herein by this reference: Banking SeTvlces (Includes Merchant Servh:ef)~ 2. EXHffiITS. The following."",hed exhibijg",e'hereby made a partofilii, agr_int:.l3';'A" ~B" """C" )lC'D-l" -"O-S" " ~ll" CONTIIACT IS NOT COMPLETE UNLESS IILL EXHIBITS ARE ATTACHED 3. TERM. The services provided under thl$: agreement shall commence on January ). 200S and shan be completed before December 31, 2008. with an option 10 renew the contract for an additiona1 two years through December .31, 2010, . 4. COMPENSA nON. CITY ,hall pay CONlltMlTOR as compeosation rorlhe lUll performanceoflhis Contract: A sum In accordance with the roe schedule set forth in Exhibit "B," attached hereto, 5. INVOICING. Send all invoices to the CITY, Attention: Projett Manager, The ProjootManager is: Tamn Narayan. AdmlnlstratiYe Services Department. (650) 329 .. :062. • . 6. CONTROI,LING DOCUMENTS. The lerma ofExhibilS "A" and"S" shaU coalrnl OV"-My conlliCling lerms in ExhibilS "0-I" through "0·8" ANY HOUlIS WORKED FOR WHICH PAYMENT WOULD RESULT IN II TOTIIL EXCE/IDING THli MAXIMUM AMOUNT OP COMPENIIIITION SET PORTFJ HEIIEIN 8l1ALL Bli AT NO COST TO CI1'f. CITY OF PALO ALTO GENERAL TERMS AND CONDmONS A. ACCEPTANCE. This agreement is limited. to the terms and conditions on pa,ges t and 2 hereof whicb includes any exhibits referenced. S: INSURANCE. CONTRACTOR agrees to provide the Insurance specified in the "insurance Requirements" fonn attached hereto as Exhibit"E". In the event CONTRACfOR is Wlabtelo securen policy endorsement Darning the City of Palo Alto as an additional insured under any comprclu.':w;ive general liabiJity or comprehens!v6 automobile policy or policies. CONTRACTOR shall nt a mirumum, and only with the writltn approval of City'S Risk Manager or designen. cnusc each such insurance policy obtained by it to conUlin rut endorsement providing thallhe insurer waives: alhight ofreeovety by way of subrogation against C1TY, its officers. agents. and employees in connecdon wft~ any damage, claim, liability persona! injury, or wrongful death covered by any such policy. Each $\leh polley obtatned by CONTRACTOR shall contain an endorsement requiring thirty flO) days' written notice from the il)$urer to CITY before canceUation or reduction in the coverage Of limits of such policy_ CONTRACTORshall provide certificates of such policies Of other evidence of coveIllge Sfltisfactoty to City's Risk Manager, together with evideru:e of payment of premiums, to CiTY at the commencement of this agreemenl~ nnd on renewal of the policY. or policies, not lata' than twenty (20) days befureexp1rallonofthe lerms ofeny such policy. C. ASSIGNMENTSICIIANGES. This agreemenl shall not be assigned or transferred without the written consent of the CITY. No amendments.ohanges or variations of aJ!Y kind areauthorized without the written consent of the City Manager. D. AUDITS. CONTRACTOR agrees to p.ermitC1TY to audit, iU any reasonable time during the term of lhis agreement and for Ihree (3) years thereafter, CONTRACTOR'S records pertaining: to matters covered by this agreement. CONTRACTOR further agrees (0' maintain such reeords for at least three {3) ~ after the term of this agreement E. NO IMPblED WAIVER. No payment, plU'tial payment. aceepw,nee. 6r partial aceeptance byCITY shall opemteas a waiver on Ihej)art of CITY of any ofim rights under this Dgreel11coL F. ClTY'S PROPERTY. Any reports, information., darn Of other matedal gi.ven to, or prepared or assembled by. CONTRACfORor its suboontractot$, if any. under this Conu1lC1 will become the property of CITY and will not be made available to any individual or organi7.ation by CONTRACfOR or its subcontractorS. if any, withouf the prior written approval of the City Manager. G. NON-DISCRIMINATION. Nomscrinl.i1tation shaU be made in the employment of persons under this agreclnen( becnuseof!hc mee. skin oolor~ gender. age. religion, disability. national origin, a.ncestry. sexual orientation. housing Slatus, marital status. familirtl status, welght or height of such person. CONTRACIOR agrees to meet all fe!l.uirements of the Pale Alto Muni¢1pal Code pertaining to nondiserinllnation in employment, Including completing the NonDiscrimination ColJlllliance Form. attru:hed hereto os Exhibit''C'', and incorporated herein by this reference. 050203 sm 0100339· Pao. 1 of2 i .l I • • y CITY OF PALO ALTO GENERAL TERMS AND CONDmONS -Continued H. QUALIFICATIONS. CONTRACTOR represents andwarrnnts that it has tbe expertise and professional quaiificalions (0 complete the services d~ribed in .ISERVICESu and that eV€Tjllndividual charged with Ihe perl'onnanee of the services under this Contract is duly licensed or certified. 10 !he extptt sueh iieensing or certification is ~e.qui.red by law to perl'onn the services. I. COMPLIANCE WITH LAWS. CONTRACTOR agrees <hot I' win comply with all federal, state and locnl taws, ordinances. regulations, and orders lhat may affect thosa engaged or employed under this Contmct, any malerials I1.rred in CONTRACTOR's performance under this CoRInlet., or the performance of the sUvices provided in completing !he work, J. INDEPENDENT CONTRACfOR. Iii, unders'ood and agreed that in lhe petfofIll3llceofthis Contract, CONTRACTOR shall [It nil times be eonsidered lUI independenr CONTRACTOR and not an eJ.'!1pJoyee of the CITY, CONTRACTOR shall be respons~ble for employing or engag.lllg all persons necessary to complete tile wort required under this Contraet. K. TERMINATIONISUSPENS[ON. The City Manager may suspend the perfurmance of this Contract in whole or in part, or temnnate this Contract. willi Ot without cause, by giving ten (to) days' prior written notioetherwr(o CONTRACTOR, Upon receipt of such notice. CONTRACTOR shall immediatoly diseontmue lis perfonnance. Upon $ooh suspension or tenrunatlon by Cl1Y. CITY shall pay CONTRACfOR fOT its services nctuidly rendered [0 CITV' on or before the effeetive date of Ihe suspension or terminnlion; provided. if this Conlrae! is suspended or terminated ~ account of a default by CONTRAcroR. CITY will be obligated to ()ompensure CONTRACTOR QIlly f01 that portion of the-Servfces which are of direcl and immediate benefit to cn"Y, in the reagonaNedetermination of the City Mtul112cr, Upon suspension" or termination. CONTRACroR shall immediately deliver to Ihe City Manager any and all oopie,sof studies. sketches, drawings. c<lmputatio~, and other material or products, wheiMr or not eompieled, prepared by CONTRACTOR orgtven to CONTRACTOR., in connection with this Contmet. Such nl/HennIs shan become the property of ClTY. nUl rights of CiTY under this sedion 10 suspend or terminate this Conlract shall be in addition (0 any and all rights or remedies the CITY may have avaHable to it under Ule law, in the case of a breach of this Conk"" by CONTRACTOl.t L. CONFLICf OF INTERES'f~ In accepting this Conh'act, TRACTOR covenants that it pt'esently h;u no inlerest, and win not acquire any inler~ direet or indirect, financial or otherwise, which would conflK:"t in any manner or degree. with the pertbrm.aooe of this Contract. CONTRACTOR furthercovenartts that, in the~e of this COnlnlct. it w;U not employ any person luwingsllchan interest. CONTRAC'roR certifIeS that no person who has or win have My Unancial intetest Under this Contract is an officer ot employee of CITY. M. ENTIRE AGREEMENT. This agreement, inol.ding all exhibits. repres~ts the entire agreement bl}tWeetl the parties with respect 10 theserviees wbich may be the subject ofthis Coniract. Any variance in the Exhibits docs oot n~t the validity of the Cootnwtand the contract itself c~ntrols, All prior agreements, fepresent.ntiOluf, statements, negoliations and undertakings whether orat or written are superseded hereby, N. NON~APPRO'pRIA TION.,This Contract is subject to the ({Seal provisions Of the Clmrter of the City of Palo Alto and the Palo Allo Munlcjp~l Code, Thia Cont:tae"t will terminate wiilioutany penulty (a) at the end of any fiscal year in the event that funds are not appropriated for the following nscs,l year, or (h) at any time within a fiscal year in !he event dlat funds are only appropriated for a portion of the fiscal year and funds for this Contnlet are no tonger available. 'This Section 15J I sball takeprecedenee in the eventofaeooflictwlth any other oovenanl, lemlt eondition, or provlsion oflhls Contract THIS AGREEMENT SHALL BECOME EFFECTIVE UPON ITS APPROVAL AND EXECUTION 9-Y CITY. IN WITNESS WHEREOF, THE PARTISS IlAVE EXEClJl'ED TIllS' AGREEMENT TIlE DAY, MONTH. AND YEAR FIRST wruTrEN ABOVE. BY _______ ~,L/ ______ _ Tille: ______ :..I __ --__ . _______ _ Tax LD. or Soeinl Soourity No; 'fr: (.itt!!>?i ____ _ Telephone: 0/15. 396· ? 'l'J!'S EXHIBIT A .. eln OF PALO ALTO . . O. BANK AND SlAffilROFll1 1. Describe the Bank. a. Provide a corporate overview of your bank and a brief description of its history . .!IANKJ!VfRVIEW Founded in 1852. Wells Fargo Bank is the oldest and largest national bank headquartered in California. Celebrating our 152nd year of operation. Wells Fargo is recogni1:ed as one·olthe most highly capitali1:ed and well-managed banks in the industry. Wells Fargo Bank. N.A. is a federally chartered banking instilution and a member of the Federal Reserve System. Wells Fargo is a nalionalleader in financial services. meeling our clients' financlal services needs when. where and how they want to be served. Our trademark; the stagecoach. is the symbol of Wells Fargo's role in the development of the Western UnKed Stales and stands for our pride in "ooming through" for our clients, a hallmark of our company since 1852. We are . licensed topracllce within the State of California. Government Banking Division The Government Banking Division at Wells Fargo Bank is a team 01 seasoned professionals dedicated exclusively to serving the unique banking needs of the public sector. Carole LaRocca. Relationship Manager, will manage your relationship from our Government Banking Unit in San Francisco with local support from our Palo Alto branch al 400 Hamilton Avenue. We draw on the Bank's vas! resources to deliver state·oI·the-art banking producls and weare commilled to serving our govemment enlilies and their employees, and the communities in Which they live, through a complete range of products and personalized . service. Some of our advantages include: + Largest and slrongest bank headquartered in California -only Aaa rated U.S. bank + Full range of services to the public sector including municipal investment specialists. Corporate Trust, Custody and Public Finance + Statewide coverage of all communities + Regulatory compliance with state codes and oollateral requirements + Sector-specific products/including Same-Day Stale Payments + Access to LAIF + Municipal credil support and expertise in fund acoounting b. Identify the number of branches within our City limits and the nearest lull service branch that can assist us with our banking and safekeeping needs. We have three full service traditional branches conveniently located within the Palo Alto city limits that are available (or deposits of currency, coin ~nrj checks. The City will receive·an immediate deposit receipt and can purchase coin and currency as needed. Deposits received at local branches by 4:00 p.m. Monday through Thursday and by 6:00 p.m. on Friday receive same day credit. The staff at our Palo Alto Main branch is available to provide any needed local support. Stanford Fann ATMrrreaSury Express II SLanfc)fd Industrial Park California Ave Express Our tnstitutional Trust and Custody office located in San Franciscc will handle safekeeping transactions. • CITY OF PALO ALTO 2. Bank's Experience. a. Describe the Bank's Experience in Providing Similar Services. I'UBYC SECTOR llIPERIENCI Wells Fargo Bank has a vel)' strong commitment to provide banking sel\li:)es to the California public sector with seasoned, experienced personnel that specialize in working exclusively with public agencies. Our Government Banking Division and Treasury Management specialists are vel)' experienced in providing superior service to our public agency clients. We are proud to have over 400 valu.ed clients made up of counties, cities and various special districts throughout California. Wells Fargo is very familiar With and is in full compliance with all requirements of the California Government Code lor public funds. b. Summarize the services provided for three of the bank's most comparable municipal clients and for two of the bank's commercial clients. Include a brief description of: i. The services provided. il. How long such services have been provided. iii. Contact person for each client described. REfER~HCIS I Funds Deposit Accounls, Full Account I Direct 'Oeposit 01 Payroll, Payroll Taxes.lnterneli\CH, ACH Debit, On·Une Banking, Sweep, CD- ROM, Controlled Disbursement. Electronic Consumer Commerce, ZBA, Sub-Accpunting. Card Public Demand Deposit Accounts, Direct Deposit 1 Controlled Disbursement. Merchant Card, Account Reconcilement. Positive Pay. ZBA, CEO - Information CITY OF PALO ALTO i Deposit Accounts, Full Account Reconcilement, Positive Pay, Deposit Of Payroll. Payroll Taxes, Internet ACH, ACH Debit, On-Une Banking, Sweep, CO- ROM, Purchase Card, Electronic Consumer Commerce, ZBA, Sub·Accounting, Merchant Card 3. Identify the Personnerto Be Assigned. RBATfOHSHIP MIIIIIIGEMEHT We currenlly have 24 dedicated professionals who have responsibility for serving our public sector clients. The individuals listed below woul<:l be specifically assigned to your relationship. Carole LaRocca would serve as the CUy's dedicate<:l Relatio~ship Manager and the City's primary point of contact for all your banking needs. Carole and the rest 01 the proposed relationship team are very excited at the prospect 01 working with the City and your finance and treasury officials. We look forward to partnering with you to lake advantage of Slate·of-the-art technology to create every possible operating efficiency lor tile City of Palo Alto. • CITY OF PALO ALTO . As your I Manager, Carole will function as a financial consultant to the City and coordinale a team of specialists working on your relationship. She. will provide guidance and assistance regarding new technologies and procedural enhancements. Carole has over 26 years of diversilied banking experience. The last t 4 years have been ,d!l\lieated to exclusively serving the public agency market. Carole is an active member in the Clllifomia Municipal Treasurer's Association, the California Society of Municipal Finance Officers and Ihe California Association of County Treasurers 1\ Tax Collectors. Tisha has the primary responsibility for providing treasury management expertise. She brings over t 4 years 01 corporate banking experience in the design, development and implemanlation of ctient specific Ireasury management systems for large corporate and public agency clients. Tisha is a Certified Treasmy . Professional through the Association for Financial Professionals. She is a member of the CalifomiaAssociation of County Treasurers and Tax Collectors, CalilOfoia Municipal Treasurer's Association, California Society of Municipal Finance Ofticers and San Fraocisco Treasury Management Association. With over 30 years in the trust industry, Jim Miller brings COnsiderable experience to Wells Fargo's Inslitulional Trust Services Department. That experience includes engagements as a Relationship Manager for institutional clients, as Manager of a Securities Lending Marketing and Service Team and as Manager of ail Employee Benelit Trust Department. As Manager of National Sales for the Custody Services area, Jim oversees the activities of a sales slaff thai covers the entire country and is directly involved in the ongoing development of Wells Inslitutional Services, Mary Lou works with your Retationship Manager to help enhance customer service to public agency clients. She will serve as Ihe liaison between the City and the . various departments of the Bank. Mary, Lou brings over 9 years 01 banking experience in the areas of portfolio management and customer service with !he last 3 years managing government relationships. She will assistlhe City direcllywith any items pertaining to your aocounl analysis stalements,LAIF and overdrafts. is the Store Manager for our Palo Alto location. He has managed the Alto store for the las12 years and has been with Wells Fargo for over 4 years. Reza takes an active role in the Palo Alto cOfOmunity and is very familiar with local issues and concerns. He and his team are active in the Palo Alto Chamber of Commerce and More Than A Meal program. Reza and his staff will assist the City and your emlployeeswith any immediate banking needs, including the opportunity to benetits Cny OF PALO ALTO 4 ... List All Services to Be Provided. SERVICE Treasury Management Services Safekeeping and Custody SelVices Merchant Card Services Sweep SelVices Local Branch Services 5. Exceptions. The City will be assigned a dedicaled client service oHicer I who will be the City's representative for day-to-day customer service. This individual will act as a liaison between you and various operations centers to resolve issues and'request information quickly. The client service officer will provide the City with expert operations support for all of your cash management be responsible for T raasury Management and services, This specialist wililrain City employees on how to use services and 'asslst in complellng all documentation, . ! LOCATION PROVIDED FROM San Francisco San Francisco San Francisco .. -San Francisco Palo Alto There are no services required by the Oity thai are not included in Wells 'Fargo Bank's proposal. We.compty wilh the City's staled minimum qualifications with no exceptions. , CITY OF PALO ALTO . . . D. DEPOSITPROOESSIND 1. Identify a branch location in proximity to Palo Alto that can accommodate the security and deposit volume Of our accounts. . We have three full selVice traditional branches eenvenientiy localed within the Palo Alto city limits and one in Stanford that are available for deposits of currency, eein and checks. The City will receive an immediate deposit receipt and can purchase coin and currency as needed. Deposits received at local branches by 4:00 p.m. Monday through Thursday and 'by 6:00 p.m. on Friday receive same day credit. Our Palo Alto Main branch can accommodate the security and deposit votume of your accounts and the staff there is available to provide any needed local support. Stanford Farm II Sf,"nio"rllndustriql Park II St;anfc'rd Campus .5 ATMlTreasury Express I ATMlTreasury ATMIT reasury Express 2. Describe the bank's deposit requiremel)ts. How should the coin and currency deposits be prepared? Can checks, currency and coin be inCluded in the same deposit? Currency should be sorted by denomination inle stacks 01100 notes. Secure each stack using appropriate color-coded currency strap. loose bills do not need to be sorted, but should be secured by rubber band or paper clip. loose coin under $10.00 is accepted at no additional charge, regardless of deposit method (except regular ATM's). Coin amounts greater than $10.00 should be packaged lpose in disposable coin bags, according to bank specificaUons provided at implementation. Typically, lees are lower lor eein sorted into like denominations in standard amounts than lor mixed coin bags with no declared vatue. Yes, checks, currency and coin can be included in the same deposit (mixed deposit), but we recommend spl~ deposits. Mixed deposits have an eartier deposit deadline than split deposits (checks and currency/coin In separate deposils). 3. Discuss how bank will handte rolled coin deposits •. We do nol accept rolled coin at our cash vaults. loose coin under $10.00 is accepted at our cash vault, branch and night drop locations at no additional charge, regardless 01 deposit method. Coin amounts greater than $10.00 should be packaged loose in plastic coln bags, according to the bank specilications we will provide at Implementation. 4. How are bank's procedures for handling deposit adjustments, be specific? What documentation does the bank provide? We always·credil your account for the declared amount on your deposit slip. We make separate debilfcredit entries for adjustments. Adjustment advicas, with relevant backup dccuments, are mailed to you. We provide telephone notilication for adjustments to cash vault deposits 01 more than $50. Electronic adjustment advices and transaction research are always available at opening of the following business day, enabling on-line research inquiry. The transaction !lmount, the reason for the adjustment and the deposillocation number related to an item is available on information reporting and BAI2 detail files. For cash vaull adjustments, deposit date, declared amount, verified currency total by denomination, and localion number (if· applicable) are provided on your adjustment not.ice. For branch deposit adjustments, the amount of the adjustment and the reason are provided. . • CITY OF PALO ALTO Discrepancies are called Into. your Client SeNice Officer (CSO), Each item Is researched to ensure accuracy and provide relevant back-up documents. All deposit borrections, retums, or adjustments made to your account are specilically idenlifled by source and nature altha transaction on your bank slatement, balance reporting, deposit reconciliation reports, detailed transaction file transmission and on optional maHed advices, Cash vault adjustment notilication will also include a breakdown of currency verified, Check adjustments will include relevant back-up documentation, Ail ~posit adjustmeills are posted within 48 hours of receipt. 5_ Descrlbllthe bank's returned Item handling and notillcaUon procedures, How long does iltake for returned ilems to be sent to the Cily? Returned items are debited from the account they were deposiled 10 unless other instrucllons are in place and Included on your endorsement stamp. Location information is provided on Ihe mailed return ilem advice, as well as on all infonnation reporting options. ' An automatic re-clear oplion is available, which allows the bank to' make a second attempt 10 clear checks returned for insufficient funds, The clearing bank has 24 hours to return Ihe original ilems. lIems Ihat are debited against your account wili be mailed to you on Ihe same business day. In additien to maited advices, the Cily can access an online daily return IIem report via CEO. Online images of relum items will be available in Ihird quarter 2004. 6. How late funds must be received to earn credit for the deposit thaI business day? Deposits made 10 the local traditional branch by.4:00 PM Monday· Thursday and by 6:00 PM on Friday receive same day credit. The City will receive same-day ledger credit on all deposits delivered by armored courier to Wells Fargo's Sari Francisco cash vault belore 6:00 PM for mixed deposits and 7:30 PM lor split and cash only deposits, Check·only deposits may be delivered by land courier to our processing center in Fremont where the cul·off lime Is 10:00 PM Monday -TllUrsday and 11:30 PM Friday •. • CITY OFPALO ALTO E. ACCOUNT RECONCIlEMENT 1. Does the Sank offer Positive Pay services? Describe the data transmission process? Online transmission method prelerred. . Yes, Full Account Reconcilement with Positive Pay service is available and recommended. To utilize Full Account Reconcilement, you would provide us with daily check issuance informalion, which we compare to your updat~d, paid check detail. You receive a fully reconciled account statement with a listing of checks still outstanding, exception items and a transmission of paid items to automatically update your accounts payable system. Check register information may be sent via data transmission: mainframe to mainframe, PC to mainframe or VAN to mainframe. The input file can be sent via an Async or Bisync data transmission or Secure File Transport, Manual check registers may also be input and uploaded to the bank online through CEO. Posilive Pay works in conjunction with our Full Account Reconcilement Service. Wells Fargo uploads your check issue information throughout the day into our Account Reconciliation Service system for teller access. (Wells Fargds Positive Pay service is unique in that check issue information is linked to our teller workstations. Checks presented for encashment can be verified before payment is made.) Wells Fargo electronically col)'ipares this check issue information to the data captured from the MICR line of checks presented for payment each day. If the serial number, dollar amount and optionally, payee name match exaclly, checks are considered paid and Wells Fargo makes no further examination of the checks. An exception report is created of unmatched items for your account. The City will need to review this report daily and make a payor no pay decision prior to the established deadline. Positive Pay Offers Two Versions: t Basic Positive Pay allows you to review, make on·the·spot corrections and create register entries for all exception items before fihaf payment occurs. t Positive Pay includes everything in Basic Positive Pay above with the added conve~ience of receiving only true "issue notice not received" exceptions. Under this. option, Wells Fargo will correct all encoding errors prior to sending the exception report; this means that only checks without a register on file at the bank are included on your exception report for your review. II the serial number and dollar amount of a presented check match your iss,ue file exaclly, the check is automatically paid. Using our Intemet portal to review your exception report, one click of a button will allow you to view an image of the exception item to help you make a pay/no pay decision. Payee Validation: This service allows payee validation on checks cashed at the teller line and on checks written by the City that are processed through the check clearing system. Tellers are able to validate the payee name on the presented check to the payee name on your issue file prior to encashment. This means that iJ an item with an unmatched payee name is presented for encashment, it witl be idenlilied before cash is paid out, helping to reduce potential payee alteration fraud activity on your account. This service requires Ihat you include payee name in the register file that is transmitted to the bank. For checks that are processed through the check clearing system, we validate the payee name and report any exceptions to the City on your daily exception report. 2. Does the bank offer Truncated check services? In addition, does the bank offer a CD-ROM imaging service? II yes, describe service(s). tnctude a description 01 the bank software lor reading the CD-ROM and when (monthty) will the City receive the CD' ROM? Yes, we offer truncated check services -CheXstor is a check storage and retrieval service that eliminates the need for you to handle and store cancelled checks at the City. Instead of returning your checks, Weljs Fargo keeps microfilm~mage copies of the checks and retrieves check information or photocopies when you need them. Check images can be accessed online through CEO the next business day after posting to the City's accounts and will be avaitable for viewing online for 90 days thereafter. Photocopy requests for older checks may be initiated through our on-line CEO service or by calling Cash Management Client Services. Copies are normally mailed/e-maited within 24 hours after the receipt of your request. Yes, CO·ROM imaging service is available. The Wellslmage service provides a CD-ROM of paid check images. Each CD contains up to 30,000 check images (front and back) delivered weekly, monthly or on a fiscat calendar. You also receive Wells Image Vision TM, our proprietary viewing software that gives you powerlul search, viewing and image management capabilities. You will receive your CD-ROM within 7 to 10 business days of your CD cycle cutoff. • CITY OF PALO ALTO' . 3. Describe the Stop payment service and features. Can stop payments b. enlered on-line? How long Is the stop payment effective? Stop payments can be easily placed or rel~ased using CEO (internet), touch·tone telephone, or by calling your Client Services Officer. CEO provides you with the choice to initiate, renew or release slop payments direclly, or to use Search to find your transactions and then submit your slop payment requests. Stop payments are effective for 6 months wilh an automatic 12-month renewal option. The first renewat is FREE. Flexible reporting allows you to confirm all stop activity initialed -whether the stop \Vas processed through the CEO, by Ctient Service Officer, or by phone. 4. Will the bank guarantee payment of all Items even If it resulls In the accounl being overdrawn temporarily for the day? Wells Fargo Bank will certainly make a good faith effort to not refuse payment on a City check for insuflicient lunds. A Oaylight Overdraft. Facility would facilitate temporary lunding shortfalls that are pending intraday receipt of funds, such as investment settlement wires or receipt of state payments. Our practice is to conlact our clients if an unexpected shortfall occurs to ensure that city finance officials. are aware' of the situation and to obtain the expected source and amount of anticipated incoming funds, This open and ongoing communication is critical to make sure our relationship teem can partner with you to provide the superior customer service we strive lor. 5. Does the bank have the ability to confirm the clearIng status of a check and view the Check Image as an on·line service? If not, by phone? Yes, you can determine the current status 01 any check, deposit, wire Iransfer or other account activity Online via the Commercial Electronic Office. Check images are available the next business day after posting to your account 6. Describe the below reports and slate when they are sent or available. Can they be downloaded electronically? a. Monthly account analysls'stalements with a parent summary, The City will receive a monthly acCount analysis statement for its demand deposit accounts, The printed statements are generated 5 business days 101l0wi!llJ the activity month and are mailed the following day, The statement will summarize balance computalions and service charges and may be deSigned flexibly to meet your account management needs. Please reler to the sample account analysis statement attached in Appendix 4. Account analysis slatements are also available on-line via our Internet portal CEO and can be delivered In PDF, ANSI 822 lext file, CSV or Excel formats •. You may also receive your statement via secure email in the same fonnats, Electronic delivery of your analysis statement is free of charge, You. will receive electronic statements within two business days after analysis, Statements are also available via fax, b. Monthly partial account reconcilement reports. H thti City prefers 10 complete tho reconciliation 01 your bank accounts yourself, then the Partial Account Reconciliation Plan is for you. The Partial Plan facilitates your in· house account reconciliation process by providing a complete summary of your Checking. account aClivity for the current statement cycle. Optional repo~s that focus on spacific portions of your statement are available in electronic output lor direct entry into your internal accounting systems. Optional Reports available with Partial Account Reconciliation include: + Posted Items listing + Stop Payments Report + Credits Report tBank Originated Entries Report + Paid Checks Report + Reversed Checks Report + Deposits By Location Repon CITY OF PALO Ano . . F. ADH,WIBEAHDOlHEI1BIHSFERS . 1. Describe the process for initialing Fed wires, ACH, arid Iransfers hetween City accounts. Please Inclode deadlines for same and nexl day payments., The City may initiate wire transfers through a variety of melhods, inoluding louoh·tone telephone, over·the·counter and Internet based Initiation. The Internet based wire in!lialion is through our business portal, the Commercial Electronic Oftice (CEO). This is our most cost·effective option. Payment types include: book translers, domestic wires, drawdowns, international single currency wires and international cross currency wires. You have Ihe option 01 sending same~ay or luture- daled translers, templated or freefann. As a back up, the City may call in wires directly to the wire department using a PIN. WIRE TRANSFER DEADliNES ~" .. -----.---~~-.. -- U.S. Domestic Outgoing Wires 2:30 Q,m. Pacilic Time Book Transfer 5:00 p.m. Pacific Time . To initiate ACH payments, the CUy woutd submH an electronic file of payment infonnation in a lonnat approved by Ihe National Aulomate'd Clearing House Association. Wells Fargo reads your file and, following your instructions, delivers payment entries to 'the payees' accounts. The payments are immediately available In the payee accounts on the morning of payout. ACH file transmission options available are asynchronous (PC), bisynchronous (mainframe) and Secure Fite Transport (internet) transmission protocols. Transmission deadlines are shown in Section Q. 2. What is the funding requirement lor ACH payments? Provide deadlines. We propose thai all the City's ACH applications have a "settlement dale" funding requirement. On your seUlement date, Wells Fargo debits your account for the file total. On the settlement date, the individual credit transactions are posted to the . appropriate Wells Fargo and non-Wells Fargo accounts. Same-day payments are available for on-us ilems (Wells Fargo aoccunt holders). You may send files anytime, 1 days a week, 24 hours a day. ACH deadlineS are shown in section Q, ':3. Provide a description or sample oflhe bank's lunds transler agreement. Please see Appendix 2 lor a sample f~nds Iransfer agreement. 4, Descrlhe your safeguards and security measures. Securi!y of the Wire Trans/er System All wires initiated by customers require atleasl one of Ihe following: a Company 10, User 10 and password, a personal PIN and Ihe SecurlO authenlication card. Also available are optional callbacks on voice initiated wires, initiator limits, batch limits and secondary authorizations. Online CEO wire transfers utilize 128-bil SSL encryption, user authentication and a token card wilh a dynamic passcode. Internally, all wire operations employees are carefully screened including fingerprinting, federall staleliocal background record checks and insurance bonding, The wire Iransfer area requires proper security access lor enlly. Wells Fargo has not exparienced any wire lraud involving Wells Fargo employees. Security 01 the ACH Sys!em To protect against lost tiles and duplicate transmissions, our ACH system employs these security and conlrol features: • Security. Password or encryption solutions are used lor each transmitted file. • Control. Our system automatically generates TransmiHal Registers (CNotes) confirming lile receipt and sends them to you by transmission or fax. • File Dup/leslion Checking. Before a file can be released to our ACH warehouse, our system makes a front-end edit to compare the dollar totals against a history of previous files you've submihed, If a dollar malch is lound. the lile is pUI inlo a hold status and we call you to confirm whether the file should be deleted or processed. . • File Umits. By establishing and checking ACH lile and item limits, we can alert you to possible errors or fraud attempts. • Changes Nof Allowed.to Warehoused Files. To ensure security of your files, warehoused files are read·only to prevent operators lrom making inadvertent or fraudulent changes to data, Access to the warehouse is by password only, and only a limited number of operators have warehouse access, All access 10 the warehouse is recorded on system reports. CITY OF PALO ALTO • O. OHANGEIIJURRENOY ORDER SERVIOES Describe the, bank's procedures for requesting changelcurrency orders. The City would like the ability to order . changelcurrimcy and have il delivered through Qur current armored carrier service. Currency and coin orders can be placed via the bank's automated touch·tone telephone ordering system or online via CEO. Each location is assigned an ID and password to access the system, and a maximum order limil per localion may be established. The City may ptace orders up to 30 days in advance and change or cancellhe order up to 1 0:00PM the night before the order is to be shipped. Currency and change orders can be placed via batch or\lers lor multiple locations, saving you lime. Authorized acoess can be by user, location and cash vault funclion. Regardless of how the change order is placed, the Cily can search orders online via the CEO though the Cash Vault Inquiry service. Orders are picked up and delivered to the customer-designated location via annored carrier, usually on a next day basis. Change orders are debited electronicilily the day they are tilled. Typically, branch change orders should be called in alleast four hoors before pick-up is required. A list of City employees authorized to pick· up chenga orders should be maintained at the appropriate branch. Cash Order 1 <If 1 ~ Required rleld i1 For more lnformalion Account Number: Location Number: AccountName: LocalionAddress; N.~ Mailable DellVel)' Date:· 0011111111 00000001100 DEMOIHC 451st street 106/06/2003 Iillllil (mm/ddNYri) • Cuftency: Enlor lhe amounts you wanl to ordet. You may order in singles or straps of100 notes. straps are more cosi etrecltve IMn single •. • CoIn: Enler tho amounls, You may order by roll or standard fullJhalfboxes., Standard run boxes are mastrost officient • SUlldlos: These must be ordered In 1,000 nole bundles. Twos: .00 NickolS: f'lIIes .00 Dime.: Tens .00 Quarters; ~.oo Twunlies: I .00 Halves: r--.00 FilUes; ,DO Dollars: ~ .00 Hundreds:1 .00 sUbloIaqtOO.oo Subtctat: ! I 00 (II) fjRAND TOTAL: 1201111(1 Mfi1jHh@M _jSht'YW Finies: .00 Twenlles: I .00 Tens: .00 fives: .00 Ones: ,DO SUbtotal: 1(1 (II) Wells Fargo maintains a good working relatiollship with numerous armered carrier providers and will gladly work with lhe City to cocrdinate service. The conlract will continue to be between the armored carrier and the City 01 Palo Alto. At youreieclion, your monthly armored carrier fees can be included on your accoont analysis statement at the cost you negotiated with the carrier. At Wells Fargo, we offer this convenience without mark-up. Crty OF PALO ALTO • H. BAIAHOEAHD DlTAllDE.ORTING 1. Please describe the bank's on-line Information reportIng system, its features and its "user-friendliness." 'The Cily can access the Treasury Information Reporting (TIR) service within the Commercial Electronic Office (CEO) 10 view balance and account activity Information over the Internet. The City may access a variety of previous day and intraday reports including Previous Day Composl!e,lntraday Composite and Wire Transfer Detail reports. TIR is a convenient way to conduct Ireasury managemenl business Oller Ihe Internet. It leis you quickly review Ihe'latest information from a single web page with a single sign-on using state·of-the-art security. Features include: • Early morning report availability. Reports are available starting at 5:00 AM PT. • Get the information you need. View, prinl and download balance and transaction inlormation with flexible and user- friendly reporting capabilities. • Comprehensive reporting options, Choose from a wide range 01 previous day and intraday reports that provide comprehensive balance, summary, and transaction detail informalion, as well as reports on specific types 01 transactions .. • Custom views. Customize any of these reports, narrowing the resulls to just the data that interesls you. • Save' time. Quicker access to !he information you w!lnt to see and create your own report templates that you can sa~e and reuse. + Image availability. Easy access to check images from hyperlinks included in tha Previous Day Composite and DDA Cycled Statement reports. a. What time Is the previous day report available? The previous day report is available by 5:00 AM. b. What are the computer hardware and software specifications for the bank's on-tine syslem? + PC compatible·Pentium II with 333 MHz or higher processor + 56 kbps baud or {aster modem (or cable,lSDN, Tl, T3 or DSL) + Windows 95, Windows 98, Windows 2000, Windows NT or Windows XP operating system + 64MBRAM • 20MB free hard disk space c. Can the report be custom-tailored for the end-us~r? • VGA or higher resolullon monitor • Accounl wilh Inlernet Service Provider (ISP) or LAN connection to corporate Inl emet service • Microsoft Internet Explorer versions 5.01 SP2, 5.5 base release, SPI or SP2 and 6 or Nelscape version 7.XX. (Your browser must support 128- bit SSLencryption or RC4 encryption) Yes. each user at the City will have Ihe abilily 10 customize the reports to meet each user's needs, II you are using location reporting or subaccounting you have the option o{ sorting and subtotaling by localion, 2, What Is the bank's contingency plan for providing thts information in the event of unexpected bank systems problems or natural disasters? Should you experience an issue pulling information reports, please contact your Clienl Service Officer (CSO) immediately. Your CSO will be able 10 update you on the status of the system and may be able to provide the information in an alternative formal. Wells Fargo has a sound business continully planning program in place, consisting o{ muttiple strategies {or each of our core lines of businees, functions, and individual produclS and services -including our Commercial Electronic OHice business portal. We regula~y test our recovery strategies in order 10 maintain their optimal reliability and effectiveness. In the event of an unexpected disaster or emergency, every reasonable attempt will be made to restore and maintain normal service levels as soon as possible. 3. Ptease provide a sample of the prior day report that is ilemiled and has text description. Please see the sample reports attached at the end of Ihis section. We are also enclosing a Commercial Electronic Office Demo CD-ROM for a demonstration of our Internet capabilities. We can also provide an on-site demonstration or walk Ihrough an interactive demonstration over the phone. ""~t~s. TREASURY MANAGEMENT "FAR~O TREASURY INFORMATION REPORTING Previous Day Composite Report The Previous Day Composite Report"is one of many repans available from ,he Treasury Information ~eporting (TIR) service, a treasury management componem of the Commetci!/I Electronic Office"' [CEO"') poria I. This report offers a complete view of previous day-or posted-information, incll1ding balances, images for each check transaction, transaction summaries, and transaction detail for each account. Extensive cusromi?ation features allow YOll 10 create a "report that fits your exact business requirements making the Previous Day Composite Report a IDol you can use for all your previolls-day reporting needs. How You Benefit )-Make more educated decisions. Easily determine your current cash position to make bener investment and borrowing decisions. The reporr " provides the balance data for each account, the IOIal doliar value of funds .vailable, your float posilion, and a· detailed listing of transactjons that have posted 10 your account. >-Reconcile quickly and easily. The report includes totals for each account and a summary total of all accounts in the report. Reference numbers, descriptions, and transaction codes for detail items make reconciling easier. Standard and Custom Reporting A Olouse click brings you to the Previous Day Composite Report. Your options include: >-View the report in HTML or PDF format. >-View images for most of your debi! check transactions, >-Print the report and cbeck images" >-Download a check image in PDF format. >-Download the report in BAI version lor ll, comma-deliOlited1pr Mlcrosoft0 Excel forrnats. Customizing the Report Y!)ll can.also use a host of custOmizarion op(lons to (uilor your report so it mOre closely meets your husiness requir,cmenrs. Options include~ )-Define the: report content to include any .combination of balances, summaries, and lr3nsactions. Your options vary depending on the report content you choose. ~ Select the banks and aHQUnts you want to see. Highlight the accounts you want or, il you have a loog list of accountS, use the filrer feature to narrow (he list. >-Choose a reporting period. Choose eirher previous business day~ any business day within (he last week) br enter cusmm beginning and ending dates. >-Control how much detail you see. You canselect the detans you want in your r~porrJ such as recap by location, sublOt.ls, or a summary of your ctlslomization seJections. You can also use a range of filter options to select a number of transaction variables, including balance rype, transaction criteria) transaction amount, and reference number. r Sort the data. Choose various son options to . view your data; for example, by location Or reference number. Save your cU5tomization opHons. After you tailor your reports to meet your business needs. 'you can save them and reuse ,hem any time you want. TIR lets each user in your company save up to 100 customized r'pOlt templates. You can also easily modify, rename and delete report templl1re",rSj'oorbusj"o"O.r:; ·n"at!s··t"hm-rgr.---..... _-_ .. _. Mioosoft i~' a ttgjj/ered Irtldemurk of MiUOjo{i COrpQIDjjoll. continued on reverse side Developing RELATIONSHIPS. Providing SOLUTIONS.'M TREASURY INFORMATION REPORTING Previous Day Composite Report -Continued For more information on this report, other reports available through TIR, or to find out about other services available through the Commercial Elecironic Office business portal, please contact your Wells Fargo treasury management representative or call (877) 283,8991. £t,tmmq:UAO G;lplc m45618 AtGtllu\!:W9951 Gabn«t aolil;g\..«1g&llhu~ Cf!!.l~(<>lIrotd&.!1mu Opeli<l§~lbli~~ OMO'!/lI~j lO;OPUIlll tW<l I GtrRonI MWMH9CoQ,lnghd9C< hlnHt MiD 1m!1~ ClmtngCollftlfdawl1u' TouIClt6u 1'<lI.olNu~(·tdiU 1<>'J>1~* lrrull+.imbfftNtib ,Sumrrnwk:i Crtdit lobi) '(yfit ul Oebit Dtbn lolJb £re:d!llt~lIutUI)ll' C(~ilJl"I\Io",,1; WIDGfTS, INC. PreI'iO:Il~ Day C"41mposltt ~ej)Mt ho)m 0&'04i1OO. Throd,h DWJGI.lOD4 Wfl.U (AIle!) 8JI.NI( S'lAn:, HA WI~,lHC. tlMO.:m.n ID15J11llJ1 ilh»,m.n J1Unw "'" I.lt!"'14.1~ .,s,g' . .(4.4.U ! 1I1.m!'.n~.~ 1~1D,~M.11 ) ) IU,Il'3,S,7S.i4 I\mO~nt lU,S)a,71i).71 mllllACi!EOOTIWlSWt ert"dit Ilri:OOO€lOOO\lOO Ibull tlri: IMOO~OOO'»} CII~ Plld loul Ito.ll·1m>fn1~UM!l,'8IlOO One "'116)1$4.0') lIlAllJION6A(COI.mflPAWflUl\OMe01'l'6Olt m IlJACIIUlIll'MHSffiI tRdIlIkf:OOCOOOOl.OO !hill fit+. r/ell. 2M! 1n,:1>1.{}1,uam OI1t O'r.l'tl,Ql.ro I(IARmOIHGA«(OOIil1fW/SJtllfiOM~I:r)9 ~H(("'!UP'\'\!) Twf> i Oly; li.lHm (;~!lMC\ll'l1: 1A!Iro~11l)1 l~ * 0,,!000 C(t'd'll i\I'/IOllnl: C"lt fI,.l: OOOOOOHIU IltnJ.: Ad; \'\'Ollllllt)llIU') -om Of IUMfI1 _ """ TREASURY MANAGEMENT TREASURY INfORMAIiON REPORTING Intraday Composite Report The Inrrnday Composite Report is one of many Internet reports available from the Treasury Information Reporring (TIR) service, the cash management and treasury services component of Wells Fargo's business porral, the Commercial Electronic 0ffice'''CCE00j. This report provides a comprehensive pictur,e of currene-day or-nOt yet posted-information, including balances, transaction summaries, and transaction details for each account. Extensive custamization features make the lncr.day Composite Report the ideal tool for currenl-day reporting, allowing you to closely comrol the accounts and data you want in your repon. And since the report is available through the CEO business pOl'tal, you can access this information whenever and wherever you want. How You Benefit ). Get current .. accurate information. Account information is updaied continuously throuGhout (he day, ensuring that reports are current. >-Determine your c'ash position, Easily <lcrcrmine your current cash pos;tton to rna ke bener invesrment and borrowing decisions. The repon provides the balance data for each account, rhe total dollar value of available funds, your floar . position, and detail of the transactions that will post to your ac,count that evening. )-Recondle quickly and easily. The report includes totals for each account and a summary total of all accounts in the repOf(, Reference numbers, descriptions, and rral)iacrion codes for derail items make reconciling eaSter. Standard and Custom Reporting A mouse dick brings you tothe lnrraday Composite Report, Your options include: >-View the reporr online in HTML or PDP formalS. ). Print the report using your browser)s tool bar. )-Download rhe report in llAl version 1 or ll, comma,delimited, or Microsoft® Excel formats. ,. Clkk lIelp from anywhere on any screen '0 ohtain help on th" topic. Customizing the Report You can also use a host of customization options [0 lailor your report so it more closely meets your >-Sdect only the banks and accounts you want '0 see, Highlight ,he accouni, YOll want ot, if you have a long list of accounts, use rhe filter feature to narrow the iist. >-Choose a reporting period. Choose either the c.urrem business day, any business day within the last weekl or enter cusmOl beginning and ending d~Hes. You can also emer a rime range to see only ,hose Iransactions within a spcdfic rime period. ,. Control how mllch detail you see. You can select (he details yOll want in your report, such as recap by locaTion) subtotals) or a summary of your customiza(ion selections. You can also use a, wide range of filter options to select a number of transaction variables, including balance 'ype, (f!.msac[ion criteria, transaction amount~ and reference oum ber. >-S.orr Ille data, Choose various son options to view your dala; for example, by location and ~mount or location and reference number, >-Saye-your cuslomizarion oprions. After you rnilor your reporcs (Q meet your business needs, you can save them and reuse them any time YOll want. TIR lets each lIser in your company save tip to 50 customiz.ed report templates. You can also easily modify, rename and delete report lel11p\('ltcS as your business needs change. MiCtoro/f is 1I feg;st~rfd frademark of Mi(;(o50fl CorfJonJ1ion. continued on reverse side bus i nes$"requirement'5-:-9pt:it;)I'ls-1'nel uck:-"-"~-~~··,~·~ "._--""" ~ -_." .. ". " ~ Define ,he repOCI content to include any combination of balancesJ summaries, and m:msactions. Your options vary depending on the content: you choose. Developing RELATIONSHIPS. Providing SOLUTIONS,'''' TREASURY INFORMA110N REPOR11NG Intraday Composite Report -Continued For more information on this report, other reports available through TIR, or to find out about other services available through the Commercial Electronic Office business portal, please contact your Wells Fargo treasury management representative or call (877) 283-8991. -"'" 9~n14~1B9 Atcoum: 12MS (i{,J16120<11 11:16 AM p Cl.JsroMlJI !&.llflOI OftAAT01I:JD:Q1'£IIO) a.,1~!Ittt Optlli1gLw~,Il~lm«' (lpcn~Awhbl~ ~I.I!H# (IJ~Mtlt~'bl'f\.(. 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This report ,hows , comprehensive, current-day -not yet posred- detail of all outgoing and incoming funds transfers, conveniently grouped by type, book transfers, Federal Reserve domestic wires, and international wires, including SWIFT and CHIPS. The Wire Transfer Detail Report is often the quickest way to keep close track of all your outgoing and incoming funds [fansfers. And, since the report is ~vail3ble through the CEO business pOrIa!, you can access [his informal ion wheneve.r .and wherever you Want. How You Benefit :> Get current" accurate inrormalion. Account information is updated continuously throughout the day, ensuring up~to-da{e information, r cgardless of when you acccs.s t he reports. > Reduced risk offraud. Wire transfers tend to be large-value transactions posing a serious risk of frat~d. Ru~ this report as aflen ns necessary to see your funds tra~sfer activity as soon as possible. :> VaJidati'on of internal records. You can use the Wire Transfer Detail repon to vaildale your internal records of outgoing wires as well as verify that the Bank processed all wires that day. > Quick advisory ofincoming transfers. Thi, report is often your first norice thai you1ve received an incoming wire transfer, Standard and Custom Reporting A mouse click brings you to .he. Wire Transfer Detail Repor •. Your options indude: > View .he report online in HTML or PDF formalS. > Print the report using YOll! browser's tool bar. > Download the report in BAI version 1 or 11, comma~deJimited~ or Microsoft@,Excellormats. ,. Click Help Jrom anywhere on any screen 10 obtain help on thar topic. A host of cUSlomilation options allow you to tailor your report [0 meet your business requiremeri[s. Options include: )-5elect only the banks al1d~ccounts you want to see. Highlight the accounts you want, or, if you have a long list oj accounts, use the filter feature to narrow the list. ,. Choose a reporting period. Choose either the current business day, any business day within the last week, or enter custom beginning and. ending dates, You can also enter a time range to. see only those transactions within a spedfic time period. )-Define the report conlent to include debits or credits, fuli transaction details; Or subtotals. Or .. select by a wire dollar amount Or a range of dollar amounts. )-Control how much detail you s.ee. Add details to your report, such as full teXI details ,ssociated . with.the wire, subtotals, Or • summary of your cuslomiz.ation selections. )-. Save your customization options. After you (ailor your reports to meet your business needsj you can save and reuse them. TIR lets each uscr in your company save up to 50 customi1.ed report templates. YOli can also easily modify, rename] and delete report templa(es as your busi~ ness needs change. Microsofr is c registered 11!fdemark of Microsoft CorpOfMiOtl. contInued on 'ever~e $ide Developing RELATIONSHIPS. Providing SOLUTIONS.'" TREASURY INFORMATION REPORTING Wire Transfer Detail Report -Continued For more information On this repOrl, orher repons available through TIR, or to lind out about orher services available through the Commercial Electronic Office business portal, please COntact your Wells Fargo treasury management representative or call (877) 283-8991. Cllmncy.USO ~Ilk: 55S5SSSSS 11",,1111\: 99999 4&1.1l2.00 4G2;7J1.oo (l6I1flJl00111;18AM[1 custoMCSI ta 1M} Of1J1ATOR ItJ.O?HlOl hom. C",nJl(lndiI19BJnk: Mu}tr.\{, Rtf(!tMtH"""~lr. VM~M~IJI9fH~.~l;J~r. PC 1I.INw<tI!lM'ul\Jj>roHI.II'1>brr. Vl:lu!D>Ir. I~ Cfl'<Ia Sub'lDUI rl;'r fwwm! f(OMR( (OOPlM ftOl& &.tN~ Of CAN,o,OM'''YM£N'i «Hl'E1i UAl'ttXOIf:Il&Ylm >IIA HlA ,,.. lnnl1nlH """'" (61181)00'/ WIDGETS, INC. WiN: ltamltr t>etailllrport ·fH.IUJ1002 WEllS rllRGO DAHlI, tU. 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HID Of R[PORT _ , , ,. ~" CITY OF PALO ALTO . 1 BANKCARD PRoelSSINO 1. Describe the bank's Bankcard and Polnt-of·Sale processing capabilities. Wells Fargo Merchant Services {WFMS) can fully support Bankcard, non-bankcard, ontine and offline debit, check guarantee, electronic check conversion and stored vatue cards. These payment methods can be processed on a variely of point·ol-sate-terminals, software, internet or telephone interfaces_ WFMS currently has a 'Master Service Agreement with Ihe State ot Cailiomia lor payment processing, Additionally, WFMS has state processing contracts in Ulah, Colorado, New Mexico and Iowa. . 2. What authorization methods do you support and which do you recommend? WFMS supports many authorization methods, such as, dial, internel, lease line, Irame relay, ISDN and IPN. WFMS recommends Ihallhe Cily use EDC via dial-up ~ansmission for retail processing. This can be accomplished with dedicated terminals or PC-based processing software such as ICVerily. We are a market leader in alleroative paymenl processes. We can combine web, telephone, telephone interactive voice response, kiosks and face-to-face processing on an inlegrated payments platlorm. WFMS can also support the collection of conveniimce fees to offset Ihe cost 01 paymenl processing. 3. Please quote a discount rate and all olher applicable charges for the credit card processing described above. Quote rates for both swiped and no·swlped transactions. ' WFMS has a Master Service Agreement with the Slate 01 Galilornia for eleotronic payment processing. WFMS will extend'lhe Slate's lavorable pricing, terms and conditions to the City of Palo Alto. This pricing is on a "Cost Plus· basis. At the eslimated average transaction amount of $100, the WFMS fee and Association assessmenls would be _23% 01 the transaction amoonl. As examples, the cosl lor Visa card present transactions and card not present transacttons, wilh an approximate average transaction amount of $2.00, would be: The total fee would be $3.38, lor a total overall effective rale 01 1.69%. Please see other examples In the Pricing Examples aftached at the end of this seclion. All examples are priced using a Wells Fargo processing plaHorm. Third party processing plaHorms are generally more expensive. Please see lhe prlclng exhibit attached at the end ollhis seclion lor the State of California Pricing. Please see the Visa aod MasterCard Interchange Tables for all rates and qualilying criteria. Please contact Discover and American Express directly lor their lee structure or WFMS can assist in establishing the entillemenls. 4. What are Ihe fees associated with debit card transactions? Debit fees are calculated on a cosl plus basis, WFMS will directly pass Ihe lowest qualilying debit network lees plus the WFMS lee 01 $.08 par b'ansaction. Please see tlla attached pricing exhibit for the Stale 01 California Pricing. 5_ How is the applICable interchange fee determined lor each lransaclion? What does the bank recommend to minimize Interchange lees? The unde~ying interchange Irom the card association is passed directly to the City and WFMS assesses a processing lee to cover costs, Each Iransaclion will clear al the lowest qualifying interchange rate. The WFMS fee remains the same, regardtess ot the undenying interchange. There are no downgrade fees or billbacks. This pricing methodology allows the CIIy to benelillrom Ihe various public sector interchange rates available. IntelChange fees can be minimized several ways. Most importantly, by having all processing accounts sel up correctly with appropriate supporting hardware and/or software. Nexl, association aulhorillltkln and seUlemenl rules must be followed for Iransactions to clear at the lowest possllJle interchange rate. WFMS with provide Ihe Cily with the currenl bankcard interchange rates and quaHlicationmatrices. Additionally, WFMS, through Relalionship Management will monilor and advise Ihe Cily on processing effICiently 10 minimize interchange lees. 6. When and how are the discount rate and other fees charged 'the City? Can this fee be paid through account analysis? Discounl fees and charges afe deb~ed once per monlh and can be debited from Ihe main merchanl processing checking account or a separate checking account. Merchant processing lees are generally nol paid through accounl analysis. This is due to Ihe fact thai the majorily of the lees are passed directly 10 Ihe bankcard associalions for interchange fees and assessments. Gerierally, merchant proceSSing fees are not paid through analysis. The cosl of the service is primarily the Visa and MasterCard interchange lees and assessments. which are passed direclly 10 Ihe card associations. CITY OF PALO ALTO 7. Describe your reporting methodology and how adjustments and charge backs are handled. Are charge backs and other debit adjustments netted from daily process or debited separately? Is the discount fee refunded when a charge back or refund occurs? WFMS provides mooIhly paper slalemanls and, under the State of California oonlrac~ fee·tree access to a secure, internet·based, reportng tool. MyMerchantVlew.net is a secure, easy·to·use Internet·based selVice that provides access to transaction data for in-depth research, rcllieval and chargeback hislory and statislics, non·compliance statistics lor managing Interchange qualifications and a host of other financial data to help rnerchants manage Iheir credit card activUy. The myrnercharitview.net service allows the Cily to view repol1s in a variety of formals and export daJa to Excel spreadSheets Ihat can be manipulated or further loaded to a variety of database and accounting software programs, For a guided tour visll our Webslle at hllp:llmymerchanlyiew,nel. Chargebacks are normal~ sepaJllle debits and can be debited to a separale account as long as the ABA is the same, The discount lee is not relunded when a charge back or refund occurs, The Chargeback proeess is initiated wllh a Relrieval Request. Retrieval requesls are received by WFMs lrom card ISSUing banks through Ihe interchange process, Retrieval requests are loaded 10 the retrieval syslems on Ihe day !he Iile is receivad, If WFMS dces not receive a response to a retrievat request, a second request is sent as a reminder 10 the mercflant. Follow up calls are atso made on lIems over $100.00, Addilionally, WFMS responds to mail and telephone order transactions and retail retrieval requests where the reason code lor !he chargeback does not require a signature or Is not fraud related with substitute drails. This beneli,ts !he m6lchant in severai ways because the merchant does not spend time searching lor drafts and avoids many latal 'non-receipt" chargebacks. Merchant responses that are'feturned via lax go Ihrough a robust fax server gateway and are presented to our retrievatteam as images that are then processed quickly and eflicienlly through our relrieval system. This fax gateway retains an archive of all images recnived lor research and validation purposes, VaUd retrieval responses ale processed Ihrough our systems within three days 01 receipt, Sabstilute drafts are processed on the day the retrieval team receives Ihe draH. Our Positive Chargeback Defense group monitors retrieval reque~ts and, in many cases, responds without the msrchant's involvement. 6. When and how will the City receive lunds lor each day's transaclions? Are settlement amounts listed separately on the bank statement or will they appear as one tump sum? Will the bank break out seUlement amounts by merchant location? Funds availabmty for bankcards is next day, when deposited to a Welts Fargo business checking account. Deposits 10 non-Wells Fargo acoounls generally incur a tunding delay due to the interbank transler and Ihe specllic financial institution's funds availability policy, Non· bankcard funding depends on Ihe contractuat arrangement that the City maintains with the spacinc card issuer, WFMS can assisl merchants in establishing or reviewing these arrangements, The settlement Iransmission timeframe, for diat terminal based processing, lor Visa, MasterCard, Discovar, American Express, Diners and JCB is 1100 p.m, PT. Settlement times for olher transmission methodotogles vary, WFMS operates on a 2417/365 schedule for transmission acceptance. SeUtement is generally made by ACH, Settlement deposil accounts can be listed separatety by batch. by loeatico or rolled up, Detailed seHiement reporting is available, Weekend settlement amounts are broken oul into daily detail lor Saturday and Sanday. Detailed settlement Inlormalion is available daily through our secured online reporling slle, hllp:llmymerchantview,nel. There is a demonstration 01 the site's repOl1ing capabilities on Ihe website. 9. The City currenlly owns and leases ils credit card terminals and printers. Can this be reprogrammed to process transactions through your bank? If not, can the bank supply the City with the terminals, printers, and pin pads, and if so, what is the cost to lease or purchase the requisite equipment? Wells Fargo offers payrnent sotutions thai can be processed on a variety' of point-ol-salo terminals, software, internet or telephone interlaces. WFMS can process using the IC Verity point·ol·sale software currently in use by Ihe Revenue Collections department. We will consull with the City 01 Palo Allo and lhe various'depal1ments to determine Ihe best customer intartace to meet deparlmenJaI needs. WFMS can reprogram most nonproprieJary pOint-ol-sale terminals 10 process on one or more of ils plaHorms, If the City must purchase, rent or lease equipmenl, WFMS would extend the State 01 CaIHornia equipment pricing and public sector softWare or hosted solullon pricing. 10. fs Ibe' bankcard retationshlp managed by a separate unit of the bank, 'or by the Account Relationship Manager? Please brklfly describe the structure of this area. ' The bankcard relationship will be managed by a specifically assigned Relationship Manager. The WFMS RM will partner with the overall bank Relationship Manager to ensure Ihat the enlire relationship is meeling the CIIy's linancial sel\ticeS needs. The processing oj email and debil card transacfions is sUbjecl to !he terms, Conditions, policies and procedures of ihe Visoand Mas(oiCard Associations and the non-bankcarrl issuers, WFMS Memh.nl Se",ices Agreement and rile Siale of California Masler Service Agreemenr reference and Incorporate lhose tenns Bnd condiTions, All Card Processing responses in this document are su1Jjecllo Ihe Wells Fargo Merchant Services Agreement. rf rhere are conl/icts wi/h /helenns and conditions In the WFMS Merchant Services Agreement and rhele""s and condilions of Ihis Request/or Proposal, WFMS will ne,qoliale in good faith 10 resolve. The tenns, cof!C/itions, policies and procedures of the VIsa and MasterCard Assocjations and lIle non·bankcard issuers CITY OF PALO ALTO . WEDS FARGO MEROHINrSERVIOES IIlIlIBITS Wells Fargo Merchant Services State of California RFPPricing Proposal Effective 01/16103 WFMS front End (Cardnet, Nashville, Wellsorvice, FDR) .:. Grid is lixed based on the individual agency's signed average tickel + Grid is.valid for all processing modes (Le. Retail, MOTO, Inlernet, elc.) + Pricing proposal structure is Interchange + Rate (rate includes MCNisa assessments and MCNisa access lees). '.+ MCNisa rate applies to the gross MCNisa volume 01 each agency thai signs with Welts Fargo Merchant seNiees. + Each agency will receive the best interchange level for their Iransactions as a straight pass through (see associalion interchange chart lor interChange levels arid descriptions). + Non-8an~ Card authorization fees (Discover, AMEX, JCB, Diners) are $0.08 per authorization attempl. + Debiftransaclion lees are $0.08 per transaction plus all applicable network interchange, switch and adjustment fees, which are passed through to each agency at cost. + Wells 'Fargo Merchant Services oHers a variely of custom reports/electronic liles. Sizing is required 10 determine actual cost II inlernel service is chosen, our online seNiee myrnerohantvlew.net will be provided at no charge. • Pricing assumes Ihallhe individual agencies wiU be utilizing an fDMS lronl end. CITY OF PALO ALTO , Wells Fargo Merchant Services State 01 California RFP Pricing Proposal Effective 01/17103 Third Party Network IVisanet, GPS (MAPP/NDC), Buypass] ____ AY,~RAG~ TICKE1AMOUNT _ _ __ .__ _ __MCNISA DISCOUNT RATE _, ._ ~~~~--:::$l&gO.OO and Up 1--_~~_'_-'f$5:7.00,OO' $999.00 $200,00 -$499.00 $100,00 -$199,00 $50,00 -$99.0Q $30.00 -$49.00 $20.00 • $29.00 $10.00 -$19.00 $5.00 -9.00 • Grid is fixed based on ,Ihe individual agency's signed average ticket • Grid is valid lor all processing modes (I.e. Retail, MOTO, Internet, etc.)' 0,20% 0,21% 0,23% 0.29% 0.38% 0.54% 0.75% 1.10% 2.82% • Pricing proposal struclure is Interchange + Rate (rate includes MCNisa assessments and MCNisa access fees). • MCNisa rate applies to the gross MCNisa volume of each agency that signs with Wells Fargo Merchant services. • Each agency will receiv,e the best interchange level for their transactions as a straight pass through (see association interchange chart for interchange levels and descriptions). • Non-Bank Card 8uUhOlization fees (Discover, AMEX, JCB, Diners) are $0.08 per authorization attempt. • Debit transactions lees are $0.08 per transaction plus all applicable network Interchange, switch and adjustment fees, which are passed through to each agency at cost . • Wells Fargo Merchant Services oilers a varietyot cus\Om raportsielectronic files. Sizing is required to determine actual cost. If internel service is chosen, our online service mymerchantview,net will be provided at no charge. ClTI OF PALO ALTO ( TVPE I , Omni3200 _ Hypercom ICE 5500.~ ---Linkpack 3000 Hypercom T7P Thermal S8Pioped Pin pad 1000 Notes: Wells Fargo Merchant Services Siale of California RFP Pricing Proposal Effectiva Of/18103 Equipment Addendum PURCHASE PRICE 36 MONTH LEAS! $510.00 $21.00 _____ M ~645.oo $24.00 $536.00 $20.00 $480.00 $18,00 --$235.00 $6.66 $215.00 $7.50 48 MONTH LEASE ~17.00 ---. $18.00 $15.00 $14.00 '- --------$6,55 $5.75 + Wells Fargo Merchant Servioes supports a variety of produots and solutions. The Equipment Addendum reflects suggested products based on your type of business. CITY OF PALO ALTO WEllS FARGO MERDHANT SERVIOES PRIGINO IKAMPIES The Card Associations (Visa and MasterCard) now provide reduced interchange fees lor the Public Sector markets. These' interchange fees are for credit and offline debit card transactions. The cost lor a Visa CheckCard (signature debit) transaction, with an approximate average transection amount of $200 would be: . The totatlee would be $2.32, for a total overall effective rate 011.16%. As an example, the cost for MasterCard card presenl and keyed transactions, with an approximate average transaCtion amount 01 $200. would be: . The total lee would be $3.67, for a total overall effective rate 01 1.84%. The cost lor a MasterCard check card (signature debit) transaction, with an approximate average transaction amount 01 $100, would be: The tolal188 would be $2.33, lor a total overall effeclive rale 011.17%. The examples are priced using a Wells Fargo processing platform. Third party processing platforms are generally more expensive. Please see the attached pricing exhibit lor the State 01 California Pricing. Please see the Visa and MasterCard Interchange Tables lor all rales and qualifying crileria. 1'1 PaytTlllml Sys\cm) e Oebit 1,05% $O.lS rd aM Visa lnterchange \F,NelS aM ra~ are not all ind\J!:,tve. For a comprete jist call the n1Jmber on YO!:,' mefchant s.tatement Ie Plus VISA Swi$le e3rd Get eU!ib:lmers $lgnatvre \Alhen pt'OC(J.$$ing an OIN.Ine Debit transaetion the autho/izatlon amount anO, settlement amount I'nV$t match esttlurarrl 1.54% $0.10 F.iutsurants (MCC 5812) and' F.lJ5t -~1 elec!rO~i;;-~nOl'izatioo . SwiPe cim:l Cava to Settl';;;;-.=_~I-----i eQE'bil 1,19% $0,10 Food Restaurants (MCC.sa14) .. Get:~t:s signlSlure MCc.Mert:harn CaleQOtY code . -' . erviee Station 1.4.3% SO,10 I ServiCe StatiOns (MCC 5541) 11 eledtonic authorization S¥.ipe card' Getcustome~signafure D~ie.$ettle": f~-------J e 0ebiI 0]0% $0.17 uperrnan:et e Debit :etail Key-Enleted oe Debit ;maI!T~ Ie Debil 1.24% 1.05% 1.8~% ~,$(l% 1.55% i.GOo,.{, $0.05 to,15 (SO.3Se3p) $0.10 $0.15 $0.04 $0.04 sup~t (MCC 541l) Available to most Ml~:w::s 1 el~ic avtnoriU\iOl"l AVS-required •• Oa!.a:U the authixizat\o., amount and Magnetic: stripe not readabie. key-errter transaction Get customers sigoat-Jfe Use Address Ven'fioatlon (AVS--) feature on terminal Ot sollwate; zip COde must'matel't DayS to settle _ 1. Days to settle ~ , loca! c:crnmutetiraMpott (MCC411), I ,1,~ed!WlIe·'a¢hofization' '-..r' ,SWtpe:can:t'· , Daystosettle~1 taxiIlimo se<Vio.e·{MCC 4121}, " , ',' .>. 'Miis~~;;a coo$Omerc~i"d Restaurantsand roast foOd parking lots (MCC 7523). video ~al ' <~", __ .. ' ~ reslauram tI'Iat take (MCC·7841). restalln!1itS: (MCC ' Transaction,arnount fells than or equal to $15.00 Signature ant.! Infinite cards 5812, and fast food restaurants aro ellgfble tor CPS Small {MCC SS14j TlCket wtlen clwing :-:--'-~ __ "-_-::-______________ --I-'t:e9..Weme!"lt$ are mel tetaU 2 {EntE!f9ing Mldl ?~"'!:~~_~:~,,~::':2~~~ & ! 1 eledfQtllc authOri:.alion Swipe or key enter ttansactlon Oays to settle -2 lEOebit toM:lfCar Rental Can:! It Card Nol Present & ,,>Ie"'" w: Oebit argo Mer:::hant Services t,5S% ~.3l5% .$0.10 $0,15 Available to !od91~, ct"Jise Ilnes, car rnnt2l1 ,~n\.$ 1 or mOle electronic autho-nzallort ,-authoriUHion reversal -I - AV$ is no! ~quire<! AVS is required tor MCC 59Sa-Oltect Ma~etiAg insurance, must meet CPSlCNP or C?SJE..c Commerce qualification (:!iteria Swipe Of K~ enter transaction iransadion ~t klt.;!ude: FollolR:ental Ast:eemenl#, CMCk~lfliPfck. Up., CI'1edo;::O'utlFbdtlITl-d.at/;'!.$. Duration, No Show te.;..1m Cherse indicator, ~d'CO$lrne: indiea10t (P) when card is not present 1 day to s.e.ttle between the t:heck out and settlement date c'" .mount Vertfied by Vlsa (vsy) ~ lncIude Days: 10 settle- If Ir.!!n!iaction meel3 CPS Retail requirom8f\i:$, tr.ans;ad.ion witt qualrty at CPS Reiail Aplil2004 :am 11,'01 Pres:e(l~ 1.65% eQebil 1.60% -commCft:e Basic 1.85-% .e Debit ',60% ,-Commerce Pl'e€etted 1.S0% Ie Debit 1,55% 'assenger TraMport 1.75"1t ItliDebit 1.SO% .l$S Payment Service 2.00% 1C Debit 1.95% argo Metd'ianl SelViC2s MasterCard and Visa It'lter\'':J'lange levels and rates are not aU inchJF'Ve. For e (;Omplete list can !he number on your merchant statement $0.17 $0.10 Av;1lJable to mom $0,15 busfrtess-es $C.-to I Internet me£Chanls $0.15 r--authoritatJut'l reversal AVS"· re«uired I internet merch3nts $0.10 , elecironie outhoriation "'-15 t -authorization revel"$a! $0.10 Re&trietcd to Airtif'les & r .1 eleetrooic sut.hOilzatiOf'l $0.15 Railwvys "'.02 Fi:e!lride<1 to R~rants 1 ~ic.; ~utl'!om:atiOl.1~' $0.02 ~~C.C sa~~'.~~tf~ .. VISA I ~~~:~et'!'!'liT!"l{ or;'~re~ enter.up to 1I1'S1'5 alpha characte($ of address '., :. ·'~~W~'~J,qU~i.'!nl~~t~;~n~Jhat;i:lale'is"ni: tn?1'e than 7 days.arter --.. " .i~~;-1'¥y'~~,.$e~'~.~~:3hi!-f4~e·lInC1.Settlemetltdate .:;::,:),::~~~~~~{~~~~~!Jtthe.:alJth~~cdamOlJnt~nthe Ship :.,' , Trans~T6ii,mus(:II'eklda:;\Ofdet.numbef .. eustomer .service phone number and eard no.! ~:~.r.ifiri.dl~.¥~:~·' .' --. Use AVS-feature On terminal Of software: enter. up to fil'$t 5 alpha' characters of addte~ ti'lenzipCQde Tran$aCtion date must equal.shipping date and tMtdale is no more than 7 days after avthortutiOI'l.1 day to settle between ship date and' :se!tfemenl date . Can settle Withln 15% or authorized amount. but I~ avthorized amount between the ship date and the settletner!t dale most msteh TtaMaalon must ind\/tle: O~e( number, customer $eMce phOne MUlTIber and E* CorNnerce irxlieator or a:'" If Commerdal -----l<ey.enter .transaetfon Transadiorl date-mllSi. equel Shipping rJao and tnat date is rio more than 7 days after avthoriz;ltjOn. 1 day to seJ:«e between ship date and se't'Jement datte Can settle within 15% oi' ilIlMo .. ized amOlJnt blJt tile 'authorized amount between !he $hlp dale ,,"d the settlement 1:f4l.te must m;neo must InClude; order nlJmber, customer .S!eNlce phone number and rJ.t'I'Cl.lred ~ • or-S" Visa {\ISV'} t pass Levell! Data- Swl~ or key enter transection Get C\Jstomers sigr\alure when the transaction is mea to me MlJst be a consumer can:!' Tl'OItlSaction must iodude: t!ckel number, sequenoe number. eount and 1tineraty information e-commerce ttar.sactions !I\ust il'lClude e.commerr;e !fldiC3tOf of vs~ or "0'. Must perform Verified by V!stI (V6V) I . Swi~.ear(f-.:.. ".". . . 's2s:~~:sia:diOn~nm~10n"e$taurar:rts (andmovfe theaters . $75:0(j ~. - <~ ~ , I ICPIFJS Oays to settle ~ t I 'Days to setUe - , I Dayt 10 settle ~ 1 I D?y$ to settle -'; t Oays to settle -.2 April 2004 19 Debit :mer Slandard 16 Debit 2.63" 1.80% $0:.10 $0.25 ~rd and Visa l"i~ange laveis :and rates are not all inelu$ive.' For a CQmprett list call the t'lumbet on your merchant statement IC Plus Aval'labie to most bVslfiesses VISA Swi~ or key eC1tettransad.lon Get sigMlure when the tran.saclion is face I¢ face Authol'i%e sals through tetmina1l$o!tware ortefephone • T!"ilu'\&action must cont.ain original auth!:!ritatlOfl Days. to setUe -2 vafid.~ticn' flot '.: ~pe',of:ke:Y..iiinteriif,&~diOfL. . D<ay$ to settle ~ 29 required , ' • ~'tUStoffl~~!9iia~:Wne,~ thi:tiansac::tkm is ftlee to face OnIy!weI available for higl"Hisk merChant$ ,..,. " i;j&t,~:~~~~r~~' , . and I'lon~ E.coml'rleJce transactions :mle COmmercial CaI'tI AVii'llIa!Jle to n"lO$I: busine-llses 1 electronic: authorizat:on Swipe or ~y-Etntet transaction Days to settle-refet to CPS qualifying level lure eleettonlc: 'ureha$ing Card urge ~Uft;hasing Card Large I ~rr.:lai Cero Level' II :etoo Merchant Services 0.95% 1,35% $35.00 Get cU$l.Omet:s sfgnature when the transactiQo is. ~ to face Best pommetdal Card levet IbrT&E and Ml..Jst be a Commercial Card' , Touch~Tone merci'lants Must I'neel CPS fequi~l1ts I Travel & entettalnme;'lt (T&E) I , eledronic auUtoriz.ation La,<,*i II Oata~· Vand authorization not required Get customer,s slgnatV!'e Must be ~ ViSa Signalum Card .• Mus! meet CPS Swipe ar July enter tm!'Wldion "Get eustomers signature when the transaction is face 10 faCe Must be a Visa SiQMattmr: Card T.ransaC\iotl does not meet CPS requitements fl-Ax'-'~'.-b~I-.-'.-~"""'1 ,",:--~fn-.-ss-e-s--~. ~V~'~!id~.~U!It-;·~o~n~·""-;t~iO-.-not-:---+---$=""~--;pe~or key-enler traOS.aJetion A ..... nahle to JTlQ$t busi~$E!s requinxl Get signature Wheft the transadion is face to face Must be a Commettial Cam , etectronic avthori::t.Oltion Trans:act~!'. doe~ tlC?t meet CPS requirements Swipe or tey.-ent.er ttaM8CtiOfl Get ~mers signature when the tr..m~ is ~e to face Must be $ GSA {Government SeNices AgMcy} Purchasing card Non-T&E mercham Traos.adion mU$1: be eqUl!ll to or greater lhan SS.ooo but feu U'lan $8,7$0 Must meet CPS requirements Days 10 settle ~ 1 Ta.e serviees include MCC"s 30\.'J0..3999:, 4~'Z, 4411, 4122. 5812, 5814, 1011. 15'2 Days to settfe -29 rae setVices ine:lude MCC's; 3000-3999, 4112.441'.472'2.5812,5814.7011.7512 Days 10 settle ~ 29 Days to zetUe-mkr to C?S qualifying levet $0.00 Avaaabl~ to most bu;1line;.s:es 1 ef~~,9:tMo#Zatiori:· ;:' I" ", . Pass leVel' II and t.;eveI HI o.rta"" D3y$ to setUe.-referto CPS q,uaITty!ng tevet .1 electronic .uthorflation ·3· -Ptirehaslno _ SWipe or~y ~tertrnn$3dion Get customer.s signature when the transac.tion is face to face Must De 3 Commert:J.,1 Cat(l' MUS! be CPS Qualified M<.r.Stp;!l= Days to setUe-referto CPS Qua!itying lever Ap;{2004 MasterCard and Vi&a Interchange levels and rotes are nol aU jnclu"::"IC!. For a comptete list calt the number on your merchant statement Ie Plus VISA Get custo."T\er.$-z'ignature when the transaction is face Ie f:aee Days to $Ct!I<Weter to CPS queljfyl~ level' .. ' Must be a Commercl$l Card Most be CPS Qualified I I Must pass Levell( and lit Data isl~ Card Lrug* r!Cket O.SS% $35_00 9usine.$s to Susines$ merchants 1 etedtonie autho~-ation -: -s;;,.j~--¢r ~-eoter:,-"~:::"",,='=~~~~~~~~~~~--~~ Get Custome~ . ~i9f1Blure When ttaliS3ctlon is fa¢.'!!! to' face M1.!st 'be's'Purehasir\9 Cam MU$l: re9laterwith Vlsa and have a Business to Susit'less MCC Transactioo is equal to orJ;lrealarlhan $4,100 Must meet cpS requirements Oays to ~tue -7 Pas,s Lev~ II ~ level m Data-I . Swipe transa@n Days 10 settle-3 alional Consume!' Card 1,10% $0.00 ~S Z)OO Foreign) 1.50% >0.00 ;" Standard) ational Comme:.«::fa! Card 1.0,," $0.00 "d mget Trans pen Creall -1.94% $0.00 Jmer Card Crean -1.6:2% SO.OO 1e Credit Debit -1,3'~ $0,00 1efcia1 Card emit ~.21% $0,00 :J-E-Commeree ~il ~2.00% so.oo 1$ Credll Debit .1.87% SO.oO nia aulholization is obtained thrlW9h a terminal or software AWllable to most bu$~$ , .. Ava~able to mod businesses PessenglUttanspor! metehants .. Non-Pasaenger Transport merch;ill'rtS- Availab!e 1¢ MOst businesses ... ~~ MorrQ.E~~ mercnants 1 electronic authorization NtA NJA NiA NtA OrIginal authorlzation Non-U.S mer.chant Key..ente,t tl'i!nsacion Onginel 1II1 • .'thori;;::atlon Non U.S merehallt Swipe mal'lS3Q'tiol'l NOn-US merchant MU$t be a Commercial Card All eard type's' .etig1b1e MuS! be a ConSumer Card Return credits apply to US originatinQ WflS3ctiOtlS only Musl qualify 7.0% or more of the doflsrvok.Jrne in OOlIsumer sates at Card Not P«!S8Ot (MOITO). E-Ccmf!"lel'Ce Basic, or S-Convnen;e PnilfemKI II Data ir:dudes sales tax al'ld eustomercode fot CornInet"r;ial Cards. Sales tall must be betWeen 0.1 * and 2Z% 'When ffle tax is gfea1etthan zero. Levell!! Dsta is Levet'lI Oats plus line item delali, which includes; ;;cription, item quantity. item unI't of measure, ~nded item amount, ~roduet code, credit and debit ;ncficet.or. Equipment must be pmgrammed to recog~ Commemat card,. Dal'$ to seW e ~ 29 Hi9h Ii:k MCC'$ SW2. SIil6G & 5967 are not eligible . lmem rnu.;t be prograrMted to prompt foi' the Address Verffic:atiol'l Sy~em (AVS) to reduce nud l settled amount is ¢'IIer the toleranoe from the inillal authori%ed amount a revel'$Sl needs to be performed, A merehaflt It'ILtst c31! the i$$t.ling banlt and ask for the a!J'lhOtizatT¢n to be reversed so it does not tie up the ~,t:otde~ ,e, Then a mea;hant may re-<!luU>.onze. :2(90 Merd'tant Services -4 -April 2004 , I s .1' E·Cornmen:e IneOebi! ;'l'Ilered lne Debit 1.05% 1,90% 1.&4% 1.90% 1.64% $0.'0 $0.16 $0.10' $0.16 MasterCar<! aoc! Visa Interd'!ange levels and rates Sf!!: not atl indushre. For a eompi,ete tis! call the number on yow merchiilnt statement AVEli13ble to m()$t businesses Available Ie mew b!Jsinesses MasterC, 1 • 1 elecirtlI'Iic au!.horitation Get Customers signature Restaurants. Sars. Barber Shop$ afld" Beauty Safons ean setlle: withln 2:5% oUhe euthori<:ed amount Holels, Car Renta! Agencies and Cruise Uoes have 1'10 rastrictiol"lS on dll'ferert¢E!S between th& sulhorWed and settl~ amount An others can $ettla within '0% of the alJthorized amovrn Auth,O>"lzatIotl end settlement lniof'l'Tlaijon tnoSt /'NIteh """"'''' settle'o"t'it.l'l1!12.5% of the r'IOJWac::e.to face, hlMll no I"'emctlclns Termtnat (CAT) levelS in Key..e~r transaction D1A!ct Martle!il'l9. Tax Preparation, Quasi Cash. Al.rt:omiilted Fuel DispeME:r, Travel Agent. Travel & .entertainment ('raE), Airline's, Hotels and Car A.ental Agencies not eligible Ie Plus cays to :Settle. 1 sel:t1e -2 D;t)'$ to $etUe -1" ~ I r Aut,."""i.n and 'effieme'" info";'" •• muS1 mateh I e SecI:« 1,55% $10.10 'I ~_e$lrl~ed (0 5~<~_~{MCC . 1 el~rnc a~~ri%ati~U"; .. -····f(e·y-a~t~. ~rl:sa~~ ";". . . 1 Day. (.se.le-2 .• Must be e:eonsvmer:eard " " • Aut.h'om~Ol1 'and s~~erit information ~ matd'l . rmarket ne Debit ;e lndustries live (Snp) 1,39% 1.05% US% $0.00 $0.15 ($0.35 cap) $0.0$ Re.s.trided to Utaity, Insural'lCe, Cable ~d Teteocmmunication eoJTIp.')nies 1 electron.k: authoriz:at1en 1 electronic authOfl2.atk!tl Swipe card Get customers sQN1ture C.:an ,settle withln 10% Of iIIUtheIiled amount Must ba reglSte:rnC with MasterCard Supetmarfi:at indicator must be present AuthQtiz:;a:tiQn and sett1ement !nft:mnation must match Key-errtet transaction Can settle w'Jthin 10% if aut.hoIUed amount Must be ~i.*re<!' with MasterCatd Rea..'f!1ng Payrrients OndlCatormust be present -, Days to se"tlle • 1 I ' I ~ A~OI'I and settlemem klfonnatioo must malt:h:::. ____________ -i--:-___ c--:-____ -----, MasterCatd Tae 2.'20".4 I $0.10 ~~~ Tae ~r¢$ , e!ean:nk::at.rthOriUllon ~~~~;~~~~ W~d' M~;.t~~rd use a1 a TaE mer;;:hant Days to settle· 2 Key-entertraosactiot'l Hotels. car Rel'1tii1l Agen~es and Cruise lines are ~mpl: tn:lm tlmeli!"les$ edits: At.'thoriution and settlarnenl information must match ling Ma!'lret 1 el~'eauthCl([zaITclll, D$YS to 1S~le ~ 2 "le;Oebi( 0.80% $0,2$ argo Merd'lcint Services ·s· Apn12004 r_ e Oebit Prwniet"S~(11,PS) le Debit 1.19% 1.$0% ,-""'" 1.36% seLia $0.15 aId and Visa lnte!'ch3nge levels and rates are not all inclu~;"~" For iii comple!e list call the r'llunbe( on yovr merchant statement Mast '::ard 1 electronic authorization $15.00 Key-entertraMaetion Qn SUb~uent: stoIys wiltl signature on 1'ile Must be ~ w'M MasterCM:! ?refen'ed CtJStomef indicator rnt.I$t ~ presel'll 'transaction must include settiemenl detai1 ad.deooum Settle Withir\ t day of Checlt.O'Jt Days to sett1e _ 1 Authorization and settlement irribrrnatiotl must match nger TI"eIM!!lpon passenger Tr;nspoi1 merd1ants 1 eledrQoiQ 1l!uthorlzatlon ' $Wi'pe-Qt key.cnt~~t;ansadion -I Days to S:ettle':'i Ie Oebit ciet cU$1;Qmm ~g~ When lhe transactiOn i1; face 10 face _. 'li;~ /'lienee Purcha$es "Service $lalion Off~Line ,oj Ie Debit n Eledtot\fe , Starn.lard ~fQO Merchan t Services '1.38% 1.05% 1.80% 0.70% 2.70% 1,510% 1.37% ~")" $0.15 $0.00 $0.17 $0.10 SO.25 $0.00 $0.10 WhOlesaro metl;h3nts {MCCS300) Restricted to. I'I\i$CefIaneous food storea; (MeC 5499/. service st<liJons {MCC 5541), automated fuel di5pen$eJ'S (MCC 5542), movie U'leatel"S (MCC 7e~2) aM fast fooO restllurarrts (MCC 5814) Awnable to most businesses Available to tnQSt bu$lnesses Avaiia~le to tfIoO$l !'fusinesses 1 electronic .authorization Tral"l$OlctiQn must Include passenger name. fu:ket number, Iss\ling"Canier and illnerary (S;rta in settlement Swlpecaro Get eJJ$tomers signarure Cart settle ,!"ithin-10% o! authorized amount Must be registered with MastetCan:! Warehouse indle3tor ~ be present Authorization and slttUement information muS'l matc~ 1 electronic autCho-n~·",-'t"'--~i-.--~$wi'-C·pe.ccea=,"~o~c~_=-= r IniU~t~~-~-c;~ ACtivated Tem'linal (CAn r Days to sett!e-1 No. eleetn'ln1c authorfu.tion required ~ri%atlOO 1 (ri~r(: 8uthorttation ·6· Gel customers slgnalure when the tIan!>aCtion is face to face Alltomated Fu.d DiSpensers reQuire iii CAT Level of iii "2" AU other must have a CAT Level of 37 Cl:I!wenienc:e Stores ancll.1oyj,e'Thea1en can settle wflhln to% of the authOl"i:ted amount l'ottransactionS over SH',!.OO Restaurants ean settl~ amol.mt wft,hin 25% of alJlhorfzed amount tor 1r.n.sactiOflS over $25.00 AuthOft:<rtfQn and settlement Infocmation mU$1 maleh SWipe or key-el'ller ttan&aet:iorl Get c;:ustDl'ner sI9naWntwhen the IMmsaction Is face to faee Must be a eonsumer eard ~j}~~~.u~~~ ~_~B~~-':;S ... tioPS:~·~Uty Salons can settle ~lhln :25% or Swipe ot J<ey-entertr.JN;action Get customers Signatunii when the tl"elnsa~ons is ~ce to face Must be non-\J.s.l$sl,led consumereard Days 10 settle -29 DaJ:l$ to. S:etlle ~ 4 Days to settle • 29 April 1004 ICPlws s MasterCard and Visa Jnterchange IlMJils and rates are not a!llncflJsive. For a complete list calt the number Ol'l yovr merchant statEment :>nrte Data 1.95% $0.00 AVililabie 10 most bvsinesses :Irate Data Rate! 2.eS% $0.10 Avail.o'!lble to MO$t busi~sses 'rate T&E n 2.15% $0.10 Awilable to most businesses )fate T&E I 2.30% .$0,00 to most ~e Latge Tid;el 1.20% S40,OO Avaiiabie to most bUSinesses lQle Standard 2.70% $0.10 Avaiahie to tM$t bUsinesses atJonal Purchasmg Data 1.55% $0.00 Availabla:to tnO!!It businesses i 0.75% I $00,00 f Avai3b1e to rtIQ$t bw>ine.sses 3tIooal Commercial 2.1-5% $0,00 Ava~t>1e to most bllsine$$es uomc .wthoriWion is oblalned" throt,ogh a tem1;na! or 50ftwete Mast :ard , 1 eledtornc authon'zatiOf\ 1 e/eet.t"orlic authorization 1 e1~!'QtU(; authoriZation I 1 eledronicaut_ f. . 1 et~ 3I..thOrization . J eledforiiiii~b~Jr!:t:~i~t)n ," .. I 1 eteetton'e authorlzation I • 1e[~' ~pe Card, gel customers Signature Sarber & Beauty Salons can settle within 25% of authorized amounl All otl~r:s. ean settle within 10% o(nuthorized amount Must pass Level II Data .. At.Ithoriation and settlerntmt information rnt.ISt matt::h . __, "",, •. , . '. . Card .. NOI"l Key-e.nte;r-~actJOf: mU$t match Must be a Commercial Card. Non T&E merchant Ke~nl:ertransaclion AutI10rizati0n and settiemeol information most match MIJ$:1 be-'a Coinmen:ia! Card Swipe or !{ey-em.er transaction; get customers signature when ~0tI Is face to face MI.I$l: pass ir,dtlStry specnlC T&e II criteria; fOlio #, !W'Ital agtftment ii.' che~piCk up ;and ~retum C'ales. duration, no shOW IndJeator/extra charge indie:ator ~ be e Commercial Card Swipe Of Key-enter trnnsaction; get eustOme($ Sigl.af.ure woon uan$ffic:tion I.s tiace 10 faI;a Res1aul3nts 21M Sars-ean setGewithin 25% ofthe i!ruthorlnd atnourrt Hotels. Cao Rental Agercies. Cn.#se lines and ~l'\Qet T~MPcn merehants can are ~mpt from avthori:letlon :Oleranee and timeliM:S$ edits Authorizailon and sertiemet'rt icl¢rmafion must n'li!1eh Must oo.a·~'C!fd. ~T&E I'I'Iefchants When wMaetion is 11lee to face can S.ettle~WMin·2.5~f1l"ie:auth<.'lft.:er::l·al'l'lOUn! {excludes AFD men:harrtl.l) n mustfT1ill.1.ah Mus! be a Commercial Card Swipe Of key-enler transaction, Get customer':S signature when trnnsaetion, is face to taee .:"~~ h.i~~~~,;~"d'Jlu~asin~j~r.F1eet {GOvemment Purchas1ng) eards . Swioe,oI~~~nsactiori:'"bet customerS signature When ITansaeilon 1$ face to fo'Ice Must be 2 non--U.S.I.ssved Pu!t:h2sil'l9 or Aeet (Government Puret~lI$jl'l9) eatOs $Wipe Of Key-ente~ transaction; get customers slgnalure when transactiOn Is face to face Must be a non T&E mercnant Transaction must be equal to,,_::',"".c:O::'C':':'===----c-=--:--:-:-c-c Fleet (GoVernment purel'oaSlng) eartH~ g~t eusromers $fgneture when tran.s:ad:ion it, faee to faee Ie Plus Days 10 settle ~ :2 Days to settle ~ 2 cays to settk't - Non Ail1ne -21Air1ine -8 Re.~ ere not eligibfe ees:t Comrrterclal cam rnte for T&E; merd'lams to ,seltie- Non Airfine ~ 2 Airline-a ~ Days to settle ~ 1 I Days: tQ settle ~ 29 me, 554: Days to seWe ~ 29 02y$ (0 settle -29 I Data includes sales tax and customer COde for CommafCial cams. Sales laX must be between 0.1 % and Z2% when the talx ~ ~ter than ;u:rg. t.evet 111 Data is Level II ~ta pluli line item d=taJI, which inchxiea: ilem d'uoription H'ltity. item unit of measure, eXlended item amount. product e.o~. credit and debit indicator. EQ:ulpr"f\ent must be programmed to recognize Comn-u:rcieJ Cards. 21go M€rcflant Services -1-April ,004 , I CITY OF PALO ALTO J. GONTROllm DISBURSEMENT 1. Describe the controlled disbursement program oNered by your bank. Include the time of day that tile current day- payment information would be available. ..' . Wells Fargo has seven endpoints available to our cliehts, including a California endpoint in Calabasas. Of the seven endpoints available, we recommend our Van Wert, Ohio poinllo besl suit your needs. The Van Wert, Ohio service oHers you the advantages of an eastern time zone endpoint and early reporting, along with a variety of available technologies, such as image access and electronic reporting, to optimize your cash management activities. Additionally, it also includes out premier Penect Presentmenl Positive Pay service. With Ihis service: • A summary of the days disbursemenllolal is available 10 you by 7:00 A.M. Pacific Time. (Presentmenllimes are at 6:00 AM PT and 7:00AM PT.) • You'll receive timely, complete information; you'll have Ihe ability to accuralely forecast your daity cash needs. Early summary informalion enables you to fund your account witnthe amount necessary to cover daily check clearing lotals and avoid excess balances, so your money works harder for you. • Your daily funding totals accurately match posting lotals, and adjuslments due to encoding 8rrors are virtually eliminated. Perfect Presentment compares checks to your issued cheCk file and our slop payment database prior 10 posting to your account. We identify and correcl encoding errors and report only "rue" exceptions 10 you. Because Penecl Presentment runs in real time rather than at end-of-day, it does in one day what other positive pay services take Ihtoo days to do: Morning • Checks are presented • Stop payment items are identified • Posilive Pay exceptions (unmatched checks) are idenUlied • Malched ilems are reported in funding lolals Afternoon • Exceptions are reported • Pay/return decisions are made Evening and Morning • . Checks are presented • All ilems are reported in funding tOlals Evening • All other checks are posted • Positive Pay exceptions (unmatched checks) are identified • Exceptions are reported • decisions are made + Encoding errors are reversed • Corrected lIoms are posled + are Controlled Disbursement Service is subje;;IIO initial and annual 5811518elol}' Illview of the tinaneia; statements ollhe Cily, credit approval by Wells Fargo Bank and satisfaClol}' camp/elian of any necessal}' documentalion. 2. Can Account Reconcilement and Positive Pay be used with your bank's Controlled Disbursement program? Yes, Account Reconcilement and Positive Pay can be used with our controlled disbursemenl program. Please see the description of our Perleet Presentment Positive Pay service in question 1 above. CITY OF PALO ALTO 3. State the detail cost and benefits otlhis service. Benefits 01 our Controlled Disbursement Service: • Sure Funding. Wilh our funding and reporting process, you are required to fund only the transactions reported 00 your daily Conlrolled Disbursement Summary report. So you know your funding lolals ea~y and surely. • Integrated Electronic Delivery. All .the senlices and information you need to monitor and manage your check disbursemenlS aclivity (Slops-Photocopy-Search, Image 'Positive Pay, Treasury Inlormalion Reporting) are deflvered electronicelly through our Commercial Electronic Office Internet portal. Access them any time, anywhere with a single sign-on. • Image Services. Your. staff has cleared check images at their fingertips for fast research and proof of payment. ;. Perlect Presentment· 'onty at Wells Fargo. We compare checks to your issued check lile and our stop payment database prior to posting to your acoounl. We identity and correct encoding errors and report only "rue" exceptions to you. Account reconciliation is simple because your ARP statements contain no adjustments for misencoded checks. CITY OF PALO ALTO . . K. OVERHIGHISWEEP 1. When does the sweep occur? Wells Fargo Corporate Cash Management Account (CCMA) sweep product provides competitive rates with several investment choices thai will allow the City 10 customize the product to best meet your investment criteria. The CCMA is a fully automated, end·of-day investment sweep. At the end of each day, the excess collected balance iii your Wells Fargo wholesale checking account is automatically "swept" inlo one or more inveslmenls to maximize the return on Ihose funds overnight. Since the sweep occiJrs alter all other account activity has been processed, accidental overd·rafts are n01 a concern. Each morning the funds are returned to your ooncentralion account and are available lor business. CCMA oHers a variety 01 high-quality inveslment options and includes the following powerlulleatuflls; .. • Same·Day Sweep -Interest income is maximized by using daily collected balances to increase investment balances. • Daily Inleresl-Inveslment interest is paid daily and is available tor immediate reinveslmenlthe lollowing day. • Automated Investment of Funds • Eliminates costly or time·consuming funds movement associated with manually transferring funds toltrom Investment accounts. • AccuratW of Funds Transfer -Since the sweep transfer is performed after all 01 the day's debits and credits have been tabutated, accidental account overdrafts are impossible. .• Direct Ownership of Securities· the account holder, not the Bank, owns CCMA securities and mutuat fund shares. A daily confirmalion Selves es the documented proof 01 ownership. • Detailed Reporting ~ Investment confirmations are mailed daily, detailing the amount iIWested and the securities supporting the inveslment. Aclivily is summarized at the end 01 the month in a clear, concise statement 2. What investments or funds are available for public sector clients? Does the investment options listed meet the California Government Code for allowable investments by City governments? As a CCMA investor, the City may choose Irom several investment options in the lollowing Government Agencies: Federal Home Loan Bank, Federal Farm Credit Bank, and Federal National Mortgage Association (Fannie Mae). Yes, the funds meet the California· Govemment Code for allowable inveslments. 3. What is the detailed cost of the sweep services? Maintaining a peg balance of $50,000 for each sweep account can eliminate the monthly maintenance lee of $250,00. No sel·up charge would apply. 4. Provide average rale of return on the proposed sweep fund{sl for the past 12 months. Please refer to the CCMA Rate Sheets attached at the end 01 this section. 5. Ptease describe alternative overnight investments options available to maximize the City's earnings potential. Other overnight investment options available to the City would be a variety of money market securities. Oaily cash management needs can oiten be met through money market securities -short·term lixed income securities with maturities of less than one year. Interest rates on money market securities vary,daily, and the yield corresponds to the current yield on bank deposits and Treasury bills. Overnight money market securities available to the City would be: • Commercial paper • Treasury bills • Agency securities • Money market mutualtunds ern OF PAW ALTO L DAYlIGHrOVERDRARPR01E8110H Describe any issues, concerns or charges associated with a line, of credit 10 cover inadvenenl overdrafts up to $5,000,000. ' Wells Fargo has the capabilily to extend a dayli!jht overdrafi facility 10 you. Establishment of such a limit would be subject to the . review ollinancial statements of the Cily and subject to credit approval by WeDs Fargo. There are currenlly· no fees charged for intra·dayactivlty. Daylight Overdraft is StJbjocl to inilfill and annual salisfee/Of)' review oflhe financial slalaments oflho Cily, credil approval by Wells Fargo Bank and satisfactory completion of any necessaiy doeumenlation, . EXHIBITB Government & Edu{atlonaJ Be;nking Carole 1.a Ro,,:a MAC A0112-l02 . Vice Pre$iden{ 550 Caiifomia Street, 1 Oih FIOOt San Francisco, CA· 94104 41>396·7485 415 646·8767 Fax (af(l'e.! .. _mct~we!rs-f~190,(<lf'\\ ". November 3, 2004 Tamo Narayan Senior Financial Analyst City of Palo Alto' POBox 10250 Palo Alto, CA 94303 Dear Tarun: Wells Fargo is pleased that the City of Palo Alto will be recommending to City Council for approval its intent to award the banking services contract to our bank. I acknowledge the tenns of this contract based on' the "Scope of Services for Banking" (RFP No. 109043) dated September 14,2004, plus the following addendums agreed to by the City and Wells Fargo Bank as reflected below. • Six year fixed tenn contract. • . Merchant Services bank' processing fee to be fixed for four years and increases in the subsequent two years will not exceed 3 basis points. • Wells Fargo will reimburse the City of Palo Alto up to $3000 for program conversion costs charged by the City' s two external vendors. • Wells Fargo also agrees to the following price concessions: • Checks deposited selected in district-CA· from $0.045 to $0.040 • Checks deposited -CA -from $0.060 to $0.055 • CD Rom Per Image -from $0.04 to $0.035 • On-Line Previous Day Report STD item -from $0.080 to $0.075 • ACH monthly maintenance -from $45 to $40 .> On-Line Previous day report maintenance--from $60 [0 $50 Once again I would like to express my thanks to the City of Palo Alto for selecting Wells Fargo Bank as your new bank. I look forward to a long banking partnership. Sincerely . .. -/' //'),f_<-.!.( CITY OF PALO ALTO M. PRIDING TERMS AND OIHOIIIONSAND PRIBING SCHEDUlE The City has the oplion of compensating on a lae Of balance basis Of a combination of both • . OPJION_A: COMPENSATING BALANCE METHOD Compensating balances are collected balances maintained in non·interest bearing accounts adju!i!ed to meet the Federal Reserve Requiremenls. The compensating balance requirement for a given month varies based upon the current eamings allowance rate, services utilized, and volumes. When USing the quarterly seUlement method, you may car!)' excess balances fOIWard.to offset a . deficfi Incurred during a calendar month and to cover charges in subsequent months, but excess balances cannot be cl\rried beyond one calendar quarter. Any shortfall will be direclly debited from your account within ten days of presentment 6f the analysis or in the final month of the quarter. OPTION B: COMPENSATING BALANCE WlTlf.SWEEP Utilizing this option, the City would utilize a sweep product. The City and the Bank would set a peg balance thaI would accommodate offsetting the monthty banking fees. Any balances above the peg woutd automatically sweep into one of the Bank's sweep vehicles and earn hard dollar dividends. Actual monthly charges will vary depending on the type and volume of services used. . OPTION c: s1N.m WITH DIRECT fEES Section 53682 of the California Government Code allows public enfities to pay direct fees for services. By peying in direct fees, theCiiy WGuld eliminate the need to maintain collected balances rscuired for the above compensating balance methods. The daily collected balance must ba positive to avoid uncollected funds charges. II you choose this alternative,lees will be bRted at the time ,the <lccount analysiS for the month is presented. Wells Fargo can either direclly debit your account or bill you for the service fees. 'Fees will ba due and payable within ten days of this presentment. Utilizing this option, the City wquld utilize a sweep product. The City and the Bank would set apeg balance of zero. Afl collected 'balancesabove this peg would automatically sweep into one of the Bank's sweep vehicles and earn hard dollar dividends. AclUal monthly charges will vary depending on the type and volume of services used. For the compensating balance payment oplion, respond to the following questions: 1. How will the bank stipulate the required compensating balance? The compensating balances method is selected by the ctient from the options listed above. We.lls Fargo does not slipulate a specific method fOf our clients to use. 2. On what rate or index will this be determined? The Earnings Credit Rate used to ligure the compensating batance rscuirement is based upon the 91·day Treasury Bill Auction Rate, discount basis, for the prior month. Please refer to question 1/5 below. . . 3. Will compensating batance be based on closing ledger or collected balances? The compensating balance wiff be based on collected balances. 4. Will the excess or deficit earnings btl carried forward to luture months or backward to prior months? When USing the Q1Jarte~y settlement metMod, you may carry excess balances forward to oflset a delicit incurred during a ca~ndar monlh and to cover charges In subsequent months, but excess balances cannot be carried beyond one calendar quarter. Any shortfall will be direcUy debited from your account within ten days of presentment althe anatysls or in the final month ofthe quarter. . CITY OF PALO ALTO 5. ProVide the formula for computing the compensating'balance requirement. The Earnings Credit Rate is based upon the 91-day TreasUlY Bill Auction Rate, discount basis, for the prior month, Earnings allowances are calculated on an actual day year basis using the Earnings Credi! Rate times the average investabte balance (collected balance less the 10% reserve requirement) for that month. ' The formula for calculating the Collected Balance Requirement is as follows: illvf1§Lable Balance Available for Services X # of Calendar Oays in Month, X ECR Actual # of Oays in the Year 6. For what period of lime would the bank agree to a fixed amount for compensating balance, regardless of the volume of transactions? . . , Wells Fargo' does not offer a fixed amount option lor compensating balances, 7. How much notice prior to efiective date of any change in campen saling balance will the bank provide? 30 days. 8. In the event that the City's actual collected balances exceed the amount stipulated, would the bank agree to pay interest on the excess? If so, please explain, stating period for calculation and providing the formula. Since Wells Fargo does not offer a fIXed amount option Ihis quesliondoes not apply 9. How is float calculated on checks deposited? Explain the impact 'of "Check 21" implementa\1on on the City's f1oal. We determine availability 01 items deposited using availability schedules. Availability is assigned on an item-by·ilem basis according to the rouling and transit number for the check, the deposit location and time of day deposited. We give immediate availability te on-us items. We define on-us lIerns as checks drawn OIl the Wells Fargo Bank in the state (pr regional legal entity) where the deposit, was made and all checks drawn on Wells Fargo Bank, N.A Ilems drawn on other Wells Fargo state or regional entities receive fractional availabilily. Northern California Unencoded Check Deposit Availability Schedule All unencoded checks deposited to your public funds checking accounts and received before the cutoff lime posted in the store, cash vault, or any olher department/office receive collected funds in accordance with the following schedule: Collected funds are staled in businoss days. Collected funds on checks drawn on banks in Federal Reserve areas closed in observance of a holiday are delayed one additional day. This schedule is subject to change without notice. , Excepl (or Bank o( America. Gily NaHanal8anl<. Bank o( Ihe Wesl and Union Bank 01 California. whicl! are 0Il8·day f/ems, 2 Two.day availability will be assigned to fiems drawn on/inane/allnstilutions localed in lire following slates: Alaska. AMon •• Idaho, Nevillla, Or8goo, VIall, Wasllfflgton. Nole: Federal ReSBIVe dasfgnated 'Gauntt)" checks drawn on Ins/IM/ons In these slales arelhree-o"y items, Please see the Corporate Accelerated Availability Schedule lor Northern California lor encoded deposits, attached at the end of section O. CITY OF PALO ALTO The enactment of Check 21 legislatiOn will lead to faster clearing times lor business and consumer checks dr<\wn on US financial institutions. While it may take. some time for these benefits to achieve mass scale, Wells Fargo will be offering new. products and services to take advantage of the opportunities that Check 21 will bring. By implementing these products and services, our clients will see the benelit of faster clearing times on the depository side of their business. WelfsFargo Will launch three products in 2005 after a successful pilot starting Oclober 28" of 2004. These products include Desktop.Deposit, Chicago Wholesale Image Lockbox and electronic check file. .. Desktop Deposit will allow our clients to scan images using bank provided hardware and software andlransmit a batch of payments to Wells Fargo for proceSsing. • Chicago Wholesale Image Lockbox will give Wells Fargo a wholesale image lockbo)(·processing center located in Chicago, from which we will process all items using Check 21 processing rules and provide images of checks and remillance documents online via the CEO. We are also planning on rolling out this service to other lockbox sites in Ihe eastern half of the US (Atlanta, Bcston and Phitadelphia) throughout 2005. • Our electronic check file will allow our clients to use their existing internal imaging equipment to .generate a file of images 01 checks and related data for processing at Wells ,Fargo. This further expands. our integration capabilities Ihat are already considered to be superior in the industry. . With all of these products, Wells Fargo will be giving 0 day availability to on-us iiems and 1 day availability on aU others provided that we receive the file before our established cutoff times. ·The availability to all ilems not processed through one of the Check 21 related services above will remain the same as·it is today. F.or the direct fee' payment'option, respond to the following questions: 1. Will the bank credit against fees the interest on average colleCted balance (monthly or other period). tndicate what . index the interest rate is tied to and specify formula for calculating interest. Yes .. we will creditlhe City against fees based on the ECA. The 91-day T-billis used. Please refer 10 Tab N for the formula used . . 2. For how long a period woutd the bank guarantee the fixed charges quoted? (Note that the City requires at teast one year of firm charges) The City's pricing will be fixed for a four·year period with the option to renew for an additional two 'years. All pricing adjustments beyond the fixed lerm will be coordinated through Carole LaRocca, the City's Relationship Manager. 3. On what basis would the fixed charges be modified? Price increases in subsequent years will be lied to the Consumer P rico Index. 4. When would payment be due for fees? For the direct fee payment option. fees will be billed at the time the account analysiS for lhe monlh is·presented. Welts Fargo can either direcdy debit your account or bilt you for the service fees. Fees will be dUI;! and payable within len days of. this presentment. " CITY OF PALO ALTO BANKING SERVICES PRDPISAlSUBMISSIIN BID FORM DO NOT DISCLOSE· CONFIDENTIAL TRADE SECRET 25 . I ~ CITI OF PALO ALTO • DO NOT DISCLOSE -CONFIDEr-.'TlAL TRADE SECRET . 26 . i CITY OF PALO ALTO ~ DO NOT DISCLOSE· CONFIDENTIAL TRADE SECRET. 27 . I CITY OF PALO ALTO • DO NOT DISCLOSE, CONFIDENTIAL TRADE SECRET 28 CITY OF PALO ALTO < DO NOT DISCLOSE. CONFiDENTIAL TRADE SECRET .29 - ! CITY OF PALO ALTO < DO NOT DISCLOSE· CONFIDEL'rTlAL TRADE SECRET 30 ! CITY OF PALO ALTO . N. fRIDING ADjUStMENtS 1. Prices are to remain firm for the first year of Ihe contract. For subsequent years, indicate what the bank proposes for . a price increase, if any. Banks may propose an annual adjustment 10 prices either on a. fixed-percentage basis or 0(1 a variable percentage based on a nationally recognized index. If the latter, indicate the not to exceed annuat increase percentage. The. City's pricing will be fixed for a lour-year period with the option to renew for an additional two yearn.' All pricing adjustments beyond the Ilxed term will be coordinated through Carole LaRocca, the City's Relationship Manager. Price increases in subsequent years will be tied to the Consumer Price Index, nollo exceed 3%. 2. If a compensating balance is used to pay for services, what interest rate is used and how is It calculated? What is the charge for negative balances? Describe all potential penalties and how these penalties ~re calculated? The Earnings Credit Rate is based upon the 91-day Treasury Bill Auction Rate, discount basis, for the prior month. Earnings allowances are calculated on an actuat day year basis using the Earnings Gredit Rate times the average investable balance (collected balance less the. 10% reserve requirement) for Ihat month. The formula for calculating the GoIlecied Balance Requirement is as follows: !!lVestable Balance Available for Services X # of Calendar Days in Month X EGR Actuat # of Days in the Year The following is Ihe six-month history of the Earnings Credit Rate: -MONTH -------", -_.---RATE 1.50% 1.35% 1.32% . June 2004 1.03% May 2004 0,94% A ril2004 0.94% The bank uses the following formula 10 compute the charge for uncollecled funds: Average Daily Negative Collected Balance x Overdraft Rate (Prime + 2%) x Days in Period 360 day/year. Additional charges would include: .£tlnds Advanced Overdrafts Per~ Overdraft Charge -Paid Item Overdraft Charge -Returned Item $20.00 $3.00 $2.00 • CITY OF PALO ALTO O. IDle CHARGES ANI ROil Provide information on applicable FDIC charges and the bank's availability schedule. Also present any float advantages by converting or maintaining our relationship to your bank, if any In light of the "Check 21"le!jlslatlon. FDIC CHARGES The Federal Deposit Insurance Corporation (FDIC) imposes 'an assessment in order to service the debt on bonds issued to pay depositors of failed savings and loan associations. The assessment will continue through the year 2017 at an annually determined rate. Wells Fargo calculates the FDIC charge at $0.00001 times the average ledger balance on a monthty basis. The calculation is based on the actual fea that the FDIC charges Wells Fargo Bank. Wells Fargo is in compliance with the Federal ReS8lve requiremenl 0110%. With the use of our automated sweep producl,the reserve requirement can be reduced or eliminated NORTHERN CAlIFORNIA UNENCODEO CHECK DEPOSIT AVAllAB!UTY SCHEDULE All unencoded c~ecks"deposited to your public funds checking accounts and received before the cutoff time posted in the store, cash vault, or any other departmeDVofflce receive collected funds in accordance with the followin,9 schedule: Collecled funds are stated in business days. Collected lunds on checks drawn on banks in Federal Reserve areas closed in observance of a holiday are delayed one additional day. This schedule is subjeclto change without notice. , Excepl for Bank of America, Cily NalionalBtmk, Btmk of rile Wesl and Union Bank of C~lilomla, wIllc/l are one· day items. 2 Two-day availablllly will be assigned 10 ItemsdnlWll vn financial ill5li1u1ions located in Ihe following states: Alaska, AriZlllla, Idaho. Nevada, Oregon, Ulah. Washlnglon. Note: Federal ReSllIV8 designated 'Coonll}'" checks drawn on instllulions In !hese slilies are IhrBo-day Items, Please see the Corporate Accelerated Avaitability Schedule for Northern California lor encoded deposils, attached at the end of Ihis section. FLOAT Based upon market share statistics from the FDIC website, Wells Fargo has a market share of 16.06% in Santa Clara County. This means Ihat approximately 16% of checks deposited will receive immediate credil. When' comparing other major bank's . market share statistics. Wells Fargo enjoys the second highest ranking. With regard to float, the Bank offers products Ihal convert checks into ACH credits, thus reducing overall float on transit (non-Wells Fargo) items. Section U contains information on Accounts Receivable Conversion (ARC), which is one of the products that the City may want to consider to reduce lIoal. Please refer to Service Enhancements to review the benefits that ARC can offer the City. If the City selects one of the products mentioned in response to question M. 9 (please see page 24), you will receive 0 day availability on all on-us items and 1 day availability on all other items. Therefore. by maintaining your relationship with Wells Fargo and implementing one of our Check 21 related products (Desktop Deposit, Wholesale Image Lockbox, or electronic check file) you can teverage Check 21 for fasler clearing times. '. CI'IY OF PALO ALTO P. SUBVENtiON PAYMENrS IROM tHE StAlE. COUNlY AND IIIF 1. Is Ihe Bank an approved Stale of California depository? Yes. 2. What is the charge for transfers from fhe above three agencies and to LAIF? Transferring 10 LAIF may be handled two ways. If processed through our Government Banking Unit, a book transfer charge of $5.50 would apply, If the City chooses to transfer funds )lia wire, an outgoing wire charge of $6.00 applies., For all monies ooming from LAIF, an Incoming wire charye of $6.00 applies.' , a. Describe the LAIF transfer process. LAIF transfers are lIandled as follows: • Funds Transfer to UIIF: The City oontacts the Stale of California LAIF office to advise of a lunds'transfer. A LAIF representative will provide a transfer confirmation number. Deadline: 10:00 a.m. You may initiate the funds transfer ' electronically via wire or instructions rnay be telephoned, faxed or emailed to the Govemment Banking Group for repelitive transfers. • Funds Transfer from LAfF; Contact the State of California lAIF office to request a wilh~rawal. DeadHne: 10:00 a.m. The funds \'Iill be transferred,into your Welts Fargo acoount via wire transferthe same day. SAME-DAY BANKING Wells Fargo participates in the State Controller's "same day banking" program. The State Controller'S office sends Wells Fargo a daily fAX identifying state agencies that participate in the program and public agency(s) with Wells Fargo acoount(s) who are receiving a payment(s). The FAX also identifies the payment amount, which we credit on a same day basis to your account. Payment information is received in the moming and your accounts are credited wilh funds that are available that same day. No fees would be assessed. ' SACRAMENTO LOCKBOX SERVICE Government & Educatiorial Banking offers a customized remittance banking selVice specifically designed for our government clients receiving Siate warrants from the State Controller's Office. This selViee is offered in addition to our Same-Day Banking service, which is provided in oonjunction with the State Controller's Office. Our Slate warrant processing offers the following advantages: BaneNts • Reduced Mail Float. We provide an early moming pick·up of mailed remittances at a West Sacramento PO Box. Our early morning pick-up ensures that all received mail is processed immediatety. • Accurate Processing. Stringent processing standards are consistently met lor accuracy, prompt mail pickup and sorting, and timely depositing and reporting. RemiUance' information and warrants are scanned and electronically provided via email attachment to your aHice. • Superior Avallabitity.' We present your State warrants direclly 10 the Stale Treasurer's Office for same day availability. State warrant totals are etectronically deposited to your account. • Timely Remil1ance Reporting. Remittance detail and deposit lotals are reported by 9:00 AM PST. State Warrant Processing is ollered in conjunction with our Sacramento vendor,Check Processor's tnc. (CPI), Our development 01 this service reaffirms our continuing commitment to pTOvide focused product enhancements supporting our public agency ellenls, .. CITY OF PAW ALTO . . . , , Q. DIRECTDEPOSnS . 1. Describe the bank's ACH and Direct Deposit service In delail. As one of the nation's largest ACH processors, we have one of the most advanced ACH systems in the country to meet your disbursoment and payment needs .. Wells Fargo waS recently the recipient of the Electronic Payment Association NACHA's highest honor, the George Mitchell Payments System Excellence Award. We were also the winner of their ACH Quality Awards for both 2002 and 2003. . Wells Fargo's state·of·the-art ACH processing system provides timely and accurate electronic deposit for your payroll on payday, streamlining fhe process lor the you and your employees. Y QU can pay your employees' salaries electronically using a nationwide connection of Automated Clearirig Houses. Payments can be delivered to employees' checking, Gredit union or brokerage cash managemenl accounls maintained at over 10,000 financial institutions In the United States. The City would submit an eIecironic file of payment information in a lormat approved by the National Automated Clearing Houso Association. Wells Fargo reads your file and, following yeur instructions, delivers payroll entries \0 your employee's accounts. The employees' salaries are immediately available in their accounts on the morning of payday. EmploY'!e Debit VourCompany's Authorization AcoountAt Agfl!"l':melll Weill Far90 ) Your(otnp,my ~ Wells Fargo +<---1 _A~_H --,I'" L R«ei .. ingSenks , Ctedit'toli. (~djl Your Employen' Account' itt Wells FII'96 ~nploye~' A«ouots ' at Other Danks ACH Services are subjecllo inHial and annual salis/aclOfY review of Ihe financial s/alemerns of Ihe Cily. crooilapproval by Wells Fargo Bank and satisfaclory comple/ion of any necessary documenlalion. 2. What Bre Ihe transmission deadlines for Direct Deposit ACH liles? What day and time does the bank need the file from the City. and when are funds debited from the City's account? You may send files anytime, 7 days a week, 24 hours a day. Although a iile may be sent al anytime, for l-day settlement, the file must be·received by 6:00pm (PT) the day prior to settlement. For 2·day se"lement, the file must be received by 9:00pm (PT) for a file sont via direct transmission or Secure File Transport and 6:00pm (PT) for a tile sent via Internet ACH. For files transmiUed with an effective date of a holiday or weekend, the transactions will automatically settle on the next business day. Internet ACH PC/Cpu·CPUJSFT CITY OF PALO ALTO 3. Delaillhe bank'shack up plans for data transmissions. Many of our clients schedule regular telecommunications tes!s between Wells Fargo and their hot s~es. If a client is having system problems that lead to tate file transmissions, Wells Fargo's ACH throughput power witl work with you in hying to meet last-minute processing deadlines. . Wells Fargo utilizeS the Federal ReselVe ACH network and the Arizona/PAX private processing network. This diversity provides the backbone for contingency alternatives, Should either our clients or Wells Fargo ever encounter system problems, we are prepared to implement short·term contingency or emergency processing. . For handling Fed ACH failures, we have a relationshipwith the Arizona Clearing House and Deluxe Data to provide backup in caSe of a Fed failure. Our contingency procedures encompass switchover of client communications as well. Wells Fargo's implementation plan for new clients includes discussions and plans for contingency. 4. Oescribe the banks process 01 notification 01 any changes or problems and the ability to re·send a file or to defete a -. . Confirmation Notification' Due to our. continuous processing environment, Wells Fargo provides transmitlal registers as conlinn.ation nolifications (CNotes) lo.all transmissioncusiomelll, This confirmation verifies Wells Fargo's receipt of your ACH file, notifies you Ihatprocessing has begun, and indicates if your liIe contains errors. CNotes are faxed or transmitted within lilleen minules of receipt 01 a file, When Wells Fargo receives transmissions, we run the data through a series of tests, includiOg a verification of NACHA format, mandatol)' conlenl and selliement date. If a discrepancy is (ound, you are immediately notified. In addition, we can automatically confirm receipt of a file and the total number 01 items and Qoll<irs and transmit the confinnation.back to you, 5. What are the different ACH file transmission options available? ACH file transmission options available are asynchronous (PC), bisynchronous (mainframe) and Secure File Transport (internet) transmission protocols. CITY OF PALO ALTo < R. PAYROll TAlI PROCESSINO Describe the services available from the bank to accommodate the City's payment and reporting of payroll state and . federal taxes. In detail, describe the bank's system lor insuring that the reporting of payroll taxes Is pertormed in a timely manner and In accord with lederal regulations. We oller twoconvenient options the City can utilize to make lax payments: Inlemet ACH and WelisT AX. INTERNET ACH The Internet ACH service via Ihe CEO porlal offers a flexible suile of solulions to address your' ACH activities. Each offering functions independently, so you can choose only lhose selViCes that meet your particulilr business needs. Til<! services available include: . • Federal & State Tax Payments + VendorPaymenm + Payroll • Employee Expense Reimbursements • Consumer Debits & Credits + Convert Wire Payments WEUSTAl! Wells Fargo 8ankoffers WellsTAX SelVlce, which provides the City with the ability 10 make Federal and State Tax Payments electronically. Tax payments are made using a PC terminal, touch·lone telephone or online via the CEO portal. It is simple and fully automated. T~e Cily may initiate payment of applicable federal and state taxes on or belore the payment date indicated by the City. following ·e.asy..to-use automated instructions; you simply enter lax period, tax type and dollar amount of your lax payment. Wells Fargo . "ooeslhe rest. Our tax service provides: • On·line aocess to lax filing; no more coupons to complete. • No more trips to the bank 10 make your tax paymenls. • More time to make your tax deposit. + federal employmenl a~d ocrporale withholding lax payments can be paid using WellsTAX. • Immadiate confirmation of tax transactions. • For added convenience, you can enter your paymenls by phone or PC anytime between 2:00 A.M. and midnight (PST), 7 OOysa week. EXHIBITC CERTIFICATION OF NONDISCRIM I NArlON SECTION 410 Certification of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below hereby certify: . a) that they are currently in compliance with all federal and state of Califomia laws covering nondiscrimination in employment; and b) that, if awarded the contract, the proposer will not discriminate in employment of any person under the contract because of race. color. national origin or ancestry. religion. disability. gender or marital status of such person. THE INFORMAllON HEREIN IS CERTIFIED CORRECT By'SIGNATURE(S) BELOW. Firm: Wells Fargo Bank~-,-____ --c _____________ ~ Signature: ~L·· .I<..~=--_____________ _ Name: Carole La Rocca ---;{:P TOR TYPE:-:N7:A:-:-M"'E:C-) --------- Sig"'tu" , ~ Name: __ :::<;:::.mes M, Tho==aChed DeSignation of Authority) __ _ (PRINT OR TYPE NAME) Note: California Corporations Code Section 313 requires two corporate officers to execute contracts. "The signature of First Officer' must be one of the fol/owing: Chairman of the Board; President; or Vice President. "The signature of the Second Officer" must be one of the fol/owing: Secretary; Assistant Socretary; Chief Financial Officer; or Assistant Treasurer. (In the alternative. a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) CITY OF PALO ALTO RFP NO 109043 PAGE 1 OF 1 Wells Fnrgo Agreement Forms -Exhibit D D-t: Acceptance of Services 1)..2: Commercial Acconnt Agreement 1)..3: ACH Security Services Prjlccdure Agreement 1)..4: Public Sector: Wells Fargo Corporate Card D-5: Authorization for Automatic Payment D-6: Wire Transfer Services Security Procedure Agreement D-7: Contract for Deposit of Moneys D-8: Master Agreement for Treasury Management Services D-l ACCEPTANCE OF SERVICES .Bank: Wells. Fargo Bank, N. A. ~ New Agreement o Additional SeNlee Each person signing this Acceptance of SelVices ("Acceptance') certifies that: (a) the undersigned Company has received and agrees to be bound by the Service Documentation, as defined in Bank's Master Agreement for Treasury Management SeNices ("Agreemenf), and, If checked below, Bank's Security Procedures, Sweep Services and Credit Sweep Services; . (b) he or she has ·full authority to execute this Acceptance on' behalf of Company, to enter into other agreem~nts with Bank for Services now or hereafter offered by Bank and to amend, termInate or otherwise act on behalf of Company with respect to such agreements and Services; and (c) Company's use of any Service confirms its agreemenUo be bound by the Servlca Documentation relating to that ServIce. . All terms defined in the Agreement shall have the same meaning when used in this Acceptance.' Company's elections with respect to SecurityProcedures, Sweep Services, end Credit Sweep Services are: ~ Yes 0 ~ Yes 0 0 Yes ~ 0 Yes ~ No No No No SecurIty Procedures-A CH. (If yes, go to Pari II. below) Security Procedures -Wire Transfers. (If yes, go to Pari II, below) Sweep Services . .llf yes. go to Part III, below} Credit Sweep Services. (Obligation #-----.J I A. Important Information about Security Procedures. Company understands that when Bank acts on any instruction to transfer funds by ACH or wire transfer from accounts Company. maintains at Bank (each, an "Older), Bank and any beneficiary's bank may rely solaly on (i) the beneficiary's account number even if It Identifies a person different from the named.benaficlary, and (ii}:if provided to Bank, the' identification number of any other financial institution through or to which the funds are to be transferred, rather than the nama of the financial institution. Company expressly agrees to be boun.d by any Older, whether or not authorized, issued in its name and accepted by Bank In compliance with tha security procedure(s) Company has selectad as indicated below. If Company selects a securIty procedure that is set forih In an Addendum, that Addendum is incorporated in this Acceptance by this referance. B. Security Procedures for A CH Services. (Select Option 1 or Option 2.) Option 1 ~ Yes 0 No Bank's Stan.dard SecurIty Procedures (as set forih In Bank's ACH Services Security Procedures Agraament that is incorporated in thIs Acceptance by this reference). If Company elects Bank's Standard Security Procedures, Company must select one of the followIng SecurIty Procedures: 181 Yes 181 Yes o No o No tnternet ACH securitY procedure. Other ACH Services security procedures (If yes, select procedure that applies.) o Token Cerd/PassGode -o PasSword -File Transmission File Transmission/Batch Release [g] Secure FI/a Transport . o Password -Taped or Written Instructions. Option 20 Ye" I8J No Spec'.' Sec~rlty Procedures. Company hes refused the security procedures set furl!> In Opt/on 1 above. Instead Company has reqUflsted use of the securlly procedure(s} set forlh . in Ihe Addendum. Indlvidual(s) authorized to receIve Information regarding the ACH security procedure selected above: Name Terun A. NalliYlw Name Jovee A. White Neme Joseph V. Sl!Cclg Name MYrna f. McCaleb I C. Security Procedures for Wire Transfer Services. (Select Opt/on 1 or Option 2.) . ~ c. ~==~====~~~~========~==~ ____ ~.~ Option 1 I8J Yes 0 No Bank's Standard Security Procedures (as set forth In Bank's Wire Transfer Services Security Procedures Agreement lhat is incorporated In this Acceptance by this reference). In addition to Bank's Standard Security Procedures, Company has selected the lollowlng securIty procedures: . I8J Yes 0 No I8J Yes ONo I8J Yes 0 No Optlon 2 0 Yes I8J No . Security Procedure for Telephone Verification (voice-Initiated Orders only). Voice-Inll/ated, non-repetilive Orders exceeding $. will be subject to tetephone verification, (If no amount Is designated, $500,000 wi# be used.) Security Procedure for Commercl.1 Electronic OffIce® ("CEO®") Wire Trlilflsf'lr ServIce (or WellsNet® Wire Transfer ServIce.) SecurIty Procedures for ElectronIc Commerce/Paymant Manager Services (If yes, sekJcl procedure that applies.) D Password -File Transmission (Non-encrypted). (This procedure requires that a ·unlque elght-dig# code separately agreed upon in writing by Company and Bank be presented with Company's wire flle. Company mey be reqUired to change the code on a regular baSiS.) 181 Secure File Transport (Encrypted). (This procedure usss 128-bIt S~ure Sockets Layer encryption and requires the use of a transmission tD and a' transrrnsslon peseword. Use of a digital ceriificete Is optional.) . Special SecurIty Procedures. Company has refused the security procedures sat forth In Op6on 1, above. 'Instead Company has requested use of the security procedure(s) set forth In the Addendum. Individual(s) authorized to reGeive information regarding the Wire Transfer security procedure selected above: Name Tarun A Narevan Name Javee A. White Name .LO§eph V. SaGGia Nama Myrna F. McCaleb '" [fl" IMPORTANT DISCLOSURES General, The investment instruments below thet are offered, sold, or pieced by Bank are not deposits In or obligations of, and ere not guaranteed by, Bank or any affiliate (except for Repurchase Agreements, see below); are not insured by the FDIC, the SeGUrities Investors Protection Corporation, or the Unlied States of America; and ara subject to Investment risk Including possible loss of princlpellnvested or the nonpayment of interest. Yields vary with market conditIons. Pest performance Is no guatIlntae of future results. Bank makes no representation or warranty as to the suitability or safety with re~pect to any investments. Bank and Its effilletes and their respective employees, offICers and directors, will not be liable to Company for any reason whatsoever related to Investments or redemptions made throl,J!}h the Services. ElectronIc Delivery, Confirmations andlor Statements wIll be sent to Company by electronic means unless otherwIse' requested by Company. Electronic means include the Commercial Electronic Offlce®, facsimile or Secure E-Meil. Mutual Funds. WellS Fargo Funds Management, LLC, a wholly-owned subsidiary of Wells Fargo & Company, provides Investment advisory and administrative seW/CBS for the Wells Fargo Funds®, Other affiliates of Wells Fargo & Company provide sub-advioory and other services for the Funds, The Funds ere distributed by Stephens, Inc" Member NYSE/SIPC. Wells Fargo & Company and Its aff//lales ere not affilleted with Stepliens, Inc. Fees for such services are dIsclosed in the prospectuses for these Funds, Bank may act as agent or as principal for Company for mutual fund transactions. For more complele Information about the Wells Fargo Money Market Funds including fees end expenses that epply 10 en investment In them, obteln a current prospectus, by contacting your Treasury Management sales officer, relationship or other manager or Institutional Brokerege & Sales representative. Please read the prospectus carefully before Invesllng. Money market mutual funds seek to praserve the value of your Investment at $1.00 per share; it is possible to lose' money by investing In /he money market mutuel funds, " Eurodollar Sweep. Funds Invested in the Eurodollar Sweep account are not domestic bank deposits, ere not Insured by the Federal Deposit Insurance Corporation and are not guaranteed by the United States government or any agency thereof, Repurchase Agreements, Repurchase Agreement transaciions' are obligations of, but nol deposits with, thB repljrchase counterparty (Bank or affiliates). Government Sponsored Enterprises ("GSE'? Bank wilioot asprincipal for all GSE transactions. Discount notas end othershort·term ,obiiga#ons Issued by GSE's ere obligetions of their respective Issuers. The obligations of Such issuers ere nol obllgat/ons of, nor Bfe they guaranteed by the United Stetes of Amarica. B. DESIGNA TION OF INVESTMENT INSTRUMENTS Compeny deslgnetes the following Investment instruments (Select only one par checking ae,count): DYes DYes DYes DYes DYes lEI No lEI No lEi No lEi No lEI Nn OVERLAND EXPRESS@ SWEEP, (Wells Fargo Overiand Express Sweep Fund) INVESTACCOUNT®, In addition to this Acceptance and the Service Description, 8 Master Repurchese Agreement must be completed and signed, EURODOLLAR SWEEP. CORPORATE CASH MANAGEMENT ACCOUNT ("CCMA'1. In addition to this Acceptance and the Service Dascription, a Master Repurchase Agreement must be compleled and signed. . . CORRESPONDENT FED FUNDS SOLD. In addition to this Acceptence and the Service Description, e Federal Funds Sale Agreement·Prlnclpal On/y-Sweep letter must by completed and signed. • Government Sponsored Enterprise Investment Option IYolI must selecl at least two) Federal Farm Credll Bank (fiFFCB" Federal Home Loan Bank ("FHLB" Federal Nattonal MortiJage Association ("Fannia Mae") • Concentration Account Elections The Concantmllon ACGOunt, Interest Account and Specified Balance Hsled below are subject to Bank's Corporete Cash Management Account Service Description. Concentretion Account Name Account Number . Specified Balance (If desired) . $ .. ...... - Interest AcCount Name Account Number ((May be the Concen.tration Account) Agreed To and Accepted By: Company:CITY OF PALO ALTO BY:~ ... C-. . f Name: Carl L:ats Tilla: Dlractor'of Admlnlstrativa Services Date: December 3p , 2004 D·2 Commercial Account Agreement General "In chis Commercial Account Agreement ,"Agreememltr, nCompany" refers to the owner (accounrholdetl of a Wells Fargo bank commercial depo'it account (the ",ccount"l, and "Bank" relers to rhe Well, Fargo bank ., which Company maintains the account. This Agreement contains the terms and conditions gO\'ernmg the account and replaces any ptior agreement' regarding the account. All fees and other charges for ,be aCCOUnt and the Services referenced below acc detaiied in Bankts separate fee and information schedule which has been provided to Company. :&y usjng tbe account or a Service after receipt of this Agreement) Company is deemed to have agreed to all terms and condidons set forth in thi' Agreement, .. .may be modified or supplemented b)' Bank from time to rime. This Agreement incorporates by reference the applicable fee and information schedule, collection schedule, funds availability policy) and rare sheets for imer:est~bearing accounts tbat have been separarely provided ro Companr concerwog the account. Dispute Resolution Program: Arbitration Agreement Company and Bank further agree: Non-Judicia' Resolution of Disputes: Maintaining good relationships it very important to Bank. Company must contact Bank immediately if Co~pan}' has a problem wj~h One of its accounts or a Service Bank provjdes. Ohen a telephone call [0 Company's relationship manager at Bank resolves the matter quickly and . amicably. However) if Company and Bank are not abJe to resolve such differences informally, Company agrees, by opening or maintaining a commercial deposit account wjth Bank or b}' accepting a Service from Bank} that any dispute berween ~ompany and Bank, regardless of when it alose~ will be settled using the following procedures. Company undersrands and agrees that borh Companrand Bank are wa"iving the right 10 a jury rrial or a trial before a judge in a pubJk court. Disputes:-..A dispute is any unresolved disagreement between Company and Bank that relates in any way ro this Agreement, Company's account(sJ) Services, OJ to Company's use of any Bank branch> Bank ATM, online Internet banking or any other method Company may use to access Bank. It includes an)' claim rhat rises Out of or is related to Company's accounr(s), Service(s) or related agreements. It includes daims based On broken promises or conrracrs, torts (Injuries caused by negligent or . jntentional conduc~), or orher wrongful acdons, 1t also includes staruroryt common law and equitable claims. A dispure also includes any disagreement about the meaning 01 this Arbination Agreementi and whether a dis.agreement is a "dispute" sl1bject to binding arbitration under this Arbirration Agreement. Binding Arbirration: Binding arbitration is a means oJ having an independem durd. parry resolve a dispute wirhout using rhe court system, judges-Of juries, Either Company or !ank may require the Submission of a dispute to binding arbirrarion at any reasonable time notwithstanding thar a lawsuit Ot otner proceeding has been. commenced, If either Company or Bank fails to submit to binding arbitration IoUowing a lawfuJ demand) the 'one who fails to.submit bears all COStS and expenses incurred by the other compelling arbitration. Neither Company nor Bank shaH be enritled to join or consolidate disputes by or against others in any arbitration, or to indude in any arbitration any dispute as a .representative or member of a class j or to act in any arbitration in the inrerest of the general public or in a private aaorney general capacity. ----~-----~---.~-.~.-----~-~ ~~~---~~--'" .. -----. Eacb arbitration,.inciuding the selecrion of the arbi'tratot(s}, shall be administered by the American Arbittation Ass_ociarion {AAA,. according to the Commercial Arbitration Rules and the Optional Rules For Emergency Me.asures Of Protection of {heAAA i"AAARules»). To the extent that there is any variance between the AAA Rules and this Arbitration Agreement, this Arbitration Agreement shaH comroL Arbitratoi!s) must be licensed .norney!,) of the state in wbich rhe Bank office where Company executed thili Agreement is }ocatedwjtn expertise}n the substantive laws applicabJe to the subjeCt maner of the dispute. Company and Bank agree that in this reJationsrup each is parricipatlng in transactions involving interstate commercej and that each arbitration is governed by the provjsjons of the Federal Arbitration Act (Tide 9 of tbe United St.tes Code), and, ro the extent any provision of that Act is inappUcableJ unenforceable or invalid) the laws of the state that govern the relationship'between Company and Bank about whicb tbe dispute .rose. To find out how to initiate an arbitration, please caJl any office of the AM. Right Of Set Off Preserved: Thi. Arbitration Agreement and the exercise of any 01 the rights Company or Bank have under this Arbitration Agreement do not stop Company Of Bank from exercising any lawful rights either has ro llse other.remedies available to preserve) foreclose or obtain possession of real or personal property; aercise self-help reme'dies, including sctMoff and repossession rights} or obtain provisjon~l or andHary remedies such as injunctive relief, sequesm1tion~ attachmentJ garnls~menr or court appointment of a receivet Miscellaneous: ~ompany and Bank agree to take aU steps, and e.xoolte al1 dOCUmel).ts, necessary for the implementation of arbitration proceedings. The arbitrator may hear and rult on appropriate dispositive motions as part o( the ar~itradon proceeding) such as motions for judgments: on the pJeadings) summary judgmenr or partial summary judgment. The AAA. arbitrator(s), Company and Bank) must take all feasible steps [O'assure that an arbitration proceedlng, as described h.erein. is complered within 180 days of filing the dispure with tbe AM and may not disclose the existence, eonr,em or results of the arbitration, except for disclosures of information by Company Or Bank required in the ordinary course of business or by applicable law or regulation, Arbitration proceedings are conduered in the state in which the Bank office, where Company executed this Agreement is located, ar a lOC1!:tion determined by the A:AA AU statures of limirations applicab~e to any dispute apply to an}' arbitration between Company and Bank. The provisions of this Arbitration Agreement shall survive termination, amendment or expiration of thi& Agreemen"tl Company's account reJatlonship or any other relatiOnship berween Company and Bank. This Arbitration Agreement constitutes the entire agreement between Company and Bank and'superseaes all prior arrangements and other communications concerning dispute resolution, In the event more than one arbitration agreement has been entered lnto between Company and Banl; the one moSt direerly related [0 the account or transaction that is the subjecr of tbe dispute sh.1l control. Modification of Terms. Bank reserves the right to add) change, or delete {individuaUy a.nd coJlectively referred to as a IImodification"} the terms and conditions described in-duli Agreement and the fees contained in any fee ~nd jnformation schedule. Except in the case of modificadons in IDJe charges, Banlt wiU send Company prior norice of any such modification. If Company does not wish -to be bound by modification. it may diScontinue using the Service affected by the modification or dose the account before the effective date of the modification, Company's continued use of the account, or., if the modification only affects a specific Service) Companyls use of rhat Service} after the modificarion becomes effective will be deemed to be Compa-ny's agreement ro it, ---------.. -... -;:----~--.--------.-~ .. --~-.-... ----.-..• ----- Laws Governing the Account. The account is governed by the laws and regulations of the United States and, to the extent applicable, the laws of the state in which the office 01 (he Bank that'maintains the accoun' is located (unless Bank has DotiJied Company in writing {hac the laws of another state shaU govern the account}, without tegard co ,conflicts of laws principles, Company and Bank agree tbat .any lawsuitS, claims) or other proceedings at ising from or rdating to the aCCOUnt or this Agreement will be venued exclusivel}· in the state at federaJ courts in the state whose laws govern the account. Any term 0; condition contained in this Asreernem v.thich is inconsistent with applicable law Dr regulation will be deemed modified and appHed in a manner consistent with sucb law or regulation, Any term or'Conditlon deemed unenforceable or im'aHd will not aHecr the enforceability or validity of the remaining ·provisions of this Agreement. ' Verification of Transactions; Righr to Reverse Erroneous Credits. AU transactions, including without jjmhanon those for ·which Bank ;has provided a receipt, are , subjecr to Bank's nnal verificarion. Bank is nor responsibJe for a deposit until it bas been received and verined by a Bank employee. A receipt recejved at the time of'deposit is not evidence that a deposit has been verified. Bank rna)' reverse Or otberwise adjust any credit it believes it bas erroneously made to the account at any time without prior notice to Company. Affilia!es. Deposits and withdrawals may be made at a bank alliliared with Bank {an "affiliate"); provided the afliliare agree,.lI a deposit is made at an alliliate, the availability of the deposit for withdrawal will be described in the alfiliate's fund, ovailability policy, If an afIjli .. e casbes an Item lot Company, Bank may place a hold on the account for a c,orresponding amoWlt of funds, If the hem is later returned to the affiliate for any reason, Bank may debit the account at Bank for the amount of the Item. Statements and Items Paid. Statements, norices, and other information Iegarding the account will be mailed to the addtess reflected in Bank)s records for the account, unless Bank agrees otherwise in writing. Company agrees to promptly examine each statement received from Bank and to promptly repol1 an1 errOneous credit or debit, Company al,o agree, that within thitty (30) days alter Bank mail, or otherwise makes the statement available, Compa.ny wiD report 10 Bank any claim for ccedit or refWld due to an erroneous Or unauthorjzed debit, a missing signature, an unauthorized signature, or an alreratJon, Statements are deemed to have been mailed_ on the first bu,iness day following the statement date. Within six (6) months alter Bank mails or otherwjse makes the statement available. Company will report'to Bank any claim for credit or refund resulting from a forged I unauthorized, or missing endorsement. Such reports are to be made by (i) caning the telephone number listed OJ'! Company·s account statement for such purpose and (ii) submitting a written report to Bank as SOOn as possiMe, but in any event) within the time frames described in this section. Without regard to care or lack of Care on the part of Bank) if Bank does nOl receive notice within the time frames specified above, Bank is released irom '1I1iabililJ' lor the Items charged to the account and for all othet transactions or marters covered by the statement. Chf€k Endorsement Requirements. By Federal regu!ndon, the area on the back of an Item between 1-1/2 inches Irom the "trailing edge" and 3 inche, from the "leading edge" is reserved for depository bank endorsement (the «Depositoty Bank Endorseme,nt AreaP ) and must be kept deat and unobstructed. The endorsement .01 the payee or depo.,itor should be placed on the hack of the Item along the «trailing edge It hut must not be placed in the .Depositor), Bank Endorsement Area. 3 If COInpan·y marks or obscures the·Deposirory Bank Endorsement Area Or Company cashes or deposirs an Item on which the Depository Rank Endorsement Area is marked or obscured, a deJay may occur if rhe Item must be returned. Examples of marks which may obscure the reserved area are endorsement~} rubber stamp impri~ts, carbon bands and preprinted information. Any resuhing deJay or loss is Compants responsibility. . . COMPANY AGREES TO HOLD BANK HARMlESS FROM ANY LOSS, LlABiUTY. OR DAMAGE BANK MAY SUFfER OR INCUR ARISING FROM OR IN ANY WAY RELATED TO MARKS APPEARING IN THE DEPOSITORY BANK ENDORSEMENT AREA AT THE TIME OF ENCASHMENT OR DEPOS!T. When Depositt Are Credited to the Account. AU oveNhe~counter deposits or ATM deposits to rhe account which are received before Bank's established cutoff time on any Bu,iness Day will be credited (and will be considered deposited) to the account as of the close of bu.iness th .. day, and will he reOeered in tha, day's Ledger Balance. All other deposit. (such as cash letter or lockbox) will be processed in accordance with separate agreements or banking ptacrice. All deposits received after Bank1s established cutoff time on a Business Payor at any rime on a day which is not a Bu,iness Da)' will be credited (and will be considered deposired) to the account at the end of the next Business Day. Deposits placed in One of Bank~ "night depositories" before the established deadlin~ on any Business Day wilt be credired to tbe aCCQunt at tbe close of business on· that same day; all other deposits placed in the "night deposhory" will be credited to the account at the end of the ncxt Business Day, All deposits are accepted subject ro verification. Bank reserves the right to make adjustments to the account for computation or othet errors. Use of Funds. Company's use of funds deposited to its account will ~ govern~o by Bank', separately disclosed collection schedule and lunds availability policy. The collection schedule describes when deposits of 'jrerns that satisfy cerrajn crireria will be considered coll.ected. UncoUected funds m.), not be ,vail. ble to be used for all purposes. There may also be a fee charged jn connecrlon with any use of uncolJecred funds that is permitted by Bank. The lunds availability polkydescribes when lund, deposited to Compants checking account will be available to be used fat aU purposes. The collecrion schedule and funds availability policy mal' change from time to time withour .prior notice. Deposited Item, Rellltned. Bank ha, the right to charge back or otherwise debit an)' . of Company's account(s~ for 'any Deposited ltem that is rerurned (and to reverse or' recover an}' associated interest that may have accrued), even if Company made withdrawals against it. This right 01 charge·back or debit is not af£"'ted b)' the expiration of an)' applicable midnight deadljne, provided Bank does not have actual knowledge th.t such deadline has expired. or haVing such knowledge, Bank conelupes that: (I) the Deposited Item is returned according ro a law, regulation, or rule (including a clearinghouse rule) that is binding on Bank; or (ii) Bank has received a claim that a transfer or presentment warrant), has been breached in connection widl the Deposired Item. Bank has the r./ght to pursue coUection of such Deposited Item, everi i:o the extent o£ allowing tbe payor bank to hold the Deposited ltem beyond the midnigbt deadline jn an attempt to recover payment. Bank may redeposit a rerurned Deposited Item and represent it for payment by any means (including electronic means)l unless, Bank has received instructions from Company not to redeposit such Deposited Item. Bank will have no lia biliry for taking or failing to take any action ro recover payment of a ret1lrned Deposited Item.1f II Deposited hems. is returned with a dairn that there has been a breach of 8 warranty (for ~xample; that it bears a forged endorsemeot or has been altered in any way) Bank may debit Company', actaunt lot the amOunt 01 the Deposited Item (plus any associated fees) and pay the amOunt to the claiming party, Bank is uoder.110 duty to question the trurh of tbe facts that are being asserted) to assess the timdiness of tbe claim. or to ass'ert any deJense. Bank need nOI give Company any prior nmineation 01 its actions with respect to the claim. Bank will have no liabilil;J' to Company il . there are insufficient availabIeJunds to pay your Items because Bank has withdrawn funds from the account Or ill any way restricted Company's access to funds because it has pJaced a hoM on or _debited the account in connection with a Deposited hem returned for a breach of a warranty claim. Company agrees to jmmediately repay any overdraft caused by the return of a Deposited hem. Breach of Warranties. lf Company breaches any warranty with respect co any hem) Company is not released or otherwise discharged from any Ii.bili!)' for such breach as lang as Bank notifies Company of the breach within one hundred rwenty (110) days after Bank is notified. If Bank fails ro notify' Company within this one hundred rwent)· (120) day period, Company lS released from li.bili,)' and discharged only to the extent that Banks failure to provide Company notice within such rime period caused a loss to Company. Determining Balance; De.biring the Account; Ord~r of Posting. A determination of the. account balance lor purposes of making a decision to disbonot' an Item for insufficiency or unavailabili!), of funds may be made at any ,ime berween the presenrment of the hem (or eartier upon receipt of any notice of presentment) and tbe time of return of the ltem. No mo re rhan one such detennination need be mad'e. The account may be debited on the day an Irem is presented by any'means. including without: limitation electronically, or at an eadle! time based on no~carion received by Bank that an Item will be p.fesented fot payment or collecrion, Bank may pay ltems presenred against lhe account in any order' it cnooses, unless a panicular.order is either required or prohibhe.d by law. In parricular, Bank may~ if it ch~ses, pay irems in t~e order of highest dollar amount to loweSt dollar amount lunless such a practice js specifically prohibited by an app"ca bJe srate Of fedefallaw, rule, or regulation}. Bank may change the order of posting hems co the account at any time without norice. Security inlereS!; Bank', Right to Setoff. Bank may setoff against any .ccounts 01 Company maintained with Bank or an}' aWHaie findllding maJured and unmatUred time accounts) for any obligation COlnpany owes Bank, whether due Ot not, at an)' time and for any reaBon as allowed·by jaw. Company grants Bank a security .I~terest in the account for the purpose of securing any obJigadons that may from rime to time arise under this Agreement. Bank may conSIder this Agreement as Company's consent to Bank's eJ<ercising its right of seroH or asser[}ng its security interest should any Jaw require consent. Bank may fund all Ot a ponion of any overdraft in one of Companrl accounn at Bank b)' cha[ging any of Company's other deposit accpunts af Bank or any affiliate oi.bank, including Wit],out lirnitation any transactj~n aCCOUnt that is pan 01 a sweep account, even though such charge overdraws the other account. The rights desctjbed in this sectiQn are in addition to and apart from any other dghts, including an)' rights granred lUlder any security inrerest agreement, that may have heen granted to Bank. Lost items, When Comp.ny cashes or deposits. check or other Item at Bank, Bank acts as Company's collecting agent to collect the ltem. Company has the risk of Joss) including reconstrucdon COSts. for Items lost while in the process of collection. U an Item deposited in the accounr is.JOST in transit, Bank may reverse the credir 'given for .-~ .... ~~--~~ 5 that Item. If an Item Company cashes ar Bank is IOSl in (fansit, Bank rna}' recover the funds given [0 Company from any of Company's accounts af Bank or an)' affillare, or directly Irom Company. Servi'ce Fees. Company agrees to pay Bank in accordance with the fees set our in Bank's then current fee and iniormarion schedule applicable-to the a"ceoum. Company also ag'rees to pay an amount equal ro any applicable raxesJ however designared, exclusive of taxes based on [he net income of Bank, Usury'Savings Clause. It is never the inrention of Bank to violate any ~pplicab)e usury or interest rate Jaws. Bank does not agree or jntend to contract for, charge~, collect, take, reserve or receive (collectively referred to herein as "charge or collect n), any amounr in the nature of interest or in the nature of a fee) penalty or other charge} which would in any way or event Uncluding demand) prepaymcni or acceJerarion) cause Bank to charge or collect more tban the maximum Bank would be permitted to charge or collect by any applicable federal or mte law. An), such cx~ss interest or unauthorized fee willJ notwitbstanding anything stared ro the contrary, be applicd.first ro reduce the true indebtedness, if any, and any excess amounts will be refunded. Earnings Allowance. The average monrhly Investable Balance in a commercial demand deposj{ account may earn an !lEarnings Allowance" which, depending 00 the arrangemenr wjrb Bank; rna}' be appBed against that montn,·' service fees for the account, An Earnings Allowance in excess of the total month}y smice fees cannot be credited to the accounf as inrerest and may nor be cacried forward to tbe following month. Earnings Allowances are calculated on a 3651366-day year basis using an "Earnings AHowance Rate '), which is a varia'ble rate established by Bank (and which may be as low as zero percent). This r~te is determined moridlly and is applied to the avemge Investable Balance for that month u,ing rhe following fonnula: Earnings Allowance Rate multiplied by the number of day, in the month divided by 3651366 days mulriplied by the average Investable Balance for that montb. As the factors used in the formula changel rhe Earningp ~iowance earned on a given average monthly Investable Balance will vary. Payment of Fee,; rmoncc Charges. Company may either be directly debired or invoked for fees, charges and raxes ulcurred in connection whh the account. Excepr as otherwJse agreed in wrhing~ aU fees and taxes wiU be perjo~icaJl}' debited against CompanY'taccru~d Earnings A)Jowance, Bank may debit ComRa.ny's. account(s) with Bank for any amount by which the fees or taxes exceed the accrued Earnings AlloWance, or may send an invoict to Company for such amount which Company wHl promptly pay. Bank: may asseSs finance cbarges on any invoked amounts that arlO not paid within forty 145) day, of the date of invoice. Finance charges are assessed at a rate of 1.S% per moiub (18% per annum) or the highest amount permitted by Jaw} whichever is less. Charges for acCrued and unpaid interest and previously assessed finance charges ",111 not be included when calculating finance charges.. Payments and other reductions of amOUnts owed will be appHed nrsf to that portion of outsranding fees attributable to charges for accrued and unpaid interest and previously assessed finance cb.arges~ then to other fees and charges, Debiring of service fees occws on the twentier~ dal' of each month) OCt if the twentieth ~ay is nor a Business Day, On the next succeeding Business Day, Dares and SpeciaUnsrruct;ons on Checks. Bank may) without inquiry or liability. pay Company's checks eyen though: {i) special instructions written on the checks indicate thar Bank should refuse payment (e.g" "Void after 30 days)" "Paid-in- F~iP\ or "Void over 5100"); (ii) {he check is srale-dared {i.e.} ir bears a 61lU: thai is ..... -.------... _ .. _._ .. ---------,,- 6 ----.. ~ .. ~--.. -.-.-------.-.. more th.n ,ix (6) months in the past). even if Bank has knowledge of the date on the check; (iii) the check is post-dared (i.e .• jr bears .. date in thelumre); or (iv) tbe check i, not dared. In addition, Bank rna)' pay in U.S. doll,,, the amount that has been MICR.en~oded on any check drawn by Company) even though Company has purportedly drawn rhe check in a foreign cumru:y. Stop Payment Orders; Notices of POSt Daring. The term lIsrop payment order" refers to both ali order to Bank not to pal' a check and to a notice of postdating. To he effective» a Stop payment order mUSt be received in a rime and manner that gives Bank 11 r~asonl:\bJe opporrunity to acr on 'it before paying) accepring~ certifying, cashiQg or otherwise becoming obligated t~ pay Company's check as provided in tile Uniform Commerdal Code. In addition to Compants name and account ".umber) Bank requires the exact name of the payee; the exact check number, and the exact amount of the check. All of the information must be eorrect jn order for Bank to stOp payment ,of a check. Rank will have no liability for paying the check if any of ·the jnformatlon provided in the StOP payment order is incorrect or incomplete, B-ank may require informarion regarding the underlying rransaction for which the check was issue.d including without limiration proof that Company does not owe the money to the payee ar the check prior to making any decision rt;garding req:ediring the account, Bank need not honor a written StOp payment order for more than six (6} months. However) 'there ar~ drcumsrances in which Bank ptay, in its sole discretion) elect to honor a StOP payment order for a longer period of time.without notice. Company must renew its stop payment order if it does not wa.nt the" stop ·payment otder to expire. Each renew~1 is treated as a new StOP payment order.lf the check;s presented fot payment during the pe-ried a stop payment order is effective, every efforr will be made to return the cbeck, pr~vided the stop payment order is accurate and complete. Bank may pay a check after an order has expired even though the check is more than si)L (6} months oid. An instruction to revoke a stop payment order must be received in a time and manner that gives Bank ·3 reasopable opportunity to 'act on it, If Ba.nk reere-dies the account aftet paying a post-dared check over a valid and time1y,norke, Bank may charge the account for the amDunt of the check as of the date of the check, If Company doe. not comply with these conditions, Company will be responsible to Bank for the.full amount of the check, and Bank may ehorge the account for that amount, Adverse Claims. If Bank receives a claim (Q aU or a portion ·of the account that is adver5e to Company's interest or .if a dispute arises regarding.the identlt)' of the authoriz.ed signals}, and Bank (i) cannot in good faith determine the relative rights of the personi') making claim to the funds or aurhority Qr (ii) does nor believe that It is Of her wise adequateiy protected if if ignores the claim Of dispute} Bank may withQut liability to Compan)' and in irs sole discretion: (a) place a hold On fund, in " the account or any other Company accoum subject to the daim or dispute, (b, close the account and send the funds to Company or to Company and the dajmant(s), or Ie) interplead the fu~ds. If Bank place, a hold on the lund" rhe hold may be pl.oed for aD)! period of time Bank.believes to be reaspnabJy nece-ssary to aHow a ~egal proceeding to determjne the meritS of the claim or dispute to be instituted. Overdrafts arid Insufficient Funds. Bank maYl at its. option) payor refuse TO pa), any hem if it would create an overdraft without regard to whether Bank may hllve previously established a pattern of honoring such hems. Bank may place a hold on balances in any other account of Compan)' until rhe overdraft is paid 'or it may setoff the amounr of the overdraft againSt any other accounts of Company in accordancewhh [he terms of this Agreement. Bank has no obligation to notify Company before it decides ~o either p3}' an hem that creates an overdraft or to disbonor an Item that it drawn against insuffkiem funds. if Bank pa),s an Item against insufficient funds! Company agrees to repay any overdraft immediately. Company will be required to pay for aoy cost< of collection that Bank incurs in . recovering the overdraft from it, including its reasonab~e arromeys' fees and court costs. Acts and Omissions of Other Financial Institutions. When Bank cashes or collecrs an Item for Company or accepts an Item for deposit £9 the account (each of which is referred to in this Agreement as a nDeposited Item"'), Bank is not responsible for tbe insolvency; neglect) misco-nducl, mistake or deIauh of another bank or person or for the loss or destruction of an Item or notice of non~payment in transit or in tbe possession, of others. If a Deposited Item is lost.or m.is~outed. by another financial institUtion (s «Collecting Bank») during the collection'proc<;s: Ii) Bank will have no responsihility to Company for the actions or inactions of .the ColJecting Bank; (lH B~nk may 'charge the account; fot the amount of the Deposited lremiand reverse any interest that may have accrued to the account in connection with the Deposited Item); 'and (iii) Company agrees to cooperate widl Bank in recreating the Deposited Item. Checks Presented Over-the-Counter for Payment by a Non-Customet. II. check drawn against the account is presented over .. the-counrer forpaymem b}· a person who is not ~ deposjt customer of Bank) Bank may charge a fee to the person presenting the check as a condition for payment of the check. Bank may require identification acceptable to Bank and not prohibited by law) including a :fingerprint of the person presenting the check. Bank may dishonor the chetl. if the person refuses to pay the fee or provide the i,dentificarion requesred by 'Bank, Forgeries or,Missing Signatures; Alterations. Bank will have no responsibility for , reviewing the number or combinadon of signarures on an Item drawn against the account, This means that if Company has indicated that more than one signature is required in connection with an hem drawn on the account~ Bank wHI have no liability ro Company if a transacrion is conducted On or through the account contrary to the sigl1arure requirements Company has specified, provided at least One of the required sjgnatures appears on the hem. Bank wit) have no liabiliry to Company for failing ro detect a forged signature or an alteration of an Ite~ if the forgery or aheration is such that a reasonabJe person could not reasonably be expected to detect it. Limitation of Liability; Indemnification WHETHER IN CONNECTION W1TIi A SERVICE OR THE ACCOUNT, IN NO EVENT WIll BANK, ITS DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR PUNfl1VE DAMAGES, WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT OR WHETHER THE LlXEUHOOD OF SUC\:l DAMAGES WAS KNOWN TO BANK. Excepl'to the extent that Bank is liable, Compan)' agrees to indemoi!)' and hold Bank and jtS dir~rors) officers) employees and agents harmless from all c!~s, demands, los~es, lia bilities) judgments, and expenses (including their reasonable attorneys' fees and legal e.xpenses) arisi·ng out of or in any wa)' connected with performance under trus Agreement. Company agrees that this indemnification will survive termination of this Agreement. Le@ends. Company is responsible for aU claims, demands, losses) liabilities, judgments Or expenses that resui{ from a restrictive legend or noration on Company's checks. 'Facsimile or Mechanical Signatures. If Company-uses a facs.imile or other mechanical signature (induding a stamp) to sign Items or endorse Items., Bank may rely on that signature as Company's authorized s.ignatute without regard to when or by whom or by what means such signature rna}' have b'een made or affixed to an . ]tem deposited ro the account or drawn against or otherWJlle debited from the account, If Company uses a facsimile or other mechanical signature (including a stamp) to sign or endorse hems} Bank may also condusivelytreat as authoriz.ed af!Y slgnature that reasonably resembles Coulpany1; facsimiJe or mechanical signature. Lo.st or Stolen Checks. Company IS in the best position to prevent the wrongful use of the aCCOUnt. 1£ ~panyls checks are lost or sIolen) COmpilnY must immediately notify Bank at the telephone number listed on Company's account statement for such purpose. FaUure to do so wHl hamper Bank's ability to pre»em loss and will1 therefore, relieve Bank' of any liability regarding the checks. Upon such norification, Bank may at its discretion, close the accOlmnand open a new one. All checks will . then be returned as II Account Closed» unless Company specifically requests that a particular check be paid, ITo make such an exception; Bank must agree to provide fbe service and Company must in a time11' manner provide Bank with the check number, dollar am Dum and rhe name of rhe payee,) If rhitd parties make regular deposjtS: ro or withdrawals from the aCCount (such as wires or ACH transfers). Company, must oorH), those parties of the new account number immediately, Protecdon Against Unauchorited Items. Company a.ck·nowledges that there is a . growing risk of joss from the increasing use of unauthorized Items including without limitation counterfdr checks~ demand drafts, and unauthorized ACH items. Company is aware that Bank offers Services that provide effective meansfor . controlling the risk frQrn unauthorized Items. These Servkes. include! • UPositive Pay" Service (offered b}, Bank in conjunction with Bankts account reconcilement plan ~ervices), and • "ACH Fraud Fjlter.» Bank bas advised Company tbar if Company doe. nor use Bank's Po,itive Pay Service and ACH Fraud Filter Service. Bank will be unable to prevent losses on Company's account(s} from unauthodzed ltems indudins whhout limitation counterfeit checks, demand drahs) and unauthofjzcd ACH irems, and Company will therefore be treated as having assumed the rJsk of these losses . . Internal Controls, Company shares responsibility for preventing the frau4ulent or unauthorized use pf the account. Company agrees to take reasonable seeps [0 enSUre the integrity of irs internal procedures with respect to its checks and the account, Payment Authoriz.ation Service. Company rna)" by executing and delivering to Bank a Payment Autho!ization Service Semp Form ("Setup Form"')) elect to urilize Sank's Payment Authorization Service for the account. Unde.! the terms of such Service, Bank w~ll, without Compants specific approval as to an)' particular lremt lij,uromaticaUy rerurn unpaid Imarked "REFER TO MAKER "I Items. drawn agaiJ}St the a.CCount which are presenred to Bank, and which exceed the IIMaximum Dotlar Authodzed Payment Amount" specified on the SetUp Forin) (ii) t\fuse encashment of .hems drawn against the accOunt which are presented to Bank through its branch/sro!e-network) and which exceed the "Maximum Check Cashing Amount" specified on the SetUp Form, Wi) refuse withdrawal requests againsr the accounrwhich are presented to Bank through its branchlstore network, and which exceed the "Maximum over the Counter Withdrawal Amount» ~pecified on the 9 • .1 Setup Form, and/or (lv) refuse encashmem of hems drawn a.gainst the accoum which are presemed to Bank through its branch/score nerwork) and which are made payable to an individual. Transf~rrIng an Interest in the Account. The account may not be pledged, 3sstgnedl or in any other manner transferred, whether in whole or in part) without the written agreement of Bank. Bank does nOt ha.ve to accept or in any way rec08!"7.e the rransfer, Interest~Bearjng Accounts. 1f the accOUnt earns Interest. the acc()unt is a variable- rate account. Interest is comp,ouuded daily and paid monthly to the account when the statement cycles. The aCcOunf earns intetest on the Investable Balance majmaioed.,,Bank rna)' in irs sole' discretion change the interest rate on the account at any time. If an Item, such as a check, is deposited to the account} interest begins 10 accrue no later than the Business Day Bank receiveS eredit/orthe deposit ofthat Item. Checking Subaccounts, For each checking account, Bank rna)' estabUsh on Company's behalf. a master account and two subaccountS, All information that is made available to Company abour the account will be at the master account level. The subactoUDtS are comprised of a sav.ings accaunr and a transaction account, At the begInning of each ,,,itement period, Bank will allocate funds between the two 5ubaccounts as it deems appropriare. Checks received by Bank that are drawn against the masrc-r account will be presmred for payment against the r.ransactlon subaccount. Funds will be transferred from the savings subaccount to cover checks presented againsrthe transaction subaccounr as may be needed, On the St);'th transfer from the savings subaccount during a Statement period all of the funds on deposit in the savings subaccount will be-transferred to the transllcrion subaccount. If t~e account earn.s inreres't, the use of subaccoums will nor affect the interest earned, Additional Term, Applicable to AU Commercial Money Market Deposit Accounts. Bank has rhe right to require seven (7) "days' written notice before Company wjthdraws money from any commercial monc}' marker deposit account ("MMDA"). Preaurhodzed transfers" autOmatic rransfers) on-line transfers, point of sale purchases •. payments to oth!:r.petsons, and winsfers by relephone from Company's MMDA ate limited to a total of six in any calendar month or statement cyde, P~eauthorq,ed . transfers include autOmaTIC bill payments) transfers to Company's other aCCOunrs with Bank) Or automatic transfers ro otber persons that Company has authorized Bank to make, If Bank permit. transfers from Company~ MMDA by che<:k, draft, check card or any s;milar order for withdrawal, no more than three of the six. transfers mall be made by such means in any calendar month or statement cyde,lfBank derermines that Company is exceeding the limits described above on more than an occasional basis, Bank wm, at its option, either close CompanyJs MMDA, transfer the funds on deposit in Company's account to another account that Company is ellgible to maimain, or terminate Company's r.ghr to make rransfers and wrire lrems again6t its MMDA, Target Balance Accounts. ]f Company maintains multiple acCOUntS at Bank, Company may designate in writing one such account as its '(Principal Account" and one or more additional accounts as "Target Balance Accounts", For each Target BaJance Account, Company will separately specify to Bank in writing the Ledger Balance or CoUected Balance which Company wishes to maintain in such accow1t (the "Target Balance"). At the end of each Business Day, Bank will determine the applicable balance on depo'it in each Target Balance Account. If rhe applicable balance in a Target Balance Account exceeds its 1 arget Ba}ance~ Bank will transfer hom the Target Balance Account ro the Principal Account such funds as are 10 necessary to bring the applicable balance to the Targer Balance. If the applicable baJance is less than the Target Balance, Bank wHl transfer from rhe Principal Account to (he Target Balance Account such funds as are necessary to bring the applicable balance ro the Target Balance. Bank may, but will not be required to, transfer funds if the rransfer would create an overdraft or e)(ceed rhe Collected Balance then on ,deposit in rhe Pci.ncipal Account. Funds·Transfers Rules" of Funds Transfer Sysrems. Funds transfers to or from the account will be governed b)' the ~uJes of an); funds transfer system through which the transfers are made, as amended from time to time, including wirhout limitation the Nation?1 Automated Clearing HOllse Associarion and .any regional associarion (each an "ACH"), Clearing House Interbank Payments Societ}',· Sociery for Worldwide Interbank Financial Telecommunications, and Electronic Check Clearing House Organization: The/following terms and conditions are in addition to, and not in place of, an}' orher agreements Company ·has with Bank regarding electronic rransactions. Notice of Receipt of Funds. Unless Bank has otherwise agreed in writing, it will notify Company of funds credired to rhe account through Company's account sratemem covering the period in which the funds were credited. Bank is under no obligation to provide CO.n'Ipany with any additional norice or receipt. ACH Transactions. The following [eims apply to paymt:nrs ro or from the accounr that are transmitted through an ACH. Compan}"s rights as ro payments to or frqm the -account will be governed b)1 the laws ofthe stare that govern rhe account. ;. Credit given by a ,receiving bank to its cusromer for a payment from the aCCOunt is provisional until final senlement has been made or Wltil paymenr is considered received under. applicable law . • If final setrlemenr or payment is not made or received, the receiving bank will be entitled ro a refund from its customer ·and Company, a·s the origin'ator of the payment, will nor be considered to have paid Company's customer. If a payment is made to the account and Bank does not receive final seu)emenr"or payment is not received under applicable law, Company will nOt be considered co haye received payment and Bank will be entitled [0 reimbursement from Compa~y for that payment. Business ATMTM and Express ATMTM Sen'ices. Company may elect to utilize Bank's Business ATM Service or Express ATM Service by completing and returning to Bank a Business ATM Setup Form or an Express ATM Setup Form, respectively. These Services will allow Company to make deposits to the account using a Business bpress Deposit Card ("Deposit Card") and either a designated, depository attached to an ATM ("Business ATM Depository") (in the case of tbe Business ATM Sen-jee) or a designated ATM (in the case of the Express ATM Service.) Company shall make such deposits according to the instructions Bank provides and shall g'ain access ro rhe Business ATM Depository or ATM using rhe Deposit Card and a PIN, the risk of misus~ of borh of which Company agrees to assume. Bank will process the deposits, and each deposit to the account will be generated elecrronically via Company's ATM input. Compan)' will recehre immediate inrra·day availability for currenc), and food II .,,-----_ .. _ .. stamps subject to the standard cutwoff time established for the ATM into which the 4eposit was entert'!d and funds availability for checks in accordance with Bank's mOSf recent A.TM funds availability pollcy scbedule, If there is a difference between Bank', !ot.land Company's total (as shown on Company's ATM receipt) of tbe doJlar amoum of the Deposited ltems) Bank win send Company a statement showing the amount of rhis difference. ]n the eVent that such difference cannot be resolved) Banks couilt of the dollar amount will be conclusive and bin ding on Company, Company will have full responsibility (or each bag or envelope used to make ~eposjts and its contents until the bag has dropped completely down into a Business ATM Depository Or the envelope has been completely physically accepted into the ATM deposirory, 1£ Company comends that a Deposited Item was lost or stolen while in Bank's custadr, Company acknowledges that it has the burden of proving that claim. Company authorizes Bank u;, initiate debits to the account and credits to the accounts of third patry vendors to cover the. COSt of Business ATM or Express ATM Service supplies provided to Company. Transfers may be processed through an automated clearing house or any other means chosen hy Bank and will be subject'to the rules of the funds transfer system used by Bank. This authoritation will remain in full force and effect until Bank has received written norHicarion from Company of Its termination jn such time and in such manner as ro afford Bank and an)' third party vendor a reasonabJe opportunity to act on it. CbeX$(or® Service. Company may elect to utilizi Bank's CbeXstor Service in connection with the account. As parr of this Service. Bank win maintain microfilm records of allirems paid against the ('Icconnt for a:period ~f seven years or any loncet period requited by applicable law ("Record Period"), Canceled Items are shredded and recycled as parr of BankJs commitment to improve the environment, Under this service, Bank will provide a photocopy of any hem posted against the aCcounr whlch Company requests dudng the Record Period. Company may request a photocopy eiecrronicaHy via jrs personal computer or by contacting Bank af the telephone number listed on Company's account statement ior such purpO$f:, If Bank fails to provide Company wirh a copy of a,n ltern Company requests during the Record Period, Bank will reimburse Company (or (and Bank's Ii.hilir)' will h,c limited [0; any direct Joss Company incurs as a result of the hem's unavailability 'not to exceed the amount of the ltem}. Bank wm require Compan}' to substantiate an)' dalmed los •. Treasury Express'M Deposit bag ("TEDb"j service. If Company elects to utilize Bank's TEDb service, Companywi11 prepare) pa.ckage and deliver TEDb deposits to Bank in accordance with Bank's instructions. Bank will provisionally credjt Companyl,c; accOUnt for rhe currency shown on the deposit ticker enclosed in Company's TEDb bac as follow" (i) ,ame day credit for deposits delivered to a Bank offjce before that office's cut~off time on any Business Da·y or for deposits placed in a Bank night depository before 6:00 a.m, on any Business Day; or (H) next Business Day credit for deposits delivered on any Business Dayan or aher the 'Sank's offjce's cut-off rime or On any non·Busincss Day, All TIIDh deposirs arc subjecr 10 Bank's acceptance and verification. Bank will verify the currency in Company's TEDb bag either at a later rime in the Bank office or when Company's TEDb bag is df'Jivered to Bank's cash vault. Check, will be verified when they .re delivered to Bank', cheel; processing center. Bank reserves the right to adjust (debir or credit) Company:s account if Bank derermines thaT tht-:.amount shown on Company's deposit ticket is incorrect. -Because ~he frequency of armored courier transportation from Bank's offices to Bank's va~bs varies from office ro office, the time it takes to verif)· l2 Company's deposit msy varY1 depending on the offIce ro which Company's TEDb bag is delivered. In most cases, adjustmerus will be made and lloti6carjon win be sent within three Business Days. Adjustments war be effective as of the date provisjon111 credirwas given for Compl'my)s deposh. Legal Process, Sank may accept and act on any legal process that it.beHeves is valid, whether serv.ed in !>elson. by mail or b)! facsimile rransmission, at any Bank location. Legal process includes a levy, garnishment or attachment} taJ: Jevy Or wirhholding older, injunction) resunining ord~ subpoena} seare!) warrant) goverrunent agency request for information) forfeiture, or other legal process relating to the account. Any such Jegal process is subject to Bank's security interest and right of setoff. Bank will not notify Company of a grand jury subpoena affecrjng its accOunt. An)t fees or e:<penses Bank incurs in responding to any' such legal process may be charged against any account) Company maintains with Bank. Bank will not have any liability if there are insufficient availa.ble funds to pay Company's Items because Bank has . withdrawn funds from the a~COUnt or in any way testricted Company's, access \0 fund, becau,e of lega! proces •. Dj~dosure on:motmation. Generally~ Bank will not disclose information about Company's accounts, but ma}1 do so under the foHowing dreumstances~ 0) [0 compJy with a statute) regwation, Or ru}ej (jil in connection with examinations by srate and federal banking authodties; (iii) to com pI)' with a.ny legal procesS) including without limitation a subpoena) search warrant Or other order of a government agency or court; {iv} when Bank determines that disclosure is necessary or appropriate ill order to complete a transactiol1; (v) to verify the existence and condition of the accotmt fot a third palt}'j such as a merchant or credit bureau; (vi} to provide information to Company's )egaf representative or successor; (vii} when reporting the invo~untaf)l closure of the account; {viii) when Bank concludes that disclosure is necessary to protect Company; the account) or the interests af Banki (he) to agenrs, independent contractors. and other representatives of Bank in connection with the servicing or processing of the account or account transactions) aCCOllnt analysis, or similar purposeSj (xl to its affiliated banks and companies; or (xi) if Company gjyes its permission. - Ina'ctive Accounts. If tbe account has had no withdrawsJ or deposit acti"iry, and ·Bank has had np contaCt from Company regarding the account for one year, the account wiD be consldered inactive and 'Bank may cease sending account statements. Except where prohibited) Service fees: and otber terms applicable to active accounts, Lncludjng aU changes to these rerms) will apply ro rhe account while it is inactive, 1f the account has any deposit or withdrawal activity or CompallY contacts Bank about the account, 1t wiU be reinstated as an active accpunt. Closing the Account: Ekher Company) through its authorized signer(s}, Or Bank rna)' close the account at any time w)thout prior notice. H the signarure of more thall one authorized signer is required lor Signing checks, the same number of authorized signers wHl be required for Company to dose its account, lIfstructions received by facsimile to dose the account wilJ not be aCcepted. Closure of rhe account wiH not affect Company's obligation [0 pay Wells Fargo any amounts owed with respect to the aCCount, CustOmer Service. In the event of questjons or errors regarding Company's account transactions, records or statemenrs Company should immediatel), call the telephone number listed on Company's account statement for such purpose. -----~-.. ----... -.----;-;--~--.... --~ ... -.--.-.. _----_ .... --.-.... __ .... _ ... _-_._. Warranty. In addition to any otber warrantie, ,hat Company makes by law or agreement, Company also warrants that aU signatures-on any Deposjred ltems are authentic and authorized. Monitoring Telephone Communications. Bank: may mODiro; record and retain 'telepho.ne conversations> electronic messages, eJecttonic records ang Other data transmissions at any time without flarther nmice to anyone and will have nO liability lor doing or failing '0 do '0. Credit Reporfs. Compan)' :authorizes Bank to .obtain credit report'S and make whateVer other inquiries Bank deems appropriate concerning Company. Questions. Company1s reJationship manager tan answer questions and assist in resolving any issues that may etise from time to time. Miscellaneous, This Agreement wiD constitute the erltire agreement between Bank and Company and supersede prior oral or written representatiOons, cOonditions, warranties, understandings; proposals or agreements regarding the account. Headings do not constirute a part of this Agreement. Any notice'or other communlcation may be seot tOo Compan}' at itS then current address on file wlth Bank. Bank will have a reasonable tirne after receipt of any notice or orher communication to ~ct Oon Lt. No person or entity will be deemed to be a third part]' benefida,,' under thi, hgreemenr. Bank may establish cur~off rimes, nnd may change those cut-off rimes up'on reasonable notice to Company. Certain Defined Term, Business Day-is a da)l; other than a-Saturday, Sunday or dny when_F~deral Reserve Banks are Closed. CoUecred Balance~is the Ledger Balance in the a~count less Deposir Floot, Depos1t Float-;--is the total doll~r amount of Items deposited in the nccouri,t for which, based on the collecred funds ,chedule used, by Bank or the applicable aJ/ilia" for this type of account, the accounr has not yet been credited for purposes of calculating ·theColiected Balance. . lnvestable nalance~js rhe Collected Balance in the accoum less (i) the portion of such Collected Balanc:e tbat Wells Fargo-is required by law to hold in reserve ar a Federal Reserve Bank and (li) OIher adjustments, Item-includes a check, draft) demand draft~ preaurhorized draft, or other order or instruction for the payment) transfer, or'withdrawal of funds (including a withdrawal slip)) auromatic transfers} and elecuonk transactions jinduding ACH, ATM, and POS]. "Item" also includes any writing created at audlOriied by Company thar would he a check or draft hur.fpr the fact that it has not been signed. Ledger Il,l.nce-;, rhe balance in the account alter all debits and credi" fa! the day ate posted. Service::"""'any Service Bank provjdes to Company including) witbout limitatioll) any Treasury Management Service. ----------_._---...... __ . __ .. _- Addendum to 'Wells Fargo Bank, N. A. Commercial Account Agreement This Addendum is effective ,2004. It amends the Wells Fargo Bank, N. A. Commercial Account Agreement ("Agreement'). All tenns defined in the Agreement have the same meaning when used in tliis Addendum. If there is a conflict between this Addendum and the Agreement, this Addendum will control. Except as expressly amended by this Addendum, the Agreement remains in full force and effect. The text of the Section titled "Stop Payment Orders; Notices of Post Dating" is deleted in its entirety and replaced witb the followiog: "Stop payment order" refers to both an order to Bank not to pay a paper Item and to a notice of postdating. To be effective, a stop payment order must be received i1) a time and manner that gives Bank a reasonable opportunity t.o act on it before paying, accepting,' certifying, cashing or otbenvise becoming obligated to pay Company's paper Item as provided in tbeUnifonn Commercial Code. Each stop payment order is subject to Bank's verification that tbe paper Item described in the order has not been paid. This verification may occur subsequent to tbe time .B ank accepts the stop paymeut order. Bank requires the exact name of the payee, Company's account number, .paper Item amount and the paper Item number or a rallge of paper Item numbers. All oithe infonnation must be correct in order for· Bank to stop payment of a paper Item. Company agrees to indemnify and hold Bank hannJess from and against any loss or liability incurred by Bank as a result of Bank's paying a paper Item if any of the infonnation provided in the stop payment order is incorrect or incomplete (or as a result of Bank's not paying a paper Item for which a valid stop payment order is in effect.) Bank may, at its sale discretion, use only a portion of the TelJuired infonnation in order to identify a paper Item. Bank need not honor a written stop payment order for more than six (6) months. For accounts that do not have Bank's STOP RENEWAL Service, Company must renew its stop payment order if it does not want the stop payment . order to expire. Each renewal is· treated as a new stop payment order. For accounts with Bank's STOP RENEWAL Service, a stop payment order is subject to annual renewals for up to six (6) twelve-month periods, unless Company has otherwise notified Bank. If Bank pays a paper Item over a valid stop payment order, Bank may require infonnation regarding the underlying transaction for which the paper Item was issued including without·limitation proof that Company does not owe the money to the payee of the paper Item prior to making any decision regarding re-crediting Company's account. Bank may pay a paper Item after a stop payment order has expired, even though the paper Item is more than six (6) months old. Company acknowledges that, notwithstanding Bank's timel)' return of any paper Item due to a valid stop payment order, Compan)! may remain liable under applicable law for the amount of that paper Item. An instruction to ... _r~".~.e .. ~t()P'Jl.11_YJ11en~..order_!!.1tlst be.Eeceive:~ _in __ a _!i~e .a~_d manner that gives Bank a reasonable opportunity to act on it. If Bank ie~credits -Company's accoUnt' after paying a post-dated paper Item over a valid and timely notice of post-dating, Bank may charge Company's account for the amount 0fthe post-dated paper Item' as ofthe date of the post-dated paper Item. TM -ClemOn5-Slop Payment Language ~ Addendum to Commercial Account Agreement 08·09~2004 -I I I I I D-3 ACH Services Security Procedure Agreement WELLS FARGO Bank and CDmpany have enteied into a Master Agreement for Treasury Management Services (the «Agreement") which governs the ACH services to be provided by Bank. . Bank and CDmpany agree: 1. Security Procedure Selection. The Token CardJPasscode . File TransmissionlBatch Release securiry proce. dure described below is required for the prDduct known as the lnternet ACH Service. If Company uses the Internet to access ACH services, but dDes not use the lnternet ACH Service, ·the Secure File Transport securi- ry procedure is required. For each Df the Dther ACH services, Company acknowledges that Bank offers each Df the security procedures described below for the purpose Df verifying the'authenticity of an instructiDn to' Driginate an ACH credit Dr debit en):!,), (a "payment Drder") received by Bank in the name of Company. Company refuses to have its payment otders verified by any security procedure Dther than the security pro- cedure it has expressly designated. CDmpany has reviewed variDUS security procedures including the follow- ing and has determined tbat the security procedure designared in tbe·Acceptance D(Services best meets its requirements, given the size, type and frequency of the payment orders it will iss.ue to Bank: . Token Cg:rdlPasscode . Fi!e TrcmsmissionlBatch Release (for Intemet ACH Service) -This procedure com· . bines a token card with a personal identification number (PIN). A token card will be assigned to each Operator (as defined below). The'PIN Is set b), each OperatDr individually upon first logon, The token ca,·d generates a random and unique secu"it)' code every minute. The code cDmbines with the PIN to pro· vide a unique password ellery minute. The password must be presented with the ACH tra"~mission or batch release authorizatiDn and is used b" Bank to authmticate t/,e identity of Compa/1y and/or the person o"iginating the trm,smission Dr release. Bank will verih' each request to access the Service by determining if the Passcode is valid for the associated Operator IDand if the Operator ID used by the person requesting access is the Operator ID of olle Df the persons Company has designated as being authorized such access. Bank has "0' Dbligation to confirm in any other wa,' the ide'ntity of any person making such a request. If Company has requested self-administration of Company's access to the CEO, Bank will assign a Company lD code and will set up Company's first Company administrator ("PCA") by assigning a persollallD' code and password to be used when the FeA first enters. the CEO. The FCA can then set up additional Company administrators (who will have access to all sewices Company receive through the CEO), administrators and users. A Us.r is an Operata!: . . IA dministrators and Users will have access oni)' to the specific servicels) they are .set up to access.) An)' Com""11J' administrator: (a) can set up additional Compo"" administrators, administrators and users, issuing them a password that will be c/,angeq upon first entry to the CEO and a perso"allD code; (b) can reset passwordl for all services; and (c) sh.1I be required to immediately disable access to 1/,. CEO for'any Company administrator, administrator or user who uo.ses to be a Company adminjstrator~ administrator or user. Administrators am set up additional adfflinistraton ;~;l'user;;nd~~·;ipasswo;':JS7o;:·thi speei/iCSiirvice(s) they "resetup ioricce55. Ilaiik-Wl!1"ot kiiow'ihe piiii'woTdor . an)' Co",pa,,)' administrator, ad",;"i,trator, or use" except the initial password assigned to the PCA. Bank will give the Compan), ad",inistrators and the administrators a tok.n eal'd and a personal identification number ("PIN"), known 0111,1 b), them and Bank, Self-administration will oJ/ow a Compatr)' administ1:ator or al1 administrator to initiate a request to Bank to reass;gn en existing token card to anoth'er Company ad11tinisttator, administrator or user, If Company has requested self-administration with duol control, Bank will assign a Company ID code and will set up Company's first two Compan,< administrators (the FCAs) by asrigning each a personal ID code and password to be ,used when each first enlers the CEO. Ali actions which can be performed b)' a Compan)' administrator or adminislra- tor in the preceding paragraph will require that one Compo"" administrator or administrator with appropriate func. tiol1 access to initiate the actibn and a second CO/rip an)' administrator or administrator with appropriaUJ function access to approve tbe action. If Company does not hove self-administration, Company" Security Admlllistrator will determine .which of Compa,,),'s emp loyees will be authorized to createlmodify and to verify ACH transfer requests (each, an ~'Operator") alld tbe dol. 1m' limits per transaction and per do), assigned to each Operator and will communicate tbis information to Bank. B<mk will set up tbe Operators b), assigning each an Operator ID. The Securit)' Administ"ator will also be responsible for communiCilting any changes in Operators 01' in Operaror limits or authorization(s) to Bank and promptly reporting an)' lost or stolen token cards. Secure File Transport -This procedure uses 128-hit SSL encryption and requires the use of a trans;"ission '] D" a transmission password, and a digital certificate. Password -Eile, Transmission· This procedure requires that a unique ~ight-digit code separately agreed upon il1 writing by Company al1d Bank be presented with ComPany's A CH file. Company may be required to change the code on a regula" basis. fugtQQrd~ Taped 01' Writte~ Instructions -This procedure requires that Compan,' p"esent taped or written inst1'Uctions in a tamper proof container accompanied by a unique code separately agreed upon in writing by Company and Bank. 2. Security Procedure Protection. Company and Bank will preserve the confidentiality of the security proce- dure. If Company becomes aware of a breach, or suspects that a breach may occur, it will immediately noti- fy Bank in a matter affording Bank a reasonable opportunity to act on the information. 3. Company Bound by Payment Orders. Company will be bound by any payment order, whether or not authori~ed, issued in its name and accepted by Bank in compliance with the designated security procedure. 4. Inconsistency of Name and Number. It a 'payment order describes the receiver inconsistently by name aria account number (i) payment may be made on the basis of the acc'ount number even if it identifies a person different from the named receiver Iii) Bank may in its sol~ discretion refuse to accept or mal' retUrn the pay- ment order. If a payment order describes a participating fInancial institution inconsistently by name and identification number, the identification number may be relied upon as the proper identification of the finan- cial institution. If a paymem order identifies a non-existent Or unidentifiable person or account as the receiver or the ,eceiver's aCCOUnt, Bank may in its sale discretion refuse to accept or may retUrn the payment order. 5. Terminology. Unless specifically defined in this Security Procedure Agreement, tenDS used nerein have the 'meanings, if any, provided ip the Agreement and the other Service Documentation, as each may be amended from time to time. · , COMMERCIAL ELECTRONIC OFFICE'lM ("CEO") SERVICI; DESCRIPTIQN 1. Description of the CEO Service,' The CEO Service will allow Company to enter Bank's CEO ~ebsite .:'nd acc~ss those treasury management services offered through the 'CEO (each, a 'Service.) for which Company has enrolled. Company agrees to use the CEO oniy as provided in the Service Documentation (which term includes notices and information posted on the CEO website.) Persons entering the CEO for Company (the "Users") must also accept the Terms of Use for the CEO which appears on the CEO when a User initially logs on, Before Company may use a Service, Company must sign or accept the Service Documentation for that Service. 2. Security Procedures. 2.1 Unless Company requests self-administration of its access to the CEO, Bank will give each User an 10 code and a p.assword to be used when the User first enters the CEO. (Self-administration may not be available· for all services offered through the CEO,) Bank will also assign a Company 10 code for use each time a User enters the CEO, Although the Company 10 code and the 10 codes for each User will remain the same for each entry into the CEO, the password Bank assigns to each User must be changed to a new password the User selects when the User first enters the CEO. Bank will not know the 'new passwords or any subsequent passwords selected by the Users. 2.2 If Company requests self·administration of jts acc~ss to the CEO, 'Bank will assign a Company ID code and will set up the first Company administrator ("FCAH) by assigning a personal 10 code and password to be used when the FCA first enters the CEO, The FCA can then set up additional Company administrators (who will have access to all Services Company receives through the CEO) and administrators or Users (each of whom will have access only to the specific Service(s) they are set up to access,) Any .company administrator: (a) can set up additional Company administrators, administrators and Users, issuing them a password and a personal 10 code; (b) can reset passwords for all Services; and (c) shall be required to immediately disable access to the CEO for any Company administrator, administrator or User who ceases to be a Company administrator, administrator or User. Administrators can set up additional administrators and Users and reset passwords for the speciflc Serviee(s) they are set up to access, The Company ID and each personal ID Gode will remain the same for each entry into the CEO, but the password assigned to each Company administrator, administrator, and User must be changed to a new password they select when they first enter the CEO. Bank will not know the password of any Company administrator, administrator, or User except the initial password assigned to the FCA. Company's administrative contact with respect to the CEO will be the FCA. 2.3 If Company requests !lelf-administration of Company's access to the CEO, Bank will give the Company administrators and the administrators a token card and a personal identification number ("PIN"), known only oy them and Bank, to use each time they give personal 10 codes and passwords to Company administrators, administrators, and Users. Token cards and PINs will be given to Users by Bank only if they have access to a Service which requires a token card for access, The token card generates a random and unique security cod~ for each token card every minute. The code combines with the PIN to prOVide a unique password (the "Passcode") every minute. . 2.4 . Company will be able 10 manage and control who in Company has access to the CEO and the Services by the ID codes, passwords, token cards, PINs, and Passcodes. It is ... __ ~QmpaJJY~~!e.S.Pg].s.ibili!y.JQ...ednsu[e)h~t Ih!3.JP..co<:les, P!!~shw~rQ~. IOkenC,,!d1?, PINs, .and rasscodes are "nown to, an useu only by, persons Wnu ave "een proper y authOrized by Company to E1ceess the CEO and use the Services through the CEO, TM-1426 Commercial Electronic Office Service Description (Rev. 9102 ) . Page 1 oj 3 2.5 FAILURE TO PROTECT 10 CODES; PASSWORDS, TOKEN CARDS, PINs, OR PASSCODES MAY ALLOW AN UNAUTHORIZED PARTY TO (1) USE THE SERVICES, (2) CORRECT, CHANGE, VERIFY, OR SEND DATA US!:.D WITH THE SERVICES, (3) SEND INFORMATION AND COMMUNICATIONS TO, OR RECEIVE INFORMATION AND COMMUNICATIONS FROM, BANK OR (4) ·ACCESS . COMPANY'S ELECTRONIC COMMUNICATIONS AND FINANCIAL DATA. ALL ENTRIES INTO THE CEO, ALL COMMUNICATIONS SENT, AND.ALL USES OF THE .. SERVICES, THROUGH COMPANY'S .10 CODES, PASSWORDS, TOKEN CARDS, PINs, OR PASSCQDES WILL BE DEEMED TO BE ENTRIES, COMMUNICATIONS, AND USES AUTHORIZED BY COMPANY AND BE .BINDING UPON COMPANY. COMPANY ASSUMES THE ENTIRE RISK FOR THE' FRAUDULENT OR UNAUTHORIZED USE OF ALL 10 CODES, PASSWORDS, TOKEN CARDS, PINs, AND PASSCODES. Company acknowledges the importance of developing internal procedures to limit such risk,' which procedures will include, at a minimum, (a) if Company is not on self-administration, notifying Bank immediately when any new person becomes a User or when any existing User stops being a User, (b) if Company is on self- administration, disabling access to the CEQ immediately for each Company administr(jtor, administrator, and User who stops beln~ a Company administrator, administrator, or User, and (c) not keeping, in any form or In any place, lists of ID codes, . passwords, PINs or Passcodes. . 2.6 Company agrees to notify Bank immediately when Company becomes aware of any loss or theft of, or any unauthorized use of, any ID codes, passwords, token cards, Pins, or Passcodes. Company also agrees to notify Bank immediately when.Company becomes aware of any unauthorized entry into the. CEO. 3. Financial Information. Financial market data, quotes, n.ews, research, and other financial information developed by third parties and transmitted to Bank (collectively, "Financial Information") will be available at the CEO. The posting of any Financial Information or any other information or data' at the CEO will not be a recommendation by Bank that any particular . Service or transaction is suitable or appropriate for Company or that Company should receive or in any way use any Service. Bank does not guarantee the accuracy, completeness, timeliness or correct sequenCing of any Financial Information. nor is It in any way responsible for the actions or omissions of the third parties develo~ing or transmitting Financial information or for any decision made or action taken by Company In reliance upon any Financial Information. 4. Use of Certain Software to Access the CEO. In using the CEO, Company will be sending finanCial and other data as well as electroni~ messages direclly to Barik through the Internet Company acknowledges that when the Internet. Or any .other electronic communications facilities, are used to· transmit or receive data and messages, the data and the messages may be accessed by unauthorized third parties .. To reduce the likelihood of such third party access, Company agrees to transmit and receive data and messages through the CEO using only software. including, but not limited to, browser software, or other acct)ss devices that support the Secure Socket Layer (SSL) protocol-or other protocols required by, or acceptable to, Bank. and to follow the Bank log-on procedures that support such protocols. 5. Disclaimers. Bank will not be Company's advisor or fiduciary with respect to this Agreement or any Service. 6. Llmilatlon of Liabilit . Bank will not be'liable to Company for any direct or indirect damages or osses su ere or Incurred by Company in connection with the CEO, any of the Services, any Financial Information, any other information or data Company receives through the CEQ, or any failure to provide, or delay in providing. access to the CEO, any Service, or any Financia! Information, except to the extent any Service Documentation specifically provides otherwise and except to th1:nOOeiiC'such damages or"losses arise directlyfrorrr the regligence or willful misconduct of Bank .. TM~1426 Commercial Elecuonic Office Service Descrip1iort {RPll CiIl1? 'j 7. Restricting or Terminating Access \0 the CEO. In addilion 10, and not in substHulion for, any. provision in this Agreement or any of the other Service Documentation, Company underslands and agrees thai Bank will not In any way be obligated 10 permit Users access to any Financial Information or the use of any Service through the CEO if (a) such use or access is not In accordance with any term or condition applicable to the Service or the CEO or to the information to be accessed, (b) such use or access is not permitted by any stale orfederallaw or regulation, . (c) Bank has reasonable cause to believe that such use or access may not be authorized by Company or any third person whose authorization Bank believes Is necessary for such use or access, or (d) Bank has reasonable cause to deny such use or access for Company's protection or the protection of Bank, If any Service Cannot be used Ihrough the CEO, Bank will make reasonable efforts for such Service 10 be used by other means, Bank shall not have liability to Company for any losses or damages Company may suffer or incur as a result of any such termination. , . . 8, SurvIval, Sections 3,6,7 and 8 will survive termination of the Service, 9, Terminology. Unless specifically defined in this Service Description', capitalized terms used in. this Service Description have the meanings, if any, provided in the Master Agreement for Treasury Management Services (the "Agreement"), as amended from time to time, TM-1426 Commercia! Elec1ronic Office Service Dfiscription (Rev, 9102 ) Page 301 3 D·4 PUBLIC SECTOR Wells Fargo' Corporate Card Important Public Entity InformatiOn (pl •••• print In black Ink) , Thank you foryourlnterest In the Wells Fargo Corporate Card program offered byWelis Fargo Bank, N.A. Please complete the requested information below (you may be required to submit financialstatemenlS). au,ines.lnformation Public Ent, lty Name J I I C/r,;" &J DoIng 8uslness As I State Zip "'de L I 9,/3""1 Nature off IJc Entity (please selectonl), ona): o Fetkral o Public Hospital o Storte o Improvements 1ft) loul {city, town, CQu,ntyj o <:Oweotion Authority o Public Utility o Othertpleasedescrlbe) ___ M. ____________ _ o Publk; Education InstitutIon lypeofProdu(tslServJ'e$_-'-_____________ ~ _________________ -,... Public Entitv Banking Informatiun InstitutionJ:ankName ' Checklng Account Number Checking Accoont Balan~~currt"t) Unrestrlctedlnve5tmentBalan~ LI ~,~<£jte"'LZil'L,"-,_L6'-"/"''':A"..p''--__ i!I.L'''"'1'.!..I2-''''-1.I'''O'-'7"-,,,6Lc;1 ~5 I $ P': -;P&y ~"""_-'21 $'--___ _ Oth&t1ypes of Relationships with Wells Fargo: o Oeposito,y 0 lending 0 Other _________ _ Requested Card Information ----- Number otCarm Requested Total Credit Une Requested 1# 16 1$ ~~~~~~ __________________ _ Billing • Consolidated-One bill senHothePublic Entity. o Individual-Slit sent toand PJlld by ea,'h cardholder Pro ram Maintenance . Progfam Manager (Of Maintenance {person wIth authority to teque$t additiOnal Cledlt Iloe,new cardholders and changes to any of your accounts), Fi,st Na~ last Name Phone Number ~ Fax Number I la.cUn /lkra-oIAA I(.ful JZ1-2-:l,{? 1(63P) ;rZ:5-,fj":;(".{' (J~.b/'&>-/lIfb.tJo/ (1:->2» 3;<-'j-ZaZ (65P) 323-/'1'11 (rev, 04 11103) Page 1 of 3 XFC ! D-8 MASTER AGREEMENT FOR TREASURY MANAGEMENT SERVICES The 'Service Documentation described ~elow contains the terms under which Wells Fargo provldes,lreasury management , services ("Services").' Wells Fargo Sank, N. A. ("Bank") and the Company \0 which the Services will be provided are Idenlified In the Acceptance of Services ("Acceptance'). ' Sank and Company agree: ~. Service Documentation. The Service Documentation includes: 2. 3. 4. 1.1 The Service Description for each Service, 1.2 The Acceptance. , 1.3 This Master Agreement for Treasury Management Services (,Master Agreement'). 1,4 The account agreement for the business or commercial deposit account(s) (each, an "Account") that Company or Company's affiliate or subsidiary maintains at Bank or Bank's effiliate In connecllon with a Service. The account agreement includes the Dispute Resolution Prpg,am that Company and Bank agree to use to resolve, any disagreements between Ccmpany and Bank regarding accounts and Services govemed by the Service Documentation. ' 1.5 User Guides which include software, software licenses, reset diskeUe5t price schedules,> speCificalions, instructions, and nottces. 1.6 The set-up form(s) for each Service. The Service Documentetion also applies to any Service Iha! is provided by an affiliate of Bank and any Service that is used by an affiliate or a subsidiary of Ccmpany, "Bank" ,includes each such affillale, and "Company" Include. each such affiliate and sub~ldlary. All terms defined in this Master Agreement shall ,have the same meaning when used in Ihe Service Documenlation. If IheJe is a conmct among the documents that make up lhe Service Docum"nlation, the documents wili govern in Ihe order set lorth above. Company acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered Into Ihls Master Agreement , Services. Bank and Company will agree upon the Service(s) to be provided, Changes to Service.. Bank may change (or add to) the lerms and fees in the Service Documentallon al any time upon prior written notification. If Company disconlinues using the affected Service bafore Ihe change becomes effective, It will not be bound by the change. If Company continues to use a Service after the change becomes effective, It will be bound by the change. Term and Termination. Unless tenmlnated sooner in accordance with the Service Documenlallon, this Master Agreement and all Services will continue in effect until terminated by either party upon 'thi~y (30) days prior written notice to the other party (unless a Service is terminated sooner in accordance with the Service Documentation). Bank may, terminate any Service following notice to, Company of, a breach of any provision of the Service. Documentation and Company's lailure 10 cure the breach within fifteen (15) days of the date of such notice. Bank may also terminate any Service without notice to Company If Company is subjeci to a petition under the U. S, Bankrupt<;y Code or if Bank determines, in its sale discretion, Ihat a meierial adverse change has occurred in Company's abllily to pelform its ohligations under Ihe Service Documentation. The termination of a SelVice will not affect Company's or Bank's rights with respect tb transections which occurred before termination. BanK shall not be liable to Company for any losses or damages Company may incur as a resull 01 any termination of any SerVice. 5. Service Fees. Company shall pay Bank Ihe fees described in Ihe Service'Documentation and any taxes applicable _u ___ """·-·~-"10 eacfi"S"Ehvice,noweveroeslgnatea. exclDS1V!"oflaXSErba~B'd·cm-eahl<.'$"net·lncome:-·ean1nmy'·deblf·Company's account(s) with Bank for any fees not covered by earnings credits and any taxes Ihal are dUe, or it may send an Invoice to Company Jar such amounts, which Company shall promptly pay. Bank may assess finance charges at a rale of 1.5% per month (18% per annum) or the highest 'Tale permitted by law, whichever is less, on any invoiced fees or taxes that are not paid wKhin thirty (30) days of the due dale and shall apply payments and other rsdu~lions of amounls owed first to unpaid lnlerest and then to other fees and charges. 6. Confldentiallnformallon. Unless. otherwise provided in the Service Documentation, all User Guides and computer programs provided pUlsuant 10 this Master Agreement constitute Bank's or Its vendor's confidential information ("Confidential Information"). Bank or lis vendor will remain the sola owner of all such Confidential Information, and Company will not acqulls any Interest In or righls 10 It as a result of Company's use of any Service except as set forth in the Servj(;e Documentallon. Company will maintain the 'confidentlallty d the Confidential Information and will not disclose (or pell11l1l1s employees 'or agents to disclose), copy, transfer, sublicense or otherwise make any of It available to any person or entity, other than Its employees who have e need to use the Confidential Information in connection Wilh the applicable ServiCe. Company shall notify Bank Immediately II it knows or suspects that there has· been any unauthorized disclosure, possession, use or knowledge (each, en· "Unauthorized Use") or any Confidential Information, and if It is responsible for the Unauthorized Use, It will, at It. expense, promptly take all actions, including without limllalion initialing court proceedings to recover possession or prevenUurlher Unauthorized Use Of the Confidential Information and' obtain redress for any injury ca~sed 10 Bank as a result of such Unalllhorlzed Use. In addition, except as permlued by applicable law, Company may not decompile, 'reve,se engineer, disassemble, mOdify, or creale derivative works of any computer program provided pursuant to this Master Agreement. 7. Third Party Networks; Use of Required Software. If Bank determines that any funds transfer or communications network, Internet service provider, or other system(s) 'It has selected 10 provide a Service is unavailable, Inaccessible or olherwlse unsullable for use by Bank or Company, Bank may, upon notice \0 Company, suspend or discontinue the aHecled Service. Company shall use and maintain In good working order (and at its own expense) software, hardware and other eqUipment necessary for Company to OSe Ihe Servlce(s) in accordance wllh the Service Documenlation. 8. No Represenlatlons or Warranties of B.n~ or Software Vendor. Neither Bank nor any soilware vendor makes any express or Implied representations or warranties with respect to the Services or any software used In connection with the Services Including without limitation any warranty as'to the merchantability or fitness for a pal1lcular purpose, olher Ihan Ihose expressly set forth In the Service Documentalion. 9. liability and Indemnifocation. 9.1 Benk will perform each Service In accordance with reasonable commercial standards applicable to Bank's business; .Iaws, regulations and operating circulars governing the activities of Bank; applicable funds transfer system{s) and cle.aringhouse rules; and the Service Documentation. 9.2 Bank Is under n'o obligation to honor, In whole or In part, any entry, file, batch release, payment order, transaclioo or Instruclion (each, an'''Order''), which a) exceeds Company's available funds on deposit in an Account wllh Bank related to the Order, unless otherwise provided in the Service Documentation; b) Is not in eccordance With the Service Documenlation or Bank's applicable policies, procedures or practices as Bank may from time to time establish and make avaliable to Company; c) Bank has reason to believe may nol been duly alllhorized, should not be honored for its or Company's protection, or Involves funds subjecl to a hold, dispute, restrlcllon or legal process that prevents their withdrawal; or d). would possibly. result in Bank violating any applicable rule 01 regulalton of any federal or state regulalory authority including without limitation any Federal Reserve risk control Rrogram or guidelines such as the limitations on Bank's Intro-day nel funds .position. . 9.3 Company shall promptly furnish written proof of loss to Bank and notify Bank If it becomes aware of any third party claim related to a Service, Company shall cooperate fully (and at lis own expense) with Bank in recovering a loss. If Company is reimbursed by or on behalf of Bank, Bank or Its deSignee will be subrogated to all rights of Company. 9.4 Any claim, action or proceeding against Bank for losses or damages arisi~g from a Service, including Bank's honoring or dishonoring a check covered by a Service, must be brought Wiilhin one (1) year from the dale of the acl o('omisslon 01 In the case of a check from the date the check was first paid or returned by Bank. 9.5 Bank wlli.have no liability for failure to perform or delay in parforming e Service·H the f,"lure or delay is due 10 Circumstances beyond Bank's reasonable control. 9,6 Except in the case of Bank's gross negligence or intenlional misconduct, Company shall Indemnify and hold Bank, lis directors, officers, employees and agents harmless from ali losses or damages that arise oul of a) .. ~ .. --the perforrnance-of-a-Servlce-in-accordanee-wllh-thB' SeNiee-DoGumentalion-inclucUn9-"'lthoullimilalion .. any . warranty Bank is required to make to a third party in connection with a Service; b) an act or omission 01 any agent, courier or authorized representative oi Company; and c) if the Service Includes e license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining access to the software through Company that is inconsistent with the license or sublicense. . -··3.2 Commercial Electronic Office (CEO!II!) Wire Transfer Servlee (or WollsNet Wire Transfer Service.) 3.U AVIliinbilll)l Of Self-Administration. If you request Self-Administration of your access to tne CEO; most of tne set-up and administration of your access to CllO services (including the CllO Wire Transfur Service) will be performed by yaur Company Adminislrator rather than Bank. Three 1evels of access authorization are available: Company Administrator, AdminisJraJar and Operator, A "Company Administl?ltorll has access to aU S;ervlces you receive through the CEO and is able to set up and administer access for other Company Administrators. Administrators nnd Operators for all such serVices. An "Administrotorll has access to specific CEO services and can set up other AdministratOl's and Operators for sllch specific services. IIOperators" are authorized to access speciflc services and functions (for example, the create/modifY function or the verify function for wire transfer requests) within those services, but they are not authorize.d 10 set up or administer access for such services or functions, 3.2.1.1 No Se/f-Al/ministratiOiI. If you do not have Self·Administration, your designated security administrator will determine Operators a'nd the dollar limits per tnmsnction and per day assigned to each Operator and will communicate this information to Bonk. Bank will set up the Oper.tors by assigning each a person. I 10 code. Your security administrator will also be responsible for communicating any changes in Operators or in Operator limits 01' authorizntion(s) to Bank, You will promptly report to Bank any lost or stolen token cards. 3.2.1.2SeIf-Administrfltioll. ffyou have requested Self-Administration, Bank wiil assign a Company ID code and will set up your first Company Administmtor by assigning a personal 10 code and password to be used when ne/she first enters tne CllO number. He/She cah then set up addition.1 Company Administmtors, Administmtors or Operators. Any Company Administmtor: (a) con set up additional Company Administrators. Adm !nistratol's and Operators (issuing each a password that will be changed upon first entry to the CEO) Dnd a person.IID code; (b) can reset passwords for all services; and (c) shall be required to immediately disable access to the CEO for any Company Administrator, Adm"inistl'ator or Operator who ceases to be a Company Administratort Administrator or Operator. An Administrator can set up additional Administrators and Operators and reset passwords for the specific service{s) he/she is set up to access. Bank will not know'the password of any Company Administrator. Administrato!", or OperatOl' except the initial password assigned to the first Company Administrator. Bank will give each Company Administrator and Administrator a token card and a PIN. known only by them individually and Bank, Self~Adminislration will also allow a Company Administrator or an Administrator to initiate a request to Bank to reassign an existing token card to another Company Administrator, Administrator or Opemtor. . 3.l.I.3 Seif-Al/millistratioll ,.Itll DUll/ Control. If you hove requested Self-Administl'1lrion with dunl control, Bank will assign a Company lD code and will set up your first two Company Administrators by assigning each a personal 10 code and password to be used when each first enters the CllO. All actions that can be performed by • Company Administrator or an Administrator in Section 3.2. t.2 will require lhnt one Compllny Administrutor (or Administrator with appropriate function access) initiate the action and a second Compnny Administr~tor (or Administrator with appropriate function access) approve the action. 3.2.2 Token Caras. Bank will assign 8 token card to each Operator. The token card generntes a I'8ndom and unique secority code every minute. The code combjnes with n PIN to provide a unique password (the "Passcode") every minute. The PIN is set by each Operator individually upon first logon. Tne Passcode must be presented witn each request to acceSs tne Service and is used by Bank to authenticate .the identity of Company and/or tnc person originating the request. Bank will verifY .achrequest to access the Service by determining iftn. Passcode is valid for the associated personalID code for tne Operator and if the person.IID code used by the person requesting access is the personal lD code of one of the persons you have designated in writing as being authorized such access. Bank has no obligation to conftrm in any other way the identity of any person making such n request. 3.2,3 Non-Repetitive Requests. For domestic and international non~repetitive wire transfer requests, Operators who crentelmodify such requests additionally will be required to use a Password whicn is initially provided to the Operator by Bank, or by n Company': Administrator or Administrator if you have Self-AdminiSlmtion, andis changed by the Operator upon first logon. ' 3.3 Electronic Commerce/Payment Manager Services. (Check applicable box.) 3.3.1 0 Password-File Transmission (Non-Encrypted). This procedure requires that a unique eight-digit code separately agreed upon in writing by yau and Bank be presented with your wire file. You may be required to change the code on a regulnr basis 3.3.2.1S!:l Secure File Tmnspor( (Encrypted). This procedure uses 128-bit SSL (Secure Sockets Layer) encryption and requires the use ofa tnmsmission ID nnd II transmission password, Use ofa digital certificate is Seetion 4 -Addilio •• 1 Provision. 4.1 Separation of Operatof Function. You may separate among Operators using the Wire Transfer Service the abiHty to creatclmodify and to verify wire transfer requests. When an Operator is authorized to create/modify both domestic and international repetitive nnd non .. repetitive transfer requests, Bank requires thaI: you assign a separate Operator to verify these transactions, Bank reQuires that you separate such functions to reduce your risk of suffering a loss resulting from an unauthorized or fraudulent wire TM-1441.doc Revised080 I 02 ·2 -of3 transfers r I 4.,2 AdditIo~naJ Ac'tions ,by Bank. Any actions Bank takes to detect erroneous wire transfer requests,_ or any actions Bank takes beyond those described above in an attempt to detect unauthorized requests or instructions: wilt be taken at Bank's sole discretion. No matter how mnny limes Sank mkes these actions Ihey will not become part of Bonk's standard procedures for attempting 10 detect such erroneous or unauthorized requesls or instructions, and Bank will not in' any situation be Hable for failing to take or to correctly perform these aClions. . . ....-..... ~-..,..J 4.3 Proteetion of Passwords, PINS, etc. [t is your responsibility to ensure that the lD codes, passwords, token cards, PINs, and' Passcodes are known 10, and used only by, persons who have been properly authorjzed by you '0 use the Wire Transfer Service. Bank. in its sole discretion. may cancel 01' reissue any PIN it believes may have been compromisedt including, wjthout limitation, a PIN thn, has never been acknowledged as having been received and any PIN that ha. been used by anyone other than the intended authorized user. NOTE: Cltstomer is NOT REQUIRED /0 complete Seclions 5 lllld 6 below if illms "ccepletl" wire lransler security procedure by sign/lIg t/le Acceptonce oj Service. Se.fion 5 -Individuall,) authorized to receive Information r •• nrdin~ the security "rocedure N.m~ A. ~Jle:ri' Name' r;~;,.-J v. L ' lAc/Un Name .-,-;; L'.' ~" // /" / Nnme ~4kd -,di ,~" J11v,--",,,,,,- '" / Scction 7 -Bonk ,A~pi:lp~ro."!.va~I!.. _____________ ~,.:,.,==~ Beak Marne --I RAUiCCII\U ··3···· , Banker/Officer -t:.fnme "MAC_~ Li~~aM_._e'_iO_·ffi_'_~_rS_ig_n_-Dt_u(_., __ '_"_ .. ____________________________ ~~;-ho-n-)~N-w~nb-e-r-------rI~D-are------, .. -._-.. -.. ===~ TM-1441.doc Revi,ed080 I 02 ~ 3 -on 'WELLS F.ARGD Contract for Deposit of Moneys THIS CONTRACT, relating to the deposit of moneys, is made as of the day of t)&rf!.>phk , 2004, between ?rl L, Y~ ["Treasurer") acting in his or her official capacity as Treasurer of CITY OF PALO ALTO ("Depositor"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"), having a shareholder's equity of $18,229,000,000.00 on December 31,2003, and Is made wllh reference to the fOllowing . . facts: WHEREAS, the Treasurer proposes to deposit In the Bank from time to time, moneys In his or her custody in an aggregate amount on deposit at anyone time not to exceed the total sh<lreholder's equity of the Bank, and said moneys will be deposited subject to Title 5, DIVision 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California (the 'Local Agency Deposit Security Law"). WHEREAS, the Government Code requires the Treasurer to enter into a contract with the Bank setting forth the conditions upon which said moneys are deposited. . WHEREAS, in the judgment of the Treasurer, this Contract Is to the public advantage. NOW, THEREFORE, the parties agree as follows: 1. This Contract cancels and supersedes any previous contracts between the Treasurer and the Bank relating to the method of collalaralization of Depositor's deposits. To the extent not inconsistent herewith, any such deposit shall be subject to the terms and conditions of the Bank's standard disclosure statement (as in effect from time to time) for depOSits of that type. 2. this contract, but not deposits then held hereunder, Is subject to termination by the Treasurer or the Bank at any time upon 30 days' wrillen notice, Deposfts may be wHhdrawn In accordance with the agreement of the parties and applicable federal and state statutes, rules and regulations. This contract Is subject to modification or termination upon enacbnent of any statute, rule, or regulation, state or federal, Which, in the opinion of the Administrator of Local Agency Security of the State of California (the "Administrator"}, is Inconsistent hereWith, including any change relative to the payment of interest upon moneys so deposited by the Treasurer, The Treasurer may withdraw Depositor's deposits Itom the Bank immediately upon receiving 'notlce from the Administrator that the Bank has failed to pay assessments, fines or penalties assessed by the Administrator. The Treasurer may immediately upon receiving notice from the Administrator withdraw authorization for the placement of securities with the Agent of the Depository in the evenl that the Agent of the Depository falls to pay fines or penalties assessed by the Administrator. 3, Interest shall accrue on any moneys so deposited as permitted by any act of Congress of the Unltad Siaies or by any rule or regulation of any department or agency of the Federal Government. If interest may legally be paid on the account into which the moneys are deposHed, then all moneys deposited shall beer interest at a rate agreed upon by the Treasurer and the Bank. 4. The Bank shall issue to the Treasurer for each deposit a receipt on a form agreed to by the Bank and the Treasurer, stating the interest to be paid (If any), the duration of the deposit (If appropriate), the frequency of interest payments (if any) and the terms of withdrawal. Each such ueposl! receipt is by reference macie'~ parl of this contract PUBI.IC SECTOR Wells Fargo' Corporate Card Documentation ~ - ---~ ~ - {NOTE: before $lgning and ,:ubmittlng thIs appli(utton pleosefoltow and review the Information balow, Authorllatlon documentat~on must be provided for aU reque$ls). To helptbe governmertl tight Uwfundtng oj terrorlHl1l1nd money 0undtrlng acIMtle .. U,$,federal 'aw requites Ananclallnttluttl;:!n$ (0 obtain, verify l)'nd rruord lnform"UOtl that ldeolilles e<):(hperson ('ndMd~1l: and bUlJneues) who oJ)!m~.n accOUIlI, WOat (hb meal'lS roryou: When you open Ut (I(CQunt,we will uk foryotll oame,addom,.dale Qft»rtJ\and other InfoffTlatlon that\WII,llow us to Iden!lfy yQtI,V/a may also 21sk 10 see yoIJf ddver's license or oltter identlfylng dOC\lmtnts. For rf!Que$ts 0($20.000 or LE$. ptea5eJ'Hmidf::: '" A fetter from your legal counsel indicating the Individual authorized to contract .. Other Information that mll'j be requested (dependent On credit evalua[lon): • ltuee years audited ffmmc1al statemenh, • Additional documentation ·as outlined by individual $tates or local statutes. Ear requem GflfATEB than $20 COQ, please provide: ~ A letter from your legal cwnsel or a certified rerolution as. to the authotlty of sign~t to enter Into the contractual agreement contemplated by Ihls. application. • A formal do(Ument showing that tbe signing entity has the authority to Issue deht and that wMn Issued It will bevaljd \lind enforceable" * If appHcable.schedule of agencies that will participate in the program.The schedule will indicate that the signing entltywllC have liability (9; all scheduled agenc{es and cardholders. " Three years audited finandal statements may also be requested, ~ Additional documentatkm may.!Je required as outlloedby Individual §tates or local statutes, Disclosures Ve~, I undel1UlIlhmrWtU, fllr$lO (orpOt1~ C~RI P/0!lIMt will buub.l«1 III CO/po/Me Lli!b!lity wies.paym£nUn full requlad urh mornh. IltCepl po b£bilY ollbt Publk MIlly named "boY« j'Appllttn,'hvuf (/feno appl)' 101 a Wi", li1!go(orpGJil1eCa/d.l~"tpl tflr Iflml and «mdiIJoI1J (If Int Cunomlt Ag~th311N111 bt proll!dtd ttl Appliuru Upon approVolltlfthll A1lPIkilllofL Pli~", ,.1011 ((Irefull)': B~ ,1gnlng below, lcerli'ty thaI I bm .nAuth.ol'l:ud Off~t.~utho!l.t/!d to~th\J awlll::1ltlon OIl beh.if ohtw }\Ihff( tnlity and IMI all fnfOllFillkm sttdtfOCWf>ooa provided In C\1I1I'WMI1~h lhl~ applkatlO.n.ulI:.Iuding iedtlal Md jlMe IotOfnlllalllGl\llflt lit any).Bfi' l!Ut.totJed, ~nd (ompl~!@, IJvihMlR Wells hfgO (hnk,N.A,raank") to oblaln b)l.n,. Md IWJOfflnfOJmltll;m Qfl ~11 !Il;(04Jf\lJ rtquflll'i!l p~ff , JJ ~ aH1c!l!!ott of I!ppril'Ang; thiS !l.ppfk1lion end to oIindn bVJ!ne$ll'Epol!i fMmfPdlo J£pOit WId/I tMlrmfi!on to O1hm, tntludlng the Inrtfn!1 Ae>'ClI\le Stl'll~ ~nd ,t~te tlJXmgsulhl:.l!WtMIOOullne Pub~c Eclhy. and If j'l(ipltd,flom IlIn' to. tlmt Ihel1,ai'U!I,1 ~Id \0 MUIy Ihnll pfomptly d my ~"" (h3nge III '11th InfotlMlIQIlJ adu'lowl,dpi! Ih~t (I) tNuppllcall!mll: wbJu1lo final approvtJ of Ih& Appl!UII~ Mdthllt lIli " addltlona! Information m~y be relluhei:l in order foI ihf !1znk lOINk~ 1.1 finBI emit derlVO/l.laglll UI P4)18&iIk'J (OS'" '&(jd 1I110IFtyl 1m In enflif!lnglhe CtlnOlntf A9rumrll!. L f IvrlNtf agrel.'tllal ~ /lui~cf 11'1)' IlglI~lure Mute of IllY feat\n:e dwell. h'~o (crptlntaOm' ttl.'Y bir U1:~d II); Ndcnc.dlhi! (O!l~901I10 lI\uhl'.lriutlom"n«plklC'" BOO agreemtnls, -:',. Autborizlng Officer #1 (person authorized to ls~ue debt) Arst Name Last N\lImEl I L cJ I Yeat;r Authorl:dng Officer /'12 (2nd person aulhorltE'd to Is~tJedebl,l( required b)l publkentlty) fintName Lalt Name I Office Phone II Office Phone It ~S"'"P) 3" Z 9 -Z-'i.s;.~R'--~~ ______ il-:::::( _-'-_____________ ~_ Title / / ./ Title i LJ;rAG No....-" ,;:101-.7;d,--,---,.5=pfr,,,,,,,,f,--_+~ Country of Citizenship Countryof' OtizellShip I ., U.S. 0 Ott"" 0 U.S. 0 Other: Signatures (required) ~ '" -- Autho~r#1, I L-!.z Signa.ure Authorirlng Officer 12 Signature Date Date For Bank Us. Only (please print,learlvl. THIS INFORMATION MUST BE COMPLETED IN FULL. Well~ fargo 8anlter (Ir applicable) Employee 1.0. II Store Name L __ ... Store SI(eel AddrEU5 City State L.._ -...-J MAC' AU' Phone Numbsr Fax Number 'Please sendcgmpleted application and necessary paperwork_to: Wells Fargo Business Direct, MAC ,51000·020, RO.Box 29499.Phoenix..AZ 85038--9499 ORFa]C 1-886-831-5567 (reV. 04 111iBl Page2of3 . ... -ZipC~--- ~----- XFC Public Sector Wells Fargo Corporate Card Employee Name Employee Title MO,nthly Social Credit limit Security # Business phone Use Hire Date for Birthday • Billing Address- Baum, Ga~ M. City Ano~net ----i~,~_ 2,~9~.~~~Q~_~~_(~-5Qt~~,~:?1i1... __ .Q7j~.;~~._ g;~~~~Y'~.9!ftce~ ~~.;a;ilto~·~~e_. 8th A~~'~,-P;~~;t~~~ 9430r-" -, ... -----_ ... -. 2 Benest, Frank City Manager _ .~~9Q.Q ... ~4~qOO~~~_.c6.5..9l.~2_9-~~.? __ ~J_Q!9!L .. ~.!~.~s.~(.s.9!'f!.c:e,. ?~~Ui~~i!~~_~A~;.~·~t~.~~!~~~:~~; A'lt~~-C;:'~301-----". - 3. Emslie, Steve i?irector p!<:,n'li~g. & Community. !=l'!.y!~of.lrn_I?'}t_ .• _ ._._~.~_Q .... 9~~99Q3~~ . .c~_~OJ. ~?§I:2:3~1 __ P&,04{O~_. !:!'!!:1!!l!!.!l_~gQ.~[f.I!:l~!~.LE~~r:onlT'~.n~. 2§9 1:"I~.I!'~ft~n_ ~ye.:~,~~hFI~~:·~;I~·f..!.t.?!_~~_~~Q.~_.· 4 Erickson, Sharon City fo.uditor 2.5~ ~'!6900~~~. (6~0) .32~::?62~ _ .. __ q7/1 ~~1. ¢i~t Aud!~o_~~.Qffi.~~~:?~ ~amil~ol) Aye;. 7th F:1'?!=l.~. Palo Alt~ •. 98.§l4391 .•.. 5 I-!arrison •. Emily As.s.isla~t.Cily' ~~~?9.e~~.. __ .•. ___ ... ~~~~.q .... 9_46_09.9.3~~ .@.9) 32~E.?~. __ .~ 1~~8~ .. 9!Y..M'!3.!!.a~r'~ 9f1i~ ... ??q. !-iaryJ~g_n Av~!! .?!!!.,=!~O! ... E..~!~~~·'!: .. ~ ~~.~Q1 . 6 Johnson. Lyt:me Polic.e Chief. _ ._ ?~q.9_0 __ ~.1~~QQ.3.?~ J§?.9t!i.?.§.:~1~.Q.21.02Q',!? __ . ~~~ D~p.!~en! •. ?50 .!:!.~.!!l.iltg~_8Y_~.~.1;;J.F.~Q!.'.f'~[~lo.!....GA_.~~91. •. _ 7 Loomi~, L.~sJie Dire~or H~!11c~!1 ~~so~rC!!:S. • .. ~ •. _ ..... _ .. _ •.•. ~':§Q.0~§9Q.q~~_~ .. @§'~A?~:2124 .......Q.4/1~~~._. Human Resgurces'p~p'artm.~~.?£.Q.tI.a_l!!mo~J'.,!,~:, M~~~!1.'¥ ~~~.I! .. ~.~!q.~!Q,_~ ~.~q.! .. ~ ~?":I.es.'.f3i~!3r~ ... I;)i~~c~or ~ Com!!l.u~l!Y. ~~~!~s _ _00 .. __ '.n _ ~~9.Q... ..1~6..Q.~01~.§I J~ 463-4951 08106!79 Community Se!yices ~I?_artment, JlJ~§..Middh:~!!.eld B.~s!~~Q.8rto. £A ~301_ ....• __ .•.•..•. h._ 9 .. I3~b~~;;. ~!~ry_n . pi!~tC?r Public.~~~._. ___ ..... _ ..•. ______ 2,500 946000389 (650) 329-2325 _Q.4/19193_Public W:or~, 250·Hamirton ~ve,!_6.!t'lrE.~'palo ~~.!......~ 94301 ________ : .•. _ .. ~.9 R..o.9..~.~!.~0.n_na _ .. _~.i!~.~!er~ ... ' ___ .......... __ .. __ .... __ ._....: ____ 2.500 1I46000389.J650} 329-2226 02/16/99 City Clerk's Office. 250 Hamilton Ave .. 7th Floor, Palo Alto, CA 94301 _._. ______ . 11. Sif!l.l?s.on .. ~~~~c:-. p.~r~!y qi~I!.c:t_~!. ___ . ___ ._ . __ .. _____ .. 2.500 946000389 (S§'Ql329-2403 03122104 Library Department, 270 Forest Ave .• Palo Alto, CA 94301 . 12 Ulrich, Joh.n ~J~~19r _'dl.irp~ . . _ ._ ... ____ . _______ ~.Q9_~_ ... 946000389 @50l 329-2277 04/26/99 Utilitie~ Department. 250 Hamilton AVI! .• 3rd Floor, Palo Alto •. CA 94301 13 Yeats, Carl .qiret:~or.Administra.tiv.~_~~!y2..~_~._ . __ .•... ___ .. _ 10.oq9 ___ ~_,!§~Q9.3~.J§'?.m. 329·2450 05/04198 Admin. Svcs:....Department •. 250 Hamilto!1 Ave" 4th ~~r. P~,?_~~~_~.~.!qL. 14 Beec!"l~m, .B~m ~ity. Counc.il M.embe.~... . .... ___ ._~500_._ 946000389 (650) 329-2362 9.1l10/OL Ci!y C!er~:~ Office. 2~Q.f1~~ilto~.:.:~y_~:~tJ:l£~!. Palo ~.!1~ ... ~~~Q.1 .... _____ . ___ . __ n •• 1~ .. K!einberg •. Jut!Y. City Cour.'~r. ~.~.~~~~ . _. _____ ... __ . 2.500 946000~~~6..5_91329-2362 01/1 0100 Ci!Y_<2~rk's ~ce, 2.50 Ham~~on ~~~:.!_?~ f1oo~ P...?J~ .~!2 •.. ~~~Q.~ _ .. _ . __ H. • ••••• _ ••••• _ •••• 16 ~ossar, gena City. Co~_nci.r!~~'!1l;?er .'_ . ___ .... __ . _ S.?.9.Q..~~~Q<L3.~~_(I?_~qJ. 32~·2362. 01101/98 City Clerk's Office. 25q.~~~~£.n_~Y~:r!r1_.!:!9gr. ~~ ~1!P~.9.f.I..~~q~ .. _ ... __ .. . ..... __ .•..• $ 55.000 a) Card Type: ~ ( all credit cards) b) Cash Access (Allows an employee to withdraw cash): N,Q (all credit cards) c) Charges on all credit cards will be paid.in full each month through a pre-authorized automatic deduction from the City's Wells Fargo '"Genera'" checking account (# 4121076145) bJ Mail the credit cards issuance to: Tarun Narayan City of Palo Alto 250 Hamilton Avenue. 4th Floor Palo Alto, CA 94301 c) Mail billing statements to respective address shown above ?tVI.d 1'11_ .......... ~_ flFP """'"",i ... 11"1" C":redil Cards Pag"! 3 of 3 'I 12171'200·1\"4:44 PM • Authorization for Automatic Payment D·5 If you would like to set up Automatic Payment, please complete the following information and include a voided check from the account where the payment will be made. If you have any questions, please call a Commercial Card Representative at 1-877-727-4801. Customer name (please print) 1..--"'£~'1~v-,-'=~/=--~A.= ... j,,,,,,-p--=-ct-"-!.'/,/,~ ____________ ,,,,.-J Address Cuy Stare Zip L.:l 2~~O!'::P'---LZ.Jk""..".,,,,-,J,,-,-' w,~A~~=~·-+-f~d"---"-h¥e"'~"v"-Ll---,,-/1.::::;""?f;;,j,~ .4 /-"'_---'1 ~ 11';t 3'$>_/ ---,I Credit card number Telephone I I ~J u ,4 ""j / ",,:c,h,m,i, jet, 1»aC'''/ 1(6~) SZ';I-Z-J'd'2-... ---", PAYMENT AMOUNT Payment amount to be made (Check one): y/ Statement Balance in Full Minimum Payment Due FINANCIAL INSTITUTION ACCOUNT Plea •• provldelnformallon on the account to be debited: .Roullng Transit Nlimber found on the bottom left corner of the check 1,I'2.I/I&7I.9lplz.lYI1l Account Number found on the bottom center of tlie check Ifl/I2-I/I?'17IdIIJ'tVl I I I IMPORTANT: Please return a voided check with this form. CUSTOMER AUTHORIZATION I authorize the Wells Fargo Commercial Card Department to debit the account number at the Financial Institution listed above lor my monthly credit card payment. Wells Fargo Commercial Card will deduct each monthly payment for the minimum due or statement balance as I requested above. I understand the debll to my financial institution account will occur on the due date shown on my current billing statement. I understand that If the debit is returned for insufficient funds, my credit card payment will be reversed and I will be charged a fee of~. per /(.1";<' -'J1,. /pfl '" '1'.1' ' This authority is to remain In fulilorce and effect until Walls Fargo Commercial Card and the Financial Institution have received written oLvarbal nouce from me of termlnallon of this Automatic Paynient service In such time and mannar as to afford Wells Fargo Commercial Card and the Financial Institution a reasonabla opportunity to act on It. I also understand that the Financlallnstltulion and Wells Fargo Commerclal Card each reserve the right to terminate this Aulomatic Payment service, or my participallon therein. at any time by wrltten notice to me. , The fax number is: (B01) 246·8270 Please keep a copy for your records. 'BBG7783 (6·04 78768FO) - Return completed authorization form to: Wells Fargo Commercial Card Department U 1252·032 PO Box 30003 Salt Lake CUy, UT 84130 " o o · '. · , · ~ : § • Wire Transfer Services Security Procedure Agreement Seethe Wire Transfer Reference Guide for required documentation and complete instructions. Secti~n I-Agr~e~.m~.~n~t ________________________________________________________________________ -, NEW REPLACEMENT Acconnt Number: Jij.z.. it? 7 ,,{/¥5' , ~"i This ogreem~nt is mode this _day of .(}e,c,*,""ft?c ,20!?j!>y and between ____________ _ c.. ,-It t.7;: e'a4 dl4> __ ("you or "your" ) and 7 Wells Fargo Bank , N.A. ("Bank"). By signing below or, if applicable, on the: Acceptance of Service, you acknowledge receiving and agreeing to be bound by Ihese terms and conditions nnd those referred to in i Bank's Wire Transler Customer Setup Form (the ~'Setllp Form") and the Wire Transfer Services Agreement or .he Mas.ter Agreement I for Treasury Management Services and Wire Transfer Services DescriptiQn nnd, if applicable, the CEO Service Description. You: understand that in any instruetions to transfer funds by wire from accounts you maintain at Bank C'Orders"), Bank may r'ely solely (i) i on the aecount number of the person C'Beneficiary") who is'to reeeive the wire transfer tather than the Beneficiary's name" and (ii) if provided by you. on the identification number of any other financial institution through or-to which the funds are to be transferred. rother than the name ofthe financial institution. You agree that you are bound by any Order, whether or not authorized, issued in your n~me an~ .. ccepted by Bonk in compliance with the security procedure selected by you. __ . _____________________ --' Seetlon 2 -StandardSeeurlty Procodures .... rz:lV olce Initiated Orders. Bank's siandard security procedures consist of confirming that the personal identification number I ("PIN") that .ccompanies an Order eorresponds with a valid PIN assigned to you on voice-initiated Orders. A PIN is required for all , voice-initiated tra-nsfers, . l.l Tetmlllllllnitioted Orders. ·Bank's standard security procedures for terminal-initiated Orders (including Orders placed via the Internet consi,t of RSA SecurlD® or o'.her system security fe:::a"tu"re",s:..;o",f"fe::.re",d=by<.=:B"an::.:k". _______________ _ Settion 3 -Additional Security Procedures for Specific Services. (UJl-less desigl1ated (IS Ifoptioua[t'l tire Jot/owing security ~roced~~.fes are reqUired tn {{({tlltlon to Me StulUl.«rd Security Procedures.) . . 3.1 Voice-Initiated, Non-Repetitive Wires • . 3.1.1l8J Telephdne Verlfioation. (Optional) By i~itialing thi, box, you have agreed that Bank will make a reasonable attempt to telephone a person(s) designated by you on Bank's most current Setup Form, to verify that a voice-initiated, non-repetitiv~ Order is authorized if it exceeds $ G'-. (If nu .mount is deSignated, $500,000 will be used.) If Bank is unable to complete , the callI the Order will not be processed. Bank will not letephone to verify a RePetitive Order. A "Repetitive Order" is an Order to ; Bank to pay a specified amount of money to a previously designated Beneficiary at n previously designated Beneficiary·s financial ! institution. ' L ___ -,--,--___________________ -:--__ -'---' Revised080 102 -I -of] 9.7 Bank will only be liable to Company for Its direct monetary losses or damages due to Bank'. negligence or breach of Ihis Master Agreement. Except in the 'case of Bank's gross negligence or Intanlional misconduct, Bank's liability to Company will be limited to an amount not to exceed ten (10) limes Bank fees inculred during the calendar month immediately preceding the calendar month in which such loss or damages were incurred (or, If no Bank fees were Incurred in such month, Bank fees incurred In the month In Which the losses or damages were incurred). In no event ,will either party to,thls Master Agreement be liabte 10 the other party for any special, consequential, Incldentel (including wllhoutllmltatlon court costs and attorneys' fees), indirect, or punillve losses or damages, whether any claim Is based on contract or tort, or whether the likelihood of such losses or damages was knowr to the other party and regardless of the form of the claIm or action. 10. General. 10.1 :rho ServIce Documentation will be goveme.d by substantive federal laws, regulations and rules and, I<l the extenl such laws, regulations and rules are not applicable, those of the state In which Ihe principal offlOO of the Bank Identified on the Acceptance Is located, wllhout regard to conflicts of laws principles. Any portion of the Service Documentation which Is Inconsistent with applicable laWS, regulallons or rules will be deemed modified and applied In' a manner consistent therewith, and Bank will incur no liability to Company as a result of the inconsistency or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, It will not otherwise affect the enforceability or validity of the Service Documenlation. 10.2 The Service Documentation Is the entire agreement between Bank and Company and supersedes all prior . representations, conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion will constitute e modifICation of the Service Documenlation or be a waiver of that light on e subsequent occasion. ,10.3 Company sgrees to 'provide Bank promp1ly upon Bank's request any existing financial statements or other Information pertaining to Company's financial condition or~any.prevlously unprepared financiat statements which Bank may require Company to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to Bank. 10.4 Oompany expressly warrants that a Service will not be used in a manner which violates any federal or state law including without Iimllation any sanction or control administered by the OffIce of Foreign Assets Control or Bureau of Export Adminlslralion. 10~5 Sections 4, 5, 6, 8, 9, 10.4 and 10.5 of this Master Agreement will survive termination of this Master Agreement. 10.6 Either party may provide notice 10 the other party by mail, personal delivery, or electronic iransmission. Bank shall use the most recent address for Company In Bank's records. and any notice from Bank llill be effective when sent. Company shall Use the address where Company's relalionship manager or other manager is iocaled and address any notice 10 Ihe attention of such manager. Any notice from Company will be effective when actually recalved by Bank. Bank will be entitled to rely On any nolice from Company that It believes in,good faith was authorized by an aulhorJ.zed representative of Company and,except as explessly stated in the Service Documentation, Shell have no obligation to verify the signature (including an eleclronlc signature). Each party will have a reasonable time after receipt of any nolice to act on it. 10.7 All uses of the Services through Company's ID codes, passwords, laken cards, PINs, or passcodes (each, a ·Code") will be deemed to be authorized by and binding on Company. Company's faiture to protect Codes may allow an unauthorized party 10 a) use the Services. b) access Company's electronic communications and financial data, and 0) send or receive information and communications to Bank. Unencrypted elecironic transmissions are not secure and Company assumes the entire risk for unaulhorized use of Codes and any unencrypted electronic transmissions. 10.6 Company may nol assign or transfer ils rights or obligations with respect to the Service Dacumenletion wilhout Bank's prior written consen\. Bank may assign Its. rights and obligations wilh'respect to the Service Documentatl,on 10 any successor by merger, consolidation or corporate reorganization. 10;9-' .. ··Unless-othelWi.e·-provided ,.In-the .. Sel¥lce .Documentation,~,the .1erro • .':Banking~Qay:, means. that.pa~ of •. business day occurring prior to the cutoff time detel1l1ined in accordance with Bank's applicable funds availability policy. Mesler Agreement TM-1450 rev/sed 311104 Pege30f3 TO: HONORABLE CITY COUNCIL 12 FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: NOVEMBER 22, 2010 CMR:422:10 REPORT TYPE: CONSENT SUBJECT: Adoption of a Budget Amendment Ordinance to Create Capital Improvement Program (CIP) ProjectVR-ll000 (Scheduled Vehicle and Equipment Replacements) and Transfer the Remaining Unused Appropriation from CIP Projects VR-07S00 anel VR-OSOOO to VR- 110000 in the Total Amount of $222,205 and Approval of a Purchas~ Order with Downtown Ford Sales in an Amount Not. to Exceed $152,030 for the Purchase of Six Police Patrol Vehicles RECOMMENDATION Staff recommends that Council: 1. Adopt the attached Budget Amendment Ordinance (BAO) to create CIP Project VR- 11000 (Scheduled Vehicle and Equipment Replacements) and transfer the remaining unused appropriation from CIP Projects VR ... 07800 and VR-08000 in the amount of $222,205 in order to provide initial funding to CIP VR-ll 000. 2. Approve and authorize the City Manager to execute a purchase order with Downtown Ford Sales in the amount of $152,030 for the purchase of six police patrol vehicles. DISCUSSION The vehicle and equipment replacement policy described in City Policy and Procedures 4-1 (Vehicle and Equipment Use, Maintenance, and Replacement), provides for the on-going replacement of City fleet vehicles and equipment. Replacements are scheduled using guidelines . based on age, mileage accumulation, and obsolescence. The City's fleet currently includes 27 police patrol vehicles (25 Ford Crown Victoria sedans, one Chevrolet Tahoe and one Ford Expedition). Policy 4-1 prescribes a replacement interval for patrol vehicles of four (4) years or 85,000 miles. In an effort to reduce ongoing costs, Equipment Management has extended this replacement interval to 100,000 miles. The extended interval has not dramatically increased maintenance costs, and the vehicles have remained safe and reliable. However, due to the severe service that patrol vehicles experience (continuous stop-and-go driving; aggressive acceleration and braking; extended idling) it is not recommended that patrol vehicles be kept beyond 100,000 miles as there is a significantly increased risk for high' cost repairs after that point, such as engine or transmission replacements. In addition to wear and tear on the powertrain components, the continuous heavy use of these vehicles places a great deal of wear and tear on the body and interior of the vehicle. As the vehicles age, this deterioration CMR:422:10 Page 10f4 results in an increasing frequency of failures, and escalates vehicle. downtime. The increased downtime has the potential to compromise the Police Department's ability to respond to calls for service. There are currently six patrol vehicles at or near replacement mileage. These vehicles are listed in the table below: Unit Year Description Current Mileage 5224 2007 Ford Crown Victoria Sedan 91,552 5229 2005 Ford Crown Victoria Sedan 95,195 5234 2005 Ford Crown Victoria Sedan 94,199 5236 2005 Ford Crown Victoria Sedan 104,236 5237 2005 Ford Crown Victoria Sedan 99,445 5239 2005 Ford Crown Victoria Sedan 95,721 The anticipated in-service date of these new vehicles is May 2011. At that time all it is anticipated that the vehicles in thetable will have exceeded 100,000 miles. Audit of Vehicle Utilization and Replacement This purchase is being conducted with full consideration for the recent Audit of Vehicle Utilization and Replacement. The audit did not include a review of the City's inventory of emergency vehicles, and emergency vehicles are generally exempt from minimum utilization requirements. The vehicles being replaced through this purchase have, on average, greatly exceeded the minimum mileage accumulation of 2,500 miles annually. The Fleet Review Committee (FRC) reviewed and ultimately approved the replacem~nt of these vehicles on October 20, 2010, in accordance with the audit recommendations. The approval was based on: .• An examination of each vehicle's current usage; • An analysis of each vehicle's operating and replacement costs; • A comparison of the age, mileage, operating cost and performance of each vehicle with others in the class. '. An analysis of alternatives to ownership, such as mileage reimbursement; pooling/sharing; the reassignment of another underutilized vehicle, or renting. The FRC determined that there are no alternatives to outright replacement. All of these vehicles are used for specialized tasks, and are equipped with a considerable amount of emergency equipment that renders them unsuitable for any purpose other than law enforcement. This precludes their assignment to a motor pool, and rules out the use of a private vehicle with mileage reimbursement. They are each used by a single employee on a continuous daily basis, so there are no opportunities for sharing. There are no similar, underutilized vehicles available to use as replacements for these vehicles. Because these vehicles are used continuously throughout the year, renting them would not be a cost-effective option. Post-Delivery Outfitting Subsequent to ·delivery, each vehicle will need to be outfitted with standard and necessary emergency equipment; including lights, sirens, two-way radio equipment, mobile data terminal, prisoner cage, and nUmerous accessories. It is Equipment Management's intent to transfer as CMR:422:10 Page 2 of4 Attachment A ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR FISCAL YEAR 2011 TO ESTABLISH CAPITAL IMPROVEMENT PROGRAM PROJECT NUMBER VR-11000, SCHEDULED VEHICLE AND EQUIPMENT REPLACEMENT, AND TRANSFER THE REMAINING UNUSED APPROPRIATION FROM CIP PROJECTS VR-07800 AND VR-08000 IN THE TOTAL AMOUNT OF $222,205 TO VR-11000 The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III 'of the Charter of the City of Palo Alto, the Council on JUIle.28, 2010 .. did adopt a budget for fiscal year :a011; and B. City policy on vehicle and equipment replacement provides for the on-going replacement of City fleet vehicles and equipment. Specifically, Policy 4-1 prescribes a replacement interval for police patrol vehicles of four years or 85,000 miles. In an effort to reduce ongoing costs, Equipment Management has extended this replacement interval to 100,000 miles; and C. There are currently six patrol vehicles at or near replacement mileage. The Fleet Review Committee (FRC) approved the replacement of these vehicles on October 20, 2010, in accordance with the audit recommendations; and D. A Request for Quotation (RFQ) for police patrol vehicles was sent to seven vendors on September 14, 2010. Bids were received from seven qualified vendors on October 5, 2010 and Downtown Ford Sales was declared the lowest responsible bidder; and E. Subsequent to delivery, each vehicle will need to be outfitted with emergency equipment; including lights, sirens, two-way radio equipment, mobile data terminal, prisoner cage, and numerous accessories; and F. An estimated amount of $197,430 is needed to purchase and outfit the six police patrol vehicles. The funds needed by this project will be provided by a transfer of appropriations from existing but completed CIP projects as follows; and Project Number aud Name Amount of Transfer VR-07800 -Scheduled Vehicle and $43,700 Equipment Replacement (FY 2007-08) VR-08000 -Scheduled Vehicl~ and $178,505 Equipment Replacement (FY 2008-09) Total $222,205 G. City Council authorization is needed to amend the 2011 budget as hereinafter set forth. SECTION 2. Capital Improvement Program (CIP) Project Number VR-11000, Scheduled Vehicle and Equipment Replacement is hereby created. SECTION 3. The -sum of Two Hurtdred Twenty Two Thousand '!'wo Hundred Five Dollars ($222,205) is hereby appropriated to CIP Project Number VR-11000. SECTION 4. The appropriation for CIP Project VR-07800, Sch~duled Vehicle and Equipment Replacement is hereby reduced by Forty Three Thousand Seven Hundred Dollars ($43,700). SECTION 5. The appropriation for CIP Project VR-08000, Scheduled Vehicle and Equipment Replacement is hereby reduced by One Hundred Seventy Eight Thousand Fi ve Hundred Fi ve Dollars ($178,505). SECTION 6. The transactions above will have no impact on the Vehicle and Equipment Replacement Fund reserve balance. SECTION 7. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 8. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 9. The vehicles being purchased are in compliance with all applicable emissions laws and regulations. Accordingly, this purchase is exempt from ,the California Environmental Quality Act under the CEQA guidelines (Section 15061) . INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: City Clerk APPROVED AS TO FORM: APPROVED: Mayor City Manager Director of Public Works Director of Administrative Services ATTACHMENT B City of Palo Alto Bid Summary Request for Ouotatig QUOTATION NUMBER: 138678 BID DUE DATE: October 5,2010 ! ITEM QTY UIM DESCRIPTION Downtown San Francisco Albany Ford Hansel Ford Folsom Wondries Theodore Ford Ford Lincoln Lake Ford Fleet Group Robins Ford 1. 7 Ea New, 2011 model Ford Crown $162,295.00 $162,638.00 $162,567.23 $162,645.00 $166,243.00 $167,706.00 $184,190.51 Victoria Police Interceptor 3. Sales Tax @ 9.25 $15,012.29 $15,044.02 $15,037.47 $15,044.67 $15,377.48 $15,512.81 $17,037.63 4. 7 Ea Tire tax $61.25 $61.25 $61.25 $61.25 $61.25 $61.25 $61.25 Total $177,368.54 $177,743.27 $177,665.95 $177,750.92 $181,681.73 $183,280.06 $201,289.39 .or 1 , CITY OF PALO ALTO Memorandum TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: NOVEMBER 22,2010 SUBJECT: 2nd Reading Adoption of Five Ordinances Amending Title 16 of the Palo Alto Municipal Code: (1) Ordinance repealing Chapter 16.04 of the Palo Alto Municipal Code and amending Title 16 to adopt a new Chapter 16.04, California Building Code, California Historical Building Code, and California Existing Building Code, 2010 Editions, and Local Amendments and Related Findings; (2) Ordinance repealing Chapter 16.05 of the Palo Alto Municipal Code and amending Title 16 to adopt a new Chapter 16.05, California Mechanical Code, 2010 Edition, and Local Amendments and Related Findings; (3) Ordinance adopting a new Chapter 16.06 of the Palo Alto Municipal Code, California Residential Code, 2010 Edition, and Local Amendments and Related Findings; (4) Ordinance repealing Chapter 16.08 of the Palo Alto Municipal Code and amending Title 16 to adopt a new Chapter 16.08, California Plumbing Code, 2010 Edition, and Lo,?al Amendments and Related Findings; and (5) Ordinance repealing Chapter 16.16 of the Palo Alto Municipal Code and amending Title 16 to adopt a new Chapter 16.16, California Electrical Code, 2010 Edition, and Local Amendments and Related Findings. Attached is the second reading for the five ordinances adopting the various parts of the 2010 California Building Standards Code. The ordinances adopting the 2010 California Building Code and 2010 California Residential Code (the first and third ordinances listed in the title above) have been amended to reflect the change the Council made regarding the types of smoke alarms that are required to be installed in buildings. For the ordinance adopting the 2010 California Building Code, the modified language is found in Section 16.04.160 and reads as follows: 16.04.160 Section 907.2.11 amended -Single-and multiple-station smoke alarms. j -~ -l Section907.2.11 of the California Building Code is amended to read as follows: 907.2.11 Single-and multiple-station smoke alarms. Listed single-and multiple- station smoke alarms complying with UL 217 shall be installed in accordance with the provisions of this code and the household warning equipment provisions ofNFPA 72. Smoke alarms more than 10 years old shall not be considered as satisfying any requirement of this code or of the Health and Safety Code Section 13113 and shall be immediately replaced by the owner with a smoke alarm that complies with this section. Smoke alarms and smoke detectors installed on or after January 1, 2011 in compliance with this code or with the provisions of the Health and Safety Code Section 13113 shall also meet the following requirements: 1. Smoke detectors or smoke alarms located within 20 feet of a kitchen or room containing a wood-burning stove or fireplace shall be photoelectric detectors or alarms. 2. In any other required locations dual sensor photoelectric/ionization detectors or alarms, shall be installed. A photoelectric smoke detector or alarm installed together with an ionization smoke detector or alarm may be used as a substitute for a dual sensor photoelectric/ionization detector or alarm. Exception: Group R occupancies. A fire alarm system with smoke detectors located in accordance with, and meeting the requirements of, this section may be installed in lieu of smoke alarms. Upon actuation of the detector, only those notification appliances in the dwelling unit or guest rooms where the detectors are actuated shall activate. For the ordinance adopting the 20lO California Residential Code, the modified language is found in Section 16.06.090 and reads as follows: 16.06.090 Section R314.1 amended -Smoke detection and notification. Section R314.1 of the California Residential Code is amended to read: R314.1 Smoke detection and notification. Listed single-and multiple-station smoke alarms complying with UL 217 shall be installed in accordance with the provisions of this code and the household warning equipment provisions of NFP A 72. Smoke alarms more than 10 years old shall not be considered as satisfying any requirement of this code or of the Health and Safety Code Section 13113 and shall be immediately replaced by the owner with a smoke alarm that complies with this section. j j 1. Ordinance repealing Chapter 16.04 of the Palo Alto Municipal Code and amending Title 16 to adopt a new Chapter 16.04, California Building Code, California Historical Building Code, and California Existing Building Code, 2010 Editions, and Local Amendments and Related Findings. 2. Ordinance adopting a new Chapter 16.06 of the Palo Alto Municipal Code, California Residential Code, 2010 Edition, and Local Amendments and Related Findings. ***NOT YET APPROVED*** Ordinance No. ---Ordinance of the Council of the City of Palo Alto Repealing Chapter 16.04 of the Palo Alto Municipal Code and Amending Title 16 to Adopt a New Chapter 16.04, California Building Code, California Historical Building Code, and California Existing Building Code, 2010 Editions, and Local Amendments The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Chapter 16.04 of the Palo Alto Municipal Code is hereby amended by repealing in its entirety Chapter 16.04 and adopting a new Chapter 16.04 to read as follows: 16.04.010 2010 California Building Code adopted. The California Building Code, 2010 Edition, Title 24, Part 2 of the California Code of Regulations, together with those ornissions, amendments, exceptions and additions thereto, is adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein. One copy of the California Building Code, 2010 Edition, has been filed for use and examination of the public in the Office of the Building Official of the City of Palo Alto. Wherever the phrases "California Building Code" or "Building Code" are used in this code or any ordinance of the City, such phrases shall be deemed and construed to refer and apply to the California Building Code, 2010 Edition, as adopted by this Chapter. 16.04.020 2010 California Building Code Appendix Chapters adopted. The following Appendix Chapters of the California Building Code, 2010 Edition, are adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein: A. Appendix I -Patio Covers 16.04.030 Cross -References to California Building Code. The provisions of this Chapter contain cross-references to the provisions of the California Building Code, 2010 Edition, in order to facilitate reference and comparison to those provisions. II II . II 101026 sh 8261463 1 ***NOT YET APPROVED*** 16.04.040 Enforcement --Citation authority. The employee positions designated in this section may enforce the provisions of this chapter by the issuance of citations; persons employed in such positions are authorized to exercise the authority provided in Penal Code section 836.5 and are authorized to issue citations for violations of this chapter. The designated employee positions are: (1) chief building official; (2) assistant building official; (3) building inspection supervisor; and (4) code enforcement officer. 16.04.050 Local Amendments. The provisions of this Chapter shall constitute local amendments to the cross-referenced provisions of the California Building Code, 2010 Edition, and shall be deemed to replace the cross-referenced sections of said Code with the respective provisions set forth in this Chapter. 16.04.060 Section 105.1.3 of Division II added -Demolition permits. Section 105.1.3 of Division II of the California Building Code is added to read: 105.5.1.3 Demolition permits. In addition to other requirements of law, every person seeking a permit to demolish a unit used for residential rental purposes shall furnish an affidavit or declaration under penalty of perjury that the unit proposed to be demolished is vacant, or that notice to vacate has been given to each tenant lawfully in possession thereof as required by law or by the terms of such tenancy. No work or demolition shall begin upon any portion of such a unit until each and every portion has been vacated by all tenants lawfully in possession thereof 16.04.070 Section 105.5 of Division II amended -Expiration. Section 105.5 of Division II of the California Building Code is amended to read: 105.5 Expiration. Every permit issued shall become invalid unless the work on the site authorized by such permit is commenced within 180 days after its issuance, or if the work authorized on the site by such permit is suspended or abandoned for a period of 180 days after the time the work is commenced The building official is authorized to grant, in writing, one or more extensions of time, for periods not more than 180 days each and may require; 1) that the construction documents be revised to partially or fully comply with current codes, and 2) payment of a fee. Extensions shall be requested in writing and justifiable cause demonstrated For the purpose of this section, failure to progress a project to the next level of required inspection shall be deemed to be suspension of the work 16.04.080 Section 109.6 of Division II amended -Refunds. Section 109.6 of Division II of the California Building Code is amended to read: 102610 sh 8261463 2 ***NOT YET APPROVED*** 109.6 Refunds. The building official may authorize the refond of any fee paid hereunder which was erroneously paid or collected. The building official may authorize the refund of not more than eighty percent (80%) of the Permit Fee paid when no work has occurred under a permit issued pursuant to this Chapter. The building official may authorize the refund of not more than eighty percent (80%) of the Plan Review Fee paid when a permit application is withdrawn or canceled before any plan review work has started. 16.04.090 Section 110.7 of Division II added -Re-Inspections. Section 110.7 of Division II is added to the California Building Code to read: 119.7 Re-inspections. A Re-Inspection Fee may be assessed by the building official for each inspection or re-inspection required when work for which an inspection is requested is not ready for inspection or when required corrections noted during prior inspections have not been completed. This section is not intended to require payment of a Re-Inspection Fee the first time work is rejected for failure to comply with the requirements of applicable codes, but as a means to discourage the practice of requesting inspections before work is ready for inspection or re-inspection. A Re-Inspection Fee may be assessed when the inspection record card is not posted or otherwise available on the work site, the approved plans are not readily available for the inspector at the time of inspection, the inspector is unable to access the work at the time of inspection, or when work has substantially deviated from the approved plans without· the prior approval of the building official. When a Re-Inspection Fee is assessed, additional inspection of the work will not be performed until the fee has been paid. 16.04.100 Section 111.1 of Division II amended -Use and occupancy. Section 111.1 of Division II of the California Building Code is amended to read: 111.1 Use and occupancy. No building or structure shall be used or occupied, and no change in the existing occupancy classification of a building or structure or portion thereof shall be made, until the building official has issued a certificate of occupancy therefor as provided herein. Issuance of a certificate of occupancy shall not be construed as an approval of a violation of the provisions of this code or of other ordinances of the jurisdiction. 102610 sh 8261463 Exception: Certificates of occupancy are not required for work exempt from permits under Section 105.2 and: 1. Group R -Division 3 occupancies 2. Group U occupancies 3 ***NOT YET APPROVED*** 111.1.1 Change of occupancy or tenancy. Each change of occupancy, official name or tenancy of any building, structure or portion thereof shall require a new certificate of occupancy, whether or not any alterations to the building are required by this code. If a portion of any building does not conform to the requirements of this code for a proposed occupancy, that portion shall be made to conform. The building official may issue a new certificate of occupancy without requiring compliance with all such requirements if it is determined that the change in occupancy or tenancy will result in no increased hazard to life or limb, health, property or public welfare. When application is made for a new certificate of occupancy under this section, the building official and fire chief shall cause an inspection of the building to be made. The inspector(s) shall inform the applicant of those alterations necessary, or if none are necessary, and shall submit a report of compliance to the building official. Before any application for a new certificate of occupancy is accepted, a fee shall be paid by the applicant to cover the cost of the inspection of the building required by the change of occupancy or tenancy. 16.04.110 Section 111.3 of Division II amended -Temporary occupancy. Section 111.3 of Division II of the California Building Code is amended to read: 111.3 Temporary occupancy. The building official is authorized to issue a temporary certificate of occupancy before the completion of the entire work covered by the permit, or as otherwise required, provided that such portion or portions shall be occupied sqfely. The building official shall set a time period during which the temporary certificate of occupancy is valid. 16.04.120 Section 111.5 of Division II added -Posting. Section 111.5 of Division II is added to the California Building Code to read: 111.5 Posting. The certificate of occupancy shall be posted in a conspicuous, readily accessible place in the building or portion of building to be occupied and shall not be removed except when authorized by the building official. 16.04.130 Section 702A amended -Definitions (Wildland-Urban Interface Fire Area). Section 702A (Wildland-Urban Interface Fire Area) of the California Building Code is amended to read: 102610 sh 8261463 4 ***NOT YET APPROVED*** WILDLAND-URBAN INTERFACE FIRE AREA is a geographical area identified by the State of California as a "Fire Hazard Severity Zone" in accordance with Public Resources Code Sections 4201 through 4202 and Government Code Sections 5Il75 through 5Il89, or other areas designated by the enforcing agency to be at a significant risk from wildfires. Within the city limits of the City of Palo Alto, "Wildland-Urban Fire Interface Area" shall also include all areas west of Interstate 280, and all other areas recommended as a "Very High Fire Hazard Severity Zone" by the Director of the California Department of Forestry. 16.04.140 Section 902.1 amended -Definitions. Section 902.1 of the California Building Code is amended to include the following definitions: DUAL SENSOR PHOTOELECTRIC/IONIZATION SMOKE DETECTOR OR ALARM. A smoke alarm or detector that utilizes both photoelectric and ionization methods in a single device. IONIZATION SMOKE DETECTOR OR ALARM. A smoke alarm or detector that uses a small amount of radioactive material to detect invisible particles generated by flame. PHOTOELECTRIC SMOKE DETECTOR OR ALARM. A smoke alarm or detector that uses a light-source to detect the presence of smoke. 16.04.150 Section 903.2 amended -Where required. Section 903.2 of the California Building Code is amended to read: 903.2 Where required. Approved automatic sprinkler systems in new buildings and structures, and in existing modified buildings and structures, shall be provided in the locations described in this section. Automatic fire sprinklers shall be installed per the requirements set forth in Sections 903.2.1 through 903.2.12 and as follows, whichever is the more restrictive: 1. An automatic sprinkler system shall be provided throughout all new buildings and structures. Exception: New non-residential occupancies, buildings or structures that do not exceed 1,000 square feet of building area. 2. An automatic sprinkler system shall be provided for all existing buildings or structures where modifications have been determined by the Building Official to trigger requirements for seismic retrofit. 102610 sh 8261463 5 ***NOT YET APPROVED*** 3. An automatic sprinkler system shall be provided throughout all existing buildings when modifications are made that create conditions described in Sections 903.2.1 through 903.2.18, that create an increase infire area beyond 3,600 squarefeet or that create an increase in the number of stories to two (2) or more. Exception: One-time additions to existing buildings made afier January 1, 1994 and that do not exceed 500 square feet in building area. 4. An automatic sprinkler system shall be provided throughout all new basements regardless of size and throughout existing basements that are expanded by more than 50%. 5. An automatic sprinkler system shall be provided throughout all new buildings located in the designated Wildland-Urban Interface Fire Areas. Exception: Non-residential accessory structures to single family ffivellings that have . afire area of500 square feet or less. 6. An automatic sprinkler system shall be provided throughout all existing buildings located in the designated Wildland-Urban Interface Fire Areas when modifications are made that increases the fire area. Exception: One-time additions to existing buildings made afier January 1, 1994 that do not exceed 500 square feet in fire area. 16.04.160 Section 907.2.11 amended -Single-and multiple-station smoke alarms. Section 907.2.11 of the California Building Code is amended to read as follows: 907.2.11 Single-and multiple-station smoke alarms. Listed single-and multiple- station smoke alarms complying with UL 217 shall be installed in accordance with the provisions of this code and the househdid warning equipment provisions ofNFPA 72. Smoke alarms more than 10 years old shall not be considered as satisfYing any requirement of this code or of the Health and Safety Code Section 13113 and shall be immediately replaced by the owner with a smoke alarm that complies with this section. Smoke alarms and smoke detectors installed on or afier January 1, 2011 in compliance with this code or with the provisions of the Health and Safety Code Section 13113 shall also meet the following requirements: 1. Smoke detectors or smoke alarms located within 20 feet of a kitchen or room containing a wood-burning stove or fireplace shall be photoelectric detectors or alarms. 1026 JO sh 8261463 6 ***NOT YET APPROVED*** 2. In any other required locations dual sensor photoelectric/ionization detectors or alarms. shall be installed A photoelectric smoke detector or alarm installed together with an ionization smoke detector or alarm may be used as a substitute for a dual sensor photoelectric/ionization detector or alarm. Exception: Group R occupancies. A fire alarm system with smoke detectors located in accordance with, and meeting the requirements of this section may be installed in lieu of smoke alarms. Upon actuation of the detector, only those notification appliances in the dwelling unit or guest rooms where the detectors are actuated shall activate. 16.04.170 Section 1206.3.4 added -Roof guardrails at interior courts. Section 1206.3.4 is added to the California Building Code to read: 1206.3.4 Roof guardrails at interior courts. Roof openings into interior courts that are bounded on all sides by building walls shall be protected with guardrails. The top of the guardrail shall not be less than 42 inches in height above the adjacent roof surface that can be walked on. Intermediate rails shall be designed and spaced such that a 12 inch diameter sphere cannot pass through. Exception: Where the roof opening is greater than 600 square feet in area. 16.04.180 Section 1505.1.4 amended -Roofing requirements in a Wildland-Urban Interface Fire Area. Section 1505.1.4 of the California Building Code is amended to read: 1505.1.4 Roofing requirements in a Wildland-Urban Intetjace Fire Area. The entire roof covering on new structures and existing structures on which more than 50 percent of the total roof area is replaced within anyone-year period, and any roof covering applied in the alteration, repair or replacement of rooft on existing structures, shall be a fire-retardant roof covering that is at least Class A. Roofing requirements for structures located in a Wildland-Urban Interface Fire Area shall also comply with Section 704A.1. 16.04.190 Section 1612.1.1 added -Palo Alto Flood Hazard Regulations. Section 1612.1.1 is added to the California Building Code to read: 1612.1.1 Palo Alto Flood Hazard Regulations. Notwithstanding the provisions of Section 1612.1, all construction or development within a flood hazard area (areas depicted as a Special Flood Hazard Area on Flood Insurance Rate Maps published by the Federal Emergency Management Agency) shall comply with the City of Palo Alto Flood Hazard Regulations (Palo Alto Municipal Code Chapter 102610 sh 8261463 7 ***NOT YET APPROVED*** 16. 52}. Where discrepancies exist between the requirements of this code and said regulations, the provisions of said regulations shall apply. 16.04.200 Table 1809.7 amended -Prescriptive Footings Supporting Walls of Light- Frame Construction. Table 1809.7 of the California Buildiog Code is amended to read: TABLE 1809.7 Prescriptive Footings Supporting Walls of Light-Frame Construction Number of Thickness of Width of Thickness of Depth of Stories Foundation Footing Footing Foundation Wall (inches) (inches) Below (inches) Natural Surface of Ground or Finish Grade (inches) 1&2 8 14 8 20 3 8 18 8 30 Group U 8 12 12 12 Occupancies All foundations as required in the above Table shall be continuous and have a minimum of three #4 bars of reinforcing steel, except for one story, detached accessory bUildings of Group U occupancy where two bars are required. 16.04.210 Section 3302.3 added -Fire walls. Section 3302.3 is added to the California Buildiog Code to read: 3302.3 Fire walls. When fire walls are required, the fire wall construction shall be completed, with all openings protected, immediately after the building is sufficiently weather protected at the location of the wall(s}. 16.04.220 Section 3310.1 amended -Stairways required. Section 3310.1 of the California Buildiog Code is amended to read: 3310.1 Stairways required. Each level above the first story in new multi-story buildings shall be provided with at least two (2) usable exit stairways after the floor decking is installed. The stairways shall be continuous and discharge to grade level. Stairways serving more than two (2) floor levels shall be enclosed (with 102610 sh 8261463 8 ***NOT YET APPROVED*** openings adequately protected) after exterior walls/windows are in place. Exit stairs in new and existing occupied buildings shall be lighted and maintained clear of debris and construction materials at all times. Exception: For new multi-story buildings, one of the required exit stairs may be obstructed on not more than two (2) contiguous floor levels for the purpose of stairway construction (i. e. installation of gypsum board, painting, flooring, etc.). 16.04.230 Section 3310.3 added -Required means of egress. Section 3310.3 is added to the California Building Code to read: 3310,3 Required Means Of Egress. All new bUildings under construction shall have a least one unobstructed means of egress. All means of egress shall be identified in the Fire Protection Plan. 16.04.240 Section 3405.2.4 added -Seismic Evaluation and Design Procedures for Repairs. Section 3405.2.4 is added to the California Building Code to read: II II 3405.2.4 Seismic Evaluation and Design Procedures for Repairs. The seismic evaluation and design shall be based on the procedures specified in the Calijornia . Building Code, ASCE 31 Seismic Evaluation of Existing Buildings (for evaluation only) or ASCE 41 Seismic Rehabilitation of Existing Buildings. The procedures contained in Appendix A of the International Existing Building Code shall be permitted to be used as specified in Section 3403.5.1.1.3. 3405.2.4.1 Compliance with CBC level seismic forces. Where compliance with the seismic design provisions of the California Building Code is required, the procedures shall be in accordance with one of the folloWing: 1. One-hundred percent of the values in the California Building Code. Where the existing seismic force-resisting system is a type that can be designated as "Ordinary, " the values of R, 0.0' and Cd used for analysis in accordance with Chapter 16 of the California Building Code shall be those specified for structural systems classified as "Ordinary" in accordance with Table 12.2-1 of ASCE 7, unless it is demonstrated that the structural system will provide performance equivalent to that of a "Detailed, " "Intermediate" or "Special" system. 2. Compliance with ASCE 41 using both BSE-1 and BSE-2 earthquake hazard levels and the corresponding performance levels in Table 3405.2.4.1 .. 102610 sh 8261463 9 ***NOT YET APPROVED*** TABLE 3405.2.4.1 PERFORMANCE CRITERIA FOR CBC LEVEL SEISMIC FORCES . PERFORMANCE PERFORMANCE LEVEL LEVEL FOR USE WITH ASCE FOR USE WITH 41 BSE-2 OCCUPANCY CATEGORY ASCE 41 BSE-1 EARTHQUAKE EARTHQUAKE (BASED ON CBC TABLE 1604.5) HAZARD LEVEL HAZARD LEVEL I Life Safety (LS) Collapse Prevention (CP) II Life Safety (LS) Collapse Prevention (CP) III Note a Note a IV Immediate Occupancy (10) Life Safety (LS) a. Acceptance cntenajor Occupancy Category III shall be taken as 80 percent of the acceptance criteria specified for Occupancy Category 11 performance levels, but need not be less than the acceptance criteria specifiedfor Occupancy Category IV performance levels. 3405.2.4.2 Compliance with reduced CBC level seismic forces. Where seismic evaluation and design is permitted to meet reduced California Building Code seismic force levels, the procedures used shall be in accordance with one of the following: 1. The California Building Code using 75 percent of the prescribedforces. Values of R, 0o, and Cd used for analysis shall be as specified in Section 3405.2.4.1 Item 1. 2. Structures or portions of structures that comply with the requirements of the applicable chapter in Appendix A of the International Existing Building Code as specified in Items 2.1 through 2.5 below shall be deemed to comply with this section. 2.1. The seismic evaluation and design of unreinforced masonry bearing wall buildings in Occupancy Category I or II are permitted to be based on the procedures specified in Appendix Chapter AI. 2.2. Seismic evaluation and design of the wall anchorage system in reinforced concrete and reinforced masonry wall buildings with flexible diaphragms in Occupancy Category I or II are permitted to be based on the procedures specified in Appendix Chapter A2. 2.3. Seismic evaluation and design of cripple walls and sill plate anchorage in residential buildings of light-frame wood construction in Occupancy Category I or II are permitted to be based on the procedures specified in Appendix Chapter A3. 102610 sh 8261463 10 ***NOT YET APPROVED*** 2.4. Seismic evaluation and design of soft, weak, or open-front wall conditions in multiunit residential buildings of wood construction in Occupancy Category I or II are permitted to be based on the procedures specified in Appendix Chapter A 4. 2.5. Seismic evaluation and design of concrete buildings in all Occupancy Categories are permitted to be based on the procedures specified in Appendix Chapter A5. 3. Compliance with ASCE 31 based on the applicable performance level as shown in Table 3405.2.4.2. It shall be permitted to use the BSE-1 earthquake hazard level as defined in ASCE 41 and subject to the limitations in item 4 below. 4. Compliance with ASCE 41 using the BSE-1 Earthquake Hazard Level defined in ASCE 41 and the performance level as shown in Table 3405.2.4.2. The design spectral response acceleration parameters Sxs and Sxl specified in ASCE 41 shall not be taken less than 75 percent of the respective design spectral response acceleration parameters SDS and SDl defined by the California Building Code and its reference standards. TABLE 3405.2.4.2 PERFORMANCE CRITERIA FOR REDUCED CBC LEVEL SEISMIC FORCES PERFORMANCE LEVEL FOR OCCUPANCY CATEGORY PERFORMANCE LEVEL USE WITH ASCE 41 BSE-1 BASED ON CBC TABLE 1604.5) FOR USE WITH ASCE 31 EARTHQUAKE HAZARD LEVEL 1 Life Safety (LS) Life Safety (LS) 11 Life Safety (LS) Life Safety (LS) III Note a, Note b Note a IV Immediate Occupancy (10) Immediate Occupancy (10) a. Acceptance criteria for Occupancy Category 111 shall be taken as 80 percent of the acceptance criteria specified for Occupancy Category 11 performance leNels, but need not be less than the acceptimce criteria specifiedfor Occupancy Category IV performance levels. b. For Occupancy Category Ill, the ASCE screening phase checklists shall be based on the life safety performance level. 3405.2.4.3 Referenced Standards Standard Reference Number ASCE 31-03 ASCE 41-06 102610 sh 8261463 Title Seismic Evaluation of Existing Buildings Seismic Rehabilitation of Existing Buildings 11 Referenced In Code Section Number 3405.2.4.1, TABLE 3405.2.4.1 3405.2.4.2, TABLE 3405.2.4.2 3405.2.4.1, (Including Supplement No.1) ***NOT YET APPROVED*** 16.04.250 Section 3404.7 added -Suspended ceiling systems. Section 3404.7 is added to the California Building Code to read: TABLE 3405.2.4.1 3405.2.4.2, TABLE 3405.2.4.2 3404.7 Suspended ceiling systems. In existing bUildings or structures, when a permit is issued for alterations or repairs, the existing suspended ceiling system within the area of the alterations or repairs shall comply with Section 803.9.1.1 and with ASCE 7-05 Section 13.5.6. 16.04.260 2010 California Historical Building Code adopted. The California Historical Building Code, 2010 Edition, Title 24, Part 8 (authorized by Health and Safety Code Sections 18950 through 18961), which provides alternative building regulations for the rehabilitation, preservation, restoration, or relocation of designated historic buildings, is adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein. One copy of the California Historical Building Code, 20 I 0 Edition, has been filed for use and examination of the public in the Office of the Building Official of the City of Palo Alto. 16.04.270 2010 California Existing Building Code adopted. The California Existing Building Code, 2010 Edition, Title 24, Part 10, which provides alternative building regulations for the rehabilitation, preservation, restoration, or relocation of existing buildings, is adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein. One copy of the California Existing Building Code, 2010 Edition, has been filed for use and examination of the public in the Office of the Building Official of the City of Palo Alto. SECTION 2. The Council adopts the findings for local amendments to the California Building Code, 2010 Edition, attached hereto as Exhibit "A" and incorporated herein by reference. II II II II II II 102610 sh 8261463 12 ***NOT YET APPROVED*** SECTION 3. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act ("CEQA"), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the amendments herein adopted will have a significant effect on the environment. SECTION 4. date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Senior Deputy City Attorney 102610 sh 8261463 This ordinance shall be effective on the thirty-first day after the 13 Mayor APPROVED: City Manager Director of Planning & CommunitY Environment Director of Administrative Services ***NOT YET APPROVED*** EXHIBIT "A" FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA BUILDING CODE Section 17958 of the California Health and Safety Code provides that the City may make changes to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the Health and Safety Code require that for each proposed local change to those provisions of the California Building Standards Code which regulate buildings used for human habitation, the City Council must make fmdings supporting its determination that each such local change is reasonably necessary because of local climatic, geological, or topographical conditions. Local building regulations having the effect of amending the uniform codes, which were adopted by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958, 17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments to the uniform codes which were adopted by the City Council prior to November 23, 1970, and have been carried through from year to year without significant change, need no required findings. Also, amendments to provisions not regulating buildings used for human habitation do not require findings. A. Explanation of Administrative Amendments 16.04.060 Section 105.1.3 of Division II added -Demolition permits. Finding: This amendment requires the notification of the occupants of a residential building prior to the issuance of a demolition permit, and requires that the building be vacated prior to the issuance of the demolition permit. This is an administrative amendment that is needed to ensure the safety of the occupants of a building which is proposed to be demolished. 16.04.070 Section 105.5 of Division II amended -Expiration. Finding: This is an administrative amendment to clarify when a permit expires. 16.04.080 Section 109.6 of Division II amended -Refunds; 16.04.100 of Division II added -Re-Inspections. Section 110.7 Finding: These amendments bring the administrative provisions of the California Building Code into compliance with the Palo Alto Municipal Code and the organization of the City of Palo Alto. 16.04.100 16.04.110 16.04.120 Section 111.1 of Division II amended -Use and occupancy Section 111.3 of Division II amended -Temporary occnpancy Section 111.5 of Division II added -Posting Finding: These administrative amendments provide for a Certificate of Occupancy to be issued for each occupancy change of a building or portion thereof. The amendment is needed for the 102610 sh 8261463 14 ***NOT YET APPROVED*** building to be inspected when tenants change to ascertain compliance with life safety and accessibility requirements. These sections also permit the issuance of a Temporary Occupancy Certificate provided all life safety and accessibility requirements have been complied with prior to completion of the entire project. B. Explanation of Amendments to conform California Building Code. as amended locally, to California Fire Code, as amended locally 16.04.130 16.04.140 16.04.150 16.04.160 16.04.170 16.04.180 16.04.210 16.04.220 16.04.230 Section 702A amended -Definitions (Wildland-Urban Interface Fire Area) Section 902.1 amended -Definitions Section 903.2 amended -Where required Section 907.2.11 amended -Single-and multiple-station smoke alarms Section 1206.3.4 added -Roof guardrails at interior courts Section 1505.1.4 amended -Roofmg requirements in a Wildland-Urban Interface Fire Area Section 3302.3 added -Fire walls Section 3310.1 amended -Stairways required Section 3310.3 added -Required means of egress Finding: These amendments make the provisions of the California Building Code, 2010 Edition, as amended locally, consistent with those of the California Fire Code, 2010 Edition, as amended locally pursuant to Section 18941.5 of the Health and Safety Code. The Findings for these amendments are more specifically set forth in Exhibit "A" of the City's Ordinance adopting the California Fire Code, 2010 Edition. In general, these amendments have been recognized by the City of Palo Alto as tools for addressing the fire problems, concerns and future direction by which the authority can establish and maintain an enviromnent that will afford a level of fire and life safety to all who live and work within the City's boundaries. Based on the specific findings that identifY the unique local climatic, geologic and topographic conditions within the City of Palo Alto, these amendments are also considered reasonable and necessary. The experience of several disastrous fires within the city, in addition to other fires' in Santa Clara, Monterey, San Mateo, Alameda and Contra Costa Counties have demonstrated the need for additional fire protection features in new buildings and those that are under construction. The implementation of these amendments may reduce the severity and potential of loss of life and property due to fire. C. Findings for Substantive Local Amendments 16.04.190 Section 1612.1.1 added -Palo Alto Flood Hazard Regulations Finding: This section is amended to conform to other provisions of the Palo Alto Municipal Code and to comply with the National Flood Insurance Program (implementing the National Flood Act of 1968, as amended), and federal regulations adopted thereunder, for the purpose of promoting public health, safety and general welfare and to minimize public and private losses due to flood conditions in the mapped Flood Hazard areas of the City .. 102610 sh 8261463 15 ***NOT YET APPROVED*** 16.04.200 Table 1809.7 amended -Prescriptive Footings Supporting Walls of Light- Frame Construction Finding: . This amendment is necessary and justified due to the documented existence of expansive soil conditions throughout much of Palo Alto as shown on published geotechnical and geologic hazard maps in the City's Comprehensive Plan. The prescribed minimum foundation requirements are based on sound engineering practices. 16.04.240 Section 3405.2.4 added -Seismic Evaluation and Design Procedures for Repairs; Finding: The greater San Francisco Bay region is a densely populated area with many buildings constructed over and near a vast array of fault systems capable of producing major earthquakes, including but not limited to, the 1989 Lorna Prieta Earthquake, and similar disasters. This amendment is intended to promote pre-disaster mitigation measures as part of repairs and renovations to existing buildings, as well as establish reasonable repair and reconstruction requirements for damaged buildings, in a manner consistent with the Federal Emergency Management Agency's (FEMA's) implementation of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, ("Stafford Act"), and other relevant informationso that Public Assistance funds may be secured for the repair and restoration of eligible government and non-profit facilities damaged in a declared disaster. 16.04.250 Section 3404.7 added -Suspended ceiling systems Finding: This amendment requires that existing suspended ceilings be braced for lateral forces at the time ofremodel work. This amendment is necessary because the greater San Francisco Bay region is a densely populated area with many buildings constructed over and near a vast array of fault systems capable of producing major earthquakes, including but not limited to, the 1989 Lorna Prieta Earthquake. 102610 sh 8261463 16 ***NOT YET APPROVED*** 16.06.040 Enforcement --Citation Authority. The employee positions designated in this section may enforce the provisions of this chapter by the issuance of citations; persons employed in such positions are authorized to exercise the authority provided in Penal Code section 836.5 and are authorized to issue citations for violations of this chapter. The designated employee positions are: (1) chief building official; (2) assistant building official; (3) building inspection supervisor; and (4) code enforcement officer. 16.06.050 Local Amendments. The provisions of this Chapter shall constitute local amendments to the cross-referenced provisions of the California Residential Code, 2010 Edition, and shall be deemed to replace the cross-referenced sections of said Code with the respective provisions set forth in this Chapter. 16.06.60 Chapter 1, Division II amended -Administration. Chapter 1, Division II of the California Residential Code is amended to read: DIVISIONII ADMINISTRATION The provisions of Chapter 1 (Scope and Administration), Division II (Scope and Administration), of the California Building Code, 2010 Edition, as locally amended and adopted, shall apply to this code. 16.06.070 Section R202 amended -Definitions added. Section R202 of the California Residential Code is amended to include the following definitions: DUAL SENSOR PHOTOELECTRICIIONIZATION SMOKE DETECTOR OR ALARM. A smoke alarm or detector that utilizes both photoelectric and ionization methods in a single device. IONIZATION SMOKE DETECTOR OR ALARM. A smoke alarm or detector that uses a small amount of radioactive material to detect invisible particles generated by flame. PHOTOELECTRIC SMOKE DETECTOR OR ALARM. A smoke alarm or detector that uses a light-source to detect the presence of smoke. WILDLAND-URBAN INTERFACE FIRE AREA is a geographical area identified by the State of California as a "Fire Hazard Severity Zone" in accordance with Public Resources Code Sections 4201 through 4202 and Government Code Sections 51175 through 51189, or other areas designated by the eriforcing agency to be at a significant risk from wildfires. Within the city 101026 sh 8261460 2 ***NOT YET APPROVED*** limits of the City of Palo Alto, "Wildland-Urban Fire Interface Area" shall also include all areas west of Interstate 280, and all other areas recommended as a "Very High Fire Hazard Severity Zone" by the Director of the California Department of Forestry. 16.06.080 Section R313.2 amended -One-and two-family dwellings automatic fire sprinkler systems. Section R313.2 of the California Residential Code is amended to read: R3I3.2 One-and two-family dwellings automatic fire sprinkler systems. Approved automatic sprinkler systems in new one-and two-family dwellings and in existing modified one-and two-family dwellings shall be provided in accordance with this section. 1. An automatic sprinkler system shall be provided throughout all new residential buildings and structures. Exception: New detached Group U occupancies, buildings or structures that do not exceed 1,000 square feet of building area. 2. An automatic sprinkler system shall be provided throughout all existing buildings when modifications are made that create an increase in fire area beyond 3,600 square feet or that create an increase in the number of stories to two (2) or more. Exception: One-time additions to existing buildings made after January 1, 1994 that do not exceed 500 square feet in building area. 3. An automatic sprinkler system shall be provided throughout all new basements regardless of size and throughout existing basements that are expanded by more than 50%. 4. An automatic sprinkler system shall be provided throughout all new buildings located in the designated Wildland-Urban Interface Fire areas. Exception: Any detached non-residential accessory structures to single family residences that have afire area of500 squarefoet or less. 5. An automatic sprinkler system shall be provided throughout all existing buildings located in the designated Wildland-Urban Interface Fire areas when modifications are made that increases the fire area. Exception: One-time additions to existing buildings made after January 1, 1994 that do not exceed 500 square feet infire area. 101026 sh 8261460 3 -~ ***NOT YET APPROVED*** 16.06.090 Section R314.1 amended -Smoke detection and notification. SectionR3l4.l of the California Residential Code is amended to read: R314.1 SmDke detectiDn and nDtificatiDn. Listed single-and multiple-station smoke alarms complying with UL 217 shall be installed in accordance with the provisions of this code and the household warning equipment provisions of NFP A 72. Smoke alarms more than 10 years old shall not be considered as satisfYing any requirement of this code or of the Health and Safety Code Section 13113 and shall be immediately replaced by the owner with a smake alarm that complies with this section. Smake alarms and smoke detectors installed on ar after January 1, 2011 in compliance with this code or with the pravisions of the Health and Safety Code Sectian 13113 shall also meet thefollawing requirements: 1. Smoke detectors or smoke alarms lacated within 20 feet of a kitchen or room containing a woad-burning stove or fireplace shall be photoelectric detectors or alarms. 2. 1n any other required lacations dual sensor photaelectric/ionizatian detectors or alarms, shall be installed. A photDelectric smoke detector or alarm installed together with an ianization smoke detector or alarm may be used as a substitute for a dual sensor phataelectric/ionization detectar or alarm. ExceptiDn: A fire alarm system with smoke detectars located in accordance with, and meeting the requirements af, this section may be installed in lieu of smoke alarms. Upon actuation af the detector, anly thase notification appliances in the dwelling unit ar guest roams where the detectors are actuated shall activate. 16.06.100 Section R322.1 amended -General. The following paragraph is added to Section R322.l of the California Residential Code: 1/ Palo. Alto. FIDDd Hazard RegulatiDns. NDtwithstanding the provisians of this sectian, all construction or development within a flood hazard area (areas depicted as a Special Flaod Hazard Area an Fload Insurance Rate Maps published by the Federal Emergency Management Agency) shall camply with the City af Palo. Alta Flood Hazard Regulatians (PaloAlto Municipal Cade Chapter 16.52). Where discrepancies exist between the requirements of this code and said regulations, the provisions of said regulations shall apply. 101026 sh 8261460 4 ***NOT YET APPROVED*** 16.06.110 Section R329 added -Sound Transmission. Section R329 is added to the California Residential Code to read: SECTION R329 SOUND TRANSMISSION R329.1 GeneraL For building standards and regulations governing sound transmission, refer to Section 1207 of the California Building Code. 16.06.120 Section R403.1.8 amended -Fonndations on expansive soils. Section R403.1.8 of the California Residential Code is amended to read: R403.1.8 Foundations on expansive soils. Foundations and floor slabs for buildings located on expansive soils shall be designed in accordance with Section 1808.6 or Table 1809.7 of the California Building Code. 16.06.130 Table R602.10.1.2(2) amended -Bracing Requirements Based on Seismic Design Category. Footnote d is added to Table R602.10.1.2(2) to read as follows: d. In Seismic Design Categories Do, DJ and D2, Method GB is not permitted and the use of Method PCP is limited to one-story single.Jamily dwellings and accessory structures. 16.06.140 Section R902.1.4 amended -Roofmg requirements in a Wildland-Urban Interface Fire Area. Section R902.1.4 of the California Residential Code is amended to read: R902.1.4 Roofing requirements iii' a Wildland-Urban Interface Fire Area. The entire roof covering on new structures and existing structures on which more than 50 percent of the total roof area is replaced within anyone-year period, and any roof covering applied in the alteration, repair or replacement of roofs on existing structures, shall be a fire-retardant roof covering that is at least Class A. Roofing requirements for structures located in a Wildland-Urban Interface Fire Area shall .also comply with Section R327.5. 16.06.150 Section RI003.9.2 added -Repairs, replacements and alterations. Section RlO03.9.2 is added to the California Residential Code to read: II RI003.9.2 Repairs, replacements and alterations. When any repair, replacement or alteration to the roof of an existing structure is performed, a spark arrester shall be installed on the existing chimney in accordance with Section R1003.9.1. 101026 sh 8261460 5 ***NOT YET APPROVED*** SECTION 2. The Council adopts the [mdings for local amendments to the California Residential Code, 2010 Edition, attached hereto as Exhibit "A" and incorporated herein by reference. SECTION 3. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act ("CEQA"), pursuant to. Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the amendments herein adopted will have a significant effect on the environment. SECTION 4. date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Senior Deputy City Attorney 101026 sh 8261460 This ordinance shall be effective on the thirty-first day after the 6 Mayor APPROVED: City Manager Director of Planning & Community Environment Director of Administrative Services ***NOT YET APPROVED*** EXHIBIT "A" FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA RESIDENTIAL CODE Section 17958 of the California Health and Safety Code provides that the City may make changes to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the Health and Safety Code require that for each propo~ed local change to those provisions of the California Building Standards Code which regulate buildings used for human habitation, the City Council must make findings supporting its determination that each such local change is reasonably necessary because of local climatic, geological, or topographical conditions. A. Explanation of Administrative Amendments 16.06.060 Chapter 1, Division IT amended -Administration. Finding: This amendment brings the administrative provisions of the California Residential Code into compliance with those of the California Building Code as locally amended and adopted, the Palo Alto Municipal Code and the organization of the City of Palo Alto. B. Explanation of Amendments to conform California Residential Code, as amended locally, to California Fire Code, as amended locally 16.06.070 16.06.080 16.06.090 16.06.140 16.06.150 Section ru02 amended -Definitions added. Section R313.2 amended -One-and two-family dwellings automatic fire sprinkler systems. Section R314.1 amended -Smoke detection and notification. Section R902.1.4 amended -Roofmg requirements in a Wildland-Urban Interface Fire Area. Section R1003.9.2 added -Repairs, replacements and alterations. Finding: These amendments make the provisions of the California Residential Code, 2010 Edition, as amended locally, consistent with those of the California Fire Code, 2010 Edition, as amended locally pursuant to Section 18941.5 of the Health and Safety Code. The Findings for these amendments are more specifically set forth in Ex;hibit "A" of the City's Ordinance adopting the California Fire Code, 2010 Edition. In general, these amendments have been recognized by the City of Palo Alto as tools for addressing the fire problems, concerns and future direction by which the authority can establish and maintain an environment that will afford a level of fire and life safety to all who live and work within the City's boundaries. Based on the specific findings that identify the unique local climatic, geologic and topographic conditions within the City of Palo Alto, these amendments are also considered reasonable and necessary. The experience of several disastrous fires within the city, in addition to other fires in Santa Clara, Monterey, San Mateo, Alameda and Contra Costa Counties have demonstrated the need for additional 1 fire protection features in new buildings and those that are under construction. Implementation of these amendments may reduce the severity and potential of loss of life and property due to fire. 101026 sh 8261460 7 ***NOT YET APPROVED*** C. Findings for Substantive Local Amendments 16.06.100 Section R322.1 amended -General. Finding: This section is amended to conform to other provisions of the Palo Alto Municipal Code and to comply with the National Flood Insurance Program (implementing the National FloodAct of 1968, as amended), and federal regulations adopted thereunder, for the purpose of promoting public health, safety and general welfare and to minimize public and private losses due to flood conditions in the mapped Flood Hazard areas of the City. 16.06.110 Section R329 added -Sound Transmission. Finding: This section merely makes reference to and incorporates the provisions of California Building Code Section 1207 to provide design guidance and requirements for sound transmission within buildings. It is included in lieu of Appendix Chapter K that was not adopted by any State agencies. 16.06.120 Section R403.1.8 amended -Foundations on expansive soils. Finding: This amendment is necessary and justified due to the documented existence of expansive .soil conditions throughout much of Palo Alto as shown on published geotechnical and geologic hazard maps in the City'S Comprehensive Plan. The prescribed minimum foundation requirements are based on sound engineering practices. 16.06.130 Table R602.10.1.2(2) amended -Bracing Requirements Based on Seismic Design Category. Finding: This amendment limits the bracing methods that can be used for walls within certain seismic design categories and is based on sound engineering principles. The amendment is necessary because the greater San Francisco Bay region is a densely populated area with many buildings constructed over and near a vast array of fault systems capable of producing major earthquakes, including but not limited to, the 1989 Lorna Prieta Earthquake. These fault systems place structures within the City of Palo Alto at greater risk of damage or collapse due to earthquakes. 101026 sh 8261460 8 (a) Require the project to include a Transportation Demand Management Program (TDM) that includes the provision of transit passes for occupants/tenants (Approval Condition 4 f), and (b) Relocate the parking garage driveway entrance to Birch Street or Sheridan Avenue (Approval Condition 4g). Staff also recommends approval with the deletion of the PTC' s recommended Approval Condition 4g requiring relocation of the driveway. BACKGROUND The purpose of the PTOD Combining District is to facilitate higher density pedestrian and transit friendly developments, to take advantage of the proximity to public transportation and the California Avenue Business District, while also protecting nearby historic resources. The PTOD Combining District specifically allows mixed use development, where residential and non- residential uses are combined, and can be applied to properties zoned R-l, CC(2), CN, GM, PF, RM-30 and RM-40 or with cOlnbining districts within the designated California Avenue PTOD boundary, as shown on the City's approved zoning maps, consistent with the provisions of Chapter 18.08 and 18.80 of the Palo Alto Municipal Code (PAMC). Once a site is rezoned to the PTOD Combining District, the PTOD development standards are applied to the associated development project in lieu of regulations of any underlying zoning designation. If development standards such as height and setbacks are not addressed in the PTOD standards, the Architectural Review Board (ARB) has the discretion to determine appropriate standards within the context of neighboring sites and buildings. Council Purview The rezoning of a site to the PTOD district may be initiated by the owner of an eligible property or may be initiated by a vote of the PTC or City Council. Rezoning applications to the PTOD district are processed in accordance with P AMC Chapter 18.80, the standard rezoning process. The PTC review and City Council approval establishes the allowable or required use limits for the area rezoned, such as types and mix of uses, and intensity, including density and floor area ratio. Following Council's approval of a PTOD rezoning, the applicant can submit an application requesting architectural review approval for the new development. The development proj ect would be reviewed by the ARB in accordance with the architectural review criteria and recommended to the Director of Planning and Community Environment pursuant to approval findings set forth in PAMC Chapter 18.76, and subject to the ARB finding the project will be consistent with the PTOD Combining District Context Based Design Criteria (P AMC Chapter 18.34.050). Proj ect Description The proposed project is a request for PTOD zoning, initiated by the applicant, to facilitate the redevelopment of five parcels, totaling approximately 19,862 square feet, with a new three-story mixed use building. The proposed building, to be constructed over a new below grade parking garage, would contain 10,257 square feet of ground floor office space and eight two-story townhome style residential units above, including one below market rate (BMR) housing unit. The garage would be accessed from Grant Avenue and houses nineteen regular parking spaces CMR: 413:10 Page 2 of9 and fifteen pairs of tandem parking stalls for a total 49 garage spaces (4 additional spaces are provided as surface parking). The property would also include a small pocket park at the comer of Birch Street and Grant Avenue and four surface parking spaces accessible from a proposed driveway curb cut on Birch Street. A detailed description of the project is available in the PTC staff report. The proposed office floor area ratio (FAR) is 0.52. The non-residential component of a mixed use project within a PTOD District is allowed a maximum FAR "cap" of 0.25, which the project would exceed by 0.27. The applicant's stated purpose in proposing greater non-residential FAR is to accommodate a large enough commercial ground floor to support the eight residential units above. The applicant requests a Government Code Section 65915 (also known as SB1818) "concession" to exceed the non-residential FAR cap; an exception that would otherwise be associated with a request for approval of a Variance. This provision allows applicants to request and receive one "concession" as incentives from the appropriate decision making bodies for the construction of at least 10% affordable housing units. Incentives may involve exceptions to open space, height, parking, FAR or similar standards. Staff believes this concession is allowed by State law as the applicant is providing one BMR housing unit but the Council's rezoning is entirely discretionary and the PTOD zoning allows the Council to determine appropriate limits. BOARD/COMMISSION REVIEW AND RECOMMENDATIONS The PTC formally reviewed the zoning request on April 15, 2009. Seven members of the public spoke on the project. Primary concerns included traffic impacts and the request for parking reductions. Other concerns regarding the project included impacts on light, trees, mix of uses, ground water contamination and open space. Some members of the public voiced specific concerns regarding the driveway proposed on Grant Avenue because of the numbers of senior citizens that live nearby who would use Grant Avenue to access the California Avenue shopping area. The PTC voted 4-2-1 (Garber, Tuma, Rosati and Holman voting yes; Keller and Fineberg voting no; Lippert absent) to recommend that the City Council approve the Mitigated Negative Declaration and Zoning Ordinance with two modifications: (1) the driveway to the garage be relocated from Grant Avenue to Birch Street or Sheridan A venue, due to concerns about the safety of turning movements, given the proximity of the driveway to Birch/Grant intersection; and (2) that a TDM program, to include transit passes, be submitted to reduce trips and parking for the site. The TDM plan/transit pass modification has been addressed by the applicant, who has provided a preliminary TDM plan including transit passes for occupants/residents (a detailed TDM plan will be required for Architectural Review Board review). The PTC was made aware of the applicant's request for the City to consider the non-residential FAR exception as a "concession" under State Density Bonus law (SB 1818) for including one below market rate housing unit. Commissioners Keller and Fineberg voted no because of concerns that the project provided an inadequate number of parking spaces and housing units respectively. Staff believes the driveway as proposed by the applicant is safe, the volumes are minimal, and alternative driveway locations are not practical, and therefore recommends the driveway remain as proposed (on Grant Avenue). The staff report and minutes of the PTC meeting are attached (Attachment K). CMR: 413:10 Page 3 of9 DISCUSSION Subsequent to the PTC and ARB hearings, three issues arose which impacted the proj ect and caused the project's City Council hearing to be continued from July 6, 2009 to a date uncertain. The issues consist of (1) the recirculation of the Mitigated Negative Declaration, (2) the neighbor opposition regarding the driveway safety and parking, and (3) the new Housing Element cycle. CEQA Issues Staff re-circulated the CEQA document to allow review and formal response by the State Regional Water Quality Board (WQ Board). The applicant worked directly, over an extensive period with the WQ Board to provide additional information, including peer review of the technical docun1ents. On October 14,2010, staff received final confirmation that the WQ Board has no objection to the project. One member of the public expressed concern that the project would expose future occupants/residents to hazardous chemicals and that the WQ Board did not / provide adequate review. The WQ Board is the agency with jurisdiction to review CEQA documents and with oversight over environmental clean up efforts in Palo Alto. Detailed discussion on the CEQA document is provided in the Environmental Review section below. Neighbor and PTC Concerns In the intervening time, staff took the opportunity to hold a meeting with the applicant and the representatives of the adjacent Sheridan Apartment residents to discuss their objections to the project. The neighbors reiterated their concern that the project provided too few parking spaces in an area that has parking issues and safety concerns over the location of the driveway on Grant Avenue. The neighbors also expressed concern about underground contan1ination. These issues were also raised by the PTC. All of these issues are discussed in-depth below. 1. Driveway Safety The Birch Street driveway provides access to four surface parking spaces on the north side of the project site. The second driveway, providing access to the underground garage, is located on Grant Avenue, near the comer shared with Birch Street. During the initial review, staff had determined that, with maintenance of sight lines near the comer, the proposed Grant Avenue driveway location would provide for safe vehicle operations and pedestrian movement. The PTe recommended the driveway relocation to Birch Street or Sheridan Avenue because several neighbors expressed concern about safety for pedestrians. Some Sheridan Avenue residents also raised this issue at the November 3,2010 meeting. Following the PTC hearing, staffre-reviewed the Grant Avenue driveway proposal, along with the PTC's suggested potential locations. Staff does not recommend Birch Street for the location of the main driveway leading to below grade parking because additional vehicular conflicts would occur due to the street's higher traffic volumes, raised median, and because the street also provides a direct link to connectors to and from Oregon Expressway. Although a driveway on Sheridan Avenue would be feasible, it would not provide any safety improvements over the Grant Avenue location. Given the proposed number of parking spaces and anticipated low traffic volumes, the location of the Grant Avenue driveway would not generate a safety hazard. Staff will continue to work with the applicant during the ARB review of the project to ensure the project maintains sight lines and provides other safety measures, such as mirrors in key locations. Because relocating the driveway to CMR: 413:10 4of9 Sheridan Avenue would not improve safety, staff continues to support the project's main driveway location on Grant Avenue and recommends that the PTC's relocation condition be deleted from the rezoning approval conditions. The applicant has also responded to the PTC's driveway relocation recommendation, noting the Grant Avenue location would maximize use of the parking garage and the number of potential parking spaces. The applicant states that relocating the driveway to Birch Street would create an unusable garage configuration or the loss of 12 parking spaces and the deletion of the comer pocket park. The applicant also believes moving the driveway to Birch Street would create a more dangerous situation because it would force cars onto a much busier street. The applicant has submitted a letter prepared by transportation consultant Fehr & Peers summarizing the traffic conflicts that may be caused by relocating the driveway and site plans examining the impacts of moving the driveway (Attachment F). 2. Parking Regulations The project includes the provision of 42 parking spaces, consisting of four surface parking spaces and 38 garage spaces. In addition, 11 tandem parking spaces are provided in the garage to support the office use or residential guests. The applicant requests two parking requirement adjustments, for 'joint use' and 'housing near transit,' permitted by PAMC Chapter 18.52.050 for a maximum of combined reduction of 30%. Without the adjustments, the required parking would total 60 spaces. If the adjustments are granted, the proposed number of spaces would meet the revised required parking total of 42 spaces. Staff supports the adjustments, given the mix of uses, the proximity to transit, the proposed TDM measures and the additional 11 tandem stalls. The project total of 42 spaces includes four tandem parking spaces proposed for the residential units. The four tandenl spaces meet the 25% maximum tandem spaces allowed by P AMC Chapter 18.52 for multi-family buildings. The additional 11 parking spaces in tandem stalls would be available if needed for the office use or for guest spaces for the residential units . . The proposed parking spaces would meet the requirements ofP AMC Chapter 18.52, as indicated in the Table 1 below. Table 1: Parking Required Reduction Proposed Revised Proposed Conforms PerPAMC Total Residen tial 16 20% for Housing Near 12 12 Yes 2 spaces/unit Transit (30% max) Guest spaces 2 Office 42 20% total for Joint 30 30 Yes 1 /250 sq. ft. Use/TDM (30% max) Total 60 30% combined max 42 42* Yes *Plus 11 additional tandem spaces. Housing Element and Density Staff is currently in process of a Comprehensive Plan Amendment proposed for a horizon of I 2010-2020. As part of the overall update, staff is preparing a revised Housing Element for the CMR: 413:10 Page 5 of9 2007-2014 Housing Element cycle per the requirements of the State of California's Department of Housing and Community Development. At the time of the ARB and PTC hearings, the City was subject to the previous Housing Element cycle, adopted in 2003. The project site is part of six parcels collectively identified as Housing Opportunity Site (HOS) 8-06 on the Palo Alto Comprehensive Plan Housing Sites Inventory. Given the mix of office and commercial uses in the area, it was anticipated in the previous Housing Element that a minimum density of 15 dwelling units would be redeveloped. Because the subject parcel is approximately 20% smaller without the sixth parcel, the minimum density would be proportionately reduced to 12 dwelling units. The applicant proposes eight dwelling units, four less than the anticipated minimum. When the project was initially considered and at the time of the PTC hearing, the City of Palo Alto had pennitted 316 more dwelling units than the 1,397 units identified in that previous Housing Element cycle. Therefore, the eight dwelling units requested to be permitted as part of this project would not have adversely affected the total amount of housing to be built within the previous Housing Element cycle. Under the new cycle, the City is required to identify locations for a minimum of 2,860 housing units. Staff is currently working on finding locations for City Council approval. City Council has directed staff to focus on sites near transit, such as the subject property. Because a new Housing Element cycle has begun, approving fewer units for a Housing Opportunity Site could be considered inconsistent with City Council direction and with the City's Goal H -1, as identified in the Comprehensive Plan, of providing "a supply of affordable and market rate housing that meets Palo Alto's share of regional housing needs." The applicant could be required to redesign the project to provide the full twelve units designated for the site. The project would then better meet the City's housing goal. Staff acknowledges that the project has been in process for over two years and that the staff position regarding the total number of housing units is the result of the timing of the Housing Element cycle. The property's configuration and potential vehicular impacts potentially limits the site's capacity for additional units. llcreasing the number of units would also increase the number of required parking spaces unless the office space is reduced or eliminated. ALTERNATIVE As an alternative, the City Council can also choose to deny the applicant's request to rezone the site to the PTOD Combining District designation. If the rezoning request is denied, the development standards of the RM-40 Multi-Family zoning designation would be applied to any future development of the site. A commercial or an office and residential mixed use project are not allowed uses under the RM -40 zoning designation. POLICY IMPLICATIONS The site is located within the Transit Oriented Residential designation in the Comprehensive Plan, which is applicable to projects within walking distance (2,000 feet) from a Caltrain station. The land use category is intended to generate residential densities that support substantial use of public transportation and especially use of Caltrain. The project, as proposed, is consistent with the current Comprehensive Plan and zoning designations and supports the City's policy objectives for pedestrian and transit oriented development. CMR: 413:10 Page 6 of9 ENVIRONMENTAL REVIEW An Initial Study and Mitigated Negative Declaration (MND), which reviewed the environmental issues as required by the California Environmental Quality Act (CEQA), was originally circulated for a 20-day public review period from Apri16, 2009 to Apri126, 2009. No comments from the public or other agencies had been received during the public review period. Staff received one comment from the public on the environmental document just prior to the originally scheduled 2009 City Council hearing, and the hearing was postponed to allow recirculation of the CEQA document to obtain feedback from the WQ Board as the agency charged with oversight. The MND was circulated for another thirty days, from November 20, 2009 to December 21, 2009. Copies of the document were sent directly to the WQ Board and the State Clearinghouse for input. The WQ Board then worked directly over the next year and a half with the applicant to obtain enough information to make their final determination on the document. The WQ Board required the applicant to provide for a third party assessment of the studies, including an air intrusion risk modeling. The WQ Board issued formal approval of the CEQA document and the mitigation measures on September 2,2010. One comment letter was received by staff from Bob Moss. No comments have been received from other agencies or individuals on the CEQA document. Mr. Moss requested that an Environmental Impact Report be required for the proposed proj ect because he did not believe the MND and supporting documents adequately address the hazardous conditions of the site. The Initial Study/MND includes mitigation measures pertaining to Biological Resources, Hazards and Hazardous Materials, and Noise, which would lessen potential impacts to a less than significant level. Specific nlitigation includes nleasures to protect trees and to prevent exposure to Trichloroethylene (TCE) during construction and for future occupants. Groundwater Contamination Analysis The site is subject to groundwater contamination by the northeasterly portions of the known Hewlett Packard-Varian plume, which has been under the WQ Board oversight for remediation since 1981. The federal Environmental Protection Agency has an agreement with the WQ Board to grant the WQ Board jurisdiction in this area. Accordingly, the WQ Board is the agency who would review environmental documents and establishes appropriate thresholds and standards. The plume is currently referred to as the California-alive-Emerson plume or CaE. The source of the contamination is offsite and appears to be located at 640 Page Mill Road and 601 California Avenue, approximately 1,000 feet south/southeast and up gradient from the subject site. Because of this condition, a Phase II Site Investigation Report and Vapor Intrusion Model Screening were prepared for the site and incorporated into the City's environmental documents. Per the Phase II Investigation report, referenced in the Initial Study, excavation of the site for the construction of the four story building and underground parking garage would be completed to a depth of approximately 15 feet below ground surface. The studies did find evidence of trichloroethylene (TCE), a cleaning solvent commonly used by the semiconductor industry and associated with the CaE plume, in three of the eight onsite testing areas. TCE is considered a volatile organic compound (VOC), a carcinogen and therefore an environmental concern. Exposure can occur either through direct contact with contanlinated groundwater or through indoor air intrusion from off-gassing from the contaminated groundwater. The testing determined that there was only one testing site that yielded environmental testing levels (ESLs) CMR: 413:10 Page 7 of9 ATTACHMENTS A. Draft Ordinance B. Revised Draft Initial Study, Draft MND and Regional Water Quality Board responses C. Location Map D. Development Standards Table E. Applicant's project description* F. Applicant's study of relocation of the Grant Avenue driveway and parking evaluation* G. Transportation Staff Memo regarding the driveway relocation H Applicant's Green Building Checklists* 1. Applicant's response to the Draft MND and CEQA comments* J. California Avenue PTOD Boundary Map K. April 15, 2009 PTC staffreport and minutes (w/o attachments) L. Public Correspondences M. Links to related background documents N. Conceptual Plans (Council Members only)* * Submitted by Applicant COURTESY COPIES: Court House Plaza David Solnick CMR: Page 9 of9 NOT YET APPROVED ATTACHMENT A Ordinance No. Ordinance of the Council of the City of Palo Alto Amending the Zoning Map of the City of Palo Alto to Change the Zone Designation for 305 Grant Avenue, 2640 and 2650 Birch Street and 306 and 320 Sheridan Avenue from RM-40 Multi- Family to the Pedestrian and Transit Oriented Development (PTOD) Combining District The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The City Council finds as follows: (A) The Planning and Transportation Commission ("Commission"), after a duly noticed public hearing on April 15, 2009, has recommended that the City Council of the City of Palo Alto ("Council") rezone the subject site (305 Grant Avenue, 2640 and 2650 Birch Street and 306 and 320 Sheridan Avenue) to the California Avenue Pedestrian and Transit Oriented Development Cornbining District (PTOD) 'zone designation. (B) The Planning and Transportation Commission has reviewed the facts presented at the public hearing, including public testimony and reports and recommendations from the director of planning and community environment or other appropriate city staff. (C) The Planning and Transportation Commission finds that the subject site is within the PTOD boundary. (D) The Planning and Transportation Commission finds that rezoning the parcel to the California Avenue Pedestrian and Transit Oriented Development Combining District (PTOD) zoning is in accord with the Palo Alto Comprehensive Plan, in that the Comprehensive Plan designation of the site is Multiple Family and within the Cal-Ventura Mixed Use Area. (E) The Council held a duly noticed public hearing on the matter on Noverrlber 22, 2010, and has reviewed the Mitigated Negative Declaration prepared for the project and all other relevant information, including staff reports, and all testimony, written and oral, presented on the matter. SECTION 2. The Council finds that the public interest, health and welfare require an amendment to the Zoning Map of the City of Palo Alto as set forth in Section 3. 1/ // 1 101116 sh 8261473 NOT YET APPROVED SECTION 3. The Council hereby amends the Zoning Map of the City of Palo Alto to place the subject site (305 Grant Avenue, 2640 and 2650 Birch Street and 306 and 320 Sheridan Avenue) in the California Avenue Pedestrian and Transit Oriented Development Combining District (PTOD) zoning regulations. SECTION 4. The City Council further determines that the rezoning is subject to the following limitations: a. The development shall be a mixed use proj ect comprising of ground floor office uses with residential use on the upper floors; b. Office uses on the ground floor shall comprise approximately 10,257 square feet; c. A minimum of eight (8) residential units shall be provided, totaling approximately 14,534 square feet in area; d. The maximum building height shall not exceed 40 feet; . e. A minimum of 42 parking spaces shall be provided; f. A Transportation Demand Management Program shall be included that requires the provision of transit passes for all occupants/tenants; and These limitations shall be recorded as conditions on the property, to the satisfaction of the City Attorney and Planning Director. Modifications to these conditions nlay be approved by the Planning Director only to the extent that increases or decreases do not exceed 10% of the allowable outlined in parts (b) and (c) and remain in compliance with all other zoning requirements. SECTION 5. The Council hereby finds that this rezoning is subject to environmental review under the provisions of the California Environmental Quality Act (CEQA). An environmental assessment and mitigated negative declaration was prepared for the project and it has been determined that all potentially adverse impacts that would result from the rezoning of the property can be mitigated to a level of insignificance; therefore, the project would have no significant impact on the environment. II II II II 2 101116 sh 8261473 '"',,,:,,c" " .... ..." ..... , ........ ~.=, ... , ... ''" ..... '' ... ,.''' ... , .. ,~."."~ .... =''''"' .. " .".'.'''''"' ......... ' .. H" .. h·'·'~''·'' "' ........ ,.. ;;:{ltesponsible Agencies sent a copy of t is document • County of Santa Clara, Office of the County Clerk-Recorder • County of Santa Clara, Department of Environmental Health • Santa Clara Valley Water District • San Francisco Regional Water Quality Board • California State Clearinghouse MifigationMeasures included in the project to reduce potentially Signific'8ot imp~cts to a less than ) I, ~i,gl!! .. f!f!l!!~I~y~t: 1 ,-, ..... C"'~~-••• ~ , ' #, .:: ENVIRONMENTAL CHECKLIST FORM City of Palo Alto Department of Planning and Community Environment PROJECT DESCRIPTION 1. PROJECT TITLE Birch Plaza Mixed-Use Project Palo Alto, California 2. LEAD AGENCY NAME AND ADDRESS City of Palo Alto . Department of Planning and Community Environment 250 Hamilton Ave. Palo Alto, CA 94303 3. CONTACT PERSON AND· PHONE NUMBER Elena Lee City of Palo Alto (650) 617-3196 4. PROJECT SPONSOR'S NAME AND ADDRESS David Solnick David Solnick Architect 212 High Street Palo Alto, CA 94301 5. APPLICATION NUMBER 08PLN-00182 6. PROJECT LOCATION 2640 & 2650 Birch Street, 305 Grant Avenue, 306 & 320 Sheridan Avenue Palo Alto, CA Parcel Numbers: 132-36-020, 069, 070, 073, -074 The project site is located in the northern section of the City of Palo Alto, in the northern part of Santa Clara County, west of U.S. Highway 101 and east of State Route 82 (El Camino Real), as shown on Figure 1, Regional Map. The site is located on the southwest side of Birch Street, between Grant Avenue and Sheridan Avenue, as shown on Figure 2, Vicinity Map. Birch Plaza Mixed Use Page 1 Mitigated Negative Declaration 7. GENERAL PLAN DESIGNATION: The project site is designated as Multiple Family Residential in the Palo Alto 1998 -2010 Comprehensive Plan. This land use designation includes a residential density range of 8 to 40 units and 8- 90 persons per acre. The actual permitted number of housing units can vary by area, depending on existing land use, proximity to major streets and public transit, distance to shopping centers and . environmental problems. Higher densities than what is permitted by zoning may be allowed where measureable community uses will be derived, services and facilities are available, and the net effect will be compatible with the overall Comprehensive Plan. The site is located in the Cal-Ventura Mixed Use Area. Policy L-31 states that the Cal-Ventura area should be developed as a well-designed mixed use district with diverse land uses, two-to three-story buildings, and a network of pedestrian oriented streets providing links to California Avenue. The site is within the California Avenue Pedestrian and Transit- Oriented District (PTOD) designation, which makes the site eligible for the PTOD Combining District. 8. ZONING The project site is zoned RM-40, Multi-Family residential. The RM-40 zone district is designed to accommodate high density multiple-family residences. Permitted densities in the RM-40 residence district range from 31 to 40 dwelling units per acre. Eating and drinking services and neighborhood serving personal and retail services may be allowed with a conditional use permit in the RM-40 Zoning District as part of a single residential development containing at least 40 dwelling units. The proposed PTOD combining district allows higher density residential dwellings, including mixed uses, on commercial, industrial and multi-family parcels within a walkable distance of the California Avenue Caltrain station. It specifically fosters densities and facilities that encourage a variety of housing types, commercial, retail, and limited office uses. However, the District has. a floor area cap for the non- residential portion of a mixed use. The office component is allowed to have· a maximum floor area ratio (FAR) of 0.25. The proposed project would include approximately 10,257 sq. ft. of office use, for a total floor area ratio of 0.52, which would exceed the cap by 0.27. According to the applicant, the purpose of designing the larger non-residential FAR is to accommodate a large enough commercial ground floor to support eight two-story residences above. Per the Palo Alto Municipal Code, a Variance would be required to accommodate the project. Because the project includes at least 10% Below Market Rate units/in lieu fee combination, the applicant is requesting to receive an exception to the non-residential FAR cap as an incentive per State Density Bonus legislation, section 65915 of the Government Code. Section 65915 allows applicants to request and receive up to three exceptions as incentives from the appropriate decision making bodies for the construction of affordable housing. Incentives can involve exceptions to open space, height, parking, FAR or similar standards. 9. PROJECT DESCRIPTION 2640 & 2650 Birch Street, 305 Grant Avenue, 306 & 320 Sheridan Avenue [08PLN-00182]: Request by David Solnick on behalf of Hohbach Realty Company Limited Partnership for a zone change from the existing RM-40 zoning to the California Avenue Pedestrian and Transit Oriented Development Combining District (PTOD) Overlay District, to allow for a mixed use development consisting of eight residential condominiums above 10,257 square feet of ground floor office space, below grade parking and related site improvements. The proposed Birch Plaza project ("proposed project") would be located at 2640 and 2650 Birch Street, 305 Grant Avenue and 306 and 320 Sheridan Avenue within the Multi-Family RM-40 zoning district. The project site is comprised of five parcels that occupy an entire block on the southern side of Birch ----------------------------------------------------------------------------------Birch Plaza Mixed Use Page 2 Mitigated Negative Declaration Street, between Sheridan Avenue and Grant Avenue. The site is located approximately 1,000 feet southeasterly of the California Avenue Caltrain station and approximately 650 feet southeasterly of California Avenue. The site is approximately 19,862 square feet in size and is currently developed with three single-family homes. Should a rezoning be approved, the applicant's proposal is to construct a new three-story mixed use office/residential building. The building would consist of a below grade parking garage and a podium structure containing 10,257 sq. ft. of ground floor office space and eight two-story townhomes above the podium on the second and third floors. The residential units are all located on the second and third floors above the podium and garage. Access to the underground parking garage would be provided via a ramp on the pan handle shaped parcel to the northwest from Grant A venue. The garage would provide up to 50 parking spaces. There would be 18 regular parking spaces and 15 pairs of tandem spaces, for a total of 49 spaces. The garage would also provide mechanical equipment storage and bicycle parking. Four at grade parking spaces would be provided as well with separate access from Birch Street. Separate pedestrian entries are provided to the offices from Birch Street. Secondary pedestrian entry to the residential units above would be provided from Sheridan Avenue. An elevator is provided from the garage to the first and second floors in the center of the site. The two-story townhomes that would occupy the second and third floors of the building comprise five three-bedroom units and three two-bedroom units. Two of the three-bedroom units would have a room on the podium level that can be used as either a study or a fourth bedroom. Open space for residents would be provided through a courtyard above the offices, which will also provide individual entries to the townhomes. The building is proposed to be 40 feet tall with storefront glass and a stone/concrete tile fa<;ade at the ground floor level. The residential component would be differentiated by stucco and vertical yellow cedar walls. The residential units would have painted wood trim, dual-glazed aluminum windows and private balconies. The applicant is proposing to reconfigure existing sidewalks to accommodate park strips with new street trees. Approvals Required Approval of the proposed project would consist of the following entitlements: (l) Rezoning the site from RM-40 to the PTOD Combining District, (2) Major Architectural Review pursuant 18.76.020, (3) one concession per State Density Bonus law, and (4) Subdivision Map to subdivide the lot for the purposes of creating commercial and residential condominiums. 10. SURROUNDING LAND USES AND SETTING, The property is located in a fully developed part of the City. Surrounding uses include a County Court House and a four story office building on the other side of Birch Street to the north and commercial/office uses to the north and northeast. The remainder of the uses to the east, south and west is comprised of primarily multi-family residential buildings. The site is located approximately 1,000 feet southeasterly of the California Avenue Caltrain station. 11. OTHER PUBLIC AGENCIES • County of Santa Clara, Office of the County Clerk-Recorder • County of Santa Clara, Department of Environmental Health • Santa Clara Valley Water District • San Francisco Regional Water Quality Board ----------------------------------- Birch Plaza Mixed Use Page 3 Mitigated Negative Declaration ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS EVALUATION OF ENVIRONMENTAL IMPACTS 1) A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the infonnation sources a lead agency cites in the parentheses following each question. [A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e. g. the project falls outside a fault rupture zone). A "No Impact" answer should be explained where it is based on project-specific factors as well as general standards (e. g. the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis).] 2) All answers must take account of the whole action involved, including off-sit~ as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3) Once the lead agency has determined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. Potentially Significant Impact" is appropriate if there is substantial evidence that an effect may be significant. If there are one or more "Potentially Significant Impact" entries when the determination is made, an EIR is required. 4) "(Mitigated) Negative Declaration: Less Than Significant With Mitigation Incorporated" applies where the incorporation of mitigation measures has reduced an effect from "Potentially Significant Impact" to a "Less than Significant Impact." The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section 17, "Earlier Analysis," may be cross-referenced). 5) Earlier analysis may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063 (C)(3) (D). In this case, a brief discussion should identify the following: a) Earlier Analysis Used. Identify and state where they are available for review. b) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. c) Mitigation Measures. For effects that are "Less than Significant with Mitigation Measures Incorporated," describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the project. 6) Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g. general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 7) Supporting Information Sources: A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. 8) The explanation of each issue should identify: a) the significance criteria or threshold, if any, used to evaluate each question; and b) the mitigation measure identified, if any, to reduce the impact to less than significance. Birch Plaza Mixed Use Page 4 Mitigated Negative Declaration DISCUSSION OF IMP ACTS The foHowing Environmental Checklist was used to identify environmental impacts, which could occur if the proposed project is implemented. The left-hand column in the checklist lists the source(s) for the answer to each question. The sources cited are identified at the end of the checklist. Discussions of the basis for each answer and a discussion of mitigation measures that are proposed to reduce potential significant impacts are included. A. AESTHETICS Issues and Supporting Information Sources Potentially Potentially Less Than No Resources Significant Significant Significant Impact Issues Unless Impact Would the project: Mitigation Incorporated a) Substantially degrade the existing visual x character or quality of the site and its surroundings? 1,2,6 b) Have a substantial adverse effect on a public view or view corridor? 1, x MapL4 c) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within 1, x a state scenic highway? MapL4 d) Violate existing Comprehensive Plan x policies regarding visual resources? e) Create a new source of substantial1ight or x glare which would adversely affect day or nighttime views in the area? 1,2,6 f) Substantially shadow public open space x (other than public streets and adjacent sidewalks) between 9:00 a.m. and 3:00 p.m. from September 21 to March 21 ? DISCUSSION: The project has been designed to be compatible with the surrounding development on this block of Birch Street. The proposed project is subject to the City of Palo Alto Architectural Review Board review and compliance with the City of Palo Alto Municipal Code, the PTOD Context Based Design Criteria, and Comprehensive Plan policies. The proposed project is infill development in a fully developed area of the City. The building will have a height of 40 feet, which meets the maximum height requirement for both the existing RM-40 and proposed PTOD zoning designations. There are other multi-story buildings within the vicinity of the site. The new building will be designed with attractive facades and add pedestrian interest to the streetscape. The redevelopment of the site may result in negligible increase, in light and glare generated from additional lighting of the site. However, the City's standard conditions of approval will ensure that the impacts will be less than significant. The condition of approval will require that all exterior lights will be shielded and not extend beyond the site. With the required architectural review, the proposed building will not substantially degrade the existing visual character or quality of the site or its surroundings, therefore no mitigation is required. Mitigation Measures: None Required Birch Plaza Mixed Use Page 5 Mitigated Negative Declaration I B. AGRICULTURAL RESOURCES In determining whether impacts to agricultural resources are significant environmental effects, lead agencies may refer to the California Agricultural Land Evaluation and Site Assessment Model (1997) prepared by the California Dept. of Conservation as an optional model to use in assessing impacts on agriculture and farmland. Issues and Supporting Information Resources Sources Potentially Potentially Less Than No a) b) c) Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and 1 Monitoring Program of the California x Resources Agency, to non-agricultural use? Conflict with existing zoning for agricultural 1,8- use, or a Williamson Act contract? MapL9, x Involve other changes in the existing environment Which, due to their location or nature, could result in conversion of 1 x Farmland, to non-agricultural use? DISCUSSION: The site is not located in a "Prime Farmland", "Unique Farmland", or "Farmland of Statewide Importance" area, as shown on the maps prepared for the Farmland Mapping and Monitoring Program of the California Resources Agency. The site is not zoned for agricultural use, and is not regulated by the Williamson Act. Mitigation Measures: None Required C. AIR QUALITY Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Conflict with or obstruct with implementation x of the applicable air quality plan (1982 Bay 1,2,3 Area Air Quality Plan & 2000 Clean Air Plan)? b) Violate any air quality standard or contribute x substantially to an existing or projected air 1,2,3 quality violation indicated by the following: i. Direct and/or indirect operational x emissions that exceed the Bay Area Air Quality Management District (BAAQMD) criteria air pollutants of 80 pounds per day and/or 15 tons per year for nitrogen oxides I (NO), reactive organic gases (ROG), and Birch Plaza Mixed Use Page 6 Mitigated Negative Declaration I Issues and Supporting Information Resources Sources I Potentially Potentially Less Than No c) d) e) f) Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated fine particulate matter of less than 10 microns in diameter (PMlO); ii. Contribute to carbon monoxide (CO) x concentrations exceeding the State Ambient Air Quality Standard of nine parts per million (ppm) averaged over eight hours or 20 ppm for one hour( as demonstrated by CALINE4 modeling, which would be performed when a) project CO emissions exceed 550 pounds per day or 100 tons per year; or b) project traffic would impact intersections or roadway links operating at Level of Service (LOS) D, E or F or would cause LOS to decline to D, E or F; or c) project would increase traffic volumes on nearby roadways by 10% or more)? Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is nonNattainment tinder an x applicable federal or state ambient air quality 1,2,3 standard (including releasing emissions which exceed quantitative thresho1ds for ozone precursors)? Expose sensitive receptors to substantial levels x of toxic air contaminants? 1,2,3 ! i. Probability of contracting cancer for the x Maximally Exposed Individual (MEl) exceeds lOin one million ii. Ground-level concentrations of non-x carcinogenic TACs would result in a hazard index greater than one (l) for the MEl Create objectionable odors affecting a x substantial number of people? 1 Not implement all applicable construction x emission control measures recommended in the Bay Area Air Quality Management District CEQA Guidelines? i DISCUSSION: The subject site is in a developed area of mixed uses including commercial retail, office and residential uses in the Cal-Ventura Area. According to the Comprehensive Plan, the property is not located in an area that contains uses or activities that are major pollutant emitters. The project is not expected to result in a significant impact on air quality. The project may result in temporary dust emissions during demolition, grading and construction activities. The. impacts are expected to be greatest during demolition. Therefore, conditions of approval, incorporated as part of an approved demolition and construction management plan secured before building permit issuance. Birch Plaza Mixed Use Page 7 Mitigated Negative Declaration The following controls shall be implemented for the duration of project construction to minimize dust related construction impacts: • All active construction areas shall be watered at least twice daily. • All trucks hauling soil, sand, and loose materials shall be covered or shall retain at least two feet of freeboard. • All paved access roads, parking areas, and staging areas at the construction site shall be swept and watered daily. • Submit a plan for the recovery/recycling of demolition waste and debris. before the issuance of a demolition permit. • Sweep streets daily if visible soil material is carried onto adjacent public streets. The standard conditions would result in impacts that are less than significant. Mitigation Measures: None D. BIOLOGICAL RESOURCES Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional 1,8-x plans, policies, or regulations, or by the MapN11 California Department of Fish and Game or U.S. Fish and Wildlife Service? 7 b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, 1,8-x policies, regulations, including federally MapNl protected wetlands as defined by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? c) Interfere substantially with the movement of x any native resident or migratory fish or wildlife species or with established native resident or 1,8- migratory wildlife corridors, or impede the use MapN1 of native wildlife nursery sites? 17 d) Conflict with any local policies or ordinances X protecting biological resources, such as a tree preservation policy or as defined by the City of 1,2,3 Palo Alto's Tree Preservation Ordinance (Municipal Code Section 8.1 O)? e) Conflict with any applicable Habitat Conservation Plan, Natural Community x Conservation Plan, or other approved local, 1,2,3 regional, or state habitat conservation plan? Birch Plaza Mixed Use Page 8 Mitigated Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated i \ DISCUSSION: The project site is located in an established urban area with no riparian or tree habitat for the candidate, sensitive, or special status species in the area. No endangered, threatened, or rare animals, insects and plant species have been identified at this site. The proposed project includes protection measures for the one protected tree located on the project site per the Palo Alto Tree Preservation Ordinance. The existing City tree is planted in the park strip near the proposed ramp to the below grade parking garage. The applicant has submitted an arborist report assessing the impact on the tree. The report concludes that the proposed ramp will not endanger the tree. To maintain the health of the tree, the report recommends several measures, including requiring that any excavation within the tree dripline be done by hand or air digging to a depth of 30 inches, requiring that pruning of roots greater than 1-1/2 inches in diameter be supervised by a qualified arborist, installation of appropriate barricades around the tree during construction, preventive pruning of canopies to remove dead wood prior to construction and implementing a program of fertilization in the spring and summer. These measures will be included as conditions of approval. Street trees would he protected to the satisfaction of the City Arborist, based upon the requirements of the City of Palo Alto's Tree Technical Manual., The conditions of approval would result in impacts that are less than significant. Mitigation Measures: Mitigation Measure D-l To assure the street trees will grow to expected size and life span, engineered soil mix base for new sidewalk will provide additional root growing area as compensation for proximity to podium structure limitations. ENGINEERED SOIL MIX (ESM). Engineered Soil Mix base material shall be utilized in specified areas to achieve normal shade tree rooting potential and maximum service life of the parking surface and curbs in parking and compacted areas. Plans and Civil Drawings shall use CPA Public Works Engineering Specifications, Section 30 and Detail #604, designate the areas with cross-hatch symbol, and specifY a minimum of 24" depth. The technology should be counted toward any credits awarded for LEED certification rating. Mitigation Measure D-2 The existing mature street tree near the proposed ramp shall be carefully evaluated for custom safety measures or replacement according to the City Arborist requirements. Mitigation Measure D-3 To maintain the health of the tree, the following measures recommended by the Tree Protection Report, prepared by any excavation within the tree drip line shall be done by hand or air digging to a depth of 30 inches. Pruning of roots greater than 1-1/2 inches in diameter shall be supervised by a qualified arborist. Appropriate barricades shall be installed around the tree during construction. Preventive pruning of canopies to remove dead wood shall occur prior to construction. A program of fertilization for the tree shall be implemented in the spring and summer. These measures will be included as conditions of approval. Street trees would be protected to the satisfaction of the City Arborist, based upon the requirements of the City of Palo Alto's Tree Technical Manual and the City's Tree Ordinance. Mitigation Measure D-4 An updated arborist report shall be provided with the Architectural Review application., Significance after Mitigation: Less than significant. Birch Plaza Mixed Use Page 9 Mitigated Negative Declaration E. CULTURAL RESOURCES Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the'project: Issues Unless Impact Mitigation Incorporated a) Directly or indirectly destroy a local cultural resource that is recognized by City Council resolution? x b) Cause a substantial adverse change in the c) d) e) f) significance of an archaeological resource 1,8-x pursuant to 15064.5? Ma~L8 Directly or indirectly destroy a unique paleontological resource or site or unique 1,8-x geologic feature? MapL8 Disturb any human remains, including those 1,8- interred outside of formal cemeteries? MapL8 x Adversely affect a historic resource listed or x eligible for listing on the National and/or California Register, or listed on the City's 1,2,8-Historic Inventory? MapL7 Eliminate important examples of major periods x of California history or prehistory? DISCUSSION: The Comprehensive Plan indicates that the site is in a moderate archaeological resource sensitivity zone. Most of the City area east of Interstate 280 is designated in this zone. Although existing and historic development has altered the native landscape, the potential exists that now-buried Native American sites could be uncovered in future planning area construction. The site has not been designated as a historic resource. If archaeological materials are discovered the applicant would be required to perform additional testing and produce an Archaeological Monitoring and Data recovery Plan (AMDRP) to be approved prior to the start of construction. The standard condition, detailed below, will reduce this potential to less than significant. If during grading and construction activities, any archaeological or human remains are encountered, construction shall cease and a qualified archaeologist shall visit the site to address the find. The Santa Clara County Medical Examiner's office shall be notified to provide property direction on how to proceed. If any Native American Resources are encountered during construction, construction shall cease immediately after until a Native American descendent, appointed by the Native American Heritage Commission of the State of California, is able to evaluate the site and make further recommendations and be involved in mitigation planning Mitigation Measures: None Required. Birch Plaza Mixed Use Page 10 Mitigated Negative Declaration F. GEOLOGY, SOILS AND SEISMICITY Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact , Mitigation Incorporated a) Expose people or structures to potential substantial adverse effects, including the See risk of loss, injury, or death involving: be10w· i) Rupture of a known earthquake fault, x as delineated on the most recent Alquist-Pri010 Earthquake Fault Zoning Map issued by the State Geologist for the area or based on 1,2 other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. ii) Strong seismic ground shaking? 8-MapN-x 10 iii) Seismic-related ground failure, including liquefaction? 8-MapNS x iv) Landslides? 8-MapNS x b) Result in substantial soil erosion or the loss of topsoil? 1 x c) Result in substantial siltation? x d) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on-or off-site landslide, lateral 8-MapNS x spreading, subsidence, liquefaction or collapse? e) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to 8-MapNS x life or property? f) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems 1 where sewers are not available for the x disposal of waste water? g) Expose people or property to major x geologic hazards that cannot be mitigated through the use of standard engineering design and seismic safety techniques? Birch Plaza Mixed Use Page 11 Mitigated Negative Declaration DISCUSSION: The entire state of California is in a seismically active area. According to the Comprehensive Plan the project site is not in an area that is subject to very strong ground shaking in the event of an earthquake or in an area subject to expansive soils, surface rupture, liquefaction, or earthquake induced landslides. Development of the proposed project would be required to conform to all requirements in the Uniform Building Code, which includes provisions to ensure that the design and construction of all buildings includes provisions to resist damage from earthquakes to the extent feasible and acceptable. All on-site soils on the project site are suitable for use as fill provided that the large pieces of concrete, brick, old pipes and other buried debris is removed. To support the at grade structure on a shallow foundation, the upper 2.5 feet of existing fill within the building footprint and all the undocumented deeper and buried debris will be removed and re-worked. The potential onsite exposure to geological hazards will therefore be less than significant. No mitigation is required. The entire site is mostly developed and is fairly flat. Substantial or permanent changes to the site topography are not expected. Standard conditions of approval require submittal of a final grading and drainage plan for the project for approval by the Public Works Department prior to the issuance of a building permit. The application of standard grading, drainage, and erosion control measures as a part of the approved grading and drainage plan is expected to avoid any grading-related impacts. The project will not involve the use of septic tanks or alternative wastewater disposal systems. Mitigation Measures: None Required. G.' HAZARDS AND HAZARDOUS MATERIALS Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Create a significant hazard to the public or the environment through the routing transport, use, x or disposal of hazardous materials? 6,8,9,12 b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the x release of hazardous materials into the 6,8,9,12 environment? c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or x waste within one-quarter mile of an existing or 1,6,8,9, proposed school? 12 d) Construct a school on a property that is subject x to hazards from hazardous materials contamination, emissions or accidental release? e) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a 1,6,8,8-x result, would it create a significant hazard to MapN9, the public or the environment? 12 f) For a project located within an airport land use plan or, where such a plan has not been Birch Plaza Mixed Use Page 12 Mitigated Negative Declaration adopted, within two miles of a public airport or public use airport, would the project result in a x safety hazard for people residing or working in 1 the }2foject area? g) For a project within the vicinity of a private airstrip, would the project result in a safety x hazard for people residing or working the 1 proiect area? h) Impair implementation of or physically i) j) interfere with an adopted emergency response 1,8- plan or emergency evacuation plan? MapN7, x 12 Expose people or structures to a significant risk ofloss, injury, or death involving wildland fires, including where wildlands are adjacent to x urbanized areas or where residences are 8-MapN7 intermixed with wildlands? Create a significant hazard to the public or the 8,9,12 X environment from existing hazardous materials \ contamination by exposing future occupants or users of the site to contamination in excess of soil and ground water cleanup goals developed for the site? DISCUSSION: Stellar Environmental Solutions prepared a Phase I Environmental Site Assessment and a Phase II Site Investigation Report for the project. Both documents have been reviewed and accepted by hazardous materials experts in the Fire Department and Public Works. The Phase I report revealed that based on the age of the building that interior and exterior building materials likely contain asbestos and potentially lead- based paints. The residential site is not documented as having been a user, transporter or generator of hazardous materials. The groundwater underlying the project site is contaminated by northeasterly portions of the known Hewlett Packard-Varian plume, which has been under Water Board oversight since 1981 and is currently referred to as the California-Olive-Emerson (COE) plume. The source of the contamination is off site and appears to be located at 640 Page Mill Road and 601 California Avenue, approximately 1,000 feet south/southwest and upgradient from the subject site. However, this source is associated with the COE study area, of which Hewlettt PackardN arian are identified as the responsible parties. In the Phase II investigation at the project site in 2008, groundwater and soil gas samples were collected at eight on site locations. The data from these bore holes showed the same dominant chemical of concern, trichloroethylene (TCE), a cleaning solvent common used by the semiconductor industry, which is associated with the COE Area plume in three of the borings. Concentrations of the TCE ranging from less than 1 to 110 micrograms per liter (J..1g/L) in the groundwater samples were in line with expected grab-groundwater samples in this area of the plume. There was no detection of TCE or other volatile organic compounds (VOCs) in the soil gas in five of the eight bores. The Water Board has established Environmental Screening Levels (ESLs) for evaluating environmental impact for different kinds of uses. A residential ESL is being used to evaluate this site. Of the three where VOCs were detected, two showed TCE at 320 and 410 micrograms per cubic meter (J..1g/m3), below both residential and commercial environmental screening levels (ESLs) of 1,200 and 4,100 J..1g/m3 TCE, respectively. There was only one boring location, B4, which exceeded ESL for both residential and commercial criteria. B4 was detected with 6,400 J..1g/m3 TCE. The B4 bore is located on the outer perimeter of the project site, outside the above building footprint, under the northern edge of the garage. It is also located 38 feet away from the nearest elevator or stairs. Birch Plaza Mixed Use Page 13 Mitigated Neaalwe Declaration I The proposed project includes 10,257 square feet of office space on the ground floor and eight two story townhon1e style condominium units on a concrete podium with a ventilated underground garage. The applicant submitted a vapor intrusion model screening report on May 6, 2009 conducted for the project for TeE impacts in soil gas. The purpose of the test is to assess the risks to human health via the indoor air inhalation pathway associated with the presence of VOCs, principally TCE in soil gas. Vapor intrusion modeling was done using data collected in September 2008. A simple screening version of a modeling system developed by the Department of Toxic Substances and Control (DTSC), called the Johnson/Ettinger vapor intrusion model, was used for this project. The highest TCE soil gas concentration was detected at the site at boring location B4 at a depth of 15 feet below ground surface. This concentration of 6,400 micrograms per cubic meter was one of the parameters used in place of DTSC default parameters. The soil-vapor ESL for TCE is 1,200 micrograms per cubic meter. The report outcome was that an incremental risk from vapor intrusion to indoor air of 3 .8xl 0-7 for carcinogens and a hazard quotient from vapor intrusion to indoor air of 7 .8xl 0-4 for noncarcinogens. This calculated incremental risk is below the common residential threshold value of lxl0-6 for cancer risk and below the threshold of 1.0 for acute risk hazard quotient. The consultants, Stellar Environmental Solutions and Treadwell & Rollo concluded that the contamination of the groundwater under the property poses no lmacceptable risk based on the Phase II study and vapor intrusion modeling results prepared for the proj ect. The potential for vapor intrusion exposure is further mitigated because one level of the underground parking garage and office space will separate the soil from the residential units on the second and third floors. Mitigation Measures: Mitigation Measure G-l The proposed above ground building footprint shall not extend over the area of bore B4, as identified in the Phase II report prepared for the Birch Plaza Project. During the construction phase of this area, PID screening, inspection, and/or possibly sampling should be performed where elevated tricholorethylene (TCE) contamination in soil-gas was detected. If excavated soil is found, it should be appropriately screen, profiled and disposed of based on the result of the analyses. This work shall be performed by a qualified professional to the satisfaction of the City of Palo Alto. Mitigation Measure G-2 Prior to the submittal of a building permit, indoor air intrusion risk modeling shall be prepared and submitted to the City for approval to alleviate regulatory concern about the potential for impacts from the one data point where soil-gas concentrations were above the regulatory environmental screening levels. Mitigation Measure G-3 In accordance with Cal/OSHA regulations, a registered asbestos abatement contractor shall be retained to remove and dispose of all potentially friable asbestos-containing materials (ACM) prior to disturbance during demolition activities. All ACM removal shall be undertaken in accordance with applicable regulations using engineering controls, trained personnel, and work methods that reduce the impact to the environment and protect workers from exposure to asbestos. Mitigation Measure G-4 In conformance with state regulations, all flaking and peeling lead-based paint shall be removed from structures proposed for demolition, and shall be handled, packaged, and disposed of as hazardous waste. The project shall comply with Cal-OSHA requirements to protect workers from exposure to lead. Requirements include worker training, proper hygiene practices, air monitoring and other controls. Birch Plaza Mixed Use Page 14 Mitigated Negative Declaration Significance after Mitigation: Less than significant. H. HYDROLOGY AND WATER QUALITY I Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Violate any water quality standards or waste discharge requirements? 1,8,9,12 x b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local 8,9 groundwater table level (e.g., the production 8-MapN2 rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? x c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial x erosion or siltation on-or off-site? 1,2,8,9, 12 d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or . substantially increase the rate or amount of surface runoff in a manner which would result 1,2,8,9, in flooding on-or off-site? x 12 i e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted 1,2,12 x runoff? f) Otherwise substantially degrade water quality? 1,2,12 x g) Place housing within a 1 ~O-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 1,12 x I h) Place within a 1 OO-year flood hazard area structures which would impede or redirect 8-x flood flows? MapN6, 12 i) Expose people or structures to a significant risk of loss, injury or death involve flooding, including flooding as a result of the failure of a 8-MapN6 levee or dam or being located within a lOO-year N8,12 x Hood hazard area? j) Inundation by seiche, tsunami, or mudflow? 8-MapN6 x .. Birch Plaza Mixed Use Page 15 Mitigated Negative Declaration The proposed residential and office mixed use project is consistent with applicable General Plan policies. Zoning The site is located on Birch Street, between Sheridan Avenue and Grant Avenue, and is proximate to the California Avenue Business District. The site has a zoning designation of Multi-family RM-40. It is also within the California Avenue Pedestrian and Transit-Oriented District (PTOD) designation, which makes the site eligible for the PTOD Combining District. The site has also been designated as a Housing Opportunity Site (HOS 8-06) in the Housing Element. HOS 8-06 was identified for high density housing with a maximum density of 40 dwelling units per acre. The existing RM-40 zoning designation allows for a small amount of neighborhood serving commercial uses, such as eating and. drinking services and neighborhood serving personal and retail services, as conditional uses as part of a single residential development containing at least 40 dwelling units. Although the project is proposing viewer residential units than the what was identified for the site as a Housing Opportunity Site, because the City has permitted more residential units than the 1,397 units identified in the Housing Element, the eight dwelling units requested to be part of this project would not adversely affect the total number of housing to be built within this Housing Element Cycle. The applicant is requesting to implement the PTOD designation to allow for a mixed use development with ground floor office space and eight townhome style condominiums above. The PTOD Combining District permits mixed use development where residential and non-resideQtial uses are combined and may include two or more the following uses: multi-family residential, retail and personal services, eating and drinking services, offices, general business services, business and trade schools, private education facilities, day care center, community center, commercial recreation and convalescent facilities. Prohibited uses consist of single-family and two-family uses, manufacturing, processing, warehousing and distribution, and research and development where hazardous materials are used or stored in excess of quantities less than the exempt quantities allowed by Title 15 of the Municipal Code. The PTOD Combining District, Section 18.34 of the Palo Alto Municipal Code (PAMC), is intended to allow for higher density residential dwellings on commercial, industrial and multi-family parcels within a walkable distance of the California Avenue Caltrain Station, while protecting low density residential parcels and parcels with historical resources. The combining district is specifically intended to foster densities and facilities that: 1. Support use of public transportation; 2. Encourage a variety of housing types, commercial, retail and limited office uses; 3. Encourage project design that achieves an overall context-based development for the PTOD overlay area; 4. Require streets cape design elements that are attractive to pedestrians and bicyclists; 5. Increase connectivity to surrounding existing and planned pedestrian and bicycle facilities; and 6. Implement the City's Housing Element and Comprehensive Plan. The project is consistent with the above because the site is within a 3-block walking distance of the California A venue Caltrain station. It is also proximate to bus stops along California Avenue and EI Camino Real. The, project includes a variety of land uses, office uses and townhouse style condominiums, which are compatible in an area that already provides a mix of housing and services. The project was designed to be consistent with the Context-based designed criteria required in the PTOD Combining District, including elements that are attractive to pedestrians and bicyclists. The project would provide attractive housing and uses that would benefit the immediate area and Palo Alto residents. All land uses are to be reviewed by the Planning and Transportation Commission and approved by the City Council at the time of a rezoning to PTOD. A subsequent Architectural Review permit is required for the building. The subsequent permit is subject to a final review by the Architectural Review Board to ensure that the overall design in compatible with the surrounding structures, aesthetically pleasing, and any potential aesthetic impact will be mitigated. The project will also be required to comply with the requirements of the PTOD Combining District Context-Based design criteria as outlined in PAMC Chapter 18.34.050. Birch Plaza Mixed Use Page 18 Mitigated Negative Declaration Mitigation Measures: None Required. J. MINERAL RESOURCES Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Result in the loss of availability of a known . mineral resource that would be of value to the region and the residents of the state? 1,2 x b) Result in the loss of availability of a locally- important mineral resource recovery site delineated on a local general plan, specific plan 1,2 x or other land use plan? D~SCUSSION: The project will not impact known mineral or locally important mineral resources. Mitigation Measures: None Required. K. NOISE I Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation , Incorporated a) Exposure of persons to or generation of noise x levels in excess of standards established in the 13 local general plan or noise ordinance, or 1,5 applicable standards of other agencies? b) Exposure of persons to or generation of x excessive ground borne vibrations or ground 1,5 borne noise levels? c) A substantial penn anent increase in ambient Ix noise levels in the project vicinity above levels 1,5 existing without the project? d) A substantial temporary or periodic increase in x ambient noise levels in the project vicinity above levels existing without the project? 1,5 e) For a project located within an airport land use x plan or, where such a plan has not been adopted, would the project expose people residing or working in the project area to 1,5 excessive noise levels? f) For a project within the vicinity of a private x airstrip, would the project expose people residing or working in the project area to 1,5 Birch Plaza Mixed Use Page 19 Mitigated Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact g) h) i) j) k) I) Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated excessive noise levels? Cause the average 24 hour noise level (Ldn) to 1,5 x increase by 5.0 decibels (dB) or more in an existing residential area, even if the Ldn would remain below 60 dB? Cause the Ldn to increase by 3.0 dB or more in 1,5 x an existing residential area, thereby causing the Ldn in the area to exceed 60 dB? Cause an increase of 3.0 dB or more in an 1,5 x existing residential area where the Ldn currently exceeds 60 dB? Result in indoor noise levels for residential 1,5 x development to exceed an Ldn of 45 dB? Result in instantaneous noise levels of greater 1,5 x than 50 dB in bedrooms or 55 dB in other rooms in areas with an exterior Ldn of 60 dB or greater? Generate construction noise exceeding the 1,5 x daytime background Leq at sensitive receptors by 10 dBA or more? DISCUSSION: The project site is located in an area with an existing noise level of 65 Ldn (24 hour average noise level). The project site is located within a mixed use area proximate to the California Avenue Business District and the California Avenue Caltrain Station. The site is surrounded by office uses and multi- family residences. It is adjacent to Birch Street, which is a busy thoroughfare. No noise impacts would be generated by the rezoning process. Construction. activities will result in temporary increases in local ambient noise levels. Typical noise sources would include mechanical equipment associated with excavation, grading and construction, which will be short term in duration. Standard approval conditions would require the project to comply with the City's Noise Ordinance (PAMC Chapter 9.10), which restricts the timing and overall noise levels associated with construction activity. Short-term construction that complies with the Noise Ordinance would result in impacts that are expected to be less than significant. Long term noise associated with the new building will be produced by mechanical equipment. There is no equipment proposed as part of this process. Future proposal of any outdoor noise producing equipment will require a subsequent permit application. Such equipment will be required to comply with all requirements of the P AMC. The project will be required to include noise control measures such as roof screens, operational controls, and the selection of quiet equipment. The City's standard conditions of approval will be applied to the project to ensure the construction noise and rooftop mechanical equipment noise impacts will be reduced to a level of insignificance: The project site is not located within an airport land use plan or within the vicinity of a private airstrip. A noise impact analysis was prepared by Charles M. Salter and Associates Inc. for the proposed project. The analysis studied the impact of rooftop and at-grade condensing units. The study concluded that it would be possible to reduce the impact of the equipment to a level that would meet the City's Noise Ordinance. Reducing the impact to a less than significant impact would require the installation of sound-isolating, sound absorbing barrier or enclosure for at-grade units. Roof mounted equipment will achieve the City's noise requirement if placed at least 20 feet from the residential property line. Birch Plaza Mixed Use Page 20 Mitigated Negative Declaration I Multi-family housing in the State of California is subject to environmental noise limits per the California Building Code for interior noise. The limit for interior noise is a maximum level of 45 decibels or dBA Ldn. When exterior noise levels exceed 60 decibels (dBA Ldn), a report must be submitted with the building plans describing noise control measures that have been incorporated into the design of the project to meet the noise limit requirements. A noise report by a qualified professional would be required with the Architectural Review application for the development of the site. The report must demonstrate how the new building will meet all City and State noise requirements. With the City's standard conditions of approval requiring implementation of the Palo Alto Noise Ordinance and any.recommendations of a new report, noise impacts from future development , will not be significant. Mitigation Measures: Mitigation Measure K-l All noise producing equipment placed at grade shall be include installation of sound-isolating, sound absorbing barrier or enclosure to reduce noise impacts to achieve the City's Noise Ordinance requirements. Mitigation Measure K-2 All roof mounted equipment shall be placed a minimum of 20 feet from the residential property line. Mitigation Measure K-3 A noise report prepared by a qualified professional shall be submitted with the Architectural Review application. Significance after Mitigation: Less than significant. L. POPULATION AND HOUSING Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact a) b) c) d) e) Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated Induce substantial population growth in an x area, either directly (for example, by proposing new homes and businesses) or indirectly (for 1,2,8 example, through extension of roads or other infrastructure)? Displace substantial numbers of existing x housing, necessitating the construction of replacement housing elsewhere? 1 Displace substantial numbers of people, x necessitating the construction of replacement housing elsewhere? 1 Create a substantial imbalance between x employed residents and jobs? Cumulatively exceed regional or local x population projections? DISCUSSION: The proposed rezoning and development will replace three existing homes with a mixed use development of commercial office space and eight residential units. California Sate Housing Element law requires that local jurisdictions provide their "fair share" of the region's housing needs. The Association of Bay Area Government (ABAG) has determined that Palo Alto will need to add significant numbers of housing units to meet State law and reduce the jobs housing imbalance. This project will increase the number of available housing Birch Plaza Use Page Mitigated Negative Declaration on site from three to eight units, while also adding about 10,257 square feet of office space. The project would be subject to the policies and regulations of the Below Market Rate Housing program, including the payment of in- lieu fees. Based on the size of the project, the project is expected to have a less than significant impact on population and housing. Mitigation Measures: None required. M. PUBLIC SERVICES Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact a) Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, re"sponse times or other perfonnance objectives for any of the public services: Fire protection? 13 x x Police protection? 13 Schools? 1 x Parks? 1 x x Other public facilities? 13 DISCUSSION: The proposed project site is located in a fully developed area of the City, where public services are already available. The proposed project would not impact fire service to the area and the site is " not located in a high fire hazard area. The conditions of approval for the project contain requirements to address all fire prevention measures. The site is located within the jurisdiction of the Palo Alto Police Department. The facility would not by itself result in the need for additional police officers, equipment, or facilities. No significant demand for school services would result from the project, which is not expected to generate a substantial increase in Palo Alto's residential population. No significant direct demand for additional parks would result from the project, which is not expected to generate a substantial increase in Palo Alto's residential population. The City's development impact fees would be imposed upon new development as applicable. Mitigation Measures: None Required. N. RECREATION Birch Plaza Mixed Use Page 22 Mitigated Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Would the project increase the use of x existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the 1 facility would occur or be accelerated? b) Does the project include recreational x facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the 1 environment? DISCUSSION: The small increase in the residences may add to the number of people using park services. The project is subject to Development Impacts fees for parks totaling approximately $338,952.66 which will provide for any additional demand on local parks from the new housing units. However, there will not be a substantial change to the demand of recreational services as a result of the proposed project. Mitigation Measures: None Required. O. TRANSPORTATION AND TRAFFIC· Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Cause an increase in traffic which is substantial in relation to the existing traffic x load and capacity of the street system (i.e., 6 result in a substantial increase in either the number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections)? b) Exceed, either individually or cumulatively, a level of service standard established by the x county congestion management agency for 6 designated roads or highways? c) Result in change in air traffic patterns, x including either an increase in traffic levels or a change in location that results in X substantial safety risks? d) Substantially increase hazards due to a x design feature (e.g., sharp curves or dangerous intersections) or incompatible 1,2 uses (e.g., farm equipment)? e) Result in inadequate emergency access? 1,13 x f) Result in inadequate parking capacity? 3,6,9 x g) Conflict with adopted policies, plans, or x programs supporting alternative Birch Plaza Mixed Use Page 23 Mitigated Negative Declaration transportation (e.g., pedestrian, transit & 1,8 bicycle facilities)? h) Cause a local (City of Palo Alto) intersection x to deteriorate below Level of Service (LOS) D and cause an increase in the average stopped delay for the critical movements by four seconds or more and the critical volume/capacity ratio (V /e) value to increase by 0.01 or more? i) Cause a local intersection already operating at x LOS E or F to deteriorate in the average stopped delay for the critical movements by four seconds or more? j) Cause a regional intersection to deteriorate x from an LOS E or better to LOS F or cause critical movement delay at such an intersection already operating at LOS F to increase by four seconds or more and the critical VIC value to increase by 0.01 or more? k) Cause a freeway segment to operate at LOS F x or contribute traffic in excess of 1 % of segment capacity to a freeway segment already operating at LOS F? 1) Cause any change in traffic that would -~ x increase the Traffic Infusion on Residential Environment (TIRE) index by 0.1 or more? m) Cause queuing impacts based on a x comparative analysis between the design queue length and the available queue storage capacity? Queuing impacts include, but are not limited to, spillback queues at project access locations; queues at turn lanes at intersections that block through traffic; queues at lane drops; queues at one intersection that extend back to impact other intersections, and spillback queues on ramps. n) Impede the development _ or function of x planned pedestrian or bicycle facilities? 0) Impede the operation of a transit system as a x result of congestion? p) Create an operational safety hazard? x DISCUSSION: The mixed use project site is located in a multi-modal area with access to major thoroughfares, such as EI Camino Real, Caltrain commuter rail system and buses (Valley Transportation Agency). The applicant is proposing a zoning designation change from high density multi-family residential to PTOD for a mixed use development with 10,257 sq. ft. of ground floor office use and eight.condominium units above. Based on a trip generation analysis for the use, the project will not create a traffic impact because it generates less than 20 peak hour trips. Projects that generate less than 50 peak hour trips are not required to submit a Traffic Impact Analysis report. The project will provide 18 regular parking spaces and up to 16 pairs of tandem parking spaces, which meets the required parking. The P AMC requires 42 parking spaces, with Director approved reductions for mixed use and proximity to transit. To qualify for the reductions, the applicant will be required as a condition of approval to submit a Transportation Demand Management Program to the satisfaction of the Director of Planning prior to the submittal of a building permit. The applicant has provided four of the required spaces at grade and 38 Birch Plaza Mixed Use Page 24 Mitigated Negative Declaration spaces in the garage for required parking. In the garage, the applicant is proposing 30 regular parking spaces and eight residential tandem spaces for the required parking. Transportation staff has some concerns regarding the circulation inside the parking garage. However, for the Architectural Review process, the applicant will be required to submit revised plans showing a garage layout that will ensure safe operations, to the satisfaction of Transportation staff. Mitigation: None required. ,/ P. UTILITIES AND SERVICE SYSTEMS Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Exceed wastewater treatment requirements of x the applicable Regional Water Quality Control Board? 1,12 b) Require or result in the construction of new x water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant 1,12 environmental effects? c) Require or result in the construction of new x storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental 1,8,12 effects? d) Have sufficient water supplies available to x e) f) g) h) serve the project from existing entitlements and resources, or are new or expanded 1,12 entitlements needed? Result in a determination by the wastewater x treatment provider which serves or may serve the project that it has inadequate capacity to serve the project's projected demand in addition to the provider's existing 12 commitments? Be served by a landfill with sufficient x permitted capacity to accommodate the project's solid waste disposal needs? 8,12 Comply with federal, state, and local statutes x and regulations related to solid waste? 12 Result in a substantial physical deterioration x of a public facility due to increased use as a result of the project? DISCUSSION: The proposed project would not significantly. increase the demand on existing utilities and service systems, or use resources in a wasteful or inefficient manner. Standard conditions of approval require the applicant to submit calculations by a registered civil engineer to show that the on-site and off site water, sewer and fire systems are capable of serving the needs of the development and adjacent properties during peak flow demands. Trash and recycling facilities are proposed in the project to accommodate the expected waste and recycling streams that would be generated by the expected uses within the project site. Birch Plaza Mixed Use Page 25 Mitigated Negative Declaration Mitigation Measures: None Required. Q. MANDATORY FINDINGS OF SIGNIFICANCE Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining x levels, threaten to eliminate a plant or animal community; reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major 1,5,12 periods of California history or prehistory? b) Does the project have impacts that are c) individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in x connection with the effects of past projects, 1,6,12 the effects of other current projects, and the effects of probab Ie future projects)? Does the project have environmental effects which will cause substantial adverse effects x on human beings, either directly or 1,4, 12 indirectly? DISCUSSION: The project does not have the potential to degrade the quality of the environment, substantially reduce the habitat or wildlife species, cause a fish or wildlife population to drop below self- sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal. The proposed project would not eliminate an important example of Ca1ifornia History. The project does not have impacts that are individually limited, but cumulatively considerable nor does it have substantial environmental effects which will cause substantial adverse effects on human beings either directly or indirectly. The project is located on an infill site and will not result in considerable effects to the environment, and therefore, would create less than significant impacts on the quality of the environment. When considered with other current projects and reasonably foreseeable future projects, the project is not anticipated to result in cumulatively significant impacts. Global Climate Change Impacts Global climate change is the alteration of the Earth's weather including its temperature, precipitation, and wind patterns. Global temperatures are affected by naturally occurring and anthropogenic generated atmospheric gases, such as carbon dioxide, methane, and nitrous oxide. These gases allow sunlight into the Earth's atmosphere, but prevent radiative heat from escaping into outer space, which is known as the "greenhouse" effect. The world's leading climate scientists have reached consensus that global climate change is underway and is very likely caused by humans. 20 Agencies at the international, national, state, and local levels are considering strategies to Birch Plaza Mixed Use Page 26 Mitigated Negative Declaration control emissions of gases that contribute to global warming. There is no comprehensive strategy that is being implemented on a global scale that addresses climate change; however, in California a muItiagency "Climate Action Team", has identified a range of strategies and the Air Resources Board, under Assembly Bill (AB) 32, has been designated to adopt the main plan for reducing California's GHG emissions by January 1,2009, and regulations and other initiatives for reducing GHG emissions by January 1,2011. AB 32 requires achievement by 2020 of a statewide greenhouse gas emissions limit equivalent to 1990 emissions, and the adoption of rules and regulations to achieve the maximum technologically feasible and cost-effective greenhouse gas emissions reductions. By 2050, the state plans to reduce emissions to 80 percent below 1990 levels. While the state of California has established programs to reduce greenhouse gas emissions, there are no established standards for gauging the significance of greenhouse gas emissions. Neither CEQA nor the CEQA Guidelines provide any methodology for analysis of greenhouse gases. Given the "global" scope of global climate change, the challenge under CEQA is for a Lead Agency to translate the issue down to the level of a CEQA document for a specific project in a way that is meaningful to the decision making process. Under CEQA, the essential questions are whether a project creates or contributes to an environmental impact or is subject to impacts from the environment in which it would occur, and what mitigation measures are available to avoid or reduce impacts. The project would generate greenhouse gases primarily through electricity generation/use and generation of vehicle trips. Efforts to reduce the project's greenhouse gas emissions by reducing electricity demand and reducing vehicle trips and miles, therefore, should be implemented. The proposed project would conform to the City's Comprehensive Plan and other policies to reduce vehicle trips and miles traveled, and encourage automobile-alternative modes of transportation (e.g., public transit, walking, and bicycling). The project is located within the California Avenue Pedestrian and Transit-Oriented District designation and is in close proximity to transit and services. Although greenhouse gas emissions generated by the project would cumulatively contribute to global climate change, to determine whether the proposed project would have a significant impact on global climate change is speculative, particularly given the fact that there are no existing numerical thresholds to determine an impact. However, in an effort to make a good faith effort at disclosing environmental impacts and to conform with the CEQA Guidelines [§ 16064(b)], it is the City's position that, based on the nature and size of this redevelopment project, its location within an established urban area served by existing infrastructure (rather than a greenfield site), the transit oriented nature of the project's nominal percentage increase in greenhouse gas emissions and the measures included in the project to reduce vehicle use, the proposed project would not impede the state's ability to reach the emission reduction limits/standards set forth by the State of California by Executive Order S-3-05 and AB 32. Over the long term, the expectation from regional planning agencies is that intensifying land uses near transit will lead to reduced dependence on the automobile and increased transit ridership. For these reasons, this project would not make a cumulatively considerable contribution to global climate change associated with greenhouse gas emissions. Based on the conceptual design of the project at this point, specific measures to reduce energy use have not been identified, apart from the project features related to increasing light rail transit use. Final measures to reduce energy use and emissions would be reviewed during the design review process. The project will be required to comply with the City's Green Building Regulations (PAMC Chapter 18.44). The project includes components that will offset the project's potential minor incremental contribution to global climate change. These include: • For buildings, require energy-efficient design such as that encapsulated in the Leadership in Energy and Environmental Design (LEED) Green Building Ratings. LEED standards are widely recognized benchmarks for the design, construction, and operation of energy efficient commercial and residential buildings (energy efficiency is only part ofLEED; a big part of the rating is also indoor air quality). Birch Plaza Mixed Use Page 27 Mitigated Negative Declaration • Require incorporation of transit into project design through considerations of siting, location, and transit linkages. • Require p.urchase of energy-efficient appliances and office equipment (Energy Star compliant, etc.). • Promote waste reduction measures and recycling (reduces cost to transport and dispose waste and energy associated with product manufacture). • Incorporate on-site renewable energy production (such' as solar installations on building rooftops) and water reuse. • In planning, promote mixed-use, compact, and higher-density development to reduce trip distance, promote alternatives to vehicle travel, and promote efficiency in delivery of services and goods. SOURCE REFERENCES -All reports used as sources and prepared specifically for the project should be listed by title/date 1. Project Planner's knowledge of the site and the proposed project 2. Palo Alto Comprehensive Plan, 1998-2010 (list specific policy and map references) 3. Palo Alto Municipal Code, Title 18 -Zoning Ordinance 4. Required compliance with the Unifonn Building Code (UBC) Standards for Seismic Safety and Windload 5. Various Technical Reports on project (e.g. Noise, Air Quality, Historic, Geotechnical, Biological analyses) 6. Project Plans, Birch Plaza, prepared by David Solnick, dated March 31,2009. 7. Arborist Report, prepared by s.P. McClenahan Co, Inc. 8. Hazardous Materials Studies/Phase lAssessments 9. Hazardous Materials Studies/Phase 2 Assessments 10. Alquist-Priolo Earthquake Fault Zoning Map 11. Palo Alto Tree Technical Manual, Municipal Code Chapter 8.1 0.030, June 2001 12. Departmental communication/memos such as Fire, Utilities, Public Works, Police, Planning Arborist, Real Estate, Community Services that address environmental issues. Birch Plaza Mixed Use Page 28 Mitigated Negative Declaration WE, THE UNDERSIGNED, HEREBY ATTEST THAT WE HAVE REVIEWED THIS INITIAL EV ALUATIONIDRAFT MITIGATED NEGATIVE DE CLARA TION DATED NOVEMBER 19, 2009, PREPARED FOR THE PROPOSED DEVELOP:MENT OF PROPERTY KNOWN AS BIRCH PLAZA, PALO ALTO, CALIFORNIA, AND AGREE TO IMPLEMENT ALL MITIGATION :MEASURES CONTAINED HEREIN. ~~5~ ;;; Applicant's Signature Court House Plaza Harold Hobach /1 II <I / D , Date Summary of Mitigation Measures Mitigation Measure D-l To assure the street trees will grow to expected size and life span, engineered soil mix base for new sidewalk will provide additional root growing area as compensation for proximity to podium structure limitations. ENGINEERED SOIL MIX (ESM). Engineered Soil Mix base material shall be utilized in specified areas to achieve normal shade tree rooting potential and maximum service life of the parking surface and curbs in parking and compacted areas. Plans and Civil Drawings shall use CPA Public Works Engineering Specifications, Section 30 and Detail #604, designate the areas with cross-hatch symbol, and specify a minimum of 24" depth. The technology should be counted toward any credits awarded for LEED certification rating. Mitigation Measure D-2 The existing mature street tree near the proposed ramp shall be carefully evaluated for custom safety measures or replacement according to the City Arborist requirements. Mitigation Measure D-3 To maintain the health of the tree, the following measures recommended by the Tree Protection Report, prepared by any e~cavation within the tree dripline shall be done by hand or air digging to a depth of 30 inches. Pruning of roots greater than 1-1/2 inches in diameter shall be supervised by a qualified arborist. Appropriate barricades shall be installed around the tree during construction. Preventive pruning of canopies to remove dead wood shall occur prior to construction. A program of fertilization for the tree shall be implemented in the spring and summer. These measures will be included as conditions of approval. Street trees would be protected to the satisfaction of the City Arborist, based upon the requirements of the City of Palo Alto's Tree Technical Manual and the City'S Tree Ordinance. Mitigation Measure D-4 An updated arborist report shall be provided with the Architectural Review application. Mitigation Measure G-l The proposed above ground building footprint shall not extend over the area of bore B4, as identified in the Phase II report prepared for the Birch Plaza Project. During the construction phase of this area, PID screening, inspection, and/or possibly sampling should be performed where elevated tricholorethylene (TCE) contamination in soil-gas was detected. If excavated soil is found, it should be appropriately screen, profiled and disposed of based on the result of the analyses. This work shall be performed by a qualified professional to the satisfaction of the City of Palo Alto. 1 Mitigation Measure G-2 Prior to the submittal of a building permit, indoor air intrusion risk modeling shall be prepared and submitted to the City for approval to alleviate regulatory concern about the potential for impacts from the one data point where soil-gas concentrations were above the regulatory environmental screening levels. Mitigation Measure G-3 In accordance with CallOSHA regulations, a registered asbestos abatement contractor shall be retained to remove and dispose of all potentially friable asbestos-containing materials (ACM) prior to disturbance during demolition activities. All ACM removal shall be undertaken in accordance with applicable regulations using engineering controls, trained personnel, and work methods that reduce the impact to the environment and protect workers from exposure to asbestos. Mitigation Measure G-4 In conformance with state regulations, all flaking and peeling lead-based paint shall be removed from structures proposed for demolition, and shall be handled, packaged, and disposed of as hazardous waste. The project shall comply with Cal- OSHA requirements to protect workers from exposure to lead. Requirements include worker training, proper hygiene practices, air monitoring and other controls. Mitigation Measure K·l All noise producing equipment placed at grade shall be include installation of sound-isolating, sound absorbing barrier or enclosure to reduce noise impacts to achieve the City's Noise Ordinance requirements. Mitigation Measure K· 2 All roof mounted equipment shall be place a minimum of 20 feet from the residential property line. Mitigation Measure K-3 A noise report prepared by a qualified professional shall be submitted with the Architectural Review application. 2 From: Sent: To: Cc: Roger Papler [RPapler@waterboards.ca.gov] Thursday, October 14, 2010 12:44 PM Lee, Elena French, Amy; Salazar, Matt; Vasudevan, Lata; Wolfenden, John Subject: Park Plaza and Birch Plaza I PA: Followup Response -5YR-Related Concerns Elena: Following up on a recent phone discussion with Amy French, we provide the following clarification to our recent email response to your urgent inquiry. The Regional Water Board approval of the submittals for the two subject sites will stand regardless of the future potential vapor intrusion investigation for the CDE plume. This is based on the following: -Site specific soil gas investigations were performed at both sites and for: --Park Plaza, acceptable mitigation measures were selected. --Birch Plaza, acceptable risk assessment was performed. Please contact us if you have any other questions. Respectfully, Roger W. Papler, P .G. San Francisco Regional Water Quality Control Board 1515 Clay Street, Suite 1500 Oakland, CA 94612 »> Roger Papler 10/14/2010 12:00 PM »> Hello Elena: Thank you for your inquiry and patience. Regarding the status of the current Five Year Review, USEPA and the Regional Water Board have directed HP to completely define groundwater plumes in all the water-bearing zones of concern to the Maximum Contaminant Levels (MCLs). We anticipate that this will probably be completed in about two years and will re-evaluate the need for vapor intrusion investigation at that time. We hope this helps and recognize the urgency of your situation. However, if the above does not completely answer your questions, we need to confer internally before responding. Respectfully, Roger W, Papler, P,G. San Francisco Regional Water Quality Control Board 1515 Clay Street, Suite 1500 Oakland, CA 94612 From: Sent: To: Cc: Roger Papler [RPapler@waterboards.ca.gov] Thursday, September 02, 20104:01 PM Lee, Elena John Wolfenden Subject: Birch Plaza / PA: Request -MND Comments Hello Elena: Thank you for your request to follow up with the City of Palo Alto on the lJulyl0 letter (Letter) that approved the October, 2008, Phase II Site Investigation Repott(Report) and the February 4, 2010, Results of Vapor Intrusion Model Screening [2010 Update] (VI RA). As indicated by our Letter, we approved the Report and VIRA. So we have no major comments on the Report or VI RA or the Mitigated Negative Declaration (MND) that was based on those two submittals. However, we suggest that the field personnel performing field screening of the proposed excavation subgrade use a photo-ionization detector (PID) with parts-per-billionlevel sensitivity. Only 1 part per million (ppm) equals over 5,000 micrograms per cubic meter (ug/m3) and the field screening is being performed to remove contaminated soils near the prior soil gas borehole where TCE in soil gas was detected at 6,400 ug/m3, exceeding our soil gas ESL of 4,100 ug/m3. Respectfu lIy, Roger W. Papler, P.G. San Francisco Regional Water Quality Control Board 1515 Clay Street, Suite 1500 Oakland, CA 94612 MAILING LIST Santa Clara Valley Water District ATTN: Mr. George Cook 5150 Almaden Expressway San Jose, CA 95118 City of Palo Alto Fire Departnlent ATTN: Mr. Gordon Simpkinson 250 Hamilton Avenue Palo Alto, CA 94301 Stellar Environmental Solutions ATTN: Mr. Richard Makdisi 2198 Sixth Street, Sutie 201 Berkeley, CA 94710 SECOR International ATTN: Mr. Mark Becker 2301 Leghorn Street Mountain View, CA 94043 Barron Parks Association Foundation ATTN: Mr. Bob G. Moss 4010 Orme Street Palo Alto, CA 94306-3136 gcook@valleywater.org gordon. silnpkinson@cityofpaloalto.org rmakdisi@stellar-environmental.com mbecker@secor.com bobgmoss@comcast.net ARNOLDSCHWARZENEGGER GOVERNOR December 24, 2009 Elena Lee City of Palo Alto 250 Hamilton Avenue, 5th Floor Palo Alto, CA 94303 Subj ect: Birch Plaza SCH#: 2009112067 Dear Elena Lee: STATE OF CALIFORNIA ING ANn RESEARCH CYNTHIA BRYANT DIRECTOR The State Clearinghouse submitted the above named Mitigated Negative Declaration to selected state agencies for review. The review period closed on December 22, 2099, and no state agencies submitted comments by that date. This letter acknowledges that you have complied with the State Clearinghouse review requirements for draft environmental documeilts, pursuant to the California Environnlental Quality Act, Please call th~ State Clearinghouse at (916) 445-0613 if you have any questions regarding the enviromn~ntal review process. If you have a question about the above-named project, please refer to the ten-digit State Clearinghouse number when contacting this office. cottMorgan ~ Acting Director, State Clearinghouse 1400 10th Street P.O. Box 3044 Sacramento, California 95812-3044 (916) 445-0613 FAX (916) 323-3018 www.opr.ca.gov ATTACHMENT 0 DEVELOPMENT STANDARDS DEVELOPMENT PROPOSED PROPOSED STANDARD PTODZONE DEVELOPMENT REQUIREMENTS i Minim um Site Specifications Site Area (sq. ft.) None required 19,862 sq. ft. Site Width (ft.) None required 40-85' Site Depth (ft.) None required 185.70-285.82' Minimum Setbacks Front Yard (ft) None required Building Setbacks Sheridan Ave.: 10' Birch St.: 7' Grant St.: 100' Rear Yard (ft) N one required 10' Side Yard (ft) None required 10' Total Mixed Use FAR 1.25: 1 1.25: 1 Residential Component FAR* 1.0: 1 0.73:1 Mixed Use Non-Residential FAR** 0.35 (0.25 for Office and 0.52 Research and Development Uses) Usable Open Space*** 100 sq. ft. per unit 138 sq. ft. per unit Minimum dimensions Private open space: 6' Meets requirement Common open space: 12' Meets requirement Maximum Height (ft) 40' 40' Residential Density (net)**** 40 dulac max. 17 dulac * The residential component of the mixed use may not exceed 1.0: 1. ** *** **** The non-residential component of a mixed use project shall not exceed 50% of the total square-footage of the project. Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space; (3) minimum private open space dimension 6 feet; and (4) minimum common open space dimension 12 feet. Residential density shall be computed based upon the total site area, irrespective of the percent of the si.te devoted to commercial use. ! ! Birch Plaza PROJECT DESCRIPTION and DESIGN INTENT 16 Nov 2010 ATTACHMENT E Submitted by Applicant The site is an assemblage of small existing parcels that will together create a 19,862 sf corner lot at Birch Street and Sheridan Avenue, with a small extension to Grant Street. We propose to change the current RM -40 zoning to PTOD, per the new California Avenue PTOD Combining District regulations. The proposed mixed-use project comprises eight 2-story townhouses above a ground floor office podium, with most of the parking underground. The townhouses are configured around two interconnected courtyards. The larger one is oriented toward and accessed by a partially hidden stair from Birch Street. The smaller one, with a southern orientation, is accessible from the quieter Sheridan Avenue. The office floor serves as a podium for the 'village' of townhouses above, with clear distinctions in massing and finishes between office and residential uses. Nevertheless, the two uses share just enough building vocabulary to read as a single project. The podium-level courtyards provide the residential component with generous outdoor common areas, which are intended to foster a sense of community in the project. With each unit also having its own private open space, the total usable open space is far in excess of the minimum required. The entries are configured in such a way as to allow residential users their own access via the two stairs, or a common access via the elevator, which serves the parking, office lobby, and podium right at the connection between the two courtyards. Even the mailbox location is intended to encourage a mixing of users. The proposal conforms with all FAR, setback, height, daylight plane, and parking requirements, with one exception. The new PTOD zoning includes a provision that the 1.25 FAR allowed for mixed-use can have no more than 0.35 FAR assigned to non- residential uses. As we developed the concept of ground floor office with residential above, we found that this ratio was insufficient to provide enough ground floor square footage to physically support the townhouses on top. One alternative would have been to reduce the residential footprint by making it three stories rather than two, thereby creating a 4-story project. Given the 3-story context, we considered this to be an undesirable alternative, an opinion shared by the Planning Director during our early meetings on the project. Another alternative would have been to introduce residential uses onto the ground floor. But because the parcel has most of its frontage on heavily- trafficked Birch Street, and because it is unusually shallow in depth (the result of an eminent domain taking when Oregon Expy was built and Birch was widened as an off- ramp), there was no place to locate the dwellings away from the busy street. Furthermore, this would create an awkward mix of office and dwellings in very close proximity on the same floor. PTOD zoning is new and hence not significantly 'field-tested'. Our first experiment here suggests that some design flexibility in the FAR ratios between the different uses would be beneficial, even as FAR limits are held firm. In our case, because the project will have more than 10% BMR units, this one exception would be allowed as a concession under state law SB1818, now codified as Section 65915. The eight townhouses on top of the podium range in size from 1470 to 1766 sf, plus one corner unit of 1936 sf. Given the size of the office podium, a design with more but smaller dwelling units would have made it impossible to provide the parking required by the parking ordinance, even with the reduction allowed by the mix of uses and the proximity to mass transit. In keeping with the intent of PTOD zoning, as well as our own design propensities, we have endeavored to create an engaging street experience for the pedestrian. This includes a variety of massing articulations, landscape diversity, high quality finish materials, entry canopies, and overhanging balconies. The sidewalk on Birch Street is currently located right next to the curb. We are proposing to move it away from the curb to conform to the configuration on both Sheridan Avenue and Grant Street. More importantly, it would provide a landscape buffer from the street that would be planted with a continuous row of sycamore trees, adding substantially to the existing trees on Sheridan and Grant. The underground garage contains a mixture of conventional and tandem parking spaces, as well as bicycle parking and storage. Given the shape of the parcel, the parking garage necessarily has one row of extra-deep stalls. These will be used to provide tandem parking beyond the parking required. The parcel's extension toward Grant Street serves perfectly as the garage ramp. Indeed, this is the only configuration of the parking that allows us to meet the requirements of the Parking Ordinance. Furthermore, this configuration has the considerable added benefit of providing a mini- park at the comer of Birch and Grant that will act as a resting area and a backdrop for public art. J(oli6acli CR§a{ty Company £imitea c.Partnersliip 29 Lowery Drive, Atherton, CA 94027 Tel: 650-322-8242 Fax: 650-853-0325 November 15, 2010 City Council RECEIVED City of Palo Alto 250 Hamilton Avenue NOV 15 2010 Palo Alto, CA 94301 Department of Planning & Re: Birch Plaza 08PLN-00182 Community Environment 2650 Birch Street Dear Council Men1bers; Hohbach Realty Company Limited Partnership (HRC) and its predecessor began acquiring the five lots for this Birch Plaza Project as early as 1966. After the last lot was acquired, HRC initiated the Birch Plaza Project in year 2000 under 00-PC-05 for a 20 unit three-story project requesting a zone change from RM-40 to PC and for and FAR of 2.2 where the RM-40 zone only permitted an FAR of 1.0. This zone change application was pursued through a preliminary review by the Public Art Commission and a study session of the ARB. Residents at 360 Sheridan Avenue objected to the project. Upon being advised by City staff that it would not accept an FAR of greater than 1.5, HRC' decided to hold the project in abeyance because such an FAR with only housing was uneconomlc. With the advent of the PTOD becoming available for this Palo Alto Housing Inventory Site, HRC decided to proceed with the present application. The present application seeks rezoning in lieu of the earlier PC. The PTOD permits a mixed-use development with an FAR of 1.25. HRC believes that this FAR for the proposed mixed- use provides an economically viable project. As pointed out above, an exclusively housing project with an FAR of 1.0 is not econon1ically feasible. This project is sited at one of the main entrances to Palo Alto - -the Birch Street off ramp from the Oregon-Page Mill Expressway. The blighted site at present is comprised of two vacant lots and three lots with small houses dating from the 1920's. These would be replaced with an artistically designed building with 50 below-grade and 4 at-grade parking spaces for a total of 54 parking spaces. This is only 6 less than required parking of 60 spaces without any allowance being given for a mixed-use project and its proximity to CalTrain which reduces the requirements to 42 parking spaces. The residents at 360 Sheridan Avenue are still objecting to the present project because of the lack of parking at their project, which only provides 19 parking spaces for 57 living units. HC should not be held accountable for this shortcoming. HRC provides n10re than adequate parking spaces for its Birch Plaza occupants. This Birch Plaza Project will not exacerbate the 360 Sheridan Avenue parking problem. HRC earnestly requests that the City Council approve the rezoning to PTOD. HRC has been paying taxes on these parcels for over 40 years. This may be the only opportunity for HRC to develop this site. Yours truly, Hohbach Realty Company Limited Partnership Hohbach Enterprises, Inc., General Partner Harold C. Hohbach, President Lee, Elena From: David Solnick [david@solnick.net] Sent: Tuesday, April 28, 2009 3:01 PM To: Lee, Elena Cc: Williams, Curtis Subject: Re: Birch Page 1 of 1 ATT,ACHMENT F '"""""~"~""" "~~~"~_'~' __ '___'_'""_""'~'_~"~~'""""_'""'W_'~~'_~o/_"_"~~~N~,~JN~!!~LI.?Y",Ap.Rlt~A!1l","" Weare requesting to retain the underground driveway approach at its currently proposed location on Grant Street. It is the only location that allows us to safely provide the parking required for this project. Access from Birch Street (option #1) renders the underground garage entirely unusable, except where the access is near the comer (see below). Access from Sheridan (option #2) results in a net loss of 12 parking stalls. Access from Birch Street near the comer of Grant (option #3) retains the same number of parking stalls, but puts the entrance near the comer of a much busier street; creates a driveway that curves sharply as it descends; forces cars from the ground level stalls to back onto Birch St; and eliminates the pocket park. ) ) 1fofi6acfi ~a{ty Company £imited(J>artnersfiip 29 Lowery Drive, Atherton, CA 94027 Tel: 650/322-8242 Fax: 650/853-0325 Curtis Williams Interim Director of Planning and Community Environment City of Palo Alto 250 Hanlilton Avenue Palo Alto, CA 94303 Dear Mr. Williams: Re: Birch Plaza Project 2650 Birch Street May 21,2009 I am writing this letter to confirm certain issues David Solnick, the architect for Birch Plaza Project, discussed with you on Apri121, 2009, in connection with the zone change application from RM-40 to PTOD heard by the Planning Commission on April 15, 2009. After hearing from condominium owners in the Birch Court Condominium Project, the Planning Commission in a 4 to 2 vote approved the Birch Plaza Project with the condition that the entrance to the underground garage be moved off of Grant Avenue. As pointed out during the meeting on April 21, 2009, moving the entrance off Grant Avenue is not feasible because it would in effect destroy the viability of the project. Moving-the entrance to Sheridan Avenue would remove 12 parking spaces , from the project. It would place more traffic on Sheridan Avenue which already has much more traffic than Grant Avenue. Sheridan Avenue in this block already services a seven unit apartment building at 303, 305, 307, 309, 311, 315 Sheridan Avenue, a 83 unit apartment project at 345 Sheridan Avenue, a 57 unit apartment project at 360 Sheridan Avenue, and the Jerusalem Baptist Church at 380 Sheridan Avenue Placing an entrance for the underground garage on Birch Street is also not feasible' because of the linlited space in a direction perpendicular to Birch Street to make a tum into parking spaces. Providing the access from Birch Street near the comer at Grant Avenue would save the underground parking but would create a driveway that curves sharply as it descends. In addition, this would cause cars ) ) parked at ground level stalls to back out into two lanes of Birch Street traffic which would be very dangerous. It also eliminates the small park along Birch Street extending to Grant A venue. Also, providing entrances on Sheridan Avenue or on Birch Street would substantially eliminate any use of the 305 Grant Avenue property in the Birch Plaza Project. In summary, the Grant Avenue entrance is the only viable entrance for the Birch Plaza underground garage. Any increase in traffic caused by the Birch Plaza Project is best borne by Grant Avenue which carries less vehicular and pedestrian traffic than Sheridan Avenue or Birch Street. A Statistics Request Report, attached hereto as Exhibit A, on Sheridan Avenue from the City of Palo Alto Police Department reports accidents from January 2000 to April 24, 2009 at the intersections of Birch and Grant and Sheridan and Birch. The report shows seven reported accidents on Sheridan Avenue for Sheridan and Birch and five on Grant for Grant and Birch. The report shows nineteen reported accidents for the Sheridan and Birch intersection and twelve on Grant and Birch for the Grant and Birch intersection .. The statistics support the placement of the entrance to the underground garage on Grant Avenue because it is safer than placing it on the more heavily traveled Sheridan Avenue. The traffic consultant for the project as set forth in Fehr & Peers letter of May 6, 2009, attached hereto as Exhibit B, also recommend that the access to the underground garage for project remain on Grant Avenue. The Grant Avenue entrance also makes it possible to provide a landscaped area along Birch Street which, along with the graceful Birch Plaza building fa9ade provides a noteworthy entrance into Palo Alto from the Oregon/Page Mill Expressway. F or these reasons we will ask the City Council to approve the recommendation of the Planning Comnlission except for the condition that the entrance to the underground garage be moved off Grant Avenue. Yours truly, Hohbach Realty Company Limited Partnership Hohbach Enterprises, Inc., General Partner ~~~ Harold C. Hohbach, President fp FEHR & PEERS TRANSPORTATION CONSULTANTS November 4, 2009 Ms. Elena Lee City of Palo Alto -Planning & Community Environment Division Mr. Rafael Rius 1 Ms. Ruchika Aggarvyal City of Palo Alto -Transportation Division 250 Hamilton Ave Palo Alto, CA 94301 Subject: Birch Plaza Mixed-Use Project Off·Street Parking Analysis Dear Ms. Lee/Mr. Rius/Ms. Aggarwal: The City of Palo Alto requires that a mixed-use project provide off-street parking according to each component land use. The project proposes a total of 42 parking spaces with 38 underground parking garage spaces and 4 at-grade parking spaces accessible from Birch Street. However, there are 16 tandem spaces in the underground parking garage for a total of 32 parking spaces. The City of Palo Alto Parking Code only permits 4 tandem spaces for a total of 8 parking spaces to be counted to provide parking for the project. Thus, there remains a total of 12 tandem spaces or a total of 24 parking spaces which are usable to provide parking for the project but can not be included in the 42 parking spaces identified above. For this project, the project applicant will assign one parking space to each residential unit. As shown in Mission Engineering, Inc. drawings 1 and 2 dated July 16, 2009 attached hereto, parking spaces 21, 23, 25,27,29,35, 37, and 38 would be assigned to these 8 residential units. All of the other spaces would be available for daytime use of the office and residential tenants. Of all of these "other spaces, the tandem parking spaces 19/20,31/32,41/42,43/44,45/46,47/48, and 49/50 would be assigned to office personnel who remain on the job and do not need in and out access during the day. Thus, 42 of the 50 underground parking spaces would be available for daytime use by tenants of the office area. The mixed-use project requires 60 parking spaces as shown in Table 1. Since only 38 of the 50 underground parking spaces can be counted under the City of Palo Alto Parking Code, these 38 spaces with the added 4 surface parking spaces gives a total of 42 spaces for a shortfall of 18 spaces. However, when all of the tandem parking spaces are utilized as pointed out above, there will actually be 12 additional parking spaces for a total of 54 available parking spaces, resulting in a projected shortfall of 6 spaces. Alternatively, considering the 60 space requirement, there are 54 spaces provided by the project, 50 underground and 4 at-grade, resulting in a shortfall of only 6 spaces without any consideration being given for shared parking. This pOints out an important fact that the parking spaces would be shared among the mixed-use components of the project that have different peak hour parking demands. Therefore, a shared parking analysis was conducted for the mixed-use development. The Urban Land Institute (UU) has published a guide to shared parking analysis that provides time-based parking demand rates for different land uses, Shared Parking, Second Edition (2005). 2990 Lava Ridge Court, Suite 200, Roseville, CA 95661 (916) 773~1900 Fax (916) 773·2015 WNW.fehrandpeers.com .Table 1 City Code Parking Requirements Required Land Use Size Rates Parking 2-Bedroom Apartments 3 2.00 6 3-Bedroom Apartments 5 2.00 10 Guest Parking (33% unit counts) 3 Research & Development Office 10.257 4.00 41 Total Parking Spaces Required 60 Source: City of Palo Alto Municipal Code, October 2007 Fehr & Peers, October 2009 Table 2 Parking Analysis.-ITE Requirements Required Land Use Size Rates Parking 2-Bedroom Apartments 3 2.50 8 3-Bedroom Apartments 5 3.50 18 Research & Development Office 10.257 3.50 36 Total Parking Spaces Required 62 Source: ITE Parking Generation, Third Edition, October 2004 Fehr & Peers, October 2009 -2- groundwater samples, TeE levels were less than the Regional Water Board's May 2008 environmental screening levels (ESLs) for vapor intrusion. TeE was not detected in any of the soil samples. The Report concludes that TeE in groundwater and soil gas (off-gassing from the groundwater) originated from the conlingled HPNarian plume emanating from 395 Page Mill Road (PMR). The Report recommends: • Avoiding construction of the building over the location of borehole B4 with the highest TeE level detected in soil gas. • Preparing a risk-based model to evaluate potential indoor-air vapor intrusion. VIRA The VI RA modeled the risk from potential indoor air vapor intrusion based on the Report findings and used the maximum TeE detection of 6,400 ug/m3. Based on the risk-based model, the VI RA concluded that the: • Potential cancer risk from vapor intrusion would be 4 x 10-7, less than one excess cancer case per million individuals. • Hazard quotient would be 7.7x 10-4, less than the threshold value of 1.0. Water Board Response The Report and VI RA satisfy Regional Water Board requirements. I hereby approve them and require no further action regarding site investigation. Please note that we do not agree with the Report statement that the source of the HPNarian plume is located at 395 PMR. The HPNarian plume sources upgradient from the site are located at 640 PMR and 601 California Avenue. The cited source at 395 Page Mill Road is located cross gradient from the site and the probability of that source impacting the site is extremely low. If you have any questions, please contact Roger Papler of my staff at (510) 622-2435 [e-mail rpapler@waterboards.ca.gov ]. cc: Mailing List Sincerely, Bruce H. Wolfe Executive Officer MAILING LIST Santa Clara Valley Water District ATTN: Mr. George Cook 5150 Almaden Expressway San Jose, CA 95118 City of Palo Alto Fire Department ATTN: Mr. Gordon Simpkinson 250 Hamilton Avenue Palo Alto, CA 94301 Stellar Environmental Solutions ATTN: Mr. Richard Makdisi 2198 Sixth Street, Sutie 201 Berkeley, CA 94710 SECOR International ATTN: Mr; Mark Becker 2301 Leghorn Street Mountain View, CA 94043 Barron Parks Association Foundation ATTN: Mr. Bob G. Moss 4010 Orme Street Palo Alto, CA 94306-3136 gcookal.{valleywater.org gordon.sitnpkinson@cityofpaloalto.org rmakdisi@stellar-environmenta1.com mbecker@secor.c01TI bobgmoss@corncast.net ) Site Information The project site is approximately 19,862 square feet in size, comprised of five parcels. The site is bounded by Birch Street, Sheridan and Grant Avenues, a three-story triplex on Grant Avenue and the Sheridan Apartments, three-story, multi-family development on the south side of the site between Sheridan Avenue and Grant Avenue. The site is located approximately 1,000 feet southeasterly of the California Avenue Caltrain station and approximately 650 feet southeasterly of California Avenue. The site is currently developed with three single family homes, none of which are considered to be historic. The project site is zoned RM-40, Multi-Family Residential district, designed to accommodate high density multiple-family residences ranging from 31 to 40 dwelling units per acre. RM-40 residential development containing at least 40 dwelling units may also include eating and drinking services, neighborhood serving personal and retail services, subject to conditional use permit approval. The site's land use designation is Multiple Family Residential, per the Palo Alto 1998 -2010 Comprehensive Plan. This land use designation includes a residential density range of 8 to 40 units and 8-90 persons per acre. The site is located in the Cal-Ventura Mixed Use Area, intended for diverse land uses, two-to three-story buildings, and a network of pedestrian oriented streets providing links to California Avenue. The site is also within the California Avenue Transit Oriented Residential designation on the Comprehensive Plan, and within the Pedestrian and Transit Oriented District (PTOD) Combining District. PTOD Combining District The purpose of the PTOD Combining District is to facilitate higher density pedestrian and transit friendly developments to take advantage of the proximity to public transportation and the California Avenue Business District, while also protecting nearby historic resources. The PTOD district specifically allows mixed use development, where residential and non-residential uses are combined, and can be applied to properties zoned R-l, CC(2), CN, GM, PF, RM-30 and RM-40 or with combining districts within the designated California Avenue PTOD boundary, as shown on the City's approved zoning~maps, consistent with the provisions of Chapter 18.08 and 18.80 of the Palo Alto Municipal Code (P AMC). Once the PTOD Combining District is implemented, the development regulations of the PTOD Combining District would be applied to a development project in lieu of any underlying zoning designation. If development standards such as height and setbacks are not addressed in the regulations, the Architectural Review Board (ARB) has the discretion to determine the appropriate standards within the context of neighboring sites and buildings. PTOD Process The rezoning of a site to the PTOD district may be initiated by the owner of an eligible property or may be initiated by a vote of the Commission or City Council. Rezoning applications to the PTOD district are processed in accordance with PAMC Chapter 18.80, the standard rezoning process. The Commission review and City Council approval establishes the allowable or required use limits, such as types and mix of uses, and intensity, including density and floor area ratio. Following Council's approval of a PTOD rezoning, an applicant can submit an application requesting architectural review approval for the new development. The development project would be formally reviewed by the Architectural Review Board in accordance with the City of Palo Alto Page 2 ) architectural review criteria and recommended to the Director of Planning and Community Environment pursuant to approval findings set forth inPAMC Chapter 18.76, and subject to the ARB finding the proj ect will be consistent with the PTOD Combining District Context Based Design Criteria (P AMC Chapter 18.34.050). Preliminary ARB Review A preliminary ARB hearing was held on August 7, 2008 for a review of the conceptual project design. The ARB was in support of the project concept and offered minor comments toward improvement of the design, such as strengthening the entries on Birch Street and softening the articulation. The ARB did not support use of a Design Enhancement Exception to allow the project to exceed the 0.25: 1 maximum Floor Area Ratio (FAR) for the non-residential portion of the proj ect. The ARB recommended reducing the amount of nonresidential square footage by incorporating a ground floor residential unit or replacing some of the office floor area with residential support uses. In response to this, the applicant has modified the proposal to request the FAR exception as an incentive under State Density Bonus law. Public testimony from two members of the public focused on the potential for contaminants to be found on (or under) the site and on the preliminary review process for the PTOD zoning applications. Minutes of the August 7, 2008 ARB meeting are attached to this report (Attachment F). Proj ect Description The proposed development is a new three-story office and residential building having a height of approximately 40 feet. A first floor podium, 10,257 square feet of ground floor office space, is intended to support eight, two-story townhomes on the two upper floors, providing 14,534 square feet of residential floor area in total, with a residential density of 17 units per acre. On-site parking facilities for 42 automobiles would be located both below-grade and at the surface, with a potential for ten extra tandem spaces. Two points for vehicular access would be provided. Ramp access to the garage would be provided from Grant Avenue. A second driveway would provide access to three surface parking spaces on the north side of the Birch Street frontage. The parking garage would provide 29 regular parking spaces, two ADA spaces, and up to eight tandem parking spaces (one for each unit), with up to ten extra tandem spaces ifneeded. Pedestrian access to the two ground floor office spaces would be provided from an elevator lobby located in the center of the site and from doors in each unit that would open up onto the Birch Street frontage. Access to the eight townhomes above would be provided from the central elevator lobby and stairwells on Birch Street and Sheridan Avenue. Individual entries to the townhomes would be accessed from the central courtyards. The two-story townhomes would include five three-bedroom units and three two-bedroom units. Two of the three-bedroom units would include a room on the first level that could be used either as a den or a fourth bedroonl. Common open space for residents would be provided through a courtyard on the second floor with two distinct areas. A small passive open space would be provided on the ground level along Birch Street, adjacent to the garage ramp. Balconies would be provided for each of the residential units. Storefront glass and stone/concrete tile fayade are proposed at the ground floor/pedestrian level. The residential component of the building would be differentiated from the commercial portion by the use of stucco and vertical yellow cedar walls, with wood trim dual-glazed aluminum windows. City of Palo Alto Page 3 ) ) DISCUSSION The Birch Plaza proposal is the second application the City has received requesting the California Avenue PTOD Combining District. In both cases, the projects are mixed use buildings adjacent to both non-residential and multiple family residential projects. prOD Zone Change Amendment The PTOD cOlTlbining district is specifically intended to foster densities and facilities that: 1. Support use of public transportation,' The project site is within a 3-block walking distance of the California Avenue Caltrain station. It is also proximate to bus stops along California Avenue and EI Camino Real. 2. Encourage a variety of housing types, commercial, retail and limited office uses; The project includes office uses and townhouse style condominiums, which are compatible in an area that already provides a mix of housing and services. The adjacent multiple family residential communities are a three-st,ory triplex and a three-story multi- family complex. 3. Encourage a project design that achieves an overall context-based development for the PTOD overlay area; and 4. Result in streetscape design elements that are attractive to pedestrians and bicyclists; The project design would be reviewed and potentially modified during the architecturaf review process. The project concept appears to be consistent with the Context-based designed criteria of the PTOD Combining District, including streetscape design elements that would be attractive to pedestrians and bicyclists. 5. Increase connectivity to surrounding existing and planned pedestrian and bicycle faCilities; The project plans currently include five-foot wide sidewalks connecting to existing sidewalks, but only underground bicycle parking facilities. The City regulations also require surface-level bicycle racks for visitors to the non-residential space. Bicycle parking requirements would need to be met in formal plans submitted for ARB review; adequate bike parking would help to increase bicycle connectivity. 6. Implement the City's housing element and Comprehensive Plan. The project would provide housing and non-residential uses that could benefit the immediate area and Palo Alto residents. Comprehensive Plan policies indicate that the actual permitted number of housing units can vary by area, depending on existing land use, proximity to major streets and public transit, distance to shopping centers and environmental problems. The plan notes that higher residential densities than what is permitted by zoning may be allowed where measureable community uses will be derived, services and facilities are available, and the net effect will be compatible with the overall Comprehensive Plan. The project, with a proposed residential density of 17 units per acre, is within the allowable residential density range for the site's Comprehensive Plan designation (8 -40 units per acre) and does not exceed the allowable density allowed within the underlying RM -40 zone district (31-40 units per acre). Comprehensive Plan policies supporting the project are cited in the attached draft ordinance (Attachment A). City of Palo Alto Page 4 The project is also within the Transit Oriented Residential designation in the Comprehensive Plan, which is intended to support densities that would support the use of public transportation, including the Caltrain. Proposed Land Uses Land uses proposed for PTOD projects are identified as items to be reviewed by the Commission and Council. The applicant has proposed land uses that are consistent with the PTOD Combining District in a vertically-mixed use building with ground floor office uses and upper floors providing a residential density of 17 units per acre. The proposed PTOD combining district allows higher density residential dwellings, including mixed uses, on commercial, industrial and multi-family parcels within a walkable distance of the California Avenue Caltrain station. It specifically fosters densities and facilities that encourage a variety of housing types, commercial, retail, and limited office uses. Allowed non-residential uses include retail, personal services and eating and drinking services. Other non-residential uses allowed, except on the ground floor where a Retail (R) combining district exists, include office, general business services, business and trade schools, private education facilities, day care center, cortnnunity center and convalescent facilities. The site is not included in an (R) combining district. Research and development uses are allowed only on sites where the underlying zoning district is GM and the use and storage of hazardous materials would be in quantities less than the exempt quantities allowed by Title 15 of the Municipal Code (Section 105.8 of the Uniform Fire Code). Compliance with Development Standards Attachment C outlines the project compliance with PTOD development criteria, and indicates that the project would be consistent with all development standards except one. The floor-area ratio (FAR) for the office portion of the project would be 0.52, where PTOD regulations would limit the office FAR to 0.25. The total FAR would, however, comply with the 1.25 FAR limitation. Density Bonus Law Concession to Exceed Maximum Floor Area Ratio The project includes at least 100/0 Below Market Rate units and therefore, the applicant can request one exception or "concession" per State Density Bonus legislation Section 65915 of the Government Code. This provision allows applicants to request and receive "concessions" as incentives from the appropriate decision making bodies for the construction of affordable housing. Incentives may involve exceptions to open space, height, parking, FAR or similar standards. The proposed project would include approximately 10,257 sq. ft. of office use, for a commercial floor area ratio of 0.52. The non-residential component of a mixed use project within a PTOD District is allowed a maximum floor area ratio (FAR) "cap" of 0.25. The project would exceed the cap by 0.27. The applicant's stated purpose in designing the larger non-residential FAR is to accommodate a large enough commercial ground floor to support eight two-story residences above. The applicant requests an SB 1818 "concession" to exceed the non-residential FAR cap that would otherwise require approval of a Variance. Parking Regulations The applicant is providing 42 total parking spaces, consisting of three surface parking spaces and City of Palo Alto Page 5 ) ) 39 garage spaces. The proposed parking spaces would meet the requirements ofPAMC Chapter 18.52, as indicated in the Table 1 below. The applicant is requesting application of two allowable parking requirement adjustments, permitted by PAMC Chapter 18.52.050. The two parking adjustments being requested are adjustments for joint use and housing near transit. The Municipal Code allows for combined parking adjustments for a maximum of 30%. Without the adjustments, the required parking would total 60 spaces. If the adjustments are granted, the proposed number of spaces would meet the revised required parking total of 42 spaces. The project also includes four pairs of tandem parking spaces, for a total of eight spaces, for the residential units. An additional ten tandem parking spaces would be available if needed. Table 1 Required I Reduction Revised Proposed I Conforms Proposed Per Total PAMe Residential 16 20% total for 12 12 Yes Two Joint Use spacesltlnit (30% 2 combined Guest spaces max) Office 42 20% for 30 30 Yes One space/250 Housing Near sq.ft. Transit (300/0 ! combined max) Total 60 30% 42 42 Yes combined max Context-Based Design Criteria Compliance Review The project must comply with the requirements of the PTOD Combining District Context-Based design criteria as outlined in Section 18.34.050 of the Zoning Code. The ARB purview includes design review of the project in reference to these criteria as well as ARB review criteria. The project features appear to conlply with the context based design criteria as follows: 1. The Combining district establishes a requirement for promoting pedestrian walkability, a bicycle environment and connectivity through design elements as well as street facades designed to provide a strong relationship with sidewalks and the street to create an environment that supports and encourages pedestrian activity. The project would include an attractive street fayade for pedestrians, via a five-foot wide sidewalk and five-foot wide planting strip adjacent to the curb with street trees across the entire frontage. The building was designed to provide pedestrian level interest with well- articulated walls, large store front windows and direct entrances to the office uses and the residential courtyards above. The site is not in an area zoned with a Retail (R) Combining District. 2. The regulations also require that the building be designed to minimize massing and provide for articulation and design variety. The project includes varied rooflines, canopies, decks and other architectural detail to break City of Palo Alto Page 6 ) up the building mass. The residential and commercial components utilize different materials to further break up the mass. Landscaping is proposed around the podium to soften the impact of the building. 3. Public and private open spaces are required so that they are useable to residents, visitors and employees of the site. . Both public and private open spaces have been incorporated into the design. Two large and open courtyards are provided on the second level for the residential units above. Each unit is also provided with large private patios/decks. The office units also have private south facing patios for employees. The courtyards and balconies that face the street increase "eyes on the street." 4. Parking needs to be accommodated and not overwhelm the character of the project or detract from the pedestrian environment. The majority of the parking spaces have been provided in the underground garage, away from public view. Three surface parking spaces are provided on the side. Green Building Regulations Compliance The applicant has prepared draft LEED New Construction and Multi-family Green Point Checklists (Attachment G). Based on the applicant's submittal, the;project would achieve 97.67 points on the GreenPoint Checklist and a LEED silver rating. Green building elements would include the use of low-emitting materials, high efficiency irrigation system, drought resistant plant species, passive solar heating, low-voc paints, and energy efficient equipment. POLICY IMPLICATIONS: The site is located within the Transit Oriented Residential designation in the Comprehensive Plan, which would be applicable to projects within walking distance (2,000 feet) from a Caltrain station. The land use category is intended to generate residential densities that support substantial use of public transportation and especially use of Caltrain. The proj ect, as proposed, is consistent with the Comprehensive Plan and zoning designations and would support the City's policy obj ectives for pedestrian and transit oriented development. TIMELINE Application submitted: ARB Preliminary Review Application deemed complete: CEQA public review period began: Comnlission hearing date: ENVIRONMENTAL REVIEW: June 10,2008 August 7, 2009 March 31,2009 April 6, 2009 April 15, 2009 A Mitigated Negative Declaration, which reviewed the environmental issues as required by the California Environmental Quality Act (CEQA), was circulated for a 20-day public review period from April 6, 2009 to April 26, 2009. A copy of the Mitigated Negative Declaration and Initial Study are provided as Attachment H. Staff has recommended mitigation measures pertaining to Biological Resources, Hazards and Hazardous Materials, and Noise, which would lessen potential impacts to a less than significant level. The conditions of approval and mitigation measures would be applied to the Major Architectural Review approval, not the zoning. City of Palo Alto Page 7 ) ) 1 Planning and Transportation Commission 2 Excerpt Verbatim Minutes 3 April 15, 2009 4 5 305 Grant Avenue, 2640 and 2650 Birch Street and 306 and 320 Sheridan Avenue*: 6 Request for a Zone Change from the existing RM -40 zoning to the California Avenue Pedestrian 7 and Transit Oriented Development Combining District (PTOD) Overlay District for this site, to 8 allow for a mixed-use development consisting of eight residential condominiums above 10,257 9 square feet of ground floor office space, below grade parking garage and related site 10 improvements. Environmental Assessment: An Initial Study has been conlpleted and a Draft 11 Mitigated Negative Declaration has been prepared in accordance with the California 12 Environmental Quality Act (CEQA) requirements. 13 14 Item Number 1 is 305 Grant Avenue and 2650 Birch Street and 306 and 320 Sheridan Avenue, a 15 request for a Zone Change from the existing RM -40 Zoning to the California Avenue Pedestrian 16 and Transit Oriented Development Combining District PTOD Overlay District for this site to 17 allow for a mixed-use development consisting of eight residential condominiums, about 10,2557 18 square feet of ground floor office space, below grade parking garage, and related site 19 improvements. Would the Staff care to make a presentation? 20 21 Ms. Elena Lee, Senior Planner: Thank you Chair, and members of the Commission. The 22 proposal before you is as request to rezone a multifamily residential site to PTOD to allow a 23 higher density pedestrian and transit-oriented friendly development to take advantage of its 24 proximity to transit and the California Avenue Business District. The site is located within the 25 PTOD boundary of California Avenue and therefore eligible for rezoning to PTOD. A copy of 26 this boundary map was included with the Staff report. 27 28 This is the second request for PTOD rezoning within the California Avenue PTOD Conlbining 29 District Boundary. The process for the PTOD Zoning begins with Commission review and 30 recommendation to Council for their decision on the rezoning request. The PTOD rezone will 31 establish allowable uses including the mix of uses and intensity and project features such as 32 density and floor area. Should the Council approve the rezoning, the Applicant could submit 33 development plans for Architectural Review Design by the ARB. 34 35 The project concept received a preliminary review by the ARB as encouraged by the PTOD zone 36 tax. The proposed 40-foot tall, three-story mixed-use building would have one level of 37 underground parking, four onsite surface parking spaces, approximately 10,000 square feet of 38 ground floor office space and eight two-story resident townhouse style units on the second and 39 third floors. 40 41 The project would be consistent with all Development Standards with one exception. Whilethe 42 project as a whole would meet the floor area ratio maximum of 1.251, the proposed 0.5221 ratio 43 of ground floor office would exceed the 0.25 maximal allowable ratio for office uses. The 44 Applicant requests the additional 0.27 ground floor office area as a Density Bonus Concession. 45 The project is eligible for the Density Bonus Concession through the State's Density Bonus Law 46 because the proj ect includes at least 10 percent below market rate units. Page 1 ) 1 2 The Applicant states that the larger office floor area, at the ground floor, is needed to support the 3 eight two-story residences above. An initial study and Mitigated Negative Declaration (MND) 4 has been prepared and circulated for a 20-day review period begimling April 6th• The public 5 review period ends April 26th• Mitigation measures for trees, noise, hazards and hazardous 6 materials were identified and accepted by the applicant. 7 8 Staff has received a few phone calls from the public on the proj ect, concerns were expressed 9 regarding design and not necessarily the rezoning and, subsequent to the delivery of the Staff 10 report packet, actually today, Staff did receive an email stating concerns about the project from a 11 Joe Vilario that was put at places this evening. Staff recommends that the Commission 12 recommend the City Council adopt the Mitigating Negative Declaration and approve the 13 rezoning request to allow the office and residential mixed-use project at this subject site. Staff is 14 available to answer questions. 15 16 Mr. Curtis Williams, Interim Planning Director: Chair Garber, I just have a couple head-on 1 7 conlments. 18 19 Chair Garber: Planning Director. 20 21 Mr. WilIams: I just wanted to note for the Commission that, as Elena mentioned, there is a 22 request here as a concession to allow an additional amount of office space. The way the PTOD, 23 Pedestrian Transit Oriented Development, District is structured, it allows up to 1.25 floor area 24 ratio for mixed-use, but not more than 2.25 of that is generally allowed to be office use. It's 25 allowed to go to 0.35 ifit's retail types of uses, and then the remainder would need to be 26 residential. In this case, they are asking for about 0.5 or 0.52 of office, and we actually think 27 that, in addition to the fact that there is a Density Bonus Incentive option here, there is probably 28 good reason for that in a couple of respects. 29 30 One is that with the concern that exists today for housing, this is actually a reduction in the 31 amount of housing units that could go on the site, and an increase to some extent in the office 32 use. 33 34 Also, I think we are finding as we distance ourselves a little bit from when the PTOD Ordinance 35 was adopted, that (and I know Commissioner Keller, in particular has kind of made this point 36 from time to time) providing employment near transit stations is important as well as housing, 37 and so in this case there is a little better balance of the employment and residential than the 38 PTOD generally would call for. 39 40 And then, the third reason I think you will hear from the Applicant, is just if you think about the 41 typical kind of mixed-use product that might come to mind, this is usually probably the first floor 42 being nonresidential and the second and third floor being residential. Well, if you kind of do the 43 math on that, that first floor is not going to be only 0.25 of a 1.25 total; it's going to be probably 44 at least a third of the three stories so you are going to have the ground floor with the 45 nonresidential, and that is at least a 0.4 or 0.45 or something like that. It does, and again in Page 2 ) 1 addition to the density law issues, there does seem to be some reasonable intent here as far as 2 making that request for the additional office space. Thank you. 3 4 Chair Garber: Does the Applicant have a presentation? You will have 15 minutes. 5 6 Harold Hollbach, Project Applicant: I'm Harold Hollbach. I'm of the Hollbach Realty 7 Company who is presenting this Birch Plaza Project to you. 8 9 I think all of you are familiar with the Birch Street off-ramp from Page Mill Road and Oregon 10 Express and Page Mill Road. I think it is one of the main entrances in Palo Alto. I think this is 11 an opportunity for us to address that issue and provide a good solution to this problem and giving 12 something that looks very good, I think, and you'll hear from the architect. 13 14 I would like to point out that we have owned some of this land since 1996, and paid taxes on it 15 all of these years, and we think this is the opportune time now to proceed with the proj ect. 16 17 I am here tonight with David Solnick, who is the architect, and also we have Richard Makdisi 18 with Stellar Environmental Solutions, Inc., to answer any environmental questions. He was 19 instrumental in preparing the environmental reports which you have before you today. Thank 20 you. 21 22 Chair Garber: Mr. Solnick, welcome. 23 24 Mr. David Solnick, Project Architect: Hi, I'm David Solnick, the architect on this project, and 25 one correction here for Harold. He has owned it since 1966, not 1996, right? Yeah. 26 27 As you know, this hearing is for rezoning from an existing RM-40 to a PTOD. The PTOD was 28 written to promote sort of a pedestrian friendly and particularly mixed-use design near transit. 29 The ARB was one of the bodies advising that, helping the Planning Staff in the writing of that, 30 and commenting on the writing of it. I was on the ARB at that time so I was quite familiar with 31 the intent of that zoning, so I feel like we bring that to the table in this. 32 33 It's a mixed-use project, as has been described. It has got an office on the ground floor and two- 34 story townhouses above. The townhouses are organized around two courtyards, one here and 35 one here, that face this open area of the property next door. The main entrance to the project is 36 here off of Birch which gives accesses to the offices as well as a stair that gets you up to the 37 courtyard, and that is part of the pedestrian-friendly aspect. to really make it very easily and 38 accessible to the street, for not only the offices, but also for the residents, so that it is sort of an 39 easy in and out and encourages people to walk as opposed to just taking the elevator, although 40 there is of course elevator access on the inside as well. 41 42 I do want to point out that we are not, andjust in followup to Curtis, I just wanted to make it 43 clear that there is no increase in the total floor area ratio (FAR) on this project over what is 44 allowed. It's only the proportion between office and residential. And it's a little harder to see on 45 this slide, so let me point out a couple more things on this slide. 46 Page 3 ) 1 There is also, as part of this proposal, a little pocket park right here which includes seating and 2 some public art. At this point, this is a placeholder. That hasn't been designed yet, but the 3 location is there. There is a little bit of surface parking and the rest of the parking is below 4 grade, as has been mentioned. 5 6 Also, right now, there are no street trees along here. The sidewalk is right up against the curb 7 and we are proposing to move the sidewalk away from the curb, creating a conventional planting 8 strip, which allows the planting of quite a number of new street trees all along this area, 9 enwrapping both comers, and I think that it's a total of about six new street trees. 10 11 This bottonl one here shows you the comer that you would see if you came off that off-ramp 12 from Page Mill. The intent is to do a little larger massing to sort of hold that comer and to have 13 something quite presentable at that comer which will be very visible and probably more for 14 people in cars than people walking. The other thing that you can start to see is you can see that 15 we've enlivened, and some of the elements in the PTOD zoning talk about enlivening the street- 16 scape, and we've done that with second-story balconies as well as the courtyard itself which 1 7 overlooks the street. We also, not only have the central entrance to the offices, but we also have 18 individual entrances from the offices, again, providing multiple entryways which tend to add 19 interest to the street as well. 20 21 These are a couple of little vignettes. This one shows you what somebody walking along Birch 22 Street might see. There is quite a lot going on in the design. This is the entrance in here, both to 23 . the offices and up to the courtyard up here for the residential, and you can see that courtyard 24 overlooks the street. This front courtyard overlooks the street. And this is a second entrance to 25 the residential off of Sheridan, which goes up to this second courtyard, which faces out to the 26 south and will get quite a lot of sun. 27 28 This is a little vignette showing where that pocket park is and, again, that is to be designed in its 29 detailing. This is the main entrance to the offices and then the stairs going up to the courtyard 30 above and overlooking the street. 31 32 A little vignette of the courtyard at the front which has a passageway to the second courtyard at 33 the rear. They are connected to each other and the courtyards. Really, part of the design here is 34 to give the residences a sense of community, that they are not just a series of row houses that 35 don't address each other, but are sort of divided into these two courtyards with about four units 36 each. The idea is that we are trying to develop sonlething beyond what you nlight get in just a 37 single-family dwelling that only addresses the street, but it addresses this sort of community 38 property as well. Here, you can just see these elements and how they are organized and planned. 39 This is the entrance off of Birch, the stair going up to the front courtyard, the passageway under 40 this, which goes to the rear courtyard, and then that has its own stairs going down to Sheridan. 41 42 There is also, and they are not shown here, but the offices have their own patios, one into this 43 yard and another over into this yard. You can see a little bit of surface parking and the pocket 44 park. There is the underground garage, and nothing terribly remarkable about it. We have met 45 the 42 parking spaces required with the reduction allowed for mixed-use. Actually, however, 46 there are extra spaces. You are only allowed to count a certain number of tandem spaces, and we Page 4 ) 1 had done the calculation in that way. However, we have added, and this parking does include 2 additional tandem spaces, which don't count officially but yet, of course, will be parking spaces. 3 So the total number of parking spaces, between this and the four up on the surface is 53, while 4 yet only, like I said, 42 actually count. 5 6 This is the ground floor, showing the two offices with the lobby, elevator and stair in-between. 7 The stairs and elevator are next to each other, again to encourage walking, and to encourage 8 people to walk even before they get to the elevator. 9 10 I think this is my last slide. This is just, again, showing the courtyards and how they might be 11 landscaped, water features for the front courtyard, and the rear courtyard. 12 13 Just one last word. In hiring us, I think Harold got something a little different than what he may 14 have bargained for. Of course, he hoped that we would help him get through the process more 15 easily and we obviously understood that from the beginning, but it turned out that there was 16 more to it. 17 First of all, as a condition of being hired, we insisted that he use the PTOD zoning, which you 18 may know was not used for the Park Plaza Project. This probably made that process more 19 d~fficult than it might have been otherwise. 20 21 More importantly, we designed a project that is very much in the spirit of the PTD zoning 22 regulations with elements that encourage walking to nearby services, enlivening the pedestrian 23 envirolllllent, and foster a sense of community among the dwellers. We hope you agree and we 24 look forward to your questions. Thank you. 25 26 Chair Garber: Thank you. Does that complete the Applicant's presentation? 27 28 Mr. Hollbach: Yes it does. The Environmental Consultant is here for any questions you might 29 have. 30 31 Chair Garber: Commissioners, I thought that we would go directly to Public Comment, and then 32 we would do questions and discussion after that, if you are agreeable to that. I'm seeing no 33 disagreement, so we will go immediately to the public. We have seven people speaking. The 34 first is Chloe Kamprath, to be followed by Mary Palmer. You will have three minutes. 35 36 Chloe Kamprath, 320 Grant Avenue: I guess what I am concerned about most is that I have 37 lived at Birch Court for over 25 years. I lived in Palo Alto for over 40, and I worry about not 38 maintaining a pleasant place to live, if we put in so many buildings that get high, and we don't 39 have light, and we don't have trees, and we don't have visible Open Space. I think that is going 40 to change. So, for me personally, the little pocket park helps my personal concerns, because I am 41 on the comer that looks at that, so personally I am okay there. But, the other thing that I am 42 concerned about is, as we come out of our garage (and I live on Birch, at Birch Court right across' 43 the street) it is very difficult coming up the driveway because of all the traffic. The traffic that 44 turns off of Birch, onto Grant, comes fast. You can hardly see them at times. So I think that is a 45 danger and a traffic issue. The other thing that is a major issue is the number of times that cars 46 get honked at as they try to cross Birch. So, they come down Grant and stop, presumably, start Page 5 ) 1 out, but when the cars are coming off of Oregon they come very fast and that is a tough place. 2 There are accidents there frequently and there are lots of horns honking, and so that's it. Thank 3 you. 4 5 Chair Garber: Thank you. Mary Palmer to be followed by Bob Brumma. 6 7 Mary Palmer, 350 Grant Avenue: Good evening. My name is Mary Palmer. I'm a homeowner 8 at 350 Grant Avenue. I am also on the Board of the Birch Court Condominium Association. I'm 9 Vice President. I am here this evening and I have three objections. The first one is that I object 10 to the exemption for the parking spaces because of the mixed-use zoning. You nlay not be 11 aware, but there is another project on the other side of our complex. It's at Sherman and Ash, 12 and that project is also going to be built up to four stories, and it is also asking for a parking 13 exemption for parking spaces. So Grant Avenue is already at full capacity. Our street and our 14 traffic congestion cannot absorb any more, so I am against/we are against the exemption. 15 16 Also, the second thing is the underground parking garage entrance/exit which is on Grant 1 7 Avenue. That is on Grant Avenue, but it is right at the comer where the stop sign is for Grant 18 Avenue and Birch Street. So you would come up Grant Avenue, you would stop sign, you'd be 19 almost right in front of the entrance/exit for the garage. And, again, I want to stress that this is 20 also a real safety hazard because we have a senior citizen complex that is going to be next to this 21 one, and the senior citizens walk across Grant Avenue as they are going to California Avenue, 22 and so if you are going to put a parking garage there, this is going to create a real safety issue. 23 24 The third thing is rezoning from residential to mixed-use. I've lived in my condominium since it 25 was built back in the 80s. I've seen the area grow. It has been largely high-density residential. 26 It has almost become sort of like a little village. We have a small little park there, and I think it's 27 called the Sara Wallace Park, and I just think that the mixed-use is not appropriate for this. It 28 impinges on the little residential neighborhood that has been developing. Weare also getting 29 more children in the area so I would ask you to please reconsider these things very carefully. 30 Thank you so much, and I have a petition here of homeowners objecting to these things. 31 32 Chair Garber: If you would give that to the Secretary that would be great. Thank you. Bob 33 Brumma followed by Curtis Schneider. 34 35 Bob Brumma, 330 Grant Avenue: I also live right across the street from where the driveway and 36 complex is going in. I've been in Palo Alto since '81 and in this complex since late '84, 37 something like that, so I share many of the concerns of the previous speakers, and I guess I'm 38 concerned about the combination of turning it into business and then bringing in more traffic to 39 an already very congested area, and I think the safety issues can't be over-emphasized. In fact, 40 you can check police records. We had a crash at that comer, I think in the last month or so. You 41 can check that. 42 43 So, I have tlus very high-quality photo here, but basically what we are talking about is the cars 44 are turning left off of Birch, and they come in here, and they are immediately going to make 45 another left turn, and probably are not able to tum in because cars are stacked up here trying to 46 cross the intersection that Mary just talked about. So my concern is, because we tum it into now Page 6 ) 1 a mixed-use, we are going to have more businesses. Depending upon the nature of the business, 2 they will be coming during the daytime, and yeah some will use the train or bus, but I would 3 wager the majority will drive in. They are going to park and continue blocking wheelchair 4 access ramps and other things because there is no parking, and I just fear that this left tunl, and 5 left tum, is going to just be a bad combination with accidents, honking and things. It would 6 make a lot more sense to bring the cars in off of Birch, or on the quieter street on the next comer, 7 because you don't have as many cars going both ways on that next block. So, some 8 considerations for you. Thank you. 9 10 Chair Garber: Thank you. Commissioner Holman, you had a question for the speaker. 11 12 Commissioner Holman: I do. Now that the visual is up here, do you want to use the pointer and 13 show us specifically what you are talking about? 14 15 Mr. Brumma: Okay, so I think one of the three speakers mentioned that there was a main exit 16 off of Oregon, so you come up here, and a little off picture here, you are going to make a left 17 tum, pretty busy, and then you are going to make a left tum again into the entrance here into the 18 underground parking. This is where cars are also coming down here, quite congested. I think 19 you are going to find that it's going to be very difficult for these cars to make that left tum, 20 particularly during the hours of7:30 to 9:00 or 10:00 in the morning. It's going to be quite a 21 mess. Then, also coming out, you are going to have similar problems later in the day, and so my 22 suggestion was right now this next block doesn't have quite as much traffic, and so from a traffic 23 flow standpoint it would be safer to have the cars coming in and out of this other side, and I'm 24 sorry I forget what that street is. They all start with S's on the east side, Sheridan. 25 26 Or another possibility, if you have good traffic control, and trying to slow this down, a good 27 thing to do, regardless of this complex, you could make right turns in and out of here to come 28 and go, and maybe you could put a break in here to allow cars to tum directly into there. But I 29 think that would be safer than the traffic jam of coming left tum, left tum, and trying to cross 30 cars that are backed up here. 31 32 You also see cars when you come out, and you will pull out to the right, and you want to cross 33 Birch Street and go down to Park to get back to the Oregon Expressway. I apologize, for my 34 pointer, but you basically go down the park, go down and you can cross over and loop onto the 35 Oregon Expressway, Page Mill and the other direction. I think you are going to find that this 36 continues to be a hazard. It already is, and again you can check the police records on the 37 accidents there. So that's my concern. Did that help? 38 39 Commissioner Holman: It answered the question, thank you. 40 41 Chair Garber: Gary Schneider to be followed by Harold Hollbach. Are you expecting to speak 42 again, Mr. Hollbach? Okay, to be followed by Richard Geiger. 43 44 Gary Schneider, Palo Alto: Hi, my name is Gary Schneider. I live across the street from the 45 proposed building also, and Ijust want to reiterate what everyone else has said that putting the 46 parking garage on Grant, at the entrance, would be a mistake. The courthouse is right across the Page 7 1 street. You have people driving up and down that street all day long, and having the entrance 2 right there at that comer would be very dangerous. It would be much better if it would be put, in 3 my estimation, on Birch. I would also like to reiterate that the parking in that area is very, very 4 difficult. We have lots of people that would like to come over and visit us that end up driving, 5 day and night, around the block, and around the block, and around the block, and sometimes it 6 can take them up to a half-hour and they finally get frustrated and go over on the other side of 7 California Avenue to park in that residential area, so it is a very congested area, and if you put an 8 entrance on Grant Avenue you are just looking for accidents to happen. So I'm just repeating 9 what everyone said. 10 11 Chair Garber: Richard Geiger. Did you want to speak on Item Number 2, Mr. Geiger? 12 13 Richard Geiger, 714 E. Charleston Road: Yes, both. 14 15 Chair Garber: You want to speak to both items, okay, very good. Thank you. After Mr. Geiger, 16 will be Herb Borock. 17 18 Mr. Geiger, Palo Alto: Richard Geiger, and I've owned over 10 acres on Page Mill Road since 19 1958, and I noticed somebody said when they owned land at this site we built a house on one 20 acre of a portion. It was zoned one acre at that time, on a one acre portion in the comer of the 21 land, and after building the house, the City came in and down-sold to ten acres for one house, 22 one main house, and just when I came here, I came to speak to the Open Space zoning, but I 23 couldn't help but comment on developments like this, compared to developments that are zoned 24 ten acres per housing unit. I wonder how many houses would be allowed if this was even zoned 25 a generous one acre per house, or how many would be allowed if it was zoned ten acres per 26 house. Our down-zoned ten-acre parcels have a 3.5 percent FAR, compared to a 100 percent 27 FAR for this site, and a 3.5 percent IC, which is impervious coverage, on 10 acres versus what 28 IC would be on this site, and even if ICs are considered on these high density projects. 29 30 Also, this is a transit-oriented development, and there is a question of why are parking spaces 31 even allowed when people can walk, walk to the train station, or walk to where their work is? I 32 just couldn't resist coming up here and making comments, and it doesn't look like there are 33 many trees allowed on this property. Only street trees in the front. We have a 200-foot setback 34 on Page Mill Road, and I don't know what the setback is on this. I didn't really study this. Ijust 35 walked in, and why there isn't at least a 20 or 30-foot setback in the industrial high-density areas 36 or residential high-density projects, so that some trees can be planted. Okay, I think that covers 37 that and I won't say any more on this, but it's just interesting to see a comparison of properties 38 on Page Mill Road, in one area of the town and near Page Mill Road, and in another area of the 39 town. 40 41 Chair Garber: Herb Borock to be followed by Lynn Chiapella. 42 43 Herb Borock, Palo Alto: Good evening, Chair Garber and Commissioners. I attended the 44 preliminary hearing at the Architectural Review Board and Mr. Moss pointed out that there are 45 hazardous waste monitoring wells directly across the street and that the aquifer is between 10 46 foot and 10.5 and 12 feet, and the TCE concentrations are 34 and 18 in those two wells, parts per Page 8 ) ) 1 billion, with a standard that is only 5 parts per billion. So there is a question of whether it is 2 appropriate to have the underground parking garage. I couldn't tell from the plans posted 3 whether the garage extends to the property line, as it did in the version at the preliminary 4 hearing. And there was concern from the board members that you wouldn't have sufficient soil 5 to support trees, if you were going to extend the underground garage that far. The Council knew 6 what it was doing just as any other legislative body is assumed to know what it is doing when it 7 set floor area ratio limits for offices, and there is an extensive legislative history of hearings as to 8 why that was done. A Bill in the legislature, SBA-18, is mentioned but that is just a Bill that 9 amends a Law. The Housing Density Law, I believe, is in government code section 65915, and 10 it asks municipalities to create standards for the concessions and for this Density Bonus, and the 11 only place Palo Alto has done that is in this particular zone, where it sets what the floor area 12 increase is for Density Bonuses, and that is the Density Bonus concession. That is the floor area 13 concession. You can't get a second floor area concession for office uses, so therefore it's 14 inappropriate because it is not needed for any economic reason, and secondly because it would 15 be a second bonus when you only get one, and then the only bonus is already in the regulations 16 for the zone district. 17 18 You should also be aware of what this applicant did with his project at 195 Page Mill. He came 19 in with Density Bonus concessions for one type of tenancy, tenant rental housing, and then later 20 came in with a map to create condominiums, for sale units. The Density Bonus law requires you 21 to chose whether you are doing rental or sale, and if they are for sale, they all have to be for sale, 22 and if they are rental, they have to be for the ternl that the City would normally have for 23 maintaining those rentals as rentals and as affordable units. There is nothing in the staff report to 24 indicate any of that, because the Mitigated Negative Declaration should be for the entire 25 project,which includes the BMR agreement, and you should tell us which of those units is the 26 BMR agreement. It's not mentioned in the staff report. Thank you. 27 28 Chair Garber: Thank you. Lynn Chiapella, and that's our last speaker of the evening. 29 30 Lynn Chiapella. Palo Alto: Good evening, I agree with what Mr. Borock said in terms of the 31 bonuses. This was zoned originally as an RM-40 which would have accommodated probably 32 twice as many residential units as are now proposed, so this is really a reduction in housing in a 33 city that is desperately needing housing and not more office jobs. We have many, many 34 vacancies in office buildings. We have lots of offices. We need more housing, not more offices. 35 So I don't believe that this Density Bonus is really justifiable and the 10 percent BMR, I assume 36 that means he is going to have one unit out of the eight will be a BMR. I actually didn't find any 37 enumerations showing how many BMRs. I'm sure it's in here somewhere in this multitude of 38 pages. 39 40 I will say the project is improved over what I saw at the ARB, which was really a catastrophe, 41 and this is a better project than it certainly was then. I do think that the parking is a severe 42 problem in that area, even though I know that PTOD nleans that everybody will use the bus. 43 They will all use trains, and nobody will have a car or drive. The only problem here is that it 44 hasn't worked out. Every area of town, and I don't care if you are south of California, north of 45 California, or whether you are in midtown, and I don't know if you are down near Greer Park, 46 but there is no parking, day or night, in these reduced parking residences and offices. Parking is Page 9 ) ) 1 a problem everywhere now. We would like to think everyone lives and works in Palo Alto, but 2 they don't. You have ajob in one town. You live in another town. That's just the way life has 3 dealt the hands here, and our prices are such that it will continue to be like that. But, even given 4 the parking they have provided, it's tandem parking. Now, this has been tried, and the Planning 5 Department is famous for its tandem parking, and I see this a lot where I live. Three tandem 6 spaces, none of them marked, so none of them used, because nobody knows who is parking in 7 what space. It's not assigned to any property, and these are just tandem spaces. It doesn't work. 8 Tandem spaces in locked parking garages. We have some samples off of California Avenue of 9 that. Nobody knows if anyone uses them. It was just a way of getting around paying for another 10 space in the public parking lot. So I do not think that the tandem spaces will provide the parking 11 that you think. You have a 22-car deficit for parking. It would be nice if everyone would not 12 drive, but this is not the reality of Palo Alto, so I think that you need to seriously take a look at 13 all of these issues that have been brought up, and see if you can justify 10,000 square feet of new 14 offices. Thank you. 15 16 Chair Garber: Thank you. That was our last speaker on this particular itenl. Commissioner's 17 questions? Commissioner Keller. 18 19 Commissioner Keller: Thank you. I have a few questions for you. There are buildings already 20 on this site? 21 22 Ms. Lee: Yes, there are three single-family homes onsite. 23 24 Commissioner Keller: So we would be losing three housing units and picking up eight, is that 25 the idea? 26 27 Ms. Lee: That's correct. 28 29 Commissioner Keller: And to what extent does it make sense, when you have a parking 30 reduction of the site proposed here, a 30 percent parking reduction, does it make sense to do 31 parking reduction and tandem parking? 32 33 Mr. Williams: Well, in this case, there isn't credit. I mean, there is a limit to how much the 34 tandem parking is credited. What Mr. Solnick, in particular, was pointing out was that there are 35 additional spaces provided through tandenl parking, above and beyond what is required after that 36 30 percent reduction. Those additional tandem spaces are available, but they are not counted as 37 part of the 42 required spaces. 38 39 Commissioner Keller: I'm a little confused, looking at the Sheet 4, where it appears that several 40 of these spaces, of the required spaces, in fact, are tandem spaces. I don't quite understand your 41 answer. 42 43 Ms. Lee: That's correct, some of the residential required spaces are tandem, but what Curtis is 44 saying, and what David has mentioned, is that there are additional tandem spaces that are 45 provided that aren't marked as required parking. All the parking spaces, if you are looking at Page 10 ) 1 Sheet 4 (to the right) those marked with a T, those are additional spaces that are available but 2 have not been counted as part of the required parking. 3 4 Commissioner Keller: Although I noticed that two of the nonresidential ones, the 35 and 36, 5 appeared to at least not be labeled as being for a predictable unit, and those are tandem as well. 6 Let me leave that at that. 7 8 To what extent is PTOD zoning a discretionary act? 9 10 Mr. Williams: Well, it is a rezoning, so it is a discretionary action. The PTOD District was 11 created and essentially indicated that this is a boundary area within in which this type of use is 12 generally appropriate. However, there was a desire to look at the specifics of the use and 13 intensity when they came through, less so that the designers felt comfortable with that before 14 changing the zoning to PTOD, but it is a rezoning so it is a discretionary act like any other 15 rezomng IS. 16 1 7 Commissioner Keller: So, hypothetically, because PTOD does include some Density Bonuses 18 along with the PTOD, could we condition PTOD zoning, just as a hypothetical situation, on not 19 allowing a further Density Bonus under SB-1818 or whatever the State Housing Density Bonus 20 Law? Could we say, we will give you PTOD only if you only do not have further Density 21 Bonuses, and if you want those Density Bonuses, you've got to be under RM -40? 22 23 Mr. Donald Larkin, Assistant City Attorney: Well, possibly, but that doesn't really get you 24 where you want to go because one of the issues is that under the Density Bonus Law, we are 25 required to allow mixed-use. They could build it, probably the same project with the existing 26 zoning, but you would lose a lot of the PTOD features that I think you are looking for in terms of 27 walk-ability, accessibility and transit-oriented development. You could end up with something 28 far worse iri'terms of design, so it may not accomplish what you are trying to accomplish. 29 30 Commissioner Keller: Does that mean that under SB-1818 somebody could use an unlimited 31 amount of Density Bonus on 1818. Suppose they say, I want to violate the amount of FAR, 32 could they have unlimited amount ofF AR, or is there some discretion on how much they can 33 allow? 34 35 Mr. Larkin: It has to be related to the BMR Housing, so it wouldn't be unlimited FAR. 36 Generally, we limit the FAR bonus to the amount of FAR that is required to build the BMR 37 housing. In this case, it's a little different because they are not asking for an FAR bonus to build 38 more housing. They are asking for an FAR bonus to build less housing and more commercial. 39 40 Commissioner Keller: And to address the question that was addressed by one of the members of 41 the public, is this rental or for sale? Do we know that and also do we know exactly how many 42 BMR units there will be. 43 44 Ms. Lee: The applicant is proposing eight units for sale and per our requirements for 15 percent 45 BMR units, one would be a BMR unit and the remainder would be in lieu of fees. 46 Page 11 1 Commissioner Keller: Basically, what is happening is the Applicant is getting 0.27 FAR for 2 creating one BMR unit. That's interesting. 3 4 Mr. Larkin: Just to clarify. They are not asking for it, and our Code addresses an overall FAR 5 bonus. They are not asking for an overall FAR bonus. They are only asking for an FAR bonus 6 to limit the housing and increase the commercial, so the alternative would be placing a housing 7 unit on the ground floor which is not probably beneficial at this location so that was one of the 8 reasons that we determined that the FAR bonus for commercial was actually appropriate in this 9 circumstance because it's not feasible to put the housing on the ground floor at this location, so 10 what you would end up having is basically just a big hole underneath that housing. 11 12 Commissioner Keller: Thank you, I will go to the next person. 13 14 Chair Garber: Thank you, just a quick followup. They are asking for 0.27 FAR in lieu of 0.25, 15 correct? 2.52. Thank you. Commissioner Fineberg and then Vice-Chair Tuma~ 16 17 Commissioner Fineberg: Clarifying question. The first two members of the public that spoke, I 18 believe they said they lived on Birch Court. Could we have a map of the area, and could you 19 show me where Birch Court is located? Thanks. Okay, so it looks like it's in our packet as 20 Attachment H, and I would just like to know where Birch Court is. 21 22 Ms. Palmer: Birch Street, Grant Avenue, all the way to Ash, although part of that area becomes 23 a public park. 24 25 Commissioner Fineberg: Chair Garber, if I might, there is a map in our packet. If we could put 26 the map up here and then have the pointer used, it would really be helpful. It's Attachment H in 27 our packet, so we can see. 28 29 Chair Garber: And, Ms. Palmer, yes you have a laser pointer. 30 31 Ms. Palmer: I'm going to have to look at the diagram here. That's Sheridan. This is Birch, is 32 this right? Right, so this is Birch. That's Sheridan, right? So we are Birch, Grant, Ash and 33 Sherman. Now, part of our unit, our unit actually kind of goes and just follow this. It goes 34 straight down, across, up and there. This building here is the new Sherman Building Project, the 35 four-story building that is going up. This is a little public park here, and so this project you are 36 talking about is right here, so we are right here, and this is right here, okay? Everybody got that? 37 38 Commissioner Fineberg: Thank you so much. Okay, my next questions are for Staff. I'm a 39 little confused about why the State Density Bonus applies in this particular project ifit is related 40 specifically because it is PTOD, or because there is a BMR unit. Why is it kicking in when we 41 haven't seen it in other projects? 42 43 Mr. Larkin: Because it's the Applicant's burden to ask for Density Bonuses, and most applicants 44 haven't, but any proj ect that is actually building BMR units to our Code is going to be eligible 45 for one incentive or concession. State Law does not require BMR housing. We attempted, when 46 we did the PTOD Ordinance, to create some limits on the use of the concessions so that it would Page 12 ) ) 1 have to be BMR units above and beyond what are already required to be provided, but the state 2 law has been amended to preclude us from doing that. 3 4 Comnlissioner Fineberg: But relative to Comnlissioner Keller's questions, there is some 5 relativity between the BMRs granted and the concessions that are granted. Do we know, then, 6 what the square footage is of this extra 0.25 versus the square footage of the BMR unit, either in 7 square footage or value. 8 9 Mr. Larkin: I think they know that and if they are asking for FAR for housing, we've determined 10 that the actual FAR has to nlatch the FAR of the housing. In this case, it's really a question of is 11 the extra FAR needed to support the housing. In other words, if they lost the FAR for the 12 commercial, would they be able to build the BMR unit. The answer is possibly, but I think that 13 what we determined was that having the commercial space on the ground floor supported the 14 housing from the above, and it doesn't necessarily have a direct relationship, but I think we can 15 answer what the square footage works out to. 16 1 7 Ms. Lee: The average unit sizes range fronl about 1400 square feet to about a maximum size of 18 1936, and then I think the extra 0.25 comes out to be about 4000 square feet, 0.27/4000 square 19 feet. 20 21 Commissioner Fineberg: So more than double than the square footage of a single unit. Okay, I 22 want to tum my questions to a little bit about the purpose of the PTOD. I'm looking at our 23 Attachment E, Page 1 of Chapter 18.34, and it says that the "California Avenue PTOD 24 Combining District is intended to allow higher density residential dwellings on commercial 25 industrial and multifamily parcels within a walk-able distance to California Avenue's Caltran 26 station." It continues, and that is all I'll read. 27 28 I'm focusing on the purpose of the PTOD is intended to allow higher density residential 29 dwellings, and I'nllooking at a parcel that, if it is five parcels with five units, we get five, but we 30 are getting a yield of eight. I'm wondering what yield of residential dwellings would we get if it 31 conformed to the underlying RM-40, and if instead of being office, it was neighborhood-serving 32 retail. Would we actually better serve the purpose of the PTOD District with RM-40 zoning? 33 34 Mr. Williams: Developing this site under RM-40 zoning would allow about 18 units to be built. 35 I think that's a consideration, and the higher density doesn't necessarily nlean higher than the 36 maximum that you could achieve under existing, but it means the not low-density housing and 37 then the opportunity for mixed-use. Then there are other items under here about a variety of 38 housing types, commercial retail and limited office uses. The neighborhood-serving retail, the 39 applicant has not proposed that, and we obviously cannot require them to do that unless they are 40 willing to proceed with that. I am not sure if you had that, then you may be having less 41 residential than those 18 units. The FAR, at least, the units could be potentially the same. The 42 floor area for them would probably be less if you had certainly if you had the entire first floor as 43 a retail use, and then you'd cut back considerably on the FAR, because you would then be back 44 to a similar FAR, which is somewhat less than the RM -40 would allow for all the residential 45 units. So, it's that tradeoff. Again, I think that it's important to remember or look at whether 46 you feel like it's, and you know we hear over and over the concerns about additional housing, Page 13 ) ) 1 and now tonight you've heard, well there should be more housing and not retail. So I think it's a 2 balancing situation. We do have a lot of residential in that area. It's two blocks or less than two 3 blocks from California Avenue, so having offices that are accessible to California Avenue makes 4 sense, but that is ultimately the kind of land use determination that is before the Commission. 5 6 Commissioner Fineberg: And my last question relates a little bit to the benefits the City would 7 get. Our attorney mentioned the benefits of zoning under PTOD and how it would make it more 8 walk-able. I am missing how that would work. Would there be such differences under RM-40 9 that somehow it would be less walk-able, or what benefits and what zoning control do we get by 10 being PTOD? 11 12 Mr. Williams: Well the PTOD has a number of criteria in there as far as frontage types and so 13 there are some very pretty specific guidelines for how to do that and ways that are pedestrian- 14 friendly. Now, there is not anything necessarily prohibiting the ARB in its review from 15 imposing those kinds of requirements, even though it's not PTOD. I mean, I think the ARB 16 certainly wants to make any street in this kind of area pedestrian-friendly. For the most part, you 17 are probably going to get the most of that, but here it is that they are prescribed standards in the 18 context-based design section for that which might not pertain if it were solely even multi-family 19 zoning. 20 21 Chair Garber: As a follow to that, there is far less discretion and opportunity for the Planning 22 Commission, by way of example, if this proj ect were just submitted under RM -40 and we may 23 not even see the proj ect. 24 25 Mr. Williams: That's correct. If you were/ifthis project was proposed as RM-40, it would go to 26 the Architectural Review Board and that would be the end of the process unless either variance 27 were requested that the Commission would have to see, or if it were appealed and then Council 28 would see it, but the Commissioner would not see that. 29 30 Chair Garber: As just a brief reminder of the history of the PTOD: When it came through the 31 Commission, the great opportunity of utilizing the PTOD as an overlay district in this particular 32 area is that it allows for us to begin to build back an architectural character to the neighborhood 33 that has been intermittent at best and create a continuity that normal zoning would not allow us 34 to have that opportunity to direct and encourage. 35 36 Comnlissioner Fineberg: Am I correct, though, that if we recommend it, and the zoning is 37 changed to PTOD, it does not come back to Planning and Transportation? And so it's still 38 ARB's design and adoption or recommendations to adopt the Negative Declaration. 39 40 Mr. Williams: The design is, but the uses, the parameters of the uses, the density and that kind 41 of thing are determined by the Commission and Council, and that is actually spelled out in the 42 Zoning and Rezoning Ordinance, and then the design goes through the ARB process. 43 44 Chair Garber: Should the Commission recommend the use of the PTOD District, here, it would 45 give the ARB the opportunities to use the context-based design criteria as a way of making their 46 findings. Did you have other questions? Okay, Commissioner Keller, you had a followup. Page 14 ) 1 2 Commissioner Keller: A quick followup. Commissioner Fineberg asked how many dwelling 3 units would there be under RM-40, and it was mentioned that it would be a nlaximunl of 18. 4 What would be the minimum number of dwelling units allowed under RM -40, because I 5 understand that there is required to be at least somewhere between 31 and 40 units per acre, so 6 what would that come out to be? 7 8 Mr. Williams: There is not a requirement for that. I think it's shown in the Comprehensive Plan 9 or in the Purpose Statement, that it is sort of an intent, but there was considerable debate about 10 whether to have mininlum densities and they were dropped from the Ordinance. There was 11 never a minimum density imposed in any of the multi-family districts, but in the Comprehensive 12 Plan ... so here it is. It says that "permitted densities," and this is just a Purpose Statement in the 13 RM -40 District range from 31-40 dwelling units per acre, but then it was taken out of any 14 requirements in here as far as the actual standards because of concerns about prohibiting lesser 15 densities and having a particular site overloaded with density even though this range might have 16 been specified in the Ordinance as being a minimum. So 31 would work out to be 13 or 14. 17 18 Commissioner Keller: Thank you. 19 20 Chair Garber: Vice-Chair Tuma, followed by myself and then Commissioner Rosati. 21 22 Vice-Chair Tuma: My first question relates to Attachment D which is entitled "Birch Plaza 23 Project Description and Design Intent." I guess my initial question is, whose document is this? 24 25 Mr. Williams: It's the Applicant's document. Under the attachments, we've got an asterisk next 26 to that item that says "prepared by Applicant." 27 28 Vice-Chair Tuma: Okay, but again we have repeatedly requested that these be marked on the 29 document themselves as to who they come~from. It's a little less confusing that way. 30 31 On the bottom of the first page of that document, on the left-hand side, it says that an "ancillary 32 consequence of the larger ground floor is an increase in the site coverage to 55 percent where 45 33 percent is allowed." Is that statement still accurate? 34 35 Chair Garber: Staff, and then we will go to ... would you like the Applicant to speak first, or? 36 37 Mr. Williams: This was relative to site coverage. I think that's comparing it to the multifamily 38 standard. I don't believe that we have specific criteria for coverage in the PTOD. 39 40 Chair Garber: Mr. Solnick. 41 42 Mr. Solnick: We were initially under the misconception that the RM-40 site coverage governed 43 this, and that turned out to be wrong, and so that Design Intent was written for the preliminary 44 ARB application. Since that time, we've discovered that there is no exception being requested 45 here for site coverage, so that is really not relevant. 46 Page 15 \ } ) J 1 Vice-Chair Tuma: Okay, that clarifies it, thanks. Question for Staff. To what extent in the 2 discussion and decision-making process that we are going through this evening should we be 3 taking into account the issue of traffic flow and entrances and that sort of thing? I nlean, are we 4 looking specifically at this project, or are we looking more at whether changing to the zoning is 5 appropriate? 6 7 Mr. Williams: It is changing to the zoning, but there is a Negative Declaration associated with 8 this. We have looked at generally the site layout where there will be additional Environmental 9 Review done for the project, itself, when it goes to the ARB. They would have to be sure that all 10 of the details at that point in time have been complied with. We have some mitigation measures 11 here, but there is even a layer deeper than that, at the ARB, that will be looked at in terms of the 12 Environmental Review. We have looked at the location of the driveways in that. If that is of any 13 concern to the Commission, it is certainly something that you could direct that we look at, as it 14 goes to ARB for more detail, and incorporate further into that and the Environmental Review. 15 16 Vice-Chair Tuma: Okay, thanks. A question for, and I think it's for the City Attorney. There 17 was some discussion, or sonle con1fl1ents, made by a couple of the speakers about, in this case, 18 the Applicant seems to be double dipping on the Density Bonus. Could you address that issue? 19 20 Mr. Larkin: And I think there is some confusion, too, because as I mentioned earlier, when we 21 did the PTOD Ordinance, at the time we prepared this Ordinance, our thought was that we could 22 preclude people from using the Density Bonus if they were only providing the minimum BMR 23 total that we would require and already require in our Inclusionary Housing Ordinance. The 24 State Law has been clarified to basically preclude us from doing that, in that as long as 10 25 percent of the units provided are below market units, they are entitled to one of the incentives or 26 concessions. Those concessions are spelled out in type, and not in amount. In the State Law, 27 although the State Law also includes this, it is not limited to this. There are probably 28 conceivably other things that could be requested as a concession. And in this case, the requested 29 concession was for an increase in FAR for the commercial property which, in our experience, it 30 has been somewhat unusual and we haven't had this. Usually, the request comes for an increase 31 in the residential property as the FAR bonus, and it's easier to calculate in that sense because, 32 obviously, you can't request more FAR than BMR units that are being added, because in this 33 case it's commercial FAR. It's just what is reasonably related to supporting housing in the 34 private ... did I answer the question? 35 36 Vice-Chair Tuma: Yes, that's fine. One last question for now, and it relates to parking and the 37 calculation of the parking reduction. If I read Table 1 (on Page 6 of the Staff Report) correctly, 38 basically any project in the PTOD that is mixed-use would find itself in the position to ask for a 39 30 percent reduction in parking. Is that correct? 40 41 Ms. Lee: Yes, they would have the option of requesting that parking adjustment with the TDM 42 (traffic demand measures). 43 44 Vice-Chair Tuma: Okay. Yeah, what TDM measures are we looking at here? 45 Page 16 ) 1 Ms. Lee: We haven't specifically discussed this at this point, but that is certainly something that 2 we would be discussing further with the Applicant as the project progresses. 3 4 Vice-Chair Tuma: How do we deal with that tonight? 5 6 Ms. Lee: It would be required as a Condition of Approval in the MND, so that it is consistent 7 with City codes. . 8 9 Mr. Williams: And then they would have to provide that program and our traffic section would 10 have to approve it before any building permit. 11 12 Chair Garber: There is nothing that would keep the Commissioners from making 13 recommendations about what might be considered as part of that management program? 14 15 Mr. Williams: Not at all. 16 1 7 Chair Barger: It was going to be me but Vice-Chair Tuma has taken nly questions, both on 18 density and parking and ramps, etc. so I may come back to that, but Commissioner Rosati and 19 then Commissioner Holman. 20 21 Commissioner Rosati: Two quick questions, with one, to staff to address a comment that we 22 received in writing from Joe Vilario. Can you comment on the size, and not the density, but the 23 size of a potential RM -40 development on that site? The concern here is that the proposed 24 building would be very large and take away from sunlight and space from the adjacent buildings. 25 What if there was an RM building that would be approved? How big would that be, compared to 26 this? 27 28 Mr. Williams: The RM Zone allows the same height, 40 feet, and a 1.0 floor area ratio as 29 opposed to the 1.25 that is proposed here and allowed under the PTOD, so somewhat more mass, 30 but the same height. 31 32 Commissioner Rosati: And second question for the Applicant's architect, Mr. Solnick. Can you 33 comment on the access of the parking? There has been a lot of concern about that, given the size 34 and shape of the lot. I can imagine you had to figure out how to optimize that space, which is 35 probably what led you to the tandem spaces to begin with. Would you mind commenting on 36 both the tandem space, and the access of the parking, and what options you looked at? 37 38 Mr. Solnick: Yes, we did look at options for that. The lot, however, you see as an unusual shape 39 in that it has sort of a panhandle going over to Grant. If that panhandle were not used for the 40 driveway access, there would be no way to meet the parking requirement, the 42 parking spaces. 41 We looked at an access off Birch, we looked at an access off of Sheridan, and both of those 42 alternatives are simply not possible. I suppose you could go two levels underground, but that 43 would require a ramp which would take more space, and that is really not sensible for a project 44 of this small size. So this was the only way to get that number of parking spaces, and the 45 difference in the number of cars between Grant and Sheridan is that they are slightly greater on 46 Grant than on Sheridan, but it is not a dramatic difference. Page 17 ) 1 2 If I might address the issue about the RM-40 versus the PTOD. 3 4 Chair Garber: Mr. Solnick, let me interrupt you for just a moment. The City Attorney just 5 reminded me that we didn't give the Applicant, yourself and Mr. Hollbach a 3-minute rebuttal 6 opportunity. You can consider that now, or you could wait until we complete our questions and 7 take it then. 8 9 Mr. Solnick: Okay, why don't I wait until your questions are complete. 10 11 Chair Garber: Commissioner Rosati, anything else? Commissioner Holman. 12 13 Commissioner Holman: Yeah, a handful of questions. Why does Staff not count tandem 14 parking places as part of the required parking? 15 16 Ms. Lee: It's described, actually, in the Municipal Code as to how many tandem parking spaces 17 can be considered as part of the required parking, as well as for what types of uses. 18 19 Commissioner Holman: I understand that, but I'm going to the intention and the purpose. 20 21 Mr. Williams: Well, initially, for a long time, no tandem spaces were allowed and we had some 22 residential developments that came through and requested tandem spaces by exception and had 23 those approved. They were specifically in the incidences where both spaces were under the same 24 unit ownership, so that you had control over who is parking there, and so when the Zoning 25 Ordinance changes were made to the parking section, and to the multifamily section, they were 26 provisions put in there that recognized that they could operate that way and effectively provide 27 parking spaces, even though they are in tandem, and so there was an allowance added at that 28 point, but I think that there was some concern that this not go too far, or that we at least see for a 29 while how that works. There was a limit of 25 percent of the units, or the spaces, or whatever 30 the measure is, not exceeding that. So, in this case, they have more than 25 percent, but those 31 ones that are over 25 percent aren't in not counting their total number, but they are there for 32 parking purposes. I assume they are, and I am not sure how many are used for residential and 33 how many are for commercial, but certainly if they are for residential use that is much more 34 effe.ctive in terms of tandem. 35 36 Commissioner Holman: I'm going to come back to that, the existing parking conditions, and you 37 have heard from me on tIns at the Alma Plaza Proj ect. What has Staff done to analyze the 38 existing parking situation in the area? 39 40 Mr. Williams: I don't think that we have analyzed the specifics of that, but I would make a 41 pretty major distinction between Alma Plaza and this. This is within the PTOD zone and does 42 have much better access in terms of alternatives, that Alma Plaza did not have, and some other 43 ones in the South EI Camino area. 44 45 Commissioner Holman: I understand the differences. The thrust of my question is that if I am 46 not mistaken it seems like whenever there is a possibility of a Parking Exception Allowance, that Page 18 ') ) 1 we give it. Sometimes, it doesn't seem like it's given or considered in context with what the 2 existing parking conditions are in an area. That is the thrust of the question, and that's what I 3 wanted to know. Yes, it is different but to me it is commensurate because with Alma Plaza we 4 said that the Alma Plaza property was not responsible for the adjacent parking, but you still 5 can't, from my perspective, ignore the fact that there is spillover parking from the adj acent 6 project. 7 8 Mr. Williams: I understand. I do want to point out, and I think in the last (and this is purely 9 anecdotal, but) six months I think I have gone to this site, or another one that is currently in the 10 process that is within a block of this, three or four times, and parked on the street right at the site 11 with no problenl, and that those are in the middle of the day and not at night. I don't know what 12 it's like at night, but I didn't have any problems parking at those two sites during the day. 13 14 Commissioner Holman: And having to do with SB-1818, could the parking exception be 15 considered one of the bonuses, understanding that it is not a guarantee, it's that the Director may. 16 17 Mr. Larkin: I don't have a definitive answer to that question because it has been a subject of 18 internal discussions, but we have not counted it, primarily just not weighing the risk of a 19 challenge, because it is unclear under the State Law. We have taken the more conservative 20 approach of not counting those things that are essentially entitlements if they meet all these 21 conditions to the satisfaction of the Director to get the Parking Reduction. To consider that a 22 concession is a risk, and so we have chosen not to count that as one of the concessions, and to 23 consider it sonlething that is part of the planning entitlenlents. 24 25 Commissioner Holman: The BMR unit, is there any way as part of an initiation, should that 26 happen to the rezoning, is there any way that we can stipulate what level of BMR that is, or a 27 minimum size for it or that kind of thing? 28 29 Mr. Larkin: Well our Code already requires that it can't be the smallest. It's got to be an 30 average size unit, so it can't be the smallest unit, and it's not going to be the largest unit. It's 31 going to be the unit that comes closest to the average size, and so I think you can, but I think that 32 this is something that you could probably specify as part of the PTOD zoning but it is already 33 covered in our Code. 34 35 Commissioner Holman: And the level of affordability? 36 37 Mr. Larkin: I don't know that you can dictate the level of affordability, particularly for a 38 condominium unit that is generally going to be dictated by our BMR program, and by our BMR 39 program requirements. Typically, those are not going to be/you are not going to have a "for 40 sale" unit in the extremely low or very low rate. It's going to be in the moderate range. 41 42 Chair Garber: If the Commission were to make a recommendation, it's a risk that the 43 Commission would take, and it's a risk that it simply could not be action-ed. 44- 45 Mr. Larkin: Yeah, the risk is that you will have a vacant unit because typically there isn't really 46 a market for very low income purchase units because people in that range don't get mortgages. Page 19 ) 1 2 Commissioner Holman: Clarification. It was not stated, at least as I understood it, that the BMR 3 unit is going to be a "for sale" unit. The other eight units it's indicated were going to be for sale, 4 the other seven units, I'm sorry, would be indicated for sale. But, then it just said "and one BMR 5 unit" was what I understood. So is it going to be for sale or for rent, just to be sure? 6 7 Mr. Larkin: It's for sale. 8 9 Ms. Lee: That's the understanding, yes. 10 11 Commissioner Holman: Okay, thank you for the clarification. 12 13 Chair Garber: Commissioner Holman, there is a quick followup by ... 14 15 Mr. Larkin: Just to clarify it. The BMR policy is that it be for sale. There is a possibility, and it 16 is not likely in this case, but in some instances there have been discussions about a mini net 17 policy (?) to allow a nonprofit to purchase the unit and then rent it, but that would require the 18 nonprofit coming forward with an interest in purchasing the unit. 19 20 Chair Barger: Commissioner Holman, Commissioner Fineberg had a followup. 21 22 Commissioner Fineberg: Do we know that that one BMR unit will actually be built or does that 23 need to be conditioned, or might there be an in lieu fee payment instead of an actual unit? 24 25 Mr. Larkin: It has to be built in order to get the incentive. If it is just an in lieu fee, they don't 26 get the incentive. 27 28 Chair Garber: Commissioner Holman. 29 30 Commissioner Holman: Just a couple other little ones, and I guess they are not little but, the 31 Comnlon Open Space on the front sheet of the plan, it says, and if I can read that correctly, it 32 says, I think it's 840 square feet a unit and that can't be accurate. And then in the comparison 33 table in the Staff Report it doesn't mention Common Open Space, as I found it anyway, and I'm 34 interested what the dimensions are of that Common Open Space, currently, and designed. And 35 the other question for the City Attorney, while that is being looked up, does SB-1818 address 36 level of affordability, or it is just any randonl for sale/rental, any level of affordability qualifies 37 for the bonus? 38 39 Mr. Larkin: Not with regard to the incentives and concessions. It does make a difference with 40 regard to a per unit, and I don't know the details off the top of my head, but I believe that it does 41 include some increases in the number of units per acre that are allowed on a site based on the 42 level of affordability, but not when it comes to the incentives and the concessions. 43 44 Mr. Solnick: On the Common Open Space, that includes the courtyards. I mean, that is 45 primarily the courtyards, and the courtyards are quite big, so I don't have the numbers or the 46 square footage of each courtyard in my head, but I ... Page 20 ) 1 2 Commissioner Holman: I wouldn't want that degree of specificity, but the 840 square feet per 3 unit of Common Open Space, is that accurate as I read it on the sheet? 4 5 Mr. Solnick: Well, 840 x 8 would be 6400 square feet. I think, yes that actually sounds about 6 right. That's about a third. Thirty (30) percent of the site would be the courtyards. Yes, that 7 sounds about right. That's in addition to the private open areas and the balconies as well. 8 9 Commissioner Holman: And then the Common Open Space that you had indicated that is on the 10 corner, do you have any recollection of what those dimensions are? 11 12 Mr. Solnick: I don't. I could certainly look at the plan and give you a sense. I mean, I'm 13 guessing about 1000 square feet. 14 15 Commissioner Holman: A dimension would be helpful. 16 1 7 Mr. Solnick: It's 25 x 40, 20 x ... okay, let nle actually look. There is a scale on the drawings, 18 and ... 19 20 Commissioner Holman: Can I chime in, because I just penciled that out. 21 22 Mr. Solnick: Yeah, actually 20 x 50, so about 1000 square feet, so that's about right. 23 24 Commissioner Holman: 20 x 50, thank you very much. 25 26 The flag lot is about 30 feet at the corner to the round part, but 38 for the length, so if the 27 driveway down is 20 wide, that would leave about 20 for the pocket park and the sidewalk and 28 the tree strip. 29 30 Mr. Solnick: No it's 40 feet for the panhandle and to my eye it looks like, yeah, not quite half of 31 that is the pocket park, so maybe it's 18 x 60 and still coming out to about 1000 square feet. 32 33 Chair Garber: Commissioner Keller. 34 35 Commissioner Keller: Thank you. A few more questions. First, I'd like to look at Sheet Four 36 (4). Now, nly understanding is that there are 42 parking spaces required of which four are at the 37 surface, and 38 are in the garage, is that correct? Okay, and I notice that the parking spaces are 38 labeled 1-38. Are those the required parking spaces? And it looks to me like spaces 35 and 36, 39 which are required parking spaces, are tandem parking spaces that are not among the two parking 40 spaces labeled 37 and 38, which are for the housing units. So it appears to me that there are four 41 tandem parking spaces being counted, of which two of them are for the housing units and two of 42 them are for not. So, could you explain that to me? I'm kind of confused. 43 44 Mr. Solnick: If you are interested, I can explain it. Actually, there is a mistake on the drawings, 45 as far as the way the parking spaces are labeled. 46 Page 21 ) ) 1 Chair Garber: So you would re-Iabel35 and 36? 2 3 Mr. Solnick: That's right. It's just in labeling. What has been indicated as units, where it says 4 Unit 3 and Unit 4, those should be moved. It doesn't have any impact. It's just a matter of 5 where those labels were put. 6 7 Commissioner Keller: So how many tandem parking spaces are there? 8 9 Mr. Solnick: There are two tandem parking places, or depending on what you would you call ... 10 if you call the front and a back, so you are allowed to have a quarter of the parking places be 11 tandem, okay? There are 16 required, 2 x 8, and 8 units x 2 each is 16, so a quarter of that is 4. 12 So there are four tandem parking spaces that we are counting. No, two pairs. Two pairs, yes. 13 14 Commissioner Keller: Okay, why don't you try to tell me this? The tandem parking space is 15 both the front and the back, is that right? 16 1 7 Mr. Solnick: Right. 18 19 Commissioner Keller: So what you are saying is that there are a total of two fronts, and two 20 backs, that are being counted. 21 22 Mr. Solnick: That's correct. 23 24 Commissioner Keller: Okay, so let's suppose, and just for discussion sake, that those are 21, 22 25 and 37 and 38, okay, which are the ones that are labeled as being tandem. So I'm trying to figure 26 this out, because it looks like 19 and 20, and 35 and 36, are also tandem parking spaces. So, let's 27 assume that 35 and 36 are erroneously labeled, could you tell me which of the parking spaces 28 should be 35 and 36? 29 30 Mr. Solnick: Well I actually did, and I noticed this just as I was preparing for this. And, I did 31 actually write out the way that I would properly label these. I can tell you that; 19 and 20 would 32 be for Unit 1, not tandem. So, yes, 19 and 20 would be for Unit 1. Then, 21 and 37 would be for 33 Unit 2, and so that's two tandems. Then 22 and 23 would be for Unit 3. And 24 and 25 would 34 be for Unit 4, while 26 and 27 would be Unit 5, and 28 and 29 would be Unit 6, with 30 and 31 35 being for Unit 7. Now, 32 and its tandem space would be for Unit 8. So those are the two pairs, 36 32 and the space behind it and 21 and the space behind it, would be the four tandem spaces. All 37 of the others would just be considered at the front of the aisle. 38 39 COInmissioner Keller: Well, I appreciate that. So what you are basically saying is that 37 is a 40 tandem space, 38 is not a tandem space. You are moving that behind, and if I remember 41 correctly, you said 31, is that right? 32. So 38, is not tandem space, and you said behind 32 is a 42 tandem space, right, so that's 38. I'm still trying to figure out where 35 and 36 goes, because 43 those are numbers that are identified with a parking space, but I can't see where they wound up. 44 I still count only 36 parking spaces, of which four are tandem and then two more are missing, so 45 I'm confused. 46 Page 22 ) 1 Mr. Williams: If I could, and I understand your concern, but it seems to me that this is a level of 2 detail where we can require this, and if there is a direction that you are looking for to be sure that 3 a certain number are tandem, or not, then we can make sure that this happens with the details that 4 mo~e forward, but it is not a Zoning consideration, per se, I don't think. 5 6 Commissioner Keller: I appreciate what you are saying. I have two points about this. The first 7 point is that this does not purport to satisfy the current rules. Per current rules, as far as I 8 understand it, is that tandem is only allowed for residential, and a maximum of four tandem 9 spaces, and it has eight tandem spaces being labeled. So that's a problem. 10 11 Mr. Solnick: It's just a labeling problenl though. We are only having four parking spaces. We 12 only have four. 13 14 Commissioner Keller: I'm not convinced that this is a labeling problem. I believe it's a counting 15 problem, but feel free to count it some other way. You can put so many things. There's 16 something in computer science called the "pigeonhole principle" and if you move the pigeons 17 from those holes, you are going to find other holes to put the pigeons in, and that's what I 18 learned in my PhD program. So, I don't know what you learned in architect school, but that's 19 what you learn in computer science. With respect to tandem and parking reduction, I think that 20 tandem parking and parking reduction are incompatible, that doing both of those is double- 21 dipping. If you want to do tandem parking, that is why dedicated parking spaces that are 22 attached to units are easier to do, but when you have tandem parking and parking reductions, 23 essentially, the people will decide, "I'm not going to use my tandem space, I'm going to use one 24 of the other spaces," and essentially, I believe that those are incompatibles, but even if you don't 25 consider them incompatible, the math doesn't work on this. 26 27 And, with respect to unit sizes and such, I don't know if you want to verify my math, but I've got 28 659 square feet average unit size. There are 14,534 square feet of residential area. There are 29 1259 square foot of overhead, which is not counted in any of these eight housing units, if I did 30 the math correctly. And then you take the remaining 13,275 square feet of housing units and 31 divide it by eight, and I get 1659. My math was done on a little calculator, so I'm not sure ifit's 32 correct. I may have punched it wrong. 33 34 If you go from 31 to 40 dwelling units, at 40 dwelling units per acre, you get 1089 square foot of 35 housing as the size of the housing unit. Assuming that it is zero overhead, no hallways, no 36 corridors or anything, 100 percent housing at 40 dwellings per acre is 1089 square feet for a 37 housing unit. At 31 housing units per acre it's 1405 square feet for a housing unit. I am 38 wondering whether these housing units are too big for PTOD and whether the idea is they should 39 be smaller housing units in which we would get more likely to be smaller units. Right now, there 40 are three, and if you will, some of the three bedroom units are declared as being four bedroom 41 units, as a den or fourth bedroom. I am wondering about the size of these housing units and 42 whether they are in fact too big for this kind of development. 43 44 Mr. Williams: That's a very interesting question because when we, and again going back to the 45 review of the PTOD zoning, there was at one point a proposal to have like an average 1250 46 square foot unit size. That was not acceptable. That was not acceptable, because there was Page 23 ) ) 1 concern about that tilting things towards the highest density possible instead of allowing for 2 lower density, less parking impact, etc. with the lower density on the project. I think that most of 3 that came from concerns of neighborhoods about high-density. Some of it came from concerns 4 from developers. I think that Mr. Solnick may have been one of them that had, although actually 5 I think there is some support for that average size, but that parking is actually, in nlany respects, 6 the driving constraint here. So if, for instance, you tried on this slot to put 18 units and needed to 7 therefore put maybe 40 parking spaces for that, it was difficult to make that work with the 8 residential. I've got what looks like maybe that many, so maybe that would work on this site, 9 but there were some sites that we were looking at, specifically, where parking was really 10 dictating that you couldn't get close to achieving those maximum densities. 11 12 So, philosophically, I have some sympathy for the perspective. I mean, I think my one concern 13 with this would be that, if anything, it's on the low-density, high unit size for this kind of transit- 14 oriented area. But, again, we had that discussion as part of the PTOD and that was not 15 incorporated into that. I find it difficult now to kind of go back and pose that size restriction on 16 the units, but again it's the Commission's call. 17 18 Commissioner Keller: Again, thank you. I just want to point out that the kinds of housing units 19 that we've seen being built elsewhere in the city that have had the most severe parking problems, 20 these have been large h,ousing developments, the 3-4 bedroom ones, which have required two 21 cars and that's been a problem. For example, the Arbor Real project, and so I think that the issue 22 of the amount of parking that we require for multiple bedrooms may be insufficient for this, and 23 if we were to correct that in general, that might moderate the tendency for developers to build 24 oversized units in comparison to whatever else is in the neighborhood. 25 26 Do we know what the average size of the neighborhood is, or do we have any ideas what is 27 around there in terms of unit sizes? 28 29 Mr. Williams: No, I don't. I mean, there are a lot of condos around there. I don't know what 30 the unit sizes are. I do want to mention that I think that there is a potential with the area plan for 31 this area to revisit that issue of the size of units. That is something that may come out of that 32 discussion. 33 34 Chair Garber: Vice-Chair Tuma had a followup. 35 36 Vice-Chair Tuma: If you know, do you know what the average size of the units are at Arbor 37 Real? Ballpark? 38 39 Mr. Williams: They are larger than this, but I don't know, and some of them are like 2400 40 square feet and that kind of thing. That's not an unusual size for those. 41 42 Chair Garber: Commissioner Fineberg, you had a question or a followup? 43 44 Commissioner Fineberg: The parcel that would make this square, that is just next to the flag lot, 45 it's on Grant and has three units, what zoning is that, and does it conform to ... ifit's RM-40, 46 does it conform to that zoning? . Page 24 ) ) 1 2 Ms. Lee: Staffwill have to confirm, but we believe it is a multi-family zoning. That area in 3 general is multifamily zoning. 4 5 Commissioner Fineberg: There is the one lot that would make this a rectangular parcel. 6 7 Ms. Lee: It's RM-40. 8 9 Commissioner Fineberg: The reason I ask that is that this is identical in size to the one on the 10 subj ect property at the other end, so it seems that you could yield three properties on that, and 11 then if you had one each on each of the single lots, you'd have three, four, five, six and seven. If 12 you squeezed one more in you'd get the same yield as eight on the five lots. So I keep coming 13 back to why rezone this? And the idea of changing from RM -40 to PTOD is to get additional 14 yield of residential units, and much as we all complain that there are too many houses being 15 built, we've got our ABAG goals. We've got our Comprehensive Plan with all of its policies. 16 I'm struggling now with my instinct that says "build less houses" and here's a project that says 17 "build less houses," but it's not consistent with everything else, and I'm being told I have to 18 weigh and value when I consider a project. 19 20 I'm struggling to find some benefit to the City, something that makes it more consistent with the 21 Comprehensive Plan. Can Staff comment on how this is better than if the project were to be 22 done in strict conformance with RM-40? I'm not getting that yet. 23 24 Chair Barger: It may help if Staff could address the inclusion of the residential in the Purpose 25 Statement. The Purpose Statement misses the direct reference to some of the other mixed-use 26 qualities of this district and the intents that the City has with this district is supposed to address. 27 28 Mr. Williams: Yes, and that's one of the statements that I made early on about the amount of 29 office that was proposed. Certainly, it's true that in having to try to accomplish higher densities 30 (and this is higher densities than what is out there, but it's not much, but it's on top of office use) 31 it's not just a residential component. This zoning district does encourage mixed-use, too, so I 32 think this site is not going to do a lot for the housing thing. Other sites will do a lot for housing. 33 This one furthers the mixed-use and getting some more employment out there, and it doesn't do 34 much for the housing. If this were that every property were coming in like this, that would be a 35 concern. But, I think that we are going to have a variety of different types of mixes or some sites 36 that, if they are RM-40,and they wanted to do residential, they can just do it under.RM-40. And 37 there are a number of sites out here that are zoned GM and other industrial and commercial uses 38 that will find it more beneficial to use this zoning for residential and accommodating residential 39 on those sites. 40 41 I think this furthers the goals in terms of mixed-use and providing some employment. It does not 42 strongly further the goals of housing here. It is, again in going back, originally proposed that it 43 did have more of an emphasis on housing. The Comprehensive Plan has this 2000-foot radius 44 circle around the transit station and designates it not PTOD, but Transit Oriented Residential, so 45 the word residential is in there. That's always been an emphasis, but it also talks about mixed- Page 25 ) 1 use in there, and this zoning also talks about mixed-use, so it's not meeting everything down the 2 line, but it's meeting certainly some of the goals of the mixed-use quality of the zoning. 3 4 Commissioner Fineberg: Okay, I understand that there are the six additional support elements in 5 the Purpose Clause and the second one does say, "Encourage a variety of housing types: 6 commercial, retail and limited office uses," so I'm still seeing that word "limited office uses" as 7 opposed to this project's design, most of it is office use. 8 9 Mr. Williams: Excuse me, I mean, more of it is residential and office. It's 0.75 residential and 1 0 [voiced over]. 11 12 Commissioner Fineberg: Okay, I stand corrected, okay, but maybe not quite so far as to say 13 "limited." 14 15 The last question I have, I know it's beyond our prevue, but in the ARB Review, it talked about 16 reducing the need for the exception for the nonresidential floor area by putting residential on 17 ground floor. Would that be something that this body would consider? Can we condition the 18 approval of the PTOD with some kind of restriction that some of that ground floor be converted 19 to residential? And why did you make the statement earlier that residential is not appropriate on 20 the first floor? The neighborhood is full of residential on the first floor, across the street, next to 21 it and down the street. 22 23 Mr. Williams: Yeah, I think it would probably be best to have the Applicant's architect address 24 why it is not appropriate there, but from our standpoint, to have 80 percent of the ground floor, if 25 the whole ground floor were residential, that would be fine. But then try to mix and have two- 26 thirds or three-quarters of the ground floor be office, and then have a residence or two down 27 there and it's awkward juxtaposition of those uses. But I think Mr. Solnick can probably better 28 answer how that works also from a structural standpoint in supporting the residential and that 29 kind of thing. 30 31 Chair Garber: Mr. Solnick, unless there are other specific questions, let's give the Applicant 32 their three (3) minutes for rebuttal here. If you would like, why don't I give you four (4) 33 minutes, and that way you can take one minute to answer the question, and then you can have 34 your three minutes. 35 36 Mr. Solnick: Okay, I don't think that this site is equivalent to a lot of the other residential sites in 37 this neighborhood, and the reason is that it is on Birch Street. The longest frontage is on Birch 38 Street, which is a very busy street. It is much busier than Sheridan and Grant and some of the 39 other crossing or perpendicular streets. It's also especially shallow. There was am eminent 40 domain taking of Birch Street when the Oregon Expressway was built, and that's what created 41 this lot as being relatively shallow. That means that the lot is especially close. It's hard to get 42 away from Birch because of the shallowness, the shallow depth is in that direction. I think this is 43 an especially poor place to put housing on the ground floor, and that is sort of a segue into my 44 rebuttal. 45 Page 26 ') 1 I think you are seeing this issue of the offices versus residential as sort of being a gift to the 2 Applicant. It was not perceived that way at all. This actually did not come from Mr. Hollbach, 3 this issue of adding more offices. It came from me, and it had nothing to do with economics. It 4 strictly had to do with making a better project. It seemed to me that residential did not belong on 5 the ground floor on Birch Street, and it made a tremendous amount of sense to make that whole 6 ground floor offices, and then make the residential two floors above it, as was done for the first 7 PTOD project that has come through Commission and went on to Council. 8 9 I also want to address the issue that if this were under RM -40, of course, the ground floor would 10 be residential, so it would have that problem. The other thing is that you have to realize that the \ 11 zoning density in this town is not deternlined by anything but the Parking Ordinance. It has 12 nothing to do with the zoning that is in the Ordinance itself. So RM-40 densities are not 13 determined by the density written in RM-40. RM-30 and RM-15, none of them are determined 14 by the density written in the zoning. They are all determined by the Parking Ordinance, because 15 the Parking Ordinance governs. It always is more restrictive than the zoning itself. It has led to 16 a new use of a verb. Developers ask each other, "Can you park it?" It's a new use of the word 1 7 "park," and what it means is, "Can you put in that many units? Does the Parking Ordinance 18 allow it?" 19 20 You could not put in the sort of densities you are talking about because of the Parking 21 Ordinance. There is just not enough room for the parking. 22 23 The other thing that has sort of been brought up, the RM-40 FAR is a maximum of 1.0, but under 24 SB 1818, you certainly could ask for an FAR Bonus. This issue of "double dipping" and so on 25 would go away. As has been pointed out, you might give it right back to the other place where 26 you have a very similar project and without any of the attributes of PTOD which seem very 27 appropriate for this location. 28 29 And, yes, we could just take a chunk out of the ground floor and nlake it residential. Weare no 30 longer asking for that bonus. I think it would be a truly inferior design, but it would solve that 31 problem. But that would be solving a paper problem and not solving an actual physical problem. 32 It's actually, in my opinion, making the project considerably worse. 33 34 I just want to emphasize that the whole purpose of designing it this way was really to do a better 35 design. It was not financial. It was to put the land uses in the places where they made sense, and 36 to do a project which was consistent with PTOD, which is certainly something that the City has 37 really been offering and has been encouraging developers to use, and here we are trying to use it. 38 39 Chair Garber: Thank you. Commissioners, discussion, and let's see if we can move towards a 40 Motion. Commissioner Keller and then Commissioner Holman. 41 42 Commissioner Holman: Actually, I had my light on earlier. I had two more questions. 43 44 Chair Garber: Okay, please go ahead. 45 Page 27 ") 1 Commissioner Holman: They are not long ones, pardon the voice. My question for the City 2 Attorney is SB1818, I have understood on the past that the project that came through under 3 SB1818 still has to comply with the City's Comprehensive Plan. We may have as much control, 4 but it can't violate the Comprehensive Plan, is that correct? 5 6 Mr. Larkin: That's generally correct. I think there are some exceptions, but that is generally 7 correct. 8 9 Commissioner Homan: Thank you, and then the other question, I believe, it was asked here 10 earlier, and that is the comparisons prompted by Joe Vilario about the shading, and the answer 11 was conlparably what size buildings could be built with an RM-40, compared to this? But my 12 question is, what is the daylight plane requirement for an RM -40 development? 13 14 Ms. Lee: The daylight plane requirements are dependent upon what it is adjacent to. I think, 15 from what we have discovered, the adjacent zoning districts would be RM-30. For the daylight 16 plane for site and rear lot lines for the sites abutting RM-30, RM-40 that don't contain single- 17 family or two-family residential use, it's basically none for lots which are within the width of70 18 feet or greater. If there is width of less than 70 feet, limited to the first ten feet from the property 19 line, it's an initial height of 10 and an angle of 45 degrees. 20 21 Commissioner Holman: So that, comparing to this, would be helpful going forward and to 22 answer Mr. Vilario's question. 23 24 The point is, then, it's not that there is no daylight plane requirement at all, which previously the 25 answer was that we were comparing building sizes to building sizes, and not really addressing 26 the daylight plane issue. 27 28 Chair Garber: Commissioner Keller. 29 30 Commissioner Keller: So, first to follow up on Commissioner Holman's question, does that 31 mean that if these were RM-40 that because the widths are mostly over 75 feet, except for that 32 little panhandle, which is below, that there is no daylight plane? Is that what I understand? 33 34 I heard you say that is correct, thank you. 35 36 Let me make a few comments. The first comment is that I think in this location ground floor 37 office does make sense and I am sympathetic with the idea that putting housing over ground 38 floor office makes sense. fu some sense, that's what some people originally thought made more 39 sense for mixed-use, although we've seen projects for mixed-use that don't have that, notably 40 some project with the initials AP. 41 42 But, so I do think that tandem parking and parking reduction are not compatible because of the 43 idea that tandem parking will discourage people from parking in the front and in the back space, 44 which means that people will probably be more likely to take up the extra spaces. I think that 45 those two concepts are incompatible. 46 Page 28 ) ) 1 With respect to transitioning some of the space from housing to parking, as the applicant is 2 requesting, this has the effect of actually increasing the parking requirement. The reason, as far 3 as I understand it, is that 2.5 parking spaces per housing unit, and that's 1659 square feet as the 4 average housing unit size, while office space is 4 parking spaces per 1000 square feet. 5 6 Essentially, by converting several thousand square feet of office space from housing to parking, 7 the developer/Applicant have essentially increased the parking requirement challenge that the 8 developer has by making that change. For the developer to basically complain about the Parking 9 Ordinance, when the developer is going to a use that has a higher parking intensity than the 10 Ordinance would ordinarily allow, is something odd to me. 11 12 Finally, I think on the issue of unit sizes, I am concerned about the unit sizes being somewhat 13 larger than they might otherwise be, and the fact that the unit sizes are as large as they are means 14 that we are essentially not getting the Housing Density Bonus effectively ofPTOD. And, 15 although I am very sympathetic with the idea of mixed-use, as Commissioner Fineberg pointed 16 out, it's very easy to build eight housing units on this odd-shaped lot without doing a lot of work. 17 In some sense, we are taking these eight housing units and sort of lifting them up and putting a 18 whole office complex underneath it. It would seem to me that, in terms of doing that, if our 19 objective is to have more housing units, which is what ABAG is forcing us to do, and although I 20 certainly am not a fan of having lots of housing units, I'm also not a fan of having very big 21 housing units either in this regard in terms of the multifamily housing, because I don't think it's 22 the kind of mix that makes sense for this area. 23 - 24 There are no schools nearby, and in that regard there does not seem like there are many amenities 25 for a children-oriented environment. Although I am not sure that we are allowed to make 26 determinations in terms of whether there are families with kids, or whatever, we are not, and I 27 see the City Attorney saying something. 28 29 Nonetheless, it seems to me that the issue is, from a point of view of satisfying the ABAG 30 requirements, building 14,534 square feet of housing units and getting only eight housing units, 31 it does not go very far towards meeting our ABAG goals. In that regard, I would actually be 32 interested in having more housing here and having the unit sizes closer to what was originally 33 proposed by some for a PTOD of a 1250 square foot average house size which probably means 34 somewhere on the order of 12 to 14 housing units. 35 36 I'm just going to put that out there. I'm going to leave it for somebody else who wishes to mull 37 over this and make a Motion. 38 39 Mr. Larkin: I pick this time to interrupt, and I interrupt because it's just after 9:00 and it's time 40 to check in, but I also wanted to correct something that I said earlier in response to 41 Commissioner Holman's question. There has been a change to the Density Bonus law that now, 42 for very low income BMR units, it is now 5 percent of the units being set aside as BMR for very 43 low income that will get you one incentive. A project that meets our minimum requirements 44 with very low BMR housing would get three concessions. 45 Page 29 ) ) 1 Commissioner Keller: I just want to say one more thing. I think that the fact that we are getting 2 these comments about SB-1818 concessions suggests that we should pass rules affecting what 3 concessions make sense and what the limits are for those concessions. 4 5 Chair Garber: Commissioner Holman and then Vice-Chair Tuma. 6 7 Commissioner Holman: Could the City Attorney please repeat what you said. 8 9 Mr. Larkin: We haven't had this issue in "for sale" projects, so it would be difficult, ifnot 10 impossible, to have very low income "for sale" units, but if a project was coming forward, 11 presumably a rental project that was going to offer 15 percent of the unit at very low income, 12 then they would be entitled to three concessions because for each 5 percent of below market 13 housing. If you provide a very low rate, you get one concession as opposed to the 10 percent for 14 just regular BMR. 15 16 Commissioner Holman: Okay, thank you for that clarification. 17 18 I am also not going to make a Motion at this point in time. I'm just going to make some 19 comments. 20 21 To be perfectly frank, projects like this make me a little nuts and the reason is not because it's 22 necessarily a bad project. It's not about that, but it does speak to, I guess, primarily 23 Commissioner Fineberg's comments. We have a PTOD Zoning District that is to encourage 24 residential near transit. While there are the other aspects of this, we have other considerations 25 too which are kind of being discounted in consideration of this being an appropriate site for 26 PTOD because, and I'm not saying it's inaccurate in terms of what is heard by people 27 commenting on projects, but it just frustrating that because we do hear a lot of comments on how 28 much housing gets produced and the impacts of the housing, now that we are using that as 29 justification to say, "Well, this is a good site for PTOD because now we can incorporate the 30 office space." And then in creation of offices, we then have a surplus of office space availability 31 in the community, and creating office space when it is not retail. I'm not saying this is a good 32 place for retail because it's not, but when we are creating office space, which then triggers 33 ABAG, which creates some more need for housing, then I feel a little bit like a hamster in a cage 34 here, on the wheel. That's why it's making me nuts, and I hope at least some people can 35 understand that. 36 37 Having said that, I have other issues about the project and its considerations. Well, one thing I 38 will say is that I have not heard anyone from the public, with possibly one exception, saying that 39 they didn't want the project, or they thought the project was too big. There is none of that, and 40 yet every person talked about the parking difficulties in the area. I have to believe that, and I 41 understand. I go to that area sometimes, too, and I don't always have a hard time parking, and 42 you did say it was, you know, random. But/and I understand that, but I have to believe what the 43 members of the public say who live right there. They don't seem to have a hidden agenda. That 44 makes it even more convincing that there is a parking concern there, and I think we can't just be 45 providing the parking exceptions when there are existing conditions that might speak against 46 that. Page 30 ) ) 1 2 The other thing that I find frustrating about projects such as this is that we are looking at 3 reducing the parking requirement and, because it's a mixed-use project, but yet it's near transit, I 4 think Commissioner Keller has mentioned this a lot of times to, but ifit's near transit, and people 5 leave their cars at honle. Then, you know, the cars are all still there, and while in some cases I 6 think there are possibilities for trip reductions, but my experience has been, in watching projects 7 that have been built in the last, you know, in the recent past is, there may be some trip reduction, 8 but I haven't experienced any, nor have I heard of any car ownership reduction. So you still 9 have the parking demand. So, let's see, I think I'll end my comments there. 10 11 Chair Garber: Vice-Chair Tuma, then nlyself, and then Conlffiissioner Fineberg. 12 13 Vice-Chair Tuma: I'm, to some extent, having some of the similar types of struggles that 14 Commissioner Holman was talking about, except I sort ofcome down on it, maybe on the other 15 side of where my sense was where she was leaning, but maybe I'm speaking more than I should 16 be. 17 18 It's not perfect in terms of providing a lot more housing, closer to 18, or 17 or 16, or however 19 many we could park on there. But I envision a hearing on a project at the same site where they 20 are asking for 18 housing units, and I envision a discussion where people say, "Well, geez, this is 21 PTOD, and we're encouraging mixed-use, and now we have 18 housing units, where's the 22 mixed-use? Why aren't we getting what we encouraged with PTOD?" 23 24 And I think, to some extent, given the discussion and the thoughts and the ideas that went into 25 PTOD, either we kind of believe that philosophy or we don't. Either we believe that being by 26 transit is going to some extent to reduce trips. Maybe, it's not the trips out of there, or maybe it 27 is the trips out of there, so people leave their cars, but hopefully the people who are coming in to 28 work at the office will possibly be taking transit. That's part of the concept behind PTOD. 29 30 I think that I'm sympathetic to the conlffient that housing, or that parking [correcting himself], is 31 what limits the site here, because I was sitting here a little while ago thinking, well, Geez, let's 32 make these units a little bit smaller. Put ten in there. Wait a minute, we can't do that, because 33 then they can't park it. 34 35 So it is a balance, and it is in some regards that part of me says, Gee, this would be better with 36 more housing but, at the same time, if that was the discussion we were having, people would be 37 up in arms about we are putting in too much housing. 38 39 I struggle with these things, as well, but where I come down, and where I'm leaning towards is, 40 thinking about maybe there are some issues around the use of tandem, even though/or tandem in 41 combination with a reduction. Maybe there is something to be said there to kind of pull that 42 back a little bit but, at the same time, one of the things that we are concerned about is, with this 43 mix in a relatively low nurrlber of housing units, the required parking for this amount of office 44 space, required without any reduction, would be 42, okay? For the amount of office space we 45 are talking about here, and that is coincidentally the number of parking spaces that we have. 46 Page 31 ) ) 1 Now, I recognize that there are still eight units there, and that's going to produce some number 2 of cars that will stay home during the day, but it doesn't seem to be that out of line. I think if we 3 had three or four more housing units, five more housing units, I think it's going to get worse. 4 But, here, with the proximity to transit, to drink the PTOD Kool-Aid, we have to believe to some 5 extent that what we put there (the reasons we designed this as PTOD) are going to work, and if 6 not then maybe we do need to address that. Maybe there is a problem with it, but we haven't 7 really given it much of a chance to work, and this is only the second project coming down the 8 pike that says we are going to get these reductions because it's close to transit. 9 10 I think there are some tweaks we could do around the edges here and maybe it is putting more 11 restrictions on tandem, and whatever impact that has on the project, but I don't think it's so far 12 off from a project that meets the overall goals, maybe not all of the goals, but the overall goals 13 and balancing of the different elements ofPTOD that I think it works. 14 15 The other thing is, we have not talked much about the other elements of it, the types of things 16 that, in terms of context base design, and the other elements of PTOD that I think it does. I think 17 the architect and the Applicant have done a nice job of addressing those. 18 19 It's a project that I'm leaning towards wanting to move it forward, but maybe there are some 20 more thoughts or creative ways we could address some of the parking and the balance issue. I 21 fundamentally don't have a problem with there being less housing and some nice office space if 22 that makes the proj ect work. 23 24 Chair Garber: I am in support of all the things that Vice-Chair Tuma has just mentioned. I think 25 this Commission has fought very hard for the PTOD District and the qualities that it brings to 26 this particular area of the City, and for the amount of latitude that it gives the Commission as 27 well as the ARB, and the staff to really change this neighborhood into a more coherent place for 28 our city, visually, as well as in a planning sense. 29 30 I, too, do not have a problem with having all the ground floor as office, and having the remainder 31 as residential. And, I wanted, and I'm just going through a bunch of different thoughts in my 32 head, but the one thing that I did want to remind myself is I wanted to thank the developer, the 33 owner of the property in this case, for allowing the architect to have significant say as to what is 34 not only good for the project, but was is good for the City and the owner's support of that, I 35 think, is commendable. 36 37 The sorts of things that this project presents to us, the amount of Open Space that is given for 38 those residences, the amount of private, as well as public Open Space, I mean, those are all great 39 things. Part of the PTOD District is to create different types of housing projects, different types 40 of housing, and having larger units that might be larger compared to some, but not all, I think, is 41 great. That is what we are supposed to be doing, and it is supposed to be providing for different 42 types of people to live there that may have more, or less, or no children, etc. It just adds to the 43 scale and the variety that you need to have a vibrant and exciting place. 44 45 I see we've got Commissioner Fineberg and then Commissioner Holman. 46 Page 32 ) ) 1 Commissioner Fineberg: I see a lot of good things about this project and there is this sort of 2 ir~.ternal conflict. Does this, for the purpose of the PTOD District, provide more housing near the 3 transit corridors? And I don't think it accomplishes that. But, there's the alternative of 18, or 4 whatever, or 20 houses, creating more under-parking, so there is sort of a balance in the scale. I 5 think some of those details you will probably iron out, if the project moves forward through the 6 ARB. They did say they want some switching of the ground floor retail to housing. Whether 7 they continue to press for that will be seen. 8 9 If this moves forward, there are a couple of things. Whoever is crafting the Motion, if we could 10 include this language, and I believe that the ARB had mentioned that, to be consistent with the 11 Zoning Ordinance, we would want some ground floor bike parking for the folks that do come on 12 bike to the office space. 13 14 I would agree with Commissioner Keller that the parking reduction is not consistent with the use 15 of tandem spaces, especially in what we are asking people in residences. Unless we can grant 16 some kind of occupancy condition, the residents are going to make their lives easier, and take up 1 7 the parking spaces that would be for the offices or a menlber of the public. 18 19 So, I don't know if there is an opportunity to condition the residence to using their two tandem 20 spaces. 21 22 I know that it is not the responsibility of the Applicant, but that empty lot is half-parked 23 frequently, the two, empty parcels. There are people from the senior complex that pull in. We've 24 got pictures from residents, and from the times I've driven,by. So, while it's not the Applicant's 25 responsibility to provide parking for the neighborhood, those cars being forced onto the street are 26 going to further exacerbate the under-parking in the area. That gives even more credence to the 27 fact that people pull into the empty lot, that the area is under-parked. So I think we need to be 28 careful not to under-park this' property. 29 30 I'd want to see as a Condition of Approval to the TDM program that we talked about earlier, and 31 then also two other things. 32 33 The driveway location that we talked about, close to Grant, I don't know if that's been analyzed. 34 . I assume we wouldn't put it so close that it violates zoning ordinances, but it seenlS like heavy 35 traffic, 10-15 feet from a busy intersection. While the developer nlay say that this is the only 36 physical location, is it a safe location? I guess the ARB will consider that, and should there be 37 conditions for analysis of that. 38 39 And, there was one more. It's escaping me, so that will be it for now. 40 41 Chair Garber: Commissioner Holman, and then Commissioner Keller and then Coil1missioner 42 Rosati, and then let's get to a Motion. 43 44 MOTION 45 Page 33 / ) ) 1 Commissioner Holman: Actually, I was contemplating a Motion, if that's ... or unless someone 2 else is dying to make it. 3 4 I have, as stated earlier, and I'm pretty conflicted on this, and pretty frustrated by it, and I think 5 when we passed the PTOD Ordinance, there was one set of knowledge that existed, and since 6 then, there have been other data points that have come to light. 7 8 So, and Staffhas known me for a good while now, I'm much more in favor of changing 9 ordinances than justifying acting against it. So, as I said earlier, I feel like a hamster in a cage, 10 and now I'm feeling like I'm ready for the farm because I'm going to make a Motion to 11 recommend Staff recommendations. 12 13 And, it's probably against my better judgment, because of all the conflicts that I have, but I have 14 conditions that I want to put on the project. I'm hoping that this is, at least, the best outcome. 15 Hearing comments, I think there is going to be a Motion to Approve and likely it would pass, so 16 I'm going to at least try my best crack at conditioning it: 17 18 1. Require that as a part of the rezone, a TDM program that includes Eco Passes. 19 20 2. That, as part of any parking reductions, the tandem parking places not be counted as part of 21 that parking reduction. In other words, not counting the tandem parking places, and then also 22 granting a parking reduction. Does that make sense? 23 24 3. That the parking garage entry be moved away from the comer and that the entry be moved to, 25 is that Sherman or Sheridan that is the back side of that? Sheridan. That the entry be moved to 26 Sheridan. 27 28 There may be other Amendments, but that's my Motion for now. 29 30 Chair Garber: So there are three. So TDM and Eco Passes, is three. Tandem spaces, don't 31 count them. And then number three, the parking entry move away from the intersection? 32 33 Commissioner Holman: And move it to Sheridan. 34 35 SECOND 36 37 Commissioner Keller: I'll second that. 38 39 Chair Garber: Discussion? And I apologize, would the Maker like to speak to their Motion. 40 41 Commissioner Holman: I think I've said enough. I feel schizophrenic enough. 42 43 Chair Garber: And then Seconder, and then we will go to Commissioner Rosati who was 44 scheduled to speak. 45 Page 34 ) 1 Commissioner Keller: Thank you. First, I'd like to make a comment about parking and theit 2 make a Friendly Amendment about the parking. 3 4 I'm directing us to Table 1 of the Staff report which is on Page 6, and I notice something quite 5 odd about this. What's interesting is that there is this juxtaposition of where it says, "Reduction 6 proposed per PAMC." So it says, "Residential, two parking spaces per unit, and guest spaces for 7 18 units," and then it says, "20 percent total for joint use, 30 percent combined max." 8 9 Okay, so far, so good. Then on the bottom, it says, "Office, one space for 250 square feet," and 10 then says, "20 percent for housing near transit," and I was saying, why do you reduce the office 11 space parking based on housing being near transit? It doesn't make any sense. 12 13 So let me get to this, where I'm thinking. I did a whole different calculation, and the calculation 14 I did is, okay, I can understand 42 parking spaces for the commercial, and I can understand 15 reducing that by 20 percent for joint use. So far, so good. 16 17 I can understand taking the 18 parking spaces for the residential and reducing that by 40 percent 18 for both combined reductions, one for the housing near transit, and one for the mixed-use, and 19 with the maximum reduction total being 30 percent. 20 21 Well, if you do the math, 42 x 0.8 is 33.6; 18 x 0.6 is 10.8, which adds up to 44.4, and if you 22 think about it that way, you get down to 45 units and not down to 42, for required parking 23 spaces. 24 25 AMENDMENT 26 27 I am "going to make a Friendly Amendment that the office space parking not be reduced below 20 28 percent, and that the total residential parking space not be reduced below 40 percent, with a total 29 combination being not reduced below 30 percent nlax. 30 31 Chair Garber: Would the Maker like to query Staff on their thoughts before ... 32 33 Commissioner Holman: Anticipated, will. 34 35 Chair Garber: Perhaps, Commissioner Rosati? 36 37 Commissioner Rosati: Yes, I would like to mention a few things. First of all, I think this is a 38 well thought out project that, from a commercial perspective, the office space on the main floor 39 makes complete sense. I think that the proportions of the parking are absolutely adequate from 40 my experience. In fact, I think I disagree with Commissioner Keller and would not be able to 41 support this Amendment because, in my experience, the office space that is near public 42 transportation uses a lot less parking, and has a much lesser parking requirement, at least a third. 43 44 Given this location, I can see people coming in from all over the Bay area using trains. I think 45 that there are going to be people that are going to be biking to this facility, and there are going to 46 be a lot of people carpooling as well. I really believe that the proj ections that are being made, Page 35 ) ') 1 even with the reduction, are completely adequate, given that we are talking about 10,000 square 2 feet of office space. 3 4 I also believe that the 10,000 square feet of office space are a likely (but I am not an expert on 5 this one in ternlS of proportion) to warrant more than 30 employees in that space. I think that the 6 requirement of 250 square foot per parking is probably a little bit out of date with the way these 7 spaces are configured today. 8 9 I just wanted to say, number one, I think this is a well thought out project and the office space 10 proportions are, in my opinion and experience in these kind of setups (and in fact my office is 11 located exactly near public transportation, comparable to this) more than adequate. 12 13 I also agree on having homes of the size that are projected in this project. I think that it is an 14 entirely reasonable thing, and I personally believe that it would be better, in the interest of the 15 community, to have fewer residences of this size as opposed to several more that would be 16 smaller. 17 18 My big concern is access to parking. I don't think that we have adequately studied whether the 19 access to parking in that particular position of the property is appropriate. However, I also 20 sympathize with the significant constraints that exist on the property, given the size. And, if the 21 development is involving only one level of underground parking, given the shape of the lot, I 22 don't know if there is an alternative positioning, and I'm sure it has been studied extensively. 23 24 I just wanted to make the comment that I appreciate and I am concerned, but I don't know if 25 there are many options, other than potentially creating a curved driveway that ends up on the 26 other comer of the same side instead of on Birch and ends up on the other in the front, where 27 basically the access to the parking lot is. 28 29 I'm saying, specifically, instead of accessing it from Grant, you would access it from Birch, by 30 making a curve, but that's not my job to point out. I'd just like to alert of the possibility of a 31 traffic problem there. 32 33 Chair Garber: I think the Staff, do you have comments? 34 35 Mr. Williams: Two comments. 36 37 I don't question the math that Commissioner Keller mentioned, but I mean we use these 38 reductions and show that, but we didn't. I mean, there is also a 20 percent reduction in here that 39 has allowed for the TDM program too. We didn't use that because we didn't need it. The other 40 reductions got down to the maximum reduction of30 percent overall and 42. We could consider 41 that. Also, the bigger two questions I have of problems or concerns are, first of all, I'm not 42 understanding what the issue is with the tandem spaces. There are how nlany tandem spaces? 43 It's not like there are one or two in excess of the minimum required. But I mean how many total 44 are there? Anyway, there are quite a few extra spaces that are additional tandem spaces, like at 45 least a half dozen, so it's ten? Ten extra tandem spaces. 46 Page 36 ) 1 I mean, it's really, and I understand that they may not all always be available, but they are not 2 ever, I don't think, found to not be available, where none of those are available. So there is a sort 3 of built-in addition here that generally we don't see. I mean, I would think that this is a positive 4 type of thing to see, which is to have some additional tandem spaces thrown in there so that this 5 does provide some relief, and in this case they are needed. 6 7 Then, the other issue was related to the driveway. I think we should ask the Applicant if that's 8 feasible to have that driveway work off Sheridan, given the narrowness of it, and the limited use- 9 ability of the project on the other side. 10 11 Chair Garber: Let me go back to the Maker here. We've got a variety of comments coming up. 12 Commissioner Holman. 13 14 AMENDMENT 15 16 Commissioner Holman: Actually, I was going to amend my own Motion. I wanted to provide 17 some flexibility because my biggest concern is that, and this is an Amendment to my Motion, my 18 biggest concern is that the driveway coming out of the parking garage is nearer the comer. 19 20 Chair Garber: That it is too near the comer? To close to it? 21 22 Commissioner Holman: Currently, it is too near the comer, and I wanted to move it away from 23 the comer, but I will take out the requirement that it be on Sheridan, and it can be optional to 24 either Birch or Sheridan. 25 26 Chair Garber: That the Applicant needs to find a safe way of entering and exiting. 27 28 Commissioner Holman: As far away from the comer as is absolutely possible, but it's too near 29 the comer now. 30 31 Chair Garber: Then, will the Seconder support that Amendment? 32 33 Commissioner Keller: I'd be supportive of the Amendment if it were quantified. So, for 34 example, to the extent that you could ... 35 36 Commissioner Holman: That's too fine in detail. 37 38 Commissioner Keller: I mean, to the extent that you could say that at least so many feet from the 39 comer because otherwise, if you say "as much as possible," they could come back with what 40 they have now, and they could say that is what they could do. 41 42 Commissioner Holman: Does the Code speak to that. 43 44 Vice-Chair Tuma: Just one moment please, point of order, the question was asked, can someone 45 other than the Seconder of the primary Motion second the Amendment? City Attorney? 46 Page 37 ) ) 1 I apologize. I misinterpreted the question. I think the only way that that works, Vice-Chair 2 Tuma, is if the Seconder does not support that and withdraws his Second, at which point the 3 Second would be open back to the Commission, and then another Second could be offered. 4 5 Mr. Larkin: The alternative is that the Maker could withdraw her original Motion and just make 6 a new Motion, which I think is what the Maker is intending. 7 8 Commissioner Keller: Well, there are several alternatives, and I understand the attorney 9 probably knows Robert's Rules and Orders better than I do, but my understanding is that it could 10 be offered as an Unfriendly Amendment, which would then have a Second and a vote. The 11 Maker of the Motion could withdraw, but I'm just trying to understand the issue of, could you 12 clarify, actually, the effect of your Amendment? 13 14 Commissioner Holman: I'm trying to get the parking garage entry further away from the comer, 15 and Ijust reminded myself by looking at the Sheridan Street front of this property, and it's only 16 75 feet. So I don't know that it's possible to get it as far from the comer as is desirable on that 17 75-foot frontage. So, understanding that Birch is a busy street, but yet there is more opportunity 18 to put a driveway in there, on that longer frontage, away from the comer. 19 20 Commissioner Keller: Are you suggesting that it has to be moved off of Grant? Is that one of 21 the requirements, and that it be preferably moved as far away from the comer as possible? I'm 22 not understanding exactly what the Motion is. 23 24 The problem I have with seconding, is that I am not sure exactly what your Amendment is. 25 26 Commissioner Holman: Perhaps the way to clarify this would be to ask the Applicant a 27 question, or ask the Staff a question about an entrance on Birch. I'm sorry if I prematurely made 28 the Motion, because that is the longer street frontage. 29 30 Chair Garber: Would the Applicant like to respond? 31 32 Mr. Solnick: I do appreciate the concern about the proximity to the comer, but there is no better 33 alternative. If you come off of Birch, you of course remove whatever parking spaces are parked 34 against Birch, and in so doing, and you can't put them back in the panhandle. So you lose 35 parking spaces, and I'm guessing, two, just offhand. No, actually it would be three. You would 36 lose three parking spaces, and the same coming from Sheridan. You can't use the panhandle, so 37 you take out parking spaces, and you don't gain any back. So we could move it a little bit farther 38 from the comer on the Grant side, but any other position loses at least three parking spaces, and 39 not three tandem parking spaces, but three long tandem parking spaces: 40 41 Commissioner Holman: Could Staff comment on that. I'm not understanding why you would 42 lose that many parking spaces. Are you talking about parking garage spaces or curb spaces? 43 44 Mr. Solnick: The driveway has to be 20-feet wide, and a parking space is 8-1/2 feet. 45 46 Commissioner Holman: Are you talking about curb parking spaces, or parking garage spaces? Page 38 ) ) 1 2 Mr. Solnick: No, in the parking garage. Yes, I'm talking about spaces in the garage, yes. The 3 parking aisle has to be 20 feet. The width ofa parking space is 8-1/2 so if you do that math, it's 4 the width you would be taking out when you came in off of Birch. You would have to remove 5 three parking spaces, and yes, the curve. I think you mentioned about Birch going in a curve. 6 That turning radius is too tight and would not be allowed by the Transportation Department. 7 8 Commissioner Holman: Thank you, and does Staff want to comment on that, because even if it '9 would eliminate some parking places in the parking garage, we still don't want to create an 10 unsafe situation, and so that is the heart of this. 11 12 Mr. Williams: Yes, I concur that they would lose two or three parking spaces because you are 13 coming down, and right now you have basically got this rectangle of parking down there, and 14 now you have the driveway that has to come down in there where, right now, it isn't there. Right, 15 now, it's on that panhandle area. You are not going to recover those spaces, in that panhandle 16 area, because it's too narrow to use as a parking zone. So, if you are coming off of here, there 17 will necessarily be some spaces but, again, not a lot. But, to get that driveway down over there 18 in the location where those parking spaces are now, and to make that work, is going to take out a 19 few, and I don't see where you recover those, although I guess I should ask. 20 21 I mean, right now, there are those four surface spaces, and I assume those would go over and flip 22 over kind of to the opposite side of that driveway entrance if it is coming off where those four 23 spaces are served now. I don't know if there is any, or if that panhandle area at the surface, 24 could handle those couple of additional parking spaces. 25 26 Chair Garber: Forgive me. Are we trying to redesign the project here? 27 28 Mr. Williams: Again, this is an issue of use an intensity and not design associated with PTOD. 29 30 Chair Garber: I mean, we should be able to make the requirement and move forward with the 31 requirement, and the requirement has to answer to all the codes and zoning that exist within the 32 State and in the City, and it has to meet all the safety requirements. I think we just need, and I 33 think I would keep your condition, but I think I would simply temper it by saying that it needs to 34 safely address the issue and the nearness that it has to the comer. 35 36 Commissioner Holman: Well, to answer Commissioner Keller's question, my intention is to 37 move it off Grant, because a 30-foot wide parcel does not provide distance enough to get that 38 entry away from the comer enough to provide safety. It also, as one of the members of the 39 public commented, doesn't provide adequate opportunity to get out of the parking garage at peak 40 times, and it doesn't allow opportunity to get in, so it's going to cause congestion in the 41 intersection. So I amended my Motion to say that the entry could be on either Birch or Sheridan, 42 but I do want it off Grant, so if that answers the Seconder's question. 43 44 Commissioner Keller: Yes it does, and perhaps you could say, move it off of Grant and put it off 45 on Birch or Sheridan in a manner that is safe. Maybe it is not necessary, but in some sense, that 46 is the idea, so that I would accept that. Page 39 ) 1 2 Commissioner Holman: If Staff has a better way of wording it, that's fine, but the intention is 3 clear. 4 5 Mr. Larkin: I think because the prevue is limited to use and intensity, the original way the 6 Motion was made is preferable. I think it has to be safe in order to get City approval. It doesn't 7 hurt anything to add it, but ... 8 9 Commissioner Keller: Okay, that's fine, thank you, I will accept that. 10 11 Chair Garber: Commissioner Rosati. 12 13 Commissioner Rosati: The issue was just resolved. While and since I have the opportunity to 14 speak, I wanted to mention that I am not in favor of the tandem parking comment of that not 15 counting, on the Motion that was described earlier. I just wanted to get that on the Record. 16 17 Chair Garber: You support the use of tandem spaces for the housing in this particular 18 circumstance. 19 20 Commissioner Rosati: Exactly. 21 22 Chair Garber: Okay. So we are back to the Motion which is supporting the Staff s 23 recomnlendation that: 24 25 1) The project be conditioned to include a TDM, Traffic Demand Management Program, and 26 Eco Passes. 27 28 2) That the tandem spaces don't count. 29 30 3) That the parking access not be from Grant, but to be on Birch or Sheridan. 31 32 Mr. Larkin: If I can just clarify, Commissioner. I understand, for the record, the Motion is not 33 seeking to reduce four of the tandem spaces and shrink them to make them four normal size 34 spaces. You just don't want them counted. 35 36 Commissioner Holman: Correct, I just don't want them counted as part of the consideration of 37 there is any parking reduction given. 38 39 Mr. Larkin: I think the confusion is going to be in order to make them not count, that you are 40 actually basically just taking four of those tandem spaces and shrinking them to normal size 41 spaces, and I wanted to just confirm that this is not the intent of the Motion. 42 43 Comnlissioner Holman: That is not the intent of the Motion. 44 45 Chair Garber: Vice-Chair Tuma? 46 Page 40 ) ) 1 Vice-Chair Tuma: Now, I am confused. Sorry, because I think that if you don't count them, 2 doesn't that have the effect of making them two parking spaces instead of four? 3 4 Commissioner Holman: It's a matter of double-dipping. It's a matter of there is a reason that 5 Staff doesn't count tandem parking places any more broadly than they do, and so I don't want 6 the tandem parking places that are now being counted to be counted when there is going to be a 7 parking reduction surely granted. 8 9 Mr. Larkin: I think, if I can explain why I'm asking for the clarifying, because there is some 10 confusion, at least in my mind. They could convert all of those tandem spaces to just single 11 spaces and still meet the parking requirements with the reductions. Instead, they are offering 12 tandem spaces which gives them more parking than they are required, and I want to make sure 13 for Staffs sake, when they are counting the parking spaces, that you are basically not asking 14 them to redesign their parking, because I think Staff is counting those, but they can just count 15 some of those tandem spaces as single spaces. Is that what you are asking, to count the tandem 16 spaces as one space instead of two? 17 18 Commissioner Holman: Correct. 19 20 Chair Garber: Vice-Chair Tuma and then Commissioner Keller and then Commissioner Rosati. 21 22 Vice-Chair Tuma: My understanding is that they have four tandem spaces that are part of the 42. 23 Is that right? And then there are 10 additional tandem spaces. Okay? Is that right? Okay, so if I 24 understand Commissioner Holman's Motion, the four that they are counting towards the 42 25 would now only be two spaces. So, as designed, they would be at 40. Is that correct? 26 27 Commissioner Holman: Yes. 28 29 Vice-Chair Tuma: Okay, I can't support that. I'm in the same place that Commissioner Rosati is 30 on this. I think that, not only do they have the 42 with the four tandem, but they also have 10 31 additional tandem spots here. I think that there is plenty of parking, and so I would not be in 32 support of the Motion ifit did not count those four tandem spaces that are counted as part of this. 33 34 I mean, there are 10 additional tandem spaces, so I just have a problem. One of the questions, 35 actually of Staff while we are on this, I thought that there was a comment made earlier that up to 36 25 percent, or four tandem parking spaces, were pemlitted? 37 38 Mr. Larkin: Absolutely, they are. 39 40 Vice-Chair Tuma: Okay, I can't support the Motion as is. 41 42 Chair Garber: Commissioner Keller. 43 44 Commissioner Keller: Firstly, let me point out that as the diagram is, there are eight tandem 45 parking spaces, as it is labeled. The Applicant tried to indicate how the tandem parking spaces 46 were moved around, but did not do so satisfactorily to indicate where parking spaces 35 and 36 Page 41 ) 1 went. 2 3 So, in fact, as you use this diagram, there are total of eight tandem parking spaces, four front and 4 four back, as well as I guess it's 30 ones that are counted as single spaces, of which somewhere 5 on the order of 10 extra tandem spaces exist which are not counted at all. 6 7 So, that is the first thing. 8 9 Secondly, I believe that as a result of that, the statement made by the City Attorney, that without 10 the tandem parking spaces, this project is sufficiently parked. I do not believe that this is 11 factually correct, and I would like somebody from Planning to confirm whether or not, if tandem 12 spaces are allowed, whether this is in fact sufficient. 13 14 If tandem spaces do not count, they only count as one space, is this sufficiently parked? 15 16 Chair Garber: Vice-Chair Tuma can also follow up, and then I suspect that it is on the same 1 7 question. 18 19 Mr. Larkin: Yes, while Planning staff is looking that up, we were supposed to check in at 9:30 20 on whether or not we would have Item Number 2 after 10:00. 21 22 Chair Garber: Thank you for that reminder. Let's get through this, and can we get through this 23 in ten minutes? 24 25 Vice-Chair Tuma: So regardless of how it's drawn, I think if we put the requirement in there, 26 they have to meet the requirement. So it's drawn, or if it's drawn wrong, and then we've got to 27 move them around, but if we have the requirement in there that they have to have the 42 spaces, 28 okay? 29 30 Then, however it is drawn, that's their problem. They have to nleet the requirement in order for 31 it to get through. All we are talking about right here is defining what the requirements are. Ifhe 32 can't, because he has messed it up, or his math is wrong, then he is back to the drawing board, 33 but I don't think that because he has drawn it wrong, which he has admitted, I don't think that 34 this is a reason to not approve it. 35 36 What I would support is a requirement, and I think maybe what you are concerned about is, if 37 they have 8, or 10 or 12, or however nlany tandem spaces, then they could count all of those 38 towards the requirement. 39 40 I think the answer to that is that they really could only count four of them under the Code, from 41 what I understood the Planning Director said, 25 percent. 42 43 So, if we said that they could have no more than the four as tandems, which is really two slots 44 with two each, tIus is just what they have, which is two with two each, that would keep it at the 45 requirement and no more than the Code allows. 46 Page 42 ) ) 1 It doesn't get into how many ever they have drawn, eight or ten or what have you. It's just the 2 four, and that I would be supportive of. 3 4 Chair Garber: Planning Director. I think there was a question here that Con1ffiissioner Keller 5 had in front of you. Would you like to reiterate it, please? 6 7 Commissioner Keller: Yes, I asked whether, and the City Attorney had stated (from my 8 understanding) that if tandem spaces do not count as more than once space,. and in other words, 9 it's just one instead of two, then the project is sufficiently parked. And I would like to confirm 10 whether in fact that is a correct statement. 11 12 Mr. Williams: I'nl not sure what he meant, but I think the bottom line is that if you have two 13 pair of tandem, no, two spaces with two spaces behind them, those spaces/that counts as four 14 total spaces. Two of them are in tandem, behind the other ones. All the other units have/cannot 15 be counting tandem spaces, because that is your 25 percent, and two of the eight units. 16 Yeah, so two of the eight units, and so then there is an additional tandem, and I mean, 8, 10, 12, 1 7 or whatever the number is, that we can go back and verify that is in excess of that, that are 18 tandem, and are available for parking, that are just extra spaces. 19 20 Commissioner Keller: So when you say that there are two tandem spaces, you mean the two in 21 the back. The ones in the back are counted as tandem. The ones in the front are not counted. 22 Those two are counted as tandem. 23 24 Mr. Williams: You can look at it either way, but yes let's say that for analysis sake. 25 26 Commissioner Keller: What I am trying to understand from this diagram is, do we have four 27 tandem spaces, the four in the back that have numbers on them? Or do we have eight tandem 28 spaces, the ones in the back and the ones in the front? That's what I'm trying to understand. 29 30 Mr. Williams: We have the two slots, just like Vice-Chair Tuma said, two slots with the two 31 spaces in the back. Those are the tandem spaces. 32 33 Commissioner Keller: And the ones in the front are not called tandem spaces? 34 35 Mr. Williams: Yes. 36 37 Commissioner Keller: They are just really long spaces. 38 39 Mr. Williams: They're spaces and those two units have two spaces, and they are in tandem, and 40 some people would say that "the one in the back," because you pull into the one, that the one in 41 the back is the tandem, and others could say that the one that you pull farthest into is the tandem 42 space, but those are two tandem spaces. We need to work all this out, but those spaces are 43 allowed by the Code. They are not based on reductions in parking. 44 Page 43 ) ) 1 Commissioner Keller: So let me just ask and try to clarify this. If you have a space in the front, 2 and the space in the back, on one column, is that considered one tandem space? Or is that 3 considered two tandem spaces under the Code? 4 5 Mr. Willianls: It's considered one, wait. It's considered two tandem. 6 7 Chair Garber: It's one tandem that has two parking spaces that are counted as part of the legally- 8 required slots, the legally-required parking slots. 9 10 Commissioner Keller: I appreciate what the Chair added, but it does not clarify my question 11 which is, if you have one car behind the other, does that count as one tandem space and one 12 regular space? Or, does that count as two tandem spaces? And I think that we have to 13 understand that in order to be able to resolve this because otherwise, whoever is going to deal 14 with this later, is going to get confused just as I am. 15 16 Mr. Williams: We have to deal with it later. It's a requirement of the Code to deal with it. It's 17 not the Commission's analysis, and at this level of detail, to determine exactly how this provision 18 is addressed on a design. 19 20 Chair Garber: Vice-Chair Tuma. 21 22 SUBSTITUTE MOTION 23 24 Vice-Chair Tuma: I would like to offer a Substitute Motion. The Substitute Motion would be 25 that we move the Planning staffs recommendation, adding the requirement for a TDM program 26 that includes Eco Passes, and also that the entrance be moved off of Grant. 27 28 SECOND 29 30 Chair Garber: I'll second that. 31 32 Chair Garber: Would the Maker like to speak to his Motion, and if you would repeat it please? 33 34 Vice-Chair Tuma: I moved the Staff recommendation with the following two conditions, that it 35 would require a TDM program to include Eco Passes, and also that we would require that the 36 entrance be moved offofGrant. 37 38 In speaking to that Motion, the only thing that I would say is that, on the issue of tandem, 39 whether is two is four, or four is eight, or whatever it is, it is the Code requirement. I think what 40 I'm trying to achieve here is a Motion and a recommendation that is consistent with the Code. 41 42 Whatever that works out, that's what Staffhas to work out, and they have to make it consistent 43 with Code, and so that is all I'm after here by taking that tandem issue out of the equation. 44 45 Chair Garber: And, I as the Seconder, have no more comments. Commissioner Rosati, and then 46 Commissioner Fineberg, finally, who has been asking to speak. We will come back to you. Page 44 ) ) 1 2 Commissioner Rosati: I support the Motion as presented. 3 4 Chair Garber: Commissioner Fineberg, then Commissioner Holman and Commissioner Keller. 5 6 Commissioner Fineberg: What happens if we approve the rezoning and if the movement of the 7 driveway to not be on Grant, I believe, causes a reduction of parking spaces and then the facility 8 is under parked. Process, what happens next? 9 10 Mr. Williams: They would have to come back. They would have to revise the project to comply 11 because they need to comply with the parking requirements. 12 13 Commissioner Fineberg: And would that be something that Planning and Transportation would 14 then have to approve, or would it be the ARB during major review? 15 16 Mr. Williams: Well, the ARB would see it as part of the review, but the director essentially 17 recommends to the ARB whether it complies with Zoning or not, and in this case, the ARB does 18 not grant the adjustments, per se, or make that determination on their own. It's not a subjective 19 determination. It's based on the Code numbers. 20 21 Commissioner Fineberg: So where would it go if it turned out that they couldn't physically park 22 it properly? 23 24 Mr. Williams: Then they would have to come back with a variance to the Co:m.t.i1ission, or revise 25 the project to reduce the square footage or the number of units in a way that complied with 26 parking. 27 28 Commissioner Fineberg: However they chose, okay. I don't think this project's reason to 29 rezone or not to rezone hinges on two parking spaces. I'm thinking of it more in terms of 30 something I'll coin "housing neutral." Do we know how many jobs this project will create? And 31 how many housing units is the Association of Bay Area Government (ABAG) going to require to 32 house those additional employees, and is that greater or less than the housing it is creating? And 33 that, to me, I think is where I am going to hinge my decision, but if I can ask the Staff that. 34 35 Mr. Williams: That's not a project-specific analysis. ABAG incorporates job growth in the City 36 and the region. This is well within the scope of what that is. It does not look at, well, this 37 particular project did this, and this many housing units, and try to mesh those together. We don't 38 do that on a project-by-project basis. We have a project that you saw two weeks ago that's got 39 no mixed-use and we don't necessarily try to look at that, but you see another project that is all 40 residential and another project that is all commercial, and it is all factored into regional and 41 citywide growth projections and so its impossible to say or to require that one project somehow 42 generates that balance or imbalance. 43 44 Commissioner Fineberg: I guess the reason I'm thinking that, though, is if we are rezoning from 45 RM-40/51, residential district to a PTOD, and the goal of the PTOD is to increase housing 46 density in that area, then a project that cannot support its own housing needs, to me, flies in the Page 45 ) ) 1 face ofPTOD. Ifwe have to build more houses because we are adding an employment center in 2 a PTOD, it is just inconsistent with the fundamental zoning. 3 4 So, I anl sorry that I did not ask this earlier, but if you can bear with me, in that square footage, 5 about how many employees would we have, and then are we even in the ballpark? 6 7 Mr. Williams: I think you're making a comment, not asking a question. I think, I understand 8 your perspective, and it sounds to me like you are at a point of making comments, and your point 9 is certainly legitimate and if that is your perspective, then Staffs role is not to ..... 10 11 Comnlissioner Fineberg: Okay, I'll pass on getting an answer then. It seems to me that, to go 12 with PTOD, the project needs to provide housing that would be adequate to not cause us to have 13 to build more housing in other areas. Fundamentally, in PTOD, the goal is to increase housing 14 density and I'm not completely convinced that this project does that over the traditional zoning. 15 If we do not approve this, then we lose the ability to condition it, so my decision is going to 16 hinge on if we reject it, losing the ability to condition it, or whether these two conditions make it 17 such a better project that we don't want to lose that chance. 18 19 Chair Garber: Commissioner Holman and then Commissioner Keller, and then let's vote. 20 21 Commissioner Holman: Just a quick one. Perhaps 'as a clarification to the Motion, or perhaps 22 it's an Amendment, and you can tell me. The Motion, as I heard it, said to move the parking 23 garage entry off Grant. It did not reference the purpose of that. so moving the parking garage 24 entry away from comers to provide greater safety, and I don't know if you want to provide that 25 clarity or? 26 27 Vice-Chair Tuma: That certainly was the intent of the Motion. 28 29 Comnlissioner Holman: Okay, I appreciate that. 30 31 Chair Garber: The Seconder supports that. 32 33 Commissioner Holman: Okay, great. That's very helpful, and all apologies. The discretion we 34 have with this is why I brought up the tandem parking issue, but I'm certainly sorry I brought it 35 up. 36 37 Chair Garber: No worries. Commissioner Keller. 38 39 Commissioner Keller: I think I was actually the first person to bring up the tandem parking 40 Issue. 41 42 Commissioner Holman: I meant as part of the Motion, so that's why I'm taking blame. 43 44 Commissioner Keller: I appreciate that, Commissioner Holman. Thanks to Commissioner 45 Rosati who has this nice printed floor-up version of the Code. Under Multifamily Residential Page 46 ) 1 Development Table, it says, and I'll read what it says about tandem parking as this may help 2 answer the questions that I and others had. 3 4 Tandem parking is allowed for any unit requiring two parking spaces, and I'm going to 5 emphasize the following, provided that both spaces in tandem are intended for use by the 6 same residential unit. For projects with more than four units, not more than 25 percent of 7 the required parking space shall be in a tandem configuration. / 8 9 To me, this means, first of all, that the front and back unit spaces are both considered tandem, not 10 just the ones in the back. The second thing it means is that, in order for you to have tandem 11 parking spaces, they nlust be dedicated to a unit, and that means that if you have reduction for 12 shared use, then that's somewhat incompatible with the idea of parking spaces being dedicated to 13 units, because essentially you say that if you have the tandem spaces, you have those two units 14 being dedicated. And that is why, in my opinion, the idea of tandem spaces are incompatible 15 with reductions for shared use, and that's the reason that I made that complaint. 16 17 As a result of that, I cannot support a Motion that allows for tandem spaces, and a maximunl 18 reduction based on shared use, because it's just logically incompatible with the idea of use by the 19 same residential unit. I also believe that I think that people will avoid tandem spaces whenever 20 possible, and aU the other tandem spaces will probably be more used by RVs than two people in 21 the office space using both front and back, because you've got to get somebody to move out of 22 your way so that you can go home. And with that, I will close. 23 24 Chair Garber: Commissioners, let's vote. All in favor of the Motion as stated, say Aye. (Ayes) 25 That would be three with Commissioners Tuma, Garber and Rosati and Holman. That would be 26 four. All those opposed? (Nays) Fineberg and Keller, nay. 27 28 The motion passes 4-2 with Commissioner Lippert absent. We will take a three-minute break. Page 47 Sheridan Residents For a Livable Neighborhood Oppose Change from. RM-48 to PTOD For Blreh Plaza Attachment L Nov 3,2010 We oppose rezoning 2650 Birch, Birch Plaza, from RM-40 to a Pedestrian and Transit Oriented Development,(pTOD). We live at 360 Sheridan Ave, The Sheridan is a senior community, adjacent to this proposed zoning change. Our primary objection to the project is the inadequate proposed parkfug. The parking situation at The Sheridan is severe, 57 units which only 19 parking spaces .. Only 19 spaces were provided because it was thought that seniors don't drive. There are no spaces for vis~tors, no spaces for people who work here, no places for home health care workers who delivers services to seniors here and at least 10 people are waiting for a parking space, thus there is a 24/7/365 lack of street parking. With the addition of the proposed PTOD with its inadequate parking, a severe problem to becomes untenable. Fifty-four (54) residents have signed and submitted a petition asking that the re-zoping be denied. By having a PTOD, Mr. Hohbach will reduce a required 60 parking spaces to 42, a loss of 18 parking spaces. The empty portion of the proposed project at the comer of Birch and Sheridan is currently used as makeshift parking for overflow parking from Mr. Bohbach's Courthouse Plaza. On any given day 25 to 30 cars, trucks and Rvs parked there. Once Birch Plaza is built, where will there vehicles park? Adding up a definite loss of 18 parking spaces by re-zoning to an average of 25 to 30 cars ~nd trucks on the makeshift parking lot, the loss of 2 parking spaces on Grant for the garage entrance plus at least 10 residents of The Sheridan with cars but no parking, totals at least 55 vehicles (18+25+2+10) looking for a place to park. The zoning change will overwhelm the neighborhood with cars driving around looking a place to park and make walking in the neighborhood difficult and dangerous. In conversations with Mr. Bohbach, he said that "if I think it bad here, consider what San Francisco residents have to deal with." Turning Palo Alto into San Francisco where parking is impossible and walking unsafe is not the way to go. A firm NO to rezoning from a RM-40 to PTOD until the parking issue is adequately addressed. theSheridanResidents@gmaiLcom The Sheridan Residents The Math Net Result of Re-Zoning Residential Two t spaces/unit 1 " L Guest s~aces Office One spacel2S0 sq.ft .. Total Required 16 2 42 60 BirchPfODPJ.atA.pdf, Page 6 Table 1 Reduction. I. Revised Proposed Per' Total PAMC 200/0 total for J 12 lointUse (30% combined max) 20% for Housing N'ear Transit (30% combined nlax) 300/0 combined max 30 42 Required 60 PTOD reduces to 42 Loss of Loss of Comer lot( 25-30 on average) Loss for Grant Garage Entrance The Sheridan current needs at least Proposed Confonns 12 I Yes 30 I Yes 42 I Yes 18 Parking Spaces 25 Parking Spaces 2 Parking Spaces 10 Parking SJ!aces BOTTOM LINE MINIMUM Net Shortage 55 Parking§paces Nov 3, 2010 Comments on Mitigated Negative Declaration, 305 Grant, 2640 & 2650 Birch, 306 & 320 Sheridan Ave., 08-PLN-00182 December 13, 2009 This MND is incomplete, inaccurate, and fails to mitigate any of the existing conditions at this site due to the well-known presence of high concentrations of toxic Volatile Organic Compounds in the ground water and soil. Standard requirements by EPA and DTSC for mitigation of new commercial and residential developments in Superfund sites are ignored. Taken in it's entirety this MND is an unacceptable document. It must be rejected and a full EIR prepared that adequately and completely addresses the toxics, health hazards, and required mitigations. The MND should be rejected as inadequate and replaced with an EIR because preparing and reviewing an MND, particularly one so erroneous as this, does not comply with CEQA, and does not adequately protect public health and safety, particularly for a site such as this with residential occupancy over part of the 640 Page Mill COE Superfund site. Mitigation of VOC is ignored, and there are no vapor barriers or Vapor hltrusion Mitigation System. No measurements of indoor VOC levels are proposed in the residential part of the development or anywhere else, in serious violation of EP A guidelines. " The most significant VOC in the contaminated aquifer and the soil below the area proposed for this development is trichloroethylene (TCE) that attacks the liver and kidneys, is a known carcinogen, and is a suspected cause of Parkinson's disease and autoimmune disorders such as Crohn disease, multiple sclerosis, and rheumatoid arthritis. No efforts are made to control this VOC nor to perform any tests or verification of the indoor air to assure safe TCE concentrations. A few examples of problems with tIns MND are noted below. In mitigation G 1 the corrective action is not to build the above ground building over the B4 sample area where soil gas concentration is 6400 ug/m3 of TCE or more than 50% greater than the normal Environmental Screening Level of 4,100 ug/m3 for commercial spaces. The ESL for residential development is even lower, 1,000 ug/m3 for TCE in soil gas. The underground garage apparently will be built over this B4 location, putting the base of the garage a few feet from the high levels of TCE in the soil. There is a high probability the TCE will penetrate the garage, "after which it can disperse to any part of the building, including the residential units, especially since there are neither vapor barrier membranes nor a Vapor Intrusion Mitigation System(VIMS). Many aspects of the design and lack of on-going indoor air monitoring violate normal"practices as applied by EPA and DTSC. Proper mitigation would prohibit any structure in the vicinity of sample site B4, either an underground garage or above grade commercial or residential occupancy and would require both a membrane vapor intrusion barrier and an active sub-slab VIMS with regular indoor air monitoring for TCE and other undesirable VOCs.1 Section G2 cites the risk model as saying the underground garage separates the housing from the plume. In fact an underground garage connects the directly to greatly increases the probability that VOC in the groundwater and soil will enter the building. This was demonstrated when a number of residential buildings at Moffett Field were tested for indoor TCE levels. Building with basements that came in contact with or were close to the aquifer had significantly higher levels of TCE indoors than those on slab. Depth of the garage is not given. How deep would the garage 1 EPA Proposed Plan to Address Vapor Intrusion Pathways at NIEW Site and Moffett Field in Mountain View, July 2009 be? Typically this developer proposes garage excavation depths in the range of 14 feet to 16feet, which at this site will put the garage close to the aquifer. If the garage penetrates the contaminated aquifer the concentration of VOCs inside the building are significantly higher than when there is no contact between the underground garage and the aquifer. There are several monitoring wells near this property. One, F34A, is at Grant and Birch directly across Birch from the site. In 2005 depth to the aquifer was 17 feet in F34A with TCE concentration of 58 ug/L. If the concentration of TCE in groundwater exceeds 50 ug/L, future residential construction should include both a membrane vapor intrusion barrier and an active sub-slab membrane/depressurization system with regular indoor air monitoring.1 Any garage deeper than 13 feet will bring the bottom of the excavation close to the contaminated ground water and probably will result in significant indoor air contamination. The MND ignores the depth of the garage, the presence of contaminated groundwater and the depth to the aquifer. Is the garage open to the atmosphere or mostly underground, with openings only at the entrances? If the latter the probability of VOCs entering occupied spaces above is significantly increased. The project does not include vapor barriers or Vapor Intrusion Mitigation System (VIMS), either passive or the preferred active sub-slab system These vapor barriers are standard practice when either commercial/industrial or residential structures are built over a contaminated site such as this one in the COE area. EPA insists on such vapor barriers for any new construction over contaminated sites such as this, and considers them to be essential to protect the health of site occupants. Without such vapor barriers public health and safety is seriously at risk. Occupants at the site, especially in residential units will be at high risk of contracting some of the serious illnesses known to be associated with TCE. Since there are no vapor barriers there is no mention of testing the indoor air for concentrations of VOCs, especially TCE. EPA and other agencies consider it standard practice to test indoor air in the commercial and residential spaces regularly and over an extended period, at least 5 to 10 years to verify that the vapor barriers and other prevention measures remain effective in preventing intrusion of TCE from the contaminated soil and groundwater. No such testing is proposed for this project, another violation of standard practices as defined by EPA and DTSC. Supposedly vapor intrusion is mitigated by the presence of the underground garage and the office on the lowest level. Underground garages increase the probability of TCE intrusion into the structure, and the mass of the building reduces the distance between the garage floor and the plume of TCE. The TCE plume is pushed towards the surface of the ground by the mass of the structure, making it more likely TCE will pass into the building. In fact, and as has been demonstrated at the Mountain View MEW Superfund site, which is very similar in characteristics and properties to the COE site, and at Orion Park in Moffett Field, unless there are effective vapor barriers the TCE vapors will enter the building via the garage or floor slab preferentially following transmittal portals such as cracked slab, elevator shafts, ~tairways, and utility pipelines. The MND fails to recognize or acknowledge these serious threats to public health that will be caused by the current design proposal. At a minimum the garage and occupied above-ground structures must have adequate vapor barriers as discussed above. Presence of a garage must be reconsidered since it will be very near the aquifer and can enhance TCE penetration into the building. A full EIR is required since this development is over the COE Superfund site and it is clear that mitigations are required and alternates for development must be carefully studied, evaluated, and implemented. Significant changes to the design are required for protection against TCE intrusion by addition of proper vapor intrusion barriers. There must be adequate long-term indoor air sampling and verification that there is no intrusion of TCE into the spaces occupied by residential or commercial uses. Corrective actions must be taken if concentrations of VOCs exceed the generally approved safe levels. The plans must be changed to assure meeting these needs. Even if the developer opposes an EIR, or claims that this proposed project is all that will ever be built on this property, a full EIR still is required to address the health and safety issues adequately and to evaluate needed corrective actions such installation of vapor barrier membranes, active sub-slab depressurization, and elimination of all underground parking, or eliminating the underground garage near the area with high soil gas readings for TCE. These necessary changes in underground parking spaces will reduce the allowable size of the overall project, preferably the office component. Another major problem is the amount of commercial space proposed on the site. This is the first development under the PrOD zone that was developed by staff and the Planning & Transportation Commission after years of study and discussion. The intent of the PTOD zone is to increase residential developments near transit hubs and help to reduce the jobs/housing imbalance in Palo Alto. The proposal is for 8 housing units, a net increase of only 5 units since there are 3 small homes on the site. The maximum FAR allowed for commercial or office use in PrOD is 0.25 in order to emphasize housing, not commercial development in the zone. This project has an office FAR of 0.57 because the developer does not believe the 0.25 FAR limit is reasonable. How nice of this particular developer to insist upon overruling regulations for PrOD zoning that were carefully crafted by the professional staff and the Planning & Transportation Commission. If the excess office FAR is approved the potential number of jobs at the site could be more than 40, far exceeding the 8 housing units and making this PrOD project a source of greater, not less, jobslhousing imbalance. This is another reason why the current proposal is inappropriate and should be denied. Bob Moss 40100rme St. Palo Alto CA 94306 From: Morariu, Kelly Sent: Monday, July 06, 2009 4:37 PM To: Williams, Curtis Subject: FW: July 6,2009, Council Meeting, Item #18: 305 Grant; 2640 & 2650 Birch; and 306 & 320 Sheridan FYI Kelly McAdoo Morariu Assistant to the City Manager City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2452 phone 650-325-5025 fax kel'y.morariu@cityofpa'oalto.org From: herb borock [mailto:herb_borock@hotmail.com] Sent: Monday, July 06, 2009 4:35 PM To: Council, City; Clerk, City Subject: July 6, 2009, Council Meeting, Item #18: 305 Grant; 2640 & 2650 Birch; and 306 & 320 Sheridan Herb Borock P. O. Box 632 Palo Alto, CA 94302 July 6, 2009 Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 VIA ELECTRONIC MAIL AND HAND DELIVERY JULY 6, 2009, CITY COUNCIL MEETING Page lof5 305 GRANT AVENUE, 2640 AND 2660 BIRCH STREET, AND 306 AND 320 SHERIDAN AVENUE Dear City Council: Staff recommends Council (1) adopt the proposed project by granting a concession or incentive for increased office Floor Area Ratio (FAR), and (2) approve a Mitigated Negative Declaration that has not been circulated to the 7/8/2009 State Regional Water Quality Control Board as required by the California Environmental Quality Act (CEQA). Page 2 of5 I urge you to deny approval of the proposed project and the proposed Mitigated Negative Declaration (MND)/ because based on substant evidence: 1. The proposed project has a Potentially Significant Impact on the environment due to hazardous materials that has not been mitigated/ and because a fair argument can be made that an Environmental Impact Report is required. 2. The MND has not been circulated to the Regional Water Quality Control Board and the State Clearinghouse for the required minimum 30-day period. 3. The MND does not evaluate the whole project that includes the proposed Tentative Map and the Below Market Rate (BMR) agreement between the City and the applicant. 4. The project does not fulfill the requirement of Housing Program H-29 ,that requires the provision of 25% BMR units. 5. There is no Mitigation Monitoring and Reporting Program. 6. Building the underground parking garage out to the property boundaries fails to provide adequate soil for healthy tree growth. 7. The project is not entitled to a reduction of parking spaces/ because the cumulative effect of this project and others in the immediate neighborhood requires more parking spaces than a project with the same uses and floor area would normally require. ENVIRONMENTAL IMPACT REPORT REQUIRED; REGIONAL WATER QUALITY CONTROL BOARD DID NOT RECEIVE MND The Phase I Environmental Site Assessment and the Phase II Site Investigation Report evaluate hazardous materials beneath the site's ground surface located in the COE [California-Olive-Emerson] HP/Varian plume/ but perform an evaluation only for hazards in ground water. That is the same evaluation error made in the environmental review of the project at 195 Page Mill Road that evaluated hazards in ground water, but did not evaluate hazards in the soil. Further/ the only bore holes drilled are on the perimeter of the site. No bore holes were drilled in the area that would be beneath the project's footprint, which is the area of the project site that most likely would be the source of any hazardous waste impacting the project's residents and office tenants, and that would most likely to disclose the presence of hazardous waste generated by former occupants of the site. The court in Santa Clara County Superior Court Case #107CV-078386 found that additional environmental review was necessary the project at 195 Page Mill Road that is a short distance from the current project and that is above the 7/8/2009 Page 3 of5 same COE HP/Varian plume, because the State Regional Water Quality Control Board (RWQCB) stated that "more environmental documentation was required to deal with the potential threat to human health from Volatile Organic Compounds ('VOCs') known to be in the soil at the Project site", and that members of the public "may very well have argued in response that confirmation of VOCs in the soil required the preparation of an EIR." For the current project, the RWQCB was not notified of the project, and the environmental evaluation considered only ground water, but not soil. The failure to circulate the MND to the RWQCB, and the failure to evaluate the presence of hazardous waste in the soil beneath the project are both violations of CEQA and prejudicial abuses of discretion. The analysis already done of the same hazardous waste plume beneath the nearby site at 195 Page Mill Road provides substantial evidence that the same unmitigated Potentially Significant Effect exists for the current project and! therefore, an Environmental Impact Report required. WHOLE PROJECT NOT CONSIDERED IN ENVIRONMENTAL ASSESSMENT CEQA requires the MND or EIR to evaluate the whole project, and CEQA Regulation 15378 defines "project" as "the whole of an action, which has a potential for resulting in either a direct physical change in the environment! or a reasonably foreseeable indirect physical change in the environment." The BMR agreement and the Tentative Map are part of the "project" that must be evaluated in the same MND or EIR as the rest of the project that is before the Council for this agenda item. Breaking up the project into~pieces deprives the public the opportunity to review and comment on the proposed BMR agreement and Tentative Map at the time you are required to make a decision about the environmental assessment and project. Piecemealing the project in this fashion is a prejudicial abuse of discretion and a violation of CEQA. Recall that the same applicant, Harold Hohbach, for his project at 195 Page Mill Road, first obtained approval for a rental project that included concessions and incentives pursuant to Government Code 65915, based on an environmental assessment that omitted that project's BMR agreement and Tentative Map, and then submitted a tentative map for a for-sale project and negotiated a BMR agreement with staff to change the income category of the target population for that project's BMR units. PROJECT VIOLATES HOUSING PROGRAM H-29 Palo Alto Comprehensive Plan Housing Program H-29 limits the removal of rental units by a subdivision or condominium "unless there is a significant net gain of housing or a replacement of rental units or affordable units. The program applies to the most recent umber of rental units on the site whether or not 7/8/2009 Page 4 of5 they have been demolished. All units after the first unit are considered rentals. " Program H-29 requires the project meet at lest two of three circumstances: 1. Produce at least a 100 per cent increase in the number units currently on the site. 2. Provide at least the same number of rental units as the number currently on the site. 3. Provide at least 25% BMR units. There are three rental houses currently on the site. Therefore, two units are considered rentals for Housing Program H-29. The project provides eight residential units, which meets condition #1 above, because eight is more than a 100 per cent increase over the number of units currently on the site. The project is a for-sale project. ,Therefore, it does not meet condition #2 above. The project provides only one BMR unit out of a total of eight units, or 12.5% BMR units. Therefore, the project does not meet condition #3 above, which requires 25% BMR units, or two BMR units out of eight total units. The project violates the Comprehensive Plan, because it violates Program H-29. Violating the Comprehensive Plan is a violation of CEQA and a prejudicial abuse of discretion. INSUFFICIENT PARKING Page 3 of 4 of the property owner's information form in Appendix A of the Phase I Environmental Site Assessment says the "parcel at 320 Sheridan Ave was demolished for surface parking for the office building at 260 Sheridan Ave." The proposed project would remove parking needed for an existing office building, which creates a Potentially Significant Effect that has not been discussed in the MND and has not been mitigated. The need for extra parking for the office building at 260 Sheridan Avenue provides substantial evidence that the proposed project needs more than the normal amount of parking. Instead, the proposed project would provide less than the normally required amount of parking by assuming that the total parking can be used by adoption of two discretionary parking reduction formulas. The office uses in the proposed project would normally require 42 parking spaces, which is the total parking spaces proposed for the combined office and residential project. 7/8/2009 Page 5 of5 Essentially, the project is providing zero residential parking spaces, when it needs additional parking spaces above the normal 42 spaces required for the office uses alone based on the substantial evidence of the parking history of 260 Sheridan Avenue. Failure to evaluate and mitigate the Potentially Significant Parking deficit is a violation of CEQA and a prejudicial abuse of discretion. INSUFFICIENT SOIL FOR HEALTH TREE GROWTH The underground parking garage for the proposed project extends to the property boundaries. At the August 6, 2008, preliminary Architectural Review Board hearing, Board Member Alexander Lew expressed his expert opinion that extending the garage to the property line would adversely impact the project's tree plantings, because the garage would prevent the project from providing sufficient soil for health tree growth. That Potentially Significant Impact has not been addressed in the MND and has not been mitigated, which is a violation of CEQA and a prejudicial abuse of discretion. Thank you for your consideration of these comments. Sincerely, Herb Borock Lauren found her dream laptop. Find the PC that's right for you, 7/8/2009 ,'") Betten, Zariah From: Joe A Villareal [joe.a.villareal@gmail.com] Sent: Wednesday, April 15, 2009 5:24 PM To: Planning Commission Subject: Request 2640 Birch PTOD Rezoning be Denied Attachments: IMG_0420.jpg; IMG_0417.jpg; IMG_0414.jpg I had planned to be at tonight's meeting to address the rezoning requested for 2640 Birch, unfortunately because of a last minute medical issue I will not be able to attend. I live at 360 Sheridan Ave., a 57 apartment senior housing community, adjacent to this proposed zoning change. Although I have spoken to Mr. Harold Hobach, he has never chosen to speak to us about this project. Perhaps Mr. Hobach has chosen to not discuss the project because we oppose his previous proposal andlor perhaps because numerous times we have requested that he do something about using this the comer portion of the lot on Birch and Sheridan as a parking lot because of the risk it poses to pedistrian. I have numerous occasions encounter cars and trucks entering and exiting the lot with little regard for pedestrians using the sidewalk. Because there is no driveway, cars and trucks enter and exit at multiple point on Birch and Sheridan and have difficulty seeing pedestrians. At times over 20 vehicles have been parked on this site, this means 20 entrances and 20 exits over the course of th day. Please see attached photos. We at the Sheridan community, believe the size is to large for the property, that it cuts off the limited sunlight we have on the apartments facing the property and that the parking is inadequate for the volume of vehicles that will be generated. Additional, crossing Birch at Park is extremely precarious of pedestrians, with the additional traffic this will make it even more dangerous. This issue has not even been noted and needs to be addressed. We request that the change in zoning be denied until this issues are addressed. Sincerely Joe A Villareal 360 Sheridan Ave Apt #101 Palo Alto, CA 94306 p: 650.326.7519 4/15/2009 ) ) My name is Mary Palmer and I am a homeowner at 350 Grant Avenue across from where the proposed development is to be constructed. I am also a board member of the Birch Court Condominium Association. We have 3 objections for the proposed project: • The exemption for the allowable parking spaces required for new construction. There is another project on Sherman & Ash that is also requesting an exemption. Parking on Grant Ave. is already at full capacity and this will only make it worse. • Underground parking garage entrance/exist on Grant Ave. will increase traffic flow. It is located right at the comer of Birch & Grant. This interaction has had accidents and this will increase the potential for more and will create an additional safety hazard for residents crossing at the intersection. • Rezoning from residential to mixed use. The area of the proposed zoning change is surrounded by residential properties and the change would infringe on the character of our residential neighborhood. Commercial interests do not fit in a residential area due to increases in traffic patterns and noise. Parking for current residents and guests will be greatly impacted. It is almost impossible for current residents to find parking on Grant. Sincerely, Mary Palmer 350 Grant Ave. Palo Alto, CA 94306 650322-1766 I t FOR THE _",,-f?_Ti_C._MEETlNG. ) The Sheridan Residents Petition for a Livable N eighhorhood No Change from RM40 to PTOD For Birch Plaza We are residents of The Sheridan at 360 Sheridan /\.ven ue, a 57-unit senior housing complex with just 19 parking spaces, strongly oppose rezoning Birch Plaza (305 Grant, 2640 and 2650 Birch and 206 and 320 Sheridan) to a :Pedestrian and Transit ()ricntcd :Dcvclopment (PT()D). In effect, this zoning will REDUCE parking spaces per square foot of developed structures. Exactly the opposite needs to occur in our neighborhood where on-street parking is already 100% janmled with cars 24/7/365. Any observer, casual or otherwise, can plainly see our current and growing parking problem. The central objection to the proposed project is inadequate parking. Every time Palo .Alto has tried sonlething like this, it has blown ~p in the face of the surrounding neighborhood reaction. This time, it is our neighborhood that is under attack. The parking situation at The Sheridan is severe because the number of spaces provided nineteen (19) is about one-third those needed to adequately accommodate current residents, their health care providers and guests. We must drive around and around with our vehicles burning gas and spewing carbon emissions as we vie for available street parking. Because three (3) large developments have occurred on Sheridan Avenue within the past few years, the addition of the proposed PTOD with its inadequate parking will cause a currently severe parking problem to become impossible. Nobody wants that, except apparently Atherton resident and developer Harold C. Hohback. One reason Mr. Hohbach wants to change the zoning from RM-40 to PTOD is so that he will be required to provide less parking. A change would mean that instead of requiring 60 parking spaces, he would only be required to provide 42, a 30% loss. The vacant land for the proposed development at Birch and Sheridan is already being used as an ad hoc parking lot primarily for overflow fronl Mr. Hohback's Courthouse Plaza. As the attached photos show, the number of cars and trucks parked is about the same number of parking spaces that Mr. Hohbach wants to do away with. Although Mr. Hohbach has been asked to fence the vacant lot to eliminate the parking and pedestrian hazards, he has instead chosen to fill with gravel the worst potholes in the lot to m~ke parking easier, thus increasing traffic 1 hazards and threatening pedestrian safety. RECEIVED theSheridanResidents@gmail.com JUL J 12009 Department of Planning &. .Commu!,ity ~nl(lr9nment ) ) The Sheridan Residents Petition for a Livable Neighborhood No Change from RM40 to PTOD For Birch Plaza Because there is no driveway to the vacant lots, cars and trucks entering and exiting at multiple points on Birch have difficulty-seeing pedestrians. The attached photos illustrate how this vacant lot, contiguous to The Sheridan, is loaded with parked vehicles, the vast majority entering and exiting the lot off Birch Street. Pedestrians using the sidewalk are caught unaware when cars and trucks veer on and off Birch into and out of the makeshift parking lot. This poses a life- threatening situation. Mr. Rohback's parking structure at 235 Sheridan Avenue serving the Plaza and adjacent rentals is simply inadequate. Thus, the parking overflow situation critically impacts our neighborhood. Entrance for the proposed PTOD has been suggested on Sheridan or Birch. There are currently two entrances/exits to The Sheridan, two entrances/exits to 345 Sheridan and another.entrance/exit to the Jerusalem Baptist Church. The entrances/exits to The Sheridan and 345 Sheridan are directly across from each other and the entrance/exit to the Jerusalem Baptist Church is adjacent to one of The Sheridan entrance/exits. Placing another entrance/exit on Sheridan Avenue will endanger pedestrians; access to the underground and surface parking for the proposed PTOD should be on Birch, which vehicles are currently using to enter and exit the vacant lot. Moreover, pedestrian crossing of Birch at Sheridan is extremely precarious, if not downright dangerous. With the additional traffic this proposed development will generate, the crossing will become even more dangerous. We thus request CouncH to deny th.e proposed cbange in zoning for 405 Birch fro!]] RM-40 to a PT(JI) until the above issues are resolved. Sincerely, The Sheridan Residents Petition signatures and photos attached. theSheridanResidents@gmail.com 2 6/30/2009 The Sheridan Residents Oppose Zoning Change of Birch Plaza 305 Grant Ave., 2640 2650 Birch Str. and 306 320 Sheridan Ave. from Existinf! RM-40 to PTOD - Name N Last First Apt 1 Bellairs Daphne 110 2 Berman Abe 216 3 Berman David 209 4 Berman Sylvia 216 5 Cannon Joan 307 6 Cardenas Hector 206 7 Cardenas Victoria 206 8 Caruso Leona 116 9 Chen Pei 310 f Chizari ~ 305 Chou Charlie 204 12 Chou Grace 204 13 D anI gren Doris 111 14 Davis Ronald 106 15 Dunning Peter 309 16 Han Chen 304 17 Han Zheng 304 18 Hassitt N 319 19 Hudson Eneda 119 20 Jett Jane 302 theSheridanResidents@gmail.com Pg 1 of3 6/30/2009 ) The Sheridan Residents Oppose Zoning Change of Birch Plaza 305 Grant Ave., 2640 2650 Birch Str. and 306 320 Sheridan Ave. ) from Existinl! RM-40 to PTO D - Name N Last First Apt 41 Slocum Jean 311 42 Sorokina AlIa 219 43 Thomas James 107 44 Tong Gladys 313 45 Trofimenko Nikolay 219 46 Villareal Joe 101 47 Vogel Penny 117 48 Wang I Mun-Fai 202 1491 Ward Maggie 218 50 Wyer Melissa 303 51 Xue Pei 201 52 Yeatman Vivian 317 53 Zhu Pei 208 theSheridanResidents@gmail.com Pg 3 of3 Name M-4< r) I 1'-GJ,..p~ p~,;:;") r~ 'C. -"------;v /VI' ko/~'t TroJ/ WfQVlJ-vO .4 I / C~ S ~ V'C] J,~ .... / /:'1 w /6 rOn/s /CI V ,I( arC'A? c" 1-", ~"l ,. c<-Karoc /'/7( (,..;) Apt # ....{ ·a ..,..'1/0 2 if g , ..... ') .-:! -f I..; 2 // 2// Yevq:t:'tVi~~ Orsh()/V'<:J~Y I 2ty Q / / l'1arlN() 'lJoro She/llt<o I 21Y Phone '2 ") . . it ,.."\"" ' .. J ").. ,,-} ..... ~ '.'. l .. ~"" ./ "".">. ~~' $." V t.. '~¢' ~ .' /""'/ .. ' . ..,-~)tf b '-1~ 3? ~b{;··!~3 ::S~ .3' d /' -,,"P t( _. .. 32?""-!lC .9./ 325"-ig 11 325 ... /~1( E-Mail ------. .. ~ Signatnre rl~~L'- ,,-LL 'f~p ~~ .~~' ?tf,( .... ~) . LL if!-r;'h"': ~~ ~7 -'"="_ /., ..... -.. -~-~ ..... -.,,~". / ... ,.,...., , c.:'"~ (,,/ Ie···· / '"'~"~ /".-c''''''' /7 p;:;.)." t:.... ." I""'-I:..{.,. ~ .. ". I' A:-.~ ({):./~-&A .'.-p ~ if # ~ Attachment M Birch Street PTOD R,ezoning Proposal Links to Related Documents 1. April 15, 2009 PTC Staff Report and Attachments http://www.cityofpaloalto.orglcivicalfilebank/blobdload.asp?BlobID=15412 2. August 7, 2008 ARB Staff Report and Attachments http://www.cityofpaloalto.org/civicalfilebanklblobdload.asp?BlobID=13097 3. Palo Alto Municipal Code Chapter 18.34 PTOD Combining District Regulations http://www.cityofpaloalto.org/civicalfilebank/blobdload.asp?BlobID=13770 • Page 'IV -1 section B. 2. -revise the paragraph as follows: Restrictions on Council Communications Outside of Quasi-Judicial Hearings. It'is the policy of the Council to . , strongly discourage the gathering and submission of information outside of any required hearing, including prior to recommendations by ARB or P&TC, when such information will impair the Council's impartiality on a quasi-judicial decision or planned community zoning application. . • Page V-I section B. 4. -delete the words "action minutes" and revise to "sense minutes". The following is a listing of the changes that were approved by the Policy & Services Committee for the City Council Protocols with additional verbiage underlined: • Page 4 Council Conduct with Palo Alto Boards and Commissions --first bullet second sentence: Any public comments by a Council Member at a Board or Commission meeting, when that Council Member is not the liaison to the Board or Commission, should be elearly made should make a point to clearly state it is an individual opinion and not a representation of the feelings of the entire City Council. • Page 5 -first bullet title: Limit contaet with Refrain from Lobbying Board and Commission members to questions of clarification. • Page 5 -second bullet: delete the last sentence: A Board or Commission appointment should not be used as a political "revrard". • Page 5 -third bullet first sentence: If a Council Member has a--conce:rn~ with the effeeti'feness of a particular Board or Commission member fulfilling their roles and responsibilities and is comfortable in talking with that individual privately, the Council Member should do so. • Page 5 -sixth bullet: Appointed Council liaisons and/or alternates are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission, er--te arrange for an alternate. . • Page 6 -OTHER PROCEDURAL ISSUES, third bullet: change the seventh line to remove "Assistant City Manager" and replace with City Manager. Add sentence at the end of the paragraph: More detailed procedures· relating to agenda questions can be found in the addendum to these protocols. • Page 6/7 -Add bullet: Submittal of Materials Directly to Council. If Council receives materials related to agenda item matters they will notify the City Clerk and the City Manager as soon as pOSSIble. • Page 6/7 -Add bullet: Late Submittals of Planning Application Materials. In order to allow for adequate staff review and analysis and to ensure public access to materials, all plans and other applicant materials related to Planning applications being heard by the City Council must be submitted not later than noon 5 working days prior to the release of the Council agenda packet. This includes materials delivered to staff or to Council members either before or during the meeting. If items are not submitted by this date or if RESOURCE IMPACT There is no resource impacts associated with the recommendations in this report. POLICY IMPLICATIONS This discussion is consistent with current Council direction and policies. ATTACHMENTS: Attachment A: Redline version of City Council Protocols and Procedures Attachment B: Excerpts from Policy & Services Committee Minutes of June 22, 2010, July 29, 2010, September 30, 2010, October 26, 2010, and Action Minutes from November 9, 2010. CITY OF PALO ALTO COUNCIL PROTOCOLS (Updated ~10.2010) All Council Members All members of the City Council, including those serving as Mayor and Vice Mayor, have equal votes. No Council Member has more power than ~my other Council Member, and all should be treated with equal respect. All Council Members should: • Demonstrate honesty and integrity in every action and statement • Comply with both the letter and spirit of the laws and policies affecting the 'operation operations of government. • Serve as a model of leadership and civility to the community • Inspire public confidence in Palo Alto government • Work for the common good, not personal interest • Prepare in advance of Council meetings and be familiar with issues on the agenda • Fully participate in City Council meetings and other public forums· while demonstrating respect, kindness, consideratidn, and courtesy to others • Participate in scheduled activities to increase Council effectiveness • Review Council procedures, such as these Council Protocols, at least annually • Represent the City at ceremonial functions at the request of the Mayor • Be responsible for the highest standards of respect, civility and honesty in ensuring the effective maintenance of intergovernmental relations • Respect the proper roles of elected officials and City staff in ensuring open arid effective government • Provide contact information to the City Clerk in case an emergency or urgent situation arises while the Council Member is out of town Council Conduct with One Another Councils are composed of individuals with a wide variety of backgrounds, personalities, values, opinions, and goals; Despite this diversity, all have chosen to serve in public office in order to improve the quality of life in the community. In all cases, this common goal should be acknowledged even as Council may "agree to disagree" on contentious issues. CLKBDM 100316 1 to be cooperative and show mutual respect for the contributions made by each individual for the good of the community. • Treat all staff as professionals. Clear, honest communication that respects the abilities, experience, and dignity of each individual is expected. As with your Council colleagues, practice civility and decorum in all interactions with City staff. • Channel communications through the appropriate senior City staff. Questions of City staff should be directed only to the City Manager, Assistant City Manager, City Attorney, City Clerk, Assistant City Clerk, City Auditor, SeniorAssistant City Attorneys, or Department Heads. The Office of the City Manager should be copied on any request to Department Heads. Council Members. should not set up meetings with department staff directly, but work through Department Heads, who will attend any meetings with Council Members. When in -doubt about what staff contact is appropriate, Council Members should ask the City Manager for direction. However, nothing in these protocols is intended to hinder the access Council-appointed liaisons (e.g. to the San Francisquito JPA or NCPA) may require in order to fulfill their unique responsibilities. • In order to facilitate open government. all Council Members should make decisions with the same information from staff on agendized or soon-to-be agendized items (Le. items on the tentative agenda or in a Council Committee). • Never publicly criticize an individual employee, including Council-Appointed Officers. Criticism is differentiated from questioning facts or the opinion of staff. All critical comments about staff performance should only be made to the City Manager through private correspondence or conversation. Comments about staff in the office of the City Attorney, City Auditor or City Clerk should be made directly to these CAOs through private correspondence or conversation" • Do not get involved in administrative functions. Avoid any staff interactions that may be construed as trying to shape staff recommendations. Council Members shall refrain from coercing staff in making recommendations to the Council as a whole. • Be cautious in representing City positions on issues. Before sending correspondence related to a legislative position, check with City staff to see if a position has already been determined. When corresponding with representatives of other governments or constituents, remember to indicate if appropriate that the views you state are your own and may not represent those of the full Council. • Do not attend staff meetings unless requested by staff. Even if the Council Member does not say anything, the Council Member'S presence may imply support, show partiality, intimidate staff, or hampers staff's ability to do its job objectively. eLK BDM 100316 3 • Respect the "one hour" rule for staff work. Requests for staff support should be made to the appropriate senior staff member, according to the protocol for channeling communications. Any request, which would require more than one hour of staff time to research a problem or prepare a response, will need to be approved by the full council to ensure that staff resources are allocated in accordance with overall council priorities. Once notified that a request for information or staff support would require more than one hour, the Council Member may request that the City Manager place the request on an upcoming Council agenda. • Depend upon the staff to respond to citizen concerns and complaints. It is the role of Council Members to pass on concerns and complaints on behalf of their constituents. It is not, however, appropriate to pressure staff to solve a problem in a particular way. Refer citizen complaints to the appropriate senior staff member, according to the protocol on channeling communications. The senior staff member should respond according to the Policy and Procedure for Responding to Customer Complaints. Senior staff is responsible for making sure the Council Member knows how the complaint was resolved. • Do not solicit political support from staff. The City Charter states that "Neither the city manager or any other person in the employ of the city shall take part in securing or shall contribute any money toward the nomination or election of any candidate for a municipal office." In addition, some professionals (e.g., City Manager and the Assistant City Manager) have professional codes of ethics, which preclude politically partisan activities or activities that give the appearance of political partisanship. Council Conduct With Palo Alto Boards and Commissions The City has established several Boards and Commissions as a means of gathering more community input. Citizens who serve on Boards and Commissions become more involved in government and serve as advisors to the City Council. They are a valuable resource to the City's leadership and should be treated with appreciation and respect. Council Members serve as liaisons to Boards and Commissions, according to appointments made by the Mayor, and in this role are expected to represent the full Council in providing guidance on Council processes or actions to the Board or Commission. Refrain from speaking for the full Council on matters for which the full council has not yet taken a policy position. In other instances, Council Members may attend Board or Commission meetings as individuals, and should follow these protocols: • If attending a Board or Commission meeting, identify your comments as personal views or opinions. Council Members may attend any Board or Commission meeting, which are always open to any member of the public. Any public comments by a Council Member at a Board or Commission meeting, when that Council Member is not the liaison to the Board or Commission, should be clearly made asshould make a point to clearly state it is an individual opinion and not a representation of the feelings of the entire City Council. eLK BDM 100316 4 • Limit contact 'NithRefrain from Lobbying Board and Commission members-te questions of clarification. It is inappropriate for a Council Member to contact a Board or Commission member to lobby on behalf of an individual, business, or developer, or to advocate a particular policy perspective. It is acceptable for Council Members to contact Board or Commission members in order to clarify a position taken by the Board or Commission. • Remember that Boards and Commissions are advisory to the Council as a whole, not individual Council Members. The City Council appoints individuals to serve on Boards and Commissions, and it is the responsibility of Boards and Commissions to follow policy established by the Council. Council Members should not feel they have the power or right to unduly influence Board and Commission members. ,A, Board or Commission appointment should not be used as a political "re'v'v'ard." • Concerns about an individual Board or Commission member should be pursued with tact. If a Council Member has a-concerns with the effectiveness of a particular Board or Commission member fulfilling their roles and responsibilities and is comfortable in talking with that individual privately, the Council Member should do so. Alternatively, or if the problem is not resolved, the Council Member should consu-It with the Mayor, who can bring the issue to the Council as appropriate. • Be respectful of diverse opinions. A primary role of Boards and Commissions is to represent many points of view in the community and to provide the Council with advice based on a full spectrum of concerns and perspectives. Council Members may have a closer working relationship with some individuals serving on Boards and Commissions, but must be fair to and respectful of all citizens serving on Boards and Commissions. • Keep political support away from public forums. Board and Commission members may offer political support to a Council Member, but not in a public forum while conducting official duties. Conversely, Council Members may support Board and Commission members who are running for office, but not in an official forum in their capacity as a Council Member. • Maintain an active liaison relationship. Appointed Council liaisons and/or alternates are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission, or to arrange for an alternate. Staff Conduct with City Council • Respond to Council questions as fully and as expeditiously as is practical. The protocol for staff time devoted to research and response is in application here. If a Council Member forwards a complaint or service request to a department head or a Council Appointed Officer, there will be follow-through with the Council Member as to the outcome. CLKBDM 100316 5 the release of the Council agenda packet. This includes materials delivered to staff or to Council members either before or during the meeting. If items are not submitted by this date or if staff determines additional review is needed, staff will reschedule the item to a future Council meeting. Additionally, if there are significant changes, staff will analyze whether the need exists to continue the item. • Respect the work of the Council standing committees .. The purpose of the Council standing committees is to provide focused, in-depth discussion of issues. Council should respect tne work of the committees and Fe commit to its policy of keeping unanimous votes of the committees on the consent calendar. If a matter is taken forward to the full Council for approval and it receives a unanimous vote at Committee, the item will be placed on the Consent Calendar unless otherwise recommended by the Committee or staff. • The Mayor and Vice Mayor should work with staff to plan the Council meetings. There are three purposes to the pre-Council planning meeting: 1) to plan how the meeting will be conducted; 2) to identify any issues or questions that may need greater staff preparation for the meeting; and 3) to discuss future meetings. The purpose of the meeting is not to work on policy issues. Normally, only the Mayor and Vice Mayor are expected to attend the pre-Council meetings with the City Manager and other CAOs. Consideration in building the agenda should be given to the potential length of the meeting and at what point items of significant public concern may be heard. POLICY & SERVICES COMMITTEE -ROLE, PURPOSE, & WORK PLANNING The Municipal Code states that the role of the Council Policy & Services Committee is to: ... consider and make recommendations on matters referred to it by the council relating to parliamentary and administrative procedures and policy matters pertaining to intergovernmental relations, personnel policies, planning and zoning, traffic and parking, public work, and community and human services. (§2.04.220) In 2009 and 2010, the Council reviewed the purpose and structure of the Committee and adopted recommendations on several items related to this. This section documents these agreements related to the Committee. Purpose Statement: The purpose of the Policy & Services Committee is to regularly review and identify important community issues and City policies and practices with a . focus on ensuring good public policy and best practices. A particular focus of the Committee is to ensure that the City organization is responsive. effective and aligned with community values and City Council priorities. eLK BDM 100316 7 ENFORCEMENT Council Members have the primary responsibility to assure that these protocols are understood and followed, so that the public can continue to have full confidence in the integrity of government. As an expression of the standards of conduct expected by the City for Council Members, the protocols are intended to be self-enforcing. They therefore become most effective when members are thoroughly familiar with them and embrace their provisions. For this reason, Council. Members entering office shall sign a statement affirming they have read and understood the Council protocols. In addition, the protocols shall be annually reviewed by the Policy and Services Committee and updated as necessary. eLK BDM 100316 8 CITY OF PALO ALTO COUNCIL PROTOCOLS ETHICS ADDENDUM The citizens, businesses and organizations of the city are entitled to have fair, ethical and accountable local government, which has earned the public's full confidence for integrity. To this end, the City Council has adopted Council Protocols and this Code of Ethics for members of the City Council to assure public confidence in the integrity of local government and its effective and fair operation. Comply with Law Members shall comply with the laws of the nation, the State of California and the City in the performance of their public duties. These laws include but are not limited to: the United States and California constitutions, the city Charter, laws pertaining to conflicts of interest, election campaigns, financial disclosures, employer responsibilities and open processes of governments and City ordinances and policies. Conduct of Members The professional and personal conduct of members must be above reproach and avoid even the appearance of impropriety. Members shall refrain from abusive conduct, personal charges or verbal attacks upon the character or motives of other members of the Council, boards and commissions, the staff or the public. Respect for Process Members shall perform their duties in accordance with the processes and rules of order established by the City Council governing the deliberation of public policy issues, meaningful involvement of the public and implementation of policy decisions ·of the City Council by City staff. Decisions Based on Merit Members shall base their decisions on the merits and substance of the matter at hand, rather than on unrelated considerations. Conflict of Interest In order to assure their independence and impartiality on behalf of the common good, members shall not use their official positions to influence decisions in which they have a material financial interest or where they have an organizational responsibility or: personal relationship, which may give the appearance of a conflict of interest. Gifts and Favors It is contrary to the city of Palo aAlto's ethical standards for any council member to accept gifts or gratuities from an individual, business, or organization doing business, or seeking to do business, with the City or who is seeking permits or other entitlements from the City. The acceptance of gifts can convey an appearance of favoritism and conflict of interest. Gifts can be perceived as attempts to influence City operations or as compensation for eLK BDM 100316 9 services rendered and can erode the public confidence in the impartiality of decisions made by Council Members. Council Members exercise good faith in carrying out this Protocol. It is impossible to list every situation and fact pattern, so it anticipates that Council Members will exercise their good judgment in determining whether the item is a gift or not. This policy. is . supplemental to the gift limitations of the Fair Political Practices Commission's Limitations and Restrictions on Gifts, Honoraria, Travel and Loans. The following are not considered gifts under this Protocol: • Gifts which the Council member returns (unused) to the donor, or for which the Council Member reimburses the donor, within 30 days of receipt. • Gifts from a Council Member's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, or first cousin or the spouse of any such person, unless he or she is acting· as an agent or intermediary for another person who is the true source of the gift. • Minor gifts of hospitality involving food or drink, -that the Council Member receives in an individual's home or at another location of business. • Gifts approximately equal in value exchanged between the Council Member and another individual on holidays, birthdays, or similar occasions. • Informational material provided to assist the Council member in the performance of their official duties, including books, reports, pamphlets, calendars, periodicals, videotapes, or free or discounted admission to informational conferences or seminars. • A bequest or inheritance. • Campaign contributions. • Personalized plaques and trophies with an individual value of less than $250. • Tickets to attend fundraisers for campaign committees or other candidates, and tickets to fundraisers for organizations exempt from taxation under Section 501 (c)(3) of the Internal Revenue Code. • Free admission, refreshments, and similar non-cash nominal benefits provided to the Council Member at an event at which the Council Member gives a speech, participates in a panel or seminar, or provides a similar service. Transportation within California, and any necessary lodging and subsistence provided directly in connection with the speech, panel, seminar, or similar service, are also not considered gifts. • Passes or Tickets which provide admission or access to facilities, goods, services, or other benefits (either on onetime or repeat basis) that the Council Member does not use and does not give to another person. • Wedding gifts • A prize or award received in a bona fide competition not related to official status. • (These exceptions are paraphrased from FPPC publications.) • Gifts from Sister Cities or other entities, other municipalities, if forwarded to the City. CLKBDM 100316 10 Confidential Information Members shall respect the confidentiality of information concerning the property, personnel or affairs of the City. They shall neither disclose confidential information without proper legal authorization, nor use such information to advance their personal, financial or other private interests. Use of Public Resources Members shall not use public resources, such as City staff time, equipment, supplies or facilities, for private gain or personal purposes. Representation of Private Interests In keeping with their role as stewards of the public interest, members of Council shall not appear on behalf of the private interests of third parties before the Councilor any other board, commission or proceeding of the City, nor shall members of boards and commissions appear before their own bodies or before the Council on behalf of the private interests of third parties on matters related to the areas of service of their bodies. Advocacy Members shall represent the official policies or positions of the City Council, board or commission to the best of their ability when designated as delegates for this purpose. When presenting their individual opinions and positions, members shall explicitly state they do not represent their body or the City, nor will they allow the inference that they do·. Positive Work Place Environment Members shall support the maintenance of a positive and constructive work place environment for City employees and for citizens and businesses dealing with the City. Members shall recognize their special role in dealings with City employees to in no way create the perception of inappropriate direction to staff. CLKBDM 100316 11 POLICY AND PROCEDURE FOR CITY COUNCIL E-MAILS FOR AGENDA-RELATED ITEMS The Council adopted protocols provide a framework for the policy on e-mail communications between Council Members and Staff on agenda-related items, including the following: • In order to facilitate open government, all Council Members should make decisions with the same information from Staff on agendized or soon-to-be agendized items (Le. items on the tentative agenda or in a Council Committee) • Submit questions on Council agenda items ahead of the meeting, In order to focus the Council meetings on consideration of policy issues and to maintain an open forum for public discussion, questions which focus on the policy aspects of agenda items should be discussed at the Council meeting rather than in one-on- one communications with Staff prior to the meetings. Any clarifications or technical questions that can be readily answered can be handled before the meeting. Council Members are encouraged to submit their questions on agenda items to the appropriate Council Appointed Officer or Assistant City ManagerCity Manager as far in advance of the meeting as possible so that Staff can be prepared to respond at the Council meeting. In its settlement agreement with the San Jose Mercury News of February 2003, the City Council agreed to consider a policy under which the Council would waive any deliberative or other privilege, other than attorney-client privilege, that it might assert with regards to e-mails on agendized items. This policy and procedure implements that agreement. The Council, in adopting this policy, does not waive attorney-client-privilege or any other privilege associated with a closed session authorized under the Brown Act. Procedure: • Council Members should direct any questions on City Managers Reports (CMRs)staff reports to the Assistant City ManagerCity Manager or designee. Questions on reports from the City Auditor, City Attorney, or City Clerk should be directed to the appropriate Council Appointed Officer. Council Members should not direct any questions on agenda items to other members of the City Manager's Staff or the Staff of the other Council Appointed Officers. • Council Members will submit questions on agenda items no later than 9 a.m. on the Monday of the Council meeting at which the item will be discussed. Any questions received after that time may be responded to via e-mail, or alternatively, will be responded to at the Council meeting. • Staff will not engage in "dialogues" with individual Council Members regarding questions, i.e. follow-up questions to initial questions will be responded to at the Council Meeting. • Staff will give highest priority to responding prior to the Council meeting via e- mail only on items on the Consent Calendar. Questions which address the policy aspects of the item on the Council agenda will not be responded to prior to the meeting, although Staff welcomes such questions in advance of the meeting in eLK BDM 100316 12 eLK BDM 100316 14 Excerpts from Policy and Services Committee Minutes of: June 22, 2010 July 29, 2010 September 30, 2010 October 26, 2010 Action Minutes from November 9,2010 Excerpt from the Policy and Services Meeting June 22, 2010 Recommendation to Council on Proposed Changes to the City Council Procedures and Protocols. Assistant to the City Manager, Kelly Morariu gave a brief overview of the changes being requested to the Procedures and Protocols. City Clerk Donna Grider stated that moving the Council packet delivery date forward had implications for Colleagues Memo's and public correspondences. She noted the public and news papers had mentioned their appreciation of receiving the information earlier. The reasoning behind altering the speaker cards was to create an easier process for the public and to have a unified card for Council and Boards and Commission meetings. Council Member Holman recalled requesting comparative information from surrounding cities and their packet delivery timeframe. She stated reviewing comparative information' would be beneficial. In reviewing the previous meeting minutes the implementation date for early release of packet was during the Council summer break. City Manager James Keene stated he recalled the discussion of bringing on board an automated agenda management system. That would create a change in the delivery schedule with the deployment of the new management system, which was anticipated by the end of the year. A single change would cause fewer disruptions to the system. Ms. Grider stated she had received the information from the San Jose City Clerk although had not had the opportunity to analyze it. 1 Council Member Holman stated there needed to be criteria set to define what a larger project was and she requested placing early release of larger projects in the Procedures and Protocols for ten days to two weeks. She noted there was no pro forma data which had previously been requested. Ms. Morariu clarified the Applicant was to submit pro formas in addition to the materials that were required in a development application. Council Member Holman stated the language provided in CMR 286: 10, Section 5) Late Submittals was inaccurate to what was requested by the authors of the Colleagues Memo. 'The goal was to receive Applicant information with ample time for Staff to review said information prior to submission to Council. If there were significant alterations to the information, Staff may decide there needed to be another review by the Architectural Review Board (ARB) or the Planning & Transportation Commission (P&TC). Ms. Morariu stated additional language could be added to the section to satisfy the requests of the Council Members on late submissions. She said the Director of Planning and Community Environment, Curtis Williams said that receiving the information a day earlier than the release of Council packet should provide the Planner with sufficient time to review the documentation and determine whether the item needed to be continued. Mr. Keene suggested the language should read: If the information was not submitted by a certain date or if Staff had insufficient time for review, the item would be continued. Council Member Holman stated the goal was for projects to receive good reviews and the objective was for Staff and volunteer time to be utilized efficiently in reviewing projects. Ms. Morariu stated after discussions with the City Attorney's office and the Planning Department, Staff deCided it would be Council's purview to continue an item if the Applicant submitted information the date of the Public Hearing. Council Member Price stated Council was at a disadvantage in determining the significance of the modification as Council relied on Staff's knowledge and history with a project to inform them whether the modifications were significant or minor. Ms. Morariu stated if there were modifications presented at the Public Hearing without Staff having time to review the changes there needed to be a discussion at Staff level to determine the significance. 3 Council Member Holman requested to put into place a clear process for Applicants to follow. Asa part of the process they should be discouraged against submittals past the Staff deadline. Mr. Keene stated there needed to be clarity in the Staffs' role in the process as well as the Applicant. There needed to be contingencies in place for unforeseen situations. Council Member Price stated if the alteratioris were significant, the notices in the newspaper would be incorrect and therefore the Public Hearing would be· invalid. Mr. Keene stated the procedures needed to beelear. There were going to be gray areas that may not be in the procedures but were common sense. Council Member Holman stated the last sentence in the proposed language in CMR 286: 10, Item 5 needed to be altered. Depending on the change to the plans being submitted they may need to be reviewed by the ARB or the P&TC rather than continued to the next Council meeting. Mr. Keene stated the language needed to be a part of the development process. Ms. Morariu stated this was the area for the pro forma discussions as part of the requirement for Planning submittal, rather than a part of the Council protocols and Procedures. Council Member Shepherd asked if the information seemed right, could two Council Members request the item return on the Consent Calendar. Ms. Grider stated legally a Public Hearing could be continued although could not be placed on the Consent Calendar. Council Member Shepherd noted the School District had a two meeting rule which saved them time when an item was fairly large. Ms. Grider stated there was not a rule in place where c;ln item could not have a two step process; although, Public Hearings needed to remain as such. Mr. Keene clarified the object was to deal with the timeliness of information flow and the Staff reports to Council. There was a need for a range of changes in . application and development processes and procedures. 4 Council Member Holman stated the requested timeline for receipt of Applicant changes was noon prior to the Council packet release. She felt there needed t,o be more time for Staff to review the Applicant changes. Council Member Price added once the Applicant changes were reviewed by the Staff member the changes needed to be reviewed by management prior to being included in the Staff report and added to the Council packet. A few days to a week seemed sufficient dependant upon the significance of the changes. Ms. Morariu asked whether the changes being referred to were from the P&TC. Council Member Holman stated any changes could affect the project and Staff needed ample time to ensure the changes were adequate, met all of the standards and requirements, and that they had sufficient information to notify Council. Council Member Price stated if the Applicants' changes were perceived as minor and Staff merely commented on the changes during the Public Hearing that did not allow the public to understand what changes were made or to comment on them. If the alterations were not imbedded in the Staff report in a timely ,manner the public did not have the ability to respond. Mr. Keene stated the language needed to be more value based than rule based. -It needed to show the Council endorsed the public decision making process which required a timely submission of materials and the ability for Staff to review the information and make adequate Staff report changes which gave the public ample time to comment. Council Member Holman stated that as a guiding principle for the process of regulating the receipt of materials the intention could not be better stated than in the City Council Protocols Section I, Ai the following sentence read: These rules are intended to enhance public participation and Council debate so that the best possible decisions can be made for Palo Alto. ChairYeh stated the draft language seemed too prescriptive: all plans and,other Applicant materials related to Planning applications being heard by the City Council must be submitted not later than noon one day prior to the release of the Council agenda packet. He felt that was not sufficient time for review. Ms. Morariu suggested the Director of Planning and Community Environment, Curtis Williams return to the Committee to revisit the language. 5 Chair Yeh asked the capabilities of the agenda management system. He asked the likelihood of receiving the Council packet earlier than the Wednesday prior to the Council meeting. Ms. Grider stated once the agenda had been released if there were changes it would cause confusion with multiple versions. Ms. Morariu clarified the City was in the first stages of the signing the contract with the vendor and forming the implementation process. Mr. Keene stated the biggest issue with an earlier packet would be the possible confusion to the public. Chair Yeh clarified this was an incremental change reflecting a new system. The Committee would have further opportunities for discussion in the fall. . Council Member Holman requested the Committee receive the planning processes and procedures in order to better understand the process. Council Member Shepherd stated at a previous meeting they discussed an eighteen month timeline. Council Member Holman clarified that Council. Priorities refer to process efficiencies. The adherence to existing rules and procedures did not take eighteen months to implement. She was requesting rectifying the adherence of State and local laws. Chair Yeh requested process mapping for the Colleagues Memo procedures. Mr. Keene felt the best practice for the planning processes and the Development Center procedures would be to have the Director of Planning and Community Environment, Curtis Williams meet with the Committee to review the current practices and the proposed changes. Council Member Price stated she felt comfortable with the current applicant process. With the Council using their best judgment in their discussions regarding a project proposal, and with the understanding that Staff would notify the Council during the Public Hearing about any changes. Council Member Shepherd stated Council needed to be mindful of their responsibilities and review each application. 6 Council Member Holman stated she was uncertain as to what relevant information could be gained by a closed meeting with the applicant that could not be learned during a public meeting. When a Council Member meets with the Applicant, the Applicant believed they had an indication of the outcome of their project and in those incidents the ARB and P&TC can be left out of the process. She clarified there should be no\meetings with the Applicant until post review. Council Member Price felt that was a reasonable request. In the event there was a meeting between a Council Member and an Applicant said Council Member should disclose the conversation. . Chair Yeh said that if the ARB or P&TC review process were circumvented through a discussion held outside the process it would undermine the whole process. Projects regularly go before Council and return to the ARB or the P&TC. He asked at what point would item 2 of CMR 286: 10 :be triggered. He stated he would not support a prohibition although he would be mindful of the impacts of what could occur for the ARB or P&TC review. Council Member Shepherd stated the Planning Department needed to know what could be and should not be submitted. Council Member Holman stated many projects violate the rules which caused the application to be returned. Council Member Shepherd asked how larger cities dealt with similar issues. Mr. Keene stated the processes and acceptances of varying situation was dependant upon who the governing body was. In Palo Alto the determining factor was what type of growth, expansion or type of visibility the Council expected to see. Council Member Shepherd stated she needed to hear from the Planning Department to see how the proposed language would work for them prior to her support on the verbiage. Council Member Holman clarified the P&TC practice of not having ex parte conversations was adopted by a narrower margin when it was first implemented on a trial basis. After the process had been in place for a year, it was approved unanimously. She stated she was a proponent of all parties receiving the same information at the same time. Ms. Morariu stated she could agendize the item for the future discussion on the Planning issues. 7 Council Member Price stated she supported the use of the term discouraged rather than prohibited in the draft language. Council Member Holman stated Attachment C of CMR 286: 10, the new speaker cards showed improvement. She felt the community may not want to show their address. Ms. Grider stated the address line was not required but a number of the Boards & Commissions utilize the address information for other purposes. Council Member Shepherd asked whether we could request their city of residence. Ms. Grider stated any person was entitled to speak. Council Member Holman mentioned historically when a speaker spoke on an item they were later notified when that specific item was to be discussed in front of the ARB or the P& TC. Ms. Grider stated the P&TC did maintain that practice which was one of the reasons the address was important for them. Council Member Holman suggested an alteration to the card to read: If you would like to be notified please provide address or e-mail. Mark Petersen-Perez spoke of the Supreme Court decision for public speakers to remain anonymous on forms such as the speaker cards. Chair Yeh asked whether there was a history in Palo Alto of speakers ceding their time to another speaker who wished to discuss the same subject. Ms. Grider stated to her knowledge Council has not allowed speakers to cede their time to another. Mr. Keene stated Council had the purview to establish the rules they choose~ Council Member Holman stated there was a procedure in the P&TC meetings where if there were five speakers who wished to comment on the same topic, one speaker may represent the group; although, that one speaker received less allotted time combined than the group would have had individually. 8 Mr. Grider suggested she could perform a poll through the City Clerk's listserve to verify if there was a general practice. Mr. Keene stated there needed to be time between hearing the public speak and giving the Council time to deliberate. Council Member Price stated ceding time seemed appropriate as long as there was a maximum time allotted. Ms. Morariu stated the past practice had been speakers could split their presentations throughout their group if they so chose. Council Member Price asked how the anaerobic digestion group was able to have a single representative speak to Council. Council Member Shepherd stated it had been her understanding that if there was a group a single representative could speak for them with a maximum time limit of ten minutes. Council Member Holman stated there was a rule in place where a larger period of time was granted to a single speaker of a group; although the time limit was ten minutes no matter how large the group was. Council Member Price stated the multiplier should equate to the same time for the single representative as it would for the individual speaks combined . . Council Member Shepherd stated when the time was shortened to two minutes the speakers' predominantly make their point clearly. Council Member Holman stated she had no issue with reducing the time limit to two minutes. She felt that ceding time was necessary when there were more speakers than the thirty minute time limit designated by the Council. Ms. Grider stated in the City Council Protocols Handbook on page 1-3, section bl spoke clearly regarding a spokesperson for a group of five or more persons. Chair Yeh stated he would appreciate receiving information regarding the ceding time from other City Clerk's. Mr. Keene stated the Council had the ability to alter the rules on a trial basis to review which process was best suited for the flexibility and efficiency of the Council. 9 Chair Yeh asked when the Procedures and Protocols would be presented to the full Council. Ms. Morariu stated there was a four week turnaround for the completion of minutes. The anticipated time would be September 2010. Council Member Shepherd asked for clarification on whom to submit Council questions to. Mr. Grider stated all of the reports for the City Staff are sent through the City Manager, the Council Appointed Officer's (CAD) reports were not sent through his office. Therefore, if there was a Council question regarding an agenda item from a CAD the question would be referred directly to them, all others would be directed through the City Manager's office. Ms. Morariu stated the language would be clarified in the City Council Procedures Handbook. Chair Yeh recommended continuing further discussion on the matter to the next P&S meeting. Ms. Morariu stated the item would be added to the agenda of the July 13, 2010 meeting. 10 --"" ~.-:' -----,-""------- changes affect a project it made sense for the Planning Department to have stricter deadlines. Mr. Williams said that the dilemma for Staff was not meeting the agenda deadline because it wasn't difficult for Staff to defer the item until another Council meeting. The larger-issue was when information arrived after the packet is released. Council Member Price said that Council Members need to be corrected in their own behaviors and review what was in the packet. If there were significant changes to the project, the Council should defer it. It protects all the stakeholders to have stricter guidelines. Council Member Holman asked if Staff had a suggested time line for final submittals. Mr. Williams said one day prior to the packet release was a good starting pOint. It CQuid be argued that the further in advance the deadline is set the longer Staff had to review it. There was also a counter argument for small changes not requiring as much time. Council Member Holman said she wasn't comfortable with one day due to the City Manager Report (CMR) process. She suggested five working days. Getting items at places violated issues of transparency and relied on Staff expertise. Mr. Williams said that they would need to use language such as "substantial" changes in order to get to that five working days. Ms. Morariu said that the item should be deferred when it warrants a change to the Staff Report. Staff's judgment should be considered when making these decisions. If the criteria were set for final submittals at the Monday before the Staff Report due date, Staff would have three days to review the changes. Council Member Holman said that all situations were not the same. She wanted to empower Staff with the ability to defer Council review of projects when changes arrive after the deadlines are missed. Ms. Morariu said that the Committee had previously discussed using the following language, "if there were significant changes, Staff would analyze to determine whether a need exists to continue the item." Council Member Holman said there still needs to be a number of days specified. 12 Council Member Price suggested three to five days. MOTION: Council Member Holman moved, seconded by Council Member Shepherd, that the language in the City Council Procedures and Protocols regarding late submittal of Planning Applications that reads "not later than noon one day prior to release of Council Agenda Packet" be changed to "not later than noon five days prior to release of Council Agenda Packet" and the language which states "Staff will continue the item to the next available Council meeting" will change to "Staff will continue the item to a future Council meeting." MOTION PASSED 4-0. Ms. Morariu discussed expanding the Council prohibition on ex-parte judicial matters referring to section IV-B-2 of the City Council Procedures Handbook. Council Member Holman said that to be consistent, this section was regarding quasi judicial matters and planned community zone projects. She said that the Council had discussed problems with not allowing Council Members to discuss projects with applicants prior to study sessions. She said that those early reviews were not very specific. She added that anything that can be learned in a private meeting with an applicant can also be learned in the study session. She recommended not having ex parte communications. She said the language should be "strongly discourage" versus "prohibit." MOTION: Council Member Holman moved, seconded by Council Member XXX, that the language in the City Council Procedures and Protocols change to strongly discourage gathering and submission of materials prior to meeting with the Planning and Transportation Commission or the Architectural Review Board. Council Member Price asked if this applied to post recommendations. Council Member Holman said she'd be willing to add that to the motion. MOTION FAILED DUE TO THE LACK OF A SECOND Ms. Morariu said they had not. She said she would change the language in the existing City Council Procedures Handbook to read "It is the policy of the Council to strongly discourage the gathering and submission of information outside of any required hearing when such information will impair the Council's impartiality on a quasi-judicial decision or planned community zoning application. It is also the policy to strongly discourage the gathering of 13 information prior to Planning and Transportation Commission and Architectural Review Board meetings." Council Member Shepherd asked for clarification regarding prohibiting the behavior. Ms. Morariu said it was suggested by the City Attorney that they could not prohibit communications but could strongly discourage them. . Council Member Price said the motion made sense but she felt there were not very many of these conversations occurring between Applicants and Council. Mr. Williams said they were not unusual. Council Member Holman asked if they should add language regarding transparency. Council Member Price said it wasn't necessary, as it was implied. Council Member Yeh said that belonged in section A-l in the City CounCil Procedures Handbook. Ms. Morariu suggested adding language to section IV-A-l of the City Council Procedures Handbook stating "To encourage transparency in review." Council Member Holman recommended adding "in order not to undermine the deliberations of the recommending bodies." Council Member Shepherd asked why they needed that language. Council Member Holman said that the context of the purpose was important. She said that, for example, a new Council Member may not know why this was added. Council Member Shepherd said it all seemed very clear and basic. Adding the transparency wording made it seem retaliatory and micromanaging. She would prefer to leave it as is. Council Member Holman said that "undermining" was the wrong word, perhaps "rendering ineffectual" would be better. She said that sometimes the appearance is that Council has met with the applicant, and the ARB and Planning Commission are undermined because the applicant appears to know they have Councils vote. 14 Council Member Shepherd said she would like to keep the wording less laced with distrust. It was micromanaging Council Member affairs. She requested the motion to be broken into two. Council Member Yeh suggested the first motion could be regarding section V-2. Ms. Morariu suggested it could read "strongly discourage gathering and submission of information outside of any required hearing including prior to recommendation by Architectural Review Board or Planning and Transportation Commission when such information will impair Council's impartiality on a quasi- judicial decision or planned community zoning application. Council Member Shepherd confirmed that the City Attorney would review the wording. Ms. Morariu said the City Attorney would review the language. Council Member Price confirmed that the language was not exclusive to the planned community zones. MOTION: Council Member Holman moved, seconded by Council Member Price that the Policy and Services Committee recommends the City Council change section IV-B-2 of the City Council Procedures Handbook to read, starting with the second sentence "It is the policy of the Council to strongly discourage gathering and submission of information outside of any required hearing including prior to recommendation by Architectural Review Board or Planning and Transportation Commission when such information will impair Council's impartiality on a quasi-judicial decision or planned community zoning application." MOTION PASSED 4-0. Ms. Morariu said these rules are intended to assure that City Council decision making on quasi-judicial matters is based upon facts and evidence known to all parties, to encourage transparency, and to not render ineffectual the review of advisory bodies to the Council. Mr. Williams suggested rather than "to not render ineffectual" the language could be "to support the autonomy of boards and commissions in making their recommendations to CounciL" 15 Ms. Morariu restated the proposed language "These rules are intended to assure that City Council decision making on quasi-judicial matters is based upon facts and evidence known to all parties, and to support the autonomy of Boards and Commissions in making their recommendations to CounciL" Council Member Holman stated they did not need to add planned community zone in this section. MOTION: Council Member Holman moved, seconded by Council Member Price that the Policy and Services Committee recommends the City Council change section IV-A-1 of the City Council Procedures Handbook to read "These rules are intended to assure that City Council decision making on quasi-judicial matters is based upon facts and evidence known to all parties, and to support the autonomy of Boards and Commissions in making their recommendations to CounciL" . MOTION PASSED: 4-0 Ms. Morariu discussed the routine changes listed in-the June 22, 2010 Staff Report. She said there were also questions regarding the procedures for Colleagues Memos to make the procedure consistent with the new early packet deadlines. She said that item three was regarding designating every Monday as a Council Meeting night in the Municipal Code but the Committee had agreed not to approve that. She said that item four was regarding adding a space for email addresses to Speaker Cards. She said there was one other minor change to add the Council travel policy as an addendum to protocols. MOTION: Council Member Shepherd moved, seconded by Council Member Holmpn that the Policy and Services Committee recommends the City Council adopt the changes to the City Council Procedures Handbook as follows and as referenced on pages one through three of the June 22, 2010 Staff Report: • II-1-A -Regular Meetings: remove the posting outside at Downtown Library and include posting in the City Plaza by the elevators. • II-1-A -Regular Meetings: change the date of the distribution of the agenda an,d reports from Thursday to Wednesday. • II-6 (e) (1) -remove "resolution" from Mayor reading titles. • II-8 Item (4) -strike by a majority of a Council Committee. • Page V-I (.4) -the minutes for these meetings shall be sense minutes. • Page 2 of Protocols -add "designee" after City Manager. • Page 11 of Protocols -change reference from Assistant City Manager to City Manager. • Page 11 of Protocols -add "highest" before priority on last bullet. 16 • Procedures for Colleagues Memos to accommodate early packet release, as well as identify the Staff and fiscal impacts of the recommended action. • Revised Speaker Cards consistent for all public meetings and to include a space for the speakers email address. • Add the Council travel policy as an addendum to protocols. City Clerk Donna Grider clarified that the email section of the Speaker Cards was for future notifications of Planning items for the use of the Planning and Community Environment Department and was not applicable for other Council meetings. The intention was not for the City Clerk's Office to create and maintain distribution· lists. Council Member Holman said it could also be used by the Public Works Department. Ms. Grider said the cards would be passed on to applicable departments. Council Member Yeh suggested that information should be folded into the motion since it was going to the full Council. Council Member Holman agreed it should be folded in to the motion. She said that there used to be a process that allowed for distribution of information to public speakers, so it should not be difficult to implement again. Ms. Grider agreed that it shouldn't be difficult, particularly using email. Public Speakers sometimes preferr~d not to use their home addresses on the cards, using email instead may ease their concerns. Ms. Morariu said that when Staff brought the item back they would state "The Committee added that it would be the original department's responsibility to provide notice. If the box is checked, the City Clerk's Office would forward the card to the department." MOTION PASSED: 4-0 Ms. Morariu said the Policy and Services Commission had discussed the Council Liaison's role in Boards and Commissions. The Council had discussed strengthening the language regarding. the work of Council Standing Committees as well as the Council Members' involvement in the agenda process. Council Member Yeh said they should start with the Liaison relationship. The language was on page four and five of the Staff Report dated Julie 22, 2010. 17 Ms. Morariu said that the policy states that they should refrain from speaking on Council matters in which the full Council has not yet taken a policy position. Council Member Shepherd said the Library Advisory Commission had asked her to review their survey. She said that perhaps she should have refused to do so. Council Member Holman said as the Liaison they asked her for input. But, it is different when a Council Member is not the Liaison. . Council Member Shepherd said that in that case they should clearly state that .they are speaking as individuals. Ms. Grider said that the policy should avoid taking away an individual's right to speak. Ms. Morariu said that all of the language was to address issues where Council Members would attend Boards and Commissions meetings as individuals, so the conversation should focus on that. Council Member Price said that "should be clearly made as individual opinion" should change to "should make a point to state it is an individual opinion." Council Member Yeh asked if the Committee had any comments on the next bullet, "Limit contact with Board and Commission members to questions of clarification. " Council Member Price asked if it was ok to seek their opinion. Council Member Holman asked if the language was too limiting. Council Member Yeh said that conversations occasionally occur when Board and Commission Members seek advice not in the spirit of this policy, such as if they want to discuss whether or not they should reapply to a board. Ms. Morariu stated that the language in the heading "Limit contact with Board and Commission members to questions of clarification" was not consistent with the language in the body, " It is inappropriate for a Council Member to contact a Board or Commission member to lobby on behalf of an individual, business, or developer, or to advocate a particular policy perspective. It is acceptable for Council Members to contact Board or Commission members in order to clarify a position taken by the Board or Commission." She suggested changing the heading to read "Council should be careful not to advocate or lobby for a position. " 19 Council Member Price said they should hear from the Commission Chair. Ms. Morariu said they could add language encouraging the Chairs to manage issues at the first level then bring them to the attention of a Council Member if needed. Council Member Holman said she had issues with the language that suggested if a Council Member cannot resolve an issue it should be brought before the full Council. She felt it was inappropriate to discuss individual Commission Members with the full Council. Council Member Shepherd said it would only be an issue if they were discussing removing them from their position. She then asked if there were processes for removing a Commissioner. Ms. Morariu said the Municipal Code stated that the "appointing authority may remove any member with the approval of the Council." Council Member Holman said the policy used the word "effectiveness" which was not specific. Council Member Shepherd agreed. Council Member Price said effectiveness referred to how they communicate, and how they conduct themselves in the course of their responsibilities. Council Member Holman said that should be left to the Board. Council Member Price said it felt like Council would be interfering. Ms. Grider.said that as an individual Council Member they might prefer to bring a concern about a Board or Commission Member to their colleagues. Council Member Holman said there· might be times when a Council Member would be comfortable discussing concerns directly wit~ the members. Ms. Grider said bringing concerns to the Council keeps the discussion subjective. Council Member Shepherd said there needed to be recourse. Council Member Holman said it was in the code. 21 Ms. Grider clarified that there were times when Council Members need to make a choice between a Council'Meeting and a Commission Meeting. If a quorum is required, the Council Meeting would take priority over a Board and Commission meeting. She added that, while Council Members attend Commission meetings as often as possible, in the past Commissioners have been concerned at the lack of attendance by Council Liaisons at their meetings. She had not heard any concerns this year. She suggested that the verbiage regarding an alternate should be removed. Ms. Morariu said that the Mayor assigns alternates; the Council Member would not arrange their own. Council Member Price suggested the following verbiage "Appointed Council Liaisons or alternates as appropriate are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission." She said the last line of the original bullet would be deleted. Ms. Morariu recapped the verbiage, with the agreed upon changes, "Appointed Council Liaisons and/or alternates as appropriate are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission." MOTION: Council Member Yeh moved, seconded by Council Member Price to adopt the changes made the Council Conduct with Palo Alto Boards and Commissions section of the City of Palo Alto Council Protocols. MOTION PASSED: 4-0 Ms. Morariu said the next bullet in question was under Other Procedural Issues, "Respect the work of the Council Standing Committees." Council Member Holman said she didn't understand the use of the word "re- commit." Council Member Shepherd said it was probably referring to the commitment that the Committee made and if the vote was unanimous, it would be placed on the City Council agenda under the Consent Calendar. Council Member Yeh said that if the Policy and Services Committee voted on an issue unanimously, it would go to Council on Consent and someone would have to actively pull it off in order for Council to discuss it. Ms. Grider said these were their procedures; as a Committee, they could put in their motion to bring this back as an Action Item. 23 Council Member Price suggested that they end the bullet after "respect the work of the committees." Council Member Yeh said sometimes things end up on Consent. Council Member Price said that many things didn't and they should not make a sweeping statement. Council MemberYeh suggested the individualCommittees could specify in their Motions whether it should go on Consent or not. Council Member Shepherd said they would not remember to include that and not all items go back to the Council. Council Member Yeh suggested the protocols could state that all items that are to return to Council should be specified. Council Member Shepherd reiterated that the Committees would rarely remember to include that. Council Member Holman said that Staff would remind them. Ms. Morariu said that Staff has always put unanimous Standing Committee decisions on the Consent Calendar. If Staff knew there would be substantial policy discussion, or if it was not unanimous, it would go on the Action Agenda. She said that did not prohibit a Committee from making their own recommendation. She recapped the changes, "If a matter is taken forward to the full Council for approval and it received a unanimous vote at Committee, the item will be placed on the Consent Calendar, unless otherwise recommended by the Committee or Staff."· MOTION: Council Member Shepherd moved, seconded by Council Member Price to adopt the changes made the bullet point titled "Respect the work of the Council Standing Committees" in the Other Procedural Issues section of the City of Palo Alto Council Protocols. MOTION PASSED: 4-0 Ms Morariu said that regarding the last bullet pOint, questions had come up about the Agenda planning process. 24 Council Member Price said one issue was to have a manageable Agenda with some assessment of the likely duration of the meeting. Ms. Grider said that it was difficult to predict the timing of Agenda items. Council Member Price said she agreed that timing predictions should not be published on the public Agenda, but rather used in the planning process. Ms. Grider said that was the goal of the Tuesday meetings of the Executive Leadership Team, but at each Council Meeting there are items that Council directs by Motion to be added to future agendas. Council Member Price said that building an evening when there is a Closed Session, and the heart of the Agenda isn't started until 9:00 or 9:30 is difficult. Council Member Shepherd said it has been nice having the Consent Agenda flipped on the agenda after the Action items. Council Member Price suggested they address the length of the Agenda or the number of topics covered. Ms. Morariu said· they were trying to reinforce the intent. She suggested "Consideration in building the Agenda should be given to the potential length of the meeting and at what pOint items of significant public concern may be heard." Council Member Yeh said that while the verbiage may not shorten the meetings it's good to have the information. He said that people look at this when considering whether to run for Council. Ms. Grider agreed. She said that often candidates tell her they don't feel the time commitment is too much even though the meetings are long, because they are only Monday nights. She said she informs them Council actually meets much more often on other nights for various committee assignments. MOTION: Council Member Price moved, seconded by Council Member Holman to adopt the changes made the bullet point titled "The Mayor and Vice Mayor should work with Staff to plan the Council Meetings" in the Other Procedural Issues section of the City of Palo Alto Council Protocols. MOTION PASSED: 4-0 Council Member Yeh asked what the deadline was for Council Questions. 25 Ms. Grider said the suggested time was by noon the day of the meeting. Council Member Yeh said this might tie back to the early Council Packet release. He suggested this should be revisited then. Ms. Grider said the intent of the procedure was simply to make sure the question is answered. If a question comes in at 4:00 pm the night of the meetfng, the Council may not receive an answer. Council Member Shepherd said the question would be asked during the meeting then. Ms. Morariu said it was on page 11 of the Policy and Procedures for City Council E-Mails for Agenda Related Items of Council Protocols. She said the current language was "Council Members will submit questions on agenda items no later than 9:00 am the Monday of the Council meeting at which the item will be discussed ." Ms. Grider said it was important to include the reasons for early submittal of Council questions. It wasn't only that Staff wanted the questions early; it was helpful to have ample time to answer the questions and to release them to not only the Council, but to the public. Council Member Holman said the language stated Council questions should be submitted by noon elsewhere. Ms. Grider said the document states "as early as possible" elsewhere. Council Member Yeh said that both page six and page 11 discuss this. Ms. Morariu suggested they cross reference the language between the two pages, "more details relating to Agenda questions can be found in the addendum." Council Member Shepherd asked Staff to clarify the timing for Council questions inthe document. She said the practice had been to sub'mit them by noon. Council Member Holman asked about page two of the protocols under the heading Council Conduct with Staff, where it references the Manager's Office, but not the other Council Appointed Officers (CAD). 26 Ms. Morariu said that was part of the Municipal Code and could not be changed at this time. Council Member Holman agreed but added that there was no language to address the other CAOs. Council Member Price said it does state elsewhere to not go to other Staff. Ms. Morariu said that the document did state that Council Members should channel communication to appropriate City Staff. Council Member Holman said it didn't say anything about trying to influence other CAOs whereas there is language in the Municipal Code about not trying to influence the City Manager. She suggested the language should be more consistent. '~ Ms. Grider said an Ordinance would be required to make that change because the language was in the Municipal Code. Council Memper Yeh said it was referring specifically to appointments made by the City Manager. Ms. Morariu said it also mentions dealing with City Services. Ms. Grider said it might be the section of the code dealing with the hiring of the City Manager. Council Member Holman asked if the Committee was agreeable to adding language regarding not interfering in the role of the City Manager. Ms. Morariu reiterated that they would have to make a motion for Staff to come back with an Ordinance to change the Municipal Code. She said they could make the motion and Staff could report back on it. MOTION: Council Member Shepherd moved, seconded by Council Member Price, that the Policy and Services Committee directs Staff to bring an Ordinance before theful\ Council adding language to the Municipal Code that states a Council Member may not interfere with the administrative role of the CAOs. MOTION PASSED 4-0. 27 Excerpt from the Policy and Services Meeting September 30, 2010 Continued Discussion of Recommendations to City Council on Proposed Changes to the City Council Procedures and Protocols. Assistant to the City Manager, Kelly Morariu stated Attachment A was the final redlined version of the Council Procedures and Protocols Handbook (Handbook) for the Policy and Services Committee for recommendation to the Council. Minor clerical errors would be revised prior to submission to the Council. This evening provided the opportunity to review Attachment A and ensure all revisions were included. City Clerk, Donna Grider stated unfinished business was called out in Section lI- S of the Handbook. She stated unfinished business was also called out under action items. The Council had the authority to adjust unfinished business dependent on audience participation. Council Member Shepherd stated she had not heard unfinished business called out as a separate item on the Council agenda. She inquired whether the City Clerk was requesting this change. Ms. Grider stated that was correct. There was not currently a section on the Council agenda that called out unfinished business agenda items. Currently unfinished business verbiage was listed at the end of any given agenda item. Ms. Morariu recommended that unfinished business be moved under action items. Ms. Grider concurred with Ms. Morariu. She recommended an overall category listed as unfinished business, and then subcategories could be listed. Council Member Holman asked about consent items that were pulled off the Council agenda for further discussion. She inquired whether these items would be moved to unfinished business. Ms. Grider spoke on the various ways a consent item could be pulled from the Council agenda. She felt it would be beneficial to indicate, in the Council's motion, whether a removed consent item should return as an action item. Council Member Holman stated a removed consent calendar item would then be called out in a Council's motion, rather than having the item automatically placed as an action item. 28 Ms. Morariu stated typically a consent item, pulled from the Council agenda, was heard as an action item. Council Member Holman stated this practice had caused ambiguity at Council meetings. .. Ms. Grider recommended that when the Council pulled a consent item they specify that it be placed as an action item in the motion. Council Member Holman stated a removed consent item be spelt out in a motion, opposed to being automatically placed as an action item. Ms. Grider stated the Council could also add, in the motion, to have the consent item return as an action .item at a later specified date. Council Member Holman concurred. Ms. Grider stated typographical errors were found within the Handbook. On page 5 of the Protocols, the first bullet should read as "Refrain from Lobbying Board and Commission Members". On page 11, Staff recommended that City Manager Reports be renamed as Staff Reports. Council Member Holman inquired why Staff recommended renaming City Manager Reports. Ms. Morariu stated topics overviewed by the City Manager were not exclusively City Manger reports. Ms. Grider stated other jurisdictions listed these types of reports as Staff Reports. Council Member Holman inquired whether these reports should be listed by the originating City departments. . Council Member Shepherd stated agenda items currently listed the originating City departments. She stated information on the cover memos of agenda items were not always uniform. Ms. Grider stated Staff was working toward standardizing the cover memos of agenda items. 29 Ms. Morariu agreed that Staff was working on standardizing agenda items. Naming reports as Staff Reports would make the documents more consistent. Council Member Holman stated Council questions would continue to be sent to the City Manager or Assistant City Manager. Ms. Morariu stated that was correct. Fred Balin, Palo Alto, spoke on the benefit of the Council agenda policy changes. Tom Jordan, Palo Alto, spoke on his recommendation to treat all quasi judicial items, on the Council agenda, the same as how they are treated at the Planning and Transportation Commission. Council Member Holman stated Section 1-2 read that public speakers shall state their name and address if presenting evidence in a hearing required by law. She felt the Council could not require a public speaker to provide their address. Council Member Shepherd stated that was for public hearings. Ms. Morariu stated public speakers were not compelled to register their name with the City Clerk. She stated she would verify this. Ms. Grider stated the section was referring to presenting evidence only. Council Member Holman stated Section II-l, under Regular Meetings, stated regular meeting. agendas must be posted no later than 7:00 p.m. on the preceding Friday. Ms. Grider stated the preceding FridaY,at 7:00 p.m., was the deadline to comply with the Brown Act requirement. Agendas could be amended or revised up to that date and time. She indicated Staff typically posted agendas sooner than this deadline. Council Member Shepherd stated City policy was to make every effort to complete and distribute the agenda, and related reports, by the preceding Wednesday. Council Member Holman inquired whether the Council should impose its own deadline. . Ms. Grider stated that would benefit the public; however, an agenda that was revised multiple times may be confusing to the public. 30 Ms. Morariu recommended keeping the last legal deadline in the Handbook. She stated stronger language could be added to show the Council's preference for earlier agenda postings. Council Member Holman stated both could be referenced. Ms. Grider agreed. Council Member Shepherd recommended adding that posting of agendas change from the preceding Friday to the preceding Thursday at 7:00 p.m. Cou'ncil Member Holman suggested that Staff change the language to make Thursday the preferred deadline, with the caveat that revised agendas must be posted by Friday. Ms. Grider stated State law established the deadline as Friday at 7:00 p.m. Instructing Staff to post agendas by Thursday could potentially create a gray area. The Council had the discretion to revise the-deadline, as long as the deadline did not pass the preceding Friday at 7:00 p.m. Council Member Holman stated it would be easier on Staff if the agenda posting date was changed to the preceding Thursday. Ms. Grider stated the Council created their own guiding rules, and could tighten the agenda posting requirement established by the Brown Act. Council Member Holman inquired whether the Policy and Services Committee was in agreeance. Council Member Shepherd stated she did not agree. The High Speed Rail (HSR) Committee sometimes rushed last minute to gather a forum of Committee members before posting their agenda. Ms. Grider stated the Policy and Services Committee needed to determine whether they were discussing regular Council meeting deadline postings, or Board and Committee agenda postings. The HSR meetings were typically special meetings, therefore, only required a 24 hour agenda posting notice. Council Member Shepherd . stated she was referring to receiving HSR information, from their Thursday morning meeting, for inclusion in their next agenda in time for the posting requirement. 31 Ms. Grider stated this caused anxiety because HSR minutes would not be available in time. Council Member Shepherd concurred. She spoke on her concern for pushing the agenda posting deadline earlier. She provided an example for an adoption of a HSR resolution that would be blocked by noticing requirements. Chair Yeh stated the Friday deadline was in accordance with the Brown Act. The deadline could be revised, as a City Policy, to do everything possible to post the agenda, and related reports, by the preceding Wednesday. Ms. Morariu stated it was important to highlight the Brown Act deadline. She suggested calling out the City's Procedure and Brown Act requirements separately in the Handbook. Chair Yeh stated the Wednesday deadline would be revisited with the implementation of the on-line system. Council Member Holman spoke on a Colleagues Memo that stated significant or large items would be published two weeks ahead of time. She stated this was not referenced in the Handbook. Council Member Shepherd inquired on the definition of a large agenda item. Ms. Morariu stated large or significant agenda items had not been defined. She stated they would be major discussion items, such as Stanford projects. She recommended that Staff attempt to distribute materials two weeks prior to scheduled Council agendas for major projects. Council Member Price stated the two week consideration should consist of items that needed thoughtful contemplation. Council Member Holman stated that in Section II-l, under Study Sessions, the public comments will be heard at the end of any Council discussion. She stated it was at the discretion of the Chair, but had been helpful to have public comments ahead of time. She asked if they should highlight that it was at the discretion of the Chair. Ms. Morariu suggested that public comments be hear at the end of the session, but the policy could be flexible or at the discretion of the Chair. 32 Council Member Holman stated Section II-3 spoke on teleconference guidelines. She spoke on the language on one week advanced written notice. She stated that it did not provide sufficient time for emergencies. Ms. Grider spoke on the requirements on teleconferencing to comply with the Brown Act. She would work with the City Attorney to ensure this procedure would fit with legal requirements. Council Member Holman stated that was fine. Council Member Shepherd inquired whether that pol'icy was necessary. Ms. Grider stated that was correct. Ms. Morariu stated the policy was formed at the request of the Council. Ms. Grider stated teleconferencing created angst among the Council. She stated hearing the teleconferenced Council Member was difficult. Council Member Holman stated late submitted materials, that could significantly change a project, were delivered to Council Members' homes. There was no public transparency here. She stated information brought to a Council meeting lacked transparency. She indicated that this topic was not addressed in the Handbook. Ms. Morariu suggested adding to the Handbook that late submitted materials could be no later than noon five working days prior to the release of the Council age.nda packet. This would include materials submitted from Staff to Council Members' homes, or material delivered to Council meetings. MS. Grider expressed her concern over materials delivered to Council Members' homes. She stated that if she did not receive a copy of the material it would not be included in the official record. She recommended that the City Clerk be added to the distribution list for materials delivered to Council Members' homes. Council Member Price inquired how the City Clerk currently monitored this process. Ms. Grider stated there was no mechanism in place. Council Member Price stated the Council could report that they received late submitted items to the City Clerk. She suggested that one Council Member be designated to bring forth a copy to the City Clerk's Office. 33 Ms. Grider stated that would be helpful. Council Member Price spoke on her concern that the public was not receiving a copy of items submitted late. Council Member Price stated the City Clerk would ensure that the public had access to the item. Council Member Holman stated the public would not have an opportunity to view these items until the Council meeting. Council Member Holman suggested that the Council contact the City Manager's Office and alert them when they have received a late submitted item. She stated this honor system would alleviate concerns pertaining to quasi judicial items. She suggested that the Council not accept late materials. Ms. Morariu suggested that this be within the Protocols versus the Procedures. If materials were delivered to the Council they should notify the City Manager and City Clerk as soon as the material was received. Council Member Holman spoke on a late submitted Planning and Transportation Commission item that was submitted to the Council, but never brought forth to the City Clerk or public. . Council Member Shepherd inquired whether this would trigger a postponement .of the agenda item. Council Member Holman stated not unless the Council add it in the Handbook. Ms. Grider stated she had no way of notifying the public if the Council did not communicate with her. She suggested that the Council email her if they received information. Council Member Price stated if the Council received something at their home they should notify the City Manager and City Clerk .. She had no way of knowing whether other Council Members had received the same items. The City Manager could then determine whether that item would need to be deferred. She inquired how other jurisdictions handled this situation. Ms. Morariu stated it had not been an issue in her past experiences with other jurisdictions. 34 Council Member Price stated she had not received additional packet materials at her home since January 2010. Council Member Holman stated this situation had not presented itself this year because large developmental items had not occurred. Council MemQer Shepherd suggested the Handbook state that the Council was not allowed to talk before a presentation and before a decision was made. She recommended that the Handbook include language that stated if the Council received a late packet by the preceding Thursday they could not speak to one another. And any additional information needed to be documented before it was considered as received by the Council. Council Member Holman stated this subject was complicated and discussions were difficult. Council Member Shepherd stated there was a section in the Handbook that prohibited the Council to talk to anyone until there was a vote. She stated this spoke to some issues brought forth. Ms. Morariu stated Page IV-2, Section d, stated "Closure of the Hearing, and prior to a final decision, Council Members will refrain from any contacts pertaining to the item, other than clarifying questions directed by City Staff". Council Member Price stated that if the late information was significantly different than the project detailed in the official posting, Staff should be required to go back to square one. The late item should be reported to the City Manager, and City Clerk, and shared with the public as soon as possible.· If it was significantly different, the item should be deferred. Council Member Shepherd suggested this be incorporated onto Page IV-2, Section b. Ms. Morariu stated this was not in reference to solely quasi judicial items. She stated, in the paragraph regarding late submittals, items could include materials delivered to Staff, or Council, before or during the meeting. The Protocol could include that if a Council Member received additional materials related to a matter, being considered on the Council agenda, the Council Member will notify the City Clerk and City Manager as soon as possible after receipt of materials. Staff will make a determination by Monday morning whether the materials require further analysis or a continuation of the item. 35 Chair Yeh stated that would be fine. Mr. Jordan suggested that when Council Members bargained with applicants, the agenda item should be deferred to give Staff and the public time to respond. Council Member Shepherd inquired why the City Attorney had not stopped this behavior in the past. Council Member Holman stated sometimes the City Attorney stepped in, and the Council had disregarded his advice. That was why it was essential for the Council to have its own Handbook. Council Member Shepherd stated the Mayor had the ultimate control over the Council meetings. Mr. Jordan spoke on an example of where there was a vote by the Council before the applicant could respond. If the C-cuncil did respond, he recommended a continuance of the agenda item. Council Member Holman stated that if the public hearing closed, there could not be any back and forth negotiation. Chair Yeh stated the applicant was granted certain rights. Council Member Holman stated applicants and proponents were allowed time for rebuttal, and afterward, the discussion returned to the Council. The Council had their discussion and makes a Motion. If the public hearing closed after the final speaker, there could not be back and forth conversations unless the Council majority voted to reopen the pubic hearing. Ms. Morariu stated re-noticing the agenda item may need to occur at that point. Ms. Grider spoke on her uncomfortably for this issue and stated the City Attorney's advice was needed. Ms. Morariu stated that having a discussion with the Planning. and Transportation Director was advised because he crafted the last planning application submittals. 38 ' .... .' .. ' .'.":.'.' Excerpt from the Policy and Services Meeting October 26, 2010 Discussion and Recommendations on Role and Purpose of Policy & Services Committee for Inclusion in Council Protocols. City Manager, James Keene stated due to Staff changes he would be stepping in to assist with the item. He asked for clarification on the status of the item. Council Member Shepherd stated her interest was to determine the purpose of the Policy & Services Committee and to define guidelines for pursuing projects: Mr. Keene stated the goal would be for Policy & Services to construct the concept of the role and purpose of Policy & Services and present them to the full Council for approval or adaptations. Chair Yeh stated the purpose of Policy & Services was to be utilized as a sounding board for Staff and as guidance for Council. Prior to the departure of the Policy & Services Staff liaison there was mention of a retreat to gather information on how Staff felt Policy & Services could assist them with prioritizing projects, programs and services. Mr. Keene stated due to the degree of vacancies at the senior Staff level the retreat had not occurred. Chair Yeh stated the first bullet in the Staff Report captured the concept of balancing and prioritizing the workload. The second bullet related to Policy & Services being in a position to provide substantive feedback for what were the core services and programs. There is a need to find a balance between the financial aspects of the City with the drive for the program. Mr. Keene suggested language as "The intent and purpose of the Policy & Services Committee was to proactively evaluate community issues and the organizations capacity and focus on the context of the interest base of policy setting." He stated the goal to respond in a timely manner as an organization that reflected community values in City programs and services. Council Member Holman asked for clarification on the difference between the role of Policy & Services and the purpose of Policy & Services. Chair Yeh stated both standing Committees had similar language in the Municipal Code regarding their role. In order to alter the role of the Policy & Services Committee there needed to be an Ordinance adopted; whereas by 42 Policy & Services working on a two year work plan for Council priorities. There needed to be consideration of a parallel work plan with the budget to ensure Council priorities had the financial sustenance necessary to move forward. Council Member Holman stated combining the priorities with the budget made sense although she asked how the input would be delivered and what timeframe would the information need to be available in order to give the Finance Committee the ability to assimilate the information. Council Member Shepherd stated the budget process although well organized was a difficult one. She felt some of the tougher issues needed to continue, such as the sidewalks. Her thought was Policy & Services could take on the issue, analyze it, and allow Staff to prepare the item for the return of the next budget season. Chair Yeh stated a two-year rolling calendar for Council's Policy and Procedures would be beneficial. He clarified with work planning the goal was to take the full set of Council priorities, work with Staff, and task the Sub-Committees with bringing back something actionable to Policy & Services. Mr. Keene stated Staff would return to Policy & Services prepared to address the key desires as he understood them; first, how to develop a meaningful, high level, strategic workplan around the Council priorities and second, how to dig down into policy issues or service questions at the right time of the year in order to develop new directives. He stated there were models where budget and research collaborated; those models would be suitable for this course of action. Council Member Holman stated a policy discussion related to budgetary items could be assisted by the Staff associated with those items. She emphasized not wanting to fatigue the community by having them assume the need to attend the Policy & Services meeting and the community meeting regarding the same matter. She asked the feasibility of the budget process being a two-year process. She felt any efficiencies that were available would be beneficial to avoid rehashing the same items each year. Mr. Keene stated the City had done a two-year budget in a sense, they adopt the first year while the second budget year was in concept. He noted it was easier to have a biennial budget in stable times rather than in changing times. He clarified it was more difficult to predict budgetary occurrences eighteen months out opposed to six months out. He stated if there was revenue loss or gain there was need to revisit the second year to determine the choices being mandated by the economy. 44 Mr. Keene asked for clarification if Policy & Services approved the reformatted Role, Purpose and Work Planning documentation on November 9th the next step would be to recommend the approval from the full Council. Chair Yeh stated that was correct. Mr. Keene suggested recommending to the full Council for consideration the two-year priority cycle prior to presenting the Role, Purpose and Work Planning documentation. He stated separating the items out may lead to a more rapidly and simpler fashion. Council Member Holman stated she supported. recommending the two-year cycle to Council after clearer language was developed in support of the two- year priorities opposed to the previous procedures in a one-year priority. Chair Yeh stated the procedures and protocols were reviewed previously with a suggested alteration for two-years. The original concept was to review all of the concerns prior to sending the recommendation to Council. Council Member Shepherd asked whether the procedures and protocols were ready to go to Council. Council Member Holman stated there were a few more items that needed to be sent to the City Attorney's Office. Mr. Keene stated it was beneficial for Staff to bring to Council the completed portions, than to wait. Council Member Holman agreed with the understanding Council would be notified there were follow-up items awaiting legal input. Chair Yeh stated no action could be taken on the Council Procedures and Protocols since it was not agendized. By consensus the Committee had signed off on the recommended changes to the Council Procedures and Protocols. Ms. Grider stated at the last Policy & Services meeting there was a Motion to move forward with recommending the Council Procedures and Protocols changes to the full Council. Mr. Keene stated Staff would add the Council Procedures and Protocols to the tentative agenda, return to the Committee as directed with the re-formatted Role, Purpose and Work Planning documentation and verify with the City Attorney the status of the Council Procedures and Protocols that needed review. 48 • Page 'IV -1 section B. 2. -revise the paragraph as follows: Restrictions on Council Communications Outside of Quasi-Judicial Hearings. It'is the policy of the Council to . , strongly discourage the gathering and submission of information outside of any required hearing, including prior to recommendations by ARB or P&TC, when such information will impair the Council's impartiality on a quasi-judicial decision or planned community zoning application. . • Page V-I section B. 4. -delete the words "action minutes" and revise to "sense minutes". The following is a listing of the changes that were approved by the Policy & Services Committee for the City Council Protocols with additional verbiage underlined: • Page 4 Council Conduct with Palo Alto Boards and Commissions --first bullet second sentence: Any public comments by a Council Member at a Board or Commission meeting, when that Council Member is not the liaison to the Board or Commission, should be elearly made should make a point to clearly state it is an individual opinion and not a representation of the feelings of the entire City Council. • Page 5 -first bullet title: Limit contaet with Refrain from Lobbying Board and Commission members to questions of clarification. • Page 5 -second bullet: delete the last sentence: A Board or Commission appointment should not be used as a political "revrard". • Page 5 -third bullet first sentence: If a Council Member has a--conce:rn~ with the effeeti'feness of a particular Board or Commission member fulfilling their roles and responsibilities and is comfortable in talking with that individual privately, the Council Member should do so. • Page 5 -sixth bullet: Appointed Council liaisons and/or alternates are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission, er--te arrange for an alternate. . • Page 6 -OTHER PROCEDURAL ISSUES, third bullet: change the seventh line to remove "Assistant City Manager" and replace with City Manager. Add sentence at the end of the paragraph: More detailed procedures· relating to agenda questions can be found in the addendum to these protocols. • Page 6/7 -Add bullet: Submittal of Materials Directly to Council. If Council receives materials related to agenda item matters they will notify the City Clerk and the City Manager as soon as pOSSIble. • Page 6/7 -Add bullet: Late Submittals of Planning Application Materials. In order to allow for adequate staff review and analysis and to ensure public access to materials, all plans and other applicant materials related to Planning applications being heard by the City Council must be submitted not later than noon 5 working days prior to the release of the Council agenda packet. This includes materials delivered to staff or to Council members either before or during the meeting. If items are not submitted by this date or if RESOURCE IMPACT There is no resource impacts associated with the recommendations in this report. POLICY IMPLICATIONS This discussion is consistent with current Council direction and policies. ATTACHMENTS: Attachment A: Redline version of City Council Protocols and Procedures Attachment B: Excerpts from Policy & Services Committee Minutes of June 22, 2010, July 29, 2010, September 30, 2010, October 26, 2010, and Action Minutes from November 9, 2010. CITY OF PALO ALTO COUNCIL PROTOCOLS (Updated ~10.2010) All Council Members All members of the City Council, including those serving as Mayor and Vice Mayor, have equal votes. No Council Member has more power than ~my other Council Member, and all should be treated with equal respect. All Council Members should: • Demonstrate honesty and integrity in every action and statement • Comply with both the letter and spirit of the laws and policies affecting the 'operation operations of government. • Serve as a model of leadership and civility to the community • Inspire public confidence in Palo Alto government • Work for the common good, not personal interest • Prepare in advance of Council meetings and be familiar with issues on the agenda • Fully participate in City Council meetings and other public forums· while demonstrating respect, kindness, consideratidn, and courtesy to others • Participate in scheduled activities to increase Council effectiveness • Review Council procedures, such as these Council Protocols, at least annually • Represent the City at ceremonial functions at the request of the Mayor • Be responsible for the highest standards of respect, civility and honesty in ensuring the effective maintenance of intergovernmental relations • Respect the proper roles of elected officials and City staff in ensuring open arid effective government • Provide contact information to the City Clerk in case an emergency or urgent situation arises while the Council Member is out of town Council Conduct with One Another Councils are composed of individuals with a wide variety of backgrounds, personalities, values, opinions, and goals; Despite this diversity, all have chosen to serve in public office in order to improve the quality of life in the community. In all cases, this common goal should be acknowledged even as Council may "agree to disagree" on contentious issues. CLKBDM 100316 1 to be cooperative and show mutual respect for the contributions made by each individual for the good of the community. • Treat all staff as professionals. Clear, honest communication that respects the abilities, experience, and dignity of each individual is expected. As with your Council colleagues, practice civility and decorum in all interactions with City staff. • Channel communications through the appropriate senior City staff. Questions of City staff should be directed only to the City Manager, Assistant City Manager, City Attorney, City Clerk, Assistant City Clerk, City Auditor, SeniorAssistant City Attorneys, or Department Heads. The Office of the City Manager should be copied on any request to Department Heads. Council Members. should not set up meetings with department staff directly, but work through Department Heads, who will attend any meetings with Council Members. When in -doubt about what staff contact is appropriate, Council Members should ask the City Manager for direction. However, nothing in these protocols is intended to hinder the access Council-appointed liaisons (e.g. to the San Francisquito JPA or NCPA) may require in order to fulfill their unique responsibilities. • In order to facilitate open government. all Council Members should make decisions with the same information from staff on agendized or soon-to-be agendized items (Le. items on the tentative agenda or in a Council Committee). • Never publicly criticize an individual employee, including Council-Appointed Officers. Criticism is differentiated from questioning facts or the opinion of staff. All critical comments about staff performance should only be made to the City Manager through private correspondence or conversation. Comments about staff in the office of the City Attorney, City Auditor or City Clerk should be made directly to these CAOs through private correspondence or conversation" • Do not get involved in administrative functions. Avoid any staff interactions that may be construed as trying to shape staff recommendations. Council Members shall refrain from coercing staff in making recommendations to the Council as a whole. • Be cautious in representing City positions on issues. Before sending correspondence related to a legislative position, check with City staff to see if a position has already been determined. When corresponding with representatives of other governments or constituents, remember to indicate if appropriate that the views you state are your own and may not represent those of the full Council. • Do not attend staff meetings unless requested by staff. Even if the Council Member does not say anything, the Council Member'S presence may imply support, show partiality, intimidate staff, or hampers staff's ability to do its job objectively. eLK BDM 100316 3 • Respect the "one hour" rule for staff work. Requests for staff support should be made to the appropriate senior staff member, according to the protocol for channeling communications. Any request, which would require more than one hour of staff time to research a problem or prepare a response, will need to be approved by the full council to ensure that staff resources are allocated in accordance with overall council priorities. Once notified that a request for information or staff support would require more than one hour, the Council Member may request that the City Manager place the request on an upcoming Council agenda. • Depend upon the staff to respond to citizen concerns and complaints. It is the role of Council Members to pass on concerns and complaints on behalf of their constituents. It is not, however, appropriate to pressure staff to solve a problem in a particular way. Refer citizen complaints to the appropriate senior staff member, according to the protocol on channeling communications. The senior staff member should respond according to the Policy and Procedure for Responding to Customer Complaints. Senior staff is responsible for making sure the Council Member knows how the complaint was resolved. • Do not solicit political support from staff. The City Charter states that "Neither the city manager or any other person in the employ of the city shall take part in securing or shall contribute any money toward the nomination or election of any candidate for a municipal office." In addition, some professionals (e.g., City Manager and the Assistant City Manager) have professional codes of ethics, which preclude politically partisan activities or activities that give the appearance of political partisanship. Council Conduct With Palo Alto Boards and Commissions The City has established several Boards and Commissions as a means of gathering more community input. Citizens who serve on Boards and Commissions become more involved in government and serve as advisors to the City Council. They are a valuable resource to the City's leadership and should be treated with appreciation and respect. Council Members serve as liaisons to Boards and Commissions, according to appointments made by the Mayor, and in this role are expected to represent the full Council in providing guidance on Council processes or actions to the Board or Commission. Refrain from speaking for the full Council on matters for which the full council has not yet taken a policy position. In other instances, Council Members may attend Board or Commission meetings as individuals, and should follow these protocols: • If attending a Board or Commission meeting, identify your comments as personal views or opinions. Council Members may attend any Board or Commission meeting, which are always open to any member of the public. Any public comments by a Council Member at a Board or Commission meeting, when that Council Member is not the liaison to the Board or Commission, should be clearly made asshould make a point to clearly state it is an individual opinion and not a representation of the feelings of the entire City Council. eLK BDM 100316 4 • Limit contact 'NithRefrain from Lobbying Board and Commission members-te questions of clarification. It is inappropriate for a Council Member to contact a Board or Commission member to lobby on behalf of an individual, business, or developer, or to advocate a particular policy perspective. It is acceptable for Council Members to contact Board or Commission members in order to clarify a position taken by the Board or Commission. • Remember that Boards and Commissions are advisory to the Council as a whole, not individual Council Members. The City Council appoints individuals to serve on Boards and Commissions, and it is the responsibility of Boards and Commissions to follow policy established by the Council. Council Members should not feel they have the power or right to unduly influence Board and Commission members. ,A, Board or Commission appointment should not be used as a political "re'v'v'ard." • Concerns about an individual Board or Commission member should be pursued with tact. If a Council Member has a-concerns with the effectiveness of a particular Board or Commission member fulfilling their roles and responsibilities and is comfortable in talking with that individual privately, the Council Member should do so. Alternatively, or if the problem is not resolved, the Council Member should consu-It with the Mayor, who can bring the issue to the Council as appropriate. • Be respectful of diverse opinions. A primary role of Boards and Commissions is to represent many points of view in the community and to provide the Council with advice based on a full spectrum of concerns and perspectives. Council Members may have a closer working relationship with some individuals serving on Boards and Commissions, but must be fair to and respectful of all citizens serving on Boards and Commissions. • Keep political support away from public forums. Board and Commission members may offer political support to a Council Member, but not in a public forum while conducting official duties. Conversely, Council Members may support Board and Commission members who are running for office, but not in an official forum in their capacity as a Council Member. • Maintain an active liaison relationship. Appointed Council liaisons and/or alternates are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission, or to arrange for an alternate. Staff Conduct with City Council • Respond to Council questions as fully and as expeditiously as is practical. The protocol for staff time devoted to research and response is in application here. If a Council Member forwards a complaint or service request to a department head or a Council Appointed Officer, there will be follow-through with the Council Member as to the outcome. CLKBDM 100316 5 the release of the Council agenda packet. This includes materials delivered to staff or to Council members either before or during the meeting. If items are not submitted by this date or if staff determines additional review is needed, staff will reschedule the item to a future Council meeting. Additionally, if there are significant changes, staff will analyze whether the need exists to continue the item. • Respect the work of the Council standing committees .. The purpose of the Council standing committees is to provide focused, in-depth discussion of issues. Council should respect tne work of the committees and Fe commit to its policy of keeping unanimous votes of the committees on the consent calendar. If a matter is taken forward to the full Council for approval and it receives a unanimous vote at Committee, the item will be placed on the Consent Calendar unless otherwise recommended by the Committee or staff. • The Mayor and Vice Mayor should work with staff to plan the Council meetings. There are three purposes to the pre-Council planning meeting: 1) to plan how the meeting will be conducted; 2) to identify any issues or questions that may need greater staff preparation for the meeting; and 3) to discuss future meetings. The purpose of the meeting is not to work on policy issues. Normally, only the Mayor and Vice Mayor are expected to attend the pre-Council meetings with the City Manager and other CAOs. Consideration in building the agenda should be given to the potential length of the meeting and at what point items of significant public concern may be heard. POLICY & SERVICES COMMITTEE -ROLE, PURPOSE, & WORK PLANNING The Municipal Code states that the role of the Council Policy & Services Committee is to: ... consider and make recommendations on matters referred to it by the council relating to parliamentary and administrative procedures and policy matters pertaining to intergovernmental relations, personnel policies, planning and zoning, traffic and parking, public work, and community and human services. (§2.04.220) In 2009 and 2010, the Council reviewed the purpose and structure of the Committee and adopted recommendations on several items related to this. This section documents these agreements related to the Committee. Purpose Statement: The purpose of the Policy & Services Committee is to regularly review and identify important community issues and City policies and practices with a . focus on ensuring good public policy and best practices. A particular focus of the Committee is to ensure that the City organization is responsive. effective and aligned with community values and City Council priorities. eLK BDM 100316 7 ENFORCEMENT Council Members have the primary responsibility to assure that these protocols are understood and followed, so that the public can continue to have full confidence in the integrity of government. As an expression of the standards of conduct expected by the City for Council Members, the protocols are intended to be self-enforcing. They therefore become most effective when members are thoroughly familiar with them and embrace their provisions. For this reason, Council. Members entering office shall sign a statement affirming they have read and understood the Council protocols. In addition, the protocols shall be annually reviewed by the Policy and Services Committee and updated as necessary. eLK BDM 100316 8 CITY OF PALO ALTO COUNCIL PROTOCOLS ETHICS ADDENDUM The citizens, businesses and organizations of the city are entitled to have fair, ethical and accountable local government, which has earned the public's full confidence for integrity. To this end, the City Council has adopted Council Protocols and this Code of Ethics for members of the City Council to assure public confidence in the integrity of local government and its effective and fair operation. Comply with Law Members shall comply with the laws of the nation, the State of California and the City in the performance of their public duties. These laws include but are not limited to: the United States and California constitutions, the city Charter, laws pertaining to conflicts of interest, election campaigns, financial disclosures, employer responsibilities and open processes of governments and City ordinances and policies. Conduct of Members The professional and personal conduct of members must be above reproach and avoid even the appearance of impropriety. Members shall refrain from abusive conduct, personal charges or verbal attacks upon the character or motives of other members of the Council, boards and commissions, the staff or the public. Respect for Process Members shall perform their duties in accordance with the processes and rules of order established by the City Council governing the deliberation of public policy issues, meaningful involvement of the public and implementation of policy decisions ·of the City Council by City staff. Decisions Based on Merit Members shall base their decisions on the merits and substance of the matter at hand, rather than on unrelated considerations. Conflict of Interest In order to assure their independence and impartiality on behalf of the common good, members shall not use their official positions to influence decisions in which they have a material financial interest or where they have an organizational responsibility or: personal relationship, which may give the appearance of a conflict of interest. Gifts and Favors It is contrary to the city of Palo aAlto's ethical standards for any council member to accept gifts or gratuities from an individual, business, or organization doing business, or seeking to do business, with the City or who is seeking permits or other entitlements from the City. The acceptance of gifts can convey an appearance of favoritism and conflict of interest. Gifts can be perceived as attempts to influence City operations or as compensation for eLK BDM 100316 9 services rendered and can erode the public confidence in the impartiality of decisions made by Council Members. Council Members exercise good faith in carrying out this Protocol. It is impossible to list every situation and fact pattern, so it anticipates that Council Members will exercise their good judgment in determining whether the item is a gift or not. This policy. is . supplemental to the gift limitations of the Fair Political Practices Commission's Limitations and Restrictions on Gifts, Honoraria, Travel and Loans. The following are not considered gifts under this Protocol: • Gifts which the Council member returns (unused) to the donor, or for which the Council Member reimburses the donor, within 30 days of receipt. • Gifts from a Council Member's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, or first cousin or the spouse of any such person, unless he or she is acting· as an agent or intermediary for another person who is the true source of the gift. • Minor gifts of hospitality involving food or drink, -that the Council Member receives in an individual's home or at another location of business. • Gifts approximately equal in value exchanged between the Council Member and another individual on holidays, birthdays, or similar occasions. • Informational material provided to assist the Council member in the performance of their official duties, including books, reports, pamphlets, calendars, periodicals, videotapes, or free or discounted admission to informational conferences or seminars. • A bequest or inheritance. • Campaign contributions. • Personalized plaques and trophies with an individual value of less than $250. • Tickets to attend fundraisers for campaign committees or other candidates, and tickets to fundraisers for organizations exempt from taxation under Section 501 (c)(3) of the Internal Revenue Code. • Free admission, refreshments, and similar non-cash nominal benefits provided to the Council Member at an event at which the Council Member gives a speech, participates in a panel or seminar, or provides a similar service. Transportation within California, and any necessary lodging and subsistence provided directly in connection with the speech, panel, seminar, or similar service, are also not considered gifts. • Passes or Tickets which provide admission or access to facilities, goods, services, or other benefits (either on onetime or repeat basis) that the Council Member does not use and does not give to another person. • Wedding gifts • A prize or award received in a bona fide competition not related to official status. • (These exceptions are paraphrased from FPPC publications.) • Gifts from Sister Cities or other entities, other municipalities, if forwarded to the City. CLKBDM 100316 10 Confidential Information Members shall respect the confidentiality of information concerning the property, personnel or affairs of the City. They shall neither disclose confidential information without proper legal authorization, nor use such information to advance their personal, financial or other private interests. Use of Public Resources Members shall not use public resources, such as City staff time, equipment, supplies or facilities, for private gain or personal purposes. Representation of Private Interests In keeping with their role as stewards of the public interest, members of Council shall not appear on behalf of the private interests of third parties before the Councilor any other board, commission or proceeding of the City, nor shall members of boards and commissions appear before their own bodies or before the Council on behalf of the private interests of third parties on matters related to the areas of service of their bodies. Advocacy Members shall represent the official policies or positions of the City Council, board or commission to the best of their ability when designated as delegates for this purpose. When presenting their individual opinions and positions, members shall explicitly state they do not represent their body or the City, nor will they allow the inference that they do·. Positive Work Place Environment Members shall support the maintenance of a positive and constructive work place environment for City employees and for citizens and businesses dealing with the City. Members shall recognize their special role in dealings with City employees to in no way create the perception of inappropriate direction to staff. CLKBDM 100316 11 POLICY AND PROCEDURE FOR CITY COUNCIL E-MAILS FOR AGENDA-RELATED ITEMS The Council adopted protocols provide a framework for the policy on e-mail communications between Council Members and Staff on agenda-related items, including the following: • In order to facilitate open government, all Council Members should make decisions with the same information from Staff on agendized or soon-to-be agendized items (Le. items on the tentative agenda or in a Council Committee) • Submit questions on Council agenda items ahead of the meeting, In order to focus the Council meetings on consideration of policy issues and to maintain an open forum for public discussion, questions which focus on the policy aspects of agenda items should be discussed at the Council meeting rather than in one-on- one communications with Staff prior to the meetings. Any clarifications or technical questions that can be readily answered can be handled before the meeting. Council Members are encouraged to submit their questions on agenda items to the appropriate Council Appointed Officer or Assistant City ManagerCity Manager as far in advance of the meeting as possible so that Staff can be prepared to respond at the Council meeting. In its settlement agreement with the San Jose Mercury News of February 2003, the City Council agreed to consider a policy under which the Council would waive any deliberative or other privilege, other than attorney-client privilege, that it might assert with regards to e-mails on agendized items. This policy and procedure implements that agreement. The Council, in adopting this policy, does not waive attorney-client-privilege or any other privilege associated with a closed session authorized under the Brown Act. Procedure: • Council Members should direct any questions on City Managers Reports (CMRs)staff reports to the Assistant City ManagerCity Manager or designee. Questions on reports from the City Auditor, City Attorney, or City Clerk should be directed to the appropriate Council Appointed Officer. Council Members should not direct any questions on agenda items to other members of the City Manager's Staff or the Staff of the other Council Appointed Officers. • Council Members will submit questions on agenda items no later than 9 a.m. on the Monday of the Council meeting at which the item will be discussed. Any questions received after that time may be responded to via e-mail, or alternatively, will be responded to at the Council meeting. • Staff will not engage in "dialogues" with individual Council Members regarding questions, i.e. follow-up questions to initial questions will be responded to at the Council Meeting. • Staff will give highest priority to responding prior to the Council meeting via e- mail only on items on the Consent Calendar. Questions which address the policy aspects of the item on the Council agenda will not be responded to prior to the meeting, although Staff welcomes such questions in advance of the meeting in eLK BDM 100316 12 eLK BDM 100316 14 Excerpts from Policy and Services Committee Minutes of: June 22, 2010 July 29, 2010 September 30, 2010 October 26, 2010 Action Minutes from November 9,2010 Excerpt from the Policy and Services Meeting June 22, 2010 Recommendation to Council on Proposed Changes to the City Council Procedures and Protocols. Assistant to the City Manager, Kelly Morariu gave a brief overview of the changes being requested to the Procedures and Protocols. City Clerk Donna Grider stated that moving the Council packet delivery date forward had implications for Colleagues Memo's and public correspondences. She noted the public and news papers had mentioned their appreciation of receiving the information earlier. The reasoning behind altering the speaker cards was to create an easier process for the public and to have a unified card for Council and Boards and Commission meetings. Council Member Holman recalled requesting comparative information from surrounding cities and their packet delivery timeframe. She stated reviewing comparative information' would be beneficial. In reviewing the previous meeting minutes the implementation date for early release of packet was during the Council summer break. City Manager James Keene stated he recalled the discussion of bringing on board an automated agenda management system. That would create a change in the delivery schedule with the deployment of the new management system, which was anticipated by the end of the year. A single change would cause fewer disruptions to the system. Ms. Grider stated she had received the information from the San Jose City Clerk although had not had the opportunity to analyze it. 1 Council Member Holman stated there needed to be criteria set to define what a larger project was and she requested placing early release of larger projects in the Procedures and Protocols for ten days to two weeks. She noted there was no pro forma data which had previously been requested. Ms. Morariu clarified the Applicant was to submit pro formas in addition to the materials that were required in a development application. Council Member Holman stated the language provided in CMR 286: 10, Section 5) Late Submittals was inaccurate to what was requested by the authors of the Colleagues Memo. 'The goal was to receive Applicant information with ample time for Staff to review said information prior to submission to Council. If there were significant alterations to the information, Staff may decide there needed to be another review by the Architectural Review Board (ARB) or the Planning & Transportation Commission (P&TC). Ms. Morariu stated additional language could be added to the section to satisfy the requests of the Council Members on late submissions. She said the Director of Planning and Community Environment, Curtis Williams said that receiving the information a day earlier than the release of Council packet should provide the Planner with sufficient time to review the documentation and determine whether the item needed to be continued. Mr. Keene suggested the language should read: If the information was not submitted by a certain date or if Staff had insufficient time for review, the item would be continued. Council Member Holman stated the goal was for projects to receive good reviews and the objective was for Staff and volunteer time to be utilized efficiently in reviewing projects. Ms. Morariu stated after discussions with the City Attorney's office and the Planning Department, Staff deCided it would be Council's purview to continue an item if the Applicant submitted information the date of the Public Hearing. Council Member Price stated Council was at a disadvantage in determining the significance of the modification as Council relied on Staff's knowledge and history with a project to inform them whether the modifications were significant or minor. Ms. Morariu stated if there were modifications presented at the Public Hearing without Staff having time to review the changes there needed to be a discussion at Staff level to determine the significance. 3 Council Member Holman requested to put into place a clear process for Applicants to follow. Asa part of the process they should be discouraged against submittals past the Staff deadline. Mr. Keene stated there needed to be clarity in the Staffs' role in the process as well as the Applicant. There needed to be contingencies in place for unforeseen situations. Council Member Price stated if the alteratioris were significant, the notices in the newspaper would be incorrect and therefore the Public Hearing would be· invalid. Mr. Keene stated the procedures needed to beelear. There were going to be gray areas that may not be in the procedures but were common sense. Council Member Holman stated the last sentence in the proposed language in CMR 286: 10, Item 5 needed to be altered. Depending on the change to the plans being submitted they may need to be reviewed by the ARB or the P&TC rather than continued to the next Council meeting. Mr. Keene stated the language needed to be a part of the development process. Ms. Morariu stated this was the area for the pro forma discussions as part of the requirement for Planning submittal, rather than a part of the Council protocols and Procedures. Council Member Shepherd asked if the information seemed right, could two Council Members request the item return on the Consent Calendar. Ms. Grider stated legally a Public Hearing could be continued although could not be placed on the Consent Calendar. Council Member Shepherd noted the School District had a two meeting rule which saved them time when an item was fairly large. Ms. Grider stated there was not a rule in place where c;ln item could not have a two step process; although, Public Hearings needed to remain as such. Mr. Keene clarified the object was to deal with the timeliness of information flow and the Staff reports to Council. There was a need for a range of changes in . application and development processes and procedures. 4 Council Member Holman stated the requested timeline for receipt of Applicant changes was noon prior to the Council packet release. She felt there needed t,o be more time for Staff to review the Applicant changes. Council Member Price added once the Applicant changes were reviewed by the Staff member the changes needed to be reviewed by management prior to being included in the Staff report and added to the Council packet. A few days to a week seemed sufficient dependant upon the significance of the changes. Ms. Morariu asked whether the changes being referred to were from the P&TC. Council Member Holman stated any changes could affect the project and Staff needed ample time to ensure the changes were adequate, met all of the standards and requirements, and that they had sufficient information to notify Council. Council Member Price stated if the Applicants' changes were perceived as minor and Staff merely commented on the changes during the Public Hearing that did not allow the public to understand what changes were made or to comment on them. If the alterations were not imbedded in the Staff report in a timely ,manner the public did not have the ability to respond. Mr. Keene stated the language needed to be more value based than rule based. -It needed to show the Council endorsed the public decision making process which required a timely submission of materials and the ability for Staff to review the information and make adequate Staff report changes which gave the public ample time to comment. Council Member Holman stated that as a guiding principle for the process of regulating the receipt of materials the intention could not be better stated than in the City Council Protocols Section I, Ai the following sentence read: These rules are intended to enhance public participation and Council debate so that the best possible decisions can be made for Palo Alto. ChairYeh stated the draft language seemed too prescriptive: all plans and,other Applicant materials related to Planning applications being heard by the City Council must be submitted not later than noon one day prior to the release of the Council agenda packet. He felt that was not sufficient time for review. Ms. Morariu suggested the Director of Planning and Community Environment, Curtis Williams return to the Committee to revisit the language. 5 Chair Yeh asked the capabilities of the agenda management system. He asked the likelihood of receiving the Council packet earlier than the Wednesday prior to the Council meeting. Ms. Grider stated once the agenda had been released if there were changes it would cause confusion with multiple versions. Ms. Morariu clarified the City was in the first stages of the signing the contract with the vendor and forming the implementation process. Mr. Keene stated the biggest issue with an earlier packet would be the possible confusion to the public. Chair Yeh clarified this was an incremental change reflecting a new system. The Committee would have further opportunities for discussion in the fall. . Council Member Holman requested the Committee receive the planning processes and procedures in order to better understand the process. Council Member Shepherd stated at a previous meeting they discussed an eighteen month timeline. Council Member Holman clarified that Council. Priorities refer to process efficiencies. The adherence to existing rules and procedures did not take eighteen months to implement. She was requesting rectifying the adherence of State and local laws. Chair Yeh requested process mapping for the Colleagues Memo procedures. Mr. Keene felt the best practice for the planning processes and the Development Center procedures would be to have the Director of Planning and Community Environment, Curtis Williams meet with the Committee to review the current practices and the proposed changes. Council Member Price stated she felt comfortable with the current applicant process. With the Council using their best judgment in their discussions regarding a project proposal, and with the understanding that Staff would notify the Council during the Public Hearing about any changes. Council Member Shepherd stated Council needed to be mindful of their responsibilities and review each application. 6 Council Member Holman stated she was uncertain as to what relevant information could be gained by a closed meeting with the applicant that could not be learned during a public meeting. When a Council Member meets with the Applicant, the Applicant believed they had an indication of the outcome of their project and in those incidents the ARB and P&TC can be left out of the process. She clarified there should be no\meetings with the Applicant until post review. Council Member Price felt that was a reasonable request. In the event there was a meeting between a Council Member and an Applicant said Council Member should disclose the conversation. . Chair Yeh said that if the ARB or P&TC review process were circumvented through a discussion held outside the process it would undermine the whole process. Projects regularly go before Council and return to the ARB or the P&TC. He asked at what point would item 2 of CMR 286: 10 :be triggered. He stated he would not support a prohibition although he would be mindful of the impacts of what could occur for the ARB or P&TC review. Council Member Shepherd stated the Planning Department needed to know what could be and should not be submitted. Council Member Holman stated many projects violate the rules which caused the application to be returned. Council Member Shepherd asked how larger cities dealt with similar issues. Mr. Keene stated the processes and acceptances of varying situation was dependant upon who the governing body was. In Palo Alto the determining factor was what type of growth, expansion or type of visibility the Council expected to see. Council Member Shepherd stated she needed to hear from the Planning Department to see how the proposed language would work for them prior to her support on the verbiage. Council Member Holman clarified the P&TC practice of not having ex parte conversations was adopted by a narrower margin when it was first implemented on a trial basis. After the process had been in place for a year, it was approved unanimously. She stated she was a proponent of all parties receiving the same information at the same time. Ms. Morariu stated she could agendize the item for the future discussion on the Planning issues. 7 Council Member Price stated she supported the use of the term discouraged rather than prohibited in the draft language. Council Member Holman stated Attachment C of CMR 286: 10, the new speaker cards showed improvement. She felt the community may not want to show their address. Ms. Grider stated the address line was not required but a number of the Boards & Commissions utilize the address information for other purposes. Council Member Shepherd asked whether we could request their city of residence. Ms. Grider stated any person was entitled to speak. Council Member Holman mentioned historically when a speaker spoke on an item they were later notified when that specific item was to be discussed in front of the ARB or the P& TC. Ms. Grider stated the P&TC did maintain that practice which was one of the reasons the address was important for them. Council Member Holman suggested an alteration to the card to read: If you would like to be notified please provide address or e-mail. Mark Petersen-Perez spoke of the Supreme Court decision for public speakers to remain anonymous on forms such as the speaker cards. Chair Yeh asked whether there was a history in Palo Alto of speakers ceding their time to another speaker who wished to discuss the same subject. Ms. Grider stated to her knowledge Council has not allowed speakers to cede their time to another. Mr. Keene stated Council had the purview to establish the rules they choose~ Council Member Holman stated there was a procedure in the P&TC meetings where if there were five speakers who wished to comment on the same topic, one speaker may represent the group; although, that one speaker received less allotted time combined than the group would have had individually. 8 Mr. Grider suggested she could perform a poll through the City Clerk's listserve to verify if there was a general practice. Mr. Keene stated there needed to be time between hearing the public speak and giving the Council time to deliberate. Council Member Price stated ceding time seemed appropriate as long as there was a maximum time allotted. Ms. Morariu stated the past practice had been speakers could split their presentations throughout their group if they so chose. Council Member Price asked how the anaerobic digestion group was able to have a single representative speak to Council. Council Member Shepherd stated it had been her understanding that if there was a group a single representative could speak for them with a maximum time limit of ten minutes. Council Member Holman stated there was a rule in place where a larger period of time was granted to a single speaker of a group; although the time limit was ten minutes no matter how large the group was. Council Member Price stated the multiplier should equate to the same time for the single representative as it would for the individual speaks combined . . Council Member Shepherd stated when the time was shortened to two minutes the speakers' predominantly make their point clearly. Council Member Holman stated she had no issue with reducing the time limit to two minutes. She felt that ceding time was necessary when there were more speakers than the thirty minute time limit designated by the Council. Ms. Grider stated in the City Council Protocols Handbook on page 1-3, section bl spoke clearly regarding a spokesperson for a group of five or more persons. Chair Yeh stated he would appreciate receiving information regarding the ceding time from other City Clerk's. Mr. Keene stated the Council had the ability to alter the rules on a trial basis to review which process was best suited for the flexibility and efficiency of the Council. 9 Chair Yeh asked when the Procedures and Protocols would be presented to the full Council. Ms. Morariu stated there was a four week turnaround for the completion of minutes. The anticipated time would be September 2010. Council Member Shepherd asked for clarification on whom to submit Council questions to. Mr. Grider stated all of the reports for the City Staff are sent through the City Manager, the Council Appointed Officer's (CAD) reports were not sent through his office. Therefore, if there was a Council question regarding an agenda item from a CAD the question would be referred directly to them, all others would be directed through the City Manager's office. Ms. Morariu stated the language would be clarified in the City Council Procedures Handbook. Chair Yeh recommended continuing further discussion on the matter to the next P&S meeting. Ms. Morariu stated the item would be added to the agenda of the July 13, 2010 meeting. 10 --"" ~.-:' -----,-""------- changes affect a project it made sense for the Planning Department to have stricter deadlines. Mr. Williams said that the dilemma for Staff was not meeting the agenda deadline because it wasn't difficult for Staff to defer the item until another Council meeting. The larger-issue was when information arrived after the packet is released. Council Member Price said that Council Members need to be corrected in their own behaviors and review what was in the packet. If there were significant changes to the project, the Council should defer it. It protects all the stakeholders to have stricter guidelines. Council Member Holman asked if Staff had a suggested time line for final submittals. Mr. Williams said one day prior to the packet release was a good starting pOint. It CQuid be argued that the further in advance the deadline is set the longer Staff had to review it. There was also a counter argument for small changes not requiring as much time. Council Member Holman said she wasn't comfortable with one day due to the City Manager Report (CMR) process. She suggested five working days. Getting items at places violated issues of transparency and relied on Staff expertise. Mr. Williams said that they would need to use language such as "substantial" changes in order to get to that five working days. Ms. Morariu said that the item should be deferred when it warrants a change to the Staff Report. Staff's judgment should be considered when making these decisions. If the criteria were set for final submittals at the Monday before the Staff Report due date, Staff would have three days to review the changes. Council Member Holman said that all situations were not the same. She wanted to empower Staff with the ability to defer Council review of projects when changes arrive after the deadlines are missed. Ms. Morariu said that the Committee had previously discussed using the following language, "if there were significant changes, Staff would analyze to determine whether a need exists to continue the item." Council Member Holman said there still needs to be a number of days specified. 12 Council Member Price suggested three to five days. MOTION: Council Member Holman moved, seconded by Council Member Shepherd, that the language in the City Council Procedures and Protocols regarding late submittal of Planning Applications that reads "not later than noon one day prior to release of Council Agenda Packet" be changed to "not later than noon five days prior to release of Council Agenda Packet" and the language which states "Staff will continue the item to the next available Council meeting" will change to "Staff will continue the item to a future Council meeting." MOTION PASSED 4-0. Ms. Morariu discussed expanding the Council prohibition on ex-parte judicial matters referring to section IV-B-2 of the City Council Procedures Handbook. Council Member Holman said that to be consistent, this section was regarding quasi judicial matters and planned community zone projects. She said that the Council had discussed problems with not allowing Council Members to discuss projects with applicants prior to study sessions. She said that those early reviews were not very specific. She added that anything that can be learned in a private meeting with an applicant can also be learned in the study session. She recommended not having ex parte communications. She said the language should be "strongly discourage" versus "prohibit." MOTION: Council Member Holman moved, seconded by Council Member XXX, that the language in the City Council Procedures and Protocols change to strongly discourage gathering and submission of materials prior to meeting with the Planning and Transportation Commission or the Architectural Review Board. Council Member Price asked if this applied to post recommendations. Council Member Holman said she'd be willing to add that to the motion. MOTION FAILED DUE TO THE LACK OF A SECOND Ms. Morariu said they had not. She said she would change the language in the existing City Council Procedures Handbook to read "It is the policy of the Council to strongly discourage the gathering and submission of information outside of any required hearing when such information will impair the Council's impartiality on a quasi-judicial decision or planned community zoning application. It is also the policy to strongly discourage the gathering of 13 information prior to Planning and Transportation Commission and Architectural Review Board meetings." Council Member Shepherd asked for clarification regarding prohibiting the behavior. Ms. Morariu said it was suggested by the City Attorney that they could not prohibit communications but could strongly discourage them. . Council Member Price said the motion made sense but she felt there were not very many of these conversations occurring between Applicants and Council. Mr. Williams said they were not unusual. Council Member Holman asked if they should add language regarding transparency. Council Member Price said it wasn't necessary, as it was implied. Council Member Yeh said that belonged in section A-l in the City CounCil Procedures Handbook. Ms. Morariu suggested adding language to section IV-A-l of the City Council Procedures Handbook stating "To encourage transparency in review." Council Member Holman recommended adding "in order not to undermine the deliberations of the recommending bodies." Council Member Shepherd asked why they needed that language. Council Member Holman said that the context of the purpose was important. She said that, for example, a new Council Member may not know why this was added. Council Member Shepherd said it all seemed very clear and basic. Adding the transparency wording made it seem retaliatory and micromanaging. She would prefer to leave it as is. Council Member Holman said that "undermining" was the wrong word, perhaps "rendering ineffectual" would be better. She said that sometimes the appearance is that Council has met with the applicant, and the ARB and Planning Commission are undermined because the applicant appears to know they have Councils vote. 14 Council Member Shepherd said she would like to keep the wording less laced with distrust. It was micromanaging Council Member affairs. She requested the motion to be broken into two. Council Member Yeh suggested the first motion could be regarding section V-2. Ms. Morariu suggested it could read "strongly discourage gathering and submission of information outside of any required hearing including prior to recommendation by Architectural Review Board or Planning and Transportation Commission when such information will impair Council's impartiality on a quasi- judicial decision or planned community zoning application. Council Member Shepherd confirmed that the City Attorney would review the wording. Ms. Morariu said the City Attorney would review the language. Council Member Price confirmed that the language was not exclusive to the planned community zones. MOTION: Council Member Holman moved, seconded by Council Member Price that the Policy and Services Committee recommends the City Council change section IV-B-2 of the City Council Procedures Handbook to read, starting with the second sentence "It is the policy of the Council to strongly discourage gathering and submission of information outside of any required hearing including prior to recommendation by Architectural Review Board or Planning and Transportation Commission when such information will impair Council's impartiality on a quasi-judicial decision or planned community zoning application." MOTION PASSED 4-0. Ms. Morariu said these rules are intended to assure that City Council decision making on quasi-judicial matters is based upon facts and evidence known to all parties, to encourage transparency, and to not render ineffectual the review of advisory bodies to the Council. Mr. Williams suggested rather than "to not render ineffectual" the language could be "to support the autonomy of boards and commissions in making their recommendations to CounciL" 15 Ms. Morariu restated the proposed language "These rules are intended to assure that City Council decision making on quasi-judicial matters is based upon facts and evidence known to all parties, and to support the autonomy of Boards and Commissions in making their recommendations to CounciL" Council Member Holman stated they did not need to add planned community zone in this section. MOTION: Council Member Holman moved, seconded by Council Member Price that the Policy and Services Committee recommends the City Council change section IV-A-1 of the City Council Procedures Handbook to read "These rules are intended to assure that City Council decision making on quasi-judicial matters is based upon facts and evidence known to all parties, and to support the autonomy of Boards and Commissions in making their recommendations to CounciL" . MOTION PASSED: 4-0 Ms. Morariu discussed the routine changes listed in-the June 22, 2010 Staff Report. She said there were also questions regarding the procedures for Colleagues Memos to make the procedure consistent with the new early packet deadlines. She said that item three was regarding designating every Monday as a Council Meeting night in the Municipal Code but the Committee had agreed not to approve that. She said that item four was regarding adding a space for email addresses to Speaker Cards. She said there was one other minor change to add the Council travel policy as an addendum to protocols. MOTION: Council Member Shepherd moved, seconded by Council Member Holmpn that the Policy and Services Committee recommends the City Council adopt the changes to the City Council Procedures Handbook as follows and as referenced on pages one through three of the June 22, 2010 Staff Report: • II-1-A -Regular Meetings: remove the posting outside at Downtown Library and include posting in the City Plaza by the elevators. • II-1-A -Regular Meetings: change the date of the distribution of the agenda an,d reports from Thursday to Wednesday. • II-6 (e) (1) -remove "resolution" from Mayor reading titles. • II-8 Item (4) -strike by a majority of a Council Committee. • Page V-I (.4) -the minutes for these meetings shall be sense minutes. • Page 2 of Protocols -add "designee" after City Manager. • Page 11 of Protocols -change reference from Assistant City Manager to City Manager. • Page 11 of Protocols -add "highest" before priority on last bullet. 16 • Procedures for Colleagues Memos to accommodate early packet release, as well as identify the Staff and fiscal impacts of the recommended action. • Revised Speaker Cards consistent for all public meetings and to include a space for the speakers email address. • Add the Council travel policy as an addendum to protocols. City Clerk Donna Grider clarified that the email section of the Speaker Cards was for future notifications of Planning items for the use of the Planning and Community Environment Department and was not applicable for other Council meetings. The intention was not for the City Clerk's Office to create and maintain distribution· lists. Council Member Holman said it could also be used by the Public Works Department. Ms. Grider said the cards would be passed on to applicable departments. Council Member Yeh suggested that information should be folded into the motion since it was going to the full Council. Council Member Holman agreed it should be folded in to the motion. She said that there used to be a process that allowed for distribution of information to public speakers, so it should not be difficult to implement again. Ms. Grider agreed that it shouldn't be difficult, particularly using email. Public Speakers sometimes preferr~d not to use their home addresses on the cards, using email instead may ease their concerns. Ms. Morariu said that when Staff brought the item back they would state "The Committee added that it would be the original department's responsibility to provide notice. If the box is checked, the City Clerk's Office would forward the card to the department." MOTION PASSED: 4-0 Ms. Morariu said the Policy and Services Commission had discussed the Council Liaison's role in Boards and Commissions. The Council had discussed strengthening the language regarding. the work of Council Standing Committees as well as the Council Members' involvement in the agenda process. Council Member Yeh said they should start with the Liaison relationship. The language was on page four and five of the Staff Report dated Julie 22, 2010. 17 Ms. Morariu said that the policy states that they should refrain from speaking on Council matters in which the full Council has not yet taken a policy position. Council Member Shepherd said the Library Advisory Commission had asked her to review their survey. She said that perhaps she should have refused to do so. Council Member Holman said as the Liaison they asked her for input. But, it is different when a Council Member is not the Liaison. . Council Member Shepherd said that in that case they should clearly state that .they are speaking as individuals. Ms. Grider said that the policy should avoid taking away an individual's right to speak. Ms. Morariu said that all of the language was to address issues where Council Members would attend Boards and Commissions meetings as individuals, so the conversation should focus on that. Council Member Price said that "should be clearly made as individual opinion" should change to "should make a point to state it is an individual opinion." Council Member Yeh asked if the Committee had any comments on the next bullet, "Limit contact with Board and Commission members to questions of clarification. " Council Member Price asked if it was ok to seek their opinion. Council Member Holman asked if the language was too limiting. Council Member Yeh said that conversations occasionally occur when Board and Commission Members seek advice not in the spirit of this policy, such as if they want to discuss whether or not they should reapply to a board. Ms. Morariu stated that the language in the heading "Limit contact with Board and Commission members to questions of clarification" was not consistent with the language in the body, " It is inappropriate for a Council Member to contact a Board or Commission member to lobby on behalf of an individual, business, or developer, or to advocate a particular policy perspective. It is acceptable for Council Members to contact Board or Commission members in order to clarify a position taken by the Board or Commission." She suggested changing the heading to read "Council should be careful not to advocate or lobby for a position. " 19 Council Member Price said they should hear from the Commission Chair. Ms. Morariu said they could add language encouraging the Chairs to manage issues at the first level then bring them to the attention of a Council Member if needed. Council Member Holman said she had issues with the language that suggested if a Council Member cannot resolve an issue it should be brought before the full Council. She felt it was inappropriate to discuss individual Commission Members with the full Council. Council Member Shepherd said it would only be an issue if they were discussing removing them from their position. She then asked if there were processes for removing a Commissioner. Ms. Morariu said the Municipal Code stated that the "appointing authority may remove any member with the approval of the Council." Council Member Holman said the policy used the word "effectiveness" which was not specific. Council Member Shepherd agreed. Council Member Price said effectiveness referred to how they communicate, and how they conduct themselves in the course of their responsibilities. Council Member Holman said that should be left to the Board. Council Member Price said it felt like Council would be interfering. Ms. Grider.said that as an individual Council Member they might prefer to bring a concern about a Board or Commission Member to their colleagues. Council Member Holman said there· might be times when a Council Member would be comfortable discussing concerns directly wit~ the members. Ms. Grider said bringing concerns to the Council keeps the discussion subjective. Council Member Shepherd said there needed to be recourse. Council Member Holman said it was in the code. 21 Ms. Grider clarified that there were times when Council Members need to make a choice between a Council'Meeting and a Commission Meeting. If a quorum is required, the Council Meeting would take priority over a Board and Commission meeting. She added that, while Council Members attend Commission meetings as often as possible, in the past Commissioners have been concerned at the lack of attendance by Council Liaisons at their meetings. She had not heard any concerns this year. She suggested that the verbiage regarding an alternate should be removed. Ms. Morariu said that the Mayor assigns alternates; the Council Member would not arrange their own. Council Member Price suggested the following verbiage "Appointed Council Liaisons or alternates as appropriate are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission." She said the last line of the original bullet would be deleted. Ms. Morariu recapped the verbiage, with the agreed upon changes, "Appointed Council Liaisons and/or alternates as appropriate are encouraged to attend all regularly scheduled meetings of their assigned Board or Commission." MOTION: Council Member Yeh moved, seconded by Council Member Price to adopt the changes made the Council Conduct with Palo Alto Boards and Commissions section of the City of Palo Alto Council Protocols. MOTION PASSED: 4-0 Ms. Morariu said the next bullet in question was under Other Procedural Issues, "Respect the work of the Council Standing Committees." Council Member Holman said she didn't understand the use of the word "re- commit." Council Member Shepherd said it was probably referring to the commitment that the Committee made and if the vote was unanimous, it would be placed on the City Council agenda under the Consent Calendar. Council Member Yeh said that if the Policy and Services Committee voted on an issue unanimously, it would go to Council on Consent and someone would have to actively pull it off in order for Council to discuss it. Ms. Grider said these were their procedures; as a Committee, they could put in their motion to bring this back as an Action Item. 23 Council Member Price suggested that they end the bullet after "respect the work of the committees." Council Member Yeh said sometimes things end up on Consent. Council Member Price said that many things didn't and they should not make a sweeping statement. Council MemberYeh suggested the individualCommittees could specify in their Motions whether it should go on Consent or not. Council Member Shepherd said they would not remember to include that and not all items go back to the Council. Council Member Yeh suggested the protocols could state that all items that are to return to Council should be specified. Council Member Shepherd reiterated that the Committees would rarely remember to include that. Council Member Holman said that Staff would remind them. Ms. Morariu said that Staff has always put unanimous Standing Committee decisions on the Consent Calendar. If Staff knew there would be substantial policy discussion, or if it was not unanimous, it would go on the Action Agenda. She said that did not prohibit a Committee from making their own recommendation. She recapped the changes, "If a matter is taken forward to the full Council for approval and it received a unanimous vote at Committee, the item will be placed on the Consent Calendar, unless otherwise recommended by the Committee or Staff."· MOTION: Council Member Shepherd moved, seconded by Council Member Price to adopt the changes made the bullet point titled "Respect the work of the Council Standing Committees" in the Other Procedural Issues section of the City of Palo Alto Council Protocols. MOTION PASSED: 4-0 Ms Morariu said that regarding the last bullet pOint, questions had come up about the Agenda planning process. 24 Council Member Price said one issue was to have a manageable Agenda with some assessment of the likely duration of the meeting. Ms. Grider said that it was difficult to predict the timing of Agenda items. Council Member Price said she agreed that timing predictions should not be published on the public Agenda, but rather used in the planning process. Ms. Grider said that was the goal of the Tuesday meetings of the Executive Leadership Team, but at each Council Meeting there are items that Council directs by Motion to be added to future agendas. Council Member Price said that building an evening when there is a Closed Session, and the heart of the Agenda isn't started until 9:00 or 9:30 is difficult. Council Member Shepherd said it has been nice having the Consent Agenda flipped on the agenda after the Action items. Council Member Price suggested they address the length of the Agenda or the number of topics covered. Ms. Morariu said· they were trying to reinforce the intent. She suggested "Consideration in building the Agenda should be given to the potential length of the meeting and at what pOint items of significant public concern may be heard." Council Member Yeh said that while the verbiage may not shorten the meetings it's good to have the information. He said that people look at this when considering whether to run for Council. Ms. Grider agreed. She said that often candidates tell her they don't feel the time commitment is too much even though the meetings are long, because they are only Monday nights. She said she informs them Council actually meets much more often on other nights for various committee assignments. MOTION: Council Member Price moved, seconded by Council Member Holman to adopt the changes made the bullet point titled "The Mayor and Vice Mayor should work with Staff to plan the Council Meetings" in the Other Procedural Issues section of the City of Palo Alto Council Protocols. MOTION PASSED: 4-0 Council Member Yeh asked what the deadline was for Council Questions. 25 Ms. Grider said the suggested time was by noon the day of the meeting. Council Member Yeh said this might tie back to the early Council Packet release. He suggested this should be revisited then. Ms. Grider said the intent of the procedure was simply to make sure the question is answered. If a question comes in at 4:00 pm the night of the meetfng, the Council may not receive an answer. Council Member Shepherd said the question would be asked during the meeting then. Ms. Morariu said it was on page 11 of the Policy and Procedures for City Council E-Mails for Agenda Related Items of Council Protocols. She said the current language was "Council Members will submit questions on agenda items no later than 9:00 am the Monday of the Council meeting at which the item will be discussed ." Ms. Grider said it was important to include the reasons for early submittal of Council questions. It wasn't only that Staff wanted the questions early; it was helpful to have ample time to answer the questions and to release them to not only the Council, but to the public. Council Member Holman said the language stated Council questions should be submitted by noon elsewhere. Ms. Grider said the document states "as early as possible" elsewhere. Council Member Yeh said that both page six and page 11 discuss this. Ms. Morariu suggested they cross reference the language between the two pages, "more details relating to Agenda questions can be found in the addendum." Council Member Shepherd asked Staff to clarify the timing for Council questions inthe document. She said the practice had been to sub'mit them by noon. Council Member Holman asked about page two of the protocols under the heading Council Conduct with Staff, where it references the Manager's Office, but not the other Council Appointed Officers (CAD). 26 Ms. Morariu said that was part of the Municipal Code and could not be changed at this time. Council Member Holman agreed but added that there was no language to address the other CAOs. Council Member Price said it does state elsewhere to not go to other Staff. Ms. Morariu said that the document did state that Council Members should channel communication to appropriate City Staff. Council Member Holman said it didn't say anything about trying to influence other CAOs whereas there is language in the Municipal Code about not trying to influence the City Manager. She suggested the language should be more consistent. '~ Ms. Grider said an Ordinance would be required to make that change because the language was in the Municipal Code. Council Memper Yeh said it was referring specifically to appointments made by the City Manager. Ms. Morariu said it also mentions dealing with City Services. Ms. Grider said it might be the section of the code dealing with the hiring of the City Manager. Council Member Holman asked if the Committee was agreeable to adding language regarding not interfering in the role of the City Manager. Ms. Morariu reiterated that they would have to make a motion for Staff to come back with an Ordinance to change the Municipal Code. She said they could make the motion and Staff could report back on it. MOTION: Council Member Shepherd moved, seconded by Council Member Price, that the Policy and Services Committee directs Staff to bring an Ordinance before theful\ Council adding language to the Municipal Code that states a Council Member may not interfere with the administrative role of the CAOs. MOTION PASSED 4-0. 27 Excerpt from the Policy and Services Meeting September 30, 2010 Continued Discussion of Recommendations to City Council on Proposed Changes to the City Council Procedures and Protocols. Assistant to the City Manager, Kelly Morariu stated Attachment A was the final redlined version of the Council Procedures and Protocols Handbook (Handbook) for the Policy and Services Committee for recommendation to the Council. Minor clerical errors would be revised prior to submission to the Council. This evening provided the opportunity to review Attachment A and ensure all revisions were included. City Clerk, Donna Grider stated unfinished business was called out in Section lI- S of the Handbook. She stated unfinished business was also called out under action items. The Council had the authority to adjust unfinished business dependent on audience participation. Council Member Shepherd stated she had not heard unfinished business called out as a separate item on the Council agenda. She inquired whether the City Clerk was requesting this change. Ms. Grider stated that was correct. There was not currently a section on the Council agenda that called out unfinished business agenda items. Currently unfinished business verbiage was listed at the end of any given agenda item. Ms. Morariu recommended that unfinished business be moved under action items. Ms. Grider concurred with Ms. Morariu. She recommended an overall category listed as unfinished business, and then subcategories could be listed. Council Member Holman asked about consent items that were pulled off the Council agenda for further discussion. She inquired whether these items would be moved to unfinished business. Ms. Grider spoke on the various ways a consent item could be pulled from the Council agenda. She felt it would be beneficial to indicate, in the Council's motion, whether a removed consent item should return as an action item. Council Member Holman stated a removed consent calendar item would then be called out in a Council's motion, rather than having the item automatically placed as an action item. 28 Ms. Morariu stated typically a consent item, pulled from the Council agenda, was heard as an action item. Council Member Holman stated this practice had caused ambiguity at Council meetings. .. Ms. Grider recommended that when the Council pulled a consent item they specify that it be placed as an action item in the motion. Council Member Holman stated a removed consent item be spelt out in a motion, opposed to being automatically placed as an action item. Ms. Grider stated the Council could also add, in the motion, to have the consent item return as an action .item at a later specified date. Council Member Holman concurred. Ms. Grider stated typographical errors were found within the Handbook. On page 5 of the Protocols, the first bullet should read as "Refrain from Lobbying Board and Commission Members". On page 11, Staff recommended that City Manager Reports be renamed as Staff Reports. Council Member Holman inquired why Staff recommended renaming City Manager Reports. Ms. Morariu stated topics overviewed by the City Manager were not exclusively City Manger reports. Ms. Grider stated other jurisdictions listed these types of reports as Staff Reports. Council Member Holman inquired whether these reports should be listed by the originating City departments. . Council Member Shepherd stated agenda items currently listed the originating City departments. She stated information on the cover memos of agenda items were not always uniform. Ms. Grider stated Staff was working toward standardizing the cover memos of agenda items. 29 Ms. Morariu agreed that Staff was working on standardizing agenda items. Naming reports as Staff Reports would make the documents more consistent. Council Member Holman stated Council questions would continue to be sent to the City Manager or Assistant City Manager. Ms. Morariu stated that was correct. Fred Balin, Palo Alto, spoke on the benefit of the Council agenda policy changes. Tom Jordan, Palo Alto, spoke on his recommendation to treat all quasi judicial items, on the Council agenda, the same as how they are treated at the Planning and Transportation Commission. Council Member Holman stated Section 1-2 read that public speakers shall state their name and address if presenting evidence in a hearing required by law. She felt the Council could not require a public speaker to provide their address. Council Member Shepherd stated that was for public hearings. Ms. Morariu stated public speakers were not compelled to register their name with the City Clerk. She stated she would verify this. Ms. Grider stated the section was referring to presenting evidence only. Council Member Holman stated Section II-l, under Regular Meetings, stated regular meeting. agendas must be posted no later than 7:00 p.m. on the preceding Friday. Ms. Grider stated the preceding FridaY,at 7:00 p.m., was the deadline to comply with the Brown Act requirement. Agendas could be amended or revised up to that date and time. She indicated Staff typically posted agendas sooner than this deadline. Council Member Shepherd stated City policy was to make every effort to complete and distribute the agenda, and related reports, by the preceding Wednesday. Council Member Holman inquired whether the Council should impose its own deadline. . Ms. Grider stated that would benefit the public; however, an agenda that was revised multiple times may be confusing to the public. 30 Ms. Morariu recommended keeping the last legal deadline in the Handbook. She stated stronger language could be added to show the Council's preference for earlier agenda postings. Council Member Holman stated both could be referenced. Ms. Grider agreed. Council Member Shepherd recommended adding that posting of agendas change from the preceding Friday to the preceding Thursday at 7:00 p.m. Cou'ncil Member Holman suggested that Staff change the language to make Thursday the preferred deadline, with the caveat that revised agendas must be posted by Friday. Ms. Grider stated State law established the deadline as Friday at 7:00 p.m. Instructing Staff to post agendas by Thursday could potentially create a gray area. The Council had the discretion to revise the-deadline, as long as the deadline did not pass the preceding Friday at 7:00 p.m. Council Member Holman stated it would be easier on Staff if the agenda posting date was changed to the preceding Thursday. Ms. Grider stated the Council created their own guiding rules, and could tighten the agenda posting requirement established by the Brown Act. Council Member Holman inquired whether the Policy and Services Committee was in agreeance. Council Member Shepherd stated she did not agree. The High Speed Rail (HSR) Committee sometimes rushed last minute to gather a forum of Committee members before posting their agenda. Ms. Grider stated the Policy and Services Committee needed to determine whether they were discussing regular Council meeting deadline postings, or Board and Committee agenda postings. The HSR meetings were typically special meetings, therefore, only required a 24 hour agenda posting notice. Council Member Shepherd . stated she was referring to receiving HSR information, from their Thursday morning meeting, for inclusion in their next agenda in time for the posting requirement. 31 Ms. Grider stated this caused anxiety because HSR minutes would not be available in time. Council Member Shepherd concurred. She spoke on her concern for pushing the agenda posting deadline earlier. She provided an example for an adoption of a HSR resolution that would be blocked by noticing requirements. Chair Yeh stated the Friday deadline was in accordance with the Brown Act. The deadline could be revised, as a City Policy, to do everything possible to post the agenda, and related reports, by the preceding Wednesday. Ms. Morariu stated it was important to highlight the Brown Act deadline. She suggested calling out the City's Procedure and Brown Act requirements separately in the Handbook. Chair Yeh stated the Wednesday deadline would be revisited with the implementation of the on-line system. Council Member Holman spoke on a Colleagues Memo that stated significant or large items would be published two weeks ahead of time. She stated this was not referenced in the Handbook. Council Member Shepherd inquired on the definition of a large agenda item. Ms. Morariu stated large or significant agenda items had not been defined. She stated they would be major discussion items, such as Stanford projects. She recommended that Staff attempt to distribute materials two weeks prior to scheduled Council agendas for major projects. Council Member Price stated the two week consideration should consist of items that needed thoughtful contemplation. Council Member Holman stated that in Section II-l, under Study Sessions, the public comments will be heard at the end of any Council discussion. She stated it was at the discretion of the Chair, but had been helpful to have public comments ahead of time. She asked if they should highlight that it was at the discretion of the Chair. Ms. Morariu suggested that public comments be hear at the end of the session, but the policy could be flexible or at the discretion of the Chair. 32 Council Member Holman stated Section II-3 spoke on teleconference guidelines. She spoke on the language on one week advanced written notice. She stated that it did not provide sufficient time for emergencies. Ms. Grider spoke on the requirements on teleconferencing to comply with the Brown Act. She would work with the City Attorney to ensure this procedure would fit with legal requirements. Council Member Holman stated that was fine. Council Member Shepherd inquired whether that pol'icy was necessary. Ms. Grider stated that was correct. Ms. Morariu stated the policy was formed at the request of the Council. Ms. Grider stated teleconferencing created angst among the Council. She stated hearing the teleconferenced Council Member was difficult. Council Member Holman stated late submitted materials, that could significantly change a project, were delivered to Council Members' homes. There was no public transparency here. She stated information brought to a Council meeting lacked transparency. She indicated that this topic was not addressed in the Handbook. Ms. Morariu suggested adding to the Handbook that late submitted materials could be no later than noon five working days prior to the release of the Council age.nda packet. This would include materials submitted from Staff to Council Members' homes, or material delivered to Council meetings. MS. Grider expressed her concern over materials delivered to Council Members' homes. She stated that if she did not receive a copy of the material it would not be included in the official record. She recommended that the City Clerk be added to the distribution list for materials delivered to Council Members' homes. Council Member Price inquired how the City Clerk currently monitored this process. Ms. Grider stated there was no mechanism in place. Council Member Price stated the Council could report that they received late submitted items to the City Clerk. She suggested that one Council Member be designated to bring forth a copy to the City Clerk's Office. 33 Ms. Grider stated that would be helpful. Council Member Price spoke on her concern that the public was not receiving a copy of items submitted late. Council Member Price stated the City Clerk would ensure that the public had access to the item. Council Member Holman stated the public would not have an opportunity to view these items until the Council meeting. Council Member Holman suggested that the Council contact the City Manager's Office and alert them when they have received a late submitted item. She stated this honor system would alleviate concerns pertaining to quasi judicial items. She suggested that the Council not accept late materials. Ms. Morariu suggested that this be within the Protocols versus the Procedures. If materials were delivered to the Council they should notify the City Manager and City Clerk as soon as the material was received. Council Member Holman spoke on a late submitted Planning and Transportation Commission item that was submitted to the Council, but never brought forth to the City Clerk or public. . Council Member Shepherd inquired whether this would trigger a postponement .of the agenda item. Council Member Holman stated not unless the Council add it in the Handbook. Ms. Grider stated she had no way of notifying the public if the Council did not communicate with her. She suggested that the Council email her if they received information. Council Member Price stated if the Council received something at their home they should notify the City Manager and City Clerk .. She had no way of knowing whether other Council Members had received the same items. The City Manager could then determine whether that item would need to be deferred. She inquired how other jurisdictions handled this situation. Ms. Morariu stated it had not been an issue in her past experiences with other jurisdictions. 34 Council Member Price stated she had not received additional packet materials at her home since January 2010. Council Member Holman stated this situation had not presented itself this year because large developmental items had not occurred. Council MemQer Shepherd suggested the Handbook state that the Council was not allowed to talk before a presentation and before a decision was made. She recommended that the Handbook include language that stated if the Council received a late packet by the preceding Thursday they could not speak to one another. And any additional information needed to be documented before it was considered as received by the Council. Council Member Holman stated this subject was complicated and discussions were difficult. Council Member Shepherd stated there was a section in the Handbook that prohibited the Council to talk to anyone until there was a vote. She stated this spoke to some issues brought forth. Ms. Morariu stated Page IV-2, Section d, stated "Closure of the Hearing, and prior to a final decision, Council Members will refrain from any contacts pertaining to the item, other than clarifying questions directed by City Staff". Council Member Price stated that if the late information was significantly different than the project detailed in the official posting, Staff should be required to go back to square one. The late item should be reported to the City Manager, and City Clerk, and shared with the public as soon as possible.· If it was significantly different, the item should be deferred. Council Member Shepherd suggested this be incorporated onto Page IV-2, Section b. Ms. Morariu stated this was not in reference to solely quasi judicial items. She stated, in the paragraph regarding late submittals, items could include materials delivered to Staff, or Council, before or during the meeting. The Protocol could include that if a Council Member received additional materials related to a matter, being considered on the Council agenda, the Council Member will notify the City Clerk and City Manager as soon as possible after receipt of materials. Staff will make a determination by Monday morning whether the materials require further analysis or a continuation of the item. 35 Chair Yeh stated that would be fine. Mr. Jordan suggested that when Council Members bargained with applicants, the agenda item should be deferred to give Staff and the public time to respond. Council Member Shepherd inquired why the City Attorney had not stopped this behavior in the past. Council Member Holman stated sometimes the City Attorney stepped in, and the Council had disregarded his advice. That was why it was essential for the Council to have its own Handbook. Council Member Shepherd stated the Mayor had the ultimate control over the Council meetings. Mr. Jordan spoke on an example of where there was a vote by the Council before the applicant could respond. If the C-cuncil did respond, he recommended a continuance of the agenda item. Council Member Holman stated that if the public hearing closed, there could not be any back and forth negotiation. Chair Yeh stated the applicant was granted certain rights. Council Member Holman stated applicants and proponents were allowed time for rebuttal, and afterward, the discussion returned to the Council. The Council had their discussion and makes a Motion. If the public hearing closed after the final speaker, there could not be back and forth conversations unless the Council majority voted to reopen the pubic hearing. Ms. Morariu stated re-noticing the agenda item may need to occur at that point. Ms. Grider spoke on her uncomfortably for this issue and stated the City Attorney's advice was needed. Ms. Morariu stated that having a discussion with the Planning. and Transportation Director was advised because he crafted the last planning application submittals. 38 ' .... .' .. ' .'.":.'.' Excerpt from the Policy and Services Meeting October 26, 2010 Discussion and Recommendations on Role and Purpose of Policy & Services Committee for Inclusion in Council Protocols. City Manager, James Keene stated due to Staff changes he would be stepping in to assist with the item. He asked for clarification on the status of the item. Council Member Shepherd stated her interest was to determine the purpose of the Policy & Services Committee and to define guidelines for pursuing projects: Mr. Keene stated the goal would be for Policy & Services to construct the concept of the role and purpose of Policy & Services and present them to the full Council for approval or adaptations. Chair Yeh stated the purpose of Policy & Services was to be utilized as a sounding board for Staff and as guidance for Council. Prior to the departure of the Policy & Services Staff liaison there was mention of a retreat to gather information on how Staff felt Policy & Services could assist them with prioritizing projects, programs and services. Mr. Keene stated due to the degree of vacancies at the senior Staff level the retreat had not occurred. Chair Yeh stated the first bullet in the Staff Report captured the concept of balancing and prioritizing the workload. The second bullet related to Policy & Services being in a position to provide substantive feedback for what were the core services and programs. There is a need to find a balance between the financial aspects of the City with the drive for the program. Mr. Keene suggested language as "The intent and purpose of the Policy & Services Committee was to proactively evaluate community issues and the organizations capacity and focus on the context of the interest base of policy setting." He stated the goal to respond in a timely manner as an organization that reflected community values in City programs and services. Council Member Holman asked for clarification on the difference between the role of Policy & Services and the purpose of Policy & Services. Chair Yeh stated both standing Committees had similar language in the Municipal Code regarding their role. In order to alter the role of the Policy & Services Committee there needed to be an Ordinance adopted; whereas by 42 Policy & Services working on a two year work plan for Council priorities. There needed to be consideration of a parallel work plan with the budget to ensure Council priorities had the financial sustenance necessary to move forward. Council Member Holman stated combining the priorities with the budget made sense although she asked how the input would be delivered and what timeframe would the information need to be available in order to give the Finance Committee the ability to assimilate the information. Council Member Shepherd stated the budget process although well organized was a difficult one. She felt some of the tougher issues needed to continue, such as the sidewalks. Her thought was Policy & Services could take on the issue, analyze it, and allow Staff to prepare the item for the return of the next budget season. Chair Yeh stated a two-year rolling calendar for Council's Policy and Procedures would be beneficial. He clarified with work planning the goal was to take the full set of Council priorities, work with Staff, and task the Sub-Committees with bringing back something actionable to Policy & Services. Mr. Keene stated Staff would return to Policy & Services prepared to address the key desires as he understood them; first, how to develop a meaningful, high level, strategic workplan around the Council priorities and second, how to dig down into policy issues or service questions at the right time of the year in order to develop new directives. He stated there were models where budget and research collaborated; those models would be suitable for this course of action. Council Member Holman stated a policy discussion related to budgetary items could be assisted by the Staff associated with those items. She emphasized not wanting to fatigue the community by having them assume the need to attend the Policy & Services meeting and the community meeting regarding the same matter. She asked the feasibility of the budget process being a two-year process. She felt any efficiencies that were available would be beneficial to avoid rehashing the same items each year. Mr. Keene stated the City had done a two-year budget in a sense, they adopt the first year while the second budget year was in concept. He noted it was easier to have a biennial budget in stable times rather than in changing times. He clarified it was more difficult to predict budgetary occurrences eighteen months out opposed to six months out. He stated if there was revenue loss or gain there was need to revisit the second year to determine the choices being mandated by the economy. 44 Mr. Keene asked for clarification if Policy & Services approved the reformatted Role, Purpose and Work Planning documentation on November 9th the next step would be to recommend the approval from the full Council. Chair Yeh stated that was correct. Mr. Keene suggested recommending to the full Council for consideration the two-year priority cycle prior to presenting the Role, Purpose and Work Planning documentation. He stated separating the items out may lead to a more rapidly and simpler fashion. Council Member Holman stated she supported. recommending the two-year cycle to Council after clearer language was developed in support of the two- year priorities opposed to the previous procedures in a one-year priority. Chair Yeh stated the procedures and protocols were reviewed previously with a suggested alteration for two-years. The original concept was to review all of the concerns prior to sending the recommendation to Council. Council Member Shepherd asked whether the procedures and protocols were ready to go to Council. Council Member Holman stated there were a few more items that needed to be sent to the City Attorney's Office. Mr. Keene stated it was beneficial for Staff to bring to Council the completed portions, than to wait. Council Member Holman agreed with the understanding Council would be notified there were follow-up items awaiting legal input. Chair Yeh stated no action could be taken on the Council Procedures and Protocols since it was not agendized. By consensus the Committee had signed off on the recommended changes to the Council Procedures and Protocols. Ms. Grider stated at the last Policy & Services meeting there was a Motion to move forward with recommending the Council Procedures and Protocols changes to the full Council. Mr. Keene stated Staff would add the Council Procedures and Protocols to the tentative agenda, return to the Committee as directed with the re-formatted Role, Purpose and Work Planning documentation and verify with the City Attorney the status of the Council Procedures and Protocols that needed review. 48 CITY OF PALO ALTO CITY COUNCIL AND BOARDS AND COMMIS,SSIONS POLICY FOR TRAVEL,AND MISCELLANEOlis EXPENSEREIMBURSEmNT March,2006 GE~B.Alt CONSIDERATIONS 16 This policy is set by the City,'Council and applies to Council Members an4 to Boa,rd, and Comnrissions members, whQ will be referred to as ''Officials'' in the policy. In reitnbursbig travel aJ).d miscellaneous expenses, a municipal purpose requiring the expenditure of public funds' must be in evidence; also~ in accord with the Chartet and Municipal Code, such expenditures must be from authorized appropriationS. ELIGIBLE ACTJVITIES The, following activities ("Eligible Activities") are recognized by the Council as adv~~g municipal' pmposes and are eligible' for expense reimb~ement, subject to limitations on activities and specific and total expenditures described elsewhere in this policy: , \ J. Communica1#lg with representatives of regional, state and national govemmCJlt on . adopted city policy positions; , 2. Attending educational seminars designed to improve officials' skill and information levels; 3: Participating in regional, state and national organizations whose activities affect the city's interest; . 4. In collaboration with city staff, implementing a city-approved strategy for attracting or retaining businesses to the city. ' All other expenditures require prior approval by UIe City Council at a regular or special meeting. OUT .. OF-TOWN CONFERENCES OR MEETINGS Reimbursement All payments for travel and meetings shall be on the basis of either reimbursement of expenses advanced by the Council Member/Official or payments made directly to travel agencies/websites, hotels, airlines or the organization sponsoring the meeting. All requests for payments or reimbursements must be accompanied by supporting vouchers, invoices or paid detailed receipts and a copy of descriptive literature about the conference or meeting. The Mayor or Chair for Officials D:lust approve, in advance, individual travel requests for out-of-town meetings and conferences, e.g., Annual League of California Cities Conference, National League 1 LOCAL OR BAY AREA ACTMTES Council Members or Officials who have been requested or designated to represent the City may receive the actual cost of: 1. Meals, if they are a scheduled feature of the activity, e.g., SCCCA dinner meetings. 2." Registration fees where applicable. 3. Mileage if activity js outside the City (mileage clanns should be submitted monthly, with details: date and type of meeting, number of miles traveled to be indicated), consistent with City Policy and Procedures 1-02. 4. Council Members and Officials may be reimbursed by" the" Gity for use of a private bicycle to attend local or Bay"Area activities outside the City of Palo Alto consistent with City Policy and Procedures 2-9. OTHER EXPENSES 1. Airport parking fees, but Council Members and Officials must use long-term parking for " travel exceeding 24 hours. 2. Meal expenses and associated gratuities must be within the limits set in City Policy and Procedures 1-02. 3. TelephoneIFaxiCellular expenses will be reimbursed for actual expense incurred on City business. " 4. Internet Fee up to $15 per day, if a CoUncil Member or Official is traveling on official business and needs access for City-related busin~ss~ 5. Baggage Handling Fee up to $3 per bag will be reimbursed. 6. Ethics Training Expenses -AB1234 requires ethics training every two years and such fee and related expenses are eligible for reimbursement. ACTIVITES NOT CONSIDERED REIMBURSABLE 1. Voluntary attendance at any conference or meeting, not representing the City. 2. Meetings of social or service organizations. " 3." Meetings of voter groups or with individual citizens concerned with agenda items. 4. Election campaign activities. 3